Appeal of Mr. Bult's, Inc.

THE STATE OF NEW HAMPSHIRE
SUPREME COURT
In Case No. 2016-0543, Appeal of Mr. Bult’s, Inc., the
court on October 16, 2017, issued the following order:
Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case. The
petitioners, Mr. Bult’s, Inc., Zurich Insurance Company, and The Lawson
Group, appeal a decision of the Compensation Appeals Board (CAB) affirming
the denial of recovery from the State Special Fund for Second Injuries (Second
Injury Fund) for injuries to Richard Morrissette. We affirm.
The following facts were found by the CAB or are supported by the
record. Morrissette, a truck driver, was hired by Mr. Bult’s, Inc. on August 26,
2013. Before he was hired, as part of his commercial driver’s license renewal
process, Morrissette underwent a Department of Transportation physical
examination. For the physical examination, Morrissette completed a medical
questionnaire, upon which he indicated that he had diabetes that was
controlled by “diet and pills.” Morrissette’s license was renewed, and Mr.
Bult’s, Inc. placed the information about Morrissette’s diabetes in his personnel
file.
On August 13, 2014, a gust of wind blew open the back doors of
Morrissette’s truck. Morrissette was thrown backwards. He suffered injuries
to one shoulder, a cervical sprain, and headaches. Ultimately, he underwent
rotator cuff surgery on his injured shoulder.
In connection with Morrissette’s injuries, the petitioners requested
reimbursement from the Second Injury Fund on September 1, 2015, which the
New Hampshire Department of Labor (DOL) denied. The petitioners appealed
the decision to the CAB, and the CAB held a hearing on the matter on July 20,
2016. The CAB thereafter denied the petitioners’ request for recovery because
it concluded that the petitioners had not met their burden of proving, by a
preponderance of the evidence, that Morrissette had a “permanent physical
impairment at the time of hire or that the Employer had knowledge of an
impairment.” Specifically, the CAB found that the petitioners had “not proven
that an employer, if it learned of the controlled diabetes, would more likely
than not significantly consider it in making a decision to hire or retain an
employee.” This appeal followed.
Our standard of review of decisions of the CAB is established by statute:
[A]ll findings of the commission upon all questions of fact properly
before it shall be deemed to be prima facie lawful and reasonable;
and the order or decision appealed from shall not be set aside or
vacated except for errors of law, unless the court is satisfied, by a
clear preponderance of the evidence before it, that such order is
unjust or unreasonable.
RSA 541:13 (2007). Accordingly, our review of the CAB’s factual findings is
deferential. Appeal of Hartford Ins. Co., 162 N.H. 91, 93 (2011). We review its
interpretations of statutes, however, de novo. Id. “On questions of statutory
interpretation, this court is the final arbiter of the intent of the legislature as
expressed in the words of a statute considered as a whole.” Id. (quotation
omitted). “We interpret legislative intent from the statute as written and will
not consider what the legislature might have said or add language that the
legislature did not see fit to include.” Id. (quotation omitted). We first examine
the language of the statute itself, and, where possible, construe that language
according to its plain and ordinary meaning. Appeal of Letellier, 163 N.H. 24,
27 (2011). “We construe liberally the Workers’ Compensation Law in order to
give the broadest reasonable effect to its remedial purpose.” Appeal of Hartford
Ins. Co., 162 N.H. at 93 (quotation omitted).
The petitioners raise several arguments on appeal. They contend that:
(1) the CAB erred in applying the inquiry we set forth in Appeal of Hartford to
determine whether a pre-existing permanent impairment is “of such
seriousness as to constitute a hindrance or obstacle to obtaining employment”
under RSA 281-A:2, XIV (2010); (2) the DOL “waived” the Appeal of Hartford
inquiry, and, therefore, the CAB erred in requiring the petitioners to satisfy
that inquiry; (3) the DOL, in contravention of RSA 281-A:2, XIV and RSA 281-
A:54 (2010), erred by denying their reimbursement request on the sole basis
that Morrissette’s pre-existing permanent impairment is diabetes; (4) the CAB
misinterpreted RSA 281-A:54 by requiring the petitioners to meet “a heightened
burden of proof concerning ‘employer knowledge’ that would be considered
illegal for an employer to obtain;” and (5) the CAB erred by disregarding
uncontradicted expert testimony and by not relying upon medical evidence.
