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					                                     STATE OF CALIFORNIA
                              DIVISION OF WORKERS' COMPENSATION
                  WORKERS' COMPENSATION APPEALS BOARD


                                                    Case No. OAK 327205
IOSUA LETULIGASENOA,                                     OAKLAND DISTRICT OFFICE
                     Applicant,                               FINDINGS, AWARD
                                                                 and ORDER
                             vs.                                     And
                                                            NOTICE OF INTENTION
S&S LOGISTICS and ZURICH                                      TO AWARD COSTS
AMERICAN INSURANCE COMPANY,

                     Defendants.




      The above-entitled matter having been heard and regularly submitted, Stanley E. Shields,
Workers' Compensation Administrative Law Judge, now makes his decision as follows:

                                        FINDINGS OF FACT
  1.      Applicant Iosua Letuligasenoa, born October 28,1959, while employed on March 22,2006, as
          a car transporter, occupational group number 350, at National City, California, by S&S
          Logistics, Inc., sustained injury arising out of and occurring in the course of his employment
          to his right shoulder.
  2.      At the time of injury, the employer was insured by Zurich American Insurance Company.
  3.      At the time of injury, the employee's earnings were 5905.17 per week, warranting indemnity
          rates of $603.44 per week for temporary disability and statutory maximum for permanent,
          partial disability.
  4.      Applicant's condition first became permanent and stationary on May 24,2007.
  5.      Applicant's condition next became permanent and stationary on December 5, 2007.
  6.      Applicant was temporarily, totally disabled in the period July 31, 2007 through December 5,
          2007, inclusive, and is entitled to S603.44 per week for that period.
  7.      Applicant was not temporarily, totally disabled in the period May 25, 2007 through July 3,
          2007.
  8.      Defendant is entitled to credit its payments of temporary disability indemnity in the period
          May 25, 2007 through July 3, 2007 against its obligation to pay temporary disability, as found
          above.
 9.          The Employment Development Department is entitled to recovery on its lien for benefits paid
             in the period July 31, 2007 through December 5, 2007.
 10.         Except as set forth in Finding No. 9, above, the Employment Development Department is not
             entitled to recovery on its lien.
 11.         The 2005 Permanent Disability Rating Schedule may be rebutted by credible and persuasive
             vocational testimony relating to the total diminished future earning capacity sustained by an
             injured worker.
 12.         Applicant has rebutted the 2005 Permanent Disability Rating Schedule.

 13.         Applicant sustained permanent disability of 30%, 100% of which is apportionable to the injury
             herein, and 0% apportionable to other causes, payable at the rate of $230.00 per week
             beginning May 25, 2007 and ending July 30,2007, and beginning again on December 6,2007,
             in the total amount of $30,130, less credit to Defendant for payments made on account.
 14.         Applicant is in need of future medical care to cure or relieve from the effects of his injury.

 15.         The permanent disability rate and total indemnity may be subject to adjustment pursuant to
             Labor Code Section 4658(d)(2), subject to proof, WCAB jurisdiction reserved.
 16.         Applicant has incurred reasonable costs in the form of expert testimony by Jeff Malmuth.

 17.         Applicant's attorney has provided valuable services, and will be entitled to a fee calculated at
             15% of the permanent disability indemnity Awarded, plus 15% of the temporary disability
             Awarded, net of the lien of the Employment Development Department and net of the credit to
             Defendant found in No. 8, above.



                                                     AWARD
    AWARD IS MADE in favor of Iosua Letuligasenoa and against Zurich American Insurance
Company as follows:
       (a)        Temporary disability indemnity as set forth in Finding No. 6, less lien of Employment
                  Development Department pursuant to Finding No. 9, less credit to Defendant consistent
                  with Finding No. 8.
       (b)        Permanent disability indemnity as set forth in Finding No. 13.

       (c)        Future medical care as provided in Finding No. 14.

