FRANK N. CAGGIANO, 
Employee, 
Applicant,
v.
HAROLD’S MAYTAG HOME 
APPLIANCE, INC.,
Employer,
and 
STATE FARM FIRE & CASUALTY,
Insurer,
Defendants.

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FINAL
DECISION AND ORDER
AWCB Case No. 199228047
AWCB Decision No. 99-0221 
Filed in Anchorage, Alaska
November 2, 1999

On September 9, 1999, we heard Employee’s claim for an increase in permanent partial impairment (PPI) benefits.¹ Attorney William Erwin represented Employee. Attorney Trena Heikes represented Harold’s Maytag Home Appliance, Inc., and its insurer, State Farm Fire & Casualty Company (Employer). We proceeded as a two-member panel which constitutes a quorum under AS 23.30.005(f). We closed the record at the conclusion of the hearing.

1. Is Employee entitled to an increase in PPI benefits?

On December 16, 1992, Employee injured his low back and right arm while he was repairing a stacked washer/dryer unit. Employee continued to work for Employer, without disability, until he underwent cervical and shoulder surgeries in 1995.

Employee did not return to work following his 1995 surgeries, and Employee was found eligible for reemployment benefits.² Employee initially signed a reemployment plan on May 28, 1997. The plan was submitted to Rehabilitation Benefits Administrator (RBA) Saltzman, and the RBA approved the plan on July 10, 1998. Employee failed to timely register in his program, a dispute arose, and Employee appealed the RBA’s plan approval.

A hearing was scheduled for March 10, 1999, for Employee’s RBA appeal, and his claim for additional PPI and PTD benefits. At Employee’s request, the hearing was continued until June 24, 1999. Prior to the hearing, Employee unexpectedly passed away as a result of liver cancer – which was not related to his work injury. Employee’s wife appeared at the hearing as the personal representative of Employee’s estate.

Employee’s wife testified Robert J. Bosveld, M.D., was Employee’s physician for more than 20 years. She testified Dr. Bosveld referred her husband to Drs. Kralick, Wickler, and Geitz for treatment of his neck, shoulder, and back conditions. She testified none of her husband’s doctors believed he had any pre-existing conditions for purposes of determining his PPI rating. She testified the insurance company sent her husband to Michel Gevaert, M.D., for a PPI rating. She testified the PPI rating was performed by Sharon, Dr. Gevaert’s nurse, not by Dr. Gevaert.

On February 20, 1995, Dr. Kralick performed an anterior diskectomy osteophyte excision at C-5/6. Dr. Kralick declared Employee was medically stable on August 27, 1996. On September 8, 1995, W. Laurence Wickler performed an arthroscopic subacromial decompression, and arthrotomy and open repair of the left rotator cuff.

On March 20, 1996, following Employee’s continued complaints of pain Dr. Kralick noted symptomatic pseudoarthritis at C5-C6, and performed a posterior wiring and fusion. On August 27, 1996, Dr. Kralick declared Employee’s cervical condition medically stable. On October 23, 1996, Dr. Wickler found Employee’s shoulder condition was medically stable.

On December 13, 1996, Dr. Gevaert assigned a 19 percent whole person impairment for Employee’s combined shoulder and cervical injury, and Employer paid Employee PPI benefits based on that rating. In his report, Dr. Gevaert stated in pertinent part:

AMA Guides to the Evaluation of Permanent Impairment, 4th edition, was used. Mr. Caggiano presents with significantly limited range of motion status post two cervical procedures and interbody fusion at C5-06 and C6-C7. MRI of the cervical spine showed a preexisting marked cervical spinal stenosis. Today, the patient presents with no neurologic deficits other than isolated sensory loss along the palmar aspect of the index finger. Loss of strength in the shoulder is secondary to the shoulder injury. He incurred a 25% whole person impairment, as described on page 104, DRE cervicothoracic IV: loss of motion segment integrity, or multilevel neurologic compromise. Of this, 50% is related to the injury and 50% is preexisting, as demonstrated by the cervical MRI. Therefore, the patient incurred a 13% whole-person impairment for the cervical lesion.

The patient incurred a shoulder injury as a result of the December 16, 1992, claim. The goniometry is as follows:

Using AMA Guides, 4th edition, page 43, figures 36, 38, 41, and 44, Mr. Caggiano incurred an 11 % upper extremity impairment, or, converted, a 7% impairment of the whole person.

