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WCB Appellate Division Issues Decisions on Res Judicata and Law of the Case

In early November, 2016, the Maine Workers’ Compensation Board's Appellate Division (AD) issued 2 decisions affirming underlying decisions on the related issues of res judicata and "law of the case." In the first case, the Administrative Law Judge (ALJ) and AD found that a prior ALJ decision against the employee did not bar her from filing a new claim after getting new evidence; in the second case, however, the ALJ and AD found that a prior decision against the employer did bar it from terminating an employee's benefits, despite a favorable §312 IME report. Both AD decisions are attached.

In Sandra Pelletier v. Twin Rivers, Pelletier had previously filed petitions that the ALJ denied because she failed to prove the extent of her incapacity. Pelletier then got additional medical evidence showing a partial incapacity and labor market evidence showing that work was unavailable to her within that capacity. She filed petitions for restoration, and Twin Rivers argued that the prior decision was res judicata and required her to present comparative evidence showing a change of circumstances since the last WCB decision.

Judge Pelletier granted her petitions without requiring comparative evidence, and he derived an earning capacity based on the labor market evidence, awarding Pelletier a fixed rate of partial benefits as of the date of her recent labor market survey. Twin Rivers appealed, but the Appellate Division affirmed Judge Pelletier's decision, stating that in the previous litigation he had not actually determined the level of her incapacity but instead had expressly declined to make findings regarding her incapacity, thus "keeping the issue open for future litigation."

We have reviewed the 2011 decision, however, and it is not true that Judge Pelletier “specifically declined to make findings on the incapacity issue.” Instead, he found that the employee failed to produce any evidence of an ongoing earning incapacity, let alone meet her burden of proof on that issue, and he denied her claim for ongoing benefits. This is an adjudication on the merits and is essentially a finding the employee had no ongoing loss of earning capacity, which should require the employee in later litigation to establish a change in medical or economic circumstances since the 2011 decision by comparative medical or economic evidence.

Instead, it appears Judge Pelletier simply reached a different decision in 2015 based on evidence which existed in 2011 but which the employee did not offer, and the Appellate Division said that was legally correct. It is difficult to reconcile the Pelletier decision with existing law on res judicata, but perhaps the Board will apply the same standard on employers’ petitions for review.

In Michael Allarie v. Jolly Gardner, Allarie injured his neck in a 1999 car accident, requiring a 3-level cervical fusion of C4-5-6. Four years later, he claimed a work-related aggravation injury from his heavy labor at Jolly Gardner, and Judge Goodnough issued a decision in 2006 finding that the work "lit up his pre-existing fusion site and accelerated disc degeneration at C3-4 and C6-7 levels" (the levels above and below his 1999 fusion site). He awarded Allarie partial incapacity benefits based on his imputed earning capacity. In 2012, Allarie had surgery at C3-4 and C6-7.

Jolly Gardner filed a Petition to Stop Benefits, arguing that Allarie's PI was below the 13.2% threshold and that the 520 week durational limit on partial incapacity benefits had expired. Dr. Hall performed a §312 IME and found that Allarie had 25% PI as a result of his neck condition, but that none of it related to his 2003 work injury and it was instead entirely the result of his pre-existing condition. Judge Goodnough adopted Dr. Hall 25% PI assessment but rejected his opinion that it did not relate to the work injury, because it was contrary to the findings he established in his 2006 decision. He thus denied Jolly Gardner’s petition, allowing Allarie to continue receiving WC incapacity benefits.

Jolly Gardner appealed, but the AD panel affirmed the decision, because the 2006 decree established as a matter of law that the 2003 work injury aggravated and accelerated his pre-existing condition, meaning that the impairment from the pre-existing condition must be included in the PI determination. Thus, Dr. Hall's §312 IME finding was inconsistent with that decision, which established the "law of the case," so Judge Goodnough properly declined to adopt Dr. Hall's contrary opinion regarding the cause of Allarie's PI.

This decision shows the importance of the language the ALJs use in their WCB decisions: if they decide factual issues against one party, that party must accept those findings and must alert any doctors who thereafter examine the employee. Those doctors must then assume the correctness of the underlying WCB decisions when they make their medical findings; otherwise the WCB will decline to adopt them.

If you have any questions about these or any other WCB decisions or issues, please let us know.

Thomas Getchell
Daniel Gilligan
Michael Richards
Attorneys at Law