Panoke v. Reef Development of Hawaii, Inc. , 136 Haw. 448 ( 2015 )

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Electronically Filed
Supreme Court
SCWC-11-0000556
14-DEC-2015
08:17 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
DAVID PANOKE, Petitioner/Claimant-Appellant,
vs.
REEF DEVELOPMENT OF HAWAII, INC.,
Respondent/Employer-Appellee, and SEABRIGHT
INSURANCE COMPANY, Respondent/Insurance Carrier-Appellee.
SCWC-11-0000556
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-11-0000556; CASE NO. AB 2005-243 (2-04-07185))
DECEMBER 14, 2015
RECKTENWALD, C.J., McKENNA, POLLACK, AND WILSON, JJ.,
WITH NAKAYAMA, J., DISSENTING
OPINION OF THE COURT BY RECKTENWALD, C.J.
David Panoke was injured while he was working for his
former employer, Reef Development of Hawaii, Inc. This appeal
concerns Panoke’s subsequent workers’ compensation claim made
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against Reef and its insurance carrier, Seabright Insurance
Company.
Panoke was involved in a work accident in which he
initially stated that he had injured his back. Reef and
Seabright accepted responsibility for Panoke’s back injury.
Shortly thereafter, Panoke also began experiencing pain in both
shoulders. MRIs of Panoke’s shoulders showed that Panoke had
labral tears and rotator cuff tendon tears in both shoulders.
Reef and Seabright denied liability for Panoke’s shoulder
injuries.
Panoke argues that pursuant to Hawai#i Revised Statutes
(HRS) § 386-85,1 the Labor and Industrial Relations Appeals Board
(LIRAB) was required to presume that Panoke’s shoulder injuries
were work-related in the absence of substantial evidence to the
contrary. The LIRAB concluded that Reef and Seabright adduced
substantial evidence that rebutted the presumption that Panoke’s
1
HRS § 386-85 (1993) provides:
In any proceeding for the enforcement of a claim
for compensation under this chapter it shall be
presumed, in the absence of substantial evidence to
the contrary:
(1) That the claim is for a covered work injury;
(2) That sufficient notice of such injury has been
given;
(3) That the injury was not caused by the intoxication
of the injured employee; and
(4) That the injury was not caused by the wilful
intention of the injured employee to injure oneself or
another.
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shoulder injuries were covered work-related injuries. The LIRAB
also limited Panoke’s Temporary Total Disability (TTD) benefits
based on deficiencies in the certificates of disability submitted
by Panoke’s attending physicians. The ICA affirmed the LIRAB’s
decision and order.
For the reasons set forth below, we hold that the LIRAB
erred in concluding that Reef and Seabright adduced substantial
evidence that rebutted the presumption that Panoke’s shoulder
injuries were related to his work accident. We also hold that
the LIRAB erred in relying on the deficiencies in Panoke’s
physicians’ reports in limiting his TTD benefits. We therefore
vacate the ICA’s judgment and the LIRAB’s decision and order and
remand the case to the LIRAB for further proceedings consistent
with this opinion.
I. Background
A. Panoke’s June 17, 2004 Work Accident
Panoke began working for Reef as an ironworker on
February 19, 2004. His job involved heavy manual labor,
including welding, climbing scaffolding, carrying heavy
equipment, pulling forty to fifty pound buckets up to the
scaffolding using ropes, using jackhammers, and using pulleys,
which involved pulling down on chain or rope with his arms to
lift heavy objects. Panoke was able to perform his job duties
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without any physical restrictions or symptoms from February 19,
2004 until June 17, 2004.
On June 17, 2004, Panoke was working for Reef at a
construction site. Panoke’s work involved installing concrete
wall panels on a building. The crew used a pulley mechanism to
lift the heavy panels. While the crew members were guiding one
of the panels into place, the panel slipped downwards in the
chain that was holding it. As the panel slipped, Panoke was
guiding it with his hands underneath it, with his knees slightly
bent. The panel fell around two feet and stopped short of the
ground, but Panoke’s body was jerked forward slightly while he
held onto the panel, and then he let go and moved back to prevent
the panel from landing on his toes. Panoke later recalled that
he immediately felt a sharp pain in his right lower back, but
felt no pain in his shoulders at the time.
B. Panoke’s Subsequent Medical Treatment and Workers’
Compensation Claims
Immediately after the June 17, 2004 work accident,
Panoke was taken to Concentra Medical Center (Concentra). At
Concentra, Dr. Diaz-Ordaz diagnosed Panoke with a lower back
strain and placed Panoke off work duty for the rest of the day,
informing Panoke that he could return to work the next day with
modified duties. On June 18, 2004, Reef completed a WC-1
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“Employer’s Report of Industrial Injury” form, and did not
contest that the back strain had occurred at work or that it was
covered by workers’ compensation. Panoke returned to Concentra
on June 21, 2004, and June 28, 2004, and was informed on both
occasions that he could return to work with modified duties.
However, Panoke did not return to work because he felt he could
not handle even light duties, and instead, on June 30, 2004, he
visited a new doctor, Dr. Scott McCaffrey, at Work Star
Occupational Health Systems.
In his first visit to Work Star, Panoke complained of
pain in his upper left back, right buttock, and right knee. Dr.
McCaffrey diagnosed Panoke with a lumbar strain or sprain, and
right leg sciatica, and placed Panoke “off duty” but did not
specify a date when Panoke could return to work. Panoke next
visited Work Star on July 2, 2004, when he complained of pain in
his upper left back, lower back, and right hip. Dr. McCaffrey
again recorded Panoke’s work status as “off duty.” Panoke
returned to Work Star on July 6, 2004, complaining of upper and
lower back and right buttock pain, and was also diagnosed with a
left shoulder sprain. On July 13, 2004, Panoke complained to Dr.
McCaffrey of pain in his neck, mid back, right buttock, and right
hamstring. Again, Dr. McCaffrey placed Panoke “off duty.”
On July 16, 2004, in addition to back pain, Panoke
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complained to Dr. McCaffrey of pain in his left shoulder. On
July 30, 2004, Panoke began to complain of pain in both
shoulders. Panoke continued regular visits to Work Star from
July 2004 until July 2007 with various pain complaints, including
pain in his legs, feet, hips, back, and shoulders.
On August 31, 2004, Panoke saw Dr. Gary Okamura, an
orthopedic surgeon, for the pain in his shoulders. Dr. Okamura
noted that Panoke had previously fractured both of his shoulders
in 1991, but did not have surgery at that time. Panoke told Dr.
Okamura that he had not noticed the shoulder pain until a few
days after the work accident because his back had been so sore.
Dr. Okamura stated that his initial impression was that Panoke
had tendinitis and labral tears in both shoulders, but requested
permission to obtain an MRI on both Panoke’s shoulders.
On September 8, 2004, Reef and Seabright sought a
second opinion on Panoke’s condition from Deborah Agles, M.D.
Dr. Agles examined Panoke and his medical records, and noted that
Panoke had been involved in a motor vehicle accident in 1991 that
resulted in fractures to both of his shoulders and
hospitalization for one week. Dr. Agles opined that Panoke’s
current shoulder injuries had not been caused by the June 17,
2004 work accident due to the lack of close temporal proximity
between the shoulder pain and the accident, Panoke’s inability to
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account for the development of the shoulder symptoms, and
Panoke’s history of prior shoulder injuries. Seabright then
informed Dr. McCaffrey, the State Disability Compensation
Division (DCD), and Panoke’s attorney that Reef and Seabright
were controverting Panoke’s bilateral shoulder injury diagnoses.
On November 6, 2004, Reef and Seabright denied Dr.
McCaffrey’s request for the shoulder MRIs based on Dr. Agles’s
report. Panoke then requested a DCD hearing to review the
denial. On February 15, 2005, Seabright obtained another medical
opinion regarding Panoke’s shoulders from Clifford Lau, M.D., an
orthopedic surgeon. Dr. Lau agreed with Dr. Agles that Panoke’s
shoulder injuries were not a result of his June 17, 2004 work
accident. Dr. Lau also opined that Panoke’s ongoing back pain
was more likely a result of psychological factors than the
June 17, 2004 accident. Based on Dr. Lau’s report, Reef and
Seabright terminated Panoke’s TTD benefits effective April 6,
2005. Panoke then amended his request for a DCD hearing to
include review of Reef’s termination of TTD.
On June 13, 2005, the DCD Director determined that
Panoke’s shoulder injuries were a result of the June 17, 2004
accident, and that “[Reef] ha[d] not provided sufficient evidence
to support its denial of a shoulder injury.” The Director
therefore ordered Reef to pay for medical care, services, and
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supplies for Panoke’s injuries, including both shoulder injuries.
