Murphy v. Fairbanks N. Star Borough

• Decision Date: 03 September 2021
• Docket Number: No. 7555,Supreme Court No. S-17530,7555
• Court: Alaska Supreme Court
• Parties: Shawn MURPHY, Appellant, v. FAIRBANKS NORTH STAR BOROUGH, Appellee.

494 P.3d 556

Shawn MURPHY, Appellant,

v.FAIRBANKS NORTH STAR BOROUGH, Appellee.

Supreme Court No. S-17530

No. 7555

Supreme Court of Alaska.

September 3, 2021

Andrew D. Wilson, Rehbock & Wilson, Anchorage, for Appellant.

Zane D. Wilson, CSG, Inc., Fairbanks, and Wendy Dau, Fairbanks North Star Borough, Fairbanks, for Appellee.

Before: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices.

OPINION

BORGHESAN, Justice.

I. INTRODUCTION

The Alaska Workers’ Compensation Act has long applied a two-year limitations period to claims for "compensation for disability."¹ In 1988 the legislature reconfigured one type of compensation — for permanent partial disability — as compensation for permanent partial impairment. The claimant argues that this amendment exempted claims for impairment compensation from the statute of limitations. We disagree. Because the statutory text contains ambiguity and the legislative history evinces no intent to exempt impairment claims from the statute of limitations, we rule that claims for impairment compensation are subject to the Act's two-year limitations period.

A secondary issue in this case is whether the Alaska Workers’ Compensation Board properly denied paralegal costs for work related to other claims. The applicable regulation requires a claim for paralegal costs be supported by the paralegal's own affidavit attesting to the work performed.² We reject the claimant's argument that this regulation is contrary to statute and the constitution.

II. FACTS AND PROCEEDINGS

A. Murphy's Injury And Early Compensation Claims

In 1998 Shawn Murphy injured his back while working as a mechanic for the Fairbanks North Star Borough.³ The Borough began paying Murphy temporary total disability benefits effective from the date of the injury. After a referral from a Fairbanks physician, Murphy went to California for surgeries related to this injury in 1998 and 1999.

Murphy was found eligible for reemployment benefits in September 1999 after his surgeon, Dr. Noel Goldthwaite, concluded Murphy would not have the physical capacities to return to work as a mechanic.⁴ The parties partially settled reemployment benefits, with the Borough paying Murphy a flat sum for costs related to a degree program at the University of Alaska. When Murphy began taking classes, he was not medically stable⁵ and continued to receive temporary total disability compensation.⁶ The partial settlement did not discuss stipend payments under AS 23.30.041(k) that may be available to injured workers during reemployment, nor did it address other types of compensation.

According to a compensation report⁷ the Borough filed with the Board, Murphy began receiving permanent partial impairment benefits instead of temporary total disability benefits in September 2000, after Dr. Goldthwaite concluded Murphy was medically stable. Dr. Goldthwaite prepared his permanent partial impairment rating report in February 2001. Using the Fourth Edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (the AMA Guides), the reference required by statute, Dr. Goldthwaite rated Murphy as having a 30% whole person impairment. The Borough did not controvert or otherwise question Dr. Goldthwaite's rating.

Dr. Richard Cobden in Fairbanks then began treating Murphy for his injury. In March 2001 Dr. Cobden concurred with Dr. Goldthwaite's earlier rating, but Dr. Cobden told Murphy to return to discuss some issues "before this report is finalized." In April 2001 Dr. Cobden noted that Murphy had "gradually improved," suggesting that up to that time Murphy may not have been medically stable, and that his impairment was then "ready for documentation." Dr. Cobden rated Murphy as having a 23% whole person impairment using the Fifth Edition of the AMA Guides, which the Board had adopted as the updated statutory reference effective February 28, 2001. The Borough did not controvert Dr. Cobden's rating.

In June 2001 the Borough filed a compensation report with the Board showing a change from permanent partial impairment benefits to reemployment stipend benefits.⁸ The report left blank the form's section related to the impairment rating and the total impairment compensation due; the boxes to indicate whether impairment benefits had been paid as a lump sum or in installments were also blank.⁹ The June 2001 report indicated the Borough had paid $20,963.38 in impairment benefits.

