Second Injury Fund v. Roland Wayne Hogan, Service Merchandise, and Pacific Employers Insurance Company

LARRY D. VAUGHT, JUDGE

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

DIVISION IV

SECOND INJURY FUND

APPELLANT

V.

ROLAND WAYNE HOGAN,

EMPLOYEE/APPELLEE

SERVICE MERCHANDISE,

EMPLOYER/APPELLEE

PACIFIC EMPLOYERS INSURANCE CO.,

CARRIER/APPELLEE

CA 00-00610

February 14, 2001

APPEAL FROM THE ARKANSAS WORKERS' COMPENSATION COMMISSION

[E713618]

AFFIRMED

The Second Injury Fund appeals from a decision of the Workers' Compensation Commission. Appellee Roland Wayne Hogan sustained a compensable injury on October 2, 1997, while working for appellee Service Merchandise. Hogan sought medical treatment, received temporary total disability benefits, and was compensated for a three percent permanent impairment rating. The issues before the Commission were the causal connection between the October 2, 1997, work-related injury and the employee's need for surgery performed on January 21, 1998, the extent of any wage-loss disability and, if any disability award is justified, whether appellant Second Injury Fund (SIF) was liable. The Commission found that Hogan was entitled to wage-loss disability benefits, and that the SIF was liable for the wage-loss benefits. The Fund argues that the Commission's decision is not supported by substantial evidence. Service Merchandise and PacificEmployers Insurance Company (hereinafter referred to collectively as "Service Merchandise") cross appeal that there is no causal connection between the work-related injury Hogan suffered while employed at Service Merchandise and the need for the January 21, 1998, surgery, and that the October 2, 1997, injury was not the major cause of Hogan's permanent condition. Hogan cross-appeals, contending that the Commission erred in limiting his wage-loss benefits to only ten percent. We affirm the Commission.

Hogan, age forty-two, has a high school education and has received management training while employed by Wal-Mart. While working as a store manager for Wal-Mart in October of 1992, Hogan sustained an injury to his lower back. His condition did not improve, and his treating physician ordered an MRI on December 8, 1993. The MRI revealed disc herniations at the L4-5 and L5-S1 levels, with nerve root and thecal sac displacement at the L4-5 level. Hogan's treating physician, Dr. Dickins, did not recommend surgery due to the lack of radicular pain, nor did he assign an impairment rating. On December 28, 1994, Hogan was again treated for back pain by Dr. Ed Barron. Hogan also sought back treatment from Dr. Barron on December 9, 1996. He was released from Dr. Barron's care on December 16, 1996. Hogan received no additional treatment for his back until after his October 2, 1997, injury. Although he received no actual treatment after December 16, 1996, the record does indicate he had a pain prescription filled prior to his October 2, 1997, injury.

Hogan testified that in April, 1994 he began working for Service Merchandise as a warehouse manager. The description of his job duties fell into the heavy-manual-labor category. On October 2, 1997, after lifting heavy freight, he began to experience pain in his back and down

his hip. He immediately reported the injury to his supervisor and sought medical treatment. He remained off work for several days, and then returned to a less strenuous co-manager position. On October 10, 1997, Hogan was diagnosed with muscle spasm at the L2-3 level on his right side. The diagnosis was not made using an MRI, but merely manual manipulation. Hogan testified that his condition continued to worsen, despite being under Dr. Barron's continuous care. By October 29, 1997, Hogan was experiencing a "stinging in his right lower side." On November 21, 1997, Hogan underwent an MRI. The results of the MRI were essentially the same as the MRI from 1993. Hogan's pain continued, but he continued to work "off and on" in a "lighter capacity." Hogan experienced extreme pain during his evening shifts on December 12 and 13, 1997. He testified that at times he had to stop and "physically hold on to something" because of the pain down his leg. Hogan informed the store manager about the painful episodes on Friday and Saturday night.

