Steel v. Workers' Comp. Appeals Bd.

• Decision Date: 09 August 2013
• Docket Number: A137915
• Citation: Acme Steel v. Workers' Comp. Appeals Bd., 218 Cal.App.4th 1137, 160 Cal.Rptr.3d 712 (Cal. App. 2013)
• Court: California Court of Appeals
• Parties: ACME STEEL et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and Michael Borman, Respondents.

218 Cal.App.4th 1137

160 Cal.Rptr.3d 712

ACME STEEL et al., Petitioners,

v.WORKERS' COMPENSATION APPEALS BOARD and Michael Borman, Respondents.

A137915

Court of Appeal, First District, Division 1, California.

Filed July 16, 2013

August 9, 2013

See 2 Witkin, Summary of Cal. Law (10th ed. 2005) Workers' Compensation, § 288.

WCAB Nos. ADJ1785165, ADJ2923303)

Wai & Connor, LLP, and Steven W. Cox for Petitioner.

Pegnim & Ivancich Antioch and Thomas M. Pegnim for Respondent Michael Borman.

Dondero, Acting P.J.

Acme Steel, insured by Sentry Claims Service and Zurich North America, (Acme), petitions for a writ of review (see Lab.Code, §§ 5950, 5952; ¹Cal. Rules of Court, rule 8.495), contending the Workers' Compensation Appeals Board (WCAB) erred by awarding respondent Michael Borman 100 percent permanent disability without apportionment for prior hearing loss. We will grant the petition.

Background

Michael Borman sustained continuous trauma injury to his ears (hearing loss), bilateral upper extremities, neck and head during the year prior to his last day at work for Acme as a steelworker on October 16, 2003. Borman was examined by three different Agreed Medical Examiners (AME), namely, Dr. John Devor (general orthopedics); Dr. Robert Ansel (neurology) and Dr. David Schindler (hearing loss). In his July 2004 report, AME Dr. Schindler apportioned hearing loss based on both non-industrial, degenerative causes and prior injury, opining that Borman's 100 percent “binaural neurosensory hearing loss” was 60 percent due to “occupational factors, specifically noise induced hearing loss. Approximately 40 percent of Mr. Borman's hearing loss is the result of non-occupational factors, particularly cochlear degeneration.” Dr. Schindler based this opinion on his proposed etiology of the hearing loss, stating that “The high-frequency progressive hearing loss is consistent with acouso-trauma of noise exposure as described both by Dr. Manace and the patient. The low frequency hearing loss seen at the 250 [hertz (Hz) ] through 750 Hz position on the pure tone audiometry is not consistent with noise[-]induced hearing loss. This form of hearing loss is suspicious of a degenerative process of the cochlea. The etiology of that degenerative process is unknown but is most consistent [with] a congenital degeneration of the entire organ of Corti.” Dr. Schindler's July 2004 report also notes Borman described how an explosion at the factory in December 1994 threw him 10 to 15 feet and knocked him out momentarily. Borman told Dr. Schindler he filed a workers' compensation claim following the explosion and was rated at 22 percent disability due to hearing loss, and his hearing has gradually gotten worse since then.

In a later report prepared in June 2009, Dr. Schindler elaborated on apportionment of hearing loss. Dr. Schindler noted Borman was examined by Dr. David Manace in October 1994. Dr. Manace documented that the explosion experienced by Borman occurred in 1993, found Borman had “a 37.5 percent monaural loss in the right ear and a 37.5 percent monaural hearing loss in the left ear for a 37.5 percent binaural hearing loss at that time,” and concluded Borman had a bilateral high-frequency hearing loss consistent with accumulated noise exposure. Dr. Manace recommended Borman should be fitted with hearing aids. Dr. Schindler opined that the “further hearing loss that occurred after Dr. Menace's report of 1994 was the result of both cochlear degeneration in the lower frequencies and persistent noise exposure in the higher frequencies.” Furthermore, Dr. Schindler reiterated his conclusion that Borman had “a 100 percent hearing loss ... apportioned ... as 60 percent due to noise-induced hearing loss and 40 percent due to other factors. The noise-induced hearing loss ... includes the explosion component that was found by Dr. Menace,” adding, “I did not apportion Dr. Menace's portion of the hearing loss.”

