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Morgan v. Bluegrass Oakwood, Inc.

Court of Appeals of Kentucky

July 26, 2019

HEATHER MORGAN APPELLANT
v.
BLUEGRASS OAKWOOD, INC.; HON. JONATHAN R. WEATHERBY, ADMINISTRATIVE LAW JUDGE; and WORKERS' COMPENSATION BOARD APPELLEES

          PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD ACTION NO. WC-14-91253

          BRIEF FOR APPELLANT: Mark D. Knight Somerset, Kentucky

          BRIEF FOR APPELLEE, BLUEGRASS OAKWOOD, INC. Robert F. Ferreri Louisville, Kentucky

          BEFORE: KRAMER, NICKELL, AND L. THOMPSON, JUDGES.

          OPINION

          KRAMER, JUDGE.

         On February 17, 2014; June 14, 2015; and April 19, 2016, Heather Morgan respectively sustained three work-related injuries while employed by Bluegrass Oakwood, Inc., as a "residential associate." Ultimately, the Workers' Compensation Board affirmed an order of an Administrative Law Judge (ALJ) that considered Morgan's three injuries and awarded her permanent partial disability (PPD) income benefits enhanced by the double multiplier set forth in KRS[1]342.730(1)(c)2. On appeal before this Court, Morgan argues the ALJ misunderstood the evidence relating to the enhancement of her award; misapplied the law to his own factual findings in that respect; and that her award should have instead been enhanced by the triple multiplier set forth in KRS 342.730(1)(c)1. For the reasons discussed below, we reverse.

         Before discussing the underlying facts, a brief discussion of KRS 342.730 is necessary for context. In general, this statute governs the authority of an ALJ to enhance a claimant's award of income benefits under Kentucky's Workers' Compensation Act. If, for example, substantial evidence supports that a permanent disability prevents the claimant from performing any type of work, thus rendering the claimant "totally disabled, "[2] the ALJ is authorized to significantly enhance the claimant's income benefits as set forth in KRS 342.730(1)(a).[3] If, on the other hand, a claimant does not return to work and the evidence only supports the claimant's permanent disability is "partial" (i.e., does not prevent the claimant from performing work[4]) and does not prevent the claimant from indefinitely returning to the same type of work the claimant performed pre-injury, the ALJ has no authority to enhance a claimant's award of income benefits. The claimant's award is calculated pursuant to the basic partial benefit criteria set forth in KRS 342.730(1)(b).

         Between those two extremes are the mutually exclusive enhancements specified in KRS 342.730(1)(c)1 and (c)2, which are at issue in this appeal. In relevant part, KRS 342.730(1)(c)1 provides:

If, due to an injury, an employee does not retain the physical capacity to return to the type of work that the employee performed at the time of injury, the benefit for permanent partial disability shall be multiplied by three (3) times the amount otherwise determined under paragraph (b) of this subsection, but this provision shall not be construed so as to extend the duration of payments[.]

         Next, the latter of these two multipliers, KRS 342.730(1)(c)2, provides:

If an employee returns to work at a weekly wage equal to or greater than the average weekly wage at the time of injury, the weekly benefit for permanent partial disability shall be determined under paragraph (b) of this subsection for each week during which that employment is sustained. During any period of cessation of that employment, temporary or permanent, for any reason, with or without cause, payment of weekly benefits for permanent partial disability during the period of cessation shall be two (2) times the amount otherwise payable under paragraph (b) of this subsection. This provision shall not be construed so as to extend the duration of payments.

