Opinion
CLAIM NO. E318865
OPINION FILED JUNE 13, 1995
Upon review before the FULL COMMISSION in Little Rock, Pulaski County, Arkansas.
Claimant represented by the HONORABLE ALICE TOTSCH, Attorney at Law, Jacksonville, Arkansas.
Respondents represented by the HONORABLE RALPH R. WILSON, Attorney at Law, Little Rock, Arkansas.
Decision of Administrative Law Judge: Affirmed in part and reversed in part.
OPINION AND ORDER
The respondents appeal an opinion and order filed by the administrative law judge on October 28, 1994. In that opinion and order, the administrative law judge found the Arkansas Workers' Compensation Commission has jurisdiction of this claim. In addition, the administrative law judge found that the surgical procedure performed on March 16, 1994, was the result of the compensable injury, and the administrative law judge found that the claimant was entitled to additional temporary total disability compensation for the period of March 14, 1994, through July 11, 1994. Finally, the administrative law judge found that the respondents were not entitled to a subrogation lien due to their failure to intervene in the third-party action.
First, we note that both the respondents and the claimant elected not to file a brief in this matter on review. Thus, our review of this claim is impeded since we can only guess at the issues raised by the respondents on appeal and at the arguments of both parties. Nevertheless, after conducting a de novo review of the entire record, we find that the Arkansas Workers' Compensation Commission can exercise jurisdiction over this claim. In addition, we find that the March 16, 1994, surgical procedure and related medical treatment was reasonably necessary for treatment of the compensable injury, and we find that the claimant is entitled to additional temporary total disability compensation for the period extending from March 14, 1994 to July 11, 1994. Therefore, we affirm the administrative law judge's decision with regard to these issues. However, we find that the respondent employer is entitled to a credit for compensation previously paid under the laws of Pennsylvania, and we find that the respondents are entitled to a credit for a portion of the proceeds that the claimant received from a third-party action. Therefore, we find that the administrative law judge's decision with regard to these issues must be reversed.
The claimant was employed by the respondent employer as a long-haul truck driver. On January 26, 1991, he sustained an admittedly compensable injury when his truck collided with another vehicle that was traveling the wrong direction on an interstate highway. Although the claimant was bruised and sore immediately after the accident, he did not think he had sustained a specific injury at that time. However, as he was traveling in a truck with another driver, his right knee began swelling, and it ultimately became swollen to the point that he could not get his leg into his pants.
He notified the respondent employer of this condition, and he was referred to Dr. Phillip Tracy. However, due to recurrent effusions of the joint and persistent severe pain, Dr. Tracy ultimately referred the claimant to Dr. Michael Weber, an orthopedic surgeon. After examining the claimant on February 27, 1991, Dr. Weber recommended an arthroscopic examination, and this surgical procedure revealed a partial tear of the anterior cruciate ligament. The claimant's condition improved with a course of conservative treatment, including physical therapy. He returned to Dr. Weber on May 6, 1991, complaining of swelling of both knees. However, this had cleared up at the time of the examination, an Dr. Weber discharged him at that time. In a narrative statement dated February 25, 1992, Dr. Weber opined that the claimant sustained a 10% permanent physical impairment of the right extremity.
The claimant returned to Dr. Weber on March 4, complaining that the right knee had started hurting him again. X-rays did not reveal any abnormality, and Dr. Weber prescribed medication. However, the claimant returned on April 8, 1992, stating that the medication had not helped, and Dr. Weber recommended another arthroscopy, primarily to look for signs of an unstable knee caused by the anterior cruciate ligament injury. A second arthroscopy was performed on May 29, 1992, but no new pathology was found. According to Dr. Weber, the anterior cruciate ligament appeared thickened, but it was intact. Dr. Weber characterized the arthroscopic examination as normal, and he again discharged the claimant from his care on June 4, 1992, with no additional permanent physical impairment.
On December 22, 1992, the claimant was treated by Dr. Kilgore of Dr. Weber's office, and Dr. Kilgore felt the pain was coming from the patellofemoral joint. He recommended exercise and anti-inflammatory medications. The claimant returned to Dr. Weber on February 17, 1993, and he advised Dr. Weber that he continued to have knee pain and swelling despite having tremendously increased his strength. Additional strengthening was prescribed, and the swelling was completely gone by March 31, 1993.