In a letter dated August 29, 2001, a Board employee asked the Borough to "complete [the report] with the [permanent partial impairment] rating" because "[t]he total [impairment benefit] paid does not seem to relate to a [permanent partial impairment] percentage."¹⁰ The Borough responded with an undated handwritten note on the Board's letter showing calculations based on a 13% rating. This 13% figure indicated the Borough used Dr. Cobden's impairment rating of 23%, adjusted for Murphy's preexisting 10% impairment from his previous injury.¹¹ A "corrected" June 2001 compensation report with similar information is in the record with no stamp showing when it was filed with the Board. Both the letter with the adjuster's handwritten note and the corrected compensation report have a May 2, 2002 fax stamp at the bottom. The "corrected" compensation report said Murphy had a 13% impairment, which equaled $17,550, as total impairment benefits. The amount of impairment benefits listed in the payment section remained unchanged, but a handwritten remark indicated an impairment-benefits-related overpayment had been deducted from ongoing reemployment stipend payments. The corrected compensation report continued to show a change from temporary total disability to impairment benefits in September 2000.

The Borough's final compensation report in December 2001 left blank the questions related to the percentage of impairment and the way it was paid. Like the original June 2001 report, the December report showed that temporary total disability ended in September 2000, that impairment benefits of $20,963.38 were paid, and that reemployment stipend benefits began in May 2001. Murphy did not file a written claim for additional impairment benefits at that time.

B. Murphy's 2017 Claim For Additional Impairment Compensation

After finishing his retraining, Murphy worked as a computer technician and continued to have follow-up care for his back over the years. The Borough in 2016 controverted any care that exceeded statutory frequency standards.

An attorney entered an appearance on Murphy's behalf in 2016, and in early 2017 Murphy filed a written workers’ compensation claim. The claim included a request for additional impairment compensation, alleging the "full rating was not paid" and that the employer "paid [impairment benefits] according to the wrong AMA Guides edition." The Borough's answer denied all claims. It also asserted that the claim for additional impairment compensation was barred by the statute of limitations in AS 23.30.105.¹² The parties settled several of the disputes in mediation but did not resolve the issue of impairment compensation, which proceeded to hearing.

In his pre-hearing brief, Murphy argued that AS 23.30.105(a) ’s two-year limitations period does not apply to claims for impairment compensation. Noting that the statute provides that the "right to compensation for disability ... is barred unless a claim for it is filed within two years" and that this court's decisions have drawn a distinction between compensation for "disability" and compensation for "impairment,"¹³ Murphy argued that his impairment claims were not subject to the limitations period.

Hearing testimony relevant to the impairment claim addressed the two different impairment ratings: Dr. Cobden's and Dr. Goldthwaite's. The Borough presented testimony from two adjusters: Melody Kokrine, who worked on the claim in 2000 and 2001, and Nichole Hanson, who was then working on it. Kokrine remembered little about adjusting the claim but indicated she probably used the later rating because Dr. Cobden noted that Murphy had improved. Hanson testified that had she been the adjuster in 2000, she would have considered the second rating "a correction or amendment to the previous rating." On cross-examination Hanson said she thought the second rating was "correct" because it was done by a Fairbanks physician (Dr. Cobden) who in her view was "more familiar" with Murphy. But she stated that typically she would use the later date for medical stability if doctors disagreed about the date of medical stability. Murphy did not testify at the hearing.

In closing Murphy argued that the Borough erred by pairing Dr. Goldthwaite's date of medical stability with Dr. Cobden's impairment rating and contended that the Borough had underpaid his impairment benefits. Murphy reiterated that AS 23.30.105(a) did not apply to his impairment claim and argued that even if it did, his claim was timely because the two-year period did not begin to run until 2016, when he retained an attorney and learned of the alleged error in impairment payment. The Borough disagreed, arguing that the statute of limitations applies to impairment claims and that Murphy knew enough in 2001 to inquire about the amount paid because his doctors gave two different impairment ratings.

The Board decided that AS 23.30.105(a) barred Murphy's impairment claim. The Board noted that the legislature in 1988 revised AS 23.30.190 by redefining compensation for permanent partial disability as compensation for permanent partial impairment. The Board then observed that AS 23.30.105(a) ’s limitations period had long applied to permanent partial disability claims (a species of "compensation for disability") and that the legislature inserted an express reference to AS 23.30.190 (formerly permanent partial disability, now permanent partial impairment) in AS 23.30.105(a) to provide that voluntary payment of impairment benefits tolls the limitations period for a compensation claim. In light...