(Bolding and capitalization omitted.)
We begin with a brief overview of the Second Injury Fund. “The second
injury fund was created to encourage employers to hire or retain employees
with permanent physical or mental impairments of any origin by reducing the
employer’s liability for workers’ compensation claims.” Id. (quotation omitted).
The implementing statute provides, in relevant part:
If an employee who has a permanent physical or mental
impairment, as defined in RSA 281-A:2, XIV, from any cause or
2
origin incurs a subsequent disability by injury arising out of and in
the course of such employee’s employment on or after July 1,
1975, which results in compensation liability for a disability that is
greater by reason of the combined effects of the preexisting
impairment than that which would have resulted from the
subsequent injury alone, the employer or the employer’s insurance
carrier shall in the first instance pay all awards of compensation
provided by this chapter. However, the commissioner shall
reimburse such employer or insurance carrier from the [Second
Injury Fund] for all compensation payments subsequent to those
payable for the first 104 weeks of disability.
RSA 281-A:54, I. A “[p]ermanent physical or mental impairment” is defined as
“any permanent condition that is congenital or due to injury or disease and
that is of such seriousness as to constitute a hindrance or obstacle to
obtaining employment or to obtaining employment if the employee should
become unemployed.” RSA 281-A:2, XIV (quotation omitted).
In order to qualify under this section for reimbursement from
the [Second Injury Fund], an employer shall establish by written
records, or by affidavit executed at the time of hire or retention in
employment, that the employer had knowledge of the employee’s
permanent physical or mental impairment at the time that the
employee was hired or at the time that the employee was retained
in employment after the employer acquired such knowledge.
RSA 281-A:54, III.
We first address the petitioners’ argument that the CAB erred in applying
the inquiry we set forth in Appeal of Hartford by using an analysis that we
rejected in that case. In Appeal of Hartford, we considered “whether RSA 281-
A:2, XIV allows the CAB to consider an employee’s past job performance as
evidence that his or her preexisting impairment would not be a hindrance or
obstacle to obtaining employment should the employee become unemployed.”
Appeal of Hartford Ins. Co., 162 N.H. at 95. We concluded that “the employee’s
ability to perform his or her existing job, or one like it, is not determinative of
whether the preexisting impairment is ‘a hindrance or obstacle to obtaining
employment.’” Id. at 96 (quoting RSA 281-A:2, XIV). Instead, we explained
that “[t]he inquiry should be whether the impairment is such that an employer
who knew of it and its extent would more likely than not significantly consider
it when making a decision to hire or retain the employee.” Id. at 97 (quotation
omitted).
A review of the CAB’s decision demonstrates that the CAB applied the
inquiry we adopted in Appeal of Hartford. The CAB determined that “the
[petitioners] ha[ve] not proven that an employer, if it learned of the controlled
3
diabetes, would more likely than not significantly consider it in making a
decision to hire or retain an employee.” This is precisely the analysis we
prescribed in Appeal of Hartford. Thus, we conclude that the CAB did not err
in its application of the analysis we outlined in Appeal of Hartford.
The petitioners also contend that the DOL “waived the [Appeal of
Hartford] inquiry requirement,” and, therefore, the CAB’s “decision determining
that the Carrier failed to meet the [Appeal of Hartford] inquiry is” erroneous.
According to the petitioners, New Hampshire Administrative Rules, Lab
506.04(d) does not require a “Carrier to meet the [Appeal of Hartford] inquiry as
there are no State Forms or Exhibits requiring a Carrier to satisfy the inquiry
with its initial filings for reimbursement.” Thus, the petitioners contend that,
because the DOL has “had ample opportunity (over 5 years) to formulate new
administrative rules to address the” Appeal of Hartford inquiry, but it has not
done so, the DOL has “waived the [Appeal of Hartford] inquiry requirement” as
a prerequisite to compensation from the Second Injury Fund. We disagree that
Lab 506.04(d) does not require proof of the inquiry we outlined in Appeal of
Hartford.
