RICHARD TRZESNIOWSKI,		)
				)
Employee,			)	DECISION AND ORDER
Applicant,			)	AWCB Case No. 8713177
				)	AWCB Decision No. 90-0090
v .				)
				)
SERVICE MASTER,			)	Filed with AWCB Fairbanks
				)	April 30, 1990
Employer,			)
				)
and 				)
				)
CNA/CRAWFORD & CO.,		)
				)
Insurer,			)
Defendants.			)
				)

We heard this claim for temporary total disability (TTD) benefits, permanent partial disability (PPD) benefits, penalties, interest, and attorney fees in Anchorage, Alaska, on April 18, 1990. Attorney James Hanlon represented the applicant. Attorney Constance Livsey represented the defendant employer and insurer. We closed the record at the conclusion of the hearing.

1. Is the employee entitled to TTD benefits under AS 23.30.185 from June 12, 1989 through December 12, 1989?

2. Is the employee entitled to PPD benefits under AS 23.30.190 for his cervical injury?

3. Is the employee entitled to penalties under AS 23.30.155(e) for TTD benefits due from December 11, 1988 through April 2, 1989 and from June 12, 1989 through December 12, 1989?

4. Is the employee entitled to interest on past due compensation?

5. Is the employee entitled to attorney fees and costs under AS 23.30.145(b)?

The employee injured his neck and wrists while working as a custodian for the employer on or about July 5, 1987. He was diagnosed to suffer left C-7 radiculopathy and bilateral carpal tunnel syndrome. He was seen and treated by several physicians and underwent an anterior disectomy and fusion at C 6-7 on December 17, 1987. He testified that he has been unable to work since.

The employee's medical history is complicated by numerous medical consultations, and the claim was quite contentious, involving seven controversions. A number of the disputes were resolved without a hearing. We will refer only to those facts which we find material to resolving the remaining issues in dispute.

On June 27, 1988 Lawrence Dempsey, M.D., performed a right carpal tunnel release, and on October 11, 1988 he performed the same operation on the left. On October 22, 1988 attorney William Soule filed an entry of appearance to represent the employee in this case.

Dr. Dempsey followed the employee's recovery, and released him to work effective December 12, 1988 (at least as far as his work injuries were concerned). The insurance adjuster handling the employee's claim, Barbara Kardys, testified that during a telephone conversation on December 8, 1988, Dr. Dempsey gave her the opinion that the carpal tunnel condition was unrelated to his work injury. The employer controverted further time loss benefits in a notice on December 19, 1988 effective December 11, 1988.

On February 28, 1989 W. Lawrence Wickler, M.D., found finger triggering in the employee's hands, severe on the left, less severe on the right. He suggested surgery, and indicated that the condition was related to the employee's work. On March 28, 1989 Robert Lipke, M.D., concurred with that diagnosis, recommended surgery, and indicated that work time loss would result. Dr. Lipke performed trigger release surgery on the left hand on April 3, 1989. The employer reinstated TTD benefits effective the day of the surgery.

Concurrent with the trigger release diagnosis and treatment, attorney Eric Olson began to represent the employee. He filed an entry of appearance on February 21, 1989. Mr. Olson attempted to get the employee's compensation benefits reinstated retroactive to Dr. Dempsey's release. Ms. Kardys testified that by March 28, 1989 she had an informal agreement with Mr. Olson's paralegal to seek a second opinion from Dr. Lipke about the work relatedness of the carpal tunnel problems.

Dr. Lipke found the finger triggering problem in the left hand resolved on May 30, 1989. Ms. Kardys received this medical report on June 6, 1989. The employer controverted TTD benefits once again on June 23, 1988, effective June 11, 1989. On July 3, 1989 attorney James Hanlon filed an entry of appearance to represent the employee and an Application for Adjustment of Claim, requesting compensation for the periods during which it had been denied. On July 17, 1989 Dr. Lipke reported his opinion that the employee's carpal tunnel syndrome had been work-related. Ms. Kardys received this report on August 8, 1989; on that same day the employee filed an Affidavit of Readiness for Hearing. On August 11, 1989 the employer issued a check for TTD benefits from December 12, 1988 through April 2, 1989.

