MARCUS STATEN,			)
				)
Employee,			)	DECISION AND ORDER
 Applicant,			)
				)	AWCB Case No. 8607029
v.				)
				)	AWCB Decision No. 90-0024
ALASKA AIRLINES,		)
(Self-Insured),			)	Filed with AWCB Anchorage
				)	February 9, 1990
Employer,			)
 Defendant.			)
				)

We heard this claim for attorney's fees and costs on December 15, 1989 in Anchorage, Alaska. Employee was present and represented by attorney Chancy Croft. Defendant was represented by attorney Timothy Stone. The record remained open for Employee's attorney to submit an affidavit of his fees and costs to Defendant for review, and for the parties to file written closing arguments. The record closed on January 11, 1990, the date we next met after the briefs were due.

Did Defendant controvert in fact Employee's claim for permanent partial disability benefits?

It is undisputed Employee sustained a work injury on March 24, 1986 when, while "off loading" cargo, Employee fell about fifteen feet to the ground, landing on his right shoulder. Defendant paid Employee temporary total disability (TTD) benefits periodically from April 2, 1986 until March 25, 1987 when Employee returned to work for Defendant in a modified job capacity.

Employee was apparently treated initially by J. Michael James, M.D. However, none of Dr. James' medical reports have been filed with the Alaska Workers' Compensation Board.

On May 27, 1986 Employee was examined by Richard Lehman, M.D., a neurologist. Dr. Lehman wrote Dr. James a letter describing the results of his examination. Dr. Lehman described Employee's symptoms as neck and shoulder pain, with some numbness in the right forearm and hand. Dr. Lehman diagnosed a shoulder and neck sprain "with perhaps a mild traction radiculopathy to C7." (Lehman May 27, 1986 report at 2). Dr. Lehman ordered x-rays of the cervical and shoulder and told Employee to return to Dr. James.

The next report in the record is on October 4, 1986 medical evaluation performed by Edward Voke, M.D., at Defendant's request. Dr. Voke indicated Employee's symptoms included neck pressure with headaches, numbness in his arms, and difficulty doing overhead work, pushing and pulling and grasping objects. Dr. Voke diagnosed a cervical strain. Moreover, because Employee indicated he no longer wanted to treat with Dr. James, Dr. Voke assumed responsibility for his treatment. Dr. Voke referred Employee to physical therapy and encouraged him to swim. Dr. Voke expressed the hope of releasing Employee to full duty within four to six weeks, and he stated he saw no evidence to suggest a permanent injury. (Voke October 4, 1986 report at 2).

Dr. Voke next examined Employee on October 29, 1986 and diagnosed "incomplete AC joint" with palpable pain in the AC joint. He further noted x-rays over the right AC joint showed minimal degenerative changes.

On December 9, 1986, Employee was examined by another neurologist, Kenneth Pervier, M.D., at Dr. Voke's request. Employee reported symptoms similar to those noted by Dr. Voke. Dr. Pervier's. impression was chronic pain syndrome "with probably thoracic outlet type symptomatology secondary to recurrent chronic spasm of the shoulder girdle musculature and base of the neck musculature with scissoring of the brachial plexi causing spell and dysesthesias in his hands with use." (Pervier December 9, 1986 report at 2). Dr. Pervier changed Employee's medications and recommended continued physical therapy and retraining into a job which does not require lifting.

Employee continued to participate in physical therapy, including weight lifting. Dr. Voke eventually released him to modified work. The lighter-duty modified job ended within three

or four months. Dr. Voke declared Employee medically stable on June 18, 1987. (Voke June 25, 1987 report).

Dr. Voke then examined Employee on July 8, 1987 and asserted Employee would have to be retrained into sedentary work because of his inability to lift heavy objects. Dr. Voke noted Employee continued "to complain of pain in the cervical area." (Voke July 10, 1987 report).

Dr. Voke examined Employee on October 19, 1987, noting Employee was working in Defendant's paint shop in a light duty capacity. Dr. Voke requested that Employee see Dr. Pervier again because Employee seemed to be worse since he stopped taking Elavil, one of his medications. (Voke October 22, 1987 report). Dr. Voke further indicated Employee's neurological status was unchanged, his reflexes were equivocal, and Employee had full range of motion in his shoulders and cervical spine with some tightness between the shoulder blades. (Id.).

According to the medical records in our file, Dr. Voke did not examine Employee again until June 15, 1988. This examination was arranged by Elaine Gold, Defendant's adjuster. Gold testified she referred Employee to Dr. Voke for a rating because she wanted to make sure that the physical therapy Employee continued to get at the Alaska Club was curative and not palliative, and was medically necessary. In addition, she wanted a determination on whether Employee was medically stable; if so, she wanted to "secure some sort of rating."

