RIESLAND v. ICA/LAPAZ/ARIZONA

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE LAWRENCE A. RIESLAND, Petitioner, v. THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent, LA PAZ COUNTY, Respondent Employer, ARIZONA COUNTY INSURANCE POOL, Respondent Carrier. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) DIVISION ONE FILED: 07/03/2012 RUTH A. WILLINGHAM, CLERK BY: sls No. 1 CA-IC 11-0057 DEPARTMENT B MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Special Action Industrial Commission ICA Claim No. 96274-989298 Carrier Claim No. 96001445624 Administrative Law Judge J. Matthew Powell AWARD SET ASIDE Law Office of Stephen L. Weiss By Stephen L. Weiss Attorneys for Petitioner Employee And Mesa Taylor & Associates, PLLC By Dennis R. Kurth Attorneys for Petitioner Employee Phoenix Andrew F. Wade, Chief Counsel The Industrial Commission of Arizona Attorney for Respondent Phoenix Klein Doherty Lundmark Barberich & LaMont PC By R. Todd Lundmark Attorneys for Respondents Employer and Carrier Phoenix J O H N S E N, Judge ¶1 This is a special action review of an Industrial Commission of Arizona ( ICA ) award and decision upon review finding that the respondent carrier, Arizona County Insurance Pool ( Arizona ), presented viable evidence warranting a consideration of its petition to rearrange a September 28, 2007 permanent total disability benefits award in favor of Lawrence Riesland. Because the record lacks sufficient evidence of increased earning capacity, we set aside the award. FACTS AND PROCEDURAL BACKGROUND ¶2 Riesland injured his back in an industrial accident in 1996. He filed a workers accepted for benefits. and award for permanent compensation claim, which was In 2007, the ICA entered its findings total disability benefits. In that proceeding, Arizona obtained an independent medical examination ( IME ) by Kevin S. Ladin, M.D., who opined that Riesland was not capable of functioning in 2 any [employment] capacity. Ladin concluded Riesland was totally disabled and incapable of functioning Based on in any Ladin s gainful opinion, occupation Arizona did at not the present protest time. the ICA s award, which became final. ¶3 Two years later, Arizona obtained a repeat IME by a group of physicians that included Ladin. It then filed a petition for rearrangement, requesting a reduction of Riesland s permanent total disability benefits. and award denying the petition The ICA entered a findings for rearrangement, finding Arizona had failed to demonstrate Riesland had any additional earning capacity beyond that determined by the 2007 award. ¶4 Arizona timely requested a hearing, at which the administrative law judge ( ALJ ) heard testimony from Riesland, Ladin and others. The sufficient medical evidence determine whether ALJ found to employment Arizona proceed consistent had to a presented hearing with to [Riesland s] remaining work restrictions is available, and, if so, whether that employment entitles [him] results to in partial a loss of permanent earning capacity disability that benefits. Riesland timely requested administrative review, but the ALJ summarily affirmed his award, and Riesland next brought this appeal. We have jurisdiction pursuant to Arizona Revised Statutes ( A.R.S. ) sections 12-120.21(A)(2) (West 2012), 23- 3 951(A) (West 2012), and Arizona Rule of Procedure for Special Actions 10. 1 See Meva v. Indus. Comm n, 15 Ariz. App. 20, 24, 485 P.2d 844, 848 (1971) (appealable award includes any ruling that contains a direct determination of some issue in relation to the claim of a particular injured workman ). 2 DISCUSSION ¶5 On appeal, Arizona argues it is entitled to rearrangement pursuant to A.R.S. § 23-1044(F)(3) (West 2012), which allows rearrangement [u]pon a showing that the employee s earning capacity has increased subsequent to . . . [the prior] findings and award. burden of proof. The party seeking rearrangement has the Pima County Bd. of Supervisors v. Indus. Comm n, 149 Ariz. 38, 45, 716 P.2d 407, 414 (App. 1986). ¶6 Arizona does not argue that Riesland s physical condition has changed since 2007. Its expert witness, Ladin, acknowledged that during the hearing condition had not changed. examined Riesland in Riesland s physical But Ladin and his colleagues who the repeat IME concluded he was exaggerating his pain symptoms. Although Ladin had concluded in 2007 to that Riesland was unable work, he testified in the 1 Absent material revision after the date of the events at issue, we cite a statute s current version. 2 The court commends the joint brief regarding jurisdiction that the parties filed after our oral argument in this matter. 4 proceeding on the 2009 petition that his opinion had changed. As his report stated, It is the opinion of the consultants the claimant should be capable of returning to gainful employment. Indeed, the consultants feel strongly that return to some form of employment would likely prove therapeutic for the claimant from both a physical and emotional perspective. ¶7 After hearing the evidence, the ALJ described the issue as whether a change in medical opinion, without a change in the applicant s physical condition, can serve as a basis for a rearrangement of permanent disability benefits. The ALJ concluded that under the circumstances, § 23-1044(F)(3) does not require medical proof of a change in an underlying physical condition to support a petition to rearrange. ¶8 In reviewing the award, we start with the proposition that after a findings and award become final, the doctrine of res judicata operates to bar relitigation of issues that were or could have been decided in that proceeding. Stainless Specialty Mfg. Co. v. Indus. Comm n, 144 Ariz. 12, 15, 695 P.2d 261, 264 (1985). In applying the doctrine in workers compensation cases, we balance the need for finality against the remedial purposes of workers compensation, including the need to accommodate changes in earning capacity caused by the employee s physical condition or by the labor market. 