On July 25, 1989 Richard Lehman, M.D., yet another treating physician, wrote a letter to Ms. Kardys that the employee was not a candidate to return to his previous work as a janitor because of his neck and hand problems. The employer arranged examinations of the employee's hands and arms by Michael James, M.D., and of the employee's neck by Edward Voke, M.D. The employer received Dr. Voke's report on September 25, 1989, but didn't receive Dr. James' report until December 13, 1989. Both doctors found him medically stable and rated permanent impairment, and both found the employee unable to return to his relatively heavy work as a janitor. The employer reinstated compensation benefits beginning December 13, 1989.

The employee was given a vocational rehabilitation evaluation, in which he was found to have sufficient transferrable skills to suffer no loss in earning ability. The employer converted the TTD compensation payment to PPD benefits based on the impairment to the employee's arms. The employer refused to pay any unscheduled PPD benefits for the 16 percent impairment of the employee's neck, contending that the employee suffered no loss of earning capacity.

Mr. Olson filed a verified petition for attorney fees in the amount of $731.50. Most of the billed time was spent in unspecified conferences, but no one objected to the list. Mr. Hanlon filed an affidavit on April 12, 1990, requesting legal costs of $75.00 and 93.1 hours of billable time. He also spent 3.5 hours in our hearing on this matter. He requested a fee of $110.00 per hour. We note that 10.55 of these hours are billed before Mr. Hanlon filed an Entry of Appearance. We also note that Mr. Hanlon is billing for 28 conferences exclusively with the client (totaling 10.5 hours) as well as 28 other billed activities which are lumped together with client conferences (for which we can't determine the amount of time spent conferring with client).

The employee argues that he was disabled from June 12, 1989 through December 12, 1989, and entitled to TTD benefits for that time, and that the controversions of December 19, 1989 and June 23, 1989 were unfounded and frivolous, entitling him to penalties under AS 23.30.155(e). He requests PPD benefits for the impairment of his neck under AS 23.30.190(a)(19)(B) suggesting 16 percent impairment multiplied times the $60,000.00 statutory maximum, because, he argues, he will be psychologically traumatized from this litigation. He requests interest and actual attorney fees.

The employer argues that there are insufficient medical records on which to find the employee disabled between June 12, 1989 and December 12, 1989, and that all of the controversions ware made in good faith and with a reasonable basis. It also argues that AS 23.30.190(a)(20) already provides a mechanism for determing PPD entitlement for neck injuries, and that AS 23.30.190(a)(19)(B) should be applied only to severe, unusual injuries. It argues that this was not a complicated case, that the employee's attorney had little or no impact on the case, and that the employee should be entitled to no more than statutory minimum attorney fees under AS 23.30.145(a). In any event, the employee's claim for actual fees includes duplication, unnecessary tasks, and clerical costs, and is clearly in excess of reasonable fees as provided at AS 23.30.145(b). The employer represents that attorney William Soule has already been paid his fees.

I. TTD Benefits

AS 23.30.120(a) provides in pertinent part: "In a proceeding for the enforcement of a claim for compensation under this chapter is is presumed, in the absence of substantial evidence to the contrary, that (1) the claim comes within the provisions of this chapter."

In Burgess Construction Co. v. Smallwood, 623 P.2d 312, 316 (Alaska 1981) (Smallwood II), the Alaska Supreme Court held that the employee must establish a preliminary link between the injury and the employment. This rule applies to the original injury and continuing symptoms. See Rogers Electric Co. V. Kouba, 603 P.2d 909, 911 (Alaska 1979). "[I]n claims 'based on highly technical medical considerations' medical evidence is often necessary in order to make that connection." Smallwood II. "Two factors determine whether expert medical evidence is necessary in a given case: the probative value of the available lay evidence and the complexity of medical facts involved." Veco Inc. v. Wolfer, 693 P.2d 865, 871 (Alaska 1985). Once the employee makes a prima facie case of work-relatedness the presumption of compensability attaches and shifts the burden of production to the employer. Id. at 870. To make a prima facie case the employee must show 1) that he has an injury and 2) that an employment event or exposure could have caused it.

