Agasiva v. Realty Laua, LLC ( 2023 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
14-APR-2023
08:12 AM
Dkt. 119 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
LOLENESE K. AGASIVA, Claimant-Appellee-Appellee,
v.
REALTY LAUA, LLC, Employer-Appellant-Appellee,
and
HAWAII EMPLOYERS' MUTUAL INSURANCE COMPANY,
Insurance Carrier-Appellant-Appellee,
and
SPECIAL COMPENSATION FUND, Appellee-Appellant
APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD
(CASE NO. AB 2014-310; (DCD NO. 2-10-08551))
SUMMARY DISPOSITION ORDER
(By: Ginoza, Chief Judge, Leonard and Nakasone, JJ.)
Appellee-Appellant Special Compensation Fund,
Department of Labor and Industrial Relations, State of Hawai#i
(SCF) appeals from the July 11, 2017 Decision and Order (Decision
and Order) of the Labor and Industrial Relations Appeals Board
(Board), that awarded permanent partial disability (PPD) benefits
under the Hawai#i Workers Compensation Law, Hawaii Revised
Statutes (HRS) Chapter 386, to Claimant-Appellee-Apellee Lolenese
K. Agasiva (Claimant) and apportioned liability for pre-existing
PPD benefits to the SCF pursuant to HRS § 386-33.1
1
HRS § 386-33 (2000), entitled "Subsequent injuries that would
increase disability," provides in pertinent part:
(continued...)
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On appeal, the SCF contends2 that the Board:
(1) erroneously found in FOF 84 that "'a determination of the
extent of pre-existing PPD is a legal question to be determined
by the Director or Board,'" and (2) erroneously held the SCF
1
(...continued)
(a) Where prior to any injury an employee suffers from a
previous permanent partial disability already existing prior
to the injury for which compensation is claimed, and the
disability resulting from the injury combines with the
previous disability, whether the previous permanent partial
disability was incurred during past or present periods of
employment, to result in a greater permanent partial
disability or in permanent total disability or in death,
then weekly benefits shall be paid as follows:
(1) In cases where the disability resulting from the injury
combines with the previous disability to result in greater
permanent partial disability the employer shall pay the
employee compensation for the employee's actual permanent
partial disability but for not more than one hundred four
weeks; the balance if any of compensation payable to the
employee for the employee's actual permanent partial
disability shall thereafter be paid out of the special
compensation fund; provided that in successive injury cases
where the claimant's entire permanent partial disability is
due to more than one compensable injury, the amount of the
award for the subsequent injury shall be offset by the
amount awarded for the prior compensable injury;
. . . .
(b) Notwithstanding subsection (a), where the director or
the appellate board determines that the previous permanent
partial disability amounted to less than that necessary to
support an award of thirty-two weeks of compensation for
permanent partial disability, there shall be no liability on
the special compensation fund and the employer shall pay the
employee or the employee's dependents full compensation for
the employee's permanent partial or total disability or
death.
(Emphases added). This court recently explained that HRS § 386-33 is
triggered if, "when the work accident happened, the injured employee already
had a loss or impairment of a physical function that, combined with additional
loss or impairment of the same physical . . . function caused by the work
accident, resulted in a greater post-work-accident loss or impairment" of the
physical function. Pave v. Prod. Processing, Inc., 152 Hawai#i 164, 170, 524
P.3d 355, 361 (App. 2022) (citation omitted), reconsideration denied, CAAP-17-
0000600, CAAP-XX-XXXXXXX, 2023 WL 127865 (App. 2023).
2
While the SCF lists numerous findings of fact (FOFs) and
conclusions of law (COLs) in its eleven points of error (POEs) that it
purportedly challenges, no specific argument pertinent to each challenged FOF
and COL is presented, with the exception of FOF 84 in POE 8, COL 1 in POE 10,
and COL 2 in POE 11, which we address. See Hawai#i Rules of Appellate
Procedure (HRAP) Rule 28(b)(7) (requiring argument "containing the contentions
of the appellant on the points presented and the reasons therefor, with
citations to the authorities, statutes and parts of the record relied on)".
These POEs are waived.
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liable in COL 1, because a pre-existing condition must be a
"quantifiable ratable impairment" for SCF contribution under
HRS § 386-33.
