2010-131. Providence Health System and Sedgwick CMS Appellants vs. John W. Hessel Appellee. Trena Heikes in her official capacity as Director of the Division of Workers' Compensation Amicus.

• Case Date: March 24, 2010
• Court: Alaska

Alaska Workers Compensation Decisions 2010. Workers' Compensation Appeals Commission 2010-131. Providence Health System and Sedgwick CMS Appellants vs. John W. Hessel Appellee. Trena Heikes in her official capacity as Director of the Division of Workers' Compensation Amicus Alaska Workers' Compensation Appeals CommissionProvidence Health System and Sedgwick CMS, Appellants, vs. John W. Hessel, Appellee. Trena Heikes, in her official capacity as Director of the Division of Workers' Compensation, Amicus.Decision No. 131 March 24, 2010AWCAC Appeal No. 09-014 AWCB Decision No. 09-0065 AWCB Case No. 200316796Final Decision Appeal from Alaska Workers' Compensation Board Decision No. 09-0065 issued on April 6, 2009, at Anchorage, Alaska, by southcentral panel members Laura Hutto de Mander, Chair, David Robinson, Member for Industry, and Robert Weel, Member for Labor. Appearances: Jeffrey Holloway, Holmes Weddle and Barcott, PC, for appellants Providence Health System and Sedgwick CMS. John W. Hessel, pro se, appellee. Daniel S. Sullivan, Attorney General, and Erin A. Pohland, Assistant Attorney General, for amicus Trena Heikes, Director of the Division of Workers' Compensation. Commission proceedings: Motion for Extraordinary Review filed on April 15, 2009. Opposition to motion filed April 29, 2009. Hearing on motion held May 13, 2009. Motion for Extraordinary Review granted, June 8, 2009. Appeal filed June 19, 2009. Order Clarifying Statement of Appeal Procedures issued July 1, 2009. Motion to Intervene granted July 14, 2009. Appellee's request for extension of time to file brief granted, October 7, 2009. Appellee's second request for extension of time to file brief converted to a motion to accept late-filed brief; motion granted December 10, 2009. Oral argument on appeal presented January 15, 2010. Commissioners: Jim Robison, Stephen T. Hagedorn, Kristin Knudsen. By: Stephen T. Hagedorn, Appeals Commissioner. The issue presented by this appeal is whether the board properly denied Providence Health Systems' petition to dismiss John Hessel's claim for failing to request a hearing within two years of Providence's controversion. The board decided that, although Hessel had received multiple board-prescribed controversion notices, the notices were ineffective to warn Hessel of his duty to request a hearing under AS 23.30.110(c), effectively invalidating the board-prescribed language warning of the § .110(c) time-bar in the controversion notices. The board also found that it and the division failed in their duty to provide assistance to Hessel as a pro se claimant. The board concluded Hessel was "legally excused" from complying with the § .110(c) requirement. In the alternative, the board decided that if Hessel was not excused due to lack of notice, he substantially complied with the requirement to request a hearing by filing a claim for benefits. Providence argues the board abused its discretion and erred as a matter of law by excusing Hessel from compliance with § .110(c) when he was provided with sufficient notice of the deadline in four controversion notices. Providence asserts the board failed to follow controlling precedent in concluding that Hessel substantially complied with § .110(c). Lastly, Providence and the director of the Division of Workers' Compensation contend that the board panel exceeded its authority by imposing duties on the division staff and effectively invalidating the board-prescribed controversion notice form. Hessel concedes that he received the controversion notices but contends that he misread them and did not seek further help because he mistakenly believed that he had satisfied the § .110(c) requirement to request a hearing within two years. He argues that he substantially complied with the requirement to request a hearing because he did not fail to pursue his claim during the two years. He asserts he lacked notice of the time-bar due to his misunderstanding and, in any event, the board designee should have verbally warned him about the § .110(c) time-bar in a prehearing conference and that the failure to verbally warn excuses him from compliance with § .110(c). Lastly, he asserts that the board's decision imposed duties on the board and its designees, not the division. The parties' arguments require the commission to consider whether Hessel's circumstances may constitute substantial compliance with AS 23.30.110(c) or legally excuse him from the time-bar. We conclude that filing a claim does not substantially comply with a requirement to request a hearing after that claim is filed and controverted. We hold that the board erred by legally excusing Hessel because the board-prescribed controversion notices Hessel acknowledged receiving provided adequate notice of the § .110(c) time-bar. Finally, we conclude the board hearing panel lacks the authority to order non-adjudicatory division staff to provide verbal warnings of the § .110(c) time-bar and that the controversion notice is an implementation of a regulation that a board panel cannot invalidate. We REVERSE the board's decision denying Providence's petition to dismiss and remand for further proceedings. 1. Factual background and board proceedings. John Hessel reported injuring his "head, neck, shoulders, back" when a patient was "resisting and fighting" on September 27, 2003, while working at Providence as a registered nurse.(fn1) Providence paid compensation until receiving a medical report in November 2003 that released Hessel to return to work.(fn2) Hessel filed a workers' compensation claim two years later, on November 6, 2005, seeking temporary total disability compensation (TTD), temporary partial disability compensation (TPD), medical costs, and permanent partial impairment compensation (PPI).(fn3) Providence issued a controversion notice on December 12, 2005, denying all temporary disability benefits after November 10, 2003, due to Hessel's release to work.(fn4) The employer also controverted the claims for medical costs and PPI and in its answer to Hessel's claim, filed on the same day as the controversion, disputed his claim for TPD.(fn5) The controversion was on a board-prescribed form, which stated at the top: "EMPLOYEE: READ IMPORTANT INFORMATION ABOUT YOUR RIGHTS ON THE BACK."(fn6) On the back, the form stated:

