2009-121. Kinley's Restaurant and Bar Republic Indemnity Company and Northern Adjusters Inc. Appellants vs. Michael S. Gurnett Appellee.

• Case Date: November 24, 2009
• Court: Alaska

Alaska Workers Compensation Decisions 2009. Workers' Compensation Appeals Commission 2009-121. Kinley's Restaurant and Bar Republic Indemnity Company and Northern Adjusters Inc. Appellants vs. Michael S. Gurnett Appellee Alaska Workers' Compensation Appeals Commission Kinley's Restaurant and Bar, Republic Indemnity Company, and Northern Adjusters, Inc., Appellants, vs. Michael S. Gurnett, Appellee.Decision No. 121 November 24, 2009AWCAC Appeal No. 09-008AWCB Decision Nos. 08-0263 and 09-0017AWCB Case No. 200716426Final Decision Appeal from Alaska Workers' Compensation Board Decision No. 08-0263, issued on December 31, 2008, at Anchorage by southcentral panel members Judith DeMarsh, Chair, Janet Waldron, Member for Industry, and Tony Hansen, Member for Labor, and, on reconsideration, Decision No. 09-0017, issued on January 30, 2009, at Anchorage by southcentral panel members Judith DeMarsh, Chair, Janet Waldron, Member for Industry, and Tony Hansen, Member for Labor. Appearances: Richard L. Wagg, Russell, Wagg, Gabbert and Budzinski, for appellants Kinley's Restaurant and Bar, Republic Indemnity Company, and Northern Adjusters, Inc. Steven Constantino, Esq., for appellee Michael S. Gurnett. Commission proceedings: Appeal filed March 2, 2009. Oral argument presented August 4, 2009.Appeal Commissioners: Jim Robison, Philip Ulmer, andKristin Knudsen.By: Kristin Knudsen, Chair. Michael Gurnett, a server at Kinley's Restaurant, was injured when he was struck on the head by a cooler door. Kinley's insurer paid compensation and benefits until it controverted compensation based on Gurnett's neurosurgeon's statement that he could return to work. The board decided the controversion was not made in good faith and ordered payment of a penalty. Kinley's and its insurer filed an unopposed petition for reconsideration of the award of a penalty against the employer for late payment of compensation without a good faith controversion.(fn1) The board modified its decision on reconsideration, but maintained the award of a penalty based on compensation not paid from February 14, 2008, through April 30, 2008. Kinley's, its insurer, and its adjuster appeal the penalty award. Appellants argue that reliance on a physician's release to return to work protects them from imposition of a penalty under AS 23.30.155(e).(fn2) Appellants argue that the board's decision requires appellants to predict that a physician will not later change his opinion, requires appellants to obtain unanimity in physician opinion before controversion, and disregards the evidence that the physician had a job description from the employee. They argue the board imposed standards that exceed the requirements of the statute and the Supreme Court's decisions in Harp v. Arco Alaska, Inc.,(fn3) and Dougan v. Aurora Electric, Inc.(fn4) Appellee opposes and contends that appellants had a duty to obtain additional information regarding other aspects of his injury before controverting disability benefits. The parties' contentions require the commission to address the question, "When is a controversion of temporary disability compensation based on a physician's statement that an injured worker is able to return to work made invalid?" The facts of this case, and the parties' arguments on appeal, also compel the commission to address the question, "Is the employer's insurer bound by the position adopted by the employer regarding the employee's ability to return to work?" Finally, the commission considers whether the board's decision imposes duties on an insurance adjuster that are inconsistent with its obligations to its insured and compliance with the Alaska Workers' Compensation Act (hereafter "Act"). The commission concludes that the board erred as a matter of law by weighing evidence in support of a controversion against evidence presented against it before determining if the controversion was valid. The commission holds that a notice of controversion's validity is assessed based on the evidence in the issuing adjuster's possession at the time the controversion was mailed. Therefore, a controversion based on the original physician opinion is not retroactively converted to a "bad faith" controversion because later the opinion was withdrawn. The commission concludes the board erred as a matter of law by assessing a penalty for nonpayment without a valid controversion retroactively to the date of the controversion. The commission holds that an employee must select one attending physician for the injury, not one physician for each condition caused by the injury. The employee's direction to his employer to contact a physician regarding an