Panoke v. Reef Dev. of Haw., Inc.

• Decision Date: 14 December 2015
• Docket Number: No. SCWC–11–0000556.,SCWC–11–0000556.
• Citation: 363 P.3d 296,136 Hawai'i 448
• Parties: David PANOKE, Petitioner/Claimant–Appellant, v. REEF DEVELOPMENT OF HAWAII, INC., Respondent/Employer–Appellee, and Seabright Insurance Company, Respondent/Insurance Carrier–Appellee.
• Court: Hawaii Supreme Court

136 Hawai'i 448

363 P.3d 296

David PANOKE, Petitioner/Claimant–Appellant,

v.REEF DEVELOPMENT OF HAWAII, INC., Respondent/Employer–Appellee, and Seabright Insurance Company, Respondent/Insurance Carrier–Appellee.

No. SCWC–11–0000556.

Supreme Court of Hawai‘i.

Dec. 14, 2015.

Wayne H. Mukaida, Honolulu, for petitioner.

Colette H. Gomoto, Honolulu, for respondent.

RECKTENWALD, C.J., McKENNA, POLLACK, and WILSON, JJ., with NAKAYAMA, J., Dissenting.

Opinion of the Court by RECKTENWALD, C.J.

David Panoke was injured while he was working for his former employer, Reef Development of Hawaii, Inc. This appeal concerns Panoke's subsequent workers' compensation claim made against Reef and its insurance carrier, Seabright Insurance Company.

Panoke was involved in a work accident in which he initially stated that he had injured his back. Reef and Seabright accepted responsibility for Panoke's back injury. Shortly thereafter, Panoke also began experiencing pain in both shoulders. MRIs of Panoke's shoulders showed that Panoke had labral tears and rotator cuff

tendon tears in both shoulders. Reef and Seabright denied liability for Panoke's shoulder injuries.

Panoke argues that pursuant to Hawai‘i Revised Statutes (HRS) § 386–85,¹ the Labor and Industrial Relations Appeals Board (LIRAB) was required to presume that Panoke's shoulder injuries were work-related in the absence of substantial evidence to the contrary. The LIRAB concluded that Reef and Seabright adduced substantial evidence that rebutted the presumption that Panoke's shoulder injuries were covered work-related injuries. The LIRAB also limited Panoke's Temporary Total Disability (TTD) benefits based on deficiencies in the certificates of disability submitted by Panoke's attending physicians. The Intermediate Court of Appeals (ICA) affirmed the LIRAB's decision and order.

For the reasons set forth below, we hold that the LIRAB erred in concluding that Reef and Seabright adduced substantial evidence that rebutted the presumption that Panoke's shoulder injuries were related to his work accident. We also hold that the LIRAB erred in relying on the deficiencies in Panoke's physicians' reports in limiting his TTD benefits. We therefore vacate the ICA's judgment and the LIRAB's decision and order and remand the case to the LIRAB for further proceedings consistent with this opinion.

I. Background

A. Panoke's June 17, 2004 Work Accident

Panoke began working for Reef as an ironworker on February 19, 2004. His job involved heavy manual labor, including welding, climbing scaffolding, carrying heavy equipment, pulling forty to fifty pound buckets up to the scaffolding using ropes, using jackhammers, and using pulleys, which involved pulling down on chain or rope with his arms to lift heavy objects. Panoke was able to perform his job duties without any physical restrictions or symptoms from February 19, 2004 until June 17, 2004.

On June 17, 2004, Panoke was working for Reef at a construction site. Panoke's work involved installing concrete wall panels on a building. The crew used a pulley mechanism to lift the heavy panels. While the crew members were guiding one of the panels into place, the panel slipped downwards in the chain that was holding it. As the panel slipped, Panoke was guiding it with his hands underneath it, with his knees slightly bent. The panel fell around two feet and stopped short of the ground, but Panoke's body was jerked forward slightly while he held onto the panel, and then he let go and moved back to prevent the panel from landing on his toes. Panoke later recalled that he immediately felt a sharp pain in his right lower back, but felt no pain in his shoulders at the time.

B. Panoke's Subsequent Medical Treatment and Workers' Compensation Claims

Immediately after the June 17, 2004 work accident, Panoke was taken to Concentra Medical Center (Concentra). At Concentra, Dr. Diaz–Ordaz diagnosed Panoke with a lower back strain and placed Panoke off work duty for the rest of the day, informing Panoke that he could return to work the next day with modified duties. On June 18, 2004, Reef completed a WC–1 "Employer's Report of Industrial Injury" form, and did not contest that the back strain had occurred at work or that it was covered by workers' compensation. Panoke returned to Concentra on June 21, 2004, and June 28, 2004, and was informed on both occasions that he could return to work with modified duties. However, Panoke did not return to work because he felt he could not handle even light duties, and instead, on June 30, 2004, he visited a new doctor, Dr. Scott McCaffrey, at Work Star Occupational Health Systems.

