White Consolidated v. Rooney

John B. Robbins, Judge. This is an appeal by White Consolidated and its workers’ compensation carrier, Continental Loss Adjusting (appellants), from a decision of the Workers’ Compensation Commission which held that a prior work-related injury must involve a loss of wage earning capacity before Second Injury Fund (appellee) liability may be found. The claimant, Alonzo Rooney, suffered a work-related back injury on September 30, 1980, while employed by Universal Nolin. As a result of this injury he underwent surgery on March 8, 1982, and there is evidence that this injury resulted in some degree of permanent physical impairment to the body as a whole. There is also evidence that he did not, however, experience any reduction in wage earning capacity as a result of this injury. On March 29, 1988, Rooney suffered a compensable lum-bosacral strain while employed by White Consolidated. There is evidence that this injury resulted in a permanent physical impairment to the body as a whole; that this injury and the 1980 injury combined to produce a greater disability than would have resulted from the last injury alone, had the 1980 injury not occurred; and that Rooney is now permanently and totally disabled. The Administrative Law Judge found that appellants’ liability was limited to benefits for the 10% permanent physical impairment that he found had resulted from the March 29, 1988, compensable injury and that the Second Injury Fund was liable for benefits for a 55% permanent disability to the body as a whole. This 55% represents the sum of the 10% anatomical impairment that the law judge found had resulted from the 1988 injury and the 35% impairment attributable to the 1980 injury, subtracted from Rooney’s total disability (100%) after his last injury. The Second Injury Fund appealed to the full Commission, which affirmed the Administrative Law Judge in part, but reversed his finding that the Second Injury Fund had liability. The Commission held that the Fund had no liability because Rooney’s 1980 injury was work-related and did not result in a loss of earning capacity. On appeal to this court, the appellants do not contend that the Commission erred in finding that Rooney is permanently and totally disabled, but they contend that the Commission erred in finding that the Second Injury Fund has no liability for the payment of compensation benefits due him. The Commission recognized that the Arkansas Supreme Court held in Mid-State Construction Co. v. Second Injury Fund, 295 Ark. 1, 746 S.W.2d 539 (1988), that “the liability of the Fund comes into question only after three hurdles have been overcome.” First, the employee.must have suffered a compensable injury at his present place of employment. Second, prior to that injury the employee must have had a permanent partial disability or impairment. Third, the disability or impairment must have combined with the recent compen-sable injury to produce the current disability status. 295 Ark. at 5, 746 S.W.2d at 541 (emphasis in the original).The Commission said it was stipulated that the first requirement was satisfied, but with regard to the second requirement, the Commission stated: [Definitional constraints imposed by the Arkansas Workers’ Compensation Law and by the Courts require a distinction between prior conditions that are work-related and prior conditions that are not work-related. See Weaver v. Tyson Foods, 31 Ark. App. 147, 790 S.W.2d 442 (1990). This distinction is based on the statutory definition of “disability” and on the Court’s definition of “impairment,” as those terms are used in Ark. Code Ann. § 11-9-525 (1987). ... ... As those terms have been defined by statute and by the Courts, a prior anatomical impairment with no loss of wage earning capacity can only be an “impairment.” However, the definition of “impairment” limits application of the term to prior non-work-related conditions. As a result, prior work-related conditions are precluded from ever being considered “impairments.”. . . In the present claim, the claimant’s prior condition was work-related, so it must be established that the 1980 injury and subsequent surgery resulted in a disability before the Fund may be found liable. Therefore, it must be established that the prior injury resulted in a loss of wage earning capacity. The Commission then found that the “preponderance of the evidence fails to establish that the claimant sustained any loss of earning capacity as a result of the 1980 injury.” Thus, the Commission found that the Fund had no liability to Rooney. The thrust of appellants’ argument to this court is that the statutory law as set out in Ark. Code Ann. § 11-9-525 (1987) uses the words “disability or impairment” in the “disjunctive” and that the General Assembly intended “to protect all ‘handicapped workers’ and not just those with non-work-related handicaps.” The appellants’ brief in this court shows that this issue was argued to the full Commission upon the Second Injury Fund’s appeal from the decision of the Administrative Law Judge. Appellants told the Commission, in their brief filed on February 4, 1992, that since the Arkansas Supreme Court’s decision in Mid-State Construction, supra, neither that court nor this court had issued a published opinion on this issue. Appellants argued that the language in Mid-State indicated that to allow second-injury-fund liability to depend upon whether the worker’s disability or impairment was work-related would impermissibly distinguish between two types of handicapped