The Director also ordered Reef to pay TTD compensation for the
periods of June 20, 2004 through June 22, 2004 and June 30, 2004
through April 5, 2005. Reef and Seabright filed a notice of
appeal to the LIRAB, and a motion to stay the payments ordered by
the Director. The LIRAB denied Reef and Seabright’s motion to
stay on August 5, 2005.
Panoke underwent Dr. Okamura’s recommended shoulder
MRIs, and Dr. Okamura diagnosed him with labral tears and rotator
cuff tendon tears in both shoulders, and requested permission to
perform surgery. Reef and Seabright authorized the shoulder
surgery, but reserved their right to seek reimbursement for any
medical expenses paid in the event that the LIRAB overturned the
Director’s order. Dr. Okamura performed surgery to repair the
rotator cuff and superior labral on Panoke’s right shoulder on
February 3, 2006.
Between March and June 2006, the parties disputed
whether TTD was due to be paid to Panoke. Panoke argued that
“[t]here can be no dispute that [Panoke] has been disabled
following his surgery, however, [Seabright] has failed to pay
TTD.” Reef and Seabright, however, argued that they “ha[d] not
received certificates of disability from [Panoke’s] treating
physicians.” As a result of this dispute, on June 7, 2006,
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Panoke moved for temporary remand to the DCD to request the
Director to compel Reef and Seabright to pay TTD and assess
penalties against them. On June 26, 2006, the LIRAB temporarily
remanded the case to the DCD.
Reef and Seabright argued to the Director that the
disputed period of TTD payments dated from April 6, 2005 (the day
after the last day of TTD ordered by the Director on June 13,
2005) through February 2, 2006 (the day before Panoke’s right
shoulder surgery). Reef and Seabright stated that they had paid
TTD for the period dating from February 3, 2006 to September 15,
2006, while Panoke was recovering from surgery, and for the
periods previously ordered by the Director. Reef and Seabright
claimed that their denial of TTD payments for the disputed period
was justified, first because of Dr. Lau’s opinions that Panoke’s
shoulder injuries were not caused by the June 17, 2004 accident
and that Panoke could return to light work, and, second, because
Dr. McCaffrey had not submitted any valid certifications of
disability.
On October 13, 2006, the Director issued a decision.
The Director credited Dr. McCaffrey’s reports, and ordered Reef
and Seabright to pay TTD benefits for the period of April 6, 2005
through September 19, 2006. The Director also ordered Reef and
Seabright to pay additional TTD payments upon the receipt of
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future medical certifications. However, the Director declined to
impose penalties against Reef and Seabright for late TTD
payments. Reef and Seabright appealed the Director’s decision to
the LIRAB, and filed a motion to stay payments. On December 8,
2006, the motion to stay payments was denied. Panoke underwent
surgery on his left shoulder on October 20, 2007.
C. Appeal to the LIRAB
The LIRAB trial was held on April 9, 2010. The issues
relevant to this appeal that were to be determined at the trial
were:
a. Whether Claimant sustained bilateral shoulder
injuries on June 17, 2004, arising out of and in the
course of employment.
. . .
c. What is the period of temporary total disability
resulting from the work injury of June 17, 2004.
d. Whether Employer is liable for a penalty for late
payment of temporary total disability benefits for the
period April 6, 2005 to February 2, 2006.
Two witnesses testified at the trial, Dr. Peter Diamond
and Panoke. After Dr. Diamond was qualified as an expert in the
area of orthopedic surgery, he testified to the following. Dr.
Diamond determined that the injuries to both of Panoke’s
shoulders were the result of degenerative, long-term conditions,
including arthritis. The arthritis may have been caused by a
previous trauma injury, such as a fracture. Dr. Diamond also
determined that the labral and rotator cuff tears in Panoke’s
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shoulders were most likely not the result of the June 17, 2004
work accident.
Dr. Diamond gave several reasons for his opinion that
the tears were not caused by the June 17, 2004 work accident.
First, the mechanism of Panoke’s injury that caused his back
injury was not consistent with the shoulder injuries. Usually,
tears in the shoulder like Panoke’s are caused by a compression
injury of the shoulder joints, rather than a pulling (traction)
injury, which is what occurred in Panoke’s case. According to
Dr. Diamond, it is possible to cause tearing of the labrum or
rotator cuff through a traction injury, but this would usually
also cause damage to the biceps, which Panoke lacked. Second, it
is very unlikely that someone would have a sudden tear of the
labrum and not have any pain symptoms immediately. Dr. Diamond
also opined that it is unlikely that Panoke’s back pain would
have masked his shoulder pain, particularly when Panoke
complained of pain in his knee immediately following his back
injury.
On cross-examination, Dr. Diamond was questioned as to
whether Panoke’s general job duties as an ironworker, such as
pulling up objects by rope, or pulling down on a rope or chain,
could have resulted in Panoke’s degenerative shoulder conditions.
Dr. Diamond answered that although heavy labor such as Panoke’s
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might increase the risk of arthritis, it is uncommon for heavy
work to cause degenerative shoulder problems. Dr. Diamond also
testified that a patient with preexisting labrum tears would be
more susceptible to traction injuries resulting in labrum tears.
When asked if it was possible that Panoke’s June 17, 2004 work
accident had aggravated Panoke’s arthritic condition or the
labral tearing “even to the slightest degree,” Dr. Diamond
responded that it was possible, but later testified that he did
not think it was probable. Dr. Diamond testified that he
estimated a twelve- to eighteen-month recovery time from Panoke’s
shoulder surgery.
Panoke testified to the following. When the concrete
panel Panoke was helping to move slipped, he let go of the panel
to move away after straining against the weight for a few
seconds, and his body was jerked forward. He experienced an
immediate, sharp, and excruciating pain in his back, but he did
not have any shoulder pain. Panoke’s shoulder pain started
“maybe a week, a week and a half, maybe two weeks later [than the
accident].” At first it was not intense, but the pain got worse
over time, and Panoke still experienced significant pain at the
time of the LIRAB trial. Following his second shoulder surgery,
Panoke’s TTD checks had stopped coming, and he was living on the
beach because he had no other place to go.
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On cross-examination, Panoke testified that after his
second shoulder surgery, Dr. McCaffrey told him he could return
to work with modified light duty, but that Reef did not have any
light duty work at that time. Panoke did not look for work
outside of Reef. Panoke also testified that in 1990 or 1991, he
broke both of his shoulders after he fell from a moped and landed
with both arms.
In their post-hearing brief, Reef and Seabright relied
on the reports of Drs. Agles and Lau, and the trial testimony of
Dr. Diamond, to support their argument that Panoke’s shoulder
injuries were not caused by the June 17, 2004 work accident.
Reef and Seabright further argued that Panoke was not
entitled to TTD benefits beyond December 17, 2005, based on Dr.
Diamond’s opinion that Panoke’s back injury had achieved maximum
medical improvement eighteen months after the June 17, 2004
accident.
Panoke argued in his post-hearing memorandum that his
shoulder injuries were caused by the June 17, 2004 work accident.
Panoke argued that this was established because he was able to
perform his work duties before June 17, 2004 without problem,
there were no intervening incidents between June 17, 2004, and
the onset of his shoulder pain, his previous shoulder injuries
had resolved, and his attending physicians concluded that his
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shoulder injuries were work-related.
Panoke also argued that the reports of Drs. Agles and
Lau could not be relied upon because Dr. Agles had not examined
Panoke’s shoulders, and because neither Dr. Agles nor Dr. Lau
considered whether the June 17, 2004 accident could have
exacerbated Panoke’s pre-existing condition. Panoke further
argued that Dr. Diamond’s reports were flawed because Dr. Diamond
failed to consider whether the June 17, 2004 accident exacerbated
Panoke’s shoulder injuries, and because Dr. Diamond’s testimony,
that the type of tears Panoke suffered to his shoulders “usually”
involve compression mechanisms or bicep injuries, was irrelevant.
Panoke next argued that he was entitled to continuing
TTD benefits from June 21, 2004 through July 12, 2007. Panoke
relied on the Work Star reports for this period placing Panoke
off work.
Finally, Panoke argued that Reef and Seabright should
have been required to pay a twenty percent penalty for late
payments of TTD under HRS § 386-92.
On June 14, 2011, the LIRAB issued its decision. The
LIRAB made the following findings of fact (FOF) relevant to this
appeal:
7. On July 2, 2004, Claimant sought treatment
with Todd M. Uchima, [physician assistant] for Dr.
McCaffrey and/or Dr. McCaffrey with complaints of pain
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in his upper back, lower back, and right hip.