We were not provided with the specific letter (if any) Gold sent to Dr. Voke. However, Gold testified that at the time of this referral to Dr. Voke, she felt Employee had sustained an unscheduled injury and not a scheduled injury.

Employee testified that it was his understanding that Defendant wanted Dr. Voke to provide a "whole man" impairment rating. He stated he got this impression because Dr. Voke told him Defendant's adjuster had requested a whole man rating.

Dr. Voke examined Employee on June 9, 1988. According to Employee, Dr. Voke had him perform certain maneuvers such as strength tests. Dr. Voke's physician's report states:

(Voke June 15, 1988 physician's report).

Gold reiterated that based on her review of the medical reports in the record, she did not believe Employee suffered a ratable permanent impairment to the upper extremity (i.e., all "scheduled" rating). She noted that one of Dr. Voke's previous reports indicated the doctor did not anticipate a permanent impairment. She added that her file review indicated Employee was working for Employer at essentially the same wages as prior to his injury.

Employee testified that: because he felt entitled to compensation for his decreased physical capacities after his injury, he consulted attorney Eric Olson for several months in 1988, including the period before and after Dr. Voke's June 1988 impairment rating. He stated that when he discussed Dr. Voke's rating with Gold, she told him he was not entitled to compensation since Dr. Voke had given a whole person rating. She further informed him he had to have a scheduled rating to be entitled to compensation. Employee testified that when he gave the rating information to Olson, Olson told him that he was one of those who "got screwed" by the system. Employee then decided to no longer consult with Olson. However, he indicated he still felt he ought to be entitled to compensation.

Gold stated that sometime in November 1988, Employee contacted her and told her his shoulder was still bothering him. Gold indicated this seemed to be a change in Employee's condition. When Employee expressed an interest in getting an examination by David Dietz, M.D., for testing of possible thoracic outlet syndrome, Gold instructed Employee to have Dr. Voke refer him to Dr. Dietz, who examined Employee and recommended surgery. Employee ultimately decided not to have the surgery, and he continued to work for Defendant.

Gold subsequently reviewed Employee's file and noted there had been no activity in the case for a while. She thus decided to diary the case for a six-month follow up. At that time, she anticipated sending Employee to a physician for a determination of medical stability following the thoracic outlet problem. Accordingly, Gold diaried the matter for August 1989. Gold added that in cases of serious injury, it is her company's procedure to automatically send employees to a doctor to see if there is an impairment rating and if the employee is medically stable.

Sometime in 1989, Employee consulted attorney Croft regarding his right to additional workers' compensation benefits. He testified that he consulted with Croft approximately three times before returning to Dr. Voke for another examination. When he went for this examination, which occurred on August 4, 1989, he hand-delivered a letter which Croft had written to Dr. Voke.

In this July 27, 1989 letter, Croft stated that "[s]ince his injury was primarily to his right arm, I assume [the 20 percent whole man impairment rating] was based primarily on his upper extremity injury." Croft added that if this was so, he would like the doctor to provide an impairment rating for the upper extremity instead of a whole man rating. Croft went on to add that his understanding of the AMA guidelines suggested a 20 percent whole man rating due to an upper extremity injury correlates to a 33 or 34 percent upper extremity rating.

Meanwhile, on August 18, 1989 Gold went to Seattle for a company picnic and to do the fall review of Alaska Airlines’ files. Prior to this trip, she had received Dr. Voke's August 7, 1989 report which stated that according to the American Medical Association guidelines, Employee would have a 33 percent permanent partial disability (PPD) rating for the upper extremity, which translates to a 20 percent whole person rating. The doctor added that the "PPD would involve primarily the right upper extremity because injury was primarily of the right arm." (Voke August 7, 1989 report).

Gold discussed this rating with Donna Egeland, workers' compensation administrator for Alaska Airlines. According to Egeland, she authorized Gold to commence payment of PPD benefits based on Dr. Voke's recent rating. (Egeland November 22, 1989 sworn affidavit).

On August 28, 1989, Employee filed an application for adjustment of claim requesting PPD benefits based on Dr. Voke's 33 percent rating. That same day, Gold completed, in longhand, a compensation report reflecting that Defendant was commencing payment of PPD benefits effective August 7, 1989. (Hearing Exhibit Three) In the remarks section of the report: she wrote Commencing payment of PPD. Reserving right to investigate accuracy of rating. Reserve right to obtain additional rating. Possible statute defense. Last [individual payment] was 3/25/87." (Emphasis in original).

Gold forwarded the document to her secretary who typed the document as handwritten, without changes. Gold's adjusting company then filed the document on September 1, 1989.

Gold testified that when she completed the August 28, 1989 compensation report, she did not know Employee had retained attorney Croft. Nonetheless, she stated that even if she had known of this, she "wouldn't have handled things differently."