In July 2012, the Workers' Compensation Administrative Law Judge (WCALJ) issued a “Findings and Award” and “Opinion on Decision” following proceedings held in April 2012 at which Borman was the only witness. The WCALJ found Borman's injury ratable under the post–2004 Permanent Disability Ratings Schedule. The WCALJ also found Borman a straight-forward and credible witness, noting that during testimony he “clearly had difficulty understanding questions and had to face his questioners directly in order to ‘lip read’ as well as listen. His cochlear implants have improved his hearing but his hearing ... is quite limited[,] ... particular[ly] ... in crowded or noisy environments, and [he] cannot function effectively on the phone.” The WCALJ found Borman effectively rebutted any Diminished Future Earnings Capacity (DFEC) ² and showed 100 percent loss of earning capacity entitling him to permanent and total disability. The WCALJ based the latter finding on expert vocational testimony proffered by Borman showing there was no job in the open labor market that could accommodate Borman's “difficulty with oral communications, limitations with use of the upper extremities, limited mobility, need for daily narcotic medication, rests and serious headaches.” Additionally, the WCALJ found that “ Labor Code section 4664^{[ 3} is not pertinent as prior to the instant cumulative trauma injury there was no earnings loss due to the prior award of permanent disability for hearing loss,” reasoning that “Borman continued to work [after] the prior award for prior hearing loss, [and his] hearing loss progressed to the point where he required implants, which ... have severe limitations.”

In August 2012, Acme sought reconsideration of the award, contending solely that the WCALJ exceeded her powers by failing to apportion injury pursuant to section 4663 ⁴ because there was evidence showing hearing loss was 40 percent non-industrial and 37.5 percent from a prior hearing loss.

In November 2012, the WCALJ issued her report and recommendation on petition for reconsideration. The WCALJ noted Acme “essentially claims that I am bound to follow [AME's] and may not find the schedule rebutted by wage loss vocational testimony.” The WCALJ stated she was not bound by the findings of the AME's “when there is convincing vocational testimony regarding loss of earning capacity.” In this regard, the WCALJ relied on expert testimony that “the appearance of the cochlear implants themselves act as a bar to employment” due the “prominent [appearance] on both sides of the head,” which is “still quite an uncommon sight.” The WCALJ found that the “ ‘new’ element of the deterrent appearance of the contacts and wires and shaved head spots associated with the implant, combined with the various medical limitations renders the Applicant unemployable and thus he has a complete loss of earning capacity.” In January 2013, the WCAB summarily denied Acme's petition for reconsideration “for the reasons stated by the [WCALJ] in said Opinion and Report, which we adopt and incorporate....”

Discussion

“When a workers' compensation decision rests on the Board's erroneous interpretation of the law, the reviewing court will annul the decision. [Citation.] The Board's conclusions on questions of law are reviewed de novo.” (Benson v. Workers' Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535, 1542–1543, 89 Cal.Rptr.3d 166 (Benson ).)

Here, we do not take issue with the WCALJ's conclusion that Borman could rebut the rating schedule's DFEC by offering vocational expert testimony showing 100 percent loss of earning capacity. (See Ogilvie v. Workers' Comp. Appeals Bd. (2011) 197 Cal.App.4th 1262, 1267, 1274–1275, 129 Cal.Rptr.3d 704 [remanding for further proceedings to allow applicant opportunity to rebut “permanent disability rating of 28 percent, as adjusted due to her [DFEC], age, occupation, and apportionment for nonindustrial and preexisting disability”].) The WCALJ erred, however, by failing to address the issue of apportionment. As the Supreme Court stated in Brodie v. Workers' Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 57 Cal.Rptr.3d 644, 156 P.3d 1100 (Brodie ): “Employers must compensate injured workers only for that portion of their permanent disability attributable to a current industrial injury, not for that portion attributable to previous injuries or to nonindustrial factors. ‘Apportionment is the process employed by the Board to segregate the residuals of an industrial injury from those attributable to other industrial injuries, or to nonindustrial factors, in order to fairly allocate the legal responsibility.’ [Citation.]” (Id. at p. 1321, 57 Cal.Rptr.3d 644, 156 P.3d 1100.)

Sections 4663 and 4664 (see ante, fns. 3, 4), enacted in 2004 as part of Senate Bill No. 899 (see ante, fn. 2), changed the former process of apportionment pursuant to which apportionment based on causation was prohibited, where employers were “ ‘liable for any portion of a disability that would not have occurred but for the current industrial cause’ ” and employees were granted “ ‘wide latitude to disprove apportionment based on prior permanent disability awards by demonstrating that they had substantially rehabilitated the injury. [Citation.]’ [Citation.]” (State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (2011) 201 Cal.App.4th 443, 450–451, 133 Cal.Rptr.3d 866 (State Comp. Fund ), citing Brodie, supra, 40 Cal.4th 1313, 1326–1327, 57 Cal.Rptr.3d 644, 156 P.3d 1100.) “The plain language of new sections 4663 and 4664,” noted the Supreme Court, “demonstrates they were intended to reverse these features” of the former workers' compensation system. (Brodie, supra, at p. 1327, 57 Cal.Rptr.3d 644, 156 P.3d 1100.) Under the revised workers' compensation system introduced by Senate Bill No. 899, apportionment was “based on causation” (§ 4663, subd. (a)), and the “the new approach to apportionment is to look at the current disability and parcel out its causative sources—nonindustrial, prior industrial, current industrial—and...