         One caveat to these provisions arises where either KRS 342.730(1)(c)1 or (c)2 could apply; that is, a situation in which substantial evidence supports that a claimant: (1) cannot return to the type of work[5] performed at the time of the injury in accordance with KRS 342.730(1)(c)1; but (2) has also returned to some form of work at an average weekly wage equal to or greater than the claimant's pre-injury average weekly wage in accordance with KRS 342.730(1)(c)2. In that situation, the ALJ has the discretion to choose the more appropriate enhancement, and the ALJ's discretion depends upon whether the claimant has the capacity to continue earning those equal or greater weekly wages into the foreseeable future. If substantial evidence indicates the claimant cannot do so, the ALJ is authorized to immediately enhance the claimant's award pursuant to the triple multiplier set forth in KRS 342.730(1)(c)1. Conversely, if substantial evidence indicates the claimant can do so, the ALJ is authorized to enhance the claimant's award pursuant to KRS 342.730(1)(c)2. See Fawbush v. Gwinn, 103 S.W.3d 5, 12 (Ky. 2003); Kentucky River Enters., Inc. v. Elkins, 107 S.W.3d 206 (Ky. 2003).

         This caveat ("the Fawbush rule") is the subject of Morgan's appeal. The parties agree Morgan is only partially disabled and is therefore capable of working. The parties agree that while Morgan returned to work at the same wages prior to the date of her award, she lacks the physical capacity to perform the type of work she performed pre-injury.

         The dispositive issues presented are: (1) whether Morgan returned to work at an equal or greater weekly wage after she sustained a work injury that caused her to lose the physical capacity to perform the full range of her duties as a residential associate for Bluegrass Oakwood; and, assuming she did return to work afterward, (2) whether Morgan could have continued to earn those equal or greater weekly wages into the foreseeable future.

         As will be seen below, three further details complicate these issues; namely, this case involves: (1) an approximately two-year period during which Morgan intermittently returned to work, but sustained three different work injuries that caused her to be temporarily totally disabled and entirely off of work for months at a time; (2) confusion over which of the three work injuries caused Morgan to lose the physical capacity to perform the full range of her pre-injury duties, owing in large part to a treating physician's retrospective opinion regarding Morgan's physical capacity; and (3) an ALJ's findings of fact, revised findings of fact, and re-revised findings of fact which somewhat equivocated about why Morgan lacked the physical capacity to perform her pre-injury type of work.

         FACTUAL AND PROCEDURAL HISTORY

         Morgan was born in 1983 and became a "residential associate" for Bluegrass Oakwood in 2007. In that position, Morgan functioned as a caregiver for patients with physical and mental disabilities who resided on Bluegrass Oakwood's campus. The general duties of all residential associates included bathing, feeding, and lifting patients; pushing wheelchairs; and sweeping, mopping, and dusting the patients' residences. These duties, according to the description of this position that Bluegrass Oakwood filed of record, frequently required residential associates to lift, pull, and push more than fifty pounds during a typical workday.

         With that said, the typical workday of a given residential associate, along with its typical risks, depended largely upon where the residential associate was stationed. Each residential associate was stationed at a cottage that housed a group of patients with a specific category of disability; and, depending upon the type of disability, different cottages presented different challenges. For instance, a cottage that housed less self-sufficient patients could require more physically demanding work from a residential associate stationed there because those types of patients required a greater amount of day-to-day physical assistance. Moreover, a cottage that housed patients with behavioral disabilities could expose residential associates to a risk of being physically assaulted.

         Morgan was stationed in a cottage of the latter variety; she worked with patients with behavioral disabilities who would occasionally kick, punch, and bite. In a November 17, 2017 opinion and order entered in this matter, the ALJ summarized the evidence relating to the three injuries Morgan sustained while working as a residential associate in her assigned cottage; the treatment she received for those injuries; and the effects of those injuries upon her ability to work according to the medical professionals who provided opinions in this matter. We quote the ALJ's summary in full because the ALJ's understanding of that evidence is raised by Morgan as an issue in this appeal:

