Liljestrand v. Dell Enters. ( 2014 )

Nebraska Advance Sheets
242 287 NEBRASKA REPORTS
Adam Liljestrand, appellee, v.
Dell Enterprises, Inc.,
doing business as The Dundee Dell, appellant.
___ N.W.2d ___
Filed January 24, 2014. No. S-13-063.
1. Appeal and Error. The construction of a mandate issued by an appellate court
presents a question of law.
2. Constitutional Law: Due Process. Whether the procedures afforded an individ-
ual comport with constitutional requirements for procedural due process presents
a question of law.
3. Courts: Appeal and Error. An appellate court independently reviews questions
of law decided by a lower court.
4. Judges: Evidence. Generally, a successor judge may not make a decision based
on conflicting evidence that a predecessor judge heard.
5. Trial: Judges: Due Process: Witnesses. Due process entitles a litigant to have
all the evidence submitted to a single judge who can see the witnesses testify and,
thus, weigh their testimony and judge their credibility.
Appeal from the Workers’ Compensation Court: Thomas E.
Stine, Judge. Reversed and remanded for a new trial.
Thomas M. Locher and Joseph J. Kehm, of Locher, Pavelka,
Dostal, Braddy & Hammes, L.L.C., and, on brief, Robert H.
Grennan for appellant.
Ronald E. Frank and Harry A. Hoch III, of Sodoro, Daly,
Shomaker & Selde, P.C., L.L.O., for appellee.
Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
Connolly, J.
SUMMARY
This workers’ compensation appeal presents a due process
issue. The original trial judge retired while the case was on
appeal. The original trial judge found that the appellee, Adam
Liljestrand, was permanently and totally disabled. The appel-
lant, Dell Enterprises, Inc., doing business as The Dundee
Dell (Dell), sought review with a three-judge review panel.
The review panel remanded the cause because it was not clear
how the judge had treated the presumption of correctness
afforded to the vocational rehabilitation specialist’s opinion of
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Cite as 287 Neb. 242
Liljestrand’s disability. Dell appealed, and the Nebraska Court
of Appeals affirmed.1 But it left it to the chief judge of the
Workers’ Compensation Court how to instruct the new trial
judge on remand.
On remand, the case was assigned to a new trial judge, who
reviewed the record and issued an order without an eviden-
tiary hearing. The new trial judge found that Liljestrand had
rebutted the presumption afforded to the specialist’s opinion.
We granted Dell’s motion to bypass the Court of Appeals.
We conclude that this procedure violated due process because
the witnesses’ credibility was relevant to the issues presented
at trial. We reverse the order and remand the cause for a
new trial.
BACKGROUND
Liljestrand originally injured his back in September 2001
while he was working for Dell as a bartender. After surgery,
Liljestrand was given work restrictions of 30 pounds for lift-
ing and no repetitive bending or twisting. He required alter-
native sitting or standing every 2 hours. In September 2002,
the agreed-upon vocational rehabilitation specialist, Ronald
Schmidt, concluded that Liljestrand had sustained a 60- to
65-percent loss of earning power. Schmidt recommended that
Liljestrand attend college for retraining as a financial advisor.
The original trial court awarded Liljestrand vocational rehabili-
tation, which ended in 2004. Liljestrand eventually secured a
job as an independent contractor providing financial advice to
clients regarding insurance and mutual funds. But he reported
that the narcotic pain medications he had to take for his back
pain made him groggy and sleepy. He felt unable to advise
clients about their financial affairs. Because of his lack of
mental acuity and inability to sit for prolonged periods, he also
could not perform the work in a subsequent position he took in
recruiting nurses. He was last employed in May 2008.
In 2010, the surgeon reexamined Liljestrand and deter-
mined that he was suffering from mechanical low-back pain
1
Liljestrand v. Dell Enters., No. A-11-925, 2012 WL 3591087 (Neb. App.
Aug. 21, 2012) (selected for posting to court Web site).
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and referred him to a pain clinic. He concluded that the
restrictions that he originally ordered had not changed but
deferred to the judgment of physicians who were currently
treating Liljestrand’s pain. A different physician, however,
determined that Liljestrand had scar tissue from the sur-
gery and further disk herniation that was causing his current
pain. He diagnosed Liljestrand with “failed back syndrome”
and determined that his condition had deteriorated since his
2002 loss of earning power evaluation. He believed that
Liljestrand’s medications were appropriate and that he was
totally disabled.
In November 2010, Liljestrand’s then vocational rehabili-
tation specialist, Stephen Schill, prepared a loss of earning
capacity report. Schill believed that Liljestrand was unemploy-
able and was permanently and totally disabled. In January
2011, Schmidt, the 2002 specialist, provided an updated loss
of earning capacity report. Schmidt determined that Liljestrand
had access to many sedentary jobs and that his loss of earning
capacity was 34 percent. He discredited Schill’s analysis and
noted that Liljestrand’s ability to care for his two preschool
daughters while his wife worked showed that he had some
flexibility and strength.