       (d)        Reimbursement of costs consistent with Finding No. 16.
       (e)        Satisfaction of lien of the Employment Development Department as set out in Finding
                  No. 9.
       (f)        A reasonable attorney's fee in line with Finding No. 17.




                                                        -2-
                                               ORDER
      Defendant IS HEREBY ORDERED to satisfy the Award of attorney's fees first, from any
accrued benefits and, second, if necessary, from commuting a sufficient sum from the far end of
Applicant's permanent disability Award.




                         NOTICE OF INTENTION TO AWARD COSTS
       Jeff Malmuth having filed a cost bill in the amount of $4,507.50, and his services having been
found reasonably incurred, and
       GOOD CAUSE APPEARING,
       NOTICE IS HEREBY GIVEN of my intention to issue an Award of Costs consistent with the
cost bill of Jeff Malmuth twenty (20) days after service of this document unless good cause to the
contrary is shown in writing within that time.


Dated: July 31,2008
Filed and Served by mail on: %ft{/0°
On all parties on the Official                                   Stanley E. Shields
Address Record. By: f£^{\fe.                                WORKERS' COMPENSATION
                                                         ADMINISTRATIVE LAW JUDGE




                                                  -3-
                                  OPINION ON DECISION

                                        INTRODUCTION

       Applicant Iosua Letuligasenoa sustained injury to his right shoulder while employed as a car

transporter by S&S Logistics, Inc., on March 22, 2006. Mr. Letuligasenoa was taken off work

shortly after this incident and provided with conservative medical care, which was not helpful. He

came to surgery on July 13, 2006, Bradford Kraetzer, M.D., providing a SLAP lesion repair. Mr.

Letuligasenoa was provided with permanent work restrictions which could not be accommodated by

his employer.

       The parties utilized Robert Steiner, M.D., as Agreed Medical Evaluator ("AME")- Dr.

Steiner reported on June 13, 2007, giving his opinion that Mr. Letuligasenoa had sustained a 10%

whole person impairment.

       At Trial, the principal issue was permanent disability. Applicant testified on his own behalf,

and both sides presented testimony from vocational counselors. Jeff Malmuth reported for

Applicant, and Ira Cohen reported for Defendant. Although the matter was formally submitted on

the day of Trial, the parties were allowed four weeks to provide any written argument or authority

they wished considered.



          PERMANENT and STATIONARY DATE; PERIODS OF TEMPORARY

                DISABILITY: DEFENDANT'S CLAIM FOR OVERPAYMENT

       Applicant claims a permanent and stationary date of December 5, 2007, and Defendant

claims a permanent and stationary date of May 24, 2007. Applicant's claim is based on the report
of Kirk Jensen, M.D., dated December 5, 2007, and Defendant's position is based on the opinion of

the AME, as expressed in his report of June 13, 2007 (for date of evaluation of May 24, 2007).

Applicant claims a period of temporary disability from July 4, 2007 to December 5, 2007, in

addition to periods previously paid. Defendant seeks credit for temporary disability indemnity

"overpayment" for benefits paid in the period May 24, 2007 to July 3, 2007.

       In his report of June 13,2007, Dr. Steiner reasoned that Mr. Letuligasenoa was permanent

and stationary because "definitive treatment" had occurred and there has been "a reasonable interval

following the surgery." Dr. Steiner, however, was also of the opinion that

          The possibility of further surgery should be a consideration. Perhaps being
          referred to a surgeon specializing in shoulder surgery such as Dr. Kirk Jensen or
          Dr. Tom Norris in San Francisco might be a reasonable consideration when
          further surgery is contemplated.

       Presumably in response to this suggestion, Mr. Letuligasenoa did, in fact, consult with Dr.

