DAVID LAWSON,			)
				)
Employee,			)	DECISION AND ORDER
				)	AWCB Case Nos.	8102683
Applicant,			)		8421294
				)	AWCB Decision No. 90-0071
v.				)
				)	Filed with AWCB Anchorage
OLSON LOGGING COMPANY,		)	April 13, 1990
				)
Employer,			)
				)
and				)
				)
ALASKA PACIFIC ASSURANCE CO.,	)
				)
Insurer,			)
				)
and				)
				)
SILVER BAY LOGGING,		)
				)
Employer,			)
				)
and				)
				)
ALASKA TIMBER INSURANCE		)
EXCHANGE,			)
				)
Insurer,			)
Defendants.			)
				)

We met in Juneau, Alaska on 15 March 1990 to determine which defendant is responsible for Employee's workers' compensation benefits. Employee is represented by attorney Michael J. Welch. Defendant Olson Logging Company and its insurer Alaska Pacific Assurance Company (ALPAC) are represented by attorney James R. Webb. Defendant Silver Bay Logging and its insurer Alaska Timber Insurance Exchange (ATIE) are represented by attorney Paul M. Hoffman. We closed the record on 15 March 1990 at the conclusion of the hearing.

Employee is a 48-year-old logger who worked as a rigging slinger and cutter after his discharge from the U.S. Navy in 1964. As a result of a logging accident, Employee has memory and new learning deficits. On 6 November 1969, while employed by Olson Logging, Employee was hit in the head by a choker bell and sustained a severe skull fracture. Employee was in critical condition and comatose upon admission to the hospital in Petersburg. He was flown to the Virginia Mason Hospital in Seattle for emergency surgery. An extensive hematoma was found over the left frontotemporal area and evacuated. John S. Tytus, M.D. , a neurosurgeon, was Employee's attending physician. In March 1970 an acrylic cranioplasty was performed to repair the skull defect.

Employee was paid temporary total disability (TTD) compensation at the rate of $107.49, based upon his average weekly wage of $165.38. In March 1970 Employee entered a two-year vocational rehabilitation (VR) program at the Green River Community College to study forestry technology. Employee completed some basic remedial courses but found the forestry program too difficult, so he changed his field of study to recreation in the fall.

Dr. Titus released Employee to part-time work in June 1970, but in August he determined Employee could not work due to poor vision in the right eye, and no useful vision in the left eye, because of hemorrhaging which occurred as a result of the accident.

In January 1971 Dr. Tytus notified ALPAC that Employee had probably reached a permanent stationary condition and that Employee's disability could be rated for the purposes of payment of permanent partial disability (PPD) compensation. Dr. Tytus referred Employee to S.N. Berens, M.D., for a rating. Dr. Berens noted memory problems, periods of depression, excessive pressure in school, and poor vision. Dr. Berens rated Employee's disability as 15 percent of the maximum allowable for the nervous system under the Washington State rating system, and stated that Employee should continue with his training program. Another physician rated Employee's vision deficits. As a result of the ratings, ALPAC discontinued temporary total disability (TTD) compensation and paid PPD compensation of $5,358. Employee dropped out of his VR training program in March 1971.

Employee attempted to work on a fishing boat in May 1971, but discontinued the employment after two and one-half weeks, earning $563. Employee testified he was unable to communicate with people and had balance problems. Employee resumed his VR program at Centralia Community College in September 1971 but poor progress in school was noted due to financial pressure. During rehabilitation, Employee was paid compensation at one-half the TTD rate. To supplement his workers' compensation benefits, Employee took part-time work paying $2.50 per hour making Christmas wreaths.

Employee dropped out of his VR program again in February 1972. Carl Hale, Employee's Rehabilitation Counselor with the. Alaska Department of Education, Department of Vocational Rehabilitation (DVR), reported Employee had discontinued his VR program for three reasons: (1) "to get a job and provide better for kids"; (2) "his attorney is encouraging him to seek total disability"; and (3) "too much pressure in school, afraid not make it." At hearing, Employee testified he couldn't learn either forestry or recreation. Upon learning Employee had again withdrawn from the VR program, ALPAC's attorney, F. M. Doogan, contacted Employee's attorney, T. H. McDowell about settling Employee's claim by compromise and release (C&R). (Doogan letter, 18 February 1972.)¹

Employee expressed interest in returning to work in Alaska in the logging camps as a cooks helper and part-time recreation counselor, but Mr. Hale expressed doubt that Employee's idea was realistic. Mr. Hale noted Employee was unable to cope with pressure, was impulsive, and was easily angered and frustrated. Mr. Hale reported Employee's personal problems "in relating to others may prevent him from maintaining full-time employment, but cannot be predicted until he is working again. (Ex. No. 49.)

