Starks v. Cornhusker Packing Co., S-97-318

• Decision Date: 20 February 1998
• Docket Number: No. S-97-318,S-97-318
• Court: Nebraska Supreme Court
• Parties: Warren STARKS, Appellant, v. CORNHUSKER PACKING CO., Appellee.

Page 757

573 N.W.2d 757

254 Neb. 30

Warren STARKS, Appellant, v. CORNHUSKER PACKING CO., Appellee.

No. S-97-318.

Supreme Court of Nebraska.

Feb. 20, 1998.

Syllabus by the Court

1. Workers' Compensation: Appeal and Error. An appellate court may modify, reverse, or set aside a Workers' Compensation Court decision only when (1) the compensation court acted without or in excess of the court's powers; (2) the judgment, order, or award was procured by fraud; (3) there is insufficient 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.

2. Workers' Compensation: Appeal and Error. Upon appellate review, the findings of fact made by the trial judge of the compensation court have the effect of a jury verdict and will not be disturbed unless clearly wrong.

3. Workers' Compensation: Appeal and Error. If the record contains evidence to substantiate the factual conclusions reached by the Workers' Compensation Court, an appellate court is precluded from substituting its view of the facts for that of the Workers' Compensation Court.

4. Workers' Compensation: Appeal and Error. A finding upon review by the compensation court regarding whether an applicant's incapacity has increased under the terms of Neb.Rev.Stat. § 48-141 (Reissue 1993) is a finding of fact.

5. Workers' Compensation. The amount of any agreement or award may be modified on the ground of increase or decrease of incapacity due solely to the injury.

6. Workers' Compensation: Proof. To obtain a modification, the applicant must prove, by a preponderance of evidence, that the increase or decrease in incapacity was due solely to the injury resulting from the original accident.

7. Workers' Compensation: Proof. The applicant must prove there exists a material and substantial change for the better or worse in the condition--a change in circumstances that justifies a modification, distinct and different from the condition for which the adjudication had previously been made.

8. Workers' Compensation. To determine whether an increase or decrease in incapacity has occurred, the whole question of plaintiff's physical condition can again be inquired into.

9. Workers' Compensation: Expert Witnesses. Where the physician's testimony gives rise to conflicting inferences of equal degree of probability so that the choice between them is a mere matter of conjecture, a compensation award cannot be sustained.

10. Workers' Compensation. A modification award cannot be applied retroactively beyond the date the application for the modification is filed.

11. Workers' Compensation. A workers' compensation award is in full force and effect, as originally entered, until the award is modified pursuant to the procedure set forth in Neb.Rev.Stat. § 48-141 (Reissue 1993).

12. Workers' Compensation. Once a determination has been made regarding the claimant's disability, the correctness of that determination may not be questioned.

13. Workers' Compensation. Employers are prohibited from unilaterally modifying workers' compensation awards.

14. Workers' Compensation: Attorney Fees. If an employee files an application for a review before the compensation court from an award of a judge of the compensation court when the amount of compensation due is disputed and obtains an increase in the amount of such award, the compensation court may allow the employee a reasonable attorney fee, and the Nebraska Supreme Court may in like manner allow the employee a reasonable sum as attorney fees for the proceedings in the Supreme Court.

15. Workers' Compensation: Attorney Fees: Interest. When an attorney fee is allowed, there shall further be assessed against the employer an amount of interest on the final award obtained.

16. Workers' Compensation: Penalties and Forfeitures: Time. The 50-percent penalty for waiting time applies when payments are delinquent after 30 days' notice of disability has been given or there is no reasonable controversy and the employer refuses or neglects to pay compensation for 30 days after the injury.

17. Workers' Compensation. To avoid the payments assessable under Neb.Rev.Stat. § 48-125(1) (Reissue 1993), an employer need not prevail in opposing an employee's claim for compensation, but the employer must have an actual basis, in law or fact, for disputing the employee's claim and refraining from payment of compensation.

18. Workers' Compensation. Whether a reasonable controversy exists regarding Neb.Rev.Stat. § 48-125 (Reissue 1993) is a question of fact.

Thomas F. Dowd, of Dowd & Dowd, Omaha, for appellant.

Mark J. Peterson, of Erickson & Sederstrom, P.C., Omaha, for appellee.

WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

PER CURIAM.