In summary, Mr. Caggiano incurred a 19% Impairment of the whole person for the combined shoulder and cervical injury.³

In his January 28, 1999 deposition, Dr. Bosveld testified he treated Employee from 1976 through the present for a variety of problems including, upper respiratory infections, chest pains, stomach problems, arthritis, bursitis, colon problems, ulcers, migraines, and his industrial injury. Dr. Bosveld testified he did not assign a PPI rating, nor was he aware of any PPI rating assigned for Employee’s industrial injury.

In his June 11, 1999 deposition, Dr. Gevaert testified regarding Employee’s pre-existing condition, in part, as follows:

Employee argued Dr. Gevaert erred when he reduced his 25 percent whole person PPI rating by 13 percent for pre-existing conditions. Employee argued Dr. Gevaert’s rating is not valid because he relied on his nurse’s findings to determine his PPI rating. Employee argued his treating physicians did not find a pre-existing condition, and he is therefore entitled to an additional 13 percent PPI benefits, interest, penalties, attorney fees, and legal costs.

Employer argued there has been only one PPI rating in this case – the 19 percent combined PPI rating assigned by Dr. Gevaert, which Employer paid. Employer argued Dr. Gevaert’s reliance on his nurse’s findings was appropriate because the Act does not require a PPI rating be performed by a physician. Employer argued AS 23.30.190(c) requires that all PPI ratings "shall be reduced by a permanent impairment that existed before the compensable injury." Employer argued the Act does not require that a pre-existing condition have been assigned a PPI rating prior to a current industrial injury PPI rating. Employer argued Dr. Gevaert’s medical opinion, based on the X-rays and MRI undertaken shortly after Employee’s injury, was that Employee "suffered pre-existing stenosis and degenerative disk disease at multiple levels with osteophytic ridging and spurring at multiple levels."⁶ Employer argued these conditions do not develop in a short period of time, nor do they occur as the result of one discreet traumatic event. Employer argued no contrary medical evidence exists. Employer argued it timely paid Employee 19 percent PPI benefits, and no additional PPI benefits, interest, penalties, attorney fees, or legal costs are owed. Alternatively, Employer argued if the Board awards any additional PPI benefits, Employee is entitled only to statutory attorney fees.

Alaska Statute 23.30.120(a) provides in part: "In a proceeding for the enforcement of a claim for compensation under this chapter it is presumed, in the absence of substantial evidence to the contrary, that (1) the claim comes within the provisions of the chapter . . . ." In Burgess Co. v. Smallwood, 623 P.2d 313, 316 (Alaska 1981), (Smallwood II), the Alaska Supreme Court held the employee must establish a preliminary link between the injury and the employment for the presumption to attach. "[I]n claims `based on highly technical medical considerations,’ medical evidence is often necessary in order to make that connection." Id. Applying the presumption involves three steps. Louisiana Pacific Corp. v. Koons, 816 P.2d 1379, 1381 (Alaska 1991). First, the employee must show a "preliminary link" between the disability and his or her employment. Id. To establish a link, there must be "some evidence" that the claim arose out of the worker's employment. Gillispie v. B & B Foodland, 881 P.2d 1106, 1109 (Alaska 1994). In determining whether the preliminary link is established, we consider only evidence that tends to establish the link and disregard competing evidence. Veco, Inc., v. Wolfer, 693 P.2d 865, 869-70 (Alaska 1985). We do not consider credibility. Resler v. Universal Servs., Inc., 778 P.2d 1146, 1148-49 (Alaska 1989).

Second, once the preliminary link is shown, "it is the employer's burden to overcome the presumption by coming forward with substantial evidence that the injury was not work related." Koons, 816 P.2d 1381 (quoting Smallwood II). 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). In Grainger v. Alaska Workers' Compen. Bd., 805 P.2d 976, 977 (Alaska 1991), the Court explained two possible ways to overcome the presumption: (1) produce substantial evidence which provides an alternative explanation which, if accepted, would exclude work-related factors as a substantial cause of the disability; or (2) directly eliminate any reasonable possibility that the employment was a factor in the disability.

Third, if the employer produces substantial evidence that the injury was not work-related, the presumption drops out, and the employee must prove his case by a preponderance of the evidence. Koons, 816 P.2d at 1381.

