State ex rel. Wyoming Workers' Compensation Div. v. Gerdes

• Decision Date: 22 December 1997
• Docket Number: No. 96-176,96-176
• Citation: 951 P.2d 1170
• Parties: STATE of Wyoming, ex rel., WYOMING WORKERS' COMPENSATION DIVISION, Appellant (Petitioner), v. Debra L. GERDES, Appellee (Respondent).
• Court: Wyoming Supreme Court

Page 1170

951 P.2d 1170

STATE of Wyoming, ex rel., WYOMING WORKERS' COMPENSATION DIVISION, Appellant (Petitioner), v. Debra L. GERDES, Appellee (Respondent).

No. 96-176.

Supreme Court of Wyoming.

Dec. 22, 1997.

William U. Hill, Attorney General; John W. Renneisen, Deputy Attorney General; Gerald W. Laska, Senior Assistant Attorney General; and Jennifer A. Evans, Assistant Attorney General, Cheyenne, for Appellant.

Bert T. Ahlstrom, Jr., Cheyenne, for Appellee.

Before TAYLOR, C.J., and THOMAS, MACY and LEHMAN, JJ., and CARDINE, J. (Retired). ^*

TAYLOR, Chief Justice.

Appellee sustained a work-related knee injury in November 1993, for which she received temporary total disability payments through June 1995. The Wyoming Workers' Compensation Division denied further benefits on June 9, 1995, after receiving a letter from appellee's doctor which stated she had reached maximum medical improvement. Appellee objected, and after a hearing before the Office of Administrative Hearings, the hearing examiner awarded retroactive benefits and ordered benefits to continue on the condition that appellee schedule future surgery. The Workers' Compensation Division appealed, claiming that the retroactive award was precluded by appellee's failure to comply with statutory filing requirements while her case was pending before the Office of Administrative Hearings, and that future benefits were not appropriate. The Workers' Compensation Division also claims that the hearing examiner's decision was not supported by sufficient evidence.

We affirm the hearing examiner's award of retroactive benefits, and reverse and remand that portion of the award which encompassed prospective benefits.

I. ISSUES

Appellant, State ex rel. Wyoming Workers' Compensation Division (Division), presents two issues for review, which are essentially echoed by appellee:

A. Whether the Office of Administrative Hearings order awarding prospective and retroactive temporary total disability benefits, for which no claims had been filed, is in accordance with law.

B. Whether the Office of Administrative Hearings order awarding temporary total disability benefits is supported by substantial evidence.

II. FACTS

In November 1993, while employed at Magic City Enterprises, appellee, Debra L. Gerdes (Gerdes), suffered a compensable injury to her left knee. Following her injury, Gerdes underwent four arthroscopic surgeries, the last two performed by Dr. David A. Kieffer. The surgeries did little to alleviate her condition, which was complicated by a back injury she sustained in a 1992 car accident.

Gerdes received temporary total disability benefits from the time of her 1993 injury until June 7, 1995. On that date, Dr. Kieffer wrote the Division stating he had examined Gerdes and that her condition had reached maximum medical improvement. Dr. Kieffer recommended she consult with the Division of Vocational Rehabilitation for possible training and suggested Gerdes be evaluated for assignment of a permanent partial impairment rating.

The Division sent Gerdes a final determination letter dated June 9, 1995, notifying Gerdes that the temporary total disability benefits were terminated as of June 7, 1995 because she had reached maximum medical improvement. The final determination informed Gerdes she would be contacted regarding a future evaluation for permanent partial disability benefits. The letter concluded with notification that she had a right to contest the determination by written objection on or before July 5, 1995.

Gerdes objected to the final determination by letter dated June 29, 1995. Her letter stated that after consultation with Dr. John E. Winter, she had been referred to Dr. Wayne Gersoff at Rose Medical Center in Denver, Colorado. On that basis, she specifically denied she had reached maximum medical improvement. The case was referred to the Office of Administrative Hearings on July 3, 1995 and a hearing was held on September 19, 1995.

At the hearing, Gerdes testified she was in considerable and constant pain and was told by Dr. Gersoff that her condition may improve with further surgery. She also testified that surgery had not been scheduled due to the Division's verbal denial of compensability. Gerdes testified she had formerly worked as a filling station clerk and an office clerk, but was currently unable to work or perform her former job at Magic City Enterprises.

