Landon v. Industrial Commission , 240 Ariz. 21 ( 2016 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
CURTIS C. LANDON, Petitioner,
v.
THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,
QUEMETCO METALS LIMITED, INC., Respondent Employer,
LIBERTY INSURANCE CORP., Respondent Carrier.
No. 1 CA-IC 14-0046
FILED 6-9-2016
Special Action - Industrial Commission
ICA Claim Nos. 20121-150492**
20121-701361*
Carrier Claim Nos. WC608-000000**
WC608-A25774*
The Honorable Rachel C. Morgan, Administrative Law Judge
AWARD SET ASIDE
COUNSEL
Robert Hommel, P.C., Scottsdale
By Robert J. Hommel
Counsel for Petitioner
Industrial Commission of Arizona, Phoenix
By Andrew F. Wade
Counsel for Respondent
Klein, Doherty, Lundmark, Barberich & LaMont, P.C., Phoenix
By Lisa M. LaMont
Counsel for Respondent Employer and Carrier
OPINION
Chief Judge Michael J. Brown delivered the opinion of the Court, in which
Presiding Judge Samuel A. Thumma and Judge Patricia A. Orozco joined.
B R O W N, Chief Judge:
¶1 This is a special action review of an Industrial Commission of
Arizona (“ICA”) award and decision upon review denying Curtis C.
Landon’s request for temporary partial disability benefits for nine months.
The principal issue before us is whether Landon was precluded from
receiving such benefits because a physician had released him to full-duty
employment at the start of the nine-month period. As discussed below, a
claimant released to full-duty employment is not precluded from receiving
temporary partial disability benefits where the claimant can show a loss of
earning capacity. Because the administrative law judge (“ALJ”) failed to
make necessary findings as to whether Landon suffered a reduced earning
capacity during the nine-month period, we set aside the award.
BACKGROUND1
¶2 Quemetco Metals Limited, Inc. (“Quemetco”), hired Landon
in 2005. Landon’s work involved casting products for use in mining and
frequently required him to lift between 65 and 100 pounds above his
shoulder level. This work gradually caused Landon to develop bilateral
shoulder injuries. Landon filed workers’ compensation claims for benefits
in 2011 for his left shoulder (with a March 15, 2011 stipulated injury date)
and 2012 for his right shoulder (with a November 30, 2011 stipulated injury
date), which the carrier denied. Landon timely protested those denials.
¶3 While Landon’s claims were pending, Brian Matanky, M.D.,
performed surgery on Landon’s left shoulder on March 8, 2012 and his right
shoulder on May 31, 2012. When Landon attempted to start working “light
1 We consider the evidence in a light most favorable to upholding the
ALJ’s award. Lovitch v. Indus. Comm’n, 202 Ariz. 102, 105, ¶ 16 (App. 2002).
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Opinion of the Court
duty” for Quemetco some months later, at a time when his claims were still
in “denied” status, he was told he could return to work only if released
without restrictions. Because Landon could no longer afford to remain off
work, he requested a release to full duty. Dr. Matanky conducted a medical
examination and signed a full-duty release on September 4, 2012.
¶4 Landon promptly returned to Quemetco, but was then told
his position had been filled by another individual and there was no other
position for him at Quemetco. During the next few months, Landon
obtained a number of short-term jobs through temporary agencies with
other employers, earning lower wages than he earned at Quemetco.
Although Landon experienced pain and weakness in both shoulders while
working, he did not return to see Dr. Matanky until May 2013, after his
workers’ compensation claims were found compensable in April 2013. In
June 2013, Dr. Matanky found that Landon’s right shoulder condition had
substantially deteriorated and he placed Landon on no-work status.