Lab 506.04 provides, in pertinent part, that “[s]elf-insured employers and
insurance carriers who desire to invoke the reimbursement provisions of RSA
281-A:54 shall file proof of eligibility for the use of the second injury fund
established by RSA 281-A:55.” N.H. Admin. R., Lab 506.04(b). It states that
“[p]roof of eligibility shall include,” among other things,
(1) Either notarized true copies of the written record of
knowledge by the employer that the employee had a permanent
impairment, prior to the work related injury which the employer is
using as a basis for reimbursement by the fund . . . or an affidavit
stating that the employer had knowledge of the employee’s
permanent physical or mental impairment which must be executed
by the employer at the time of hire or retention but before the
second injury may be used as written record;
(2) Medical evidence of the preexisting permanent
impairment[.]
N.H. Admin. R., Lab 506.04(d)(1), (2) (emphases added).
Although Lab 506.04(d) refers to both “permanent impairment” and
“permanent physical or mental impairment,” we think it implausible that the
DOL meant for the phrase “permanent impairment” to refer to something other
than “permanent physical or mental impairment,” cf. Ruel v. N.H. Real Estate
Appraiser Bd., 163 N.H. 34, 39 (2011) (stating that court will not presume
legislature intended illogical result); Appeal of Town of Pittsfield, 160 N.H. 604,
606 (2010) (principles of statutory construction govern interpretation of
4
administrative regulations). We, therefore, interpret both phrases as
referencing the “[p]ermanent physical or mental impairment” defined in RSA
281-A:2, XIV and thereby required under RSA 281-A:54, I and III. It is this
language that we interpreted in Appeal of Hartford when we concluded that the
“inquiry should be whether the impairment is such that an employer who knew
of it and its extent would more likely than not significantly consider it when
making a decision to hire or retain the employee.” Appeal of Hartford Ins. Co.,
162 N.H. at 97 (quotation omitted). Accordingly, by requiring proof that the
employer knew of the employee’s “permanent physical or mental impairment,”
N.H. Admin. R., Lab 506.04(d)(1), the DOL is, in effect, requiring proof to
satisfy the Appeal of Hartford inquiry.
For the same reason, we reject the petitioners’ argument that the DOL’s
“Second Injury Fund Sworn Statement of Employer” form does not require a
party seeking compensation from the Special Injury Fund to submit
information to satisfy the Appeal of Hartford inquiry. (Capitalization omitted.)
As the petitioners note in their brief, the form “requires an employer to provide
records, ‘Pursuant to N.H. RSA 281-A:54, III and N.H. Admin. Rule Lab
506.04(d)(1).’” Thus, contrary to the petitioner’s contention, by requiring an
employer to provide records pursuant to RSA 281-A:54, III and Lab
506.04(d)(1), the “Second Injury Fund Sworn Statement of Employer” form does
require the employer “to produce evidence to support the [Appeal of Hartford]
inquiry in the initial submissions.” (Capitalization omitted.)
The petitioners further cite an e-mail sent by the DOL’s Special Funds
Coordinator on August 26, 2016 — almost a year after the petitioners
requested reimbursement — as evidence that the DOL does not require parties
seeking reimbursement to submit evidence to satisfy the Appeal of Hartford
inquiry. In the e-mail, the Special Funds Coordinator lists what she refers to
as “a couple more things to remember” regarding Second Injury Fund files and
reimbursement requests. The petitioners suggest that, because the e-mail
notes that the case does not need to be outlined in the cover letter and that
“physical therapy notes, occupational therapy notes or any other therapy
notes” do not need to be included unless “it is a stress claim and [the party] is
seeking mental health therapy,” it is clear “that carriers/employers do not need
to submit evidence to show the [Appeal of Hartford] inquiry.” We fail to see
how these statements in the e-mail affirmatively demonstrate or even suggest
that employers or insurance carriers need not submit evidence to satisfy the
Appeal of Hartford inquiry, nor do we see anything that discourages employers
from doing so. See Petition of Warden (State v. Roberts), 168 N.H. 9, 18 (2015)
(“We interpret written documents de novo.”).
