Appeal of Letellier , 163 N.H. 24 ( 2011 )

DUGGAN, J.

The petitioner, Raymond Letellier, appeals an award of the New Hampshire Compensation Appeals Board (CAB) that granted reimbursement for medical bills and expenses, but did not grant indemnity benefits. The respondents, Steelelements, Inc. and its insurance carrier, Chartis Insurance (together, the carrier), cross-appeal arguing that the CAB erred in finding that Letellier suffered a compensable work-related injury. Because we conclude that Letellier’s injury is excluded from the statutory definition of the term “injury,” we affirm the denial of indemnity benefits and reverse the award for medical bills and expenses.

The CAB found, or the parties do not dispute, the following facts. Letellier was the co-founder of Steelelements, Inc., a business that produced steel materials. He also served as the manager of plant operations for the business, and oversaw sales, transportation, engineering and customer relations. In March 2007, a fire destroyed the manufacturing plant and production was temporarily relocated while the facility was rebuilt. The final cost of rebuilding the facility far exceeded budget projections, and the business floundered. The business was closed in October 2009. Letellier then filed for personal and business bankruptcy.

During the summer of 2009, before the business closed, Letellier saw a nurse at Concord Psychiatric Associates due to stress. Letellier was not admitted, but the nurse recommended he follow up with outpatient counseling. During the ensuing months, Letellier developed hypertension and major depression, and several doctors attributed his ailments to the failure of his business, as well as other life stresses. Letellier filed a workers’ compensation claim with the carrier, citing mental stress and severe depression. The carrier denied the claim.

Letellier requested a hearing before the department of labor. A hearing officer denied Letellier’s claim, finding that he “failed to show that he suffered an injury which arose out of and in the course of his employment.” The officer determined that Letellier was merely “the victim of an economic reality which is far outside the realm of the Workers’ Compensation Statute.” Letellier appealed to the CAB. The CAB found that Letellier established both medical and legal causation, and that stress and depression qualify as compensable occupational injuries within the meaning of the statute. It overturned the hearing officer’s denial, and ordered the carrier to pay all medical and psychological treatment expenses associated with the claim.

The carrier filed a motion for rehearing, arguing that Letellier’s alleged condition falls outside the scope of the workers’ compensation statute. Letellier filed a motion for clarification of the order, requesting that the order include indemnity benefits in addition to the cost of medical expenses. The CAB denied both motions, and both parties appealed.

On appeal, Letellier argues that he should have been awarded indemnity benefits. In its cross-appeal, the carrier argues that the CAB should have denied Letellier’s claim for three reasons: (1) the injury did not result from a risk created by employment; (2) the injury is excluded from the statutory definition of the term “injury”; and (3) Letellier did not prove that his employment substantially contributed to his mental injury. Because it is dispositive, we first address the argument that Letellier’s injury was excluded from the statutory definition.

We will overturn the CAB’s decision only for errors of law, or if we are satisfied by a clear preponderance of the evidence that the decision is unjust or unreasonable. Appeal of Langenfeld, 160 N.H. 85, 89 (2010); RSA 541:13 (2007). The appealing party bears the burden of demonstrating that the CAB’s decision was erroneous. Appeal of Belair, 158 N.H. 273, 276 (2009).

An injury is compensable under the Workers’ Compensation Law if it is an “accidental injury... or occupational disease... arising out of and in the course of employment ...” RSA 281-A:2, XI (2010). Mental injuries, including major depression caused by work-related stress, may qualify as compensable injuries. RSA 281-A:2, XI. However, the statute does not permit compensation for any “mental injury” caused by “any disciplinary action, work evaluation, job transfer, layoff, demotion, termination, or any similar action, taken in good faith by an employer.” Id.

Resolution of this case requires us to interpret RSA 281-A:2, XI. We are the final arbiter of the meaning of the workers’ compensation statute. Appeal of Hartford Ins. Co., 162 N.H. 91, 93 (2011). In interpreting a statute, we first examine the language of the statute itself, and, where possible, construe that language according to its plain and ordinary meaning. Kenison v. Dubois, 152 N.H. 448, 451 (2005). Whether a condition is excluded from the definition of the term “injury” is “governed by the express statutory language and that which can be fairly implied therefrom.” Rooney v. Fireman’s Fund Ins. Co., 138 N.H. 637, 638-39 (1994) (quotation omitted). We must determine whether major depression caused by the stress of business failure comes within the statutory exclusion and thus does not constitute a compensable injury.

We begin by construing the plain meaning of the phrase “any disciplinary action, work evaluation, job transfer, layoff, demotion, termination, or any similar action.” RSA 281-A:2, XI. Layoffs, demotions, terminations, or similar actions may be precipitated by a number of factors, including poor performance, insubordination, or economic conditions. Such circumstances are explicitly excluded from the definition of the term “injury” because they are “normal and expected conditions of employment life.” Skidis v. Industrial Com’n, 722 N.E.2d 1163, 1166 (Ill. App. Ct. 1999) (quotation omitted); see also Kemp v. W.C.A.B. (Elkland Elec. Co.), 549 A.2d 1365, 1367 (Pa. Commw. Ct. 1988) (“[B]eing laid off because of modernization is, in fact, a normal working condition.”).