ability to return to work is a selection of the attending physician. In this case, the adjuster was not required to inquire of all consulting physicians before controverting compensation. But, if a physician specifically qualifies an opinion on return to work by deferring to the attending physician, or the selected physician declines to serve as the attending physician, then the insurer must inquire of the default attending physician. The commission holds that (1) if the employment has not been terminated and an employee's position is still available, (2) if the employer refuses in writing to accept the employee's physician's release to return to work in the employee's position, and (3), if the employer's refusal is based on a belief the employee cannot, because of the work injury, perform the essential functions of the position, then the employer's refusal to accept its employee's attending physician's release to return to work is an acceptance of liability for disability compensation that is binding on the insurer. If the insurer has, or when the insurer obtains, other substantial evidence that the employee can return to the same or other employment at similar wages or other evidence that the employee is not disabled, the insurer may assert a defense to liability based on that evidence. This holding does not apply when the employer offers temporary limited duty, alternate positions, or limitations on hours or duties consistent with medical advice or safety rules, even if it results in reduction in pay. The commission finds that the record lacks evidence to apply these holdings. Therefore, the commission reverses the board's decision awarding a penalty under AS 23.30.155(e) and remands the case to the board for further proceedings in light of this decision. 1. Factual background. Michael Gurnett worked part-time at Kinley's Restaurant and Bar as a server. On September 26, 2007, he was filling ketchup containers near the door to a walk-in cooler. A chef kicked the door open, striking Gurnett on the forehead, causing blood to run into his eye and swelling. He developed headaches and dizziness, and went to the Providence Hospital emergency room two days later. A CT scan found no abnormality and he was told to see his physician in a week, but to return to the hospital if new symptoms appeared. On the fourth day after the injury, Gurnett went to a regularly scheduled eye exam. His optometrist, Dr. Brinkerhoff, referred him to a neuro-opthalmologist, Carl Rosen, M.D. Dr. Rosen ordered an MRI scan and additional scans were recommended by the radiologist, Dr. Moeller, including an MRI angiogram. On October 11, 2007, Dr. Rosen evaluated Gurnett. He referred Gurnett to Marshall Tolbert, M.D., a neurosurgeon, for evaluation and to rule out dissection of the carotid artery. Dr. Tolbert saw Gurnett on October 15, 2007, and diagnosed a traumatic dissection of the left distal cervical internal carotid artery, resulting in Horner's syndrome, but no abnormalities consistent with stroke. He recommended surgery to place a stent in the artery, which was nearly occluded. The employer's physician, neurosurgeon Paul Williams, M.D., saw Gurnett on October 29, 2007. He agreed that the work injury was the substantial cause of the Horner's syndrome and stenosis of the carotid artery. He agreed that surgery, or anticoagulant therapy, were appropriate. On November 5, 2007, Dr. Tolbert announced he would perform surgery the next week. A second angiogram in preparation for the surgery revealed that the occlusion had healed itself; that is, that while it revealed a dissection had occurred, the artery showed no significant stenosis or pseudoaneurysm. Therefore, surgery was no longer needed. Dr. Tolbert later sent Gurnett back to Dr. Rosen to evaluate the Horner's syndrome. On January 10, 2008, the adjuster wrote Dr. Tolbert to ask when Gurnett could return to work, if he was medically stable. A copy of a Department of Labor occupational description form for server/waiter was attached, as well as the employer's job description. On January 19, 2008, Gurnett telephoned Dr. Tolbert, wanting to know when he could go back to work, and, according to Dr. Tolbert's office chart note, Gurnett was told he had no restrictions.(fn5) On February 12, 2008, Gurnett wrote to Dr. Tolbert, describing the hazards of his job in detail.(fn6) The next day, February 13, 2008, the adjuster received a letter from Dr. Tolbert, indicating that Gurnett was able to return to work: "Mr. Gurnett may resume his job. His restrictions include no chiropractic manipulations or activities with high impact to cervical region, such as snow machining, ATV riding . . ."(fn7) Temporary disability compensation was controverted based on this statement. On February 26, 2008, Solomon Loosli at Kinley's Restaurant sent an e-mail to...