Opinion
W.C. No. 3-949-781
July 15, 1999.
FINAL ORDER
The respondents seek review of a Supplemental Order of Administrative Law Judge Gandy (ALJ Gandy) which required them to pay the cost of surgery performed by an unauthorized physician. The respondents contend the ALJ was precluded from awarding medical benefits under the doctrines of collateral estoppel and res judicata. In any event, the respondents argued the ALJ misapplied the holding in Martin K. Eby Construction Co., Inc. v. Industrial Commission, 710 P.2d 1164 (Colo.App. 1985), and that the evidence does not support the order. We affirm.
The claimant sustained a compensable back injury in June 1989, and she declined to undergo surgery suggested by the authorized treating physician. Consequently, the claimant was placed at maximum medical improvement (MMI) in October 1990. The respondents subsequently filed a final admission of liability for maximum permanent partial disability benefits, and the claimant collected a lump sum award.
The claimant experienced a worsening of condition and filed a petition to reopen in November 1994 (a previous petition to reopen was dismissed for failure to prosecute). The respondents refused voluntarily to reopen the claim and rejected the claimant's request for a change in the treating physician. On January 24, 1995, before the petition to reopen was adjudicated, the claimant underwent back surgery performed by Dr. Akmakjian. It is undisputed that Dr. Akmakjian was not an authorized treating physician.
On April 7, 1995, ALJ Gandy entered an order granting the petition to reopen, awarded temporary disability benefits commencing October 26, 1994, and authorized a change of physician to Dr. Akmakjian. The order reserved all issues not specifically addressed, and was ultimately affirmed on appeal.
Subsequently, the claimant applied for a hearing listing the issues as "medical benefits and permanent total disability" benefits. (Transcript September 27, 1996, p. 3). However, in discussing the issues with the presiding ALJ (ALJ Erickson), claimant's counsel narrowed the issue to whether the claimant was entitled to permanent total disability benefits under Wishbone Restaurant v. Moya, 162 Colo. 30, 424 P.2d 119 (1967). Claimant's counsel opined that ALJ Erickson did not have authority to order payment for the unauthorized surgery, and therefore, ALJ Erickson stated that "medical benefits are really not at issue." (Transcript, September 27, 1996, p. 11).
On November 7, 1996, ALJ Erickson entered an order denying the claim for permanent total disability benefits. He determined the claimant was not entitled to permanent total disability benefits because she had not reached MMI at the time she obtained the unauthorized surgery. The ALJ further found that it would be "manifestly unfair" to award permanent total disability benefits where the claimant refused to undergo surgery which was offered by the authorized treating physician. ALJ Erickson reserved for future determination "all matters not decided" by the order. This order was affirmed on appeal.
Thereafter, the claimant filed another application for hearing seeking an order requiring respondents to pay for the unauthorized surgery under the doctrine announced in Martin K. Eby Construction Co., Inc. v. Industrial Commission, supra. The respondents moved to dismiss the application on grounds that the claim for medical benefits was barred by the doctrines of res judicata and collateral estoppel. However, ALJ Gandy denied the motion.
Ultimately, ALJ Gandy resolved the issues in a Supplemental Order dated April 13, 1999. The ALJ ruled that his prior order of April 7, 1995, did not address the issue of payment for unauthorized medical benefits. Similarly, ALJ Gandy found that ALJ Erickson's November 7 order did not address the issue of payment for the unauthorized medical benefits. ALJ Gandy also found that, although claimant's counsel "made statements concerning the issue of medical benefits" at the hearing before ALJ Erickson, counsel did not make a "knowing waiver of claimant's rights concerning such issue."
ALJ Gandy ordered the respondents to pay for Dr. Akmakjian's unauthorized surgery in accordance with the Eby Construction Co. case. In support, the ALJ credited the claimant's testimony that she was totally disabled from working before she underwent the surgery in January 1995, and that her condition is improved to the extent she is now able to work. The ALJ also credited medical evidence that, prior to the surgery, the claimant was "at best capable of sedentary-type work and maybe even totally disabled for that." Consequently, the ALJ determined the unauthorized surgery reduced the claimant's permanent disability from total to partial, and that the expenses incurred as a result of the treatment were reasonably proportionate to the benefit received.
I.
On review, the respondents contend the doctrine of collateral estoppel bars the claim for payment of the unauthorized surgery because the issue was previously adjudicated by ALJ Gandy's order of April 7, 1995, and ALJ Erickson's order of November 7, 1996. We disagree.
