ApportionmentCase BriefTo Parcel or Not to Parcel, the Complete Edition

August 15, 20180

Imagine going to a restaurant with your friends and not knowing until the end of the meal what portion of the check you’re going to have to cover or even how the check will be itemized.  Unfortunately, with the endless variety of employment histories and medical facts facing claims professionals and other parties involved in the workers’ compensation system that is often the case when it comes to determining both the amount and the portion of disability indemnity chargeable to a particular defendant in cases with multiple injuries.  Ever since the passage of SB 899, litigation as to which injury is responsible for indemnity obligations to the injured workers has been endless, and Workers’ Compensation Judges and the Workers’ Compensation Appeals Board continue to struggle with application of the facially simple principles set forth by Labor Code 4663 and Labor Code 4664.

From the applicant’s perspective, apportionment between two injuries only serves to reduce awards and can mean the difference between a life pension and two large awards.  Many doctors, when faced with a particularly challenging case, have avoided the careful determinations as to apportionment required by Benson, and have seized on the phrase “inextricably intertwined” to avoid an apportionment analysis, despite the fact that the phrase does not appear in the Benson decision itself.  A panel of three commissioners with the Workers’ Compensation Appeals Board has now incorporated that phraseology into a possibly far-reaching decision, and elucidated what it means in a finding that appears to suggest that in multiple injury cases with overlapping body parts, even where medical evidence suggests that disability can be parceled out as to one body part, a single unapportioned award may still issue where the disability rising out of other conditions or body parts cannot be parceled out between two or more injuries because the residual effects of the injuries are “inextricably intertwined.”

It Gets Complicated

In the case of Enrique Herrera v. Maple Leaf Foods; U.S. Fire Insurance Company; & Alea North American Insurance Company, the trial judge was tasked with parceling out obligations between multiple parties arising out of two claims.  U.S. Fire Insurance Company was the carrier on October 15, 2002, a date on which the parties stipulated a specific injury occurred, and continued to have coverage through November 30, 2002.  Alea North American Insurance Company had coverage from December 1, 2002 through January 2, 2003.  The applicant, a baker, was fixing a box-sealing machine on October 15, 2002 when he got his right arm caught in the machine and jerked it free, lacerating tendons in his right index finger.  He returned to work a week after a surgery to repair the tendons, and worked light duties in a cast for two months before being placed in a role where he was operating two bread machines.  The new job duties aggravated his neck, low back, right shoulder, and both hands, and headaches and depression also developed.  He eventually was taken off work by his physician and his last day worked was January 2, 2003.

An AME in orthopedics, Dr. McDavid, found that applicant lacerated his right index finger, right shoulder (including the brachial plexus), and lumbar spine when he jerked to free himself from the machine.  The AME also found, however, that his return to work then traumatized his low back further and caused additional problems with the right shoulder.  Dr. McDavid parceled out disability and found that 30% of lumbar impairment was caused by a specific injury on October 15, 2002 and 70% of lumbar impairment was caused by a cumulative trauma through the last date worked.  Dr. McDavid was then replaced by a new AME, a Dr. Sew Hoy, who found that 40% of lumbar impairment was owing to the 2002 specific injury and 60% of lumbar impairment was owing to the cumulative trauma through 2003.  An internal medicine AME, Dr. Hirsch, found that 20% of applicant’s gastrointestinal disability was nonindustrial, but reported that it would be speculative to apportion between the two injuries and apportioned all of the industrial disability to the specific injury.  An AME in psychiatry, Dr. Preston, apportioned 80% of applicant’s psychiatric disability to his orthopedic condition and stated that further apportionment would follow the findings of the orthopedic AMEs.  He apportioned 10% of applicant’s psychiatric disability to his internal medicine problems and deferred to the internal medicine AME as to how internal medicine issues were to be apportioned.  As to apportioning between the two injuries from a purely psychiatric standpoint, he stated that the two injuries were inexorably intertwined (apparently not getting the memo that only the word inextricably has totemic power).

