2009-EB-2 (2009). In re Pellicer.
Court | California |
California Workers Compensation Decisions
2009.
2009-EB-2 (2009).
In re Pellicer
WORKERS' COMPENSATION APPEALS BOARD
STATE OF CALIFORNIA WANDA OGILVIE, Applicant, vs.CITY AND COUNTY
OF SAN FRANCISCO, Permissibly Self-Insured, Defendant(s).Case No. ADJ1177048 (SFO 0487779) OPINION AND DECISION AFTER RECONSIDERATION(EN
BANC) We granted the petition for reconsideration of defendant, the
City and County of San Francisco, to allow time to further study the record and
applicable law. Because of the important legal issue as to whether and how the
diminished future earning capacity (DFEC) portion of the current Schedule for
Rating Permanent Disabilities (Schedule or 2005 Schedule) [1] may be rebutted,
and to secure uniformity of decision in the future, the Chairman of the Appeals
Board, upon a majority vote of its members, assigned this case to the Appeals
Board as a whole for an en banc decision. (Lab. Code, § 115.)[2]
For the reasons below, we hold in summary that: (1) the DFEC
portion of the 2005 Schedule is rebuttable; (2) the DFEC portion of the 2005
Schedule ordinarily is not rebutted by establishing the
percentage to which an injured employee's future earning capacity has been
diminished; (3) the DFEC portion of the 2005 Schedule is not
rebutted by taking two-thirds of the injured employee's estimated
diminished future earnings, and then comparing the resulting sum to the
permanent disability money chart to approximate a corresponding permanent
disability rating; and (4) the DFEC portion of the 2005 Schedule may be
rebutted in a manner consistent with Labor Code section 4660 - including
section 4660(b)(2) and the RAND data to which section 4660(b)(2) refers.[3]
Further, the DFEC rebuttal approach that is consonant with section 4660 and the
RAND data to which it refers consists, in essence, of: (1) obtaining two sets
of wage data (one for the injured employee and one for similarly situated
employees), generally through the Employment Development Department (EDD); (2)
doing some simple mathematical calculations with that wage data to determine
the injured employee's individualized proportional earnings loss; (3) dividing
the employee's whole person impairment by the proportional earnings loss to
obtain a ratio; and (4) seeing if the ratio falls within certain ranges of
ratios in Table A of the 2005 Schedule. If it does, the determination of the
employee's DFEC adjustment factor is simple and relates back to the Schedule.
If it does not, then a non-complex formula is used to perform a few additional
calculations to determine an individualized DFEC adjustment factor.
Here, the workers' compensation administrative law judge (WCJ)
did not follow the correct method of determining whether and how the DFEC
portion of the 2005 Schedule may be rebutted. Accordingly, we will rescind the
WCJ's findings on permanent disability, apportionment, and attorney's fees and
remand the matter to the WCJ for further proceedings and a new decision on
those issues consistent with our opinion.
I. BACKGROUND
Applicant, Wanda Ogilvie, sustained an admitted industrial injury
to her right knee, low back and neck on April 1, 2004, while employed as a
transit operator (occupational group 250) by defendant. She was 59 years old at
the time of her injury.
On September 14, 2004, applicant had a right knee arthroscopy,
partial medial meniscectomy, and chondroplasty. On May 8, 2006, she had a right
knee replacement. Although a spine surgeon recommended that applicant have a
posterior lumbar laminectomy and interbody fusion at L4-L5 and L5-S1, applicant
declined to have the surgery. She did not return to work following her April 1,
2004 injury.
Applicant selected Dominic Tse, M.D., as her qualified medical
evaluator (QME) in orthopedics. In his March 8, 2007 report, Dr. Tse declared
applicant to be permanent and stationary. With regard to her right knee, Dr.
Tse found that she had 20% whole person impairment (WPI) under the AMA Guides,
but he further noted that applicant's right knee condition limited her to
semi-sedentary work, contemplating the ability to work approximately 50% of the
time in a sitting position and 50% of the time in a standing or walking
position, with a minimum of demand for physical effort while standing, walking
or sitting. With respect to applicant's spine, Dr. Tse found 10 to 13% WPI of
the lumbar spine (i.e., DRE lumbar category III) and 15 to 18% WPI of the
cervical spine (i.e. DRE cervical category III), based on the AMA Guides. He
also concluded that applicant's spinal disability precluded substantial work,
contemplating the loss of approximately 80% of her pre-injury capacity for
performing such activities as bending, stooping, lifting, pushing, pulling,
climbing, or other activities involving comparable physical effort. Dr. Tse
opined that 80% of the right knee disability was caused by the April 1, 2004
injury, with the remaining 20% caused by other factors. He further opined that
34% of the spinal disability was caused by the injury, with 66% caused by other
factors. He concluded that applicant could no longer work as a transit
operator.