In April 1972 Employee returned to work for Olson Logging, his employer at the time of injury, as a "safety man." Employee testified he cleaned the shop, cleared ice and tried working on the rigging crew. Employee testified he made mistakes and that Mr. Olson told him he had better go home, and that he wasn't the man he used to be. Employee contacted Mr. Doogan in Juneau to get a $500 advance to return home to Washington. Employee testified he cut firewood in Washington, but made very little money and was having financial problems.

In December 1972 Employee's attorney took the position, that Employee was permanently totally disabled. (Ex. No. 66.) On examination in March 1973 to determine Employee's disabilities, Dr. Tytus reported "a slight degree of expressive aphasia" and no evidence of dementia, no motor weakness, and no defects in coordination. Dr. Tytus also reported Employee enjoyed his work as a logger and "obviously intends to continue with this occupation." Dr. Tytus determined Employee was not totally disabled but had a 30 percent permanent partial disability. (Ex. No. 74.) A physiciatric assessment by E. R. Rynearson, M.D., reported no psychiatric abnormality in March 1973. (Ex. No. 75.) Employee was also referred to a clinical psychologist, Arthur Lamphere, Ph.D., for a psychological evaluation. Dr. Lamphere noted Employee was at times "confused and perplexed" which slowed the testing procedure. Dr. Lamphere reported Employee was functioning in the average range of intellectual ability but that his reaction times were slow, reducing his scores. Employee's perplexity and confusion were attributed to difficulties in comprehending speech; prolonged concentration and attention were noted to be difficult. Slow thinking and comprehension were reported to be less than would be expected of a person with his intellectual abilities.

A compromise and Release (C&R) was prepared in April 1973 and mailed to Employee for signature by Employee's attorney. The C&R provided for a payment of $7,104 for release of all disability compensation. The C&R states at page four; "The parties agree that the employee is not permanently and totally disabled as a result of the covered accident." We approved the C&R on 7 May 1973. Employee testified at hearing he did not remember discussing the C&R, but just signed it and got the money. Employee was employed at Voetberg Logging from April to July 1973, and by two other employers through September.

In February 1974 Employee was examined for the Washington Department of Public Assistance by H. D. Leo, M.D., Employee complained that while working as a logger he had six accidents in six months because his reactions to danger and judgement were poor. Dr. Leo stated that Employee seemed to have regressed mentally, acting like he was 12 to 14 years old, and had become a "physical culture nut" to compensate. (Ex. No. 89.)

Employee applied for Social Security disability benefits in June 1974 and was determined to be disabled beginning 30 September 1973 due to chronic organic brain syndrome following his head injury, and secondary psychiatric disorders. (Social Security Administration Reconsideration Determination, 15 July 1976.)

Employee began to experience psychiatric problems after the C&R was approved. In July 1984 Employee was admitted to a hospital in Olympia, Washington for treatment related to a self-inflicted eye injury sustained during a marital conflict. The admission report states:

(Ex. No. 92.)

J. D. Bremner, M.D., a psychiatrist treated Employee on a monthly basis after his hospitalization. In January 1975 Dr. Bremner reported that Employee has chronic brain damage as a result of his 1969 injury, that Employee was not able to work to provide for his family, and that he would not be able to do so for the rest of his life. Dr. Bremner advised Employee to accept his disability (Ex. No. 98.)

In 1979 Employee worked for seven different employers and earned $8,085.

On 7 April 1980, while employed by Reid Timber Inc., Employee sustained a L-1 compression fracture and fractured ribs when he was struck by a falling sapling. Employee still earned $17,626 that year.

On 23 July 1981, while employed by Shafer Logging Company, Employee sustained a contusion of the left ankle.

In 1982 Employee worked for four employers and earned $11,136.

On 21 May 1983, while working for Reid Timber, Employee injured his low back, and on July 20th he was injured when a chain saw kicked back and cut his leg. On 23 August 1983 Employee slipped and fell off a log and injured his back while working for South Central Timber Development Inc.