Although a business failure is not among the specifically enumerated exclusions, the legislature made clear that the list was not exclusive by including the words “any similar action.” Garand v. Town of Exeter, 159 N.H. 136, 141 (2009) (“The legislature is not presumed to waste words ... and whenever possible, every word of a statute should be given effect.”) (quotation omitted). We must consider the meaning of the term “any similar action” in the context of the specifically enumerated exclusions. State v. Beauchemin, 161 N.H. 654, 658 (2011) (explaining that where general words follow specific words in a statute, the general words are construed to embrace objects similar in nature to those enumerated by the specific words). Like the listed exclusions, the possibility of a business failure is a normal condition of employment. See Ziv v. Industrial Com’n of Ariz., 773 P.2d 228, 231-32 (Ariz. Ct. App. 1989) (agreeing that business failure “is not necessarily unexpected, extraordinary, or unusual” and injury from such stress is not covered by the workers’ compensation act). It, too, is often precipitated by poor company performance or general economic conditions. A business failure is indistinguishable from the specifically enumerated exclusions. "Viewing the plain meaning of the phrase “any similar action” in light of this fact compels us to conclude that the phrase encompasses a business failure.

Letellier argues that the exclusion does not apply in this case because the business failure was not an action taken by the employer. However, business failure necessarily implies some action by the employer; a business has not “failed” until the employer shuts the business down. Just as an employer’s decision to lay off employees due to economic conditions may result in mental injury, so too an employer’s choice to shut down a business due to economic conditions may result in mental injury. See Lapare v. Industrial Com’n of Ariz., 742 P.2d 819, 822 (Ariz. Ct. App. 1987) (“In summary, threatened economic hardship, including such naturally traumatic events as lay offs and plant closures, may indeed set the stage for varying degrees of emotional distress.... Their remedy, however, does not lie with workers’ compensation benefits. Other remedies . . . must be pursued.”).

Moreover, interpreting the phrase “any similar action” not to include business failure would lead to the absurd result that employees who are laid off due to business failure, and thus are expressly excluded from the coverage for mental injury, would be precluded from receiving benefits, while the owner of the failed business would be eligible for benefits. We decline to adopt such an illogical interpretation. Favazza v. Braley, 160 N.H. 349, 351 (2010). We thus conclude that a business failure constitutes “any similar action” within the meaning of the statute.

Although not cited by either party, we also conclude that this case is distinguishable from our most recent interpretation of RSA 281-A:2, XI in Petition of Dunn, 160 N.H. 613 (2011). The petitioner in Dunn was the chief of police for the Town of Jaffrey. Id. at 614. In that capacity, he “faced a number of stressors beginning in 2004 and continuing through his final day of work in July 2006.” Id. at 615. The stressors included: “a letter on NAACP stationery threatening to sue him”; internet attacks by the letter’s author; a budget dispute with Jaffrey selectmen; staffing shortages; department in-fighting; a labor grievance against him; the conducting of an investigation of the town manager, requiring a referral to the county attorney and the United States Attorney; his own suspension and reinstatement; and an email from a Jaffrey selectman containing derogatory statements and questioning his sanity. Id. at 615.

After being terminated, the chief applied for accidental disability retirement benefits from the New Hampshire Retirement System. Id. at 616-17. The exclusion provision in RSA 281-A:2, XI applies to retirement benefits. Id. at 620-21. The hearings examiner denied the claim and “apparently made a distinction between ‘work-related’ and ‘personnel-related’ psychological injuries].” Id. at 624. On appeal, we held that RSA 281-A:2, XI “does not exclude all stress-based injury that is personnel-related.” Id. We noted that the chiefs duties specifically included personnel responsibilities, and that an injury is compensable when the exercise of such personnel-related activities, rather than a good faith personnel action taken against the employee, causes the injury. See id.

Here, there is no contention that Letellier’s injury was caused by personnel actions comparable to those in Dunn. Letellier’s injuries did not arise from the performance of personnel duties that were part of his job. As the CAB explained, “[T]he failure of the claimant’s business caused the stress that resulted in his severe and disabling depression.” Without a transcript of the CAB hearing, we assume the evidence was sufficient to support this finding. See Atwood v. Owens, 142 N.H. 396, 396-97 (1997). Based upon this finding, the business failure that caused the injury falls squarely within the exclusion for “any similar action” in RSA 281-A:2, XI.

Although we have determined that business failure comes within the statutory exclusion, the exclusion applies only to “any similar action, taken in good faith by an employer.” RSA 281-A:2, XI (emphasis added). There is nothing to suggest that the failure of the business in this case involved bad faith. The CAB found that “the business floundered” largely due to the cost of reconstruction after a fire that caused substantial losses in 2007. It also specifically found that Letellier’s depression resulted from the ultimate economic failure of his business. “The medical care providers all [agreed] on this chain of events and the insurer did not dispute it.” Further, neither party alleges any bad faith on the part of Steelelements, Inc. We thus find that the failure of the business was “any similar action . . . taken in good faith by the employer.” Accordingly, Letellier’s depression was excluded from the statutory definition of the term “mental injury” and was not compensable.

Because of our disposition of the cross-appeal, we need not address the parties’ additional arguments.

Affirmed in part and reversed in part.

Conboy and Lynn, JJ., concurred; ÜALIANIS, C. J., with whom HICKS, J., joined, dissented.