At the 2011 hearing, the sole issue was the nature and extent
of Liljestrand’s permanent disability. The trial court found
Liljestrand’s testimony credible that he needed his current
medications to control his back pain and that these medica-
tions reduced his mental acuity. The judge concluded that
Liljestrand’s loss of earning capacity had increased since the
original assessment and that he was completely disabled as of
October 2010 because of the effect of his medications, coupled
with his physical restrictions. He did not mention the rebut-
table presumption of correctness afforded to Schmidt’s report.2
The review panel concluded that it could not tell whether the
trial judge had considered the presumption afforded Schmidt’s
report and determined that it must remand the cause for
that purpose.
2
See Neb. Rev. Stat. § 48-162.01(3) (Reissue 2010).
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Court of Appeals’ Decision
On appeal, the Court of Appeals determined that the review
panel’s order was final because it effectively vacated the trial
judge’s order, thus affecting Liljestrand’s substantial right:
We think it goes without saying that a remand to a lower
tribunal of necessity cancels out all or part of the lower
tribunal’s original decision. . . . .
. . . [W]hen the review panel’s decision is read in its
entirety, it is clear that the intent was a remand for deter-
mination of the applicability of the presumption of cor-
rectness to Schmidt’s opinion, or whether such had been
overcome by rebutting evidence from Schill. . . .
. . . [I]t is clear that the effect of the remand, of neces-
sity, is to take away the award of permanent total dis-
ability from Liljestrand. Without this appeal, there would
be further proceedings by the trial judge to determine the
extent of permanent disability. The trial judge is directed
to determine the applicability of the statutory presump-
tion concerning the agreed-upon vocational rehabilitation
counselor’s second opinion rendered January 21, 2011—
necessarily meaning that the trial judge must decide the
case anew after the consideration of the issue and evi-
dence which was not discussed in the trial judge’s original
decision. Accordingly, Liljestrand’s substantial right is
affected, as he has now lost his permanent and total dis-
ability award.3
The Court of Appeals declined to infer that the trial judge
had found the presumption rebutted, because Workers’ Comp.
Ct. R. of Proc. 11 (2011), as amended, requires sufficient find-
ings to provide meaningful appellate review:
In this case, we need factual findings and a rationale con-
cerning whether the presumption of correctness applied
or had been rebutted . . . . Our jurisprudence is that in
such circumstance, the remedy is to remand to the trial
judge for a determination of the unresolved issue, upon
the previous record. . . . We note in passing that in Hale,
3
Liljestrand, supra note 1, 2012 WL 3591087 at *4-5.
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supra,[4] the Supreme Court vacated the trial judge’s deci-
sion on the issue where there was no compliance with
Rule 11. This result serves to reinforce our conclusion
in our jurisdiction discussion that the review panel’s
decision in the instant case affects Liljestrand’s sub-
stantial rights and that thus, the review panel’s decision
is appealable.5
But the Court of Appeals noted that the trial judge had retired
and could not render the new decision: “Thus, we leave the
determination of who shall become the trial judge and follow
the directions of the review panel in the hands of the chief
judge of the compensation court.”6
P roceedings on R emand
The case was assigned to a new judge on remand, without
instructions to conduct a new hearing. In December 2012,
the new trial judge issued an “Award on Mandate” order. He
concluded that the Court of Appeals’ mandate required him to
review the previous record and issue a new order. After review-
ing the record, he concluded that the evidence presented at the
trial had rebutted Schmidt’s updated report. He noted that at
the 2011 hearing, Schmidt believed Liljestrand’s loss of earn-
ing capacity had decreased because of his vocational training.
But Schmidt had admitted that he did not know the effect that
Liljestrand’s medications would have on his employability. The
new trial judge concluded that Schmidt had not attempted to
verify the effect of these medications but that the second phy-
sician’s report had documented the effect of the medications.
Because Schmidt did not consider this report or Liljestrand’s
reports of his actual experiences, his opinion was incorrect.
In addition, based on the previous record, the new trial judge
ruled that Liljestrand was permanently and totally disabled as
of October 5, 2010, and awarded him permanent disability ben-
efits of $508 per week.
4
See Hale v. Standard Meat Co., 251 Neb. 37, 554 N.W.2d 424 (1996).
5
Liljestrand, supra note 1, 2012 WL 3591087 at *6.
6
Id. at *7.
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ASSIGNMENTS OF ERROR
Dell assigns that the court erred in (1) failing to con-
duct a new trial or abide by procedural due process require-
ments and (2) finding that Liljestrand was permanently and
totally disabled.
STANDARD OF REVIEW
[1-3] The construction of a mandate issued by an appel-
late court presents a question of law.7 Whether the procedures
afforded an individual comport with constitutional require-
ments for procedural due process presents a question of law.8
We independently review questions of law decided by a
lower court.9
ANALYSIS
Dell contends that the new trial judge violated its due proc­
ess rights by issuing an order without notice or an opportunity
to be heard on the meaning of the mandate, to present evidence,
or to cross-examine witnesses. Dell argues the procedure was
constitutionally deficient because a workers’ compensation
judge is the sole judge of the witnesses’ credibility and the
successor judge had no opportunity to assess their credibility.