On 7 July 1984 while working for Reid Timber, Employee injured his shoulder when a snag fell and hit him, and on July 21st he sustained a cut on his left wrist from a chain saw. On 15 September 1984 while employed by Defendant, Silver Bay Logging, Employee fell ten to twelve feet and landed on a root wad, reinjuring his back at the location of his previous compression fracture. On 3 October 1984 Employee returned to the hospital in Juneau and complained of back pain from bending, operating his saws, and jumping off logs. Employee has not returned to logging since. The extent of Employee's back injuries is disputed.

Employee worked from April to June 1988 for the City of Centralia, Washington, as a temporary park maintenance aid, picking up trash after softball games. Employee testified at hearing that this employment was very frustrating and demeaning; although Employee did his work, his co-workers called him "dummy."

At hearing James K. Maxwell, Ph.D. , and Hans O. Doerr, Ph.D., testified at hearing about Employee's current condition. Dr. Maxwell and Dr. Doerr are both clinical neuropsychologists practicing in Washington. Dr. Maxwell testified that neuropsychology is a relatively new specialty, and that no neuropsychological testing was performed after Employee's 1969 injury. Neuropsychologists perform more complicated and more extensive testing than neurologists perform.

Dr. Maxwell saw Employee on 26 January 1989 and administered an eight-hour test battery. His report indicates Employee has dysfunction of both cerebral hemispheres, with greater verbal than non-verbal memory disturbance, and severe right hand tactual-spatial impairment, reflecting greater dysfunction of the left hemisphere. (Maxwell report, 26 January 1989.) Dr. Maxwell testified that the injury to the left cerebral hemisphere causes Employee to slow down to compensate for the various errors. Dr. Maxwell diagnosed mild to moderate impairments related to new learning and the ability to carry out new tasks. Particular difficulties were detected with memory, verbal memory, and psychomotor slowing with the right hand. Accordingly, Dr. Maxwell testified that since his 1969 injury, Employee has been unemployable and a very poor candidate for retraining. In relation to logging after his head injury, Dr. Maxwell testified that Employee's condition would affect his productivity and his safety awareness; for example, when falling a tree, Employee may not remember all the safety precautions he should take, and if something new or unexpected happened, Employee would not be able to think of alternatives, so he would be at risk of injury. Dr. Maxwell testified Employee's condition has not improved much since his 1969 injury and that Employee could not have logged safely after that injury,

Dr. Doerr saw Employee on 13 December 1989 for one and one-half hours and supervised eight hours of testing. Dr. Doerr compared Employee’s test results from the Navy to establish a baseline for comparison with his current condition. He testified that Employee has a "moderately severe" brain injury (a severe brain injury requires custodial care). Dr. Doerr testified that injury to the frontal lobe of Employee's brain impaired his ability to handle new incoming tasks and to mobilize in unusual situations. He testified about four effects of the injury (1) Employee is easily befuddled, causing him to perserverate. (2) Employee's memory problems make it difficult for him to benefit from experiences. (3) Employee is slow, awkward and clumsy. (4) Employee's personality has suffered; he gets angry, has fluctuations in feelings, and is unable to modulate his feelings and emotions. In connection with Employee's ability to work, Dr. Doerr stated that Employee's lack of judgement for foresight made it "cruel and dangerous" for him to work as a logger, and that Employee has not been "realistically and competitively employable" since 1969.

Employee seeks to have his 1973 C&R overturned and to be determined permanently totally disabled as a result of his 1969 head injury. Defendant, ALPAC raises the defense of laches and the "last injurious exposure rule."

At the time of Employee's 1969 head injury, AS 23.30.180 provided:

AS 23.30.265(10) defines "disability" as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment."

In discussing post-injury earnings, our Supreme Court has quoted the following from Professor Larson:

Hewing v. Peter Kiewit & Sons, 586 P.2d 182, 186 (Alaska 1978).

In connection with the "odd-lot" doctrine as applied in J.B. Warrack Company v. Roan, 418 P.2d 986 (Alaska 1966) the court quoted the following:

(Hewing at 187.)

We find that Employee has been permanently totally disabled since his 1969 head injury. It is not disputed that Employee suffered a permanent disability as a result of that injury.