¶5 Landon then filed a hearing request for temporary partial
disability benefits pursuant to Arizona Revised Statutes (“A.R.S.”) section
23-1061(J). At the hearing, Dr. Matanky testified that as of September 4,
2012, Landon had reported 85 percent improvement, but still had some
pain, stiffness, and swelling, and was therefore not finished with his
recovery. Ultimately, however, Dr. Matanky concluded that because
Landon’s condition had improved significantly post-surgery, he issued a
full-duty release, but with instructions for re-evaluation after four weeks if
needed. Quemetco took the position that because Dr. Matanky had
released Landon without any employment restrictions, Landon was
precluded from receiving temporary partial disability benefits from
September 4, 2012 to June 3, 2013.
¶6 Landon acknowledged at the hearing that when he attempted
to return to work in September 2012, he would not have been able to lift 65
to 100 pounds over his head, but he thought Quemetco might put him in
the “package area,” where heavy lifting would not be required. Landon
explained he had received short-term disability payments for several
months after the surgeries, but that he asked Dr. Matanky for the full-duty
release because those payments were scheduled to end on September 4.
According to Landon, he lost his health insurance and transportation when
his job was terminated, and thus was unable to return to see Dr. Matanky
until his workers’ compensation claims were found compensable in April
2013.
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Opinion of the Court
¶7 After the parties submitted post-hearing memoranda, the ALJ
ruled in relevant part as follows:
[Landon] testified that after his bilateral surgeries, he
requested a full duty work release from Dr. Matanky because
[Quemetco] would not allow him to return to work without
one. . . . When [Landon] presented his full release to
[Quemetco], he was informed his job was terminated and his
position filled. Subsequently, [Landon] worked for
temporary employment agencies performing various jobs, . .
. [and] had physical problems working because of pain and
weakness in both of his shoulders[.]
....
I find that [Landon] was medically released to full duty
without restrictions to his date of injury job effective
September 4, 2012. I further find that [Landon] failed to meet
his burden of proof that he was unable to perform his date of
injury job as of September 4, 2012 or that he had any work
restrictions from September 4, 2012 until [June 3], 2013.
....
IT IS ORDERED that [Landon] is not entitled to temporary
disability benefits[.]
¶8 Landon requested administrative review of the award, and
the ALJ summarily affirmed. Landon next sought timely review by this
court, which has jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(2), 23-
951(A), and Arizona Rules of Procedure for Special Actions 10.
DISCUSSION
¶9 In reviewing ICA findings and awards, we defer to the ALJ’s
factual findings but review questions of law de novo. Young v. Indus.
Comm’n, 204 Ariz. 267, 270, ¶ 14 (App. 2003). An ALJ must include findings
on all material issues in the award. Post v. Indus. Comm’n, 160 Ariz. 4, 7
(1989) (citation omitted). “Although lack of findings on a particular issue
does not invalidate an award per se,” we will set aside an ALJ’s award “if
we cannot determine the factual basis of [the] conclusion or whether it was
legally sound.” Id.
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Opinion of the Court
I. Eligibility for Temporary Partial Disability Benefits
¶10 The principal purpose of Arizona’s workers’ compensation
system is to compensate an injured worker for lost earning capacity. See
Altamirano v. Indus. Comm’n, 22 Ariz. App. 379, 380 (1974). During the
progression of a workers’ compensation claim, the worker typically may
transition through three phases following a significant injury: (1) temporary
total disability, when no work can be performed; (2) temporary partial
disability, when recovery has progressed such that work may be
performed, but the condition has not yet become medically stationary; and
(3) permanent disability, when the condition cannot be medically improved
to increase earning capacity. See Hardware Mut. Cas. Co. v. Indus. Comm’n,
17 Ariz. App. 7, 9-10 (1972). During each phase, the injured worker may
receive compensation as provided in Arizona’s Workers’ Compensation
Act (“the Act”). See A.R.S. §§ 23-1044, -1045. The unusual circumstances
presented here fall roughly within the second phase described above, given
that Landon was unable to work for several months following his surgeries,
and then he was released to return to work but his condition had not been
declared medically stationary.
