COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Moon, Judge Annunziata and
Senior Judge Duff
Argued at Alexandria, Virginia
EWC CONSTRUCTION, ET AL.
v. Record No. 1474-95-4 MEMORANDUM OPINION * BY
JUDGE ROSEMARIE ANNUNZIATA
KENNETH ARNOLD PAYNE MARCH 12, 1996
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
William C. Walker (Bradford C. Jacob; Taylor
& Walker, P.C., on brief), for appellants.
Edward P. Cuccias for appellee.
On September 7, 1993, Kenneth Payne ("claimant") suffered an
accidental injury arising out of and in the course of his
employment with EWC Construction ("employer"). Employer accepted
claimant's claim as compensable and paid him benefits for total
incapacity from September 14 through September 29, 1993 pursuant
to an award entered February 11, 1994. On December 1, 1994,
claimant filed an application for hearing alleging a change in
condition and seeking reinstatement of compensation for total
incapacity beginning April 15, 1994. The deputy commissioner
entered an award for claimant which the full commission affirmed.
On appeal, employer contends the commission erred in concluding
that claimant was not required to prove that he had reasonably
marketed his residual work capacity. We disagree, and, for the
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
reasons that follow, affirm.
BACKGROUND
Claimant worked as a bricklayer for twenty-two years. On
September 7, 1993, he suffered a back injury while working for
employer. Claimant received treatment from Dr. W. Bartley Hosick
who ordered claimant not to work for two or three weeks.
Employer accepted claimant's claim as compensable and paid him
benefits for total incapacity from September 14 through September
29, 1993 pursuant to an award entered February 11, 1994.
Claimant returned to work for employer, but he could work only
part-time due to his back pain.
Claimant continued to see Dr. Hosick who noted claimant's
continuing symptoms which were unexplained by an early 1994 bone
scan. Dr. Hosick eventually diagnosed claimant's condition as a
chronic lumbar strain. Because of claimant's symptoms and Dr.
Hosick's belief that claimant suffered a significant muscular
ligamentous injury to the lower back, Dr. Hosick ordered claimant
to stop working in mid-April 1994 and referred him to a work
hardening program. At that time, employer began paying claimant
compensation for his total incapacity to work. However, employer
failed to file a memorandum of agreement reflecting its payments.
Claimant's work hardening continued from April 15 to May 27,
1994 but was discontinued because claimant's condition failed to
improve. An MRI conducted at that time failed to identify the
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source of claimant's continuing problem. Dr. Hosick referred
claimant to a spine specialist for evaluation and recommended
that claimant return to work on "a limited capacity" basis if the
spine specialist found no further treatment was necessary.
Dr. Neal Kahanovitz evaluated claimant on July 25, 1994 and
found no neurological or structural abnormalities. Concluding
that no further treatment was indicated, Dr. Kahanovitz found
that claimant could return to work on a "medium lifting capacity"
basis. Claimant did not return to work. However, employer
continued paying him total incapacity benefits until October 7,
1994.
After employer ceased paying benefits, claimant filed an
application alleging a change in condition beginning April 15,
1994, the day on which he stopped working. The deputy
commissioner found that employer had accepted claimant's change
in condition when it reinstated benefits in April 1994. Because
employer continued to pay claimant benefits without filing a
supplemental memorandum of agreement, the deputy commissioner,
applying National Linen Service v. McGuinn, 5 Va. App. 265, 362
S.E.2d 187 (1987), placed the burden of proving a subsequent
change in condition on employer. The deputy commissioner
concluded that employer, who did not appear at the hearing, had
not shown such a change in condition and awarded claimant total
incapacity benefits commencing April 15, 1994. 1 The full
1
The award provided employer a credit for the payments
it had voluntarily made.
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commission affirmed, finding that there was no disagreement that
claimant was totally disabled beginning April 15, 1994. The
commission concluded that claimant's condition had changed,
employer was aware of the change, employer participated in the
change, and employer had an obligation under Code § 65.2-701 to
file a memorandum of agreement reflecting that a change occurred.
ANALYSIS
Under Code § 65.2-708,
upon the application of any party in
interest, on the ground of a change in
condition, the Commission may review any
award and on such review may make an award
ending, diminishing or increasing the
compensation previously awarded.
The party alleging a change of condition has the burden of
proving the allegation by a preponderance of the evidence. See
Jones Construction Co. v. Martin, 198 Va. 370, 373, 94 S.E.2d
202, 204 (1956); Pilot Freight Carriers, Inc. v. Reeves, 1 Va.
App. 435, 438-39, 339 S.E.2d 570, 572 (1986).
Generally, partially disabled claimants seeking an award for
total incapacity, whether on initial application or on
application for change of condition, must prove that they have
made a reasonable effort to market their residual work capacity.
See, e.g., Washington Metropolitan Area Transit Authority v.
Harrison, 228 Va. 598, 601, 324 S.E.2d 654, 654-55 (1985); cf.