In his first visit to Work Star, Panoke complained of pain in his upper left back, right buttock, and right knee. Dr. McCaffrey diagnosed Panoke with a lumbar strain

or sprain, and right leg sciatica, and placed Panoke "off duty" but did not specify a date when Panoke could return to work. Panoke next visited Work Star on July 2, 2004, when he complained of pain in his upper left back, lower back, and right hip. Dr. McCaffrey again recorded Panoke's work status as "off duty." Panoke returned to Work Star on July 6, 2004, complaining of upper and lower back and right buttock pain, and was also diagnosed with a left shoulder sprain. On July 13, 2004, Panoke complained to Dr. McCaffrey of pain in his neck, mid back, right buttock, and right hamstring. Again, Dr. McCaffrey placed Panoke "off duty."

On July 16, 2004, in addition to back pain, Panoke complained to Dr. McCaffrey of pain in his left shoulder. On July 30, 2004, Panoke began to complain of pain in both shoulders. Panoke continued regular visits to Work Star from July 2004 until July 2007 with various pain complaints, including pain in his legs, feet, hips, back, and shoulders.

On August 31, 2004, Panoke saw Dr. Gary Okamura, an orthopedic surgeon, for the pain in his shoulders. Dr. Okamura noted that Panoke had previously fractured both of his shoulders in 1991, but did not have surgery at that time. Panoke told Dr. Okamura that he had not noticed the shoulder pain until a few days after the work accident because his back had been so sore. Dr. Okamura stated that his initial impression was that Panoke had tendinitis

and labral tears in both shoulders, but requested permission to obtain an MRI on both Panoke's shoulders.

On September 8, 2004, Reef and Seabright sought a second opinion on Panoke's condition from Deborah Agles, M.D. Dr. Agles examined Panoke and his medical records, and noted that Panoke had been involved in a motor vehicle accident in 1991 that resulted in fractures to both of his shoulders and hospitalization for one week. Dr. Agles opined that Panoke's current shoulder injuries had not been caused by the June 17, 2004 work accident due to the lack of close temporal proximity between the shoulder pain and the accident, Panoke's inability to account for the development of the shoulder symptoms, and Panoke's history of prior shoulder injuries. Seabright then informed Dr. McCaffrey, the State Disability Compensation Division (DCD), and Panoke's attorney that Reef and Seabright were controverting Panoke's bilateral shoulder injury diagnoses.

On November 6, 2004, Reef and Seabright denied Dr. McCaffrey's request for the shoulder MRIs based on Dr. Agles's report. Panoke then requested a DCD hearing to review the denial. On February 15, 2005, Seabright obtained another medical opinion regarding Panoke's shoulders from Clifford Lau, M.D., an orthopedic surgeon. Dr. Lau agreed with Dr. Agles that Panoke's shoulder injuries were not a result of his June 17, 2004 work accident. Dr. Lau also opined that Panoke's ongoing back pain was more likely a result of psychological factors than the June 17, 2004 accident. Based on Dr. Lau's report, Reef and Seabright terminated Panoke's TTD benefits effective April 6, 2005. Panoke then amended his request for a DCD hearing to include review of Reef's termination of TTD.

On June 13, 2005, the DCD Director determined that Panoke's shoulder injuries were a result of the June 17, 2004 accident, and that "[Reef] ha[d] not provided sufficient evidence to support its denial of a shoulder injury." The Director therefore ordered Reef to pay for medical care, services, and supplies for Panoke's injuries, including both shoulder injuries. The Director also ordered Reef to pay TTD compensation for the periods of June 20, 2004 through June 22, 2004 and June 30, 2004 through April 5, 2005. Reef and Seabright filed a notice of appeal to the LIRAB, and a motion to stay the payments ordered by the Director. The LIRAB denied Reef and Seabright's motion to stay on August 5, 2005.

Panoke underwent Dr. Okamura's recommended shoulder MRIs, and Dr. Okamura diagnosed him with labral tears and rotator cuff

tendon tears in both shoulders, and requested permission to perform surgery. Reef and Seabright authorized the shoulder surgery, but reserved their right to seek reimbursement for any medical expenses paid in the event that the LIRAB overturned the Director's order. Dr. Okamura performed surgery to repair the rotator cuff and superior labral on Panoke's right shoulder on February 3, 2006.

Between March and June 2006, the parties disputed whether TTD was due to be paid to Panoke. Panoke argued that "[t]here can be no dispute that [Panoke] has been disabled following his surgery, however, [Seabright] has failed to pay TTD." Reef and Seabright, however, argued that they "ha[d] not received certificates of disability from [Panoke's] treating physicians." As a result of this dispute, on June 7, 2006, Panoke moved for temporary remand to the DCD to request the Director to compel Reef and Seabright to pay TTD and assess penalties against them. On June 26, 2006, the LIRAB temporarily remanded the case to the DCD.

Reef and Seabright argued to the Director that the disputed period of TTD payments dated from April 6, 2005 (the day after the last day of TTD ordered by the Director on June 13, 2005) throu...