Simmons v. Indus. Comm'n of Ariz.

• Decision Date: 07 February 2020
• Docket Number: No. 2 CA-IC 2019-0003,2 CA-IC 2019-0003
• Citation: 248 Ariz. 245,459 P.3d 507
• Parties: Keith D. SIMMONS, Petitioner Employee, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, J.R. McDade Company, Inc., Respondent Employer, CopperPoint American Insurance Company, Respondent Insurer.
• Court: Arizona Court of Appeals

248 Ariz. 245

459 P.3d 507

Keith D. SIMMONS, Petitioner Employee,

v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent,J.R. McDade Company, Inc., Respondent Employer,CopperPoint American Insurance Company, Respondent Insurer.

No. 2 CA-IC 2019-0003

Court of Appeals of Arizona, Division 2.

Filed February 7, 2020

Brian Clymer Attorney at Law, Tucson, By Brian Clymer, Counsel for Petitioner Employee

The Industrial Commission of Arizona, Phoenix, Gaetano Testini, Chief Legal Counsel, By Stacey Rogan, Assistant Chief Counsel, Counsel for Respondent

CopperPoint American Insurance Company, Tucson, Mark A. Kendall, VP, Legal Services, By Jean Kamm Gage, Counsel for Respondents Employer and Insurer

Judge Eckerstrom authored the opinion of the Court, in which Presiding Judge Eppich and Judge Espinosa concurred.

ECKERSTROM, Judge:

¶1 We must decide in this statutory special action whether the administrative law judge (ALJ) erred by awarding scheduled as opposed to unscheduled benefits to petitioner employee, Keith Simmons, for his permanent industrial injury.¹ Because we find the ALJ applied an incorrect legal standard and issued an award that is not reasonably supported by the evidence, we set that award aside.

Factual and Procedural Background

¶2 Simmons sustained an industrial injury to his dominant right wrist in October 2015 while working as a vinyl flooring installer for respondent employer, J.R. McDade Company. The facts regarding the injury are not disputed. Simmons’s claim for benefits was accepted by respondent insurer, CopperPoint American Insurance Company. After nearly two years of medical treatment, Simmons’s treating physician determined Simmons had reached maximum medical improvement, rating the permanent impairment to his right upper extremity at five percent.

¶3 The insurer closed the claim with a scheduled disability and notified Simmons that he was entitled to permanent disability benefits, which it calculated using his treating physician’s five-percent impairment rating. Simmons protested, arguing that although his wrist injury

was scheduled, the "injury should be unscheduled because of his prior disabilities." The employer disagreed, contending the claim was properly closed with a scheduled disability. A hearing was held over four days, during which the ALJ heard testimony from Simmons and the medical and labor market experts called by both parties.

¶4 As the award notes, Simmons testified at the hearing that his diabetic peripheral neuropathy²

"caused pain and numbness into his feet," resulting in "difficulty walking long distances or loading and unloading items on the job." Medical records predating Simmons’s industrial injury corroborated this testimony. In November 2013, Simmons’s physician recorded that his "[l]eg pain due to peripheral neuropathy [was] worsening," his "feet [were] numb, painful, sometimes burning, sometimes ice cold," he felt "as if he [were] walking on broken bones," and "[s]ome days, he cannot walk." In March 2014, Simmons’s physician again recorded that he complained of "[p]ain and numbness of the feet," and this condition was "getting worse" by the time of his appointment in October 2014. Due to this persistent "[b]ilateral pain and numbness of feet," the physician ordered a test that revealed the worsening of Simmons’s peripheral neuropathy.

¶5 Respondent employer’s medical expert reviewed these medical records and agreed that, before his industrial injury, Simmons was suffering from "peripheral neuropathy

involving primarily the lower extremities," which had been documented as causing pain and numbness in his feet and worsened between April 2010 and October 2014. At the hearing, he testified that Simmons’s symptoms—"numb and painful feet," "feel[ing] like you’re walking on broken bones," and "difficulty with walking"—were all consistent with peripheral neuropathy.

¶6 In January 2019, the ALJ issued an award confirming the five-percent scheduled disability based on her conclusion that Simmons had failed to carry his burden of establishing a pre-existing earning capacity disability capable of converting his scheduled wrist injury

into an unscheduled disability. Simmons requested review, and the ALJ affirmed her prior determinations, finding "no reason" in either the case law or the hearing transcripts to alter the award. This timely special action followed, and we have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(2), 23-951, and Rule 10, Ariz. R. P. Spec. Act.

Standard of Review

¶7 "This court deferentially reviews factual findings of the ALJ, but independently reviews any legal conclusions." Young v. Indus. Comm’n , 204 Ariz. 267, ¶ 14, 63 P.3d 298 (App. 2003). In so doing, we liberally construe Arizona’s Workers’ Compensation Act, so as to effectuate its remedial purpose. Borsh v. Indus. Comm’n , 127 Ariz. 303, 306, 620 P.2d 218, 221(1980) (act "must be construed liberally to effectuate the humanitarian reasons for which the statute was enacted").