On Sunday, December 14, 1997, Hogan was still in pain and was unable to work his scheduled shift. While at home, Hogan got out of bed to get a drink of water. As he raised his arm to open the refrigerator, he collapsed in pain. Hogan was transported by ambulance to the emergency room. On January 21, 1998, another MRI was conducted on Hogan; following the MRI, Dr. Dickins performed a lumbar discectomy surgery at L4-5 on Hogan. After the surgery, Hogan was assigned a ten percent permanent-partial-impairment rating and released to perform only medium labor. Hogan's work at Service Merchandise was considered heavy or very heavy labor. Since his surgery, Hogan has sought less strenuous management opportunities.

The Commission found on de novo review that the Administrative Law Judge was correct and adopted her findings. Those findings were that Hogan had proven by a preponderance of the evidence that he had sustained a compensable injury in the course and scope of his employment on October 2, 1997; that his need for treatment and his disability are not the result of an independentintervening event; that he had proven by a preponderance of the evidence that he sustained a decrease in his wage-earning ability in the amount of ten percent in permanent partial disability benefits; and that the SIF is liable for the ten percent wage-loss benefits.

In reviewing decisions of the Workers' Compensation Commission, this court views the evidence in the light most favorable to the Commission and affirms the decision if it is supported by substantial evidence. Hooks v. Gaylord Container Corp., 67 Ark. App. 159, 992 S.W.2d 844 (1999); Barnett v. Allen Canning Co., 49 Ark. App. 61, 896 S.W.2d 444 (1995). Substantial evidence is that which a reasonable person might accept as adequate to support a conclusion. Id. A decision by the Workers' Compensation Commission should not be reversed unless it is clear that fair-minded persons could not have reached the same conclusions if presented with the same facts. Id. There may be substantial evidence to support the Commission's decision even though the appellate court may have reached a different conclusion if it had sat as the trier of fact or heard the case de novo. Brower Mfg. Co. v. Willis, 252 Ark. 755, 480 S.W.2d 950 (1972); see also Arnold v. Tyson Foods, Inc., 64 Ark. App. 245, 983 S.W.2d 444 (1998). These rules insulate the Commission from judicial review and properly so, as it is a specialist in these areas and this court is not; however, a total insulation would render meaningless the appellate court's function in reviewing these cases. Buford v. Standard Gravel Co., 68 Ark.App. 162, 5 S.W.3d 478 (1999). Questions concerning the credibility of witnesses and the weight to be given to their testimony are within the exclusive province of the Commission. Arkansas Dep't of Health v. Williams, 43 Ark. App. 169, 863 S.W.2d 583 (1993). We defer to the Commission's findings on what testimony it deems to be credible. Id. When there are contradictions in the evidence, it is within the Commission's province to reconcile conflicting evidence and to determine the true facts. Id. The Commission is not required to believe the testimony of the claimant or any other witness, but may accept and translate into findings of factonly those portions of the testimony that it deems worthy of belief. Jordan v. Tyson Foods, Inc., 51 Ark. App. 100, 911 S.W.2d 593 (1995).

Combination of Disabilities or Impairments

The tripartite test for SIF liability in workers' compensation cases is that the claimant must have suffered a compensable injury at his present place of employment, prior to that injury the claimant must have had a permanent partial disability or impairment, and the disability or impairment must have combined with the recent compensable injury to produce the current disability status. Mid-State Constr. Co. v. Second Injury Fund, 295 Ark 1, 746 S.W.2d 539 (1988).

In the case at bar, the Fund argues that Hogan fails to meet the second and third prong of the tripartite test. Regarding the second prong, SIF argues that Hogan was not assigned a permanent partial disability (PPD) or impairment rating following his 1992 Wal-Mart injury and that he returned to work at full duty following the injury. However, Douglas Tobacco Products Co., Inc. v. Gerrald, 68 Ark. App. 304, 309, 8 S.W.3d 39, 42 (1999) presents a clear precedent that SIF's argument is without merit. In Douglas, the court ruled that the failure to receive a PPD or impairment rating is not determinative of SIF liability. Although Hogan was not originally assigned an impairment rating following his 1992 injury, Dr. Dickins testified that, had he been asked to do so, he would have assigned Hogan a five percent impairment rating. Also, Douglas gives clear direction regarding Hogan's return to work: "[A] claimant's ability to return to work after her prior injuries is not determinative of Second Injury Fund liability."

