Lozier Corp. v. State, Second Injury Fund

Decision Date16 March 1993
Docket NumberNo. A-92-222,A-92-222
Citation501 N.W.2d 313,1 Neb.App. 567
PartiesLOZIER CORPORATION and Liberty Mutual Insurance Company, Appellees, v. STATE of Nebraska, SECOND INJURY FUND, Appellant, and Michael Decroix, Intervenor-Appellee.
CourtNebraska Court of Appeals

Don Stenberg, Atty. Gen., John R. Thompson, and David T. Bydalek, Lincoln, for appellant.

Jay L. Welch, of Rickerson, Welch & Wulff, Omaha, for appellees Lozier Corp. and Liberty Mut. Ins. Co.

Sheldon M. Gallner, of Gallner & Gallner, P.C., Council Bluffs, IA, for intervenor-appellee.


WRIGHT, Judge.

The State of Nebraska, Second Injury Fund (Fund), appeals the award on rehearing entered by the Workers' Compensation Court. The Fund assigns as error the compensation court's requiring the Fund to pay medical, hospital, and psychiatric care and treatment expenses incurred by Michael DeCroix. The Fund claims that the court erred in imposing on the Fund the responsibility for paying temporary total disability, except for the period of time DeCroix is undergoing vocational rehabilitation.


A decision by the Workers' Compensation Court after rehearing has the same force and effect as a jury verdict, and findings of fact will not be set aside unless, after reviewing the record in the light most favorable to the successful party, an appellate court determines that those findings are clearly erroneous. Foreman v. State, 240 Neb. 716, 483 N.W.2d 752 (1992); Wiese v. Becton-Dickinson Co., 239 Neb. 1033, 480 N.W.2d 156 (1992).

An appellate court may modify, reverse, or set aside a Workers' Compensation Court's decision only when (1) the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award. Kramer v. DeNoyer, 240 Neb. 805, 484 N.W.2d 447 (1992); Kraft v. Paul Reed Constr. & Supply, 239 Neb. 257, 475 N.W.2d 513 (1991).

In testing the sufficiency of evidence to support findings of fact made by the Workers' Compensation Court after rehearing, the evidence must be considered in the light most favorable to the successful party. Hernandez v. Hawkins Constr. Co., 240 Neb. 129, 480 N.W.2d 424 (1992); Wiese v. Becton-Dickinson Co., supra.


On March 28, 1979, Michael DeCroix sustained a "degloving injury" to his right arm while employed by Lozier. Due to the extensive scarring, degeneration, and the underlying muscular damage and persistent stiffness, DeCroix was given a permanent partial disability rating of 60 percent to the right upper extremity. DeCroix returned to work for Lozier on April 13, 1981, following a 1-year rehabilitation.

On October 2, 1989, while employed at Lozier, DeCroix became disabled as a result of a repetitive motion injury to his left arm. As a result of this second accident On November 6, 1990, Lozier and its insurance carrier, Liberty Mutual Insurance Company (both hereinafter Lozier), filed a petition in the Workers' Compensation Court against the State of Nebraska, Second Injury Fund (Fund), asserting that DeCroix's injury of October 1989, when considered alone, would not have caused his need for vocational rehabilitation and would not have been a hindrance or obstacle to his continued employment by Lozier.

and injury, DeCroix incurred medical and hospital expenses and was totally disabled from and including October 3, 1989, to and including September 25, 1990, when the extent of the permanent impairment of the injury to his left arm was ascertained, a period of 51 weeks. He thereafter sustained a 10-percent permanent partial disability to his left arm.

Lozier asserted that if DeCroix has sustained either (1) total disability beyond his temporary total disability, (2) permanent disability in excess of 10 percent of his left upper arm, (3) a need for vocational rehabilitation, or (4) any combination of the foregoing, such circumstances were the result of the combined disabilities resulting from the first injury of March 28, 1979, and the second injury of October 2, 1989. Lozier asked the court to adjudicate the rights and duties of the parties.

After the single-judge hearing, the Fund filed for a rehearing. On rehearing, the court found that at the time of the accident of October 2, 1989, DeCroix was entitled to benefits of $245 per week for 51 weeks for temporary total disability, $245 per week for 22 weeks for the 10-percent permanent partial disability of the left arm, and $245 per week for so long in the future as DeCroix remained permanently and totally disabled. The court found that DeCroix qualified for benefits from the Fund, as set forth in Neb.Rev.Stat. § 48-128 (Reissue 1988), and that DeCroix was permanently and totally disabled as a combined result of the injury to his left arm on October 2, 1989, and the previous permanent partial injury to his right arm on March 28, 1979.