This case involves the modification of appellant Warren Starks' workers' compensation award. We affirm, since there was sufficient, competent medical testimony in the record warranting the modification. See Neb.Rev.Stat. § 48-185(3) (Reissue 1993). However, we also modify the award because the compensation court incorrectly applied the modification award retroactively to the date of the decrease in incapacity.

On August 25, 1993, the Nebraska Workers' Compensation Court determined Starks was permanently and totally disabled. Cornhusker Packing Company (Cornhusker), Starks' employer, made payments in compliance with the award. For reasons undisclosed in the record, Cornhusker later obtained a private investigator to observe Starks. Based on the investigator's observations from June to October 1995, Cornhusker obtained information that Starks was involved in various forms of unlawful activity, including an illegal cab service ("jitney" service), buying and selling food stamps, and selling illegal drugs. Cornhusker also obtained evidence that Starks was selling used cars and was climbing trees to stay physically fit. Relying on this information, Cornhusker terminated Starks' benefits as of October 29, 1995, without obtaining a modification award. In response, Starks filed a motion in the compensation court, requesting an order requiring Cornhusker to resume making total disability payments retroactively from October 29 and to pay a 50-percent waiting penalty, interest, and reasonable attorney fees. After Starks filed his motion, Cornhusker filed an application for modification that claimed Starks' incapacity decreased on November 30.

A modification hearing was held on June 3, 1996. At the hearing, Starks presented the deposition testimony of Dr. Louis Tribulato. Dr. Tribulato opined that Starks' permanent impairment had not decreased and that his physical capabilities had not increased. The compensation court noted, however, that Dr. Tribulato started treating Starks in April 1995 and that Dr. Tribulato last treated Starks on October 17. In response, Cornhusker offered the medical report of Dr. Lonnie Mercier. In his report, Dr. Mercier essentially concluded that Starks was capable of participating in most gainful employment and that he was not "totally disabled." In addition to the opinions of Drs. Tribulato and Mercier, the court also noted the evidence regarding Starks' legal and illegal activities, Starks' testimony in which he indicated he climbs trees to stay physically fit, Starks' testimony that he is running up his medical bills so that his insurance company will "lump sum" him, and Starks' conditions of probation that require Starks to "be employed or provide proof that employment is being sought."

Based on the aforementioned evidence, the compensation court modified Starks' award, retroactive to August 27, 1995, finding that Starks was not entitled, after said date, to total disability payments and was entitled only to the loss of earning power and permanent partial disability benefits as provided in the original award. The court specifically stated that "the activities of the plaintiff involving 'jitney services' as set forth in the surveillance and audiotapes, in addition to the opinions of Dr. Mercier[,] are sufficient to show a decrease of incapacity due solely to the injury in regard to plaintiff's physical condition...."

Based on the compensation court's modification award, Starks filed an application for review with the Workers' Compensation Court review panel on August 13, 1996. The review panel affirmed the court's award. In turn, Starks filed a notice of appeal on March 20, 1997, and a petition to bypass on April 18. Pursuant to our power to regulate the caseload of the Nebraska Court of Appeals, we removed the case to our docket. See Neb.Rev.Stat. § 24-1106 (Reissue 1995).

Pursuant to § 48-185, an appellate court may modify, reverse, or set aside a Workers' Compensation Court decision only when (1) the compensation court acted without or in excess of the court's powers; (2) the judgment, order, or award was procured by fraud; (3) there is insufficient 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. Roth v. Sarpy Cty. Highway Dept., 253 Neb. 703, 572 N.W.2d 786 (1998). Upon appellate review, the findings of fact made by the trial judge of the compensation court have the effect of a jury verdict and will not be disturbed unless clearly wrong. Scott v. Pepsi Cola Co., 249 Neb. 60, 541 N.W.2d 49 (1995). If the record contains evidence to substantiate the factual conclusions reached by the Workers' Compensation Court, an appellate court is precluded from substituting its view of the facts for that of the Workers' Compensation Court. Aken v. Nebraska Methodist Hosp., 245 Neb. 161, 511 N.W.2d 762 (1994). A finding upon review by the compensation court regarding whether an applicant's incapacity has increased under the terms of Neb.Rev.Stat. § 48-141 (Reissue 1993) is a finding of fact. See, Gomez v. Kenney Deans,...