Appellant next argues that the third prong of the tripartite Mid-State test has not been satisfied. SIF argues that Hogan's 1992 injury was a herniated disk at L4-5, and that the October 10, 1997, notes from Dr. Barron indicate a palpable muscle spasm at L2-3. However, this examinationwas done without the benefit of an MRI. The MRI conducted on December 23, 1997, indicated a need for surgery, showing a herniated disc with nerve root compression at L4-5. In light of the physicians' testimony and the controlling case law, we affirm the Commission's finding of a combination of disabilities or impairments, and thus SIF liability. Causal Connection1

The Fund argues that the December 14, 1997, refrigerator incident was an independent intervening cause and that the ALJ applied an outdated "unreasonable activity" standard in arriving at her finding of a causal connection between the October 2, 1997, work-related injury and the need for the surgery performed on January 21, 1998.

Appellant argues that since the November 21, 1997, MRI was compared to the 1993 MRI and found to be the same, that Hogan's attempt to open the refrigerator door, while at home on December 14, 1997, was an intervening and superceding event necessitating his January 21, 1998, back surgery. To further support this conclusion, SIF argues that the first time Hogan experienced any radiating pain following his October work-related injury was after the refrigerator incident.

The record reflects that Hogan had been under the continuous care of a physician since the October 2, 1997, injury and that he had experienced no significant improvement, in fact, Dr. Dickins' notes indicate Hogan's condition had worsened. Further, the record reflects that Hogan did experience radiating pain on both Friday and Saturday evening, prior to the December 14, 1997, refrigerator episode. Hogan testified that he was unable to stand due to radiating pain and wasrequired to hold on to items in order to remain balanced. His testimony went further to explain the pain was so extreme on Friday and Saturday that he had called in sick for his Sunday shift. Based on this testimony and the fact that Hogan was reaching for the refrigerator handle when he fell over in pain, the ALJ concluded that "there is no evidence that opening a refrigerator door exceeded the claimant's limitations or any restrictions. I find the activity of opening a refrigerator door was not unreasonable under the circumstances and does not constitute an independent and intervening cause."

The ALJ relied on the test for determining the existence of an independent intervening cause articulated in Georgia-Pacific Corp. v. Carter, 62 Ark. App. 162, 969 S.W.2d 677 (1998):

The test for determining whether a subsequent episode is a recurrence or an aggravation is whether the subsequent episode was a natural and probable result of the first injury or if it was precipitated by an independent intervening cause. Bearden Lumber Co. v. Bond, 7 Ark. App. 65, 644 S.W.2d 321 (1983). If there is a causal connection between the primary and the subsequent disability, there is no independent intervening cause unless the subsequent disability is triggered by activity on the part of the claimant which is unreasonable under the circumstances. Guidry v. J&R Eads Constr. Co., 11 Ark. App.219, 669 S.W.2d 483 (1984).

62 Ark. App. at 167-68, 969 S.W.2d at 680.

Appellant argues that the Commission applied the wrong standard because Act 796 of 1993 as codified at Arkansas Code Annotated § 11-9-102(5)(F)(iii)(Repl. 1997), states in part that a non-work-related independent intervening cause does not require negligence or recklessness on the part of the claimant. The supreme court addressed this very argument in Davis v. Old Dominion Freight Line, Inc., 341 Ark. 751, 20 S.W.3d. 326 (2000). The respondent in Davis argued that tripping over a child at home was an independent intervening cause and that whether the activity was "unreasonable" was no longer an issue under the provision of the 1993 act quoted above. Thesupreme court discussed the effect of Act 796 on the status of independent intervening causes and found that the Georgia-Pacific Corp. test "remains in force for new Act cases."

Here, we find the testimony supports a finding that the need for Hogan's January 21, 1998, surgery was his October 2, 1997, work-related injury and that the December 14, 1997, refrigerator incident was not an independent intervening cause. Major Cause2

Appellant argues that the Commission erred when it determined that the major cause of Hogan's permanent condition is the October 2, 1997, work-related injury. Appellant correctly asserts that Hogan is required to "meet the same burden of proof against the Fund that he is required to meet against the employer and carrier." Hogan must prove that the compensable injury is the major cause of the permanent disability or need for treatment before permanent benefits shall be payable. Ark. Code. Ann. § 11-9-102 (5)(F)(ii)(b). The Fund argues that "it is not only proper, but mandatory, that the law judge consider the December 14, 1997, refrigerator incident, along with the prior herniated disk, when determining the major cause."