5 Id. at 16, 695 P.2d at 265. two In striking that balance, the legislature has provided statutory exceptions to finality: Reopening, pursuant to A.R.S. § 23-1061(H), and rearrangement, pursuant to A.R.S. § 231044(F). See A.R.S. §§ 23-1061(H), -1044(F) (West 2012); Epstein s Custom Carpentry v. Indus. Comm n, 155 Ariz. 284, 287, 746 P.2d 25, 28 (App. 1987). ¶9 To discern whether Riesland s earning capacity increased after 2007, we compare the facts determined by the 2007 award with those at the time of the rearrangement petition. See Gallegos v. Indus. Comm n, 144 Ariz. 1, 5-6, 695 P.2d 250, 254-55 (1985); see also Pima County, 149 Ariz. at 44, 716 P.2d at 413 ( anything that demonstrates increased earning capacity is relevant ). ¶10 Riesland concedes that rearrangement may be ordered pursuant to A.R.S. § 23-1044(F)(3) in the absence of a change in physical condition. See Pima County, 149 Ariz. at 44, 716 P.2d at 413 ( All that is necessary is that the increase [in earning capacity] occur. ). But he asserts that Ladin s changed medical opinion, by itself, is insufficient to satisfy the statute. We agree. ¶11 Citing res judicata, our supreme court in Stainless expressly rejected the proposition that a change in a medical opinion, by itself, would support reopening under A.R.S. § 23- 6 1061(H). 144 Ariz. at 19, 695 P.2d at 268. The court in that case drew a distinction between a physician s change of opinion and a subsequent advancement in medical procedures required to treat a allowed claimant s in the condition. latter Id. situation, it Although is not reopening allowed in is the former: We hold . . . that reopening is permissible when a change in physical circumstances or medical evaluation creates a need for treatment, and the legitimacy of that need was not and could not have been adjudicated at the time of the last award. We do not hold that different medical opinion will justify reopening a claim. . . . Thus, if new evidence is found to controvert that produced at the hearing or if a doctor changes his mind, reopening would be an attempt to relitigate issues which were or could have been litigated, and will not be allowed under principles of res judicata. Id. at 18-19, 695 P.2d at 267-68. in a rearrangement proceeding. We apply the same principle Brown v. Indus. Comm n, 199 Ariz. 521, 524, ¶ 13, 19 P.3d 1237, 1240 (App. 2001). ¶12 On appeal, Arizona argues that Riesland s continued symptoms no longer preclude [him] from returning to work. But Arizona offered no evidence that Riesland s symptoms or physical abilities had changed since the 2007 award. The only change it cites is Ladin s revised opinion that Riesland can and should return to work. It offers no legal authority, however, for the 7 proposition that such evidence is sufficient to establish a right to rearrangement pursuant to A.R.S. § 23-1044(F). ¶13 Citing Stainless, Arizona further argues Ladin s medical evaluation and opinion have evolved and contends his testimony is a rearrangement. that while a sufficient basis on which to proceed with But as noted, the Stainless court made clear change in medical evaluation might permit rearrangement, such a change must be based on new techniques or discoveries in change of mind. ¶14 at the medical field, not simply a physician s 144 Ariz. at 18-20, 695 P.2d at 267-69. Arizona also argues that the opinion Ladin expressed the hearing on rearrangement was based on new evidence, namely, his observed increase in Waddell signs and striking inconsistencies and nonorganic findings on examination. But Ladin did not associate these observations with any change in Riesland s physical condition. Rather, they tend to show only that Ladin s earlier conclusion may have been a mistake. ¶15 There was no evidence at the hearing on the rearrangement that Riesland was working and earning wages or that his wages or earning capacity had changed. Nor was there evidence education that he had received any additional or training or that there were employment opportunities available to one with his physical abilities that were not available in 8 2007. 3 Thus, we conclude the ALJ erred by holding Ladin s changed opinion was a sufficient basis on which to proceed with rearrangement. CONCLUSION ¶16 For the foregoing reasons, we set aside the award. /s/ DIANE M. JOHNSEN, Presiding Judge CONCURRING: /s/ DONN KESSLER, Judge /s/ PATRICIA K. NORRIS, Judge 3 Arizona does not contend that Ladin s revised opinion was based on a posited change in the open labor market for an employee with Riesland s capacities. Cf. 8 Arthur Larson and Lex K. Larson, Larson s Workers Compensation Law § 131.03D[1][e], at D131-92 (2011). [I]t should not be forgotten that disability in the compensation sense has an economic as well as a medical component; accordingly a change in claimant s ability to get or hold employment, or to maintain his earlier earning level, should logically be considered a change in condition, even though claimant s physical condition may have remained unchanged. Id. at § 131.03[1][e], at 131-25. 9

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