3. [Morgan] testified by deposition on April 27, 2017, and at the Formal Hearing on September 18, 2017. [Morgan] testified at the Formal Hearing on September 19, 2017, and stated that she had not returned to work. She said that she last worked on April 19, 2016, the date of her last injury. She said that her first injury occurred on February 17, 2014, when she was hit by a client in the back of the neck on the right. She said that since that time, she has had headaches, pain, and numbness in her middle and ring finger. [Morgan] said that she did not return to work until August 16, 2014, at the same or greater wages and performing the same job duties. [Morgan] said that she continued working until the second injury on June 14, [2015[6], when she was hit by a client in the neck. She said that the resident weighed approximately 190 pounds and that she weighs about 112 pounds. [Morgan] said that she returned to work in August of 2015 and continued working until her surgery. [Morgan] said that she did not return to work until she was released by Dr. [Magdy] El-Kalliny. A prior Opinion was completed in this case in August of 2015[7] and thereafter [Morgan] had surgery to her neck on October 1, 2015. [Morgan] returned to work in February, 2016 following surgery to the same position and then was injured again in April of 2016. When she returned, she was having problems with her back and headaches. [Morgan] explained that the April 2016 injury occurred when a resident pulled her hair and jerked her neck trying to bite her. She recalled that she reported the injury to Max McAdoo and completed an injury report. She then sought medical treatment from Urgent Care following the injury. Following the injury, she began treating with Dr. El-Kalliny who found that [Morgan] reached MMI as of January 11, 2017. She said that since her third injury, she has had numbness in the middle and ring fingers on the left hand, with headaches, and severe neck pain. Dr. El-Kalliny restricted her to taking breaks every 30 minutes and changing positions with lifting no more than 20 pounds. [Morgan] did not believe she could return to her prior employment due to her pain, and her inability to sit/stand for long periods of time or lift, pull, push, or tug. She stated that the residents sometimes bite, hit, spit, punch, and head butt. She added that she is scared of being injured again due to the combative residents but that she is still an employee for the Defendant and is currently on medical leave. She also said that she would like to return to some type of employment, but is unable to do so at this time due to her pain and headaches. She added that she usually has around three headaches per week, which last all day and keep her in bed.
On cross examination, she stated that she is still an employee, [8] but has talked to Christy Underwood[9] and found that there are no positions within her restrictions. She said that when she returned after being released by Dr. El-Kalliny, she needed assistance from other staff members in order to complete her job duties.
4. The medical records of Dr. Warren Bilkey were introduced into evidence on behalf of both parties. [Morgan] was seen for an independent medical evaluation on October 11, 2016. After performing a physical examination, reviewing medical records and diagnostic studies, Dr. Bilkey diagnosed a February 17, 2014, work injury, cervical strain, cervical disc herniation with C7 radiculopathy ([Morgan] underwent anterior cervical discectomy at C6-7 level with artificial disc placement at the C6-7 level with artificial disc placement with chronic headache); additional cervical strain injury occur [sic] post operatively on April 19, 2016, with aggravation of chronic neck pain. He noted that [Morgan] was a small individual who was struck by a resident in the neck. Dr. El-Kalliny performed surgery, which was beneficial and allowed her to return to work until another injury occurred at work hyper extending her neck when a resident yanked her hair backwards aggravating her neck condition. [Morgan] had not returned to work since that time. Dr. Bilkey found that [Morgan's] diagnosis was due to the