Claimaint’s Pain diagram noted that he
experienced burning pain in his posterior right
shoulder, aching in his left scapular region, and low
back burning and stabbing pain, and pins and needles
in his right hip. Claimant rated his pain at 10/10.
The [LIRAB] notes, however, that two other pain
diagrams of the same date do not indicate any right
shoulder symptoms.
. . .
10. On July 16, 2004, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in his low back and left shoulder. According to
Claimant’s July 16, 2004 pain diagram, he had pain in
his right and left shoulder, his right hip, and his
right leg.
. . .
18. On August 31, 2004, Claimant informed
Gary Y. Okamura, M.D. that he first noticed shoulder
pain a few days after the subject accident, because
his back was so sore. Claimant rated the pain on his
right shoulder at 6/10 and on the left shoulder at
4/10.
. . .
20. At Employer’s request, Deborah A. Agles,
M.D. examined Claimant on September 8, 2004.
Claimant’s pain drawing noted right shoulder aching.
Claimant informed Dr. Agles that his right shoulder
began hurting about one week after the June 17, 2004
work accident. He was unable to describe how the
shoulder was injured, but assumed it was due to the
heavy lifting. Claimant had no complaints regarding
the left shoulder. Dr. Agles did not, however,
examine Claimant’s shoulders.
. . .
29. By letter dated January 31, 2005, Dr.
McCaffrey opined that Claimant sustained a
“[b]ilateral shoulder sprain with chronic persistent
dysfunction, right greater than left.” Dr. McCaffrey
noted that Claimant had no history of ongoing shoulder
problems or medical treatment for the shoulders, and
that Claimant “fully and totally” recovered from the
prior motor vehicle accident-related shoulder trauma,
without residual symptoms or impairment. Dr.
McCaffrey further noted that Claimant had been
involved in heavy work activities and recreational
pursuits and was clinically asymptomatic before the
subject work accident.
. . .
31. Clifford K.H. Lau, M.D. examined Claimant
at Employer’s request. In his report dated
February 15, 2005, Dr. Lau noted Claimant’s report
that he developed pain in the front of his right
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shoulder and the back of his left shoulder about a
week after the subject accident. Claimant also
informed Dr. Lau that he had no problems with his
moped accident-related shoulder injuries after they
healed.
Dr. Lau opined that Claimant’s subject
complaints exceeded his objective findings and that
his examination showed “multiple inconsistencies.”
Dr. Lau opined that Claimant suffered a strain
to his lower back as a result of the June 17, 2004
work injury and that Claimant’s current problems were
not related to that work injury. He further opined
that, based on the “time sequence and development of
the shoulder complaints,” Claimant’s shoulder
complaints were not related to the subject work
accident. Dr. Lau explained that “development of neck
pain and severe shoulder pain at 3-4 weeks following
an injury is not medically probable unless there was
loss of consciousness or change to his mental status.”
. . .
43. A September 21, 2005 MR arthogram [sic]
(“MRA”) of [Panoke’s] left shoulder revealed:
1. . . . evidence of degenerative joint
disease.
2. Moderate degenerative joint disease
of the AC joint . . . .
3. High grade partial tear of the
supraspinatus tendon . . . . There
is also a tear involving the . . .
infraspinatus tendon.
4. Stellate tear and degeneration of
the superior labrum which extends
into the posterior labrum. The
anterior labrum is grossly normal.
44. A September 21, 2005 MRA of [Panoke’s]
right shoulder revealed:
1. Degenerative changes of the
glenohumeral joint and AC
joint. . . .
2. Partial tear along the articular
surface of the supraspinatus tendon
near its insertion site.
3. Superior labral tear near its base.
The superior labrum is of increased
intensity related to degeneration.
. . .
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45. By letter dated September 30, 2005, Dr.
Okamura reported his impressions as:
1. Right shoulder superior labral tear
2. Right shoulder partial rotator cuff
tendon tear.
3. Left shoulder superior labral tear.
4. Left shoulder partial versus full
thickness rotator cuff tear.
. . .
47. Dr. Lau prepared a supplemental report
dated October 28, 2005. He acknowledged that Claimant
had a “pain problem.” He continued to opine, however,
that Claimant’s shoulder conditions were not related
to the June 17, 2004 work injury. If the work
accident caused the rotator cuff and labral tears to
both shoulders, the significant force would have been
applied to both shoulders, and “the pain would have
been substantial and presentation would have occurred
immediately or at least within several days to a
week.”
48. Dr. Agles prepared a supplemental report
dated November 15, 2005.
. . . .
[Dr. Agles] continued to opine that Claimant’s
shoulder symptoms were not related to the subject
accident, given the lack of temporal association and
Claimant’s inability to describe how the shoulders
were injured. Dr. Agles noted Claimant’s pre-existing
shoulder pathology wherein Claimant had bilateral
fractures and a left shoulder strain that was
sustained while resisting arrest.
. . .
50. On December 9, 2005, Claimant sought
treatment with Dr. Baloy with complaints of pain in
both shoulders, his lower back, buttocks, right upper
leg, and right foot. Dr. Baloy noted Claimant’s “work
status” as “off duty.”
51. On December 30, 2005, Claimant sought
treatment with Dr. Baloy with complaints of pain in
both shoulders, his lower back, buttocks, right leg,
and right foot.
. . .
53. On January 26, 2006, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in both shoulders, his mid to low back, right buttock,
and right posterior thigh. Dr. McCaffrey noted
Claimant’s “work status” as “off duty.”
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. . .
57. On March 9, 2006 and April 11, 2006,
Claimant sought treatment with Dr. McCaffrey with
complaints of pain in both shoulders, his lower back,
buttocks, and right leg.
58. On April 11, 2006 . . . Dr. McCaffrey
noted that Claimant was not able to work light duty,
pending a left shoulder surgery. He anticipated a
return to work six months after left shoulder surgery.
. . .
62. On May 2, 2006, Claimant sought treatment
with Dr. McCaffrey with complaints of pain in both
shoulders, his low back, and right leg.
. . .
67. . . . Dr. Diamond opined that Claimant’s
shoulder complaints were not directly related to the
subject accident because:
• There is a definite history of prior
significant trauma to the shoulder, with a
history of bilateral fracture.
• [Claimant] has documentation in the
records of prior shoulder complaints.
• [Claimant] also has remarkably symmetrical
complaints, and I suspect, findings.
• [Claimant] demonstrates multiple positive
Waddell’s findings,2 tending to de-
emphasize the importance of non-documented
history and question the relationship of
clinical findings to pain generators.
Dr. Diamond also explained that “the mechanism
of injury is not typical of the shoulder pathology
found.” He explained that although it is debatable,
“SLAP lesions[3] usually involve a
compression mechanism, such as seen in
overhead throwing, rather than a traction
mechanism. In the rare cases where
traction mechanism is implicated, SLAP
lessions usually involve a biceps
2
Waddell findings are exaggerated responses to pain, not
necessarily intentionally exaggerated, but which do not make sense in terms of
the patient’s anatomical condition.
3
In his testimony at the LIRAB trial, Dr. Diamond explained that
“SLAP” stands for “severe labrum from anterior to posterior.”
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avulsion, as well as other pathology.”
Dr. Diamond noted that Dr. Okamura found that
Claimant’s biceps tendon was normal and that the
operative note documented “extensive debridement due
to glenohumeral joint arthritis,” which was suggestive
of long term pathology.
. . .
71. On October 31, 2006, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in both shoulders, his low back, buttocks, and right
leg. Claimant’s “work status” was noted as “modified
duty.”
. . .
73. On March 3, 2007, Claimant sought “Urgent
Care Walk-In” treatment with Dr. McCaffrey with
complaints of pain in his left shoulder, low back,
left buttock, and right leg.
74. On March 29, 2007, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in his left shoulder, low back, left buttock, and
right leg. Claimant’s “work status” was noted as
[“]off duty.”
75. On April 19, 2007, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in his left shoulder, low back, left buttock, left
thigh, right knee, and left foot.
76. On May 31, 2007, Claimant sought treatment
with Dr. McCaffrey with complaints of pain in both
shoulders, his low back, left buttock, and right leg,
and left leg and foot.
77. On June 21, 2007, Claimant sought
treatment with Dr. McCaffrey with complaints of pain
in both shoulders, his low back, left buttock, and
both legs and left foot.
. . .
80. In Claimant’s Answers to Employer’s First
Request for Answers to Interrogatories . . . Claimant
. . . revealed that he broke both shoulders in a moped
accident in 1990 or 1991, wherein he “flew off the
moped and landed with both arms extended”.
. . .
92. Claimant was deposed on January 27, 2006.
Claimant testified that at the time of the June 17,
2004 work accident, his arms were straight out
approximately three feet from the ground as he helped
support a panel weighing 800 to 1200 pounds. The
panel then fell approximately two-and-a-half feet in
approximately two seconds or less. It stopped falling
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approximately six inches from the ground.
