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Bower v. Eaton Corp.

Supreme Court of Nebraska

October 12, 2018

John J. Bower, appellant and cross-appellee.
v.
Eaton Corporation and Old Republic Insurance Company, appellees and cross-appellants.

         1. Workers' Compensation: Appeal and Error. An appellate court is obligated in workers' compensation cases to make its own determinations as to questions of law.

         2. ___: ___. Determinations by a trial judge of the Workers' Compensation Court will not be disturbed on appeal unless they are contrary to law or depend on findings of fact that are clearly wrong in light of the evidence.

         3. Workers' Compensation. Whether an injured worker is entitled to vocational rehabilitation is ordinarily a question of fact to be determined by the Workers' Compensation Court.

         4. Workers' Compensation: Appeal and Error. The percentage of permanent partial loss of use for an injured member is a question of fact that an appellate court reviews for clear error.

         5. Workers' Compensation: Expert Witnesses. As the trier of fact, the Workers' Compensation Court is the sole judge of the credibility of the witnesses and the weight to be given their testimony.

         6. Workers' Compensation: Rules of Evidence: Due Process. The Workers' Compensation Court is empowered to admit evidence not normally admissible under the rules of evidence applicable in the trial courts of this state, subject to the limits of constitutional due process.

         7. Workers' Compensation: Evidence. Given the beneficent purposes of workers' compensation law, the Workers' Compensation Court can admit evidence not normally admissible in order to investigate cases in the manner it judges is best calculated to ascertain the substantial rights of the parties and to carry out justly the spirit of the Nebraska Workers' Compensation Act.

          [301 Neb. 312] 8. Workers' Compensation: Physicians and Surgeons: Words and Phrases. Only the supervising physician in a physician-physician assistant relationship falls under the definition of physician as stated in Workers' Comp. Ct. R. of Proc. 49(0) (2018).

         9. Workers' Compensation: Appeal and Error. Whether an employee's compensable scheduled member injury has resulted in a whole body impairment and loss of earning power is a question of fact, which an appellate court reviews for clear error.

         10. Workers' Compensation. Employees are not limited to benefits for a scheduled member injury when the effects of that injury have extended to other parts of the employee's body in a manner that impairs the employee's ability to work.

         11. ___ . The test for determining whether a disability is to a scheduled member or to the body as a whole is the location of the residual impairment, not the situs of the injury.

         12. Workers' Compensation: Proof. An employee has the burden to prove by a preponderance of the evidence compensability of a claim against an employer under the Nebraska Workers' Compensation Act.

         13. Workers' Compensation. A workers' compensation award cannot be based on mere possibility or speculation.

         14. Workers' Compensation: Evidence. An award of future medical expenses requires explicit evidence that future medical treatment is reasonably necessary to relieve the injured worker from the effects of the work-related injury.

         15. Appeal and Error. An appellate court will not consider an issue on appeal that was not presented to or passed upon by the trial court.

         16. Workers' Compensation. The Nebraska Workers' Compensation Act is construed liberally to carry out its spirit and beneficent purposes.

         17. Workers' Compensation: Jurisdiction: Statutes. As a statutorily created court, the Workers' Compensation Court is a tribunal of limited and special jurisdiction and has only such authority as has been conferred on it by statute.

         18. Workers' Compensation: Jurisdiction: Contracts: Parties: Insurance. The Nebraska Workers' Compensation Act does not afford the compensation court jurisdiction to resolve contractual disputes between employees and third-party insurers.

         19. Workers' Compensation: Jurisdiction: Contracts: Insurance. A contractual dispute over private agreements for disability coverage that is not workers' compensation coverage is not ancillary to the compensation court's primary jurisdiction.

         20. Workers' Compensation: Jurisdiction: Termination of Employment. Wrongful discharge in relation to filing a workers' compensation claim [301 Neb. 313] does not fall under the compensation court's exclusive jurisdiction over accidents arising out of and in the course of employment.

         21. Workers' Compensation: Termination of Employment: Torts. Wrongful discharge is not one of the tort actions for which employers receive relief in exchange for liability under the Nebraska Workers' Compensation Act.

