Opinion
NOT TO BE PUBLISHED
PROCEEDINGS to review a decision of the Workers’ Compensation Appeals Board No. LAO 0837499, Annulled and remanded with directions.
Law Offices of Raul Granados for Petitioner.
Rockard J. Delgadillo, Valentin F. Dinu and Robert M. Unruh, for City of Los Angeles.
No appearance by Respondent Workers’ Compensation Appeals Board.
MANELLA, J.
Carmen Moran Muraoka (Muraoka) filed a petition for writ of review of the decision of the Workers’ Compensation Appeals Board (Board) that the 2005 permanent disability rating schedule (PDRS), rather than the 1997 PDRS, applied to the determination of permanent disability in her claim against the City of Los Angeles (City). We find that the Board did not consider the entire medical record prior to 2005 to determine whether substantial medical evidence supported application of the 1997 PDRS, and that had it done so, it would have found the 1997 PDRS applicable. We annul the Board’s decision.
The consultative rating determination under the 1997 PDRS would be 68 percent; under the 2005 PDRS it would be 32 percent.
FACTUAL AND PROCEDURAL BACKGROUND
Muraoka sustained a cumulative trauma injury from 1998 to September 13, 2003 to her spine and bilateral upper extremities in the course of her employment as a clerk typist for the City. Initial treatment was received at Kaiser and Western Hand Center. Thereafter, Steven Nagelberg, M.D., became the primary treating physician. Treatment included bilateral carpel tunnel release surgeries in May 2004 and July 2005.
The case proceeded to trial on July 31, 2007 on the issues of temporary disability, permanent and stationary date, permanent disability, apportionment, the need for further medical treatment and whether the 1997 or the 2005 permanent disability rating schedule applied. Based on medical reports from Western Hand Center and Dr. Nagelberg, the Workers’ Compensation Judge (WCJ) found that the injury caused temporary disability beginning September 18, 2003 to and including January 23, 2006. The WCJ relied upon the July 24, 2006 report of Dr. Nagelberg to find Muraoka was permanent and stationary on July 13, 2006. City did not obtain a medical-legal rebuttal to the opinion of the primary treating physician.
“‘Permanent and stationary status’ is the point when the employee has reached maximal medical improvement, meaning his or her condition is well stabilized, and unlikely to change substantially in the next year with or without medical treatment.” (Cal. Code Regs., tit. 8, § 9785 (a)(8).)
The WCJ examined two medical reports that issued prior to 2005 in order to make a determination of which PDRS would apply. In the April 28, 2004 report, Dr. Nagelberg stated, “Based on my clinical evaluation of the patient, it is my medical opinion that within a reasonable medical probability, the patient has suffered permanent disability as a result of the injury(s) sustained on 1998-9/17/03.” In the September 23, 2004 report Dr. Nagelberg stated he was not yet able to determine the extent of permanent disability. In his opinion on decision, the WCJ found that based on a review of these two 2004 reports authored by Dr. Nagelberg, there was no substantial medical evidence showing the existence of permanent disability or a permanent loss of functional capacity prior to 2005. Accordingly, the WCJ found that the 2005 PDRS would apply to the determination of permanent disability.
Dr. Nagelberg’s July 24, 2006 medical report was submitted to the Disability Evaluation Unit (DEU) for a determination of a final permanent disability rating with instructions to the disability evaluator that the factors of disability were to be determined using the 2005 PDRS. Muraoka filed a Motion to Strike the Rating instructions, arguing that the WCJ should have instructed the disability evaluator to determine the disability factors using the 1997 PDRS. The September 26, 2007 determination of the DEU found that Dr. Nagelberg needed to clarify some medical data and address other medical issues, and absent the additional information, the DEU could not determine the final rating. The WCJ vacated submission of the case, and issued Findings of Fact and Order to develop the record. The WCJ opined that although he would allow Dr. Nagelberg to submit a supplemental report addressing the issues raised by the DEU, he would still apply the 2005 PDRS and a final decision would be needed on that issue in order to properly develop the record on the issue of permanent disability.
Muraoka filed a Petition for Reconsideration, contending that the 1997 PDRS applied. Two commissioners from the Board voted to deny the petition and adopt the opinion of the WCJ; Commissioner Brass dissented. Relying on Zenith Ins. Co. v. Workers’ Comp. Appeals Bd. (2008) 159 Cal.App.4th 483 (Cugini), the dissent argued that a determination whether a treating physician’s report provided substantial evidence of permanent disability required consideration of the entire record. Applying that standard, the dissent concluded that substantial evidence, including a December 2003 report of Dr. Nagelberg, substantiated his conclusion that Muraoka had sustained permanent disability.