Upon careful review of the record and the briefs
submitted by the parties, and having given due consideration to
the arguments advanced and the issues raised, we resolve the
SCF's points of error as follows, and affirm in part and vacate
in part.
The underlying case arises from an appeal to the Board
from the Director of Labor and Industrial Relations' (Director)
award of PPD to Claimant, and the determination that the SCF was
not liable for any portion of the award. On appeal to the Board,
the parties agreed that the issues to be determined were as
follows:
a. Whether any permanent disability should be
apportioned between Employer/Insurance Carrier
and the [SCF].
b. If so, how much of Claimant's [PPD] should be
paid by the [SCF].
At the October 6, 2015 trial before the Board, Drs.
Peter E. Diamond, M.D. (Dr. Diamond), Christopher R. Brigham,
M.D. (Dr. Brigham), and Lorne K. Direnfeld, M.D. (Dr. Direnfeld)
testified about Claimant's pre-existing conditions; and their
medical evaluation reports of Claimant were entered into
evidence. The Board found that Claimant had a pre-existing PPD
that supported an award of 32 weeks of compensation, which
resulted in a greater work injury, and that PPD payments must be
apportioned between Employer-Appellant-Appellee Realty Laua, LLC,
and Insurance Carrier-Appellant-Appellee Hawai#i Employers'
Mutual Insurance Company (collectively, Employer/Carrier), and
the SCF. In its Decision and Order, the Board found in pertinent
part:
73. Based on the opinions of Drs. Direnfeld, Diamond,
and Brigham, Claimant had permanent conditions of his right
and left shoulder and right hip that pre-existed his August
12, 2010 work injury.
74. Dr. Demeter also stated that the Claimant had a
pre-existing degenerative disease in his left shoulder,
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which the Board finds to be a permanent pre-existing [sic]
Claimant's August 12, 2010 work injury.
75. The Board finds that no evaluation for rating
permanent impairment was conducted before Claimant's August
12, 2010 work injury.
76. Based on the explanations by Drs. Direnfeld,
Diamond, and Brigham, the Board finds that on a medical
basis, a person's pre-existing permanent impairment could be
determined either by application of the AMA Guides or from a
clinical/pathological perspective.
77. Based on the testimony and opinions of Drs.
Direnfeld, Diamond, and Brigham, the Board finds that the
clinical judgment method of apportionment to be reasonable
for determining the extent of Claimant's pre-existing
permanent impairment.
. . . .
80. Applying Dr. Diamond's 50% and 75% clinical
judgment apportionment to Claimant's shoulders and right
hip, respectively, would result in the following pre-
existing impairment.
15.6 weeks right upper extremity (5% x 312 weeks)
9.36 weeks left upper extremity (3% x 312 weeks)
64.8 weeks right lower extremity (22.5% x 288 weeks)
. . . .
82. The Board finds that despite the unanimous
opinions that Claimant had significant pre-existing
conditions, a rating of pre-existing impairment was not
possible, because of the information contained in the
medical records, or lack thereof.
83. The Board finds that under the AMA Guides' stated
method of apportionment, no pre-existing impairment could be
determined, because the medical records before the accident
lacked specificity as to Claimant's pre-injury ranges of
motion [(ROM)], which in this case, was the appropriate
method of permanent rating according the AMA Guides.
84. The Board finds that a determination of the extent
of pre-existing PPD is a legal question to be determined by
the Director or Board, upon consideration of the relevant
evidence.
85. In this case, based upon the opinions of Drs.
Direnfeld, Diamond, and Brigham that Claimant had
significant pre-existing factors or conditions that
contributed to his post-injury PPD, the Board credits the
clinical judgment method of apportionment over the AMA
Guides method of apportionment for determining Claimant's
previous PPD.
86. The Board finds that in this case, the application
of the clinical judgment method is more consistent than the
AMA Guides' method to meet the letter and intent of the
workers' compensation statute regarding apportionment.
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87. Based on Dr. Diamond's clinical judgment
apportionment, the Board finds that the Employer met its
burden of proving that Claimant had a pre-existing PPD in
excess of 32 weeks.
