Michael F. Bailey v. City of Lewiston

MAINE SUPREME JUDICIAL COURT Reporter of Decisions

Decision: 2017 ME 160

Docket: WCB-16-204

Argued: April 11, 2017

Decided: July 20, 2017

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

MICHAEL F. BAILEY

v.

CITY OF LEWISTON et al.

JABAR, J.

[¶1] The City of Lewiston and its insurer, Cannon Cochran Management

Services (referred to collectively as the City), appeal from a decree of the

Workers’ Compensation Board Appellate Division vacating the hearing

officer’s (Goodnough, HO)1 grant of the City’s petition to determine the extent

of Michael F. Bailey’s permanent impairment. See 39-A M.R.S. § 322 (2016).

We affirm the Appellate Division’s decision.

I. BACKGROUND

[¶2] The following facts, which are derived from a 2014 Workers’

Compensation Board decree granting the City’s petition to determine the

1 Pursuant to P.L. 2015, ch. 297 (effective Oct. 15, 2015), Workers’ Compensation Board hearing

officers licensed to practice law are now designated as administrative law judges (ALJ). All of the

decisions made by now-ALJ Goodnough however, were made before this change.

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extent of Bailey’s permanent impairment, are supported by the record. See

39-A M.R.S. §§ 318, 322(3) (2016). Bailey, who at the time of the 2014 decree

was sixty-five-years old, began working as a City of Lewiston firefighter in

1975. On October 21, 2001, he suffered a respiratory work injury and was

subsequently diagnosed with reactive airways deficiency syndrome (RADS).

By way of a Workers’ Compensation Board decree, Bailey began to receive

partial incapacity benefits stemming from that injury in 2004. In 2007, the

City sought review of Bailey’s award of benefits and Bailey sought a

determination of the extent of his permanent impairment. The hearing officer

(Goodnough, HO) denied the City’s petition, but found that Bailey had reached

maximum medical improvement (MMI) and that he had sustained an injury

that resulted in a permanent impairment level of 32%. This determination

was based on the results of an independent medical exam performed pursuant

to 39-A M.R.S. § 312 (2007).2

[¶3] Because the 2007 decree established that Bailey’s permanent

impairment level exceeded 15%, he was eligible to receive ongoing

2 Title 39-A M.R.S. § 312 (2007) has since been amended. P.L. 2015, ch. 297 § 11 (effective

Oct. 15, 2015) (codified at 39-A M.R.S. § 312 (2016)).

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compensation without a temporal “cap.” See 39-A M.R.S. § 213(1) (2007).3

The City did not appeal from the 2007 decree.

[¶4] In 2013, the City filed a petition seeking review of the level of

Bailey’s incapacity4 and a second petition seeking to determine the extent of

his permanent impairment. In support of these petitions, the City introduced

the results of an updated medical examination that indicated that Bailey’s

level of permanent impairment had decreased to 0%.

[¶5] The hearing officer rejected Bailey’s claims that the doctrine of res

judicata precluded the City’s petition to determine the extent of his permanent

impairment, concluded that the new medical report constituted a change of

circumstances warranting a new permanent impairment finding, and reduced

Bailey’s permanent impairment level to 0%. The decree terminated Bailey’s

entitlement to further compensation because his 0% permanent impairment

rating ended his eligibility to receive benefits without a temporal restriction

and because he had already received benefits for longer than the limit

established for an injury resulting in 0% permanent impairment. See

39-A M.R.S. § 213(1)(A).

3 Title 39-A M.R.S. § 213(1) (2007) has since been amended. P.L. 2015, ch. 297 § 8 (effective

Oct. 15, 2015) (codified at 39-A M.R.S. § 213(1) (2016)).

4 The Hearing Officer determined that the City had failed to show any change in the level of

Bailey’s incapacity, and the City did not challenge that issue on appeal to the Appellate Division.

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[¶6] Bailey subsequently appealed to the Appellate Division. See

39-A M.R.S. § 321-B (2014).5 In a unanimous decision, the Appellate Division

vacated the hearing officer’s decree, concluding that the 2007 determination

of permanent impairment as of the date of MMI was final, and therefore res

judicata principles barred relitigation of that issue. The Appellate Division

further concluded that there existed no significant change of circumstances to

warrant the hearing officer revisiting the issue of Bailey’s MMI.

[¶7] The City successfully petitioned for appellate review of the

Appellate Division’s decision. See 39-A M.R.S. § 322 (2016).

II. DISCUSSION

[¶8] The central issue on appeal is whether the doctrine of res judicata

prevents a party from seeking to change the permanent impairment level

associated with an employee’s work-related injury after that level has been

established by a prior decree. The City argues that res judicata principles

should not prevent it from seeking to reduce Bailey’s permanent impairment

level and contends that the Appellate Division erred in applying the doctrine

of res judicata to the facts of this case. Bailey, on the other hand, contends

that the Appellate Division’s decision was supported by the plain language of

5 Title 39-A M.R.S. § 321-B (2014) has since been amended. P.L. 2015, ch. 297 § 16 (effective

Oct. 15, 2015) (codified at 39-A M.R.S. § 321-B (2016)).