Muraoka filed this timely petition for review, contending there is substantial medical evidence of the existence of permanent disability prior to 2005 to support a finding that the 1997 PDRS applies, that the Board ignored the entire medical history in determining that the 2005 PDRS applies, and that the Board exceeded its jurisdiction by “ignoring” the standard set by Cugini, supra, 159 Cal.App.4th 483, that the entire record must be taken into account in deciding the issue.
DISCUSSION
I. Permanent disability, in injuries occurring before 2005, may be subject to either the 1997 or 2005 PDRS.
The Administrative Director of the Division of Workers’ Compensation periodically adopts or amends the Schedule for Rating Permanent Disability, which is used to determine permanent disability ratings. The schedule contains a standard or recommended rating for a myriad of injuries or conditions. (1 Hanna, Cal. Law of Employee Injuries and Workers’ Compensation (Rev. 2d ed.) Permanent Disability Benefits, § 8.02[4][a], pp. 8-9 – 8-18.2.) The standard rating constitutes prima facie evidence of the percentage of permanent disability to be attributed to any injury. (Lab. Code, § 4660, subd. (c).) The schedule is intended to promote consistency, uniformity, and objectivity. (§ 4660, subd. (d).)
All further references to statute are to the Labor Code unless otherwise stated.
The WCJ deferred a final determination as to the level of permanent disability to be awarded pending a decision on the applicable PDRS. Ascertainment of the applicable PDRS has been determined to be a threshold issue critical to a claim for permanent disability, and thus is considered a final appealable order. (Aldi v. Carr, McClellan, Ingersoll, Thompson & Horn (2006) 71 Cal.Comp.Cases 783, 784, fn. 2.)
Muraoka sustained an injury from 1998 to September 13, 2003. The general rule is that the law in effect at the time of injury governs all rights and liabilities arising out of the injury. (Harrison v. Workmen’s Comp. Appeals Bd. (1974) 44 Cal.App.3d 197, 202, fn. 5; Aetna Cas. & Surety Co. v. Ind. Acc. Com. (1947) 30 Cal.2d 388, 392.) Section 4660 governs how the percentage of permanent disability is determined. It was amended in 2004 to require a new rating schedule, which became effective January 1, 2005. It supersedes the 1997 PDRS (old schedule) and applies to all claims regardless of date of injury unless there are certain circumstances in existence prior to January 1, 2005, as set forth in the statute, as follows: “For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker.” (§ 4660, subd. (d).)
City did not obtain a comprehensive medical-legal report prior to 2005 that indicated the existence of permanent disability. Prior to 2005, City was not required to give notice per section 4061 with the last payment of temporary disability that no permanent disability would be paid or of the amount payable. The notice is not required at the inception of payment of temporary disability. (§4061, subd. (a)(1); Costco Wholesale Corp. v. Workers’ Comp. Appeals Bd. (2007) 151 Cal.App.4th 148, 156-157.) Muraoka remained on temporary disability into 2006. Accordingly, there was no obligation by the employer to send the section 4061 notice until 2006.
Thus, the only exception to the applicability of section 4660, subdivision (d) in this case would be a report by a treating physician, issued prior to 2005, evidencing the existence of permanent disability. However, the 2005 schedule applies where a physician’s 2004 report indicating the existence of permanent disability under section 4660, subdivision (d) is not substantial medical evidence. (State Comp. Ins. Fund v. Workers’ Comp. Appeals Bd. (2007) 146 Cal.App.4th 1311, 1315 (Echeverria).) Here, the Board determined that the 2004 reports of the primary treating physician were not substantial medical evidence regarding the existence of permanent disability, and therefore that the 2005 PDRS applied. We disagree.
II. The entire medical record must be reviewed to determine whether substantial medical evidence supports an indication of the existence of permanent disability prior to 2005.