To overcome the presumption of compensability, the employer must present substantial evidence the injury was not work-related. Id. Miller v. ITT Arctic Services, 577 P.2d 1044, 1046 (Alaska 1978). The Alaska Supreme Court "has consistently defined 'substantial evidence' as 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."' Miller, 577 P.2d at 1046 (quoting Thornton v. Alaska Workmen's Compensation Board, 411 P.2d 209, 210 (Alaska 1966)). In Fireman's Fund American Insurance Cos. v. Gomes, 544 P.2d 1013, 1016 (Alaska 1976), the court explained two possible ways to overcome the presumption: 1) producing affirmative evidence the injury was not work-related or 2) eliminating all reasonable possibilities the injury was work-related. The same standards used to determine whether medical evidence is necessary to establish the preliminary link apply to determine whether medical evidence is necessary to overcome the presumption. Veco, 693 P.2d at 871. "Since the presumption shifts only the burden of production and not the burden of persuasion, the evidence tending to rebut the presumption should be examined by itself." Id. at 869. If the employer produces substantial evidence that the injury was not work-related, the presumption drops out, and the employee must prove all the elements of his claim by a preponderance of the evidence. Id. at 870. "Where one has the burden of proving asserted facts by a preponderance of the evidence, he must induce a belief in the minds of jurors that the asserted facts are probably true." Saxton v. Harris, 395 P.2d 71, 72 (Alaska 1964).

The employee's testimony about his condition during the disputed period provides a preliminary link of evidence, raising the presumption of compensability. We find that the medical records of Drs. Dempsey and Lipke, reporting the resolution of the employee's various physical problems by June of 1989 are substantial evidence rebutting the presumption of compensability.

Essentially, the employer is relying on a paucity of medical records during the disputed period between Dr. Lipke finding that the triggering condition had resolved and Dr. James issuing his evaluation on December 13, 1989. Although there is very little medical evidence during this period, we do have two pieces: the opinion of Dr. Lehman on July 25, 1989, and that of Dr. Voke on September 25, 1989. Both of these physicians found the employee unable to return to his work because of his injuries. We find by the preponderance of the available evidence that the employee's work injuries prevented his return to his work during the disputed period. We conclude that his TTD benefits were improperly suspended during that time.

II. Additional PPD Benefits

There is no dispute over compensation for the employee's scheduled arm injuries. Compensation for PPD benefits is provided in AS 23.30.190. Subsection 190(a)(20) applies to "unscheduled" injuries such as employee's neck injury.

Our Supreme Court has repeatedly emphasized that disability compensation in Alaska is a function of lost earning capacity:

Vetter v. Alaska Workmen's Compensation Board, 524 P-2d 264, 266 (Alaska 1974) (emphasis added). See also Bailey v. Litwin Corporation, 713 P.2d 249, 253 (Alaska 1986); Ketchikan Gateway Borough v. Saling, 604 P.2d 590 594 (Alaska 1979). Regarding the determination of wage- earning capacity, AS 23.30.210 provides:

Our Supreme Court has held that "other factors" include age, education, availability of suitable employment in the community, the employee's future employment intentions, trainability, and vocational rehabilitation assessment and training. Bignell v. Wise Mechanical Contractors, 651 P.2d 1163, 1167 (Alaska 1982); Hewing v. Peter Kiewit and Sons, 586 P.2d 182, 186 (Alaska 1978); Vetter v. Alaska Workmen's Compensation Board, 524 P.2d 264, 266 (Alaska 1974); Hewing v. Alaska Workmen's Compensation Board, 512 P.2d 896, 899 (Alaska 1973).

Thus an employee must suffer both a permanent medical impairment and a loss of earning capacity to be entitled to unscheduled permanent partial disability benefits. An employee's actual post-injury earnings are presumed to fairly and reasonably represent his wage-earning capacity absent evidence that post-injury earnings are an unreliable basis for estimating capacity. Hewing, 586 P.2d at 186 (citing 2 A. Larson, The Law of Workmen's Compensation §57.21 at 10.39 to 10.40 (1976)). It is not necessary to precisely compute an employee's lost earning capacity but, rather, to fairly represent lost earning capacity. Bailey 713 P.2d at 256.

In Brunke v. Rogers and Babler, 714 P.2d 795 (Alaska 1986), our Supreme Court held that an employee has the burden of proving loss of wage-earning capacity for purposes of determining his or her PPD benefits for an unscheduled injury. The court concluded as follows:

Id. at 801.

In this case the preponderance of the evidence available at this time shows no permanent loss of the employee's earning potential. We must conclude that he is entitled to no additional PPD benefits for his neck injury under AS 23.30.190(a)(20).

The employee argues we should consider additional compensation under AS 23.30.190(a)(19)(B), which provided at the time of the employee's injury:

. . .