Gerdes also presented documentary evidence, including: a letter from Dr. Kenneth A. Pettine, dated May 30, 1995, which stated her back injury and knee injury "continue[ ] to be symptomatic" and had caused her to fall on several occasions; Dr. Winter's report, written June 14, 1995; and Dr. Winter's referral to Dr. Gersoff, dated June 29, 1995. Gerdes also submitted Dr. Gersoff's report, which stated:

IMPRESSION: I explained to Debbie that she certainly does have a very difficult situation. I explained to her that I certainly have a great deal of concern about what her expectations might be after any type of knee surgery. I thought that her best option at this point would probably be to repeat the arthroscopy with repeat debridement and to further assess the patellofemoral joint area; and at the same time also do a tibial tubercle transfer to try to eliminate some of the * * * discomfort and also probably give her more stability * * *. The last resort would possibly be a patellectomy but I certainly discouraged her from this because of the negative impact it will have on her function. I also described to her that it really is an end-stage procedure.

PLAN: She would like to consider her options and will get back to us. I informed her that I will send a copy of this note to Dr. Winter.

In addition to the June 7, 1995 letter from Dr. Kieffer, the Division rebutted Gerdes' evidence with a report from an independent medical examination, conducted at the request of the Division, which determined Gerdes had reached maximum medical improvement with a three percent whole person permanent impairment and was able to work in a "sedentary" job.

The hearing examiner concluded that Gerdes' testimony and the report from Dr. Gersoff were persuasive, and that additional surgery may "improve her function and reduce the disabling effects of her compensable injury." The hearing examiner also found that the temporary total disability benefits should be paid for the period prior to the hearing. In addition, Gerdes was awarded continuing benefits on the condition she schedule the additional recommended surgery.

At that point, the Division objected, contending that Gerdes had not appropriately filed claims pursuant to Wyo. Stat. § 27-14-404(d) (Cum.Supp.1993) during the pendency of the contested case. The hearing examiner rejected this argument. Noting that the Division's final determination letter did not state that Gerdes must continue to file for benefits during the pendency of her appeal in order to preserve her claim, the hearing examiner determined that the Wyoming Worker's Compensation Act did not require the application of Wyo. Stat. § 27-14-404(d) after notification that benefits were terminated and the matter referred for hearing.

The written order awarding benefits issued on December 6, 1995. The Division filed a timely appeal to the district court, which was certified to this court pursuant to W.R.A.P. 12.09(b).

III. STANDARD OF REVIEW

Our standard of review of the hearing examiner's factual findings is well settled:

"If, after examining the entire record, we find substantial evidence to support the agency's finding, we will not substitute our own judgment for that of the agency. Instead, we will uphold the agency's finding. Substantial evidence is relevant evidence which a reasonable person might accept as supporting the agency finding. * * * In addition, we examine only the evidence which favors the prevailing party, allowing every favorable inference, while omitting consideration of any conflicting evidence. * * * "

* * *

This rule clearly encompasses the proposition that the reviewing court does not reweigh the evidence. On judicial review of an agency determination, the burden * * * is assigned to the appellant to demonstrate that the agency's findings and conclusions are not supported by substantial evidence.

Wyoming Steel & Fab, Inc. v. Robles, 882 P.2d 873, 876 (Wyo.1994) (quoting Sinclair Trucking v. Bailey, 848 P.2d 1349, 1351 (Wyo.1993)).

While the reviewing court may not substitute its judgment for that of the agency when reviewing findings of fact, a similar precept does not apply to agency conclusions of law. An agency's conclusions of law will be affirmed only if they are in accordance with law. Matter of Cordova, 882 P.2d 880, 882 (Wyo.1994); Aanenson v. State ex rel. Wyoming Worker's Compensation Div., 842 P.2d 1077, 1079 (Wyo.1992) (quoting State ex rel. Wyoming Workers' Compensation Div. v. White, 837 P.2d 1095 (Wyo.1992) and Employment Security Com'n v. Western Gas Processors, Ltd., 786 P.2d 866, 871 (Wyo.1990)). Where the determination to be reviewed is a mixed question of law and fact, the reviewing court will defer to the agency's findings of basic fact, but will correct misapplication of the law to those facts. Aanenson, 842 P.2d at 1080 (quoting Union Pacific R.R. Co. v. State Bd. of Equalization, 802 P.2d 856, 860-61 (Wyo.1990)).

IV. DISCUSSION

A. APPLICATION OF WYO. STAT. § 27-14-404(d) TO PENDING CONTESTED CASES

The Division claims that because Gerdes did not file claim certification pursuant to Wyo. Stat. § 27-14-404(d) while her contested claim was pending, the hearing examiner had no authority to award benefits for that time period. Wyo. Stat. § 27-14-404 provides, in relevant part:

(a) If after a compensable injury is sustained and as a result of the injury the employee is subject to temporary total disability as defined under W.S. 27-14-102(a)(xviii), the injured employee is entitled to receive a temporary total disability award for the period of...