In COL 1's twelve-page discussion, the Board considered
the parties' positions, examined the legislative history of HRS
§ 386-33, Hawai#i case law precedent, precedent from the Board's
prior decisions, the "Guides to the Evaluation of Permanent
Impairment by the American Medical Association" (AMA Guides),3
and the limitations of the AMA Guides. COL 1 states in pertinent
part:
1. It is undisputed that Claimant had conditions or
factors in his right and left shoulder and right hip prior
to his August 12, 2010 work injury. The pivotal
disagreement in this case is whether such factors or
conditions must be quantifiable as a ratable permanent
impairments pursuant to the AMA Guides for purposes of
apportionment with the SCF.
. . . .
To conclude that an opinion regarding pre-existing
permanent disability can only be credited if it meets the
requirement of some guide, whether it be the AMA Guides or
another, would lead to some level of arbitrariness,
depending on the body part or system affected. That is,
pre-existing impairment might be ratable because a diagnosis
exists in one instance, but not ratable in another instance.
For example, in this case, the prior medical records do not
contain enough information to meet the requirements of AMA
Guides because the specific pre-accident hip and shoulder
ranges of motion document were not documented. Therefore,
the pre-existing permanent disability is not be [sic]
ratable, despite Claimant's significant pre-existing
conditions or factors. However, if another body part were
injured, such as the spine, pre-existing permanent
disability would be ratable based on the existence of a
diagnosis.
As noted in Section 387-1, HRS,
"Guide" or "guidelines" means an
indication of suggested criteria, course,
or means to a particular end, and not an
authoritative or exclusive prescription
which limits the exercise of independent
judgment, expertise, or care.
Further, as the Hawaii Supreme Court stated in Duque
v. Hilton Hawaiian Village, 105 Hawai#i 433 (2004), ". . .
3
The AMA Guides include various editions and are used by medical
experts as a reference or guide in measuring disability. Pave, 152 Hawai#i at
172-73, 524 P.3d at 363-64 (citations omitted).
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physicians must be allowed to draw on their medical
expertise and judgment to evaluate the numerous factors
relating to an individual's impairment rating and to
determine which Guides would be most appropriate to apply."
Further, Section 12-10-21(a), Hawaii Administrative
Rules states as follows:
Impairment rating guides issued by the American
Medical Association, American Academy of
Orthopedic Surgeons, and any other such guides
which the director deems appropriate and proper
may be used as a reference or guide in measuring
a disability.
Thus, while the AMA Guides are a helpful tool in
determining disability, the Board is not bound by them.
Cabatbat v. County of Hawaii, Department of Water Supply,
2013 Hawai#i, 1, 6 (2003).
Given the foregoing, the Board concludes that
permanent disability should be apportioned between
Employer/Insurance Carrier and the [SCF].
(Emphases added). This timely appeal followed.
"Appellate review of a LIRAB [(Board)] decision is
governed by the provisions of the Hawai#i Administrative
Procedure Act relating to judicial review of agency action."
Ihara v. State of Hawai#i Dep't. of Land and Nat. Resources,
141 Hawai#i 36, 41, 404 P.3d 302, 307 (2017) (citing HRS
§ 91-14(g) (1993)) (additional citation omitted).4
4
HRS § 91-14(g) (Supp. 2021) provides:
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;
(2) In excess of the statutory authority or
jurisdiction of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
(continued...)
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To be reversed as clearly erroneous, the agency's findings,
conclusions, decisions or orders must be clearly erroneous
in view of the reliable, probative, and substantial evidence
on the whole record. As to conclusions of law, the
[Board]'s conclusions will be reviewed de novo, under the
right/wrong standard.
Id. (citations and internal quotation marks omitted).
FOF 84, a legal conclusion, was not erroneous.