However, the claimant continued to complain of recurrent knee problems. On March 14, 1994, he returned to Dr. Weber, and he had "a tremendous amount of fluid in his knee joint," and the quantity of fluid was so great that he had "billowed out the back of his knee into . . . a Bakers' Cyst." According to Dr. Weber, a Bakers' cyst is "like an aneurysm of the joint capsule where because of increased fluid pressure it just billows a balloon of fluid out the back of the knee into the space behind the knee." Consequently, on March 16, 1994, Dr. Weber performed a McIntosh ligament repair on the claimant's right knee. With a McIntosh ligament repair, "a structure on the side of the knee . . . is rerouted from its normal route so that it then has the same function as the anterior cruciate ligament." Dr. Weber last saw the claimant on June 1, 1994.
The respondents initially accepted the compensability of the claim, and they paid the claimant compensation through his recovery from the second arthroscopy under the laws of Pennsylvania. However, when the respondents controverted liability of the third surgery and period of resulting disability, the claimant filed this claim with the Arkansas Workers' Compensation Commission. Neither party now contends that this Commission does not have jurisdiction to consider this claim. Nevertheless, we find that this Commission does have jurisdiction to consider the claim.
In this regard, the Arkansas Workers' Compensation Law creates a statutory prima facie presumption that the Arkansas Workers' Compensation Commission has jurisdiction over any claims filed with it. Ark. Code Ann. § 11-9-707 (1) (1987). However, before the Arkansas Workers' Compensation Commission can assume jurisdiction over a claim, there must be a statutory basis for entertaining the claim, and the application of the Arkansas Workers' Compensation Law must not violate federal constitutional principles, particularly the full faith and credit clause. International Paper Co. v. Tidwell, 250 Ark. 623, 466 S.W.2d 488 (1971); McKeag v. Hunt Transportation, Inc., 36 Ark. App. 46, 818 S.W.2d 581 (1991); Patton v. Brown Root, Inc., 31 Ark. App. 141, 789 S.W.2d 745 (1990). In considering these federal constitutional principles, Larson has set out six grounds on which the applicability of a particular compensation act has been asserted, and Arkansas's appellate Courts have favorably quoted these six grounds. 4 A. Larson, Larson's Workmen's Compensation Law, § 86.10 (1993); Tidwell; see also, Midwest Dredging Co. v. Etzberger, 270 Ark. 936, 606 S.W.2d 619 (Ark.App. 1980) (decision by evenly divided court).
In the present claim, the headquarters of the respondent employer is located in Pennsylvania, but it maintains a plant in Jacksonville, Arkansas. The claimant was living in El Dorado, Arkansas when he first started working for the respondent employer, and he was interviewed in Jacksonville, Arkansas. When he was hired, he reported for his first load in Jacksonville. He traveled all over the country, picking up loads at the respondent employer's plants and delivering the loads to customers. His paycheck was sent from Pennsylvania to the Jacksonville, Arkansas, plant, where the claimant picked it up. After the claimant started working for the respondent employer, he and his family moved to Jacksonville, where they resided during the entire time of his employment with the respondent employer. As discussed, the injury occurred in Pennsylvania.
Based on these facts, we find that the evidence establishes that the Arkansas Commission has a statutory and constitutional basis for exercising jurisdiction over this claim. Certainly, the evidence indicates a constitutional basis for Pennsylvania to also exercise jurisdiction over the claim. However, the fact that the claimant received compensation payments under Pennsylvania law does not, in itself, preclude this Commission from assuming jurisdiction. In this regard, all states having a legitimate interest in an injury have the right to apply their own law, either separately, simultaneously, or successively, to the same injury. Industrial Commission of Wisconsin v. McCartin, 330 U.S. 622 (1946); Missouri City Stone, Inc. v. Peters, 257 Ark. 917, 521 S.W.2d 58 (1975); McGehee Hatchery Co. v. Gunter, 234 Ark. 113, 350 S.W.2d 608 (1961); Robinson v. Ed Williams Construction Co., 38 Ark. App. 90, 828 S.W.2d 860 (1992); see also, A. Larson, Larson's Law of Workmen's Compensation, § 85.00 et. seq (1994). Therefore, a claim for compensation may be instituted in two or more states having jurisdiction over the claim, so long as it is not prohibited by the law of the first state. Id. Likewise, the voluntary payment of compensation under the laws of one state which is accepted by the claimant does not affect the claimant's statutory right to an award of compensation in another state unless the laws of that state prohibit such a claim. Peters, supra; Larson, supra at § 85.50. Although successive or simultaneous claims are not prohibited by Arkansas law, the jurisdiction of the Arkansas Workers' Compensation Commission may be denied if the claimant had previously made an election of remedies by actively initiating proceedings or knowingly receiving benefits pursuant to the laws of another state. Biddle v. Smith Campbell, Inc., 28 Ark. App. 46, 773 S.W.2d 840 (1989); see also; Houston Contracting Company v. Young, 267 Ark. 322, 590 S.W.2d 653 (1979).