What Constitutes an "Earning Capacity Disability"?

¶8 Simmons challenges the ALJ’s determination that he "did not have an earning capacity disability on October 14, 2015," the date of his industrial injury. In particular, Simmons contends the ALJ "used the wrong legal standard to analyze whether Simmons’s previous disability resulted in a loss of earning power" at the time of his injury. We agree.

¶9 In order for a scheduled disability to be converted into an unscheduled one, the injured worker must have been suffering from "a previous disability" at the time of the injury. A.R.S. § 23-1044(E). In this context, "disability" is a term of art that means a pre-existing "earning capacity disability." Adams Insulation Co. v. Indus. Comm’n , 163 Ariz. 555, 559, 789 P.2d 1056, 1060 (1990) (quoting Alsbrooks v. Indus. Comm’n , 118 Ariz. 480, 484, 578 P.2d 159, 163 (1978) ).

¶10 In Alsbrooks , our supreme court held that the word "disability" as used in the Workers’ Compensation Act "does not mean disablement to perform the particular work petitioner was doing at the time of his injury, but refers to injuries which result in impairment of earning power generally." 118 Ariz. at 484, 578 P.2d at 163 (quoting Savich v. Indus. Comm’n , 39 Ariz. 266, 270, 5 P.2d 779 (1931) ). In other words, "[i]t applies to earning power and not to inability to do a certain class of work." Id. The court reiterated this reading in Borsh , concluding that it is error to consider "only one aspect of [an individual’s] job history." 127 Ariz. at 307, 620 P.2d at 222 (quoting Savich , 39 Ariz. at 270, 5 P.2d 779 ). The determining factor is whether an employee was suffering from a "potential earning capacity" disability, not an "actual earning capacity" disability. Id . (quoting Sutton v. Indus. Comm’n , 16 Ariz. App. 334, 336, 493 P.2d 501 (1972) ); see also PFS v. Indus. Comm’n , 191 Ariz. 274, 277, 955 P.2d 30, 33 (App. 1997) ("The requisite loss of earning capacity need only be minimal and need only constitute a general impairment of earning power, not a specific inability to perform one’s former work.").

¶11 Despite this guidance from our supreme court, in this case as in Borsh , the ALJ focused too narrowly on "only one aspect of petitioner’s job history," rather than his complete job history. 127 Ariz. at 307, 620 P.2d at 222. In particular, the ALJ framed "the issue" as whether Simmons’s pre-existing impairments "restricted his ability to work as a vinyl floor installer" at the time of the injury in October 2015. This narrow focus is contrary to settled jurisprudence, including the very decisions cited in the ALJ’s award.

¶12 Respondents contend these opinions are inapplicable to Simmons’s case because they involved presumptions that do not apply here (an issue we discuss separately below). But what constitutes an "earning capacity disability" under the statute does not change from one category of cases to another, and our supreme court’s guidance about the meaning of that legal term is binding on this court whether or not a particular presumption applies. See Borsh , 127 Ariz. at 305, 620 P.2d at 220 ("loss of earning capacity" always required to convert scheduled disability into unscheduled one, and presumptions impact only burden of proof, not legal meaning of "earning capacity disability" that must be shown); Alsbrooks , 118 Ariz. at 484, 578 P.2d at 163 (defining "earning capacity disability" as "impairment of earning power generally," without reference to presumptions discussed earlier in opinion (quoting Savich , 39 Ariz. at 270, 5 P.2d 779 )).

Was the Award Reasonably Supported by the Evidence?

¶13 "Our duty on review is to determine whether the Commission’s award is supported by reasonable evidence." Borsh , 127 Ariz. at 306, 620 P.2d at 221. Although we defer to the ALJ’s factual findings, we cannot do so if the ALJ applied an incorrect legal standard in assessing the facts before her. See Young , 204 Ariz. 267, ¶ 14, 63 P.3d 298 ; see also Borsh , 127 Ariz. at 306-07, 620 P.2d at 221-22 (if "award was based and proceeds upon an erroneous and improper theory," correction appropriate despite deference to factfinder (quoting Hoffman v. Brophy , 61 Ariz. 307, 312, 149 P.2d 160 (1944) )). Here, the ALJ’s overly narrow definition of a qualifying "earning capacity disability" led her to issue an award that is not reasonably supported by the evidence.

¶14 The law is clear that "the effect upon the workman’s earning capacity may be minimal" and still qualify as an earning capacity disability. Adams Insulation , 163 Ariz. at 559, 789 P.2d at 1060 (quoting Alsbrooks , 118 Ariz. at 484, 578 P.2d at 163 ). The standard is "some evidence, no matter how slight," that the pre-existing disability impacted the worker’s earning capacity. Alsbrooks , 118 Ariz. at 483, 578 P.2d at 162. This is a low bar, and the only sort of pre-existing condition that does not clear it is "a disability or physical impairment having no effect upon the claimant’s ability to work." Id. at...