Hornbeck v. Spectra Painting, Inc.

• Decision Date: 31 July 2012
• Docket Number: No. SC 92116.,SC 92116.
• Citation: 370 S.W.3d 624
• Parties: Terry HORNBECK, Appellant/Cross–Respondent, v. SPECTRA PAINTING, INC., Respondent/Cross–Appellant, and Treasurer of the State of Missouri as Custodian of the Second Injury Fund, Respondent.
• Court: Missouri Supreme Court

370 S.W.3d 624

Terry HORNBECK, Appellant/Cross–Respondent,

v. SPECTRA PAINTING, INC., Respondent/Cross–Appellant,andTreasurer of the State of Missouri as Custodian of the Second Injury Fund, Respondent.

No. SC 92116.

Supreme Court of Missouri, En Banc.

July 31, 2012.

Charles W. Bobinette, Uthoff, Graeber, Bobinette & Blanke, St. Louis, for Hornbeck.

Michael P. McDonald Jr., Thompson & McDonald, St. Louis, for Spectra.

Karin Krohn Schute and Mary J. Sommers, Attorney General's Office, for Treasurer.

MARY R. RUSSELL, Judge.

This workers' compensation appeal raises the question of whether the 15–percent statutory violation penalty under section 287.120.4 ¹ applies to an employee's compensation award from the Second Injury Fund (SIF). ² This Court finds that the section 287.120.4 penalty is inapplicable to the claimant's award from the SIF.

For the reasons explained below, the Labor and Industrial Relations Commission's decision in this case is affirmed as modified by this opinion.

I. Background

Terry Hornbeck was employed by Spectra Painting, Inc., as a painter and drywall taper. He suffered a work-related accident in November 2006 when he fell 10 feet from a ladder onto a concrete surface. The ladder from which he fell was on a makeshift scaffolding platform. After his fall, Hornbeck was taken to the emergency room with complaints of pain in his feet, legs, back, and left shoulder. No structural abnormalities were diagnosed, and he was released from the hospital the same afternoon as his fall. In the coming months, he visited three physicians provided by Spectra. Because none of those physicians diagnosed a physical cause for his continued discomfort and pain, he was released in April 2007 to return to work.

In October 2007, still complaining of pain, Hornbeck utilized his own insurance to obtain additional medical care.

Seeking additional compensation for his ongoing medical treatments, Hornbeck moved in January 2008 for a hearing before an administrative law judge (ALJ) pursuant to section 287.203.³ He sought payment for his unpaid medical expenses, additional temporary total disability (TTD) benefits, and attorneys' fees and costs. He also alleged that his work injury resulted from Spectra's violation of the scaffolding act ⁴ and sought application of the 15–percent statutory violation penalty under section 287.120.4.

The ALJ's findings included that, from November 2006 to April 2007, Spectra had paid Hornbeck $32,801.15 in medical expenses and $16,754.88 in TTD benefits. Spectra also had paid him a $7,000 indemnity credit against any further liability in the case. The ALJ determined that Hornbeck was not entitled to further payments for his unpaid medical expenses or future medical treatments. He found that Hornbeck had reached maximum medical improvement (MMI) for his work-related injury on April 24, 2007. The ALJ refused to award Hornbeck the additional benefits he sought in his petition because he found that Hornbeck's “treatment undertaken and medical expenses incurred [after his April 2007 MMI date] [were] unrelated to [his work-related] injury.”

The ALJ concluded that Hornbeck's 2006 work injury caused him to suffer permanent partial disability (PPD) of 20 percent of his left bicep, 5 percent for each of his feet, and 2.5 percent of his total body as a whole for lower back pain. He found that Hornbeck's injuries warranted application of a 5–percent multiplicity factor. He also indicated that Hornbeck was entitled to 42.4 weeks of PPD compensation from the SIF.

The ALJ further determined that Spectra had not violated the scaffolding act, such that the 15–percent penalty under section 287.120.4 was not applicable to enhance Hornbeck's award. Although Hornbeck sought attorneys' fees and costs based on an itemized fee petition, the ALJ found that his requested fees and costs were not warranted. Instead, the ALJ awarded expenses and a 25–percent attorneys' fees award.

Hornbeck sought review of the ALJ's decision by the Labor and Industrial Relations Commission (Commission).