The SCF contends that the Board erred in concluding in
FOF 84, which is more accurately a COL, that the "extent of pre-
existing PPD is a legal question to be determined by the Director
or Board, upon consideration of the relevant evidence." See
Pave, 152 Hawai#i at 171-72, 524 P.3d at 362-63 (explaining that
"the accuracy of the label affixed by the agency is freely
reviewable by reviewing courts") (citation and quotation marks
omitted). The SCF made this same argument in Pave,5 which we
rejected, holding that the statement — — "the extent of
preexisting PPD is a legal question to be determined by the
Director of the Labor and Industrial Relations or the Board, upon
consideration of all the evidence, including the medical records
and testimony in the record" — — was "actually a conclusion of
law; [and] it is not wrong." Id. at 176, 524 P.3d at 367
(brackets omitted). We explained that "it is ultimately the
director of the Department of Labor and Industrial Relations
through the [Disability Compensation Division] or the Board, and
not the physician, that decides the final PPD rating." Id.
(quoting Ihara, 141 Hawai#i at 43, 404 P.3d at 309 (brackets and
4
(...continued)
(6) Arbitrary, or capricious, or characterized
by abuse of discretion or clearly unwarranted
exercise of discretion.
5
The SCF in Pave challenged FOF 39, which stated:
39. The Board finds that a determination
of the extent of preexisting PPD is a
legal question to be determined by the
Director [of Labor and Industrial
Relations] or the Board, upon
consideration of all the evidence,
including the medical records and
testimony in the record.
152 Hawai#i at 176, 524 P.3d at 367.
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ellipsis omitted). We conclude the legal conclusion in FOF 84
was not wrong. See Ihara, 141 Hawai#i at 41, 404 P.3d at 307.
COL 1's reasoning, that pre-existing PPD does not have
to be a "ratable impairment" under the AMA Guides, was
not erroneous.
The SCF contends that "quantifiable ratable impairment"
pursuant to the AMA Guides is required in order to obtain
contribution from the SCF under HRS § 386-33. The SCF argues
that pre-existing PPD must be a "ratable impairment," based on
"objective medical criteria to a guide." The SCF claims that in
this case, "[t]here is no evidence that Claimant had a ratable
pre-existing disability based on the AMA Guides to his shoulders
or right hip prior to his industrial accident" sufficient to
support contribution from the SCF under HRS § 386-33. (Emphasis
in original). The SCF's arguments lack merit.
COL 1 quoted Hawai#i Administrative Rules (HAR)
12-10-21, entitled "Disabilities," which states in relevant part
that: "[i]mpairment rating guides issued by the American Medical
Association, American Academy of Orthopedic Surgeons, and any
other such guides which the director deems appropriate and proper
may be used as a reference or guide in measuring a disability."
(Emphasis added). "HAR § 12-10-21, by its terms, provides that
the AMA Guides may be used to determine impairment ratings."
Cabatbat v. Cnty. of Hawaii, Dep't of Water Supply, 103 Hawai#i
1, 6, 78 P.3d 756, 761 (2003). HAR § 12-10-21 "permits reliance
on the AMA Guides, but does not mandate their use to the
exclusion of other appropriate guides." Id.
The Hawai#i Supreme Court subsequently explained in
Ihara that "where the AMA Guides and the physician's assessment
do not give an accurate portrayal of the total loss of [sic]
impairment, the director or Board shall take other factors into
account to reach an accurate disability determination."
141 Hawai#i at 44, 404 P.3d at 310 (citation omitted). The Ihara
court noted that such "other factors affecting a PPD assessment
include 'skills, education, job history, adaptability, age, and
environment ...." Id. (quoting Duque v. Hilton Hawaiian Vill.,
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105 Hawai#i 433, 439, 98 P.3d 640, 646 (2004)). "Where a
physician's estimate of the permanent impairment under the AMA
Guides is zero, the Board nonetheless has the discretion to find
a determinate degree of impairment using standards not
encompassed by the AMA Guides." Id. at 45, 404 P.3d at 311.
Here, the Board was not wrong in its legal conclusion
in COL 1 that "while the AMA Guides are a helpful tool in
determining disability," the Board is "not bound by them[;]" and
that a pre-existing PPD does not have to be a "ratable"
impairment pursuant to a guide such as the AMA Guides. See
HAR § 12-10-21; Ihara, 141 Hawai#i at 41, 44-45, 404 P.3d at 307,
310-11; Cabatbat, 103 Hawai#i at 6, 78 P.3d at 761.
COL 1 incorrectly equated Claimant's pre-existing
"conditions or factors" with pre-existing
impairment.