The doctrine of collateral estoppel is focused on "issue preclusion" and holds that a final decision on an issue actually litigated and determined is conclusive of that issue in any subsequent action. Pomeroy v. Waitkus, 183 Colo. 344, 517 P.2d 396 (1974). The elements of collateral estoppel are that : (1) the issue precluded is identical to an issue actually determined in the prior proceeding; (2) the party against whom estoppel is asserted has been a party to or in privity with the party in the prior proceeding; (3) there is a final judgment on the merits in the prior proceeding; and (4) the party against whom estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. Lindner Chevrolet v. Industrial Claim Appeals Office, 914 P.2d 496 (Colo.App. 1995).
Here, the record supports ALJ Gandy's determination that the "identity of the issues" element is absent. With respect to ALJ Gandy's order of April 7, 1995, there is no indication that he considered whether the respondents were liable for the unauthorized surgery under the equitable formula established in the Eby Construction Co. case. Indeed, as ALJ Gandy recognized in his April 1999 order, application of the Eby doctrine would have been premature in April 1995 because the claimant had not reached MMI from the worsened condition and it would have been impossible to determine whether or not the unauthorized surgery reduced the degree of permanent disability. Further, ALJ Gandy's 1995 order addressed the issue of change of physician, not payment for unauthorized medical expenses.
Further, the "identity of the issues" element is absent with respect to ALJ Erickson's November 1996 order. That order addressed the legal question of whether the claimant was entitled to permanent total disability benefits on account of the respondents' refusal to pay for the unauthorized surgery under the test announced in Wishbone Restaurant v. Moya, supra. ALJ Erickson correctly concluded that the claimant was not entitled to permanent total disability benefits because she underwent the unauthorized treatment prior to reaching MMI. See Pickett v. Colorado State Hospital, 32 Colo. App. 282, 513 P.2d 228 (1973) ( Wishbone doctrine not applicable unless claimant reaches MMI and then procures unauthorized treatment which reduces permanent disability). ALJ Erickson never reached the factual issue of whether the unauthorized surgery reduced the degree of permanent disability because he found it was procured before MMI. Moreover, ALJ Erickson had no reason to consider whether the cost of the unauthorized treatment was proportional to the benefit received, as required by Eby. Thus, the factual and legal issues considered by ALJ Erickson were distinct from those considered by ALJ Gandy in the April 1999 order, and there was no "identity of issues." See M M Management Co. v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 98CA0370, December 10, 1998).
The respondents next argue that res judicata precluded ALJ Gandy from ordering payment for the unauthorized treatment. Respondents point out that res judicata, unlike collateral estoppel, encompasses the concept of "claim preclusion" and, under the doctrine of merger, bars relitigation of not only all issues actually decided, but all issues that might have been decided. See Ferris v. Bakery, Confectionery and Tobacco Union, Local 26, 867 P.2d 38 (Colo.App. 1993). Respondents reason that the claimant could have made his claim for payment of the unauthorized treatment at the same time he sought permanent total disability benefits before ALJ Erickson. We disagree.
The doctrine of res judicata applies only when there exists identity of subject matter, cause of action, parties, and capacity in the person for whom or against whom the claim is made. People in Interest of G.K.H., 698 P.2d 1386 (Colo.App. 1984). In workers' compensation cases, a claim is not considered fully and finally adjudicated until a final admission of liability is filed, or the ALJ enters an order which does not reserve any issues and addresses the claimant's right to all benefits under the Act. See Brown Root, Inc. v. Industrial Claim Appeals Office, 833 P.2d 780 (Colo.App. 1991).
Here, ALJ Erickson's order reserved issues not specifically addressed. One issue not addressed was whether the respondents are liable for payment of the unauthorized treatment under the Eby theory. Thus, we conclude that there was not sufficient identity of "subject matter" and "cause of action" between ALJ Erickson's order and ALJ Gandy's 1999 order to justify application of res judicata. Rather, the claim remained open considering ALJ Erickson's express reservation of undecided issues.
Finally, the respondents assert that claimant's counsel "waived" the right to seek reimbursement for the unauthorized care by "confessing judgment" that the claimant was not entitled to this relief. The respondents rely on the statement of claimant's counsel to ALJ Erickson that Erickson could not order payment of the medical expenses. We are not persuaded.