Georgia Pacific Corp. v. Dancy, 17 Va. App. 128, 134, 435 S.E.2d
898, 901-02 (1993) (totally disabled claimants seeking award for
total incapacity not required to prove they made a reasonable
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effort to market their residual capacity); National Linen Service
v. McGuinn, 5 Va. App. 265, 271, 362 S.E.2d 187, 190 (1987) (en
banc) (same). Conversely, once a claimant receives benefits
pursuant to an award for total incapacity, the employer bears the
burden of showing a change in condition when the claimant's
condition improves. See Foust Coal Co. v. Messer, 195 Va. 762,
768, 80 S.E.2d 533, 537 (1954); McGuinn, 5 Va. App. at 270, 362
S.E.2d at 189-90. In such a case, the employer must prove "a
change as would enable [claimant] at least to do some kind of
selective work within his then capacity." Messer, 195 Va. at
768, 80 S.E.2d at 537; see also McGuinn, 5 Va. App. at 270, 362
S.E.2d at 190 (employer must introduce evidence that claimant
either able to return to regular employment or had been offered
or provided selective employment within his capacity).
Here, claimant filed an application alleging a change in
condition as of April 15, 1994, the day his doctor ordered him to
stop working. Employer does not dispute that claimant was
totally incapacitated from work as of that date and that
2
claimant's condition had changed. Indeed, employer concedes
that it owed claimant compensation during the six weeks he
engaged in work hardening, and it had, in fact, resumed payment
of total incapacity benefits on April 15. For these reasons, we
2
Since claimant was totally incapacitated as of April
15, he was not required to establish that he had made a
reasonable effort to market his residual work capacity to meet
his burden of proving a change in condition on that date.
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find the evidence clearly supports the commission's finding that
claimant underwent a change of condition on April 15. By
statute, the burden was thereafter on employer to prove any
subsequent change in claimant's condition.
Employer attempts to escape this result by arguing that by
the time claimant filed his application, in December 1994,
claimant was only partially disabled and was, therefore, required
to establish that he had made a reasonable effort to market his
residual work capacity. Employer's argument is flawed in three
major respects.
First, claimant's application was based on a change of
condition alleged to have occurred on April 15, 1994. As
discussed above, the parties did not dispute that claimant was
totally incapacitated as of April 15.
Second, employer's argument assumes a finding of fact the
commission never made, viz., that claimant was only partially
disabled. The issue before the commission was whether claimant
established a change of condition as of April 15 which entitled
him to total incapacity benefits, not whether claimant's
condition had improved by some later date.
Finally, but for employer's failure to file a memorandum of
3
agreement as required by Code § 65.2-701, reflecting its payment
3
Code § 65.2-701 provides, in part:
[i]f after injury . . . the employer and the
injured employee . . . reach an agreement in
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of total incapacity benefits to claimant beginning April 15, an
award based on total incapacity would have been entered in
claimant's behalf contemporaneous with his April 15 change in
condition. 4 Had such an award been entered, "employer would have
been obligated to honor the award" until it established a
subsequent change of condition. McGuinn, 5 Va. App. at 270, 362
S.E.2d at 189; see also Messer, 195 Va. at 768, 80 S.E.2d at 537;
Martin, 198 Va. at 373, 94 S.E.2d at 204; Reeves, 1 Va. App. at
(..continued)
regard to compensation or in compromise of a
claim for compensation under this title, a
memorandum of the agreement in the form
prescribed by the Commission shall be filed
with the Commission for approval. The
agreement may be prepared by the employee,
the employer or the compensation carrier.
. . . Nothing herein contained shall be
construed so as to prevent settlements made
by and between the employee and employer, but
rather to encourage them . . . . A copy of
such settlement agreement shall be filed with
the Commission by the employer.
4
Based on the undisputed finding that claimant underwent
a change of condition rendering him totally incapacitated, had
employer properly filed a memorandum of agreement, the commission
clearly would have entered an award in claimant's behalf. See
McGuinn, 5 Va. App. at 270, 362 S.E.2d at 189.
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438-39, 399 S.E.2d at 572. Employer's failure to file a
memorandum of agreement violated the statute, and it cannot use
its failure to comply with the statute as a means of
circumventing the burden it would otherwise face. See McGuinn, 5
Va. App. at 270, 362 S.E.2d at 189-90 ("To hold otherwise would
be to allow an employer or its carrier to unilaterally violate
the clear requirements of § [65.2-701] and thereby frustrate the
purpose behind that statute.").
Employer argues that the result claimant urges and which we
reach here will discourage employers from making voluntary
payments to settle claims and that the result therefore
undermines the purposes of the Act. Indeed, the Act encourages
voluntary settlement of compensable claims. See Code
§ 65.2-701(C); McGuinn, 5 Va. App. at 268, 362 S.E.2d at 188.
However, the result reached here was caused not by employer's
attempt to settle the claim but, rather, by its failure to record
the settlement by filing a memorandum of agreement as required by
statute. Employer ignores the "equally strong policy that when
agreements as to settlements are reached they . . . be
memorialized in a memorandum of agreement filed with the
commission." See McGuinn, 5 Va. App. at 268, 362 S.E.2d at
188-89. This policy serves the fundamental purpose of the Act:
"to protect employees, not to facilitate a deprivation of an
employee's rights by an employer who has not complied with the
statutory requirements." McGuinn, 5 Va. App. at 270, 362 S.E.2d
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at 190 (citation omitted).
Accordingly, the commission's award is affirmed.
Affirmed.
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