Employers Lose on Apportionment at High Ct., but Win at 1st DCA

"....counsel for Nilsen, filed a response to the letters with the Supreme Court attacking the amici's arguments as a 'strawman' fallacy.' ....there was never any finding that any nonindustrial factors contributed to Nilsen's loss-of-earning capacity after his industrial injury, so Nilsen's employer was not being held liable for a disability that was not attributable to his workplace accident. "   Alan Gurvey

The California 1st District Court of Appeal on Tuesday ruled in favor of an employer that argued a worker's hearing loss should be apportioned for nonindustrial factors, handing business interests a small consolation prize after the state Supreme Court ruled against them last week in a case that touched on similar apportionment issues.

In Acme Steel et al. v. WCAB, No. A137915, the 1st DCA ruled that a workers' compensation judge erred by failing to apportion Michael Borman's disability for progressive hearing loss caused by long exposure to industrial noise by taking into account the amount of hearing loss caused by nonindustrial factors and his previously established disability from hearing loss related to a 1993 explosion at work.

Borman had received a stipulated award based on a 22% permanent disability rating for the 1993 injury. As time passed, however, his condition worsened.

Borman filed a claim for benefits asserting he was permanently and totally disabled because his total hearing loss left him without any future earning capacity. 

Administrative Law Judge Deborah Lieberman ruled that he was entitled to a PTD award because there was no possible job that could accommodate Borman's difficulty with oral communication and other physical limitations. She declined to apportion any liability for Borman's condition to his prior hearing loss claim since Borman had suffered no loss of earnings as a result of that injury. 

Acme sought reconsideration, arguing that some of the liability for Borman's condition should be assigned to the 1993 accident and to nonoccupational factors. 

A Workers' Compensation Appeals Board panel declined reconsideration of Lieberman's decision in January, and Acme sought judicial review.

The 1st DCA heard oral argument on June 11 and issued an unpublished decision Tuesday ordering the WCAB to return the case to a judge for additional proceedings.

Justice Robert Dondero, writing for the 1st DCA panel, said the judge and the WCAB had "ignored substantial medical evidence" from Acme's medical expert. 

Since the expert's unrebutted opinion was that the causative sources for Borman's hearing loss could be apportioned between industrial sources and nonindustrial sources, Dondero said the judge should have parceled out liability. 

Acme's attorney, Steven Wade Cox of Wai & Connor, declined to comment on the case Tuesday, saying he had not yet had a chance to speak with his client. Borman's attorney, Thomas Marshall Pegnim of Pegnim & Ivancich, could not be reached for comment. 

The Borman case comes on the heels of the California Supreme Court's decision last week to deny review to a case involving a similar issue of apportionment.

Pacific Compensation Insurance Co. v. WCAB (Nilsen) involved a dispute about whether an employer could apportion liability for a permanent and total disability caused by a worker's loss-of-earning capacity if the worker also had limitations caused by nonindustrial medical conditions.

The claimant in that case, Gregory Nilsen, had a significant documented history of treatment for his lumbar spine, degenerative joint disease, chronic pain and anxiety disorder before his industrial injury, but Administrative Law Judge William Carero reasoned that none of these conditions contributed to Nilsen's total loss-of-earning capacity after a February 2007 workplace accident. In light of this, Carero said liability for Nilsen's permanent and total disability fell entirely upon Nilsen's employer and its carrier, the Pacific Compensation Insurance Co.

A WCAB panel upheld Carero's ruling in October. 

Pacific petitioned for judicial review, but the 2nd DCA summarily denied the carrier's petition in May. 

The carrier then requested writ relief from the California Supreme Court, with 13 entities representing business and insurers sending letters in support of Pacific's petition.

Among them was a letter from Ron Foster, chief executive officer of Foster Farms. Foster said he understood the WCAB decision in Nilsen as holding that employers will be responsible for the entirety of an employee's lost future earning capacity from a disability that is caused, at least in part, by nonindustrial factors. He warned that such an expansive approach to liability would adversely affect his company, which is already “struggling” to do business in California, where the high cost of workers' compensation is eroding the company's ability to compete with larger poultry companies outside of the state.

The California Chamber of Commerce also sent a letter urging the court to grant review, saying it had a similar understanding of the Nilsen decision and it contended that such case law would "essentially eviscerate" the Supreme Court's 2007 decision in Brodie v. WCAB. The Brodie decision established that an employer need only compensate an injured worker for the portion of disability attributable to an industrial injury during the course and scope of that worker's employment with that employer. 

Alan Zane Gurvey of Rowen, Gurvey & Win, counsel for Nilsen, filed a response to the letters with the Supreme Court attacking the amici's arguments as a "'strawman' fallacy." 

He emphasized that there was never any finding that any nonindustrial factors contributed to Nilsen's loss-of-earning capacity after his industrial injury, so Nilsen's employer was not being held liable for a disability that was not attributable to his workplace accident. 

Gurvey said Tuesday he thought the reason why Borman's disability was apportioned and Nilsen's injury was not turned on the question of whether the most recent injury created a disability that was "separate and apart from any prior potentially apportionable factors."

In Nilsen's case, Gurvey said, the medical and vocational testimony was able to clearly establish that Nilsen's total loss-of-earning capacity was due solely to his February 2007 accident. 

He explained that Nilsen "was working fine" until the February 2007 accident and his back problems, which predated his accident, were not hindering his earning capacity. Since Nilsen only lost his ability to earn a living after his February 2007 accident, Gurvey said Nilsen was permanently and totally disabled and no liability could be apportioned to his preexisting, nonindustrial health problems. 

In Borman's case, Gurvey observed, Borman was found to be 100% disabled, but the medical evidence indicated that 22% of that disability was from Borman's prior accident. If, however, the evidence indicated that Borman would have suffered a 100% loss of hearing based on his industrial exposure after the 1993 accident, Gurvey posited, then apportionment would not have been appropriate under the reasoning in Nilsen. 

"You can have a preexisting disability and then have a new injury which in and of itself creates a total disability, notwithstanding that there was previous disability," he said, "but you have to be able to differentiate the cause of that total disability from the preexisting disability." 

Published on 06/17/13 by WorkCompCentral, authored by Sherri Okamoto