The petitioners also maintain that, contrary to RSA 281-A:2, XIV and
RSA 281-A:54, the DOL automatically disqualified their reimbursement request
on the sole basis that Morrissette’s pre-existing permanent impairment is
diabetes. As we explained, to qualify for reimbursement under RSA 281-A:54,
5
the employer must establish that it “had knowledge of the employee’s
permanent physical or mental impairment.” RSA 281-A:54, III. RSA 281-A:2,
XIV requires that the employee’s “[p]ermanent physical or mental impairment”
be both: (1) a “permanent condition that is congenital or due to injury or
disease”; and (2) “of such seriousness as to constitute a hindrance or obstacle
to obtaining employment or to obtaining employment if the employee should
become unemployed.” (Quotation omitted.) To determine whether an
employee’s preexisting impairment is a hindrance or obstacle to obtaining
employment under RSA 281-A:2, XIV, the inquiry is “whether the impairment
is such that an employer who knew of it and its extent would more likely than
not significantly consider it when making a decision to hire or retain the
employee,” Appeal of Hartford Ins. Co., 162 N.H. at 97 (quotation omitted).
Here, the DOL concluded that the petitioners had “failed to establish that
Mr. Morrissette had any permanent physical or mental impairment, as defined
in RSA 281-A:2, XIV, at the time of his subsequent disability.” It stated that
although Morrissette was diagnosed with diabetes, “[d]iabetes in and of itself is
not a hindrance or obstacle to obtaining employment or to obtaining
employment if the employee should become unemployed.” In doing so, it
appears that the DOL either implicitly determined or assumed, without
deciding, that Morrissette’s diabetes constituted a “permanent condition that is
congenital or due to injury or disease,” RSA 281-A:2, XIV, but that the
petitioners had failed to demonstrate that Morrissette’s diabetes was “of such
seriousness as to constitute a hindrance or obstacle to obtaining employment
or to obtaining employment if the employee should become unemployed,” id.
(emphasis added). Thus, the DOL did not automatically disqualify the
petitioners from reimbursement under the Special Injury Fund simply because
Morrissette has diabetes. Rather, the DOL recognized the statutory
requirements for reimbursement, but found that the petitioners had failed to
meet those requirements.
The petitioners next contend: (1) that the CAB committed an error of law
in requiring the petitioners to prove that Mr. Bult’s, Inc. had knowledge of the
seriousness of Morrissette’s condition, thus “establish[ing] a heightened burden
of proof”; and (2) that requiring an employer to demonstrate that it knew the
seriousness of an employee’s preexisting impairment “would place all
employers [at risk] of potentially violating the [Americans with Disabilities Act].”
(Bolding and capitalization omitted.)
RSA 281-A:54, III provides that employers seeking reimbursement from
the Second Injury Fund “shall establish . . . that the employer had knowledge
of the employee’s permanent physical or mental impairment” at the relevant
time. As we explained, the statutory definition of “[p]ermanent physical or
mental impairment” has two parts. RSA 281-A:2, XIV (quotation omitted).
Thus, by its plain and ordinary meaning, RSA 281-A:54, III requires the
employer to establish that it had knowledge of both parts: (1) that the employee
6
had a “permanent condition that is congenital or due to injury or disease”; and
(2) that the condition “is of such seriousness as to constitute a hindrance or
obstacle to obtaining employment or to obtaining employment if the employee
should become unemployed.” RSA 281-A:2, XIV; RSA 281-A:54, III; see 8 A.
Larson et al, Larson’s Workers’ Compensation Law, § 91.03[3], at 91-42
(Matthew Bender ed. rev. 2016) (“The knowledge that the employer must have
of the nature of the injury also [is] held to include awareness that the condition
was of a kind likely to be a hindrance to employment.”). Therefore, contrary to
the petitioners’ assertion, the CAB did not impose a heightened burden of proof
upon the employer; the CAB simply concluded that the employer had not met
the burden of proof established by the statute.