In the present claim, we find that the preponderance of the evidence indicates that the claimant did not make an election of remedies by actively initiating proceedings or knowingly receiving benefits pursuant to the laws of Pennsylvania. No award of compensation was made in Pennsylvania, so it cannot be said that the claimant elected to proceed under Pennsylvania law by actively participating in the procurement of compensation in that state. See, Young, supra. He testified that he was aware that the workers' compensation checks came from Crawford and Company in Pennsylvania. However, this was not unusual to the claimant since his pay checks regularly came from Pennsylvania. In addition, the claimant did nothing to initiate the compensation in Pennsylvania, and his testimony indicates that he did not know that the compensation was being paid under the laws of Pennsylvania or any other state. He testified that he did not ask for the compensation to be paid under the laws of Pennsylvania, and he testified that the respondents did not ask that the laws of Arkansas be applied to the claim. According to his testimony, no question about the applicable law was ever raised.
Therefore, we find that a preponderance of the evidence indicates that the claimant did nothing to initiate the payment of compensation under the laws of Pennsylvania and that he did not know he was being paid under the laws of Pennsylvania. Therefore, we find that the administrative law judge's decision in this regard must be affirmed. However, where one state exercises jurisdiction of a claim after compensation has been paid under the laws of another state, the respondents are entitled to a credit against future payments for all payments that they previously made under the laws of the other state. Peters, supra; Gunter, supra; Houston Contracting Co. v. Young, 270 Ark. 1009 (Ark.App. 1980); Larson, supra at § 85.60. This is consistent with the law which provides that an employer who has made advance payments for compensation is entitled to a credit against future installments of compensation due. Ark. Code Ann. § 11-9-807 (1987). Consequently, in the present claim, we find that the respondents are entitled to a credit against future installments due for all payments of compensation previously made under the laws of Pennsylvania.
In addition, we find that the respondents are entitled to a credit against a portion of the proceeds that the claimant received as a result of the settlement of the third party law suit in Pennsylvania, subject to the distribution criteria established in Ark. Code Ann. § 11-9-410 (a)(2) (1987). In this regard, little evidence was presented which pertains to this issue. However, the evidence presented indicates the claimant initiated legal proceedings in Pennsylvania against the driver of the other vehicle involved in the accident. The claimant's claim against the other driver was eventually settled for $35,000 through arbitration. The respondents were aware of the claimant's third party action in Pennsylvania. However, Pennsylvania law does not give workers' compensation respondents any subrogation rights in a claimant's settlement or recovery from a third party who is actually responsible for the injury. Although the respondents did not seek to intervene or otherwise become involved in the third party action and settlement, they cannot reasonably be expected to have done so since they had no legal rights to protect under the law being applied to the claim at that time. The settlement agreement is not in the record, but the claimant has indicated that it extinguished all claims against the other driver.
Ark. Code Ann. § 11-9-410 (Cumm. Supp. 1993) preserves the right of injured workers and employers or compensation carriers to maintain actions against third parties who are actually responsible for the death or injury of an employee.Travelers Insurance Co. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (1972). In this regard, the statute establishes a mechanism under which either the employee, the employer, or the carrier can initiate such claims or actions against third parties, and the statute establishes a formula which allows the employer or carrier to recoup part or all of its past and future compensation payments from any recovery from third parties. See, Liberty Mutual Insurance v. Billingsley, 256 Ark. 947, 511 S.W.2d 476 (1974); see also, Hartford Insurance Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971).
The statutory scheme of Ark. Code Ann. § 11-9-410 recognizes three potential situations. First, subsection (a)(1) provides that the making of a workers' compensation claim shall not affect the right of the employee to assert a claim or maintain an action against a third party. Therefore, subsection (a)(1) recognizes situations where a workers' compensation claim is filed, or workers' compensation benefits are received, before the third party claim is asserted. See, Carter, supra; see also, James Billington v. Smith Ford, Full Workers' Compensation Commission, opinion filed Dec. 11, 1990 (Claim No. D801143). Employers or carriers must intervene in the action in order to be entitled to the subrogation lien provided by this subsection. Jackson Cookie v. Fausett, 17 Ark. App. 76, 703 S.W.2d 468 (1986); John Garner Meats v. Ault, 38 Ark. App. 111, 828 S.W.2d 866 (1992). Second, subsection (a)(2) provides that the commencement of an action or assertion of a third party claim by the employee will not affect the right of the employee to receive benefits under the Arkansas Workers' Compensation Law. In Carter, supra, the Court stated that "subsection (a)(2) recognizes that an employee can make . . . an adjustment before filing a Workmen's Compensation claim by providing a procedure for the application of the proceeds thereof between the employee and the employer when a claim is filed." This subsection contains no requirement for employers or carriers to intervene in the action to protect their rights. In this regard, requiring intervention by the employer or carrier as a prerequisite to the right to a credit would obviously be unreasonable where no claim for workers' compensation benefits has been asserted by claimant, for, prior to the filing of a claim, the employer or carrier has no legal right to protect. Furthermore, it is likely that the employer or carrier may not even be aware of the potential workers' compensation claim. Furthermore, this provision protects the rights of employers and carriers by assuring that the employee cannot deprive them of their share of the recovery by resolving the third party claim prior to asserting a claim under the Arkansas Workers' Compensation Law. Finally, subsection (b) allows the employer or carrier to initiate a claim against a third party.
