12-0002. TERRY MAHLBERG Employee v. MUNICIPALITY OF ANCHORAGE Self-Insured Employer.

Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0002. TERRY MAHLBERG Employee v. MUNICIPALITY OF ANCHORAGE Self-Insured Employer Alaska Workers' Compensation Appeals Commission TERRY MAHLBERG, Employee, Applicant v. MUNICIPALITY OF ANCHORAGE, Self-Insured Employer. AWCBDecision No. 12-0002 Filed with AWCB Anchorage, Alaska on January 5, 2012 AWCB Case No. 200919347 FINAL DECISION AND ORDERTerry Mahlberg's (Employee) petition for imposition of a penalty for late paid medical benefits was heard on December 7, 2011, in Anchorage, Alaska. Attorney Eric Croft represented Employee. Attorney Trena Heikes represented the Municipality of Anchorage (Employer). Law F. Henderson, Workers' Compensation Risk Manager for Employer, and Richard Degenhardt, Jr., Ms. Heikes' assistant, attended the hearing. Employer's petition for hearing officer recusal, disseminated by email at 3:40 p.m. the afternoon prior to the hearing and filed at the hearing, was addressed as a preliminary matter. After hearing Employer's evidence and arguments for recusal, the hearing officer declined self-recusal. After deliberating privately, the panel's lay members also declined to recuse the hearing officer. The underlying petition for a penalty then proceeded to hearing before the full panel. The record was held open to allow Employee to file a response to Employer's objections to Employee's attorney fee affidavit. The record closed on December 16, 2011. ISSUES Employer contends the hearing officer, having filed a grievance against Employer's attorney in her former capacity as the Director of the Division of Workers' Compensation, should be recused for a conflict of interest, bias or the appearance of impropriety. Employee contends the applicable standard is whether the hearing officer can accord Employer a fair and impartial hearing, and there is no evidence to the contrary. Employee further contends there is no evidence the hearing officer has any personal or financial interest in this case. 1. Should the hearing officer be recused? Employee contends Employer paid David Mulholland, D.C.'s bill for performing a permanent partial impairment (PPI) evaluation late, and a penalty is therefore owed. Employer concedes its payment to Dr. Mulholland was late, but a penalty should not accrue because Dr. Mulholland never submitted the required Physician Report Form (07-6102). 2. Does Employer owe a penalty for a late paid medical bill? Employee contends he is entitled to an award of attorney fees and costs for prevailing on his petition for a penalty. Employer contends since Employee cannot prevail, no award of fees or costs is due. 3. Is Employee entitled to an award of attorney fees and costs? If so, in what amounts? FINDINGS OF FACT Evaluation of the relevant record establishes the following facts and factual conclusions by a preponderance of the evidence: 1) On November 5, 2010, Mahlberg v. Municipality of Anchorage, AWCB Decision No. 10-0181 (Mahlberg I) issued. (Mahlberg I) 2) Mahlberg I determined Employee, a firefighter for Employer for 35 years, met the prerequisites for application of the firefighter presumption under AS 23.30.121, and by a preponderance of evidence proved his employment was the substantial cause of his prostate cancer, need for medical treatment and disability. Employee was awarded the benefits he sought at that time: temporary total disability (TTD) benefits, medical costs, attorney fees and costs. (id.) 3) Employer did not petition for reconsideration or modification, nor did it appeal Mahlberg I. (Record). 4) On July 12, 2011, Dr. Mulholland performed a PPI evaluation. He rated Employee with a 23% whole person permanent partial impairment resulting from his prostate cancer and subsequent prostatectomy. (PPI Evaluation, July 12, 2011). 5) On July 19, 2011, Dr. Mulholland sent Employee a bill for $1,100.00 for his professional medical services performing the evaluation. (Invoice, July 19, 2011). 6) On July 22, 2011, Patty Jones, legal assistant to Mr. Croft, filed and served on Employer an Affidavit of Service containing a medical summary, the July 12, 2011 PPI report, and Dr. Mulholland's bill for services. No Physician Report Form 07-6012 was attached. (Stipulation of Facts, November 17, 2011). 7) On July 26, 2011, Employer received the Affidavit of Service with the stated attachments. (id.) 8) Also on July 26, 2011, Employee filed a workers' compensation claim (WCC) seeking payment for PPI, medical costs totaling $1,100.00, and attorney fees and costs. (WCC). 9) Employer did not controvert the 23% impairment rating or Dr. Mulholland's bill for services. (Stipulation of Facts, November 17, 2011). 10) On August 2, 2011, pursuant to AS 23.30.190, Employer mailed a check to Employee in the amount of $40,710.00, representing the 23% impairment rating. (id.) 11) On September 1, 2011, Employer mailed Dr. Mulholland a check for $1,100.00. (id.) 12) On October 7, 2011, Employee notified the board by letter the PPI and fee for the PPI evaluation had been paid, but contended Dr. Mulholland was paid late. Employee noted the only issues remaining for hearing were a penalty on the late payment to Dr. Mulholland, attorney fees and costs. (Letter from Croft to Ringel, October 7, 2011). 13) At a prehearing conference on November 8, 2011, the matter was set for a December 7, 2011 hearing on the issues of penalty, attorney fees and costs. (Prehearing Conference Summary, November 8, 2011). 14) At 3:40 p.m. on December 6, 2011, Employer, through its counsel Trena Heikes, disseminated by email though did not file a petition to recuse the assigned hearing officer. The petition alleged the assigned hearing officer filed a grievance against Ms. Heikes directly when she previously served as the Director of the Division of Workers' Compensation, the hearing officer continued to pursue the grievance, and was seeking "significant financial gain in the form of overtime pay." The email and its attachments were sent to counsel for Employee, the assigned hearing officer, Chief of Adjudications Janel L. Wright, Director of the Division of Workers' Compensation Michael Monagle, Employer's workers' compensation risk manager Law Henderson, and Ms. Heikes' assistant Richard Degenhardt, Jr. (Email with attachments, December 6, 2011). 15) Employer filed the petition for recusal at the hearing on December 7, 2011. The petition was not accompanied by the Affidavit AS 44.62.450(c) requires. Ms. Heikes agreed to swear to the facts contained in the petition in order that the petition be addressed, and was sworn in. (Record). 16) The hearing officer asked Ms. Heikes if she was familiar with AS 39.52.140, a provision contained in the Alaska Executive Branch Ethics Act, and its implications with respect to her proposed testimony. After reading the title of the statute, "Improper use or disclosure of information," and asking if Ms. Heikes wished to continue, Ms. Heikes replied she did. Ms. Heikes testified that in February 2010, while she was serving as the Director of the Division of Workers' Compensation, the hearing officer filed a grievance against her personally...

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