TO EMPLOYEE (OR OTHER CLAIMANTS IN CASE OF DEATH), READ CAREFULLY

This notice means the insurer/employer has denied payment of the benefits listed on the front of this form for the reasons given. If you disagree with the denial, you must file a timely written claim (see time limits below). The Alaska Workers' Compensation (AWC) Board provides the "Application for Adjustment of Claim" form for this purpose. You must also request a timely hearing before the AWC Board (see time limits below). The AWC Board provides the "Affidavit of Readiness for Hearing" form for this purpose.(fn7)

Under "Time Limits," the form stated:

1. When must you file a claim?

a. Compensation Payments.

You will lose your right to compensation payments unless you file a written claim within two years of the date you know the nature of your disability and its connection with your employment and after disablement. If the insurer/employer voluntarily paid compensation, you must file a written claim within two years of the last payment.

. . . .

2. When must you request a hearing?

Within two years after the date the insurer/employer filed this controversion notice, you must request a hearing before the AWC Board. You will lose your right to the benefits denied on the front of this form if you do not request a hearing within two years. Before requesting a hearing, you should file a written claim.(fn8)

At the bottom the form provided: "IF YOU ARE UNSURE WHETHER IT IS TOO LATE TO FILE A CLAIM OR REQUEST A HEARING, CONTACT THE NEAREST AWC BOARD OFFICE."(fn9) Below this written instruction, the board offices and phone numbers were listed.(fn10) Providence amended its controversion of Hessel's claims on March 16, 2006, after receiving more information about Hessel's condition from his second treating physician, and the dates for which he was claiming TTD.(fn11) It once again filled out the board-prescribed form with the time limits and other information on the back.(fn12) After an employer medical evaluation was conducted, Providence supplemented its controversion, on November 7, 2006, filling out the board-prescribed form for the third time.(fn13) Finally, Providence controverted all Hessel's benefits again on the board-prescribed form after receiving an addendum medical report on December 7, 2006.(fn14) All four controversion notices indicated that they were served on Hessel by mail.(fn15) On December 12, 2007, the two-year time limit for requesting a hearing under AS 23.30.110(c)(fn16) expired. Almost five months later, on May 7, 2008, Hessel requested a hearing by filing an affidavit of readiness for hearing.(fn17) Providence filed a petition to dismiss Hessel's claims as time-barred on June 26, 2008.(fn18) The board held a hearing on the petition to dismiss on March 17, 2009.(fn19) Hessel testified that he had read the warning on the back of the controversion form, but believed that he had complied with the time limits when he filed his claim on November 6, 2005.

[S]ince I didn't know there was a second two-year statute of limitations on there, I just understood it to be that that was the first one that I did, . . . [W]hen I read it, I thought why are they sending me this

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