We do not dispute that a party may waive valuable rights where counsel makes a deliberate declaration in a judicial proceeding for purposes of dispensing with proof of formal matters or facts about which there is no real dispute. Kempter v. Hurd, 713 P.2d 1274 (Colo. 1986). However, a waiver must be the product of deliberate, knowing, and intelligent action. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988). The record must demonstrate a clear intent not to assert the disputed right. Department of Health v. Donahue, 690 P.2d 243 (Colo. 1984).
Here, the record supports ALJ Gandy's determination that counsel's statements did not rise to level of a waiver of the right to seek reimbursement for the unauthorized expenses. Counsel's statements to the ALJ indicate that he was not fully informed concerning case law permitting an ALJ to order reimbursement for unauthorized medical expenses under the circumstances set forth in Eby. Further, the record does not demonstrate that counsel harbored any valid tactical reason for waiving his client's rights under Eby. Therefore, we conclude there was no voluntary and intelligent waiver of the issue of reimbursement.
II.
Nevertheless, respondents contend the ALJ misapplied Eby because the claimant had not reached MMI at the time she underwent the unauthorized surgery. The respondents reason Eby is derived from principles announced in Wishbone Restaurant v. Moya, supra, and Wishbone explicitly states that the claimant must have reached MMI at the time the unauthorized treatment is procured. We disagree with this argument.
There is no doubt that Eby is derived from the general principle, discussed in Wishbone, "that the employer may not disclaim responsibility for the expense of treatment from which it received benefit." Martin K. Eby Construction Co, Inc. v. Industrial Commission, 710 P.2d at 1166. However, Eby does not contain any explicit requirement that to obtain reimbursement for unauthorized medical expenses the claimant must have reached MMI at the time the treatment was provided. Indeed, such an interpretation would be inconsistent with the facts in Eby.
In Eby, the claimant obtained unauthorized vocational rehabilitation services after declining vocational services offered by the respondents. The claimant's unauthorized vocational services eventually allowed her to return to work at her pre-injury rate of pay, and therefore, reduced the degree of permanent disability which she would have sustained under the vocational plan provided by the respondents. Thus, in Eby, the claimant had not reached her maximum degree of "industrial efficiency" at the time she declined the respondents' services and procured the unauthorized vocational services. See Allee v. Contractors, Inc., 783 P.2d 273 (Colo. 1989) (discussing maximum industrial efficiency and right to temporary disability benefits pending determinations of eligibility for vocational rehabilitation). It seems unlikely that the Eby court would require the claimant to have reached MMI in order to obtain reimbursement for unauthorized medical expenses, but not require the claimant to have reached maximum industrial efficiency to obtain reimbursement for unauthorized vocational services.
The respondents' assertion that the evidence is insufficient to support the ALJ's finding the claimant would have been permanently and totally disabled without the unauthorized surgery is without merit. Under the standard applicable to this claim, the claimant would be permanently and totally disabled if she lost, and could not regain, efficiency in some substantial degree in fields of general employment. Prestige Painting Decorating, Inv. v. Mitchusson, 825 P.2d 1049 (Colo.App. 1991). The question of whether the claimant proved permanent total disability is one of fact for the ALJ, and the ALJ has the widest possible discretion in determining the issue. Professional Fire Protection, Inc. v. Long, 867 P.2d 175 (Colo.App. 1993).
Because the issue is factual nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 1998. The claimant's testimony concerning her condition prior to the surgery, taken with the medical evidence cited by the ALJ, provides substantial evidence from which the ALJ could infer the claimant would have been permanently and totally disabled but for the surgery. The mere fact the record might have supported contrary findings is immaterial on review.
Insofar as the respondents assert the ALJ erred by failing to "balance the equities," we find no error. The ALJ's order explicitly considers the factors set forth in the Eby decision.
IT IS THEREFORE ORDERED that ALJ Gandy's Supplemental Order dated April 13, 1999, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. 1998.
Copies of this decision were mailed July 15, 1999 to the following parties:
Dawn D. Davis Erickson, 428 E. 11th St., Loveland, CO 80537
Patrick McCabe, TIG Fairmont Insurance Co., P.O. Box 17005, Denver, CO 80217-0005
Stephen J. Jouard, Esq., P.O. Drawer J, Ft. Collins, CO 80522 (For Claimant)
Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)
By: AP