Jensen on September 5, 2007. At the initial appointment, Dr. Jensen was of the opinion that "[fjhis

patient most likely will require a repeat right shoulder arthroscopy and evaluation of his

glenohumeral joint." Dr. Jensen also found it likely that Mr. Letuligasenoa would require a "biceps

tenodesis, followed by a capsular release." The doctor reviewed an MRI, described to be of poor

quality, and suggested the need for a new MRI.

       At an office visit on October 8, 2007, Dr. Jensen reviewed a new MRI, which

          reveals a very clear indication that he has some subluxation of the biceps
          tendon into the subscapularis tendon. He also has some degeneration of the
          biceps tendon in this region. The patient also has a diagnosis of adhesive
          capsulitis.




                                                   2
       In his October 8, 2007 report, Dr. Jensen found Mr. Letuligasenoa totally, temporarily

disabled, and he repeated his recommendation for surgery, noting that, "[t]he patient is going to go

home and think about this and follow up in approximately four weeks time."

       The third, and final, office visit occurred on December 5,2007. At that time, Dr. Jensen

noted that Mr. Letuligasenoa had decided not to undergo further shoulder surgery.

       In general, while an injured worker is being worked up for surgery, including undergoing

diagnostic testing, he is entitled to temporary disability indemnity. Case law also supports the

injured worker being entitled to temporary disability indemnity for a reasonable time while deciding

whether to undergo a surgery.

       Here, Mr. Letuligasenoa appears to have seen Dr. Jensen on referral from Dr. Arnold

Spanjers at Kaiser. Dr. Spanjers' July 31, 2007 report notes that "AME, Dr. Steiner[,] agrees wirh

referral to orthopedics for evaluation for possible surgery." Under "Treatment Plan," Dr. Spanjers

states, "Request for transfer of care to Orthopedics."

       Based on the above, it appears that Mr. Letuligasenoa first became permanent and stationary

on May 24, 2007, at the time of his evaluation by Dr. Steiner. With Dr. Spanjers' request to transfer

Mr. Letuligasenoa's care based on the potential need for further surgery, a new period of temporary

disability began. This ran until Mr. Letuligasenoa definitively communicated his decision not to

pursue further surgery.

       I find two permanent and stationary dates: May 24, 2007 and December 5, 2007. I find a

further period of temporary disability from July 31, 2007 through December 5, 2007. I also find

that Defendant is entitled to take credit for payments of temporary disability indemnity made in the




                                                   3
period May 25, 2007 through July 3, 2007, when Mr. Letuligasenoa's condition was permanent and

stationary.



                   LIEN OF EMPLOYMENT DEVELOPMENT DEPARTMENT

        The Employment Development Department ("EDD") paid benefits beginning July 4, 2007

at the rate of $242.50 per week. There was no EDD representative present at the Trial, and it was

not clear whether benefits were continuing at that time.

        In reference to the period from July 4, 2007 through July 30, 2007, it was found, above, that

Mr. Letuligasenoa's condition was permanent and stationary during that time. Accordingly, he was

owed permanent disability indemnity during that period at the rate of $230.00 per week.1 Based on

his temporary disability rate of $603.44 per week, it appears that the EDD payments of $242.50 per

week represent a "supplement" and that EDD is not entitled to recover on its lien from either party.

        With respect to the period July 31,2007 through December 5, 2007, this is a period of

temporary disability, as found above. EDD will therefore be entitled to full reimbursement on its

lien for that period, to be deducted from Applicant's Award of temporary disability indemnity.

        After December 5, 2007, Applicant would again be entitled to permanent disability

indemnity. Based on the various rates, as set out above, EDD would not be entitled to recovery on

its lien.




1
 No evidence was presented as to the size of this employer, and it is not possible to determine on the record before me
whether Mr. Letuligasenoa would be entitled to an increase of permanent disability indemnity pursuant to Labor Code
Section 4658(d)(2).




                                                            4
          RELEVANT LAW REGARDING PERMANENT DISABILITY

Current Labor Code Section 4660, which applies in this case, provides, in pertinent part:

    (a)   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.