Permanent disability is not defined in the Labor Code, but it is a term with historical meaning in workers compensation law. (See General Foundry Service v. Workers’ Comp. Appeals Bd. (1986) 42 Cal.3d 331.) It is an evaluation of various elements which would allow for compensation due to “‘impairment of earning capacity, impairment of the normal use of a member, or a competitive handicap in the open labor market.’” (State Compensation Ins. Fund v. Industrial Acc. Com. (1963) 59 Cal.2d 45, 52.) Permanent disability does not connote a total inability to work, but rather an impairment of earning power caused by a mental or physical condition. (1 Hanna, Cal. Law of Employee Injuries and Workers’ Compensation, supra, Permanent Disability Benefits, § 8.01, pp. 8-4-8-5.) Section 4660, subdivision (a) provides: “In determining the percentages of permanent disability, account shall be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and his or her age at the time of the injury, consideration being given to an employee’s diminished future earning capacity.” A prophylactic work restriction can be the basis for permanent disability. (Luchini v. Workmen’s Comp. App. Bd. (1970) 7 Cal.App.3d 141,145.) Generally, the assessment of permanent disability is made when the worker becomes permanent and stationary; however, a physician may provide a prognosis of the existence of permanent disability. (Genlyte Group, LLC v. Workers’ Comp. Appeals Bd. (2008) 158 Cal.App.4th 705.) Whether permanent disability exists is a question of fact, and in order to comply with section 4660, subdivision (d), the physician must indicate only the likely existence of permanent disability, not the extent of the final ratable permanent disability. (Cugini, supra, 159 Cal.App.4th at pp. 495, 498.)
“Permanent disability payments are calculated by first expressing the degree of permanent disability as a percentage and then converting that percentage into an award based on a table.” (Brodie v. Workers’ Comp. Appeals Bd. (2007)40 Cal.4th 1313, 1320.)
A number of cases have addressed the factors that apply in determining whether a medical report issued prior to 2005 adequately substantiates permanent disability in a worker who is not yet permanent and stationary. Review of these decisions compels the conclusion that in light of the entire record, the Board in the instant case erred in determining the 2005 PDRS applied to Muraoka’s claim.
In the instant case, the Board relied on factors set forth in Echeverria, supra, 146 Cal.App.4th 1311 to determine that there was no substantial medical evidence in 2004 that Muraoka had sustained permanent disability due to her industrial injury. In Echeverria, the worker was injured in 2004 and his injuries became permanent and stationary in 2005. In November 2004, the worker’s attorney sent a letter to the primary treating physician, which read: “Dear Dr. Morales: Changes have occurred in the California Workers’ Compensation system. Elements of those changes may affect your patient’s rights to permanent disability benefits. [¶] Please advise by merely signing and dating this letter if you believe permanent disability, as that term is now defined, is a reasonable medical probability as a result of your patient's industrial injury. [¶] This is very important so your immediate attention to this matter would be greatly appreciated. [¶] I believe permanent disability is within reasonable medical probability emanating from this injury.”
The letter was signed by Dr. Morales and dated December 15, 2004. The Board found that the letter, read in light of the other 2004 reports by Dr. Morales describing persistent spinal range of motion problems, was sufficient to comply with the exception of section 4660, subdivision (d) for a report prior to 2005 indicating the existence of permanent disability. (Echeverria, supra, 146 Cal.App.4th at p. 1314.) The Board reasoned that the report was not required to show the level of permanent disability, only the probable existence of permanent disability. (Ibid.)The Board therefore applied the 1997 schedule.
On review of the Board’s decision the Court of Appeal held that the decision to apply the 1997 schedule was not supported by substantial evidence. (Echeverria, supra, 146 Cal.App.4th at p. 1316.) The court found nothing in the reports that tied the range of motion and pain symptoms to the December 2004 prediction of permanent disability. (Id. at p. 1315.) The court also concluded that the reports from the primary treating physician did not mention a prognosis and provided no reasoning to support the conclusion in the 2004 report that the worker had sustained permanent disability. (Ibid.)
The Court of Appeal in Cugini, supra, 159 Cal.App.4th 483,provided further guidance on the factors to consider in determining which PDRS to apply. Cugini suffered an injury to his back in 2004. He was referred for treatment and an MRI was performed. Cugini treated with various physicians, who prescribed medications and discussed the need for back surgery. Following an orthopedic consultation, Dr. Fenton prepared a report dated December 28, 2004, stating, “I am a treating physician for the above-referenced applicant. There is a reasonable medical probability that permanent disability exists as a result of the injury or injuries for which I am treating this patient. I will describe that disability further in a subsequent report.” Also in 2004, Cugini was examined by a neurosurgeon who in a report of that same year recommended additional diagnostic studies but also recommended surgery. (Cugini, at p. 488, fn. 2.) Cugini underwent surgery and his condition was declared permanent and stationary in 2005. The court concluded that the determination whether Dr. Fenton’s report or other qualifying medical reports constituted substantial medical evidence of permanent disability under section 4660, subdivision (d), should be based on the entire record. (Cugini, supra, 159 Cal.App.4th at p. 495.)