work injury of February 17, 2014, she had no active impairment prior to that date, and is currently at MMI. Dr. Bilkey recommended that [Morgan] follow up with a spine surgeon as needed and added that [Morgan] should be limited to maximum lifting, pushing, and pulling no more than 20 pounds; alternate sitting and standing every 30 minutes. These restrictions were placed by Dr. El-Kalliny but Dr. Bilkey agreed with them. [Morgan] was directed [by Dr. El-Kalliny] to remain off work until January 11, 2017, and [Dr. Bilkey] was in agreement with Dr. El-Kalliny. Dr. Bilkey assessed a Cervical DRE Category IV and 28% impairment pursuant to the AMA Guides. He noted that the impairment takes into account the April 19, 2016, work injury as it was impossible to apportion between the work injuries of February 17, 2014, and April 19, 2016.
5. The medical records of Urgent Medical Care dated June 14, 2015, through April 27, 2016, were introduced into evidence on behalf of [Morgan]. These records have been reviewed and considered into evidence.
6. The medical records and deposition dated July 18, 2017, of Dr. Magdy El-Kalliny were introduced into evidence on behalf of both parties. [Morgan] was seen on June 2, 2015, with continued complaints of cervical pain. Dr. El-Kalliny diagnosed cervical radiculitis, HNP cervical, neck pain, and myofascitis muscle pain. He had requested an anterior cervical discectomy and fusion but the surgery was denied. Dr. El-Kalliny noted that physical therapy or an epidural injection would not help due to the size of the disc herniation and the pressure on C7 nerve root. [Morgan] had surgery on October 1, 2015, for a microsurgical anterior cervical discectomy at C6-7 with a placement of artificial cervical disc with good results. [Morgan] returned on October 7, 2015, with improvement following surgery. [Morgan] was directed to follow up on December 2, 2015, and to remain off work until that time per a letter of the same date. Upon return, she was feeling better, but had aching in the shoulders and some sharp pain in the anterior aspect of the neck. [Morgan] was directed to remain off work until January 20, 2016, as [Bluegrass Oakwood] did not accept restrictions. X-rays revealed good alignment of the artificial disc. On follow up, she continued to have cervical pain, more so on the right side. She had no shoulder pain or soreness and was released to return to work on January 20, 2016, with no restrictions. [Morgan] was directed to return in three months and was seen on June 29, 2016, with a new injury from work on April 19, 2016. She was to remain off work until the follow up on July 20, 2016. A cervical MRI was performed on July 7, 2016, and was compared to prior imaging studies dated December 2, 2015, and March 25, 2015. It was found that there was limited exam secondary to metallic streak artifact; small posterior disc bulge at C4-5 which does appear to minimally efface the anterior aspect of the thecal sac and flatten the anterior surface of the cord. [Morgan] was seen on July 20, 2016, and Dr. El-Kalliny reviewed the MRI and pointed out the broad based disc bulge at C4-5. He did not recommend surgery. An X-ray of the cervical spine dated July 20, 2016, revealed disc prosthesis in satisfactory position at C6-7. Dr. El-Kalliny released [Morgan] with restrictions on July 20, 2016, with no lifting of more than 20 pounds and to alternate sitting and standing every 30 minutes. Another note from the same day, states that [Morgan] was off work, but restricted to no contact with clients. Dr. El-Kalliny was concerned about an adjacent level causing the need for a cervical fusion and stated that if he would have put [Morgan] on restrictions to begin with the additional injuries may have been avoided. On cross-examination, Dr. El-Kalliny stated that the life expectancy of the artificial disc is 10-15 years.