Alaska Timber insurance Exchange submitted a document entitled Comparable Wages Study for David Lawson prepared by the McDowell Group. Employee's 1967 earnings, the highest of the three years before his injury² were $8,561. Adjusting those earnings for inflation yields $22,415 in 1982 dollars and $22,829 in 1983 dollars. According to the study, Employee earned only $11,135 in 1982 and wages of $11,577 in 1983.³In 1983 Employee obtained his highest earnings.

During the 14-year period between 1971 and 1984 it appears that Employee's earnings totaled $73,000 to $75,000; the wage information is incomplete. This averages only about $5,357 per year, assuming earnings at the higher figure.

We find that Employee's ability to earn a living has been essentially confined to the logging industry, utilizing skills which he acquired before his head injury. It is not disputed that the VR programs in forestry and recreation were inappropriate and unsuccessful. Based upon Employee's post-injury earning history, we conclude Employee was an "odd-lot" employee. Due to his head injury, Employee was unable to perform services other than those which were limited in dependability and quantity and that a reasonably stable market for them did not exist. (Hewing at 187.) in reaching this conclusion we also relied upon the fact that Employee was unable to work safely in the woods, that he worked for about 27 different employers, excluding self-employment, and sustained numerous injuries. We find no stable market exists in the logging industry for individuals who are unable to work safely due to chronic organic brain dysfunction.

A C&R is not subject to modification. AS 23.30.012. However, a C&R may be set aside for fraud or mistake.

The Alaska Supreme Court has addressed the test to be used in determining whether to relieve a party who signed a release. In Witt v. Watkins, 579 P.2d 1065 (Alaska 1978), the court stated:

(Emphasis added, footnote omitted.)

Although we believe there is room for some doubt about the issue, we find Employee understood the nature of the instrument he was signing. Accordingly, we consider the facts and circumstances surrounding the execution of the release. First and foremost, we find that Employee was at a distinct disadvantage because of the nature of his injuries. Employee has chronic organic brain damage. In January 1973, shortly before the C&R was signed, A. Lamphere, Ph.D., reported that Employee exhibited confusion and perplexity, and that his thinking was slower and comprehension less than would be expected. (Ex. No. 68.) Soon after the C&R was signed, Employee began to experience severe psychiatric problems, resulting in his hospitalization. Recently, Dr. Doerr determined Employee is easily befuddled, and lacks judgement and foresight. Dr. Maxwell and Dr. Doerr agree that Employee's condition has not improved since his 1969 injury. The above mentioned factors also have bearing on the relative bargaining position of the parties. Employee's relative bargaining position was also adversely affected by his financial distress and his inability to provide for his family. Employee's TTD compensation was discontinued in January 1971 and intermittent VR payments were made under AS 23.30.191 at one-half the TTD rate. It is evident from all the evidence that Employee was under extreme financial pressure after his TTD compensation was discontinued. Under these facts, we believe that Employee was unable to discern any alternative other than settlement. Although Employee was represented by an attorney, it is not clear that the attorney was familiar with the Alaska Workers' Compensation Act and case law. We also note that the C&R was mailed to Employee to sign, and Employee testified he is unable to recall discussing the settlement with his attorney. Finally, we find that the amount of compensation paid under the C&R, about $7,100, was insignificant in relation to Employee’s disability and his earnings at the time of injury.

Applying the test set out above, we find that Employee did not intend to discharge the disability which was subsequently discovered. In the C&R the parties agreed Employee was not permanently totally disabled. Employee was working as a logger, with apparent success, at the time, the C&R was signed. It was not until January 1989 that comprehensive neurosphychological testing revealed that Employee suffers from learning and memory deficits and from right hand psychomotor slowing, rendering Employee unable to work safely as a logger. Employee's "disability" for the purposes of the Alaska Workers' Compensation Act, is his learning deficit. Employee could not have intended to release that disability, because that disability was not recognized. It was not recognized because neuropsychological testing was not conducted, and was scarcely available. For the above stated reasons, we find Employee's C&R should be get aside.

We also find that the agreement between the parties as expressed in the C&R, that Employee was not permanently totally disabled was a mutual mistake of fact, a separate ground for setting the release aside. (Id. at 1067.)

ALPAC asserts that the petition to set aside the C&R should be barred by the doctrine of laches, an equitable defense. In view of our determination that Employee has been permanently totally disabled since 1969; the apparent understanding that he was so disabled by nearly everyone involved in the case, even ALPAC's attorney (See Ex. No. 100); and the fact that Employee may have refrained from returning to work in the woods and avoided numerous serious and minor injuries if he had been paid permanent total disability (PTD) compensation, we decline to apply the quitable remedy. In our view, equity preponderates in Employee's favor.