    (b) (1) For purposes of this section, the "nature of the physical injury or

    disfigurement" shall incorporate the descriptions and measurements of physical

    impairments and the corresponding percentages of impairments published in the

    American Medical Association (AMA) Guides to the Evaluation of Permanent

    Impairment (5th Edition).

    (2) For purposes of this section, an employee's diminished future earning capacity shall

    be a numeric formula based on empirical data and findings that aggregate the average

    percentage of long-term loss of income resulting from each type of injury for similarly

    situated employees. The administrative director shall formulate the adjusted rating

    schedule based on empirical data and findings from the Evaluation of California's

    Permanent Disability Rating Schedule, Interim Report (December 2003), prepared by

    the RAND Institute for Civil Justice, and upon data from additional empirical studies.

    (c) The administrative director shall amend the schedule for the determination of the

    percentage of permanent disability in accordance with this section at least once every

    five years. This schedule shall be available for public inspection and, without formal




                                           5
                 introduction in evidence, shall be prima facie evidence of the percentage of permanent

                 disability to be attributed to each injury covered by the schedule.

           In contrast, former Labor Code Section 4660 began:

                 (a) 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 age at the time of such injury, consideration being given to the

                 diminished ability of such injured employee to compete in an open labor market.

           It will be noted that new Section 4660(a) adds "or her" between "his" and "age" and

substitutes "the" for "such" before "injury." More consequentially, "consideration being given to

an employee's diminished future earning capacity" is substituted for "consideration being given to

the diminished ability of such injured employee to compete in an open labor market."

           The diminished ability of an injured worker to compete in an open labor market in our prior

rating system was not just a consideration, it was the ultimate fact to be determined. As Marcus, et

al., put it: "The 'old' rating system measured loss of capacity to compete in the open labor

market."2 By the same token, the current rating system measures loss of future earning capacity as

the ultimate fact to be determined. The Introduction to the Schedule for Rating Permanent

Disability, 2006, states:

               A permanent disability rating can range from 0% to 100%. Zero percent
               signifies no reduction of earning capacity, while 100% represents permanent
               total disability. A rating between 0% and 100% represents permanent partial
               disability. Permanent total disability represents a level of disability at which an
               employee has sustained a total loss of earning capacity.


2
    Marcus, et al., California Workers' Compensation Law and Practice. 6lh Ed., Rev. 4, Vol I, Sec. 8.04.




                                                              6
          Thus, current Section 4660(a) gives diminished future earning capacity the same status that

loss of ability to compete in an open labor market had in the old system: it is the ultimate fact to be

determined.

          Then we have Section 4660(b), which states that "diminished future earning capacity" is "a

numeric formula." In fact, as contained in the current Schedule, it is a number ranging from 1.1 to

1.4 which is used as a multiplier for the impairment rating. In other words, it is an adjustment in a

rating formula, essentially no different than the adjustment for age and occupation found in both the

old and new Schedules.

          Can "diminished future earning capacity" be simultaneously the ultimate fact to be

determined and also a mere step in determining the ultimate fact? As Theseus asked Philostrate one

summer evening: "How shall we find the concord of this discord?"3

          I can think of only two ways out of this conundrum.

          "Diminished future earning capacity" ("DFEC") can be the ultimate fact (the final

permanent disability rating) as well as a factor in determining the final permanent disability rating if

the DFEC is zero. Zero as a DFEC multiplier will result in a permanent disability of zero. There is

no other number which will result in an identity between the DFEC as a "numeric formula" and the

DFEC as the ultimate fact—the final permanent disability rating. This solution has the advantage of

being harmonious with the Supreme Court's opinion that SB 899 was meant to reduce workers'

compensation costs. Ensuring that every injured worker receives a 0% rating would be in keeping

with this Legislative purpose. However, even if the Legislature intended to ensure that injured

3
    Shakespeare, William, "A Midsummer Night's Dream", Act V, Scene 1.
workers received nothing for their injuries (a sentiment voice in my courtroom virtually every day),

it seems unlikely that the Legislature would have chosen such a roundabout way of accomplishing

this goal.