93. Claimant did not feel immediate pain to
the shoulders. He first experienced pain to both
shoulders one to one-and-a-half-weeks later. He
believed the pain in his shoulders was 4/10 or 5/10,
but increased to 6/10 or 7/10 by the third week after
the June 17, 2004 work accident.
94. At the trial on April 9, 2010, Dr. Diamond
testified that Claimant had . . . a history of
previously asymptomatic neck and shoulder pain, a
history of prior bilateral shoulder fractures,
multiple Waddell’s findings.
Dr. Diamond testified that most of the
impressions noted from the right shoulder MRA were
indicative of long-standing (5-10 years) degenerative
conditions. However, the changes noted in the
supraspinatus could be considered acute and were not
necessarily long-standing. The left shoulder MRA
showed similar degenerative changes.
He further testified that the labral and rotator
cuff tears that resulted in Claimant’s surgeries were
not related to the subject work accident, because the
mechanism of the subject accident was not consistent
with such injuries. He stated that he could
definitely say that the labral tearing and
degenerative arthritis were not acute injuries.
Dr. Diamond testified that heavy lifting could
cause degenerative conditions of the rotator cuff, but
it would depend upon the position of the rope and
arms. It would take abduction and positioning of the
arms overhead to irritate the rotator cuff. Reaching
overhead to pull down on a rope would likely lead to a
biceps tendonitis rather than a rotator cuff
tendonitis. Further, “heavy work” could lead to
rotator cuff and labral degeneration.
Labral tearing occurs with compressive injuries,
where the humeral head grinds into the labrum, like a
fall onto outstretched arms. Although it is possible
to tear the labrum on the basis of a traction accident
as in this case, but that usually involves damage to
the biceps, which is not present [sic]. Therefore,
can exclude [sic] traction as the mechanism of injury
for the labral tear and arthritis, and the same
reasoning applied to rotator cuff injuries. He opined
that more likely than not, the tears and degenerative
changes pre-existed the June 17, 2004 work accident.
Further, if the tears as seen on the MRA
occurred from the work injury, Claimant, more likely
than not, would have felt pain immediately. It would
also be probable that he would have felt the shoulder
pain from the tears immediate [sic], regardless of
pain in his back. Dr. Diamond pointed out that
Claimant had a complaint of knee pain, and, the back
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pain he experienced did not mask that pain.
Dr. Diamond opined that although possible, it
was “more likely than not” that the June 17, 2004
accident did not cause, aggravate, or accelerate
Claimant’s labral tears. He would expect immediate
symptoms given the amount of tears noted on the MRA.
Dr. Diamond further testified that it was
virtually impossible to develop the advanced arthritic
changes seen on the MRA during the period since the
June 17, 2004 work accident.
With regard to Claimant’s low back, Dr. Diamond
testified that Claimant reached medically stability
[sic] approximately one year after the June 17, 2004
work accident.
He further testified that he would generally
tell his patients that it would take 12-18 months to
fully recover strength after a shoulder surgery.
Dr. Diamond clarified that the supraspinatus
changes seen on the MRA in this particular case were
not related to the subject work accident for the same
reasons.
95. At trial, Claimant testified that he first
noticed symptoms in his shoulders one to two weeks
after the June 17, 2004 work accident, while he was
washing rice. The pain in his shoulders thereafter
intensified.
96. The [LIRAB] credits the opinion of Dr.
Diamond and finds that Claimant’s bilateral shoulder
conditions pre-existed the June 17, 2004 work accident
and was [sic] not caused, aggravated, or accelerated
by said accident. The [LIRAB] credits Dr. Diamond’s
expert opinion that Claimant would have experienced
immediate symptoms if his shoulder conditions were
caused by the June 17, 2004 work injury. Claimant’s
argument that his shoulder symptoms were masked by his
low back injury is inconsistent with the report of
knee symptoms immediately after the June 17, 2004 work
accident. The [LIRAB] also credits Dr. Diamond’s
opinion that Claimant’s shoulder conditions are not
consistent with a traction type mechanism of injury.
The LIRAB also made the following conclusions of law
(COL):
“Hawaii Revised Statutes (“HRS”) § 386-85(1)
creates a presumption in favor of the claimant that
the subject injury is causally related to the
employment activity. . . . Furthermore, this
presumption may be rebutted by “substantial evidence
to the contrary . . . .” § 386-85, HRS. The Board
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has applied the rebuttable presumption of
compensability.
1. The [LIRAB] concludes that Claimant did
not sustain bilateral shoulder injuries on June 17,
2004, arising out of and in the course of employment.
Employer has adduced substantial evidence to rebut or
overcome the presumption of compensability.
Although Claimant argues, in part, that his
shoulder conditions could have been incurred over the
period of his work for Employer, [the LIRAB] makes no
determination as to Claimant’s cumulative trauma
contention, where such theory or contention was raised
for the very first time at the trial and in Claimant’s
Post Hearing Memorandum.
2. The [LIRAB] concludes that Claimant’s
periods of [TTD] resulting from the work injury of
June 17, 2004 are:
June 20, 2004 through June 22, 2004
June 30, 2004 through December 17, 2005
April 11, 2006 through May 11, 2006
As stated in Alexis v. Kasseebeer v. Paul J.
Samarin, AB 2007-207 (October 2, 2009):
A medical certification of [TTD] requires
an attending physician to certify that a
claimant’s absence from work is due to
disability attributed to a specific work
injury or condition. Without such
certification, an award of temporary total
disability is not proper.
The [LIRAB] interprets the laws and rules to
require certifications of disability by the attending
physician to be contemporaneous, in writing, and
including the date of accident and work injury-related
condition(s) for which such disability is certified.
Statements that Claimant’s work status as [sic]
“off duty” or that he is significantly impaired is
[sic] insufficient as a certification of disability
without a statement that such impairment or disability
is due to the work injury.
The record before the [LIRAB] does not include
statements of certification that Claimant remained
temporarily and totally disabled due to a work-related
injury. For the period April 11, 2006 through May 11,
2006, the [LIRAB] credits Dr. McCaffrey’s Work
Restriction Profile and concludes that Claimant was
disabled due to the June 17, 2004 work injury.
The [LIRAB] makes no determination as to
Claimant’s entitlement to TTD benefits after
September 4, 2007, which was the medical reports
deadline.
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3. The [LIRAB] concludes Employer is not liable
for a penalty for late payment of [TTD] benefits for
the period April 6, 2005 to February 2, 2006. There
is no evidence to indicate that payments were
untimely. Further, the [LIRAB] determined that except
for the period April 11, 2006 through May 11, 2006,
Claimant was not entitled to TTD benefits after
December 17, 2005.
D. Appeal to the ICA
On July 21, 2011, Panoke filed a notice of appeal of
the LIRAB’s decision to the ICA. Panoke raised essentially the
same arguments to the ICA that he raised before the LIRAB.
Panoke also argued that it was error for the LIRAB to
limit his TTD benefits to certain time periods when Work Star had
provided clinical reports that kept Panoke off work from June 30,
2004 through July 12, 2007.
Panoke further asserted that it was error for the LIRAB
to fail to assess a penalty against Reef and Seabright because
Reef and Seabright’s WC-3 form showing TTD payments made for the
year 2005 indicated that payments were only made until April 5,
2005, but the LIRAB awarded TTD until December 17, 2005, and
there were no grounds for the Director to excuse penalties.
Reef and Seabright argued that Panoke’s shoulder
injuries were not caused by the June 17, 2004 accident, relying
on the reports of Dr. Lau and Dr. Agles, and on Dr. Diamond’s
testimony.
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Reef and Seabright argued that it was not error for the
LIRAB to limit Panoke’s TTD benefits to certain time periods.
Reef and Seabright asserted that the Work Star reports were not
sufficient to certify Panoke as disabled because they did not
indicate the dates when his disability started, and when he would
be able to return to work, as required by HRS § 386-96.
Reef and Seabright also argued that no penalties for
late TTD payments were due because the Director’s decision of
June 13, 2005, only awarded TTD benefits until April 4, 2005.
After that, according to Reef and Seabright, the disability was
disputed, therefore no TTD benefits were due until October 13,
2006, when the Director extended the TTD period beyond April 5,
2005.