In support of their argument that requiring employers to demonstrate
knowledge of the seriousness of an employee’s impairment violates the
Americans with Disabilities Act, the petitioners quote 29 C.F.R. § 1630.13(b)
(2016), which provides: “Except as permitted by § 1630.14, it is unlawful for a
covered [employer] to require a medical examination of an employee or to make
inquiries as to whether an employee is an individual with a disability or as to
the nature or severity of such disability.” However, “[p]reemployment inquiries
contained in an employer’s application form . . . do not automatically violate
the [Americans with Disabilities Act].” Caldwell v. Aarlin/Holcombe Armature,
481 S.E.2d 196, 198 (Ga. 1997); see 42 U.S.C. § 12112(d)(2)(B) (2012). The
petitioners have not persuaded us that employers cannot satisfy the knowledge
requirement of RSA 281-A:54, III without running afoul of the Americans with
Disabilities Act.
We turn next to the petitioners’ contention that the CAB erred by
disregarding uncontradicted expert evidence. At the hearing, the petitioners
presented the testimony of a vocational counselor. The counselor testified that,
after contacting fifteen employers in the trucking industry and three recruiters,
it was her opinion that an employer would possibly consider diabetes in
deciding between two otherwise similar candidates. In the petitioners’ view, the
fact that the DOL presented no evidence contradicting the counselor’s
testimony compelled the CAB to resolve the appeal in their favor. They contend
that in Second Injury Fund reimbursement claims, just as when a worker
seeks to establish a claim for workers’ compensation benefits, “[o]nce the [party
seeking reimbursement] has established a prima facie case, the burden of
production shifts to the respondent.” See Appeal of Newcomb, 141 N.H. 664,
667 (1997).
We need not decide if the burden-shifting framework of workers’
compensation claims applies to Second Injury Fund reimbursement claims.
Assuming that it does, “[t]he burden of persuasion . . . remains with the [party
seeking reimbursement],” id. (quotation omitted), and the CAB was not
persuaded by the counselor’s opinions about whether employers significantly
consider diabetes when making a decision to hire or retain an employee. The
7
CAB gave “little weight” to the counselor’s testimony because her opinions,
“based upon limited questioning of recruiters and employers[,] did not require
any expertise nor did the responses prove persuasive.”
The CAB is not bound to accept any uncontradicted evidence, even
expert testimony, Appeal of Lambrou, 136 N.H. 18, 20 (1992), unless “the
complexity of the . . . issues involved, the unequivocal nature of the testimony,
and the absence of any articulated reason to discount it” compel its
acceptance, Town of Hudson v. Wynott, 128 N.H. 478, 486 (1986). If the CAB
“declines to accept uncontroverted evidence, it must state its reasons for doing
so.” Appeal of Lambrou, 136 N.H. at 20. Here, the CAB stated its reasons for
“giv[ing] little weight” to the counselor’s testimony. On appeal, the petitioners
have not demonstrated that the CAB was compelled to accept the counselor’s
testimony. See Town of Hudson, 128 N.H. at 486. Therefore, we conclude that
the CAB did not err in according little weight to the counselor’s testimony.
Nonetheless, even had the CAB accepted the vocational counselor’s
testimony, the petitioners proved, at most, that an employer possibly would
consider diabetes. Their burden, however, was to prove that “the impairment
is such that an employer who knew of it and its extent would more likely than
not significantly consider it when making a decision to hire or retain the
employee.” Appeal of Hartford Ins. Co., 162 N.H. at 97 (quotation omitted;
emphasis added). Proof that an employer possibly would do so does not prove
that the employer more likely than not would do so.
The petitioners further contend that the CAB was required to rely upon
medical evidence to determine whether or not Morrissette’s diabetes was “of
such seriousness as to constitute a hindrance or obstacle to obtaining
employment” under RSA 281-A:2, XIV. The petitioners presented the written
opinion of a doctor that Morrissette’s “pre-existing permanent impairment [is]
. . . diabetes,” but the CAB concluded that the doctor’s opinion did not
establish that Morrissette’s diabetes was “of such seriousness as to constitute
a hindrance or obstacle to obtaining employment,” RSA 281-A:2, XIV, because
the “‘seriousness’ of the condition under the statute is a legal not medical
question.” The petitioners suggest that, because they presented the only
medical evidence before the CAB, the CAB was compelled to find in their favor.