A. Loss of Earning Capacity
¶11 Landon argues he is entitled to temporary partial disability
benefits from September 4, 2012 (when at his request he was released to full
duty by Dr. Matanky) through June 3, 2013 (when Dr. Matanky placed him
on no-work status) because he sustained a loss of earning capacity during
that period. Quemetco counters that Landon is not entitled, under any
circumstance, to receive temporary partial disability benefits because he
was released to work without restrictions between September 4, 2012 and
June 3, 2013. According to Quemetco, an injury-related work restriction is
a pre-condition of any entitlement to temporary disability benefits and thus
Landon’s full-duty release on September 4, 2012 forecloses any recovery for
loss of earning capacity. Resolution of this issue turns on the application of
A.R.S. §§ 23-1044(D) and (G), as construed by pertinent case law.
¶12 “If a statute’s language is subject to only one reasonable
meaning, we apply that meaning.” Bell v. Indus. Comm’n, 236 Ariz. 478, 480,
¶ 7 (2015). “We liberally construe [the] Act to effect its purpose of having
industry bear its share of the burden of human injury as a cost of doing
business.” Hahn v. Indus. Comm’n, 227 Ariz. 72, 74, ¶ 7 (App. 2011) (internal
quotations omitted).
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Opinion of the Court
¶13 An injured worker may be awarded temporary disability
benefits consisting of “sixty-six and two-thirds percent of the difference
between the wages earned before the injury and the wages which the
injured person is able to earn thereafter.” A.R.S. § 23-1044(A). Eligibility
for such an award requires a determination that the industrial injury is not
yet stationary and proof that the injury affected the worker’s earning
capacity. See Western Cable v. Indus. Comm’n, 144 Ariz. 514, 518 (App. 1985).
A claimant’s residual earning capacity can be established only by “evidence
of job opportunities that are both (1) suitable, i.e.: of the type the claimant
could reasonably be expected to perform in light of his impaired physical
or mental condition, and (2) reasonably available.” Zimmerman v. Indus.
Comm’n, 137 Ariz. 578, 582 (1983).
¶14 In determining the amount of this reduced earning capacity,
if any, under A.R.S. § 23-1044(A), an ALJ shall consider, among other things,
any previous disability, the occupational history of the
injured employee, the nature and extent of the physical
disability, the type of work the injured employee is able to
perform subsequent to the injury, any wages received for
work performed subsequent to the injury and the age of the
employee at the time of the injury.
A.R.S. § 23-1044(D).
¶15 In 2009, the legislature amended subsection D, adding in
pertinent part the following:
If the employee is unable to return to work or continue
working in any employment after the injury due to the
employee’s termination from employment for reasons that are
unrelated to the industrial injury, the commission may consider
the wages that the employee could have earned from that
employment as representative of the employee’s earning
capacity.
Id. (emphasis added); see also 2009 Ariz. Sess. Laws, ch. 184, § 5.
1. Relation of Industrial Injury to Employment
Loss
¶16 Quemetco argues that under the 2009 amendment, an
employee’s inability to continue working is “related” to the industrial
injury only if the injury prevented the employee from performing his job
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Opinion of the Court
duties. According to Quemetco, because Landon was released to full-duty
status, his injury was “unrelated” to the reason why his employment was
terminated. This narrow interpretation, however, is contrary to generally
used definitions of the word “related.” See Black’s Law Dictionary (10th ed.
2014) (“[c]onnected in some way; having relationship to or with something
else”); Webster’s II New College Dictionary (3d ed. 2005) (“connected” or
“associated”); see also Yollin v. City of Glendale, 219 Ariz. 24, 28, ¶ 9 (App.
2008) (explaining we may consult respected dictionaries for the plain
meanings of words that are undefined in a statute). Applying the
commonly understood meaning of “related,” an employee’s termination
from employment is related to the employee’s industrial injury (under
A.R.S. § 23-1044(D)) if it is connected to or associated with the industrial
injury.