In a summary disposition order (SDO) filed on June 30,
2014, the ICA affirmed the LIRAB’s ruling. The ICA first held
that the opinions of Drs. Agles, Lau, and Diamond constituted
substantial evidence sufficient to rebut the presumption of
coverage. In doing so, the ICA rejected Panoke’s argument that
the opinions were generalized and therefore irrelevant because
the opinions “identified specific reasons as to why the shoulder
injuries were not work related and why the industrial accident
did not exacerbate Panoke’s pre-existing condition.” The ICA
then held that, even though there was some evidence to the
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contrary in the form of Dr. McCaffrey’s and Dr. Okamura’s
opinions, the LIRAB did not err in giving more weight to the
“high quantum of evidence” presented by Reef and Seabright.
The ICA next determined that, although the LIRAB’s
requirement that each disability certification contain a specific
statement that the disability is due to work injury was
“questionable,” any error by the LIRAB in this regard was
harmless because the LIRAB did not err in determining the TTD
periods. The ICA concluded that the LIRAB’s determination of the
TTD periods was not error because the first period, from June 20,
2004 to June 22, 2004, was based on a statutory three-day waiting
period after the accident and the initial reports of Dr. Diaz-
Ordaz. The second period, from June 30, 2004, to December 17,
2005, started when Dr. McCaffrey first placed Panoke off duty,
and ran for eighteen months from the June 17, 2004 accident,
based on Dr. Diamond’s opinion that Panoke’s back injury had
achieved maximum medical improvement after eighteen months.
The ICA also agreed with Reef and Seabright that the
LIRAB did not err in failing to assess penalties. The ICA held
that Panoke’s argument that he had not received TTD benefits
since April 2005 was without merit because the Director’s order
extending benefits beyond April 2005 was not issued until
October 13, 2006.
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II. Standards of Review
A. The LIRAB’s decision
Appellate review of a LIRAB decision is governed by
HRS § 91-14(g) (1993), which states that:
Upon review of the record the court may affirm
the decision of the agency or remand the case
with instructions for further proceedings; or it
may reverse or modify the decision and order if
the substantial rights of the petitioners may
have been prejudiced because the administrative
findings, conclusions, decisions, or orders are:
(1) In violation of constitutional or
statutory provisions; or
(2) In excess of the statutory authority
or jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the
reliable, probative, and substantial
evidence on the whole record; or
(6) Arbitrary, or capricious, or
characterized by abuse of discretion
or clearly unwarranted exercise of
discretion.
We have previously stated:
[Findings of Fact] are reviewable under the
clearly erroneous standard to determine if the
agency decision was clearly erroneous in view of
reliable, probative, and substantial evidence on
the whole record.
[Conclusions of Law] are freely reviewable to
determine if the agency’s decision was in
violation of constitutional or statutory
provisions, in excess of statutory authority or
jurisdiction of agency, or affected by other
error of law.
A [Conclusion of Law] that presents mixed
questions of fact and law is reviewed under the
clearly erroneous standard because the
conclusion is dependent upon the facts and
circumstances of the particular case. When
mixed questions of law and fact are presented,
an appellate court must give deference to the
agency’s expertise and experience in the
particular field. The court should not
substitute its own judgment for that of the
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agency.
Igawa v. Koa House Rest., 97 Hawai#i 402, 405-06, 38 P.3d 570,
573-74 (2001) (internal quotation marks, citations, and brackets
in original omitted) (quoting In re Water Use Permit
Applications, 94 Hawai#i 97, 119, 9 P.3d 409, 431 (2000)).
[A finding of fact] or a mixed determination of law
and fact is clearly erroneous when (1) the record lacks
substantial evidence to support the finding or
determination, or (2) despite substantial evidence to
support the finding or determination, the appellate court is
left with the definite and firm conviction that a mistake
has been made. We have defined “substantial evidence” as
credible evidence which is of sufficient quality and
probative value to enable a person of reasonable caution to
support a conclusion.
In re Water Use Permit Applications, 94 Hawai#i at 119, 9 P.3d at
431 (internal quotation marks and citations omitted).
B. The LIRAB’s statutory interpretation
An appellate court
generally reviews questions of statutory
interpretation de novo, #Olelo v. Office of Info.
Practices, 116 Hawai#i 337, 344, 173 P.3d 484, 491
(2007), but, “[i]n the case of . . . ambiguous
statutory language, the applicable standard of review
regarding an agency’s interpretation of its own
governing statute requires this court to defer to the
agency’s expertise and to follow the agency’s
construction of the statute unless that construction
is palpably erroneous,” Vail v. Employees’ Ret. Sys.,
75 Haw. 42, 66, 856 P.2d 1227, 1240 (1993).
Gillan v. Gov’t Employees Ins. Co., 119 Hawai#i 109, 114, 194
P.3d 1071, 1076 (2008).
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III. Discussion
A. The LIRAB erred in concluding that the employer presented
substantial evidence to rebut the presumption that Panoke’s
shoulder injuries were a covered employment-related injury
In COL 1, the LIRAB concluded that “[Panoke] did not
sustain bilateral shoulder injuries on June 17, 2004, arising out
of and in the course of employment” because “[Reef and Seabright]
ha[ve] adduced substantial evidence to rebut or overcome the
presumption of compensability.” In support of this conclusion,
the LIRAB stated that it “credits the opinion of Dr. Diamond and
finds that [Panoke’s] bilateral shoulder conditions pre-existed
the June 17, 2004 work accident and was not caused, aggravated,
or accelerated by said accident.”
Panoke argues that the LIRAB clearly erred because it
should not have relied on the “generalized” reports of Drs. Agles
and Lau and the testimony of Dr. Diamond. Panoke also claims
that his degenerative shoulder conditions made him more
susceptible to injury, that his shoulders were asymptomatic prior
to June 17, 2004, that he did not immediately feel pain in his
shoulders because it was masked by his back pain and pain
medication, and that his prior shoulder injuries had completely
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resolved.4
As discussed below, the LIRAB erred in finding that
Reef and Seabright presented substantial evidence sufficient to
overcome the presumption that Pankoke’s shoulder injuries were
work-related. Although Reef and Seabright presented reports from
three physicians opining that Panoke’s shoulder injuries were not
caused by the June 17, 2004 work accident, none of these
physicians explained why the June 17, 2004 accident could not
have aggravated Panoke’s pre-existing shoulder injuries, or,
similarly, why Panoke was asymptomatic prior to June 17, 2004,
but then started suffering from shoulder problems shortly
afterwards. As a result, the medical reports of the employer’s
physicians do not provide a sufficient degree of specificity to
constitute substantial evidence to rebut the presumption that
Panoke’s shoulder injuries were work-related.
When determining whether a workers’ compensation claim
is work-related, it is well established in Hawai#i that “it shall
be presumed, in the absence of substantial evidence to the
contrary . . . [t]hat the claim is for a covered work injury[.]”
HRS § 386-85 (1993). As indicated in Acoustic, Insulation &
4
Panoke also argues that the LIRAB erred in declining to consider
the possibility that his shoulder injuries were caused cumulatively as a
result of his heavy labor at work. Because of our holding, we do not reach
this issue.
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Drywall, Inc. v. Labor and Indus. Relations Appeal Bd., 51 Haw.
312, 316, 459 P.2d 541, 544 (1969), to rebut the presumption, the
employer has the burden of going forward with the evidence, which
is the burden of production, as well as the burden of persuasion.
The burden of production means that “the employer must initially
introduce substantial evidence that, if true, could rebut the
presumption that the injury is work-related.” Nakamura v. State,
98 Hawai#i 263, 267, 47 P.3d 730, 734 (2002) (citation omitted).
In evaluating whether the burden of producing substantial
evidence has been met, “the slightest aggravation or acceleration
of an injury by the employment activity mandates compensation.”
Van Ness v. State, Dep’t of Educ., 131 Hawai#i 545, 562, 319 P.3d
464, 481 (2014) (citation omitted).
If the employer meets the burden of production, the
burden of persuasion requires that “the trier of fact . . . weigh
the evidence elicited by the employer against the evidence
elicited by the claimant.” Igawa, 97 Hawai#i at 409, 38 P.3d at
577 (citation omitted). In evaluating whether the burden of
persuasion has been met in the workers’ compensation context,
“the broad humanitarian purpose of the workers’ compensation
statute read as a whole requires that all reasonable doubts be
resolved in favor of the claimant[.]” Van Ness, 131 Hawai#i at
558, 584 P.3d at 477 (quoting Lawhead v. United Air Lines, 59
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Haw. 551, 560, 584 P.3d 119, 125 (1978)) (emphasis omitted); see
also Akamine v. Hawaiian Packing & Crating Co., 53 Haw. 406, 408,
495 P.2d 1164, 1166 (1972). In this case, the employer failed to
meet its initial burden of producing substantial evidence, and we
therefore do not reach the burden of persuasion.