We find the presumption attached to Employee’s claim for additional PPI benefits with Mrs. Caggiano’s testimony that no doctor Employee ever treated with previously mentioned any permanent impairment. Further, we find Employer rebutted the presumption with substantial evidence: Dr. Gavaert’s December 13, 1999 report attributing 50% of the cervical PPI to a preexisting condition, and his subsequent June 11, 1999 deposition testimony. Now we must decide which rating is supported by a preponderance of the evidence.

We find AS 23.30.190(b) is mandatory in its operation. We have consistently held that the rating for the pre-existing impairment must be made under the AMA Guides before it can be used to reduce the benefit payable under subsection 190(a). See e.g., Overstreet v. Jones Tool Rental, AWCB Decision No. 95-0222 (August 24, 1995); Jarrard v. Nana Regional Corp, AWCB Decision No. 90-0299 (December 14, 1990); Kirks v. Mayflower Contract Services, AWCB Decision No. 93-0313 (December 9, 1993); Atkinson v. City of Ketchikan, AWCB Decision No. 94-0018 (February 4, 1994).

In the Overstreet decision and order, (aff’d, Jones Tool Rental v. Overstreet, 3AN-95-7414 Civ. (Alaska Super. April 26, 1996)), the Board concluded a doctor’s allocation regarding PPI apportionment needed to be specific under the Guides. In Overstreet, the employer’s doctor attributed 50% of the employee’s knee condition to preexisting factors based on the following:

Well, I could have easily said that 75 percent of it was attributable to prior injury, and I could probably argue that.

I felt because it was such a confusing history and there was so much late information arriving that the fairest thing to do, in my opinion, was to attribute it 50/50, because there’s no way to know without some uncertainty when all the damage occurred, but there is no question that the on-the-job injury was preexisted by a number of other injuries that led to damage in that knee.

Unlike the physician in Overstreet, we have a physician who can specifically attribute, under the Guides, permanent impairment to a preexisting condition, in certain terms. In his deposition Dr. Gavaert testified regarding the employee’s distinct degenerative disk bulges, and osteophytic ridges, which indicate both a preexisting degenerative component, and an acute injury component. We find this to be the basis for Dr. Gavaert’s 12% percent rating for a preexisting impairment under the Guides.⁷ Accordingly, we conclude Dr. Gavaert correctly reduced his rating of the employee’s PPI, reflecting the employee’s permanent impairment that existed before his injury with this employer.

We find Dr. Gavaert’s PPI rating of the employee’s industrial injury under the Guides was 13 percent. Consequently, we can find no evidence on which to base an increase in the employee’s PPI rating. Accordingly, we deny the employee’s claim for additional PPI benefits. As we have denied and dismissed the employee’s claim for additional PPI, we also deny and dismiss his claims for attorney’s fees, costs, interest, and a penalty.

The employee’s claims for additional permanent partial impairment benefits, attorney’s fees and costs, interest, and penalty are denied and dismissed.

Dated at Anchorage, Alaska this 2nd day of November, 1999.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Gwendolyn K. Feltis
Gwendolyn Feltis,
Designated Chairman

/s/ S.T. Hagedorn
S.T. Hagedorn, Member

This compensation order is a final decision. It becomes effective when filed in the office of the Board unless proceedings to appeal it are instituted. Proceedings to appeal must be instituted in Superior Court within 30 days of the filing of this decision and be 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 party may ask the Board to reconsider this decision by filing a petition for reconsideration under AS 44.62.540 and in accordance with 8 AAC 45.050. The petition requesting reconsideration must be filed with the Board within 15 days after delivery or mailing of this decision.

Within one year after the rejection of a claim or within one year after the last payment of benefits under AS 23.30.180, 23.30.185, 23.30.190, 23.30.200 or 23.30.215 a party may ask the Board to modify this decision under AS 23.30.130 by filing a petition in accordance with 8 AAC 45.150 and 8 AAC 45.050.

I hereby certify that the foregoing is a full, true and correct copy of the Decision and Order in the matter of FRANK N. CAGGIANO employee / applicant; v. HAROLD’S MAYTAG HOME APPLIANCE, INC, employer; STATE FARM FIRE & CASUALTY, insurer / defendants; Case No. 199228047; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 2^nd day of November, 1999.

Brady D. Jackson III, Clerk