Liability in multiple defendant cases may be resolved under the "last injurious exposure" rule adopted by the Alaska Supreme Court in Ketchikan Gateway Borough v. Sailing, 604 P.2d 590 (Alaska 1979). That rule imposes liability on the employer at the time of the most recent injury that bears a causal relation to the disability. It must be determined that the subsequent injury was a "substantial factor" in the employee's disability before liability for workers' compensation benefits is shifted to the last employer. United Asphalt Paving v. Smith, 660 P.2d 445, 447 (Alaska 1983).

In view of our determination that Employee was permanently totally disabled at all times after his 1969 head injury, his 1984 back injury could not be a substantial factor in his disability. The last injurious exposure rule is inapplicable. The presumption of compensability in AS 23.30.120(a) (1) does not affect this result.

Employee is entitled to permanent total disability (PTD) compensation based upon his compensation rate as determined at the time of injury, $107.50.

No offset or reduction in the compensation rate is due as a result of Employee's receipt of Social Security disability benefits. AS 23.30.225 was enacted in 1977, long after Employee was injured. Casperson v. Ketchikan Gateway Borough, Supreme Court opinion No. 3556 (February 9, 1990).

Employee is entitled to PTD compensation notwithstanding his receipt of unemployment benefits. AS 23.30.187 was enacted in 1982, long after Employee's injury.

We find that ALPAC has resisted the payment of compensation and that Employee employed an attorney in the successful prosecution of his claim. We find that ALPAC is responsible for the payment of Employee's costs and a reasonable attorney's fee. Employee's attorney shall submit his allowable costs and affidavit showing the extent and character of work performed to ALPAC for payment. 8 AAC 45.180. We retain jurisdiction to resolve any dispute about the reasonableness of the costs and fees.

ATIE asserts it has made "advance payments" to Employee, apparently as a result of an error in calculating Employee's compensation rate and that it is entitled to recoup an overpayment of $18,393. Because we have determined that Employee has been permanently totally disabled since his 1969 injury, ALPAC is responsible for the payment of PTD compensation. ALPAC is entitled to credit for disability compensation paid. We find that ALPAC is responsible for the payment of interest on unpaid disability compensation. Land and Marine Company v. Rawls, 686 P.2d 1187 (Alaska 1984).

We find that ALPAC should reimburse ATIE for disability compensation paid from the PTD compensation due Employee.

ATIE's responsibility for the payment of vocational rehabilitation and medical benefits has not been addressed by the parties. We decline to enter an order on those issues. We direct ATIE and ALPAC to confer and reach an agreement about each party's relative responsibility for the payment of those benefits. We retain jurisdiction to resolve disputes.

In view of the above finding and because the issue was not fully briefed, we decline to address the Robinette defense issue.

1. Employee has been permanently totally disabled since his head injury in 1969.

2. The Compromise and Release we approved on 7 May 1973 is set aside. ALPAC is responsible for the payment of Employee's permanent total disability compensation at the weekly rate of $107.50, with credit for disability compensation paid.

3. ALPAC shall reimburse ATIE for disability compensation paid from the lump sum payment due employee as a result of orders one and two above.

4. ALPAC shall pay interest at the legally allowable rate.

5. ALPAC shall pay Employee's attorney's reasonable fees and allowable costs. We retain jurisdiction to resolve disputes.

DATED at Anchorage, Alaska this 13th day of April, 1990

ALASKA WORKERS’ COMPENSATION BOARD

/s/ L.N Lawson
Lawson N. Lair, Designated Chairman

/s/ DwRichards
David W. Richards, Member

/s/ Mary A. Pierce
Mary A. Pierce, Member

LNL;wjp

If compensation is payable under terms of this decision, it is due on the date of issue and penalty of 20 percent will accrue if 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 David Lawson, Employee/Applicant; v. Olson Logging Company, Employer; and Alaska Pacific Assurance Co., Insurer; and Silver Bay Logging, Employer; and Alaska Timber insurance Exchange, Insurer/Defendants; Case Nos. 8102683 and 8421294; dated and filed in the office of the Alaska Workers' Compensation Board at Anchorage, Alaska, this 13th day of April, 1990.

Clerk