In the workers’ compensation context, “substantial
evidence” means “a high quantum of evidence which, at the
minimum, must be relevant and credible evidence of a quality and
quantity sufficient to justify a conclusion by a reasonable
[person] that an injury or death is not work connected.” Id. at
267-68, 47 P.3d at 734-35 (quoting Flor v. Holguin, 94 Hawai#i
70, 79, 9 P.3d 382, 391 (2000)). As this court explained in Van
Ness, this is a “high burden” placed on the employer, which is
necessary because of the purpose of Hawaii’s workers’
compensation law:
The legislature has decided that work injuries are
among the costs of production which industry is
required to bear. Workmen’s compensation laws were
enacted as a humanitarian measure, to create legal
liability without relation to fault. They represent a
socially enforced bargain: the employee giving up his
right to recover common law damages from the employer
in exchange for the certainty of a statutory award for
all work-connected injuries.
131 Hawai#i at 558, 319 P.3d at 477 (quotation marks, brackets,
and citation omitted).
Two decisions by this court--Akamine and Nakamura--
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illustrate the “substantial evidence” standard.
In Akamine, the claimant died from a heart attack, and
the employer’s experts, relying on the fact that heart disease
originates early in life and physical exercise generally reduces
the risk of heart disease, testified that there was no connection
between the employee’s heart condition and his physical exertion
at work. 53 Haw. at 410-12, 495 P.2d at 1167-68. This court
held that such testimony was generalized and thus did not rebut
the presumption of coverage. Id. at 412-14, 495 P.2d at 1168-69.
This court also noted that “[t]he primary focus of the medical
testimony should have been a discussion on whether the employment
effort, whether great or little, in any way aggravated Mr.
Akamine’s heart condition which resulted in his death.” Id. at
412, 495 P.2d at 1168.
In Nakamura, the claimant, an employee of the
University of Hawai#i (UH), claimed he had sustained a
psychiatric stress injury at work due to “‘long term inhumane
treatment’ and harassment . . . .” 98 Hawai#i at 264, 47 P.3d
730 at 731. Nakamura claimed his inability to work was a result
of this treatment by his supervisors and also an IRS garnishment
of his wages. Id. at 264-65, 47 P.3d at 731-32. At trial,
Nakamura’s regular psychiatrist testified that she believed
Nakamura had a pre-existing psychiatric illness that was
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exacerbated by both the IRS garnishment and the UH work
environment. Id. at 266, 47 P.3d at 733. UH relied on the
report of another psychiatrist, Dr. Ponce, who had examined
Nakamura at UH’s request and testified that Nakamura had a pre-
existing psychiatric illness that was exacerbated by the IRS
garnishment but not his treatment by UH supervisors. Id. The
LIRAB credited Dr. Ponce’s testimony, and thus found that
Nakamura’s work did not cause his injury. Id.This court in Nakamura clarified the Akamine decision,
and stated that “the court [in Akamine] was intending to
illustrate that a reasonable degree of specificity is required in
order for medical opinion evidence to rebut the presumption of
compensability.” 98 Hawai#i at 269, 47 P.3d at 736. This court
went on to affirm the LIRAB’s decision and held that Dr. Ponce’s
opinion constituted substantial evidence because
Dr. Ponce did more than opine generally that Nakamura
had an illness predating his employment with UH. Dr.
Ponce identified symptoms of paranoia and accompanying
behaviors attributable to Nakamura’s pre-existing
illness as the source of Nakamura’s pre-garnishment
work-related difficulties, pointing out that the
behaviors were similar to difficulties that Nakamura
had encountered before starting work at UH.
Id.In the present case, Reef and Seabright bore the
initial burden of producing substantial evidence to rebut the
presumption that Panoke’s shoulder injuries were the result of
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the June 17, 2004 work accident. Reef and Seabright rely on the
testimony of Dr. Diamond, and the reports of Drs. Agles and Lau,
and argue that these met their burden to produce substantial
evidence.
At trial, Dr. Diamond testified that the labral and
rotator cuff tears found in the MRIs of Panoke’s shoulders were
most likely not the result of the June 17, 2004 work accident.
Dr. Diamond’s reasons for this opinion were that the traction
mechanism of Panoke’s June 17, 2004 accident was inconsistent
with the shoulder injury, Panoke lacked any injury to his biceps,
Panoke did not complain of pain in his shoulders for
approximately two weeks after the June 17, 2004 work accident,
and, according to Dr. Diamond, Panoke’s shoulder injuries were
more consistent with degenerative changes over time resulting
from his previous shoulder fractures, rather than the June 17,
2004 accident. Drs. Agles and Lau also opined that Panoke’s
shoulder injuries were not related to the June 17, 2004 accident
because of Panoke’s delayed pain complaints in his shoulders.
However, Panoke’s treating physician, Dr. McCaffrey,
concluded in a January 31, 2005 letter that Panoke’s shoulder
injuries were related to the June 17, 2004 accident. As the
LIRAB noted in FOF 29, Dr. McCaffrey explained that Panoke had no
shoulder complaints or ongoing problems with his shoulder prior
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to the June 17, 2004 accident and had “fully and totally”
recovered from his 1991 vehicle accident in which he fractured
his shoulders “without residual symptoms or impairment.” Dr.
McCaffrey also noted that Panoke had been involved in heavy work
activities immediately prior to June 17, 2004, and had been
“clinically asymptomatic” until the June 17, 2004 accident.
None of the medical reports submitted by Reef and
Seabright, or Dr. Diamond’s testimony at the LIRAB hearing,
rebutted these bases for Dr. McCaffrey concluding that Panoke’s
shoulder injuries were related to the June 17, 2004 accident.
Moreover, all three of the employer’s physicians focused almost
entirely on explaining why Panoke’s work accident on June 17,
2004 could not have caused his shoulder injuries without
adequately explaining how the accident could not have caused “the
slightest aggravation or acceleration of an [existing] injury.”
Van Ness, 131 Hawai#i at 562, 319 P.3d at 481. Instead, the
focus of the employer’s medical reports “should have been a
discussion on whether the employment . . . in any way aggravated
Mr. [Panoke’s] [shoulder] condition which resulted in his
[injury].” Akamine, 53 Haw. at 412, 495 P.2d at 1168 (emphasis
added).
Given that Panoke had a history of shoulder injuries
and his MRI scans showed degenerative arthritis in both
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shoulders, which Dr. Diamond acknowledged was both “longstanding”
and most likely pre-existing (because, as the LIRAB noted in FOF
94, “it was virtually impossible to develop the advanced
arthritic changes seen on the MRA during the period since the
June 17, 2004 work accident”), evidence showing why Panoke’s
June 17, 2004 accident could not have aggravated these conditions
was necessary for the employer to adduce “substantial evidence”
and overcome the presumption of coverage.
Indeed, at the LIRAB trial, Dr. Diamond even
acknowledged that it was “possible” that the June 17, 2004
accident might have aggravated labral tears that pre-existed in
Panoke’s shoulders. Although Dr. Diamond testified that he
thought that it was “more likely than not” that the work accident
had not aggravated Panoke’s shoulder injuries, his only
explanation was that “[h]e would expect immediate symptoms given
the amount of tears” Panoke suffered. However, this explanation
was not sufficient to constitute “substantial evidence.” First,
one of the employer’s own physicians, Dr. Lau, acknowledged that
the pain experienced with the type of injuries Panoke suffered
would not necessarily be immediate, but could have manifested
“within several days to a week.” Second, although it is not
necessary for the employer to provide evidence showing
definitively what was the cause of the claimant’s injury (i.e.,
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something other than the work accident), there is nothing in the
record to explain why Panoke would have started experiencing
serious shoulder pain approximately two weeks after the work
accident if the work accident had not caused the injury or
aggravated some pre-existing injury.
Thus, unlike the physician in Nakamura, Reef and
Seabright’s physicians did not do more than “opine generally that
[Panoke] had an [injury] predating his employment,” Nakamura, 98
Hawai#i at 269, 47 P.3d at 736, because the physicians did not
consider how Panoke’s prior injury might have been affected or
aggravated by the June 17, 2004 accident. As a result, the LIRAB
erred in concluding that Reef and Seabright had adduced
substantial evidence to overcome the presumption that Panoke’s
shoulder injuries were related to the June 17, 2004 work accident
as he alleged.
We therefore vacate the LIRAB’s ruling and remand the
case to the LIRAB for further proceedings consistent with this
opinion, including a determination on the merits of Panoke’s
eligibility for TTD benefits.
B. The LIRAB erred in denying Panoke’s TTD benefits based on
deficiencies in the certifications of disability submitted
by Panoke’s physicians
In COL 2, the LIRAB concluded that:
Claimant’s periods of [TTD] resulting from the work
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injury of June 17, 2004 are:
June 20, 2004 through June 22, 2004
June 30, 2004 through December 17, 2005
April 11, 2006 through May 11, 2006
As stated in Alexis v. Kasseebeer v. Paul J.
