Herrera-Gallegos v. H & H Delivery Service

• Decision Date: 24 July 2009
• Docket Number: No. 100,741.,100,741.
• Citation: 212 P.3d 239
• Court: Kansas Court of Appeals
• Parties: Tracy HERRERA-GALLEGOS, Appellee, v. H & H DELIVERY SERVICE, INC., and Commerce & Industry Insurance Company c/o AIG Claims Services, Appellants.

212 P.3d 239

Tracy HERRERA-GALLEGOS, Appellee, v. H & H DELIVERY SERVICE, INC., and Commerce & Industry Insurance Company c/o AIG Claims Services, Appellants.

No. 100,741.

Court of Appeals of Kansas.

July 24, 2009.

Christopher J. McCurdy and James L. MowBray, of Wallace, Saunders, Austin, Brown & Enochs, Chtd., of Overland Park, for appellants.

Randy S. Stalcup, of Affiliated Attorneys of Pistotnik Law Offices, PA, of Wichita, for appellee.

Before STANDRIDGE, P.J., BUSER and LEBEN, JJ.

LEBEN, J.

Tracy Herrera-Gallegos hurt her back badly while moving a heavy box for H & H Delivery. Both the administrative law judge and the Workers Compensation Board concluded that she was permanently and totally disabled, meaning that she was unable to engage in any substantial or gainful employment.

Her employer argues that the Board's decision was based on flawed evidence, that her failure to seek out other employment opportunities negates her right to an award, and that she shouldn't have been given an award for future medical expenses where no evidence demonstrated a need for ongoing medical treatment. But we review the Board's factual findings to see whether substantial evidence supports them, and sufficient evidence showed that Herrera-Gallegos was unemployable due to her chronic pain and that she needed additional pain-management treatment. Further, nothing in our workers'-compensation law requires a person who is permanently and totally disabled to try to find a job or lose workers'-compensation benefits. We therefore affirm the Board's award to Herrera-Gallegos.

Standard of Review

We begin our analysis by noting a change in the standard of review for workers'-compensation cases that took effect on July 1. Under K.S.A. 44-556(a), decisions of the Workers Compensation Board are reviewed under the Kansas Judicial Review Act, K.S.A. 77-601 et seq., which applies generally to appeals from administrative agencies. The statute was amended July 1, 2009, and that change alters our standard of review. See L.2009, ch. 109, sec. 28 (amending K.S.A. 77-621).

K.S.A. 77-621 has always provided that we review an agency's factual findings to be sure substantial evidence supports them "in light of the record as a whole." But our cases had limited that review by directing that we take the evidence in the light most favorable to the Board's ruling. If we found substantial evidence that would support the Board's decision, we were not concerned about other evidence that might have led to a different conclusion. See Graham v. Dokter Trucking Group, 284 Kan. 547, Syl. ¶ 1, 161 P.3d 695 (2007); Gutierrez v. Dold Foods, Inc., 40 Kan.App.2d 1135, Syl. ¶ 4, 199 P.3d 798 (2009). In addition, if the Board ruled against a party who had the burden of proof on a factual issue, we reviewed the matter under a negative-findings test—we would then uphold the Board's ruling unless it arbitrarily ignored disputed evidence or the Board acted on bias, passion, or prejudice. Gutierrez, 40 Kan.App.2d 1135, Syl. ¶ 4, 199 P.3d 798.

As amended, K.S.A. 77-621 now defines "in light of the record as a whole" to include the evidence both supporting and detracting from an agency's finding. Thus, we must now determine whether the evidence supporting the Board's factual findings is substantial when considered in light of all the evidence. In addition, the amended statute, K.S.A. 77-621(d), now requires that we consider both the credibility determinations that the hearing officer "who personally observed the demeanor of the witness" made, and if the agency head, here the Board, does not agree with those credibility determinations, the agency should give its reasons for disagreeing. We must consider "the agency's explanation of why the relevant evidence in the record supports its material findings of fact." For us to fairly consider an agency's position should it disagree with a hearing officer's credibility determination, an explanation of the agency's differing opinion would generally be needed. See also L.2009, ch. 109, sec. 13 (amending K.S.A. 77-527[d] and providing that agency head give "due regard" to hearing officer's ability to observe witnesses and determine credibility).