Dr. El-Kalliny found that [Morgan] was at MMI as of January 11, 2017, and assessed a 25% impairment pursuant to the AMA Guides for the February 17, 2014, work injury. He found that there was no apportionment between the injury of February 17, 2014, and the injury of April 19, 2016. Dr. El-Kalliny found since an artificial disc is not addressed in the AMA Guides, he found that the cervical artificial disc fits into the DRE Category IV since there was a complete removal of the disc as in a fusion. He added that all treatment rendered for the cervical condition had been due to the work injuries of February 17, 2014, and April 19, 2016. Dr. El-Kalliny permanently restricted [Morgan] to no pushing, pulling, lifting more than 20 pounds and alternating sitting and standing every 30 minutes for the February 17, 2014 injury. [Morgan] was found temporarily totally disabled from the date of her injury on April 19, 2016, until January 11, 2017. [Morgan's] work injury on February 17, 2014, was determined to be the cause of her cervical injury resulting in impairment and restrictions. In his deposition, he noted that C4-5 was considered an adjacent disc problem, related to the first injury.
7. The medical records of Dr. Ellen Ballard were introduced into evidence on behalf of [Bluegrass Oakwood]. [Morgan] was seen for an independent medical evaluation on June 1, 2016. After performing a physical examination, reviewing medical records and diagnostic studies, Dr. Ballard diagnosed history of reported work injury times three, status post cervical surgery at C6-7 October 2015 and history of recent cervical spine injury. Dr. Ballard found that [Morgan] was at MMI from her previous event when she returned to work in February 2016. Dr. Ballard assessed a 16% impairment pursuant to the AMA Guides and found that [Morgan] needs no restrictions. Dr. Ballard stated that [Morgan] was able to perform her job duties prior to her new injury. Dr. Ballard recommended that an MRI be performed to determine if [Morgan] had a new injury and what needed to be done next. [Morgan] was determined to be a maximum medical improvement from her February 17, 2014, injury.
In a letter dated August 22, 2016, Dr. Ballard reviewed [Morgan's] MRI dated July 7, 2016. She reviewed the MRI and noted that the C4-5 disc is of minimal importance and is unchanged from the findings previously noted. [Morgan] was determined to be at MMI as of the date of her MRI on July 7, 2016. Dr. Ballard did not assign any work restrictions. She found that [Morgan] had the physical abilities to perform her job duties as a residential associate.
8. [Morgan's] first reports of injury were introduced into evidence on behalf of [Bluegrass Oakwood]. [Morgan's] injury on February 17, 2014, injured her neck and was witnessed by Scott Griffin. [Morgan] was injured again on June 14, 2015, resulting in an injury to her neck and shoulders. That injury was witnessed by Ed Meadors. [Morgan's] third injury occurred on [April[10] 19, 2016, resulting in an injury to her neck.
9. The medical records and deposition dated August 4, 2017, of Dr. John Vaughan were introduced into evidence on behalf of [Bluegrass Oakwood]. [Morgan] was seen on June 5, 2017, for an independent medical evaluation. After performing a physical examination and reviewing medical records, Dr. Vaughan diagnosed cervical disc herniation at C6-7 and status post disc replacement C6-7. Dr. Vaughan assessed a 25% impairment pursuant to the AMA Guides. He found that the initial injury caused the diagnosis of the C6-7 disc herniation and that the second and third injuries exacerbated the pre-existing condition. Dr. Vaughan found that [Morgan] retains the physical capacity to return to her prior employment unrestricted and that she needed to further treatment or diagnostic studies. He agreed with Dr. Bilkey's DRE impairment rating and added that [Morgan] had subjective complaints and had a successful surgical disc replacement. In his deposition, he agreed that [Morgan] had a prior probability of injuries, like 5% or 10%, at adjacent levels than at the level of the artificial disc. He believed that any restrictions placed would be preventative for injuries in the future. On redirect, Dr. Vaughan did not believe that [Morgan] was at a higher risk factor while working for [Bluegrass Oakwood]. He found that she was somewhere in the middle and that it was not unreasonable for her to go back to her prior job duties.