¶17 Interpreting the 2009 amendment as suggested by Quemetco
would be inconsistent with a related provision of A.R.S. § 23-1044, which
establishes the framework for resolving “any issue . . . raised regarding
whether the injured employee has suffered a loss of earning capacity
because of an inability to obtain or retain suitable work[:]”
In cases involving loss of employment, the employer or carrier
may present evidence showing that the injured employee was
terminated from employment or has not obtained suitable work, or
both, due, in whole or in part, to economic or business
conditions, or other factors unrelated to the injury. The
injured employee may present evidence showing that such
termination or inability to obtain suitable work is due, in whole or
in part, to the industrial injury or limitations resulting from
the injury.
A.R.S. § 23-1044(G)(2) (emphasis added); see also Bell, 236 Ariz. at 480, ¶ 7
(explaining that when statutory provisions relate to the same subject
matter, they should be construed together and reconciled “whenever
possible, in such a way so as to give effect to all the statutes involved”
(quotation omitted)). A reading of §§ 23-1044(D) and (G) together indicates
that the legislature did not intend to prevent an injured employee from
showing that his termination and subsequent inability to find suitable,
available alternative employment was caused, at least in part, by his
industrial injury. Moreover, construing A.R.S. § 23-1044 in the restrictive
manner advanced by Quemetco would frustrate the remedial purposes of
the Act, “to dispense with, as much as possible, the litigation between
employer and employee and to place upon industry the burden of
compensation.” Marriott Corp. v. Indus. Comm’n, 147 Ariz. 116, 121 (1985).
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Opinion of the Court
¶18 This construction of A.R.S. § 23-1044 is consistent with
Arizona case law addressing the showing required to support a loss of
earning capacity. As recognized by our supreme court, “[t]he law should
compensate for losses attributable to industrial injuries, but not for losses
attributable to other factors.” Dep’t of Pub. Safety v. Indus. Comm’n, 176 Ariz.
318, 321 (1993) (“D.P.S.”).2 A claimant has the burden of proving a loss of
earning capacity, which requires establishing his inability to return to date-
of-injury employment and either to make a good faith effort to obtain other
suitable employment or to present testimony from a labor market expert to
establish his earning capacity. Zimmerman, 137 Ariz. at 580. If the worker
meets this initial burden of proof, the employer or carrier must then “go
forward with evidence demonstrating the availability of suitable
employment and/or the lack of a causal relationship between the claimed
loss of earning capacity and the injury.” D.P.S., 176 Ariz. at 322. Various
factors may affect whether a job is “suitable” and/or “available,” and the
“determination must be made in each case, regardless of whether the
employee resumed the former job and then lost it, or the reasons why it may
have been lost.” Id.; see also Zimmerman, 137 Ariz. at 582-84. The law does
not require a claimant to show that the industrial injury was the “sole
2 In adopting the 2009 amendment to A.R.S. § 23–1044(D), the
legislature expressed its intent to overrule D.P.S. “to the extent that the
court opinion precludes consideration of wages earned from employment
from which the employee has been terminated for reasons unrelated to the
industrial injury.” 2009 Ariz. Sess. Laws, ch. 184, § 7. However, the analysis
in D.P.S. does not preclude such consideration by an ALJ. Instead, D.P.S.
held that the “unrelated reasons” are “significant only where . . . they, rather
than [the] claimant’s disability, caused the subsequent inability to secure
work.” D.P.S., 176 Ariz. at 323. Stated differently, the court concluded that
compensation is unavailable only if the injury plays “no part in the worker’s
inability to find suitable employment.” Id. Thus, the 2009 amendment,
which did not address subsection (G)’s provisions addressing “loss of
employment,” merely clarifies the court’s holding and does not supersede
it. The legislature also stated that the 2009 amendment was intended to
give the ICA “broad discretion” to determine a loss of earning capacity,
“including whether and to what extent to consider relevant evidence of
wages earned in employment that has been terminated.” 2009 Ariz. Sess.
Laws, ch. 184, § 7. The analysis in this opinion is consistent with the
statements of intent the legislature included in the 2009 amendment.
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Opinion of the Court
cause” of the loss because doing so “would effectively deprive many
genuinely injured workers of benefits when unrelated causes have
combined with their disabilities to make it difficult or impossible to secure
other employment.” D.P.S., 176 Ariz. at 325.