workers. Appellants’ brief in this court also contains an objection to the jurisdiction of this court on the basis that the appeal should be heard by the Arkansas Supreme Court. Of course, that objection is overruled. See Houston Contracting Co. v. Young, 271 Ark. 455, 609 S.W.2d 895 (1980), and Rules of the Supreme Court and Court of Appeals l-2(a)(3), 2-4(c). Mid-State Construction, supra, set out the process by which this court, in ultimate reliance upon Chicago Mill & Lbr. Co. v. Greer, 270 Ark. 672, 606 S.W.2d 72 (1980), reached our decision in Osage Oil Co. v. Rogers, 15 Ark. App. 319, 692 S.W.2d 786 (1985), where we held that the word “impairment,” which was added by Act 290 of 1981 to what was then Ark. Stat. Ann. § 81-1313(i) (Supp. 1979) (which had previously been amended by Section 4 of Act 253 of 1979), meant “loss of earning capacity due to a non-work-related condition” and that the impairment must be “independently” causing disability prior to the second injury and continue to do so after that injury. But in Mid-State our supreme court said we were wrong in holding “that the impairment must have involved loss of earning capacity.” The court said that “a claimant’s non-work-related condition suffered prior to the recent compensable injury need not have involved a loss of earning capacity.” 295 Ark. at 6, 746 S.W.2d at 542. However, Mid-State also quoted the “operative language” from its Greer, supra, decision and said: In other words, the claimant’s prior impairment must have been of a physical quality sufficient in and of itself to support an award of compensation had the elements of compensability existed as to the cause for the impairment. It is the substantial nature of the impairment which is emphasized, and the elements of compensability, none of which may have existed as to the particular claimant, merely assist the fact finder in his determination as to whether the former condition was sufficient in degree to constitute an impairment qualifying the claimant as one of the “handicapped” for whose benefit the statute was enacted. . . . Id. While the opinion in Mid-State did not specifically state that Osage was wrong in holding that “impairment” is a condition that is not work-related, one thing is clear. The court said that our definition of impairment in Osage requires a result that: [I]mpermissibly distinguishes between two types of handicapped persons, contravenes the statutory scheme which makes employers liable only for the “degree or percentage of disability or impairment which would have resulted from the [recent compensable] injury had there been no preexisting disability or impairment,” and defeats the purpose of the Fund to encourage the hiring of the handicapped. 295 Ark. at 8, 746 S.W.2d at 543 (brackets in the original). Thus it is clear that there is a point at which it is impermissible to distinguish between types of handicapped persons. Therefore, it appears that we must retreat from that portion of our definition of “impairment” that said it is a non-work-related condition. Not only is this strongly implied by the Mid-State opinion, but there seems to be no real justification for limiting “impairment” to a non-work-related condition. Moreover, neither party has cited us to a decision where this precise issue has been presented to us. In fact, a division of this court has said that the legislature added the words, “or impairment” to the act to make it clear that “non-work-related” conditions were included. See Masonite Corporation v. Mitchell, 16 Ark. App. 209, 212, 699 S.W.2d 409, 411 (1985). By implication, at least, this suggests that “work-related” conditions were already included in the term “disability.” This means, that we must remand this case for two reasons. One, the Commission did not find that the claimant, Mr. Rooney, sustained a 35% anatomical impairment as a result of his first (1980) injury. The law judge made such a finding, but the Commission must make the finding that we review. Ark. Coal Co. v. Steele, 237 Ark. 727, 375 S.W.2d 673 (1964); Jane Traylor, Inc. v. Cooksey, 31 Ark. App. 245, 792 S.W.2d 351 (1990). Two, the Commission must make a determination with regard to the second and third “hurdles” that Mid-State said must be “overcome” before the Fund has any liability. We therefore point out that our decision today only removes from our former definition of “impairment” the requirement that it must be a non-work-related condition. The Arkansas Supreme Court in Mid-State removed from our definition of impairment the requirement that there must be “loss of earning capacity.” The consequence of that holding is spelled out in Mid-State, but we point out that Mid-State was remanded for the Commission to determine: (1) whether Davis’ former neck injury and loss of the right eye constituted an “impairment” in that they were of a physical quality which, were the other elements of com-pensability present, would have been capable of supporting an award; and (2) whether, even if the first requirement is satisfied, Davis’ former condition combined with his 1981 compensable injury to produce a disability greater than that which “would have resulted from the last injury, considered alone and of itself.” Section ll-9-525(b)(3). 295 Ark. at 9, 746 S.W.2d at 543. We affirm the Commission’s finding that Rooney is permanently and totally disabled. We reverse its finding as to the liability of the Second Injury Fund and remand that issue for a new determination in keeping with this opinion and the opinion in Mid-State. Jennings, C.J., concurs.