           The second solution is to assume that DFEC has two meanings. The first meaning (in

subparagraph (a)) has to do with the ultimate determination of permanent disability. The second

meaning (in subparagraph (b)) has to do with the directions given by the Legislature to the

Administrative Director regarding the formulation of what it calls "the adjusted rating schedule."

           The probability that the Legislature meant to give two meanings to DFEC is borne out by

history. The Legislature has often given multiple meanings to the same terms used in workers'

compensation. Two examples should suffice.

           In the period 1990 through 1993,4 parties were required to file an Application for

Adjudication of Claim for injuries subsequent to 1989 in situations in which they wanted a case set

for hearing. This Application was a two-page document which served the purpose of our present

Declaration of Readiness to Proceed. The Board was understood to already have jurisdiction over

any case for which a Claim Form existed, although such Claim Form had not been filed with the

Board. During the same period, parties had to file a one-page Application for Adjudication of

Claim for injuries in 1989 and prior years in order to obtain jurisdiction at the Board. In other

words, the Legislature created a situation in which the term Application for Adjudication of Claim

meant (1) the pleading establishing jurisdiction, for some cases, or (2) a moving paper requesting a

hearing date, for other cases.


4
    Invariably referred to as "the window period."




                                                      8
           A current term created by the Legislature which has dual meanings is Qualified Medical

Evaluator. Labor Code Section 139.2 sets out qualifications for Qualified Medical Evaluators and

methods of appointment. Current Labor Code Section 4062.2, on the other hand, describes methods

for selection of a Qualified Medical Evaluator in an individual case—including those cases in which

the treating physician is a Qualified Medical Evaluator within the meaning of Labor Code Section

139.2

           One of the documents furnished by Applicant's attorney in connection with the DFEC issue

is the Board panel decision in Magana v. Essey International, July 9, 2007, Case No. AHM 127643.

In that decision, the Board panel appears to take the position that a vocational expert's testimony on

DFEC must rebut the "numeric formula" utilized in the current Schedule. Another Board panel

decision furnished by Defendant was Martins v. City of Arroyo Grande, January 16,2008, Case

Nos. GRO 33090 and 33495. The reasoning in this decision is similar to Magana. However, in the

Board's en banc decision, Costa v. Hardy Diagnostic (2007) 72 Cal.Comp.Cases 1492, the Board

appeared to draw parallels between the ability to rebut the current Schedule through DFEC

testimony and rebuttal of the prior Schedule through LeBoeuf testimony. It is worthwhile noting

that LeBoeuf testimony goes to the ultimate fact to be determined, not the correctness or

incorrectness of any adjustment leading to the ultimate fact. For that reason, I disagree with the

reasoning of the Board panels in Magana and Martins, at least as I understand it.

           I specifically find that the term DFEC as used in Section 4660(a) is inconsistent with the

term DFEC as used in Section 4660(b), and reason therefrom that the Legislature intended Labor

5
    I can, however, count, and note that the two Board panels accumulate four of the seven Commissioners.




                                                            9
Code Section 4660(b) and (c) to be solely directions to the Administrative Director regarding the

formulation of a rating manual. I further find that the DFEC to be rebutted in an individual case is

the DFEC as set out in Section 4660(a)—that is, the ultimate finding of permanent disability.



                                      PERMANENT DISABILITY

        Here, as set forth above, the parties utilized Robert Steiner, M.D., as AME. Dr. Steiner

found that Mr. Letuligasenoa had a 10% whole person impairment. The parties agree (see their

respective Trial Briefs) that the 10% would adjust to 15% based on a DFEC ranking of 7,6

occupational group of 350, and age of 46.