The court imposed liability upon Lozier for the 10-percent permanent partial disability of the left arm for 22 weeks and 51 weeks for temporary total disability. From and after March 3, 1991, the Fund was required to pay DeCroix $245 per week for so long as he remained permanently and totally disabled. The court found that Lozier had paid to DeCroix $245 per week, commencing October 3, 1989, and continuing to the present, for which Lozier was entitled to credit for overpayment, and that Lozier should be reimbursed by the Fund to the extent of the overpayment. The court correctly apportioned the payments of the disability between Lozier and the Fund, and we affirm this portion of the award.

The court found that DeCroix was entitled to vocational rehabilitation, that he needed vocational rehabilitation in order to return to suitable employment, and that he would not have needed rehabilitation but for the accident of March 28, 1979. The Fund was ordered to pay temporary disability compensation to DeCroix if and when he participates in a rehabilitation plan. We find that the court was correct in this determination, and we also affirm this award.

The court found that DeCroix had suffered an exacerbation of a preexisting major depressive disorder as a result of the combined injuries, for which he received psychiatric treatment beginning July 15, 1991. The court found that the 1989 accident and injury, standing alone, would not have caused the need for this psychiatric treatment and ordered the Fund to provide and pay such future medical and hospital care and treatment as may be reasonably necessary as a result of said exacerbation. We reverse that portion of the award which requires the Fund to pay for the medical, hospital, and psychiatric care, for the reasons set forth below.

The court found that since the Fund had appealed and had not obtained a reduction in the award, the Fund should pay $1,500 as attorney fees for rehearing, a witness fee of $300, and the court reporter fee for the deposition of the witness, as provided by Neb.Rev.Stat. § 48-125(2) (Supp.1991). We reverse this portion of the award, for the reason that the Fund did obtain a reduction

in the award, and therefore no attorney fees or costs should be paid by the Fund.


On rehearing, the Fund was ordered to continue to provide and pay for future medical and hospital care, including psychiatric treatment as may be reasonably necessary as a result of the exacerbation of DeCroix's condition from the two injuries. The Fund alleges that the Workers' Compensation Court erred in ruling that the Fund was liable for continued medical treatment. It claims the Fund is liable only for its apportioned share of disability payments and not for medical expenses.

Section 48-128 provides in part:

[I]f the employee is entitled to receive compensation on the basis of the combined disabilities, the employer at the time of the last injury shall be liable only for the degree or percentage of disability which would have resulted from the last injury had there been no preexisting disability.

The Fund contends that Nebraska law does not make it liable for the injured employee's medical expenses. We are asked by Lozier to extend this liability to the Fund for medical and hospital expenses, including psychiatric expenses, which are necessary and reasonable for DeCroix's health and rehabilitation. The question is not what compensation and benefits DeCroix should receive, but who shall pay for them. All parties assert that this is a case of first impression in Nebraska, and we believe they are correct.

"Compensation" has not been specifically defined by the Nebraska Workers' Compensation Act, Neb.Rev.Stat. § 48-101 et seq. (Reissue 1988 & Cum.Supp.1992). The Nebraska Supreme Court on at least one recent occasion declined to adopt a uniform and constant meaning for "compensation," referring to "compensation" as a chameleonlike word which gets its color of meaning from the context of the statute in which it is used. Bituminous Casualty Corp. v. Deyle, 234 Neb. 537, 451 N.W.2d 910 (1990). The court...

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    ...this section of the act to allow the employer to shift the cost of medical expenses to the Second Injury Fund. Lozier Corp. v. State, 2 NCA 886, 501 N.W.2d 313 (1993). It is apparent that the plain language in the act does not impose the burden of medical, surgical or hospital expenses on t......
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    ...Second Injury Fund statute is to encourage employers to hire those with permanent preexisting disabilities. See Lozier Corp. v. State, 1 Neb.App. 567, 501 N.W.2d 313 (1993). Therefore, an insurer is like the union in Alaska Intern., supra--neither entity is a "hirer" of workers (except its ......
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