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the statute, relevant case law, and policy concerns, and was therefore not

erroneous. We conclude that the doctrine of res judicata bars relitigation of

the permanent impairment level established for an employee’s work-related

injury and therefore affirm the Appellate Division’s decision.

A. Standard of Review

[¶9] Previously, when a hearing officer or ALJ’s decision was reviewed

by the Appellate Division and subsequently appealed, we would review “the

[hearing officer’s or ALJ’s] decision directly.” Freeman v. NewPage Corp.,

2016 ME 45, ¶ 5, 135 A.3d 340. However, the Legislature has recently

amended the workers’ compensation statute to provide that “only a decision

of the [appellate] division may be reviewed on appeal.” 39-A M.R.S. § 322(1);

see P.L. 2015, ch. 469, § 2 (effective July 29, 2016). Therefore, we now review

decisions of the Appellate Division according to established principles of

administrative law, except with regard to the hearing officer’s or ALJ’s factual

findings.6 See Kroeger v. Dep’t of Envtl. Prot., 2005 ME 50, ¶ 7, 870 A.2d 566

(explaining that we will only vacate an agency’s decision where that decision

“violates the Constitution or statutes; exceeds the agency’s authority; is

procedurally unlawful; is arbitrary or capricious; constitutes an abuse of

6 “[I]n the absence of fraud,” the hearing officer’s or ALJ’s findings of fact are final. 39-A M.R.S.

§ 318 (2016); see 39-A M.R.S. § 322(3) (2016).

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discretion; [or] is affected by bias or an error of law”). As we have

consistently done in the past, we will continue to afford appropriate deference

to the Appellate Division’s reasonable interpretation of the workers’

compensation statute, see Hackett v. W. Express, Inc., 2011 ME 71, ¶ 9, 21 A.3d

1019, and will uphold the Appellate Division’s interpretation unless “the plain

language of the statute and its legislative history” compel a contrary result.

Guiggey v. Great N. Paper, Inc., 1997 ME 232, ¶ 10, 704 A.2d 375.

B. Res Judicata and Permanent Impairment

[¶10] “It is well established that a valid judgment entered by a court, if

not appealed from, generally becomes res judicata and is not subject to later

collateral attack.” Standish Tel. Co v. Saco River Tel. & Tel. Co., 555 A.2d 478,

481 (Me. 1989) (emphasis omitted). Likewise, “valid and final decisions of the

Workers’ Compensation Board are subject to the general rules of res judicata

and issue preclusion.” Grubb v. S.D. Warren Co., 2003 ME 139, ¶ 9, 837 A.2d

117. Accordingly, “[a]bsent specific statutory authority, the Board may not

reopen or amend a final decision. Such a rule ensures finality of workers’

compensation decisions and effectuates the legislative desire for speedy and

summary disposition of workers’ compensation cases.” Guar. Fund Mgmt.

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Servs. v. Workers’ Comp. Bd., 678 A.2d 578, 583 (Me. 1996) (footnote omitted)

(citations omitted) (quotation marks omitted).

1. Statutory Authority

[¶11] The workers’ compensation statute provides that “[e]mployees

with work-related injuries may be entitled to incapacity benefits for either

total or partial incapacity, based on the difference between the employee’s

pre-injury wage and post-injury earning capacity.” Morse v. Fleet Fin. Grp.,

2001 ME 142, ¶ 5, 782 A.2d 769; see 39-A M.R.S. §§ 211-213 (2016). When an

injured worker is granted partial incapacity benefits, his entitlement to

receive compensation is capped at 2607 weeks unless it is determined that his

“permanent impairment . . . resulting from the personal injury is in excess of

15%8 to the body,” in which case there is no statutory cap. 39-A M.R.S.

§ 213(1). “Permanent impairment,” as defined by the statute, means “any

anatomic or functional abnormality or loss existing after the date of maximum

medical improvement that results from the injury.” 39-A M.R.S. § 102(16)

7 A claimant may petition for an extension, but the statute provides that such an extension may

not exceed an additional 260 weeks. See 39-A M.R.S. § 213(4) (2016).

8 The Legislature requires that the permanent impairment percentage threshold be reviewed

yearly “so that 25% of all cases with permanent impairment will be expected to exceed the

threshold and 75% of all cases with permanent impairment will be expected to be less than the

threshold.” 39-A M.R.S. § 213(2). The current threshold is 11.8%. 14 C.M.R. 90 351 002-1

§ 1(1) (2014).

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(2016) (emphasis added). “Maximum medical improvement” is defined as

“the date after which further recovery and further restoration of function can

no longer be reasonably anticipated, based upon reasonable medical

probability.” Id. § 102(15).

