United Parcel Service, Inc. v. Lust

Decision Date29 January 1997
Docket NumberNo. 96-0137,96-0137
Citation560 N.W.2d 301,208 Wis.2d 306
PartiesUNITED PARCEL SERVICE, INC., d/b/a United Parcel Oshkosh, and Liberty Mutual Insurance Company, Plaintiffs-Appellants, d v. James LUST and Labor and Industry Review Commission, Defendants-Respondents.
CourtWisconsin Court of Appeals

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Thomas W. Bertz, of Anderson, Shannon, O'Brien, Rice & Bertz of Stevens Point.

On behalf of the defendant-respondent, James Lust, the cause was submitted on the brief of Anthony J. Utschig, of Bollenbeck, Rowland, Utschig & Fyfe, S.C. of Appleton.

On behalf of the defendant-appellant, LIRC, the cause was submitted on the brief of James E. Doyle, Attorney General, and Monica Burkert-Brist, Assistant Attorney General.



United Parcel Service, Inc. (UPS) appeals from a circuit court order which affirmed a Labor and Industry Review Commission (LIRC) decision awarding workers' compensation benefits to James Lust for physical injury aggravated by job-related stress. 1 On appeal, UPS argues that: (1) LIRC exceeded its statutory authority by awarding benefits on a basis not raised in the prior proceedings before the administrative law judge (ALJ), (2) LIRC erred by failing to apply the "unusual stress" test to Lust's claims of physical injury, and (3) LIRC's decision is not supported by the evidence. We reject UPS's arguments and affirm the circuit court order.


Lust was employed as a delivery driver by UPS from 1965 to August 1990. For eighteen of those years, Lust served as a union steward. Between 1984 and 1987, Lust experienced job-related mental stress. However, it was not until 1987 that Lust began to experience symptoms of this mental stress. These symptoms included weight loss, nightmares, nervousness and shaking. Lust believed his problems were the product of extraordinary stress caused by the conditions of his employment and, particularly, the intimidating behavior of his new supervisor, John Messler. In March 1988, Lust was hospitalized for depression, anxiety and related conditions.

Assisted by medication, Lust returned to work in June 1988. However, a year later, in June 1989, he was hospitalized for Ramsay-Hunt syndrome (also referred to as "cephalic herpes zoster"), a condition which causes a deterioration of the brainstem. In the summer of 1990, Lust again returned to work but not as a delivery driver. Instead, he performed truck washing and vehicle maintenance duties. However, in August 1990, Lust was again unable to work and has not worked since.

Subsequently, Lust filed a workers' compensation claim. His Application for Hearing alleged that his injuries included "Mental and emotional distress; depression; Herpes Zoster." At the hearing, Lust produced evidence in support of both his claimed mental injury and his Ramsay-Hunt syndrome physical condition. The ALJ concluded that Lust had failed to prove that he was subjected to "unusual stress" in the workplace and therefore dismissed Lust's claim for mental injury. However, the ALJ did not address the evidence of Lust's physical injury.

Lust obtained LIRC review of the ALJ's decision. LIRC agreed with the ALJ that Lust had not established a compensable mental injury. However, LIRC did award Lust compensation for his physical injury based on Lust's Ramsay-Hunt syndrome condition.

UPS then obtained circuit court review of the LIRC decision. The circuit court affirmed LIRC's decision. UPS appeals to us. We will recite additional facts as required by our discussion of the issues.

1. LIRC's Statutory Authority

On a threshold basis, UPS contends that LIRC did not have authority under § 102.18(3), STATS., to award Lust compensation for his physical injury because that claim was not decided by the ALJ and was not raised by Lust in his petition for review to LIRC. The statute governs findings, orders and awards made in workers' compensation hearings. Subsection (3) allows for review of the ALJ's decision by LIRC. It provides, in relevant part: "The commission shall either affirm, reverse, set aside or modify the findings or order in whole or in part, or direct the taking of additional evidence. This action shall be based on a review of the evidence submitted." Section 102.18(3), STATS.

It is not entirely clear from the record of the proceedings before the ALJ whether Lust gave the same prominence to his physical injury as he did to his mental injury. However, as we have noted, Lust's initial Application for Hearing did list his Ramsay-Hunt syndrome among the injuries which he had sustained. 2 In addition, Lust presented evidence of his Ramsay-Hunt syndrome at the hearing before the ALJ.