Regarding the remarks in her compensation report, Gold testified she reserved the right to investigate the accuracy of Dr. Voke's rating because his August 7, 1989 report did not indicate how he had arrived at his rating. She added she needed to get more information on the rating. Gold further testified that Defendant was still reserving the right to investigate the accuracy of Dr. Voke's rating, and she had not had time yet to discuss this matter with Egeland.

Regarding an additional rating, one was obtained from J. Michael James, M.D., on November 15, 1989. In that report, Dr. James provided the results of his examination and testing, and he concluded Employee had a 30 percent impairment of the right upper extremity which translates to an 18 percent whole person rating. (James November 15, 1989 report at 2). However, Dr. James made no indication whether the rating was done under the AMA guidelines. Nevertheless, Gold testified that although Dr. James does not use the acronym AMA in his ratings, is "understood" that Dr. James uses the AMA guidelines. Gold added that Dr. James "always rates according to the AMA guides."

Regarding the reservation of the statute defense, Gold stated she was not reserving a statute defense once she commenced PPD payments. She stated she was simply remaining that the last payment of compensation was more than two years before the commencement of the PPD benefits. She testified it was therefore an error to put this statement on the compensation report.

Employee requests statutory minimum attorney's fees under AS 23.30.145(a) and costs on the PPD compensation paid. He asserts there was a controversion in fact here, and Defendant only paid because of the work done by Employee's attorney.

Defendant contends this matter should be denied and dismissed. It asserts it paid PPD benefits timely after receiving Dr. Voke's scheduled impairment rating. Defendant contends it is undisputed it "never controverted or intended to controvert the payment of compensation for permanent partial disability. The award of the minimum statutory fees applies only in cases where a claim has been controverted." (Defendant's written closing arguments at 7-8).

AS 23.30.145(a) states in pertinent part:

Defendant has never filed a board-prescribed controversion notice in this matter. Therefore, the issue for our determination is whether Defendant controverted in fact Employee's benefits.

Employee argues that his dispute is essentially the same as that in State, Department of Highways v. Brown, 600 P.2d 9 (Alaska 1979). In Brown, the employee received temporary total disability (TTD) benefits until a subsequent physician's report indicated the problem was not work-related. Brown (the employee) secured an attorney who filed a claim for benefits.

Based on subsequent medical reports, and before a board hearing was held, the employer paid Brown a lump sum of $10,429.30 for the period January 1975 to January 1976. In addition, Brown was paid $1,192.93 for subsection 145(a) attorney's fees on the lump sum amount.

The employer continued to pay Brown TTD benefits until he had received $30,000, the maximum amount of TTD benefits available at that time. Brown then filed a claim for statutory fees on the remaining $19,571 paid. The Alaska Supreme Court held that even though the employer essentially withdrew its controversion by voluntarily paying benefits before the board's hearing, attorney's fees on the entire $30,000 amount were warranted because it was only through the attorney's efforts, in obtaining the necessary medical evidence to 're-establish' the work-relatedness of Brown's claim, that benefits were restarted for Brown. (Id. at 12). The court added that payment based on the entire amount was warranted because the legal work done related to the entire claim.

In Alaska Interstate v. Houston, 586 P.2d 618 620 (Alaska 1978), the court stated that "controversion of a claim may at the same time also include "an attempt to resist payment of compensation," and therefore arguably be subject to the provisions of section 145(a) and section 145(b). " The court concluded that a controversion under AS 23.30.145(a) could occur despite the lack of a formal controversion by the employer. This informal type of controversion is the so-called controversion in fact.

We believe the crucial issue here is whether adjuster Gold's actions here constituted a controversion in fact. She told Employee at the time of his first rating in June 1988 that she could only pay benefits if Employee had suffered a scheduled injury. The record indicates she determined Employee was ineligible for PPD benefits because Dr. Voke gave Employee a whole person rating in June 1988. The record suggests she felt Employee had sustained an unscheduled injury, and since she felt Employee had returned to work at essentially the same wages as he earned before his injury, he had no loss of earning capacity and was therefore not eligible for benefits.

Gold stated she requested "some sort of" rating from Dr. Voke. However, we question why she accepted a whole person rating in the first place. If she felt Employee had an unscheduled injury, then his right to PPD benefits would be based on his loss of earning capacity, which would be based in the first instance on post-injury earnings. AS 23.30.210. if there were no earnings, an impairment rating would be appropriate. (Id.). However, Gold clearly knew Employee was working full-time for Defendant.

Gold also testified she sent Employee to Dr. Voke for the June 1988 examination to determine whether Employee's physical therapy at the Alaska Club was still medically reasonable and necessary, and to get "some sort of rating" if Employee was medically stable.