¶19 Quemetco asserts that because Landon had been absent from
work for approximately six months, replacement of his position by another
worker was necessary due to “business conditions” based on the long
absence. Thus, Quemetco acknowledges that it terminated Landon’s
employment because his industrial injuries required surgery and the
recovery time associated with those surgeries made termination the most
prudent economic decision. Given the undisputed facts demonstrating that
Landon’s employment would not have been terminated absent his
industrial injury, his termination was related to his industrial injury under
A.R.S. § 23-1044(D). See D.P.S., 176 Ariz. at 323 (“Termination reasons
unrelated to the industrial injury, such as layoff, strike, economic
conditions, or misconduct become significant only where the evidence
demonstrates that they, rather than claimant’s disability, caused the
subsequent inability to secure work.”); cf. Wiedmaier v. Indus. Comm’n, 121
Ariz. 127, 130 (1978) (noting that if economic conditions are the sole cause
of unemployment, then there is no right to an award for lost earning
capacity) (emphasis added)).3 Accordingly, the second sentence in
subsection (D) (addressing the situation where termination is caused for
reasons unrelated to the industrial injury) does not apply here and Landon
qualifies for temporary benefits under A.R.S. § 23-1044(A) if he is able to
establish a loss of earning capacity.
3 Quemetco cites Olszewski v. Indus. Comm’n, 113 Ariz. 282 (1976), for
the proposition that an injured employee given a full-duty release to work
is ineligible for temporary disability benefits. In Olszewski, the injured
employee sustained a series of workplace injuries from “many accidents
over the years.” Id. at 283. Although the employee was eventually released
to “regular work” following his last accident, the employer had the
employee assume timekeeping duties at a lower wage rather than allowing
him to resume his duties as a foreman. Id. at 282-83. Because the loss of
wages was not attributable to the employee’s injury, but rather to his
repeated involvement in serious workplace accidents, our supreme court
concluded the employee was ineligible for benefits. Id. at 283. The supreme
court did not suggest, however, that an employee released to regular work
is, as a matter of law, ineligible for temporary disability benefits.
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Opinion of the Court
2. Determining The Amount Of Loss Of Earning
Capacity
¶20 Determining the amount of Landon’s loss of earning capacity,
if any, is governed by the remainder of subsection (D), as well as subsection
(G)(2), of A.R.S. § 23-1044. Under subsection (D), an ALJ must consider
Landon’s previous disability, if any, his occupational history, the nature
and extent of his injuries, what kind of work he could perform after the
shoulder injuries, the wages he received for work performed after the
injuries and his age at the time he was injured. See also Zimmerman, 137
Ariz. at 582 (After considering various factors, an ALJ evaluates the
evidence presented to determine whether “there is employment reasonably
available which the claimant could reasonably be expected to perform,
considering his physical capabilities, education and training[.]”).
¶21 Under subsection (G)(2), Quemetco may present evidence
showing that Landon was terminated or has not obtained suitable work due
to economic or business conditions. Landon, on the other hand, may
present evidence demonstrating that his termination from Quemetco and
his inability to obtain suitable work after his shoulder injuries were based,
in whole or in part, on the injuries or limitations resulting from the injuries.
Thus, even if there are other reasons why Landon was terminated or could
not obtain suitable work, such as the economic justification offered by
Quemetco, Landon may show that the injury played at least some part in
the reasons for termination or lack of suitable work. See A.R.S. § 23-
1044(G)(2) (“The administrative law judge shall consider all such evidence
in determining whether and to what extent the injured employee has
sustained any loss or additional loss of earning capacity.”); see also D.P.S.,
176 Ariz. at 322-23 (explaining that compensation benefits are payable if
limitations resulting from an industrial injury contribute to a claimant’s
inability to secure employment at pre-injury wage levels); Fletcher v. Indus.
