COURT OF APPEALS OF VIRGINIA
Present: Judges Baker, Benton and Overton
Argued at Salem, Virginia
CITY OF ROANOKE FIRE DEPARTMENT
v. Record No. 2561-94-3 MEMORANDUM OPINION *
BY JUDGE JOSEPH E. BAKER
JOHN H. ANDERSON DECEMBER 19, 1995
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Monica L. Taylor (James C. Joyce, Jr.;
Gentry, Locke, Rakes & Moore, on briefs), for
appellant.
Mary L. Poletti (Clifton A. Woodrum; Dodson,
Pence, Viar, Woodrum & Mackey, on brief), for
appellee.
The City of Roanoke Fire Department (employer) appeals from
a decision of the Workers' Compensation Commission (commission)
affirming the deputy commissioner's finding that (1) a de facto
award of compensation existed between John H. Anderson (claimant)
and employer, and (2) employer defended the claim without
reasonable grounds. Employer contends that (1) the de facto
award was erroneously made by the commission, (2) it was
erroneously precluded from presenting evidence that claimant's
disability was unrelated to his occupational disease, (3) it was
erroneously refused permission to proffer evidence in support of
its causation defense; and (4) the commission abused its
discretion in assessing attorney's fees against employer.
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
Claimant is a fire marshal employed by employer. On May 28,
1992, claimant was found to be suffering from hypertension and
was unable to work as a fire marshal. Employer accepted
claimant's condition as compensable and an award was entered by
the commission. Claimant returned to work in October 1992 and
was assigned light-duty work. Approximately three months
thereafter, he returned to full pre-injury employment. The
parties executed an agreed statement of facts that terminated
claimant's benefits.
In July 1993, approximately seven months after claimant's
benefits had been terminated, he again left his work place on the
advice of Dr. Jorge Roman who had previously treated claimant for
hypertension. From July 14, 1993, until the end of February or
the beginning of March, 1994, for approximately eight months,
employer paid claimant workers' compensation benefits. Trena
Hicks (Hicks), a claims adjuster for the city, explained that
while a determination is being made whether a disability is
work-related, the city, which is self-insured, pays employees
workers' compensation at two-thirds of their salary rather than
sick leave at one hundred percent of their salary. This approach
prevents employees from having to pay the city back if it is
later determined that the condition or injury for which they have
been receiving sick leave is actually compensable under the
Workers' Compensation Act.
When employer advised claimant that it would no longer pay
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benefits, asserting that it had determined that claimant's
disability was not related to his employment, on March 18, 1994,
claimant filed an application for hearing asking that benefits
payments be required to resume. In that application, claimant
gave July 23, 1992 as the date of injury, stating work-related
hypertension as the basis for the request and "change of
condition" as the reason for the hearing. Claimant asserted that
the nature of the change was that "[E]mployer cut off benefits in
contradiction of medical reports by treating physician."
At the outset of the requested hearing, the deputy
commissioner framed the issue:
This is before us upon the claimant's claim
requesting resumption of compensation which
[employer] had been voluntarily paying the
claimant since July 14th, 1993 but which was
stopped during March 1994.
No objection was made and, in response, employer stated its
defense:
Our position is that [claimant's] disability
is not related to his compensable condition
but rather is related to his failure to
follow the directions--medical directions of
his physicians. Specifically, to take the
antihypertensive medication and the diuretics
that were prescribed by his doctor.
Prior to any testimony being taken at the hearing, the deputy
commissioner ruled that the case was not in the proper procedural
posture to permit employer to raise and present evidence on its
causation defense. Based on this decision, the deputy
commissioner refused to permit employer to proffer any evidence
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regarding such defense. The deputy commissioner excluded (1)
testimony from Hicks on the question of causation including two
charts related to claimant's medications, prescription records
from the Revco Pharmacy or a proffer of what those records would
show, and (2) testimony from a druggist who had been subpoenaed
to the hearing or a proffer of the testimony of the druggist.
At the hearing, claimant testified that he had not met with
anyone from the city since June of 1993, and that he had not been
advised either verbally or in writing that the city was only
making workers' compensation payments to him while they
investigated whether his condition was related to his
hypertension. No supplemental memorandum of agreement was
executed by the parties.
Hicks testified that the excuse claimant submitted in July
1993 was not specific as to why he was unable to work. Hicks
advised claimant that she "needed a more definitive excuse
. . . before a decision could be made as to how he would be
carried." Hicks stated that she discussed with claimant "the
fact that he was certainly entitled to workers' comp or sick
leave but we needed doctor's information in detail to make those
determinations." Hicks then received a letter from claimant's
counsel asking that Hicks have no further communication with
claimant.