The statute doesn't define the term substantial evidence, but caselaw has long held that it is such evidence as a reasonable person might accept as being sufficient to support a conclusion. Blue Cross & Blue Shield of Kansas, Inc. v. Praeger, 276 Kan. 232, 263, 75 P.3d 226 (2003). With the statutory amendments, we have simply been told to look more completely at the record in determining whether substantial evidence supports the agency decision.

The amended statute finally reminds us that we do not reweigh the evidence or engage in de novo review, in which we would give no deference to the administrative agency's factual findings. Indeed, the administrative process is set up to allow an agency and its officials to gain expertise in a particular field, thus allowing the application of that expertise in the fact-finding process. But we must now consider all of the evidence—including evidence that detracts from an agency's factual findings—when we assess whether the evidence is substantial enough to support those findings. Thus, the appellate court now must determine whether the evidence supporting the agency's decision has been so undermined by cross-examination or other evidence that it is insufficient to support the agency's conclusion.

An Overview of the Evidence and the Board's Ruling

Herrera-Gallegos hurt her back while trying to move a 70- to 80-pound box out of the way. There's no dispute that this injury occurred during the course of her employment with H & H Delivery.

Doctors performed disc-fusion surgery of the L4/L5 discs in November 2004, and a second fusion of the L5/S1 discs in January 2006. Herrera-Gallegos said the doctor who performed the surgery told her she'd never work again.

Dr. Pedro Murati testified regarding his examination of Herrera-Gallegos. He diagnosed her with failed-back-surgery syndrome, and he said that individuals with it experience pain and difficulty in all activities. Based on his examination and a review of her medical records, he said she should rest for 30 minutes every 2 hours. He concluded that she was unable to engage in any substantial or gainful employment due to the level of pain she experienced. He conceded that she could physically do certain work-related tasks, but he recommended that she not do them because it would cause her too much pain. In addition, he said that if she tried to work, it would cause her so much pain that she'd often have to stay at home to rest her back. He concluded that she was unemployable because "she has lost the ability to [work] to the satisfaction of any reasonable employer."

H & H Delivery presented a different view from Dr. Paul Stein. He reviewed a functional-capacity evaluation and concluded that Herrera-Gallegos could function under light physical-demand restrictions, including that she not lift more than 20 pounds on an occasional basis and no more than 10 pounds on a frequent basis. He concluded that "within the framework of the restrictions that I have provided, she should be able to function." He reviewed lists of tasks she had done in past jobs, noting some (like vacuuming) that she could no longer do but many others (like standing to operate a cash register) that she could do. Even for tasks that she could do, however, the functional-capacity evaluation approved by Dr. Stein recommended that she frequently alternate between sitting and standing.

Two vocational experts, Jerry Hardin and Karen Crist Terrill, testified. Based on Dr. Murati's restrictions, Hardin concluded that Herrera-Gallegos was "essentially and realistically unemployable." Based on Dr. Stein's restrictions, Terrill testified that Herrera-Gallegos had "the ability to earn wages in the open labor market" as a customer-service representative or as a bill collector. But when asked to consider Dr. Murati's restrictions, she conceded that Herrera-Gallegos wouldn't be employable under them:

"Dr. Murati has indicated she needs to rest every two hours for at least 30 minutes and that she is essentially and realistically unemployable. I would then defer to those statements. If Dr. Murati is of the opinion she's essentially and realistically unemployable from a medical standpoint, I would defer to that opinion."

Terrill also testified that Herrera-Gallegos said she hadn't looked for any jobs since her injury because she hadn't been released to go back to work and because the pain made it hard for her to leave her home.

An administrative law judge found that Herrera-Gallegos was permanently and totally disabled. H & H Delivery sought review by the Workers Compensation Appeals Board, but the Board agreed that she was permanently and totally disabled. Both the judge and the Board relied heavily on Dr. Murati's testimony.

I. Substantial Evidence Supports the Board's Finding that Herrera-Gallegos Is Permanently and Totally Disabled.

We begin our review of H & H Delivery's appeal by determining whether, with consideration of the entire record, substantial evidence supports the Board's conclusion that Herrera-Gallegos is permanently and totally disabled. Our statute provides several examples that are presumed to result in total disability, but it otherwise provides that the Board determine whether the person's disabilities have altogether shut them out of the labor market based on the facts of that individual case:

"Permanent total disability exists when the employee, on account of the injury, has been rendered completely and permanently incapable of engaging in any type of substantial and gainful employment. Loss of both eyes, both hands, both arms, both feet, or both legs, or any combination thereof, in the absence of proof to the contrary, shall constitute a permanent total disability. Substantially total paralysis, or...