The Cugini court distinguished the facts before it from those in Echeverria, supra, 146 Cal.App.4th 1311, noting that prior reports from Cugini’s primary treating physician stated the history, facts and diagnosis of a herniated disc, which was confirmed by the diagnostic studies and supported the need for back surgery. These factors, the court concluded, together with a report of a neurosurgeon who concurred with the primary treating physician as to the need for surgery, constituted substantial medical evidence as to the existence of permanent disability prior to January 1, 2005. (Cugini, supra, 159 Cal.App.4th at p. 495.)
Two Board panel decisions discuss other factors to consider in making the determination as to which PDRS to apply. The worker in Xerox Corp., Inc. v. Workers’ Comp. Appeals Bd. (2007) 72 Cal.Comp.Cases 1044 (writ denied) injured her cervical spine and right upper extremity in 2003. The first primary treating physician reported in 2003 that the worker was “limited in the use of her right hand, limited from overhead work, and limited from lifting, pushing, or pulling more than 15 pounds,” but was released to return to work. (Id. at p. 1045.) The worker continued to treat while working modified duty and underwent cervical spine surgery in 2004, but she remained temporarily disabled through 2005. The employer argued that the language in the first report was not a work restriction but rather a work status, and thus did not constitute an opinion on permanent disability. The WCJ read the restriction to mean that the worker was in moderate pain when those restrictions were exceeded, and thus supported the need for surgery. Additionally, the primary treating physician reported loss of range of motion in the cervical spine, and loss of motion is a ratable disability under the 1997 schedule. (Id. at p. 1046.) Accordingly, the entire medical record supported the existence of permanent disability prior to 2005.
The 1997 PDRS characterizes subjective disability including moderate pain as one that “could be tolerated, but would cause marked handicap in the performance of the activity precipitating the pain.” (Cal. Code Regs., tit. 8, § 9727, subd. (4)(2).)
The WCJ in Santa Rosa School District, PSI v. Workers’ Comp. Appeals Bd. (2007) 72 Cal.Comp.Cases 1312 (writ denied), applied the 1997 schedule stemming from a 2004 hip injury which required hip replacement surgery on the date of the injury. The Board determined that permanent disability existed at the time the hip replacement surgery was performed because the rating guidelines assign permanent impairment to all total hip replacements. (Id. at p. 1313.)
III. The entire medical record provides substantial evidence supporting Dr. Nagelberg’s conclusion that Muraoka sustained permanent disability prior to 2005.
In the instant case, Dr. Nagelberg issued a report dated April 28, 2004, stating that based on his clinical evaluation “[i]t is my medical opinion that within a reasonable medical probability, the patient has suffered permanent disability as a result of the injury(s) sustained on 1998-9/17/03.... I feel that the patient has sustained a permanent loss of functional capacity, which results in permanent disability.” The time disclosure statement in the report indicated: “Forty-five minutes were spent in review of the patient’s chart, including all prior reports, any reports of other physicians, medical records and any applicable diagnostic tests and preparation of this report.”
The Board found that Dr. Nagelberg’s April 28, 2004 report was strikingly similar to the report issued by the primary treating physician in the Echeverria case. Furthermore, the Board found that there was nothing in Dr. Nagelberg’s April 28, 2004 report that tied the finding of permanent disability to his prior reports.
We are not confined to comparing Dr. Nagelberg’s April 28, 2004 report with that of the treating physician in Echeverria. Rather, we review the entire record and in doing so, conclude that Dr. Nagelberg’s reports prior to April 28, 2004 support his conclusions. In his initial report of December 12, 2003, Dr. Nagelberg reviewed prior treatment records. Those records provided the history of treatment that Muraoka received in 2003 at Kaiser and at Western Hand Center. The records reviewed included diagnostic studies, which confirmed the diagnosis of bilateral carpal tunnel syndrome, and documented that there had been no improvement with conservative treatment. Based on these factors, the recommended treatment plan as of August 2003 was bilateral carpal tunnel release surgery. Moreover, the prior evaluating physicians determined that the symptoms and need for treatment were due to Muraoka’s work duties from 1998 to September 17, 2003. Muraoka’s job at City required continuous data entry on a computer in addition to answering phones, filing and copying; thus, performing her duties required continuous hand manipulation, grasping, gripping pushing and pulling. Due to the impairment of her hands and wrists, Muraoka was unable to continue her work duties and was taken off work by her physicians in August 2003.