The ALJ's decision discussed Lust's claim of mental injury, ultimately rejecting that claim because Lust had failed to establish that the mental injury was the result of "unusual stress" in the workplace. However, the ALJ did not address the evidence relating to Lust's physical injury. On further review, LIRC reviewed the entire record, consulted with the ALJ, and then issued a decision addressing the evidence pertaining to both categories of Lust's alleged injuries. Although LIRC agreed with the ALJ that Lust had failed to meet his burden regarding his claim for mental injury, LIRC awarded Lust benefits on the basis of his physical injury.

In support of its argument that LIRC exceeded its authority under § 102.18(3), STATS., by addressing a theory of recovery not addressed by the ALJ, UPS relies on Joseph Schlitz Brewing Co. v. DILHR, 67 Wis.2d 185, 226 N.W.2d 492 (1975). There, the department had awarded worker's compensation death benefits on a theory not raised by the claimant. See id. at 189-90, 226 N.W.2d at 494. After concluding that the department had erred both in its legal conclusions and by failing to make sufficient factual findings, see id. at 191-92, 226 N.W.2d at 495, the supreme court held that the department should have reopened the proceedings to permit the parties to present evidence regarding the basis upon which the department had awarded benefits. See id. at 193, 226 N.W.2d at 496.

UPS argues that the same impropriety occurred here. We disagree. It was not the department's procedure which triggered the reversal in Joseph Schlitz. Rather, it was the department's error of law and its concomitant failure to make sufficient findings which necessitated the reversal. See id. at 191-92, 226 N.W.2d at 495. Only then, in the context of discussing the appropriate appellate relief, did the supreme court turn to the question of whether the department's procedure was proper. See id. at 193, 226 N.W.2d at 496. Importantly, in the course of that discussion, the supreme court did not hold that the department could not award benefits on a different theory than that used by the examiner. Rather, the court held that if the department did so, it was first required, under the facts of that case, to reopen the proceedings to allow the parties to address the new issue introduced into the proceedings by the department. See id.

Unlike Joseph Schlitz, here, as our ensuing discussion will reveal, LIRC committed no legal or factual errors. Moreover, as we have indicated above, Lust's application for a hearing listed his Ramsay-Hunt syndrome physical condition among his injuries, and his evidence at the hearing established this condition. Thus, the evidence relied upon by LIRC was already in the record. Obviously, Lust's allegation of his physical injury and his evidence in support thereof were not presented in a vacuum. Even though Lust may not have emphasized his physical condition as strongly as his claimed mental injuries, a fair reading of the entire record reasonably alerted UPS that Lust's claim for compensation was linked to his physical condition as well as his mental injuries. Thus, when Lust sought LIRC review, it was reasonable to assume that LIRC would look to the entire evidentiary record which had already been constructed before the ALJ.

Thus, unlike Joseph Schlitz, we do not see this as a case where UPS has been blindsided by the LIRC action. LIRC, not the ALJ, bears the ultimate responsibility for finding facts. See Falke v. Industrial Comm'n, 17 Wis.2d 289, 294-95, 116 N.W.2d 125, 128 (1962); see also § 102.18(3), STATS. The position taken by the parties at the administrative proceedings does not control the agency's ultimate resolution of the case. See Miller Brewing Co. v. LIRC, 173 Wis.2d 700, 719, 495 N.W.2d 660, 667 (1993). LIRC has the duty to "find the facts and determine the compensation irrespective of the presentation of the case by the attorneys." Id. at 719-20, 495 N.W.2d at 667 (quoted source omitted).

We conclude that LIRC did not exceed its authority in considering Lust's claim on the basis of his physical injury.

2. "Unusual Stress" Test

UPS next argues that LIRC erred by failing to apply the "unusual stress" test to Lust's claim of physical injury.

Workers' compensation benefits are governed by Ch. 102, STATS. In order to qualify for benefits, the claimant must satisfy § 102.03(1), STATS., which requires in part that "the employee sustain[ ] an injury" and that "the accident or disease causing injury arises out of the employee's employment." See § 102.03(1)(a), (e). Section 102.01(2)(c), STATS., defines "injury" as "mental or physical harm to an employee caused by accident or disease...." Ordinarily, we accord great weight to a LIRC determination because that agency has the experience, competence and specialized knowledge regarding the Workers' Compensation Act. See GTC Auto Parts v. LIRC, 184 Wis.2d 450, 460, 516 N.W.2d 393, 397 (1994).

Here, however, the appellate issue is whether the "unusual stress" test applies to a case in which emotional stress in the workplace aggravates an...

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