         22. Workers' Compensation: Penalties and Forfeitures. To avoid the penalty provided for in Neb. Rev. Stat. § 48-125 (Cum. Supp. 2016), an employer need not prevail in the employee's claim, but must have an actual basis in law or fact for disputing the claim and refusing compensation.

         23. Workers' Compensation: Penalties and Forfeitures: Time: Appeal and Error. An appellate court reviews for clear error the compensation court's findings concerning reasonable controversy underlying its determination of waiting-time penalties.

         24. Workers' Compensation: Proof. Depending on the circumstances, a reasonable controversy may exist regarding the employer's liability until an employee presents the employer with competent medical evidence that he or she is entitled to workers' compensation benefits.

         25. Attorney Fees. The determination of the amount of attorney fees is necessarily a question of fact that requires a factual determination on several factors, including the value of legal services rendered by an attorney by considering the amount involved, the nature of the litigation, the time and labor required, the novelty and difficulty of the questions raised, the skill required to properly conduct the case, the responsibility assumed, the care and diligence exhibited, the result of the suit, the character and standing of the attorney, and the customary charges of the bar for similar services.

          Appeal from the Workers' Compensation Court: Thomas E. Stine, Judge. Affirmed.

          Vikki S. Stamm and Jerad A. Murphy, of Stamm, Romero & Associates, PC, L.L.O., for appellant.

          Kent M. Smith and Michael J. Lunn, of Scheldrup, Blades, Schrock & Smith, PC, for appellees.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          [301 Neb. 314] Freudenberg, J.

         NATURE OF CASE

         The employee appeals from an award of the Nebraska Workers' Compensation Court. The issues presented concern the employee's member impairment rating, whether an injured extremity caused a whole body impairment, the sufficiency of the evidence to prove out-of-pocket medical expenses and future medical expenses, whether a physician assistant is a "physician" for the purpose of admitting signed written reports in lieu of testimony, whether there was no reasonable controversy as to the compensability of the injury such that greater waiting-time penalties should have been imposed, the compensation court's jurisdiction to decide retaliatory discharge or a private disability insurer's right to reimbursement, the necessity of vocational rehabilitation, and the amount of attorney fees. We affirm.

         BACKGROUND

         John J. Bower worked for Eaton Corporation (Eaton) as a relief operator. Bower earned approximately $19 per hour and worked approximately 56 hours per week. On September 30, 2013, Bower injured his right shoulder in an accident arising out of and in the course of his employment.

         Bower reported the incident to his supervisor that same day, but continued working until the end of his shift. Bower woke up the following morning with "the sharpest pain I've ever . . . felt before." He saw his general physician, Dr. Chadd Murray. An x ray did not reveal an injury.

         When nonsurgical treatments did not alleviate continuing symptoms, Bower was referred to Dr. Heber Crockett, an orthopedic surgeon, for treatment of his injury. Magnetic resonance imaging on November 25, 2013, revealed a moderate partial rotator cuff tear.

         Over the course of the next 3 years, the injury was treated with medication, steroid injections, physical therapy, and four surgical procedures. The surgical procedures were performed [301 Neb. 315] on February 4 and May 20, 2014, and March 17 and December 22, 2015. During this time, Eaton did not acknowledge that the injury was work related and did not pay workers' compensation benefits.

         Bower filed a workers' compensation claim on February 24, 2015. Bower reached maximum medical improvement on June 6, 2016, during the pendency of the workers' compensation proceedings. He submitted to an independent medical examination on July 7, conducted by Dr. Michael Morrison, an orthopedic surgeon.

         Morrison opined that Bower suffered from a permanent 12-percent impairment of his right upper extremity as a result of the September 2013 injury. After receiving Morrison's report, Eaton determined that Bower had incurred a work-related injury on September 30, 2013. Eaton determined that the February and May 2014 and March 2015 surgical procedures were compensable. But Eaton determined that the December 2015 surgery was not compensable.

         On August 12, 2016, Eaton paid Bower temporary total disability benefits representing the periods from February 4 until July 17, 2014, and March 17 until August 16, 2015, in a total amount of $33, 073.72. Eaton also paid on August 12, 2016, $19, 718.91 in permanent partial disability benefits based on Morrison's assessment of a 12-percent permanent impairment of Bower's right upper extremity.