Defendant selected Eugene A. Baciocco, M.D., as its QME in
orthopedics. In his February 21, 2006 report, Dr. Baciocco found 4% WPI of the
right knee and 8% WPI of the lumbar spine (i.e., DRE lumbar category II),
resulting in a combined WPI of 10% under the AMA Guides. Following applicant's
May 8, 2006 right knee surgery, Dr. Baciocco issued two supplemental reports of
August 8, 2006 and April 4, 2007; however, he never provided a post-surgical
assessment of her disability under the AMA Guides.
On August 20, 2008, applicant's claim went to trial on the issues
of permanent disability, apportionment, and attorney's fees. At trial, the
parties stipulated that, if applicant's disability was rated in accordance with
the 2005 Schedule, it would rate 28% after adjustment for age and occupation
and after apportionment - equating to permanent disability indemnity in the
total sum of $26,700.00. This agreed scheduled rating was based on a compromise
between the opinions of Drs. Tse and Baciocco, together with a stipulation that
25% of any permanent disability in the case would be
apportionable to non-industrial and pre-existing causes. However, applicant
sought to rebut the agreed 28% scheduled rating.
At trial, applicant testified that she took a service retirement
in 2007 and is on Social Security disability. She believed she would be unable
to return to her job as a bus driver. She was not offered modified or
alternative employment by defendant.
Also, at trial, the parties stipulated that Eugene E. Van de
Bittner, Ph.D., and Jeff Malmuth, M.S. - who are both certified rehabilitation
counselors - qualified as experts in the fields of vocational rehabilitation
and diminished future earnings capacity. The parties further agreed to submit
the reports of these experts in lieu of their testimony.
Dr. Van de Bittner, who was defendant's expert, concluded in his
February 16, 2008 report that, absent her industrial injury, applicant likely
would have earned $335,680.80 during the remaining 6.09 years of her expected
work life. Further, based on two different scenarios, Dr. Van de Bittner found
that, after sustaining her industrial injury, applicant could likely earn
either $169,391.25 or $177,654.88 during her remaining expected work life. This
is between $158,025.92 and $166,289.55 less than her pre-injury earning
capacity. Therefore, Dr. Van de Bittner opined that, to a reasonable degree of
vocational probability, applicant's diminished future earning capacity ranged
from 51.31% to 53.77%.
The September 25, 2007 report of applicant's expert, Mr. Malmuth,
concluded that applicant's pre-injury earning capacity during the 6.26 years of
her estimated remaining work life would be $364,482.24. He further found that,
following the injury, applicant's earning capacity over the same time period
would be $178,562.88, which is $185,919.36 less than her pre-injury earning
capacity. Accordingly, Mr. Malmuth estimated applicant's diminished future
earning capacity to be 51%.
On September 17, 2008, the WCJ issued a Findings and Award which
determined that applicant's April 1, 2004 injury caused permanent disability of
40%, after adjustment for age and occupation and after apportionment. In
essence, the WCJ concluded that applicant had rebutted the 2005 Schedule
because the $26,700.00 in permanent disability indemnity she would receive if
the 28% agreed scheduled rating was used would not fairly, adequately and
proportionally compensate applicant for her $158,025.92 to $178,562.88 in lost
future earnings (i.e., her diminished future earning capacity of 51% to
53.77%), as determined by the vocational rehabilitation experts.
In arriving at his 40% permanent disability rating, the WCJ took
into consideration three alternative rating methods.
With respect to the first method, the WCJ observed that the 2005
Schedule states as follows:
"A permanent disability rating can range from 0% to 100%. Zero percent signifies no reduction of earning capacity, while 100% represents permanent total disability. A rating between 0% and 100% represents permanent partial disability. Permanent total disability represents a level of disability at which an employee has sustained a total loss of earning capacity." (2005 Schedule, at pp. 1-2 - 1-3.)The WCJ then said, "A logical inference to be drawn from the foregoing . is that the percentage of an injured...
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