COL 1 stated: "It is undisputed that Claimant had
conditions or factors in his right and left shoulder and right
hip prior to his August 12, 2010 work injury. . . ." (Emphasis
added). The Board then explained how it would evaluate pre-
existing PPD in the remainder of COL 1, treating the "conditions
or factors" as the equivalent of a disability.
The SCF contends that "a condition or factor is not an
impairment[,]" and the fact that Claimant had "pre-existing
condition[s]," does not mean that Claimant had a pre-existing
PPD. This contention has merit, per our recent decision in Pave.
In Pave, a consolidated appeal, we noted that in one of
the appeals, the Board "incorrectly equated a pre-existing
'condition' with a pre-existing 'disability.'" 152 Hawai#i at
181, 524 P.3d at 372. The issue in each of the two appeals in
Pave was whether there was evidence that the injured claimant's
asymptomatic pre-existing physical condition had caused any "loss
or impairment" of physical function before the work accident.
Id. at 185, 524 P.3d at 376. We noted that "the plain statutory
language" of HRS § 386-33(b) "requires that a 'disability'
supporting an award of thirty-two weeks of PPD benefits must
involve 'loss or impairment of a physical or mental function.'"
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Id. at 180, 524 P.3d at 370 (quoting HRS § 386-1)6 (other
citations omitted). In reversing the Board's decision and orders
in both appeals, we stated:
[w]e hold that SCF is not liable for PPD benefits if an
employee's preexisting "condition" did not cause a
"disability" — that is, "loss or impairment of a physical or
mental function" — before the employee's work accident. The
record in each case contains no evidence that the injured
employee was physically impaired before their work accident.
In each case, at least one doctor apportioned causation of
post-work-accident disability to a preexisting condition;
but in neither case was there evidence that the preexisting
condition had caused a pre-work-accident loss or impairment
of physical or mental function.
Id. at 169, 524 P.3d at 360.
Here, in COL 1, the Board concluded that because of
Claimant's pre-existing "conditions or factors" in his right and
left shoulder and right hip, Claimant had pre-existing PPD under
HRS § 386-33, and Claimant's PPD benefits should be apportioned
between Employer/Carrier and the SCF. Employer/Carrier does not
address the SCF's contention that a pre-existing "condition or
factor is not an impairment," or point to any other language in
the Board's Decision and Order that suggests the Board concluded
that Claimant's pre-existing conditions or factors constituted a
"loss or impairment of a physical or mental function" under
HRS § 386-1.
We hold that COL 1's conclusion that equated Claimant's
pre-existing "conditions or factors" with pre-existing impairment
of Claimant's physical function was erroneous. We do not reach
or express any opinion on whether the record contains evidence of
pre-existing impairment of a physical or mental function, but
narrowly hold that the Board made an error of law in its analysis
when it applied HRS § 386-33 based on pre-existing "conditions or
factors," rather than pre-existing impairment of a physical or
mental function. See Pave, 152 Hawai#i at 169, 524 P.3d at 360;
HRS § 386-1 (defining "disability"). Accordingly, COL 1 was
erroneous in this regard. See Ihara, 141 Hawai#i at 41, 404 P.3d
6HRS § 386-1 (2013) defines "disability" as "loss or impairment of
a physical or mental function."
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at 307. For the same reason, COL 2, which concluded that "104
weeks of PPD payable to Claimant" should be apportioned and "paid
by the SCF" under HRS § 386-33(a) was also erroneous. See id.
For the foregoing reasons, we affirm in part and vacate
in part the July 11, 2017 Decision and Order filed by the Labor
and Industrial Relations Appeals Board, and remand for further
proceedings consistent with this Summary Disposition Order.
DATED: Honolulu, Hawai#i, April 14, 2023.
On the briefs:
/s/ Lisa M. Ginoza
Li-Ann Yamashiro, Chief Judge
Deputy Attorney General,
for Appellee-Appellant. /s/Katherine G. Leonard
Associate Judge
Robert E. McKee, Jr.,
(Law Office of Robert E. /s/ Karen T. Nakasone
McKee, Jr.), Associate Judge
for Employer-Appellant-
Appellee Realty Laua, LLC and
Insurance Carrier-Appellant-
Appellee Hawai#i Employers'
Mutual Insurance Company.
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