As discussed above, the ALJ and the Commission correctly found that the refrigerator incident was not an "independent intervening cause." Additionally, testimony was presented that Hogan had "felt much better" and had recovered from the 1992 injury, and that he would have been assigned a five percent impairment rating. He had sought no treatment for the 1992 injury since December 16, 1996. Prior to the October 2, 1997, injury, Hogan was performing heavy manual labor as a warehouse manager. After the October 2, 1997, work-related injury, Hogan experiencedconstant back pain, that worsened over time, and ultimately resulted in a ten percent physical impairment rating "for the lumbar disc injury and surgery." The record contains sufficient evidence to support the Commission's finding that the October 2, 1997, work-related injury was the major cause of Hogan's ten percent physical impairment rating. Wage-loss Benefits

Finally, we turn to the issue of the amount of wage-loss benefits. Although appellant and appellee Service Merchandise claimed below that Hogan was not entitled to wage-loss benefits at all, neither argues this position on appeal. On cross appeal, Hogan contends that the Commission erred in finding that he was only ten percent wage-loss disabled. Hogan argues that since he has been restricted to medium work with lifting limitations of thirty-five to fifty pounds, occasionally, has leg and back pain, and can only sit or stand for short periods, he is no less than five percent wage-loss disabled. The wage-loss factor is the extent to which a compensable injury has affected the claimant's ability to earn a livelihood. Eckhardt v. Willis Shaw Express, Inc., 62 Ark. App. 224, 970 S.W.2d 316 (1998). The Commission is charged with the duty of determining disability based upon a consideration of medical evidence and other matters affecting wage-loss, such as the claimant's age, education, and work experience. Ark. Code Ann. § 11-9-522 (c)(1) (Supp.1997); Bradley v. Alumax, 50 Ark. App. 13, 899 S.W.2d 850 (1995).

Hogan has a high school degree and significant managerial work experience. The vocational counselor admitted that, in all probability, Hogan could not return to work at the salary he was making at the time of the injury. However, she went on to state that "there are jobs in the area for employees with management skills and it should not be difficult to locate employment." Hogan spent much of his adult life working for Wal-Mart. He testified that he has managed some Wal-Mart stores with fifteen million dollars in volume; when he left Wal-Mart he was making $42,000 peryear. As a manager of Service Merchandise, Hogan was paid a salary of $36,000 annually. Although he has attempted to find work in management following his surgery, he has not pursued any employment opportunities with Wal-Mart or Service Merchandise. Dr. Dickins testified that Hogan was capable of returning to management work, specifically the type of work associated with his former job as a Wal-Mart manager. When questioned about his standing with Wal-Mart, Hogan indicated that he was in good standing with his former employer, but did not apply there because "I did not wish to relocate geographically. That was the biggest thing. I'm a single parent, and I've got to take care of my son as far as keeping from dragging him around. That's the reason why I got out of Wal-Mart." It is clear from the record that some of Hogan's perceived wage-loss disability is of his own making. His failure to even attempt to obtain employment with Wal-Mart prevents a finding that suitable work was unavailable. Thus, substantial evidence was presented to sustain the Commission's determination of Hogan's ten percent wage-loss benefit, and the Commission is affirmed on appeal and cross appeal.

Affirmed.

Stroud, C.J., and Bird, J., agree.

1 Cross appellant, Service Merchandise, joins appellant SIF in the argument that a causal connection between the October 2, 1997, injury and the January 21, 1998, surgery did not exist; that the need for surgery was necessitated by an independent intervening event; and that the ALJ incorrectly used an "unreasonable activity test" that has not been valid since the 1993 Workers' Compensation Act was passed.

2 Cross appellant, Service Merchandise, joins in SIF's argument that substantial evidence does not exist to support the Commission's finding that the major cause of the permanent character of Hogan's physical condition is the October 2, 1997, injury.