In a June 19, 2015 decision, the Judge found that applicant sustained industrial injury due to cumulative trauma between October 15, 2002 and January 2, 2003 to his back, gastrointestinal system, psyche, right shoulder, left shoulder, left index finger, cervical spine, and head in the form of headaches while employed as a baker by Maple Leaf Foods (suffering a veritable baker’s dozen of injuries), and that applicant was entitled to 68% permanent disability after apportionment.  In a June 30, 2015 decision in a companion claim, the Judge determined that applicant sustained industrial injury to his right index finger, right shoulder, lumbar spine, cervical spine, psyche, gastrointestinal system, and head in the form of headaches, and that applicant was entitled to 39% permanent disability after apportionment.  The Judge disregarded the stipulation by the parties that there was an October 15, 2015 specific injury, and instead fond that this second claim also resulted from a cumulative trauma between October 15, 2002 and January 2, 2003.

Sometimes Too Complicated

In an entirely unsurprising development, everyone filed petitions for reconsideration.  The WCAB rescinded both the June 19, 2015 and the June 30, 2015 Findings and Award and issued a Joint Findings and Award that found instead that applicant’s combined permanent disability in both cases is 83% after non-industrial apportionment and that disability could not be parceled out under the Benson decision.   The WCAB also corrected an error made by the WCJ and found that there was a specific October 15, 2002 injury.

More importantly, and enshrining the magical phrase often used by QMEs and AMEs, “inextricably intertwined,” the WCAB opined that where some aspects of industrially-caused disability (in this case the psychiatric and gastrointestinal disability) from two or more separate industrial injuries cannot be parceled out because the disability born of each injury is inextricably intertwined, then a combined award must issue, even where other aspects of disability (in this case the orthopedic disability) could be parceled out with reasonable medical probability.  The WCAB quoted the Brodie decision establishing that Labor Code sections 4663 and 4664 established a new regime of apportionment requiring medical legal evaluators and triers of fact to parcel out the causative sources of disability.  The WCAB emphasized, however, that the burden of proving apportionment still rests with defendants, quoting the Benson decision.   The WCAB also seized upon the language in the Benson decision in which the Court of Appeal stated that there may be “limited circumstances where an evaluating physician cannot parcel out, with reasonable medical probability, the approximate percentages to which each distinct industrial injury causally contributed” to overall disability, and that in such cases where a defendant fails to meet its burden of proof, a combined award of permanent disability may still be justified.  The WCAB engaged in a careful analysis of the language in the multiple AME reports, and dismissed contradictory language in the reporting of Dr. Hirsch to focus on his ultimate finding that he could not parcel out industrial disability between the specific injury and the cumulative trauma.  The WCAB was clear that even though the gastrointestinal injury resulted from treatment for the orthopedic injury, it did not follow that apportionment of the gastrointestinal injury should follow the apportionment of the orthopedic injury.  The WCAB then selected U.S. Fire to administer the joint award; subject to its right to seek contribution in separate contribution proceedings (which proceeding itself promises to be somewhat complicated).

Apportionment in a Time of Inextricably Intertwined

This case, which was very carefully authored by the WCAB, certainly has the potential to change the way applicants and defendants approach cases, and it is yet unknown if it has been appealed.  In a case with multiple injuries that is close to life pension or a permanent and total rating, it could behoove attorneys representing applicants who want to obtain an award they feel is sufficient to compensate their clients to focus medical legal discovery on conditions and body parts that are famously difficult to apportion such as psyche or internal medicine issues (apportionment could be difficult for instance where medication being used to treat multiple injuries is the source of internal medicine disability).  Even in a case with clear orthopedic apportionment, the Herrera case suggests that an inability to parcel out disability as to the internal medicine condition could result in a single unapportioned award.

The Benson Court stated that there would only be “limited” circumstances where disability could not be parceled out, but it remains to be seen how limited arguments utilizing the framework provided by the Herrera case will be.  The WCAB in this case gave careful consideration to the record, so the takeaway for all parties may be that the battle will be lost or won in the doctor’s office.  It remains the defendant’s burden of proof to establish apportionment, and defendants cannot expect a finding of apportionment unless they explore fully with a medical legal evaluator the degree to which disability can be parceled between two injuries.  As to cases with multiple defendants, it may benefit them to decide to split the check based on coverage or an estimation of exposure, rather than push too hard for an itemization of disability that could result in an AME or QME throwing up their hands and stating “inextricably intertwined,” which could only serve to increase the bill.

 Written by Jim Cotter, Associate Attorney in our Oakland August 2018.

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