We have utilized this section of the law to award compensation when a type of injury or impairment cannot be rated under the American Medical Association Guides to the Evaluation of Permanent Impairment or otherwise under the statute. See McCalister v. Heavier Than Air, AWCB No. 86-0290 (November 5, 1986), and Ingebo v. Alyeska, AWCB No. 85-0211 (November 12, 1982). However, in this case the injury to the employee's neck can be rated and compensation could be found due if the injury was severe enough to permanently affect the employee's earning capacity. We conclude that injury is otherwise provided for under the statute and that AS 23.30.190(a)(19)(B) is not applicable.

III. Penalties

Although benefits for the periods December 11, 1988 through April 2, 1989 and June 12, 1989 through December 12, 1989 were not paid when due, the employer filed a Notice of Controversion for each of the two periods pursuant to AS 23.30.155(d). Nevertheless, the employee argues that the employer's controversions were not valid because they were made frivolously and without foundation. We disagree, in both instances the controversion was based on a medical report. Although we might not concur with the employer's interpretation of those reports, we find that there was some reasonable basis to the employer's controversions. We cannot find that the controversions were frivolous. We conclude that no penalties are due under AS 23.30.155(e).

IV. Interest

In Land & Marine Rental Company v. Rawls, 686 P.2d 1187, 1192 (Alaska 1984), the Alaska Supreme Court held "that a workers' compensation award, or any part thereof, shall accrue lawful interest, as allowed under AS 45.45.010, which provides a rate of interest of 10.5 percent a year and no more on money after it is due, from the date it should have been paid." The court's rationale is that the applicant has lost the use (hence, interest) on any money withheld, and should be compensated. In accordance with the court's decision in Rawls, we award interest on the past-due TTD benefits awarded to the applicant by this decision.

V. Attorney Fees and Costs

AS 23.30.145(b) provides:

8 AAC 45.180(d) provides, in part:

The employee retained several attorneys and incurred costs in the partially successful prosecution of his claim. After examining his itemization of the legal costs incurred, we find the claimed costs reasonable. Under AS 23,30.145(b) we will award the claimed reasonable costs of $75.00

Attorney fees for William Soule have been paid. The record reflects that this has been a contentious claim, but that quite a few of the disputes were resolved without our intervention. Considering that, a statutory minimum fee on the amount awarded in this decision would clearly not compensate the two remaining attorney's fairly. We conclude that the reasonable fees under AS 23.30.145(b) are in order.

Mr. Olson has submitted an itemized affidavit of attorney fees. Although the various entries were not very specific, the total amount claimed is small and the employer made no objection. We will award the claimed $731.50 as a reasonable attorney fee for Mr. Olson.

Mr. Hanlon's itemized billing is more problematic. He claims substantial fees for the period before he filed an entry of appearance, while Mr. Olson was still the attorney of record. He also billed for 56 conferences with his client, a frequency we find stunning. In this case, we will order payment only for billing subsequent to his entry of appearance, and only for one half of his client conferences, deducting 10.5 hours for each of these factors. This leaves 75.6 billable hours. We find his claimed rate of $110.00 per hour to be reasonable. See Gaffney v. Mayflower Contract Services, AWCB Case No. 8814608 (March 2, 1990). We will award $8,316.00 as a reasonable attorney fees for the services of Mr. Hanlon.

1. The employer shall pay the employee temporary total disability benefits under AS 23.30.185 from June 12, 1989 through December 12, 1989.

2. The employee's claims for additional permanent partial disability benefits and penalties are denied and dismissed.

3. The employer shall pay the employee interest at the rate of 10.5 percent per annum on the past- due compensation awarded by this decision.

4. Under AS 23.30.145(b) the employer shall pay the employee reasonable legal costs of $75.00, a reasonable attorney fee of $731.50 for the services of Mr. Olson, and a reasonable attorney fee of $8,316.00 for the services of Mr. Hanlon.

DATED at Fairbanks, Alaska, this 30th day of April, 1990.

ALASKA WORKERS' COMPENSATION BOARD

/s/ William S.L. Walters
William S.L. Walters, Designated Chairman

/s/ Mary Pierc
Mary Pierce, Member

/s/ Harriet Lawlor
Harriet Lawlor, Member

WSLW/ml

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 interlocutory order staying payment is obtained in Superior Court.

APPEAL PROCEDURES

A compensation order may be appealed through proceedings in the 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 Richard Trzesniowski, employee/applicant; v. Service Master, employer; and CNA/Crawford & Company, insurer/defendants; Case No. 871377; dated and filed in the office of the Alaska Workers' Compensation Board at Fairbanks, Alaska this 30th day of April, 1990.

Clerk

SNO