Hicks further testified that Dr. Roman, claimant's treating
physician, failed to supply her with medical reports until
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February 1994 when she stopped paying his charges for services
and medications. The prescriptions, she said, raised questions
in her mind whether the claim was compensable. She added, "I'd
get one piece of information which would say he was having
headaches not related to the job. Then when I'd question a
prescription for pain medication they'd say, 'No, I think it's
secondary to hypertension.'" According to Hicks, these records
also showed a problem with claimant's compliance with Dr. Roman's
prescriptions for medications.
Hicks testified that she did not reach an agreement with
claimant in regard to compensation or compromise of his claim.
However, she did testify that "there was an assumption that
[claimant] does have hypertension and we had approved his claim.
We had not denied it." She further testified that payments to
claimant were "being carried [on the books] as Workers' Comp pay,
in all honesty." (Emphasis added.)
Upon this record, the deputy commissioner ruled from the
bench that there was a "de facto award" in place by virtue of
employer's voluntary payment of workers' compensation, and he
entered a supplemental award in favor of claimant for
compensation during his recurrent incapacity beginning July 14,
1994. The ruling from the bench was later memorialized in an
opinion dated August 8, 1994. In that opinion, the deputy
commissioner also assessed claimant's attorney's fee in the
amount of $700 against employer "for having defended this matter
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without reasonable ground."
Employer filed an application for review and, after
consideration thereof, the commission affirmed the decision of
the deputy commissioner.
The deputy commissioner and the commission relied upon
National Linen Services v. McGuinn, 5 Va. App. 265, 362 S.E.2d
187 (1987), to support their decisions that employer's conduct
created a de facto award. McGuinn is factually distinguishable
from the case before us, however, the principle is on point.
In McGuinn, the initial injury occurred in August 1983.
Without executing a memorandum of agreement or requesting the
commission to enter an award, National paid McGuinn benefits from
November 1983 to December 1984. On December 19, 1984, McGuinn
returned to light duty but could not perform the work. When
McGuinn failed to work, National discontinued payments. On
January 23, 1985, McGuinn filed an application for hearing,
claiming continued entitlements and that National had refused to
execute and file a memorandum of agreement. National did not
contest McGuinn's claim of a compensable injury. Instead, it
defended on the ground that McGuinn had failed to market his
remaining capacity. In an en banc decision, this Court held,
"that because National Linen paid compensation benefits to
McGuinn for thirteen months and failed to file with the
commission a memorandum of agreement" a de facto award had been
established which National was obligated to honor. McGuinn,
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5 Va. App. at 270, 362 S.E.2d at 189. This Court added that if
that award is to be altered, the burden is on National to prove
by a preponderance of the evidence "a change in condition" as
required by Code § 65.1-93. Id., 362 S.E.2d at 190.
McGuinn does not prohibit evidence that claimant's condition
is not compensable, and neither the deputy commissioner nor the
commission make that assertion. The deputy commissioner refused
to consider the causation evidence saying that the posture of
this case did not require it. In approving that ruling, the
commission said:
The employer sought to introduce evidence
that the claimant's disability was not caused
by his work-related hypertension, but by his
failure to take his medications. The Deputy
Commissioner ruled that having reached an
agreement on compensability, the employer
could not now challenge causation. We find
that the Deputy Commissioner's procedural
ruling is correct. Because there was a de
facto award in effect, the employer must
comply with Virginia Code § 65.2-708 and Rule
1.4(C). This entails paying compensation
through the date of the filing of an
application for a change in condition. In
this case, the employer unilaterally
terminated compensation in March, 1994,
forcing the claimant to hire legal counsel
and deplete his accrued sick and holiday pay.
(Emphasis added.)
We hold that, under the facts of this case, the commission
did not err when it held that employer's assumption that the
claim was compensable, together with the fact that the
investigation continued for more than eight months even after
claimant returned to light duty, sufficiently supported the
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award. We further hold that the award having been established,
the burden was on employer to specifically plead a change of
condition pursuant to the requirements of Code § 65.2-708 if it
wished to present the evidence refused by the deputy. Until
then, the case was not in a posture to consider that evidence.
Finally, employer asserts that the commission abused its
discretion when it assessed attorney's fees to employer. The
award of fees is left largely to the discretion of the commission
and will not be disturbed in the absence of an abuse of
discretion. Jensen Press v. Ale, 1 Va. App. 153, 159, 336 S.E.2d
522, 525-26 (1985). We cannot say that the commission's
determination that an award of fees should be made discloses an
abuse of its discretion.
Accordingly, the decision of the commission is affirmed.
Affirmed.
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