They maintain that, instead, the CAB relied upon “‘common knowledge’ of the
manifestations of diabetes” and that this was error.
Even assuming, without deciding, that, as the petitioners suggest, the
CAB was required to treat the “seriousness” of Morrissette’s condition as a
medical question and not a legal question, we still find no error in the CAB’s
decision to deny them reimbursement under the statute. As we have
explained, to obtain reimbursement under the Second Injury Fund, the
petitioners had to do more than prove the “seriousness” of Morrissette’s
condition. They had to demonstrate that Morrissette’s condition “is of such
8
seriousness as to constitute a hindrance or obstacle to obtaining employment
or to obtaining employment if the employee should become unemployed.” RSA
281-A:2, XIV (emphasis added). This means that the petitioners had to prove
that the “impairment is such that an employer who knew of it and its extent
would more likely than not significantly consider it when making a decision to
hire or retain the employee.” Appeal of Hartford Ins. Co., 162 N.H. at 97
(quotation omitted; emphasis added). Here, the CAB found that the petitioners
failed to show “that an employer, if it learned of the controlled diabetes, would
more likely than not significantly consider it in making a decision to hire or
retain an employee.” The petitioners have not shown on appeal why this
determination was error.
Nonetheless, the petitioners maintain that Lab 506.04 and the forms that
the DOL requires those seeking reimbursement from the Second Injury Fund to
submit require only medical evidence, and they therefore argue that the
submission of medical evidence alone was sufficient for the petitioners to meet
their burden. For the same reasons that we explained Lab 506.04 does not
waive the Appeal of Hartford inquiry, we disagree that Lab 506.04 and the
DOL’s forms require a party seeking reimbursement from the Special Injury
Fund to submit only medical evidence.
Finally, to the extent that the petitioners argue that the CAB erred by
relying upon “common knowledge” in its decision, we find no reversible error.
In its decision, the CAB noted that:
[D]iabetes is a disease which manifests itself in a wide variety of
ways and severity. It ranges from a condition easily controlled by
diet or exercise, through control by diet, exercise and medication to
the more extreme manifestations concerning “strokes, retinopathy
or limb amputations or other serious consequences.” This
information is common knowledge. As a result of this
determination by the Panel, the Employer/Insurer is found not to
have proven by a preponderance of the evidence that Mr.
Morrissette had a permanent physical impairment at the time of
hire or that the Employer had knowledge of an impairment.
Because diabetes is so common and of such wide ranging severity,
the Employer would need more information to determine it to be a
serious permanent condition [a]ffecting employability.
We read this portion of the CAB’s decision as explaining that, although
Morrissette has the disease of diabetes, it does not necessarily follow that the
employer had knowledge that his diabetes was “of such seriousness as to
constitute a hindrance or obstacle to obtaining employment or to obtaining
employment if the employee should become unemployed” as required by RSA
281-A:2, XIV. As the Second Injury Fund articulates in its brief, the mere
knowledge of an employee’s controlled diabetes “is not equivalent to knowledge
9
of a permanent impairment.” See RSA 281-A:2, XIV, :54, III. We agree. Thus,
to the extent that the CAB erred by taking note of the specific manifestations of
diabetes in the absence of expert testimony, that error was harmless. See
McIntire v. Lee, 149 N.H. 160, 167 (2003) (“An error is considered harmless if it
is trivial, or formal, or merely academic, and was not prejudicial to the
substantial rights of the party asserting it.”).
Accordingly, we conclude that the CAB’s decision that the petitioners
failed to prove that Mr. Bult’s, Inc. had knowledge of Morrissette’s permanent
physical impairment as required by RSA 281-A:54, III is not unjust or
unreasonable. See RSA 541:13.
Affirmed.
DALIANIS, C.J., and HICKS, LYNN, and BASSETT, JJ., concurred.
Eileen Fox,
Clerk
10