        Jeff Malmuth, testifying on behalf of Applicant, found that Mr. Letuligasenoa had sustained

a 36.6% loss of future earning capacity. Ira Cohen, testifying on behalf of Defendant, found that

Mr. Letuligasenoa had sustained a 24.6% loss of future earning capacity. Both of these findings

exceed the permanent disability rating based upon the Schedule. Moreover, they both exceed the

permanent disability rating based upon any DFEC rank in the Schedule (see footnote 5, below).

        As the Appeals Board stated in its en banc decision, Becker v. Security Pacific National

Bank (1976) 41 Cal.Comp.Cases 274: "The Schedule for Rating Permanent Disabilities is a guide.

It is not conclusive but merely evidence to be considered by the Board in arriving at its decision. 41

Cal.Comp.Cases 274 at 276.

        In Becker, the Board went on to quote with approval the language of Justice Kingsley in

Luchini v. WCAB (1970), 7 Cal.App.3d 141, 35 Cal.Comp.Cases 205, as follows:


6
 The highest DFEC ranking is "8." For a 10% whole person impairment, the adjustment for a DFEC rank "7" is the
same as the adjustment for the DFEC rank "8." Both adjust to 14%.




                                                       10
              [T]he Board cannot rely on some administrative procedure to deny to petitioner
              a disability award commensurate with the disability that he has suffered.... [The
              Board's] duty is to take whatever steps are necessary to insure that the award of
              permanent disability granted petitioner takes fully into consideration the work
              restrictions imposed by the treating physicians.

Id, at 277.

         With the above in mind, I find that the Schedule has been rebutted by the credible and well

researched reports and testimony of vocational experts retained by both sides. Based upon the range

of this evidence, I find that Mr. Letuligasenoa has sustained a 30% loss of future earning capacity,

i.e., a 30% permanent disability.7

         Apportionment was not raised as an issue, nor was any apportionment found by the AME.



                                           FUTURE MEDICAL CARE

         By stipulation of the parties, Applicant is found in need of further medical treatment to cure

or relieve him from the effects of his injury.



                                                         COSTS

         I believe that the cost of vocational evaluation was reasonably incurred by the Applicant and

that the various requirements set out in Costa have been met. On the other hand, Mr. Malmuth filed

an amended and updated cost bill after Trial, and I believe that to rule on the amount of the bill,

which was not in evidence at time of Trial, would not afford Defendant due process. Therefore, I

will find that Defendant is liable for the reasonable costs of Applicant's vocational expert and issue


7
 As indicated in footnote 1, above, it is not clear if Mr. Letuligasenoa will be entitled to an increase in benefits
pursuant to Labor Code Section 4658(d)(2).




                                                             11
a Notice of Intention to Award an amount consistent with Mr. Malmuth's billing, allowing

Defendant leave to object.



                                       ATTORNEY'S FEES

       Applicant's attorney has performed valuable services in a case of above average complexity

and will be entitled to a fee calculated at 15% of the permanent disability Awarded, together with

15% of the temporary disability Awarded, net of EDD lien and credit to Defendant.




Dated: July 31,2008
                                                            m^
                                                          Stanley E. Shields WORKERS'
                                                        COMPENSATION ADMINISTRATIVE
                                                        LAW JUDGE




                                                  12
                                   NOTICE
      Pursuant to Board Rule 10840 (Cal. Code Reg., tit. 8, Subsection 10840), as
amended effective February 1, 1993, any Petition for Reconsideration from this
decision, order or award shall be filed onlv at the Oakland District Office of the
Workers' Compensation Appeals Board, and not with any other Board Office.
Petitions for Reconsideration received in any Board Office other than the Oakland
District Office will neither be accepted for filing nor deemed filed for any purpose.




 X                               _, this notice was
          Served by mail on all parties listed on the
          Official Addfess Record
          By: ___ fc^Vf/j^-- _____________

				
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