# Michael F. Bailey v. City of Lewiston

> Supreme Judicial Court of Maine · July 20, 2017 · 2017 ME 160

URL: https://www.frixlaw.com/law-library/cases/4189202

## Case

- **Court:** Supreme Judicial Court of Maine
- **Decided:** July 20, 2017
- **Citations:** 2017 ME 160
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4189202

## How later opinions describe it (automated extraction)

- 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

## Opinion text

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.
2

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)).
3

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.
4

[¶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)).
5

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).
6

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.
7

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).
8

(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).
9

[¶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
10

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	.	.	.	.”).
11

[¶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.

12

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4189202. Public record. Not legal advice.