Instead, Dell argues the successor trial judge acted as an appel-
late judge by issuing an order based solely from his reading
the record. It cites cases from other jurisdictions holding that
due process requires a decision to be entered by the judge who
heard the evidence and observed the witnesses.
Liljestrand, of course, sees it differently. He argues that the
only issue on remand was whether the evidence had rebutted
the presumption of correctness afforded Schmidt’s report and
that due process did not require a new trial on all the issues.
But this argument ignores the effect of the Court of Appeals’
decision and the trial court’s rulings on remand.
7
Pennfield Oil Co. v. Winstrom, 276 Neb. 123, 752 N.W.2d 588 (2008).
8
Travelers Indem. Co. v. Gridiron Mgmt. Group, 281 Neb. 113, 794 N.W.2d
143 (2011).
9
Moyera v. Quality Pork Internat., 284 Neb. 963, 825 N.W.2d 409 (2013).
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The Court of Appeals found that it had jurisdiction over the
first appeal because the effect of the review panel’s remand
was to “take away” the award of permanent total disability.10
The Court of Appeals further stated that deciding whether
the presumption of correctness was rebutted would neces-
sarily mean that the new trial judge “must decide the case
anew.”11 The correctness of these conclusions are not before
us, but the decision can only reasonably be interpreted as
concluding that the award order was vacated by the Court of
Appeals’ affirmance.
That conclusion was the law of the case on remand, and the
successor trial judge accordingly treated the original order as
vacated. He did not limit his order to whether the evidence had
rebutted the presumption. He also ruled on Liljestrand’s entitle-
ment to disability benefits, and Liljestrand argues on appeal
that this finding was correct.
[4,5] State courts generally agree that a successor judge
may not make a decision based on conflicting evidence that
a predecessor judge heard,12 although courts sometimes dif-
fer when the parties have consented to the procedure or have
agreed to the facts underlying an issue of law.13 We agree with
this general rule. It rests upon the principle that “due process
entitles a litigant to have all the evidence submitted to a single
judge who can see the witnesses testify and, thus weigh their
testimony and judge their credibility.”14
Moreover, the rule is consistent with the reason that we
defer to a trial court’s findings of fact. We have stated that
10
Liljestrand, supra note 1, 2012 WL 3591087 at *5.
11
Id.
12
See Annot., 84 A.L.R. 5th 399 (2000).
13
Compare Smith v. Freeman, 232 Ill. 2d 218, 902 N.E.2d 1069, 327 Ill.
Dec. 683 (2009) (parties may waive their due process right to have
issues decided by successor judge if waiver is knowing, intelligent act),
with Moore Golf v. Lakeover Golf & Country Club, 49 A.D.2d 583,
370 N.Y.S.2d 156 (1975) (holding that despite parties’ stipulation to
procedure, new trial was necessary where case hinged on credibility of
trial witnesses).
14
See Smith, supra note 13, 232 Ill. 2d at 223, 902 N.E.2d at 1071, 327 Ill.
Dec. at 685.
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in a bench trial of an action at law, the trial court is the sole
judge of the witnesses’ credibility and the weight to be given
their testimony.15 Even under more lenient standards of review,
we generally defer to a trial court’s assessment of conflicting
evidence because the trial court had the advantage of hearing
and observing important parts of evidence that are not readily
apparent from a cold record.16 These principles weigh against a
successor judge’s making findings of fact from a transcript of
proceedings before a different judge.
We need not consider here any exceptions that other courts
have recognized because none are presented by this record. The
parties did not consent to this procedure, and they clearly pre-
sented conflicting evidence at the original hearing whether the
presumption should be rebutted. Moreover, the issues involved
the credibility of witnesses.
It is true that Schmidt admitted to not considering the effect
of pain medications on Liljestrand’s ability to work. But he
also testified that no physician provided him with restrictions
based on Liljestrand’s medications and that Nebraska law
prohibited him from investigating this information himself.
Liljestrand challenged this assertion. Similarly, Dell challenged
both Liljestrand and his wife about why they would leave their
two young children in Liljestrand’s care if he could not drive
or care for their needs because of his medications or physical
restrictions. These witnesses’ credibility was clearly at issue
both for determining whether the presumption of correctness
afforded Schmidt’s opinion had been rebutted and whether
Liljestrand was totally disabled.
We reverse, because the successor judge’s ruling on these
issues without a new evidentiary hearing violated Dell’s
right to due process. We remand the cause to the Workers’
Compensation Court for a new trial.
R eversed and remanded for a new trial.
15
Henderson v. City of Columbus, 285 Neb. 482, 827 N.W.2d 486 (2013).
16
See, e.g., Caniglia v. Caniglia, 285 Neb. 930, 830 N.W.2d 207 (2013);
U.S. Cold Storage v. City of La Vista, 285 Neb. 579, 831 N.W.2d 23
(2013); Coffey v. Coffey, 11 Neb. Ct. App. 788, 661 N.W.2d 327 (2003).