Samarin, AB 2007-207 (October 2, 2009):
A medical certification of [TTD] requires
an attending physician to certify that a
claimant’s absence from work is due to
disability attributed to a specific work
injury or condition. Without such
certification, an award of temporary total
disability is not proper.
The [LIRAB] interprets the laws and rules to
require certifications of disability by the attending
physician to be contemporaneous, in writing, and
including the date of accident and work injury-related
condition(s) for which such disability is certified.
Statements that Claimant’s work status as [sic]
“off duty” or that he is significantly impaired is
[sic] insufficient as a certification of disability
without a statement that such impairment or disability
is due to the work injury.
The record before the board does not include
statements of certification that Claimant remained
temporarily and totally disabled due to a work-related
injury. For the period April 11, 2006 through May 11,
2006, the Board credits Dr. McCaffrey’s Work
Restriction Profile and concludes that Claimant was
disabled due to the June 17, 2004 work injury.
The [LIRAB] makes no determination as to
Claimant’s entitlement to TTD benefits after
September 4, 2007, which was the medical reports
deadline.
The LIRAB therefore discredited Panoke’s Work Star
reports because they did not indicate that Panoke’s “off work”
status was due to a work injury--in this case Panoke’s back
injury. The ICA noted that the LIRAB’s requirements that
physicians’ reports must include the dates of the accident and
the disability “were based upon statutory authority [in HRS
§ 386-96] and were not error as a matter of law.” The ICA then
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held that although “the LIRAB’s requirement that each
certification of disability contains a specific statement that
the impairment/disability is due to work injury is
questionable . . . the LIRAB did not err in its determination of
the TTD benefits period.”
Panoke argues that although the Work Star reports did
not include all of the information required by the LIRAB, the
reports nevertheless sufficiently certified Panoke as disabled
because “[a] claimant should not be penalized simply because his
physician failed to properly fill out a report.” Therefore,
according to Panoke, the LIRAB should have awarded him TTD
benefits for the entire period for which the Work Star reports
placed him off work duty.
Although part III.A of this opinion vacates and remands
Panoke’s claim to the LIRAB for redetermination of the TTD
benefits he is due, clarification of the relevant law is
warranted.5 We hold that the LIRAB may not deny a claimant
5
Compare Zhang v. State, Dept. of Land & Natural Res., No. CAAP-11-
0001106 (App. Sept. 15, 2014) (SDO) (holding that a physician’s document “did
not comport with the [statutory] requirement that it include the ‘dates of
disability’ because it simply constituted a plan for future treatment and did
not specify any range of time the document was supposed to cover”); Boydstun
v. Polynesian Cultural Ctr., No. CAAP-11-0000803 (App. Sept. 11, 2014) (SDO)
(affirming the LIRAB’s determination that “there were no contemporaneous
medical certifications” for unaddressed “gap” periods); Custino v. State,
Dept. of Transp., No. CAAP-11-0000570 (App. May 15, 2014) (SDO) (holding that
the failure of a physician to include the information required in HRS § 389-
96(2), including the dates of disability and the return to work date, violates
(continued...)
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benefits based on deficiencies in a physician’s certifications of
disability.
HRS § 386-966 requires a physician to include in
5
(...continued)
HRS § 389-96(2) as an improper certification, and thus justifies a denial of
the claimant’s TTD benefits) with Alayon v. Urban Management Corp., No. CAAP
XX-XXXXXXX (App. Dec. 31, 2014) (SDO) (vacating the LIRAB’s ruling that the
claimant was not entitled to TTD benefits because “the [LIRAB] cannot deny a
claimant’s request for TTD benefits based solely on a physician’s failure to
submit the certifications of disability in the proper form”).
6
HRS § 386-96 reads:
(a) Any physician, surgeon, or hospital that has given any
treatment or rendered any service to an injured employee shall
make a report of the injury and treatment on forms prescribed by
and to be obtained from the department as follows:
(1) Within seven days after the date of first attendance or
service rendered, an initial report shall be made to the
department and to the employer of the injured employee in
the manner prescribed by the department;
(2) Interim reports to the same parties and in the same
manner as prescribed in paragraph (1) shall be made at
appropriate intervals to verify the claimant’s current
diagnosis and prognosis, that the information as to the
nature of the examinations and treatments performed is
complete, including the dates of those treatments and the
results obtained within the current reporting period, the
execution of all tests performed within the current
reporting period and the results of the tests, whether the
injured employee is improving, worsening, or if “medical
stabilization” has been reached, the dates of disability,
any work restrictions, and the return to work date. When an
injured employee is returned to full-time, regular, light,
part-time, or restricted work, the attending physician shall
submit a report to the employer within seven calendar days
indicating the date of release to work or medical
stabilization;
. . .
(b) No claim under this chapter for medical treatment, surgical
treatment, or hospital services and supplies, shall be valid and
enforceable unless the reports are made as provided in this
section, except that the director may excuse the failure to make
the report within the prescribed period or a nonsubmission of the
report when the director finds it in the best interest of justice
(continued...)
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reports all of the information listed in HRS § 386-96(2),
including the “dates of disability.” In addition to the required
information, HRS § 386-96 provides the consequences of not
including such information: “[n]o claim under this chapter for
medical treatment, surgical treatment, or hospital services and
supplies, shall be valid and enforceable unless the reports are
made as provided in this section[.]” HRS § 386-96(b) (emphasis
added).
Similarly, the Department of Labor and Industrial
Relations (DLIR) administrative rule on this issue also allows
for the denial of payment to the physician in the event that a
disability certification does not comply with the reporting
requirements. Hawai#i Administrative Rules (HAR) § 12-15-80
provides:
(a) Any provider of service required by chapter 386,
HRS, this chapter, or any related rules to make and
submit reports of an injury and treatment shall:
(1) Submit those reports to the director and the
self-insured employer, or the insurer of the
employer when the employer is not self-insured,
whichever is applicable; and
(2) Itemize its statement of services rendered
in a manner showing the date of injury,
diagnosis, date of each visit or service, the
appropriate code number used as the basis for
the charge, and the fee not to exceed the
maximum allowed under the medical fee schedule.
(...continued)
to do so.
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No service charge for preparing and submitting
reports required by section 386-96, HRS, and any
related rules shall be allowed.
(3) Interim WC-2 reports shall be submitted
monthly with the corresponding billing invoice,
if applicable, to the employer and shall include
the following:
(A) Current diagnosis and prognosis;
(B) Complete information as to the nature
of the examination(s) and treatments
performed, dates of those treatments, and
the results obtained within the current
reporting period;
(C) A complete listing of all tests
performed within the current reporting
period and the results of the tests;
(D) A statement of whether the injured
employee is improving, worsening, or if
“medical stabilization” has been reached;
and
(E) Dates of disability, work
restrictions, if any, and return to work
date.
(c) The repeated failure of a physician, surgeon,
hospital, or provider of service to comply with
chapter 386, HRS, and any related rules shall be a
reasonable basis for an employer to refuse to pay or
withhold payment for services rendered.
(Emphasis added).
Therefore, according to a plain reading of the rule,
the consequence of a physician not including the required
information on a report is that the physician may not be
compensated for medical services rendered. Moreover, HAR § 12-
15-80(c) provides that this sanction may only be applied after a
physician’s “repeated failure” to comply with the requirements.
However, even though HRS § 386-96 and HAR § 12-15-80
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permit denial of payment to a physician who fails to comply with
the reporting requirements, neither the statute nor the
administrative rule provides that an employee’s claim for TTD
benefits must be denied due to a physician’s non-compliance.
Moreover, those provisions must be read in pari materia with the
rest of the workers’ compensation statute, and in particular, the
provision that establishes the employee’s entitlement to TTD, HRS
§ 386-31(b) (Supp. 2013). That section provides that when “a
work injury causes total disability not determined to be
permanent in character, the employer, for the duration of the
disability, but not including the first three calendar days
thereof, shall pay the injured employee” the prescribed benefits.
There is nothing in that provision which prescribes a
particular method of proof, or that suggests that information not
presented in accordance with HRS § 386-96 and HAR § 12-15-80
cannot be considered. To be sure, the LIRAB must assess the
quality of the evidence that is presented, to determine whether
the necessary showing has been made. However, in doing so it
cannot rely on the physician’s failure to comply with the
certification requirements set forth in those provisions. To the
extent that the Board’s analysis in COL 2 suggests otherwise, it
is clearly erroneous, and the ICA erred in finding that the LIRAB
properly determined Panoke’s benefits period.