Regarding the physical therapy, Dr. Voke's report fails to address this question, but Gold apparently did not follow up on this unanswered question. Dr. Voke did report that Employee was medically stable and had a 20 percent whole person rating. As we have noted, this impairment rating was not helpful in determining Employee's right to benefits since Gold believed Employee had an unscheduled injury and was working full-time.

Essentially, then, Dr. Voke's June, 1988 report was useless to Gold. We question why Gold did not follow up and request more details from Dr. Voke, including the body parts to which the 20 percent whole person rating applied. Our experience indicates this is a significant whole person rating. An additional reason for requesting more information was Dr. Voke's statement that the 20 percent rating was based on a "brachial plexus stretch" injury, which indicates Employee suffered damage to a nerve structure encompassing an area from the neck to the armpit, and including the clavicle. We believe this alone suggests a scheduled injury may have occurred.

Technically, none of the three ratings in Employee's file complies with 8 AAC 45.120(k) (9) which requires physicians to provide "detailed factors upon which" they base their impairment ratings. Both of Dr. Voke's ratings left out the details. Moreover, Dr. James report, although not specifically relevant here, failed to state whether the rating was based on the AMA guidelines. Although the adjuster may accept this, we would not consider the rating valid unless it specifies it was based on the appropriate AMA guidelines. We believe, however, that not only does an adjuster have a right to question these incomplete ratings, but the adjuster has a duty to do so. Payment of benefits could begin while the adjuster awaits the details. By following the above procedure, the adjuster could assure that its hunch on the type of injury squares with the doctor's opinion.

We find that Gold's review of Employee's medical record should have at least raised the question that he may have suffered a scheduled injury. He fell fifteen feet and landed on his shoulder. He had numbness in his right arm and hand. Even Dr. Voke noted on his June 15, 1988 report that Employee had carpal tunnel syndrome. As noted above, Employee's medical history should have put Gold on notice that a scheduled injury might be involved.

Gold should have asked Dr. Voke that if the doctor found Employee suffered a permanent impairment, she needed to know whether it was scheduled or unscheduled. The evidence in the record suggests this question would have been appropriate. This procedure is preferable, in these close cases, to the procedure of an adjuster injecting his or her own opinion on whether an employee's injury is scheduled or unscheduled. We conclude that by failing to ask Dr. Voke whether Employee had a scheduled injury, and by failing to follow up on the June 1988 whole person rating, Defendant controverted in fact Employee's request for permanent partial disability benefits. In addition, we find, that by concluding that Employee had sustained an unscheduled injury, Defendant resisted, in a subtle but definite manner, its obligations to pay Employee scheduled benefits. We further find the evidence shows this scheduled injury existed all along.

Accordingly, we conclude that Defendant shall pay Employee statutory minimum attorney's fees on the permanent partial disability benefits paid from August 7, 1989 and continuing. Defendant shall also pay reasonable costs under AS 23,30,145(h). We retain jurisdiction to resolve subsequent disputes.

During the hearing of this matter, Defendant attempted to call attorney Croft as a witness. Croft objected, claiming the attorney-client privilege and also arguing he would have to withdraw from the case. We denied Defendant's request, ruling that the primary issue was whether a controversion occurred. We do not find that the issue of the existence of a controversion turns on Croft's actions. However, this issue does turn on Defendant's conduct.

Defendant's written closing argument suggests that it believes an award of minimum statutory fees would be excessive in this case. In Wien Air Alaska v. Arant, 592 P.2d 352, 366 (Alaska 1979), the Alaska Supreme Court addressed this concern but held that application of subsection 145(a) could result in some excessive fee awards. Nonetheless, the court added that the only remedy for this was legislative change to the statute. This remedy has not yet occurred.

Defendant shall pay Employee statutory minimum attorney's fees under AS 23.30.145(a), and costs under AS 23.30.145(b), in accordance with this decision.

Dated at Anchorage, Alaska, this 9th day of February, 1990.

ALASKA WORKERS' COMPENSATION BOARD

/s/ MR Torgerson
Mark R. Torgerson, Designated Chairman

/s/ John H. Creed
John H. Creed, Member

/s/ RL Whitbeck Sr.
Richard L. Whitbeck, Member

MRT:fm

If compensation is payable under terms of this decision, it is due on the date of issue and penalty of 20 percent will accrue it not paid within 14 days of the due date unless an interlocutory order staying payment is obtained in Superior Court.

APPEAL PROCEDURES

A compensation order may be appealed through proceedings in Superior Court brought by a party in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

A compensation order becomes effective when filed in the office of the Board, and unless proceedings to appeal it are instituted, it becomes final on the 31st day after it is filed.

CERTIFICATION

I hereby certify that the foregoing is a full, true and correct copy of the Decision and Order in the matter of Marcus Staten, employee/applicant; v. Alaska Airlines (Self-insured), employer/defendant; Case No. 8607029; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 9th day of February, 1990.

Clerk

SNO