[¶12] Read together, the above provisions provide for a 260-week cap

for payment of benefits unless the injured employee’s (1) “anatomic or

functional abnormality” (2) exceeding 15% to his body (3) persists after the

date on which “further recovery . . . can no longer be reasonably anticipated,

based upon medical probability.” 39-A M.R.S. §§ 102(15)-(16), 213.

[¶13] Here, the Appellate Division’s conclusion that relitigation of

Bailey’s permanent impairment level was barred by the doctrine of res

judicata is supported by the statute’s plain language and legislative history.

Except for the very limited circumstances referenced in 39-A M.R.S. §§ 319

and 321, the workers’ compensation statute provides no opportunity for a

redetermination of a hearing officer’s or ALJ’s findings regarding permanent

impairment or MMI. Cf. Hird v. Bath Iron Works Corp., 512 A.2d 1035, 1038

(Me. 1986) (concluding that the commission exceeded its authority in

applying the doctrine of equitable estoppel where there was no “express or

implied legislative authority” to do so).

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[¶14] This is in direct contrast to the statute’s inclusion of explicit

procedures for adjusting benefit levels when an injured employee’s ability to

be gainfully employed changes. See, e.g., 39-A M.R.S. § 205(9) (2016). We

apply the “changed circumstances” test in those cases, requiring the party

seeking to “increase or decrease compensation in a workers’ compensation

case when a benefit level has been established by a previous decision . . . to

show a change of circumstances . . . which may be met by either providing

comparative medical evidence, or by showing changed economic

circumstances.” Grubb, 2003 ME 139, ¶ 7, 837 A.2d 117 (quotation marks

omitted) (citations omitted) (petition to recalculate benefit level); see

McIntyre v. Great N. Paper, Inc., 2000 ME 6, ¶¶ 1, 5-6, 743 A.2d 744 (petition

for review of incapacity); Folsom v. New England Tel. & Tel. Co., 606 A.2d 1035,

1036-1038 (Me. 1992) (petition for review of incapacity).

[¶15] This distinction between the determination of MMI and

permanent impairment on one hand and an employee’s level of incapacity on

the other reflects the Legislature’s crafting of the workers’ compensation

statute to create a dichotomy of injured workers. See 39-A M.R.S. § 213(1)(A),

(2). Those who have suffered workplace injuries that do not result in

permanent impairment levels in excess of a specified whole person

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percentage are eligible to collect compensation for no more than 260 weeks.

Id. § (1)(A). On the other hand, those who have suffered particularly severe

injuries that nonetheless result in only partial disability are eligible to receive

ongoing benefits without temporal limitations. Id. The permanent

impairment determination does not, however, govern whether a claimant is

actually entitled to receive benefits, either during or beyond the 260-week

limit. See 39-A M.R.S. § 205(9). Whether an employee actually qualifies to

receive incapacity benefits is subject to a determination pursuant to

39-A M.R.S. § 205(9).

[¶16] A determination of permanent impairment as of the date of MMI

is the method by which the Legislature chose to differentiate between these

two classes of injured workers. If a party were able to disturb a permanent

impairment finding so as to either terminate an employee’s eligibility to

receive ongoing benefits or award such eligibility after it had already been

denied, the statute would be completely circumvented and the provisions

creating the temporal dichotomy rendered superfluous. See State v.

Thompson, 2008 ME 166, ¶ 12, 958 A.2d 887 (“We give statutory language its

plain meaning and do not treat language as superfluous or meaningless . . . .”).

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[¶17] Finally, by granting preclusive effect to decrees that establish

MMI and permanent impairment for work-related injuries, the Legislature has

minimized the expense and uncertainty associated with ongoing and

repetitive litigation and helped to fulfill its “desire for speedy and summary

disposition of workers’ compensation cases.” Dunphe v. O’Connor, 1997 ME

147, ¶ 4, 697 A.2d 421 (quotation marks omitted).

2. Change of Circumstances

[¶18] The City next contends that the Appellate Division erred in

concluding that the City failed to show a sufficient change of circumstances to

warrant relitigation of the issue of Bailey’s permanent impairment level.

Because a “changed circumstances” analysis does not apply to a permanent

impairment finding, that argument is unpersuasive. See 39-A M.R.S. § 205(9).

Therefore, the Appellate Division did not err in declining to apply that analysis

here.

[¶19] For the reasons set forth above, we affirm the decision of the

Appellate Division vacating the hearing officer’s grant of the City’s petition to

determine the extent of Bailey’s permanent impairment.

The entry is:

Judgment affirmed.

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John H. King, Jr., Esq. (orally), Norman, Hanson & DeTroy, LLC, Portland, for

appellant City of Lewiston and Cannon Cochran Management Services

Benjamin DeTroy, Esq. (orally), Leary & DeTroy, Auburn, for appellee Michael

F. Bailey

James J. MacAdams, Esq., Nathan A. Jury, Esq., and Donald M. Murphy, Esq.,

MacAdam Law Offices, Portland, for amicus curiae the Maine Building Trades

Workers’ Compensation Board Appellate Division case number 14-0050

FOR CLERK REFERENCE ONLY