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C. The LIRAB did not err in denying Panoke’s request for
additional penalties against Reef
The LIRAB held in COL 3 that “[Reef and Seabright]
[are] not liable for a penalty for late payment of [TTD] benefits
for the period April 6, 2005 to February 2, 2006” because
“[t]here is no evidence to indicate that payments were untimely.”
Panoke argues that the LIRAB erred because Reef and Seabright
were required to pay TTD benefits to Panoke as they accrued for
the period January 5, 2005 through December 17, 2005, but that
Reef and Seabright did not pay the TTD benefits for this period
until much later.7 Panoke states that in June 2005, the Director
ruled that Panoke had suffered compensable injuries to his back
and shoulders, and that Panoke’s physician submitted disability
certificates throughout 2005 certifying him as off work duty.
According to Panoke, HRS § 386-31(b) requires payment of TTD
7
Panoke contends that “[t]he WC-3 reports . . . for 2004 and 2005
demonstrated that [Reef and Seabright] failed to pay TTD benefits “from
1/5/2005 - 12/17/2005 and from 5/6/2005 - 12/17/2005[.]” However, the 2004
WC-3 form shows that in 2004, Reef and Seabright paid TTD benefits to Panoke
for the periods of June 20, 2004 through June 22, 2004, and June 30, 2004
through January 4, 2005. The 2005 WC-3 shows that Reef and Seabright paid TTD
benefits to Panoke for the period of January 5, 2005 through April 5, 2005.
Panoke has not pointed to any other evidence that the payments for the period
January 1, 2005 through April 5, 2005, were late. Panoke’s argument appears
to be based on the fact that payments for the period January 5, 2005 through
April, 5, 2005 did not appear on the WC-3 for 2004. However, as Panoke
acknowledges, the employer is required to file the WC-3 by January 31 of each
year, showing payments made for the previous year. Payments from January
through April 2005 therefore could not have appeared on the 2004 WC-3.
Therefore, the only evidence in the record of any late payments, based on the
2005 WC-3, is for the period April 6, 2005 through December 17, 2005, because
it is clear from the 2005 WC-3 that Reef and Seabright did not make these
payments in 2005.
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without waiting for a decision from the Director, so the ICA
therefore erred in holding that TTD was not due until the
Director issued its second decision on October 13, 2006,
extending TTD benefits beyond April 5, 2005. Panoke contends
that “[a] carrier should not be allowed to withhold TTD, gambling
that on appeal there may be a ruling that TTD was not due.”
The timing of TTD payments and the penalties for
untimely payments are governed by HRS §§ 386-31 and 386-92.
HRS § 386-31(b) (Supp. 2012) provides, in relevant part:
The employer shall pay temporary total disability
benefits promptly as they accrue to the person
entitled thereto without waiting for a decision from
the director, unless this right is controverted by the
employer in the employer’s initial report of
industrial injury. The first payment of benefits
shall become due and shall be paid no later than on
the tenth day after the employer has been notified of
the occurrence of the total disability, and thereafter
the benefits due shall be paid weekly except as
otherwise authorized pursuant to section 386-53.
(Emphasis added).
HRS § 386-31(b) therefore requires that an employer pay
TTD benefits to an employee within ten days of the employer being
notified of the disability, without waiting for a decision from
the Director, unless the employer controverts the employee’s
claim “in the employer’s initial report of industrial injury.”
HRS § 386-92 (Supp. 2012) provides:
If any compensation payable under the terms of a final
decision or judgment is not paid by a self-insured
employer or an insurance carrier within thirty-one
days after it becomes due, as provided by the final
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decision or judgment, or if any temporary total
disability benefits are not paid by the employer or
carrier within ten days, exclusive of Saturdays,
Sundays, and holidays, after the employer or carrier
has been notified of the disability, and where the
right to benefits are not controverted in the
employer’s initial report of industrial injury or
where temporary total disability benefits are
terminated in violation of section 386-31, there shall
be added to the unpaid compensation an amount equal to
twenty per cent thereof payable at the same time as,
but in addition to, the compensation, unless the
nonpayment is excused by the director after a showing
by the employer or insurance carrier that the payment
of the compensation could not be made on the date
prescribed therefor owing to the conditions over which
the employer or carrier had no control.
(Emphasis added).
The legislative purpose behind HRS § 386-92 is “to
assess a [20]% penalty[8] in cases where an employer or his [or
her] insurance carrier is notified of a work injury, does not
deny liability for said injury under the law, and still neglects
to pay compensation to a [TTD] worker within 10 days of such
notification.” S. Stand. Comm. Rep. No. 216, in 1971 Senate
Journal, at 878; H. Stand. Comm. Rep. No. 757, in 1971 House
Journal, at 1007 (emphasis added). Further comments in the
committee reports also suggest that the legislature did not
intend for employers contesting a determination of liability by
the Director to be required to pay ongoing TTD benefits while the
appeal is pending:
8
The penalty was changed from ten percent to twenty percent in
1995. 1995 Haw. Sess. Laws Act 234, § 14 at 613.
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Even upon the issuance of such an order [by the
Director], the employer or insurance carrier can still
wait until the 30 day appeal period has run before
making payment.
This Bill proposes to grant the director
discretion to add a 10% penalty on the compensation
payments in cases where liability is not denied and
there is no question that the compensation is due the
injured worker.
S. Stand. Comm. Rep. No. 216, in 1971 Senate Journal, at 878
(emphasis added); see also H. Stand. Comm. Rep. No. 757, in 1971
House Journal, at 1007.
Here, the LIRAB did not err in declining to assess
penalties against Reef and Seabright. First, TTD payments for
the period dating from April 5, 2005 to December 17, 2005 did not
become due as a result of a “final judgment” after the Director’s
June 13, 2005 decision because Reef and Seabright timely appealed
to the LIRAB. A decision by the Director shall be “final and
conclusive between the parties . . . unless within twenty days
after a copy has been sent to each party, either party appeals
therefrom to the appellate board . . . .” HRS § 386-87 (1993)
(emphasis added). The Director’s decision therefore was not
“final” according to the statute.
Although Reef and Seabright’s motion to stay payments
was denied, this related only to the payments ordered by the
Director, i.e., TTD payments through April 5, 2005. The Director
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did not order ongoing payments beyond that date.9
Second, although Reef and Seabright were notified of
Panoke’s disability during the period dating from April 5, 2005
through December 17, 2005, they are not subject to penalties for
not making immediate payments because the claim was still
controverted. HRS § 386-31(b) provides that the employer or
carrier must pay TTD benefits within ten days after notification
“unless this right is controverted by the employer in the
employer's initial report of industrial injury.” Here, Reef and
Seabright were unable to controvert Panoke’s shoulder injury in
the initial report because Panoke had not complained of any
shoulder injury. Reef and Seabright did, however, controvert the
shoulder injuries as soon as Panoke made those claims. Holding
that Reef and Seabright had not controverted Panoke’s shoulder
injury for the purposes of HRS § 386-92, merely because they had
not done so in the initial injury report of June 17, 2004, would
have the effect of allowing employees to subsequently add any
injuries to their claims and prevent their employers from
controverting them without paying a penalty.
Furthermore, Panoke’s shoulder injury claims were still
controverted after the Director’s June 13, 2005 decision. Reef
9
This differed from the Director’s October 13, 2006 decision, in
which the Director did order ongoing payments, and with which Reef and
Seabright appear to have complied.
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and Seabright immediately appealed the decision, so it was not a
final judgment with respect to whether Panoke’s shoulder injuries
were compensable work-related injuries. The Director also made
no determination as to Reef and Seabright’s obligation to pay TTD
benefits after April 5, 2005. Because coverage for Panoke’s
shoulder injuries was still in dispute for the period dating from
April 5, 2005 to December 5, 2005, and payments for that period
had not been subject to a final judgment, Reef and Seabright are
not liable for additional penalties under HRS § 386-92.
V. Conclusion
The LIRAB erred in concluding that Reef and Seabright
adduced substantial evidence sufficient to overcome the
presumption that Panoke’s shoulder injuries were related to his
June 17, 2004 work accident. Further, the LIRAB erred in relying
on deficiencies in Panoke’s treating physicians’ disability
certifications when it limited Panoke’s TTD benefits. We
therefore vacate the ICA’s July 31, 2014 judgment on appeal and
the LIRAB’s June 14, 2011 decision and order, and remand to the
LIRAB for further proceedings consistent with this opinion.
Wayne H. Mukaida /s/ Mark E. Recktenwald
for petitioner
/s/ Sabrina S. McKenna
Colette H. Gomoto
for respondent /s/ Richard W. Pollack
/s/ Michael D. Wilson
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