We find that the present claim is controlled by subsection (a)(2) and that the respondents were not required to intervene in order to protect their right to a credit. Although the claimant had received workers' compensation benefits, these benefits were paid under the laws of Pennsylvania. No claim for benefits was asserted under the Arkansas Workers' Compensation Law prior to the claimant's settlement of the third party claim, so the respondents had no rights to subrogation under the Arkansas Workers' Compensation Law until after the third party claim was settled. However, once the claimant sought to avail himself of the benefits of the Arkansas Workers' Compensation Law by filing a claim in this state, the respondents gained all rights given them by the Arkansas law, including a right to a portion of the claimant's third party settlement.
In short, while the claimant seeks to enforce his rights under the Arkansas Workers' Compensation Law, he would deny the respondents their rights under the same law. This is exactly the type situation which Ark. Code Ann. § 11-9-410 (a)(2) is intended to govern. Injured workers should not be allowed to defeat the spirit of the statute, either intentionally or unintentionally, by resolving a third party claim before the employer or carrier is aware that a claim is being asserted under the Arkansas Workers' Compensation Law and that they need to act to protect their rights under that law. Therefore, we find that the respondents are entitled to a credit for a portion of the claimant's third party settlement, in accord with the formula set forth in Ark. Code Ann. § 11-9-410 (a)(2).
In addition, we find that the third surgery and related medical treatment was reasonably necessary for treatment of the compensable injury. Claimant has experienced recurrent problems with his knee since the occurrence of the injury, including intermittent swelling and a build-up of fluid in the joint. Furthermore, Dr. Weber has indicated that the third surgery was necessitated by the Bakers' Cyst, and he testified that the Bakers' Cyst was caused by the build-up of a "tremendous amount of fluid in his knee joint." Furthermore, there is no evidence that these recurring problems were caused by any intervening event or unreasonable activity by the claimant. Dr. Weber opined that these problems are causally related to the compensable injury. Therefore, we find that the respondents are liable for the third surgery and the related medical treatment.
Finally, we find that the claimant is entitled to temporary total disability compensation for the period extending from March 14, 1994 through July 11, 1994. The claimant returned to Dr. Weber on March 14, 1994, and Dr. Weber diagnosed the Bakers' Cyst at that time. Apparently, the claimant had been looking for employment prior to that time. Then, Dr. Weber released him to return to work on July 11, 1994. Therefore, we find that the claimant was in his healing period and totally incapacitated from working during this period.
Accordingly, based on our de novo review of the entire record, and for the reasons discussed herein, we find that the Arkansas Workers' Compensation Commission can exercise jurisdiction over this claim. However, we find that the respondents are entitled to a credit for benefits previously paid under Pennsylvania law, and we find that the respondents are entitled to a credit for a portion of the proceeds the claimant recovered in his third party settlement. In addition, we find that the third surgery performed by Dr. Weber and the related medical treatment was reasonably necessary for treatment of the compensable injury, and we find that the claimant is entitled to temporary total disability compensation for the period extending from March 14, 1994 through July 11, 1994. Therefore, we find that the administrative law judge's decision must be, and hereby is, affirmed in part and reversed in part.
All accrued benefits shall be paid in a lump sum without discount and with interest thereon at the lawful rate from the date of the Administrative Law Judge's decision in accordance with Ark. Code Ann. § 11-9-809 (1987). For prevailing in part on this appeal before the Full Commission, claimant's attorney is hereby awarded an additional attorney's fee in the amount of $250.00 in accordance with Ark. Code Ann. § 11-9-715 (b) (1987).
IT IS SO ORDERED.
Commissioner Tatum concurs. Commissioner Humphrey concurs.