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Ward v. Allen County Hospital
Citations: 50 Kan. App. 2d 280; 324 P.3d 1122; 2014 WL 1873884; 2014 Kan. App. LEXIS 30Docket: No. 110,085
Court: Court of Appeals of Kansas; May 9, 2014; Kansas; State Appellate Court
Judy Ward, employed by Allen County Hospital, sustained a work-related injury leading her to apply for workers' compensation benefits. An administrative law judge (ALJ) determined Ward had a 75.50% work disability, awarding her the maximum statutory compensation of $100,000. The hospital appealed to the Kansas Workers Compensation Board, which acknowledged a 15% preexisting impairment but adjusted her work disability to 60.75% instead of reducing the compensation by the full 15%. Ward cross-appealed, contesting the Board's finding of her preexisting impairment, but her claim was deemed without merit, supported by substantial evidence. However, the hospital's appeal raised issues regarding the calculation of Ward’s compensation, arguing the Board misinterpreted K.S.A. 44-501(c), which mandates a reduction in compensation equal to the preexisting impairment percentage. The court agreed, stating the Board's calculation was erroneous and instructed a recalculation of Ward’s compensation in accordance with this interpretation. Ward had worked at the hospital since 1993 and underwent cervical spine surgery in 2003. After reinjuring her spine in 2010 while assisting a patient, she underwent further surgery and did not return to work. Evaluations from Dr. Paul Stein indicated Ward had a 25% overall impairment and a 15% preexisting impairment due to her prior surgery and condition. Ward's 2003 injury was classified by Dr. Stein under Cervicothoracic Category III of the DRE Model, indicating she had radiculopathy linked to nerve root compression, which persisted as an impairment. Dr. Stein assessed a 50% task loss due to this condition. Following Ward's 2010 work injury, Dr. Edward Prostic evaluated her and found a 53% task loss but did not provide a definitive opinion on any preexisting impairment. The Administrative Law Judge (ALJ) determined that Ward sustained a work-related injury and averaged the task loss findings of both doctors, concluding a 51.5% task loss and a 100% wage loss without requiring proof of causation from the work injury. The ALJ found Dr. Stein's report more credible, assigning Ward a 25% overall functional impairment, with 15% preexisting before the 2010 injury. Compensation was awarded for 41.5 weeks at $546 per week for a 10% functional disability, leading to a calculated 75.75% permanent partial general "work" disability, but the ALJ settled on a 75.50% work disability, capped at $100,000. The hospital appealed, and the Board adjusted the award to account for the 15% preexisting impairment by reducing the work disability to 60.75%, while still granting the maximum compensation. A dissenting Board member argued for a direct reduction to the compensation based on the preexisting impairment. The hospital appealed the Board's decision, while Ward cross-appealed, disputing the finding of a 15% preexisting impairment. The Board's determination is subject to review under the Kansas Judicial Review Act. The standard of review for administrative decisions under the Kansas Judicial Review Act (KJRA) varies by issue, as defined in K.S.A. 2013 Supp. 77-621. In this case, the appellate court must evaluate whether the Board incorrectly found that Ward had a 15% preexisting functional impairment. The court reviews factual findings based on substantial evidence from the entire record, which includes all relevant evidence that supports or detracts from the finding, as well as credibility assessments made by the presiding officer. The court does not reweigh evidence or conduct a de novo review, as stated in K.S.A. 2013 Supp. 77-621(d). "Substantial evidence" refers to evidence that is significant enough to support the conclusion that the award was justified, primarily relying on medical testimony and reports. In this case, Dr. Stein provided critical medical evidence, confirming that Ward had undergone cervical spine surgery in 2003 due to a non-work-related injury, which resulted in ongoing discomfort and numbness. He assessed Ward's impairment using the AMA Guides, categorizing her as having a 15% preexisting impairment based on her history and the nature of her surgery. Specifically, he indicated that the surgery automatically qualifies for permanent impairment, and her complaints of numbness supported his evaluation. Conversely, Dr. Prostic was uncertain about Ward's preexisting impairment, suggesting she might have had one but lacking a definitive stance. Dr. Prostic acknowledged that medical records indicated Ward had a prior issue at C6-7 and noted that a decrease in range of motion post-surgery is common for patients who underwent similar procedures. However, he later suggested that Ward might not have had any permanent impairment following her 2003 surgery, explicitly stating he was not opining on her preexisting impairment. The Board's determination of a 15% preexisting impairment is backed by substantial evidence, particularly Dr. Stein’s uncontradicted testimony, which assessed Ward's functional impairment at 15%. This reliance on Dr. Stein's credible testimony was crucial for the Board's decision, as his absence would have made it difficult to ascertain Ward's preexisting functional impairment. The hospital claims the Board erred in its calculation of Ward's permanent partial disability award, arguing that the Board misapplied K.S.A. 44-501(c) and failed to follow the calculation method from Payne v. Boeing Co. Ward defends the Board’s approach to calculating her compensation. The court reviews the Board's final orders under the KJRA, noting that while Kansas courts traditionally deferred to administrative agencies' statutory interpretations, recent rulings have shifted away from this