II. The Commission's Findings

As he had in his case presented to the ALJ, Hornbeck largely premised his case before the Commission on testimony by his osteopathic physician, Dr. Volarich, who had started treating him in March 2008.⁵The Commission also examined Hornbeck's treatment records from three physicians who had treated him beginning in October 2007,⁶ as well as the treatment records from Hornbeck's Spectra-provided physicians who had treated him after his initial complaints of pain and discomfort.⁷ In deciding Hornbeck's case, the Commission expressly found that the medical opinions of the Spectra-provided physicians were more credible than the opinions offered by Dr. Volarich. The Commission affirmed the ALJ's decision to deny Hornbeck's requests for additional medical benefits after concluding that Hornbeck had “failed to demonstrate that [his work-related injury in November 2006] was the prevailing factor resulting in a medical condition that warranted treatment after [he had reached MMI in] April 2007.” ⁸

The Commission's decision highlighted its disagreement with the standards of proof that it believed that the ALJ had applied, and it sought to clarify the appropriate standards for determining the issue of medical causation. The Commission also expressly found that TTD benefits had not been underpaid to Hornbeck, which was an issue that the ALJ had not reached. The Commission approved and affirmed the attorneys' fees and costs that had been awarded by the ALJ.

Contrary to the ALJ, however, the Commission found in favor of Hornbeck that Spectra had violated the scaffolding act and was required to pay the 15–percent penalty under section 287.120.4. The Commission indicated that the 15–percent penalty applied to the compensation awards entered by the ALJ. Hornbeck and Spectra both appeal the Commission's decision.⁹

III. Standard of Review

On appeal, this Court reviews the Commission's decision to determine if it is supportedby competent and substantial evidence upon the whole record. Mo. Const. article V, sec. 18. Section 287.495.1 provides in relevant part:

Upon appeal no additional evidence shall be heard and, in the absence of fraud, the findings of fact made by the commission within its powers shall be conclusive and binding. The court, on appeal, shall review only questions of law and may modify, reverse, remand for rehearing, or set aside the award upon any of the following grounds and no other:

(1) That the commission acted without or in excess of its powers;

(2) That the award was procured by fraud;

(3) That the facts found by the commission do not support the award;

(4) That there was not sufficient competent evidence in the record to warrant the making of the award.

Nothing requires this Court to review the evidence and all reasonable inferences drawn from the evidence in the light most favorable to the Commission's decision. Hampton v. Big Boy Steel Erection, 121 S.W.3d 220, 223 (Mo. banc 2003). The whole record is considered to determine if there is sufficient competent and substantial evidence to support the Commission's award. Id. A reviewing court considers whether the Commission “could have reasonably made its findings, and reached its result, upon consideration of all the evidence before it.” See Wood v. Wagner Elec. Corp., 355 Mo. 670, 197 S.W.2d 647, 649 (1946).

This Court defers to the Commission's factual findings and recognizes that it is the Commission's function to determine credibility of witnesses. CNW Foods, Inc. v. Davidson, 141 S.W.3d 100, 102 (Mo.App.2004). This Court “may not substitute its judgment on the evidence,” and when the “evidence before an administrative body would warrant either of two opposed findings, the reviewing court is bound by the administrative determination, and it is irrelevant that there is supportive evidence for the contrary finding.” Pulitzer Pub. Co. v. Labor & Indus. Relations Comm'n, 596 S.W.2d 413, 417 (Mo. banc 1980).

IV. Arguments on Appeal

Both Hornbeck and Spectra appeal regarding the Commission's imposition of the 15–percent penalty to be applied under section 287.120.4 for violating the scaffolding act.¹⁰ The parties maintain that the Commission did not articulate clearly what categories of compensation payable to Hornbeck would be enhanced by the 15–percent penalty, and they request that this Court clarify the applicable penalty amounts.

Hornbeck further argues that the Commission erred in entering a final PPD award because it misapplied the law and made findings contrary to the overwhelming weight of the evidence when it agreed with the ALJ's determinations that he had reached MMI in April 2007. He asserts that the Commission wrongly determined that he had failed to prove that his medical treatments and claimed disabilities after April 2007 were related to his compensable November 2006 work injury. He also maintains that he should have been awarded his requested attorneys' fees and costs because Spectra unreasonably denied him additional benefits. He further contends that the Commission wrongly refused to award him past due medical expenses, interest, and future medical expenses.

A. Application of the Section 287.120.4 Penalty

This case presents an issue of first impression regarding the application of the 15–percent penalty under section 287.120.4—which in this case is payable for Spectra's violation of the scaffolding act—to an award from the SIF. Hornbeck maintains that the penalty is applicable to his SIF award, and Spectra contends that the penalty cannot be applied to enhance a SIF award.¹¹

The purpose of the SIF is to compensate an employee when his work-related injury combines with a preexisting disability and causes a greater disability than the work-injury alone would have caused. As laid out in section 287.220.1,¹²the SIF “provides for fund liability if the preexisting disability and the combined effect of it and the new injury are...