         On September 1, 2016, Eaton discharged Bower from his employment, explaining to Bower that Eaton could not accommodate the work restrictions for his injury. Bower had been performing his regular duties without any accommodations, believing that he was adequately compensating with his left arm in order to avoid lifting too much weight with his right. Moreover, Bower believed he was qualified to continue working at Eaton in different positions as the "lead" or supervisor of the line. Nevertheless, representatives of Eaton told him that he was not working within his restrictions and that he [301 Neb. 316] would be discharged unless he could convince a physician to reduce them.

         In his petition, Bower had sought temporary total disability benefits, vocational rehabilitation, and payment of medical bills incurred and to be incurred in the future, as well as waiting-time penalties and attorney fees. In a joint pretrial memorandum, the parties presented several issues for determination, including reimbursement for out-of-pocket medical expenses and entitlement to future medical expenses, entitlement to return to work at Eaton or vocational rehabilitation services, the amount of Bower's permanency rating to his right upper extremity and whether he suffered a whole body impairment, Eaton's insurer's entitlement to repayment for short-term disability payments made to Bower in relation to his injury, Bower's entitlement to attorney fees and a waiting-time penalty, and whether Bower was entitled to compensation for allegedly being discharged in retaliation for Eaton's payment of workers' compensation benefits.

         The statement of issues for determination in the joint pretrial memorandum did not include reimbursement for vacation time used during treatment of the September 2013 injury. In the court's notice of trial and pretrial order, it had advised the parties that any issue not set forth in the joint pretrial memorandum would be deemed waived.

         The court issued its award on October 16, 2017, following a trial.

         Temporary Total Disability Awarded

         In the court's award, it found that all the surgeries were compensable. Thus, in addition to the amount paid voluntarily by Eaton during the pendency of the proceedings, the court awarded temporary total disability benefits pertaining to the December 2015 surgery. This amounted to a total of $1, 877.99, which neither party disputes on appeal.

          [301 Neb. 317] Permanent Disability Based on Member Impairment Rating of 12 Percent

         The court awarded permanent disability benefits based on a 12-percent impairment to Bower's right upper extremity. This member impairment rating was derived from Morrison's report.

         Bower had submitted a report by Crockett's physician assistant, Yuji Kitabatake. Kitabatake opined in the report that Bower suffered a 15-percent permanent impairment to his right upper extremity. The report was signed "Yuji Kitabatake. PA-C for Heber C. Crockett, M.D." Crockett did not sign the document. Eaton objected to the report as hearsay and outside the scope of Workers' Comp. Ct. R. of Proc. 10 (2018). The court received the report into evidence, but stated it would give the report whatever weight it found was due after reviewing it.

         In its award, the court concluded that the report was not due any weight. Citing to Neb. Rev. Stat. § 48-151(1) (Reissue 2010) and Workers' Compensation Court rule 10, the court found that the report failed to qualify as an expert medical opinion upon which it could rely for a determination of workers' compensation benefits.

         No Whole Body Impairment

         The court declined Bower's suggestion that his permanent disability benefits should be calculated based upon a loss of earning capacity under an impairment to the body as a whole. The only evidence of an impairment to the body as a whole was Kitabatake's report which stated, "Conversion from upper extremity to whole person is from 15% to 9% of whole person . . . ." Kitabatake did not otherwise describe how the shoulder injury caused a whole body impairment.

         In refusing to calculate the permanent partial disability award based on impairment to the body as a whole, the court reasoned that the medical evidence showed Bower's residual [301 Neb. 318] limitation and impairment were to his right upper extremity, and the court was "not persuaded that [Bower's] impairment to his right upper extremity has in some manner manifested itself as a . . . whole [body] impairment.''

         Partial Waiting-Time Penalty Awarded

         The court awarded Bower a waiting-time penalty pursuant to Neb. Rev. Stat. § 48-125(3) (Cum. Supp. 2016), but only in relation to Eaton's failure to timely pay workers' compensation benefits for the December 2015 surgery and corresponding recovery period. The waiting-time penalty for such benefits was $939. The court found that there was no longer a reasonable controversy as to the compensability of Bower's injury and the resulting medical care, including the December 2015 surgery and recovery period, as of the date of Eaton's receipt of Morrison's report.