Comm’n, 120 Ariz. 571, 573 (App. 1978) (noting that when a “claimant loses
employment as a direct result of economic or other reasons unrelated to his
injury, he may nevertheless be entitled to compensation if he is able to show
that the difficulties in finding other employment are due to his injury”).
¶22 Quemetco contends that if it had not filled his position,
Landon would have been able to earn his pre-injury wages because he was
willing and able to return to work. Landon’s position, however, was no
longer available to him because of an economic decision by Quemetco, so
he could not earn the wages even if he could have accomplished the lifting
required for the job. Landon testified that he sought to return to work
because he needed the money and he believed he could fulfill other duties
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Opinion of the Court
that would not require heavy lifting, such as those carried out in the
package area. Quemetco argues further that Landon’s ability to work in his
pre-injury capacity is supported by the temporary jobs he obtained after his
position with Quemetco was terminated. But Landon’s employment in
temporary jobs does not mean he is precluded from receiving any
temporary partial disability benefits. See Pennell v. Indus. Comm’n, 152 Ariz.
276, 280 (App. 1987) (“Post-injury earning capacity itself is based on
employability in general, not simply on employability in the pre-injury
occupation.”). It is undisputed that Landon earned less money in those
temporary jobs than he did at Quemetco and it would be contrary to the
purposes of the Act to penalize a claimant who works diligently to obtain
some employment in place of his pre-injury work by depriving him of the
opportunity to obtain temporary benefits. See Fullen v. Indus. Comm’n, 122
Ariz. 425, 429 (1979) (noting the purpose of the Act is to protect injured
workers and compensate valid claims).
II. Insufficient Findings
¶23 Although an ALJ is not required to make a specific finding on
every issue presented, the ALJ must specifically resolve primary issues in
the case, thereby permitting the reviewing court to determine whether the
basis of the ALJ’s conclusion is legally sound. See, e.g., Cavco Indus. v. Indus.
Comm’n, 129 Ariz. 429, 435 (1981). The ultimate issue here is whether
Landon was entitled to receive temporary partial disability benefits
between September 4, 2012 and June 3, 2013, and if so, the amount of such
benefits, which turns on (among other things) whether Landon
demonstrated that he made good faith efforts to obtain other suitable
employment but no equivalent employment was available to him. See
D.P.S., 176 Ariz. at 322 (“The administrative law judge must make a
determination, based on all the facts and circumstances, whether and to
what extent the worker’s disability has prevented employment.” (citing
A.R.S. § 23-1044(G))).
¶24 Landon testified he was still recovering from his injuries
when he was given the full-duty release, and that he faced difficulty in
obtaining other work. Although he was successful in finding several
temporary positions, he received significantly less than what he had earned
with Quemetco. However, the ALJ made no findings as to whether Landon
met his burden of showing why he was unable to return to his date-of-
injury employment or whether he made a good faith effort to obtain other
suitable employment. See Zimmerman, 137 Ariz. at 584 (“After considering
all these factors, if the finder of fact can conclude that there is a reasonable
probability that the injured worker can find suitable employment on a
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regular basis, then and only then may it be found that such employment is
’reasonably available.’”). Nor is there any indication that the ALJ
considered the various factors outlined in A.R.S. § 23-1044(D) and (G)
relating to whether Landon was in a position where he could find suitable
employment that was reasonably available.
¶25 Without findings specifically addressing loss of earning
capacity, and the factors related to it, we are unable to determine whether
the ALJ erred by denying Landon temporary partial disability benefits. See
Post, 160 Ariz. at 7 (explaining an appellate court will not speculate about
the basis of the award or become a factfinder); Hardware Mut. Cas. Co., 17
Ariz. App. at 10 (explaining that “when earning capacity during this period
has been placed in controversy,” an ALJ must “make a specific finding
thereon.”).
CONCLUSION
¶26 Because the ALJ erred in determining that Landon was not
entitled to an award of temporary partial disability benefits, and failed to
make findings as to whether Landon sustained a loss of earning capacity
following his termination of employment, we set aside the award.
:AA
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