Dr. Nagelberg also noted that Muraoka had not improved with physical therapy provided under his direction. His December 2003 report confirmed that Muraoka was “in need of [bilateral carpal tunnel release]surgical intervention,” and noted that “[s]urgery authorization is formally being requested.” In his reports prior to April 2004, Dr. Nagelberg recommended carpal tunnel release surgery, and in a March 2004 report, he noted that surgery for the left hand had been authorized and that surgery on the right hand was pending authorization. Given the lack of improvement and need for surgery, Dr. Nagelberg reported that within reasonable medical probability, Muraoka sustained a permanent loss of functional capacity, which resulted in permanent disability.
The December report further noted that “MRI scans of the cervical spine and lumbar spine will be obtained in addition to EMG/Nerve conduction studies of the lower extremities.” As the dissent to the Board’s decision noted, the result of a subsequent EMG was positive, showing “probable left L5 root impingement.”
The Board emphasized that when Dr. Nagelberg issued his April 28, 2004 report, he had not examined Muraoka since the initial examination in December 2003. The record shows, however, that after Dr. Nagleberg’s initial examination in December 2003 and up until the April 28, 2004 report, Muraoka was examined by a licensed certified physician’s assistant who reported to Dr. Nagelberg. The reports from the physician’s assistant indicated that Muraoka’s case was discussed with Dr. Nagelberg, who reviewed his observations and findings. Accompanying each of the physician’s assistants’ reports was a report by Dr. Nagelberg regarding his recommended treatment plan and Muraoka’s work status.
In recommending denial of Muraoka’s petition for reconsideration, the WCJ opined that the case law did not give sufficient guidance as to the factors to consider in determining if a report issued prior to January 1, 2005 constituted substantial medical evidence as to the existence of permanent disability. We provide guidance in the application of the factors set forth in Cugini, supra, 159 Cal.App.4th 483. The Board must determine whether there is medical evidence of permanent disability under section 4660, subdivision (d), which is substantial medical evidence, considering the entire record. (Cugini, at p. 487.) Furthermore, the assessment does not require a finding that the worker be permanent and stationary, because the statute does not require a medical determination of the amount of permanent disability, only an indication of the existence of permanent disability. (Ibid.;see also Genlyte Group, LLC v. Workers’ Comp. Appeals Bd., supra, 158 Cal.App.4th 705.) Nor does the fact that the worker has been examined by a physician’s assistant preclude the physician’s opinion from constituting substantial evidence.
The medical record from 2003 and 2004 was consistent in the diagnosis of carpal tunnel syndrome and the need for surgery for the condition. Dr. Nagelberg reviewed the entire medical record and it supported his conclusions. Muraoka underwent left carpal tunnel release surgery in May 2004. Because substantial medical evidence supported Dr. Nagelberg’s finding of permanent disability prior to January 2005, the applicable rating schedule is the 1997 PDRS.
For the first time on appeal, City contends that the language of section 4660, subdivision (d), mandates that the 2005 PDRS applies if either of two conditions is met, viz., there is no medical-legal or treating physician’s report showing the existence of permanent disability prior to January 1, 2005, or the employer is not required to provide notice per section 4061 of the termination of temporary disability. There is no evidence City raised this issue at trial or in a petition for reconsideration, and it may not do so for the first time on appeal. (See Estate of Westerman (1968) 68 Cal.2d 267, 279.) Moreover, the case law is clear that “‘[W]hen any of the [ ] three circumstances [described in the final sentence of section 4660(d)] have occurred before January 1, 2005, the percentage of permanent disability will be calculated using the earlier schedule that was in effect on the date of the injury.’” Genlyte Group, LLC v. Workers’ Comp. Appeals Bd., supra, 158 Cal.App.4th at p. 716, quoting Costco Wholesale Corp. v. Workers’ Comp. Appeals Bd., supra, 151 Cal.App.4th at p. 152, italics added; see also Cugini, supra, 159 Cal.App.4th at p. 492 [2005 PDRS applies only “‘when none of the circumstances (described in § 4660, subd. (d)) has occurred before January 1, 2005.’”]
DISPOSITION
The Board’s decision is annulled and the case is remanded to the trial level for further proceedings consistent with this opinion finding that the 1997 PDRS should be applied.
We concur: EPSTEIN, P. J., WILLHITE, J.