         The court declined to award additional waiting-time penalties in relation to the remaining benefits that were paid by Eaton voluntarily on August 12, 2016, because it concluded that a reasonable controversy existed as to the compensability of Bower's injury until Eaton received Morrison's report. The court explained that the reasonable controversy stemmed from Murray's original progress note. The note described that Bower was seen on October 1, 2013, complaining of shoulder pain. And, in the "History of Present Illness" section, under the title, "Recent Interventions," Murry wrote, "He has no injury to his shoulder just woke up with the pain."

         When an agent of Eaton advised Bower that Murray had failed to indicate the injury was work related, Murray revised the progress note. The revision was apparently faxed to Eaton on November 22, 2013. It added that Bower "had injured his shoulder at work when he was lifting a heavy item, he has had pain but it became much worse this morning." However, the amended note continued to include the contradictory language from the original progress note.

          [301 Neb. 319] Exhibit 48 reflects that Eaton's workers' compensation insurer sent a letter to Murray on December 10, 2013, requesting that Murray explain the discrepancies between the initial report and the revised report and why it was changed. The letter stated that Eaton's workers' compensation insurer had attempted to speak with Murray on several occasions to discuss the discrepancy. There was no evidence that Murray responded to Eaton's inquiries.

         No Out-of-Pocket Medical Expenses Awarded

         The court denied Bower's claim for unpaid out-of-pocket medical expenses. In its pretrial order, the court had ordered the parties to file a joint pretrial memorandum, including, among other things, a "medical expense cover sheet setting forth an itemization of each medical expense incurred and unpaid, or for which reimbursement is claimed, by provider, date, and amount."

         The parties jointly submitted a medical expense cover sheet that specified providers and amounts, but not dates. It showed a total paid by Bower in the amount of $3, 975.41 and a total paid by Bower's insurer in the amount of $38, 735.88. The cover sheet showed a total amount of medical expenses, by provider, of $104, 356.87.

         At trial, Bower entered into evidence voluminous medical billing statements and records. The medical billing statements are contained in exhibits 23 through 32, and the medical records are found in exhibits 16 through 20. The billing statements show numerous payments made by health care insurance and by patient, but several statements contain overlapping dates, and thus duplicative payment receipts.

         The court additionally accepted into evidence exhibits 14 and 15, which contain Bower's summarization of his out-of-pocket expenses. Most, but not all, of the items summarized are detailed by date and provider. Exhibits 14 and 15 claimed a total of $12, 315.94 in out-of-pocket expenses. Bower testified [301 Neb. 320] that he was never reimbursed for any out-of-pocket expenses he paid during the treatment of his injury.

         After trial, the court contacted counsel and requested additional information to clarify the medical expenses. Counsel were to submit the information by stipulation on October 6, 2017. Counsel did not provide the information as requested. Approximately 2 weeks later, the court again contacted counsel on October 10, requesting additional information. Counsel indicated they would have the information to the court by October 12; but counsel did not provide any additional information.

         In denying compensation for any out-of-pocket medical expenses, the court explained, "The medical expense information provided by the parties falls woefully short of what was ordered to be provided by the Pretrial Order, and the Court is unable to meaningfully analyze the information." Specifically, the court noted that the cover sheet reflected medical expenses still owed in an amount of $61, 645.58, which amount the court observed was not reflected in the exhibits entered into evidence. Furthermore, the court noted the discrepancy between the claimed amount of out-of-pocket medical expenses in exhibits 14 and 15 of $12, 315.94 and the amount of $3, 975.41 stated as being paid by Bower in the medical expenses cover sheet of the joint pretrial memorandum.

         The court concluded that Bower had "failed to satisfy his burden to prove that the medical expenses submitted in Exhibits 14, 15, and 23 through 32, are fair, reasonable, and related to the work injury." With this reasoning, the court awarded Bower no out-of-pocket medical expenses.

         Attorney Fees Awarded

         Because the court had determined that Eaton failed to timely pay benefits relating to the December 2015 surgery, the court awarded attorney fees under § 48-125(2)(a), in the amount of $7, 500. The court explained that it had reached the amount of attorney fees to be awarded based upon the general nature of the case, the time spent in preparing and trying the case, the [301 Neb. 321] novelty and difficulty of the questions raised, the skill required to properly conduct the case, the responsibility assumed, the care and ...


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