         There is nothing materially inaccurate about the ALJ's summary of the conflicting evidence. But, for the sake of analyzing the ALJ's subsequent application of the Fawbush rule, it is necessary to highlight and elaborate upon four points the ALJ touched upon in his summary. First, the ALJ understood Morgan never returned to any kind of work after her injury of April 19, 2016.[11] She only returned to work after her injuries of February 17, 2014 and June 14, 2015, [12] and after her October 1, 2015 surgery. After her February 17, 2014 injury, she was paid temporary total disability until June 16, 2014, and she returned to work on August 16, 2014. And, after her October 1, 2015 surgery, Morgan returned to work January 25, 2016.

         Second, the ALJ noted that when Morgan was released to return to work following her injuries of February 17, 2014, and June 14, 2015, "she was having problems with her back and headaches" and "needed assistance from other staff members in order to complete her job duties." This was a reference to Morgan's repeated testimony that since her February 17, 2014 injury, work activities which involved lifting, pushing, and pulling continuously caused her pain in the region of her neck and shoulders.

         Indeed, Drs. Bilkey and El-Kalliny contemplated that surgery - specifically, the anterior cervical discectomy and artificial disc placement at the C6-7 level that Morgan eventually received in October 2015 - might remedy Morgan's pain and improve her condition; notwithstanding, both doctors still recommended permanent work restrictions for Morgan due to her February 17, 2014 injury, even before Morgan sustained her June 14, 2015 and April 19, 2016 injuries.[13] During his May 12, 2015 deposition, Dr. El-Kalliny testified:

Q: Should [Morgan] have restrictions right now as far as her work condition?
EL-KALLINY: Well she - I asked her if she needs to be on restrictions and she's afraid that she would lose her work, so that's why I left her. And I told her, this is not good because it can get worse and it can press on the cord and it can make you paralyzed. She - but I would say restrictions not to lift, push or pull more than fifteen pounds would be reasonable at this time.
Q: Okay. But I understand you haven't put those on her because of -
EL-KALLINY: No, I did not.
Q: -- she wanted to continue to work?
EL-KALLINY: She did, yeah.

         Bluegrass Oakwood has never disputed Morgan's testimony that, for purposes of employing her as a residential associate, it could not accommodate the type of restrictions that Drs. El-Kalliny and Bilkey recommended. Thus, when Morgan did return to work after her periods of temporary total disability following her respective injuries of February 17, 2014, and June 14, 2015, she returned without restrictions and to the full range of her residential associate duties. At least on paper, she returned the same type of work.

         Third, the ALJ acknowledged that the physicians who concluded Morgan lacked the physical capacity to perform the full range of duties associated with being a residential associate for Bluegrass Oakwood (i.e., Drs. El-Kalliny and Bilkey) definitively arrived at that conclusion, and the conclusion that Morgan required permanent work restrictions, after Morgan sustained her April 19, 2016 injury. The ALJ also acknowledged that the permanent work restrictions Morgan was assigned precluded her from performing the full range of her pre-injury residential associate duties, and consequently the same type of work. See Forman, 142 S.W.3d at 145. As indicated, on July 20, 2016, Dr. El-Kalliny determined (and Dr. Bilkey later agreed) Morgan: (1) "should not lift, push, or pull more than twenty pounds. She should be able to sit and stand every thirty minutes;" and (2) should "have no contact with patients/clients."[14]

         Fourth, despite what the chronology of Morgan's injuries outlined in the prior three points might imply, the permanent restrictions Dr. El-Kalliny assigned were unrelated to Morgan's April 19, 2016 injury; they were still entirely related to her February 17, 2014 injury.

         This begs a question. Clearly, Morgan had no greater impairment on in July 2016 than in January 2016; after all, each of the physicians who examined Morgan in this matter opined that the entirety of her permanent impairment - and the necessity of her permanent medical restrictions - owed to Morgan's February 17, 2014 injury. So, why did Dr. El-Kalliny release Morgan back to work with no restrictions on January 2016, but later impose permanent restrictions in July 2016?

         For the most part, the answer is found in paragraph 6 of the ALJ's summary. Initially, Dr. El-Kalliny intended to impose permanent restrictions in January 2016, before he released Morgan back to work from her post-surgery period of temporary total disability. But, he remained optimistic and chose not to do so at that time. He testified:

DR. EL-KALLINY: To tell you the truth, after the first surgery, I was trying to put [Morgan] on some restrictions, but she felt that she was doing very well, and she wants to go back to work. She wants to work, obviously.
Q: Sure.
DR. EL-KALLINY: So, I said, "You just go back and hopefully, you'll be fine."
Q: Be careful and do what you can do within ...

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