deference in workers' compensation appeals, emphasizing no deference is owed to the Board's interpretations. In Hill v. Kansas Dept. of Labor, the court addressed the declining relevance of the doctrine of operative construction in statutory interpretation, emphasizing that cases relying on it should no longer be cited in administrative matters due to unlimited appellate review. The hospital argued that the Board misinterpreted K.S.A. 44-501(c) when calculating Ward's permanent partial disability compensation. The statute specifies that recovery for aggravation of a preexisting condition is limited to increased disability caused by a work-related injury, with any compensation reduced by the amount of preexisting functional impairment. To determine legislative intent, ordinary statutory construction rules were applied. The court established that for an award reduction due to preexisting impairment, the current injury must be an aggravation of the prior condition. The burden of proving the amount of preexisting impairment lies with the hospital. The determination must follow the AMA Guides. The evidence supported the Board's finding that Ward had a preexisting functional impairment aggravated by a new injury in April 2010. The core issue was whether the Board correctly applied K.S.A. 44-501(c) in calculating Ward's compensation. The Kansas Supreme Court stated that appellate courts must adhere strictly to statutory language. The Board concluded that Ward had a 15% preexisting functional impairment, which it subtracted from her calculated 75.75% work disability, resulting in a reduced compensation award. This calculation yielded an award of $137,652.06, which was further capped to the statutory maximum of $100,000 under K.S.A. 44-510f. The Board awarded Ward permanent partial disability compensation at $546 per week, totaling $100,000 for a 60.75% work disability. As of May 22, 2013, Ward was owed $87,829.56 for 160.86 weeks, to be paid in a lump sum, with a remaining balance of $12,170.44 paid weekly until fully disbursed. A dissenting Board member argued that the majority's calculation did not align with the legislative mandate in K.S.A. 44-501(c) to reduce compensation based on preexisting functional impairment. The dissenter proposed a 15% reduction, resulting in an award of $85,000, asserting that this method followed legislative intent and statutory language. The dissent highlighted that the majority's approach, which reduced the work disability percentage rather than the compensation amount, contradicts statutory requirements. The interpretation of K.S.A. 44-501(c) necessitates an initial calculation of the total compensation before applying any reductions. The dissent referenced previous case law to emphasize the need for adherence to statutory language. The majority's calculation was deemed erroneous as it did not incorporate the required reduction for Ward's preexisting impairment, resulting in her receiving the statutory maximum of $100,000 without adjustment. The hospital referenced additional case law to support its compensation calculation. The ALJ in Payne determined the claimant's compensation for permanent total disability based on the time needed to reach the statutory maximum of $125,000, calculating it would take 299.76 weeks at an average weekly rate of $417. Medical evidence indicated Payne had a 35% preexisting impairment and a 10% work-related aggravation. The employer acknowledged Payne's permanent total disability but argued for a reduction due to the preexisting impairment under K.S.A. 44-501(c). The ALJ agreed, awarding 154.51 weeks of compensation, totaling $64,430.67, after deducting 145.25 weeks for the preexisting impairment. This calculation was upheld by a Board majority. The Payne court ruled that Payne's interpretation of K.S.A. 44-510(c) and K.S.A. 44-510f(a) was too narrow, as it did not account for K.S.A. 44-501(c) regarding preexisting impairments. In a related case involving Ward, the hospital argued for the application of the Payne formula to calculate preexisting impairment credits. The hospital proposed that Ward's 15% preexisting impairment equated to 62.25 weeks, and his work disability amounted to 183.15 weeks, leading to a net entitlement of 120.9 weeks or $66,011.40. However, the Board's dissent critiqued the Payne formula as inconsistent and suggested simply subtracting the 15% impairment from the $100,000 statutory maximum, resulting in a compensation award of $85,000. This dissenting opinion is supported by evidence that both methods yield the same conclusion of $85,000 when correctly calculated. The hospital calculated that it would take Ward 183.15 weeks to reach the statutory maximum compensation cap of $100,000, based on a weekly compensation rate of $546. After applying a 15% reduction for preexisting functional impairment, the adjusted duration is 155.68 weeks, resulting in a compensation amount of $85,001, which closely aligns with the Board's dissent. The hospital's reference to a maximum of 415 weeks in its calculation is critiqued as inconsistent, given Ward's 75.75% work disability, which implies he could not receive the full compensation for that extended period. The interpretation of K.S.A. 44-501(c) is clarified, emphasizing that compensation awards must account for any preexisting functional impairment when determining total compensation. Following the Supreme Court's decision in Bergstrom, which shifted the standard for interpreting workers' compensation statutes away from agency deference, it is asserted that the 15% reduction should be applied against the $100,000 cap due to Ward's exceeding work disability. The conclusion is that the Board's dissenting formula aligns with statutory requirements, particularly in cases where the claimant’s work disability surpasses the cap and the cap is reached before the maximum weeks are exhausted. The decision is reversed and remanded with specific directions.