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Employer Can't Apportion Liability for Disability From Poor Surgical Outcome

By Sherri Okamoto (Legal Reporter)

Friday, June 23, 2017 | 2018 | 0 | 0 min read

The 2nd District Court of Appeal on Thursday ruled that an employer with a legal obligation to provide medical treatment to an injured worker is responsible for any disability arising directly from an unsuccessful medical intervention, without apportionment to any non-industrial causes for the underlying injury.

The case was Hikida v. WCAB, No. B279412.

Maureen Hikida had worked as an auditor for the Costco Wholesale Corp. for more than 25 years. During this period, she developed a number of medical conditions, including carpal tunnel syndrome.

In May 2010, Hikida underwent carpal tunnel release surgery, but her recovery did not go well. She wound up with chronic regional pain syndrome, and she never returned to work.

An agreed medical evaluator opined that the CRPS was permanently and totally disabling for Hikida, as it severely limited her ability to use her hands and arms. The AME attributed the CRPS entirely to the failed surgery, although he said Hikida’s need for surgery was caused by the combined effect of industrial and non-industrial factors.

Administrative Law Judge M. Victor Bushin accepted the AME’s opinion as persuasive. Based on the AME’s assessment of the causative factors for Hikida’s need for surgery, Bushin apportioned 90% of the liability for Hikida’s permanent total disability benefits to Costco.

Hikida petitioned the Workers' Compensation Appeals Board for review.

Last February, a WCAB panel rescinded Bushin's order and sent the case back to the judge to determine whether Hikida's claimed psyche condition had contributed to her level of permanent disability. It also directed Bushin to consider any other industrial causes of Hikida's disability.

Commissioner Marguerite Sweeney dissented, saying apportionment was improper because 100% of Hikida's total disability was from her CRPS, and her CRPS had been caused by the treatment of an industrial injury.

On remand, Bushin issued findings that Hikida had a 98% permanent disability.

A WCAB panel upheld that decision in October, but Sweeney once more dissented because she remained convinced that apportionment was inappropriate.

Hikida petitioned the 2nd DCA for review, with the amicus support of the California Applicants' Attorneys Association. The court granted review in February.

Earlier this month, the parties advised the court that they were trying to settle the case. The WCAB sent a letter to the court asking to address the parties’ respective arguments, even if they were able to settle the matter, because the case involved important issues of continuing public interest that were likely to surface in other litigation.

Last week Wednesday, the eve of the scheduled oral argument, the parties informed the court that they had agreed to a settlement and asked the court to dismiss the case. The court denied the motion. On Thursday it issued a published ruling that annulled the WCAB’s decision.

As an initial matter, the court rejected Costco’s suggestion that Hikida’s petition for review was untimely. Although the court acknowledged that the WCAB’s decision in February 2016 had addressed the apportionment issue, the court said that was not a final order disposing of the case, and there was no reason for Hikida to forego an opportunity to present her arguments for an un-apportioned award to the workers' compensation judge before resorting to an appeal.

As for the merits of the case, the court said the WCAB erred in allowing apportionment of Hikida’s award.

Prior to the 2004 passage of Senate Bill 899, the court noted, apportionment was “closely circumscribed.” Back then, the court said, an employer could apportion liability only if it had medical evidence showing that the worker’s disability was the result of the natural progression of a pre-existing, nonindustrial condition, and that the disability would have occurred even in absence of the industrial injury.

SB 899 changed the Labor Code to require that apportionment of permanent disability “be based on causation,” the court explained. Under the changes made by the 2004 amendments, the court said, the disability arising from Hikida’s carpal tunnel syndrome was apportionable between industrial and nonindustrial causes.

However, the court said, her permanent total disability was not apportionable because it was not caused by her carpal tunnel, but by the CRPS that resulted from the medical treatment her employer provided.

The court said it “has long been the rule that ‘the aggravation of an industrial injury or the infliction of a new injury resulting from its treatment or examination are compensable.’” While California workers’ compensation law relieves Costco of liability for any negligence in the provision of the medical treatment that led to Hikida’s development of CRPS, the court said, it does not relieve Costco of the obligation to compensate her for the disability caused by this condition.

Alan Gurvey and Sylvia Joo of the Law Office of Rowen, Gurvey & Win represented Hikida.

“The Court of Appeal got it right in making a determination that after the first decision by the WCAB, under these facts, it would not have been proper to file a writ petition,”  Gurvey said Thursday.

Guvey said he was pleased to see the court make it clear that “disability ratings must be based on compensable consequences such as the effects of the treatment, in this case the surgery, when assessing overall disability.”

In light of Thursday’s decision, Gurvey said, “I think that the effects of treatment need to be considered an integral part of the ultimate disability.”

Justin Sonnicksen, author of the CAAA amicus brief, said the 2nd DCA's decision is “legally sound.” The ruling “confirms the long-standing rule that employers are responsible for medical treatment for industrial injuries without consideration of nonindustrial apportionment,” he said.

The decision also establishes “the determination of causation of permanent disability is a separate analysis from the determination of the causation of the need for medical treatment or of the cause of the injury,” Sonnickson said.

Attorneys Jay S. Cohen, Daniel Nachison and Kiran A. Seldon represented Costco before the 2nd DCA. They declined immediate comment on Thursday, saying they wished to discuss the ruling with their client before speaking publicly about the decision.

Two other defense attorneys who reviewed the decision expressed disappointment with the court’s conclusion, although for differing reasons.

Gerald Lenahan of Lenahan Lee Slater & Pearse said he thought it was “an awful decision” because of the court’s conclusion on the apportionment issue. Aside from being quite “cursory” in its analysis, Lenahan said it seemed to him as though the court was “readily interchanging” medical treatment for permanent disability.

“Medical treatment is not apportionable, and everyone knows that,” he said. “But the Labor Code expressly says permanent disability can be apportioned for causation.”

From his review of the Hikida case, Lenahan said, the issue was whether “the disability that was derivatively caused by a compensable injury” could be apportioned. He said his personal belief is that the answer should be “yes.”

Should there be a consequential injury resulting in disability, Lenahan said, the employer would have to pay all the medical bills associated with the consequential injury, but he thought the liability for the disability ought to be apportioned in the same manner in which liability for the direct injury is assessed, since the employer wasn't completely liable for the injury that caused the secondary injury. 

But defense attorney Scott Davenport of Manning & Kass, Ellrod, Ramirez, Trester said he thought the court had arrived at the correct conclusion.

“Since medical treatment is not subject to apportionment to non-industrial factors, it makes a certain amount of sense that PD resulting from a failed surgery to cure an industrial injury would be compensable without apportionment,” he opined.

Davenport said his beef lay with the procedural aspect of the court’s ruling, in treating Hikida’s writ petition as timely.

He predicted that this aspect of the decision “will make it extremely difficult to achieve finality going forward as parties will feel emboldened to resurrect long-dead and waived appellate issues under the theory that they were merely ‘re-visiting’ a prior non-final ruling.”

To read the court’s decision, click here.

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