CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-11-0000556; CASE NO. AB 2005-243 (2-04-07185))
Wayne H. Mukaida for petitioner
Colette H. Gomoto for respondent
RECKTENWALD, C.J., McKENNA, POLLACK, AND WILSON, JJ.
David Panoke was injured while he was working for his former employer, Reef Development of Hawaii, Inc. This appeal concerns Panoke's subsequent workers' compensation claim made against Reef and its insurance carrier, Seabright Insurance Company.
Panoke was involved in a work accident in which he initially stated that he had injured his back. Reef and Seabright accepted responsibility for Panoke's back injury. Shortly thereafter, Panoke also began experiencing pain in both shoulders. MRIs of Panoke's shoulders showed that Panoke had labral tears and rotator cuff tendon tears in both shoulders. Reef and Seabright denied liability for Panoke's shoulder injuries.
Panoke argues that pursuant to Hawai'i Revised Statutes (HRS) § 386-85,  the Labor and Industrial Relations Appeals Board (LIRAB) was required to presume that Panoke's shoulder injuries were work-related in the absence of substantial evidence to the contrary. The LIRAB concluded that Reef and Seabright adduced substantial evidence that rebutted the presumption that Panoke's shoulder injuries were covered work-related injuries. The LIRAB also limited Panoke's Temporary Total Disability (TTD) benefits based on deficiencies in the certificates of disability submitted by Panoke's attending physicians. The ICA affirmed the LIRAB's decision and order.
For the reasons set forth below, we hold that the LIRAB erred in concluding that Reef and Seabright adduced substantial evidence that rebutted the presumption that Panoke's shoulder injuries were related to his work accident. We also hold that the LIRAB erred in relying on the deficiencies in Panoke's physicians' reports in limiting his TTD benefits. We therefore vacate the ICA's judgment and the LIRAB's decision and order and remand the case to the LIRAB for further proceedings consistent with this opinion.
A. Panoke's June 17, 2004 Work Accident
Panoke began working for Reef as an ironworker on February 19, 2004. His job involved heavy manual labor, including welding, climbing scaffolding, carrying heavy equipment, pulling forty to fifty pound buckets up to the scaffolding using ropes, using jackhammers, and using pulleys, which involved pulling down on chain or rope with his arms to lift heavy objects. Panoke was able to perform his job duties without any physical restrictions or symptoms from February 19, 2004 until June 17, 2004.
On June 17, 2004, Panoke was working for Reef at a construction site. Panoke's work involved installing concrete wall panels on a building. The crew used a pulley mechanism to lift the heavy panels. While the crew members were guiding one of the panels into place, the panel slipped downwards in the chain that was holding it. As the panel slipped, Panoke was guiding it with his hands underneath it, with his knees slightly bent. The panel fell around two feet and stopped short of the ground, but Panoke's body was jerked forward slightly while he held onto the panel, and then he let go and moved back to prevent the panel from landing on his toes. Panoke later recalled that he immediately felt a sharp pain in his right lower back, but felt no pain in his shoulders at the time.
B. Panoke's Subsequent Medical Treatment and Workers' Compensation Claims
Immediately after the June 17, 2004 work accident, Panoke was taken to Concentra Medical Center (Concentra). At Concentra, Dr. Diaz-Ordaz diagnosed Panoke with a lower back strain and placed Panoke off work duty for the rest of the day, informing Panoke that he could return to work the next day with modified duties. On June 18, 2004, Reef completed a WC-1 "Employer's Report of Industrial Injury" form, and did not contest that the back strain had occurred at work or that it was covered by workers' compensation. Panoke returned to Concentra on June 21, 2004, and June 28, 2004, and was informed on both occasions that he could return to work with modified duties. However, Panoke did not return to work because he felt he could not handle even light duties, and instead, on June 30, 2004, he visited a new doctor, Dr. Scott McCaffrey, at Work Star Occupational Health Systems.
In his first visit to Work Star, Panoke complained of pain in his upper left back, right buttock, and right knee. Dr. McCaffrey diagnosed Panoke with a lumbar strain or sprain, and right leg sciatica, and placed Panoke "off duty" but did not specify a date when Panoke could return to work. Panoke next visited Work Star on July 2, 2004, when he complained of pain in his upper left back, lower back, and right hip. Dr. McCaffrey again recorded Panoke's work status as "off duty." Panoke returned to Work Star on July 6, 2004, complaining of upper and lower back and right buttock pain, and was also diagnosed with a left shoulder sprain. On July 13, 2004, Panoke complained to Dr. McCaffrey of pain in his neck, mid back, right buttock, and right hamstring. Again, Dr. McCaffrey placed Panoke "off duty."
On July 16, 2004, in addition to back pain, Panoke complained to Dr. McCaffrey of pain in his left shoulder. On July 30, 2004, Panoke began to complain of pain in both shoulders. Panoke continued regular visits to Work Star from July 2004 until July 2007 with various pain complaints, including pain in his legs, feet, hips, back, and shoulders.
On August 31, 2004, Panoke saw Dr. Gary Okamura, an orthopedic surgeon, for the pain in his shoulders. Dr. Okamura noted that Panoke had previously fractured both of his shoulders in 1991, but did not have surgery at that time. Panoke told Dr. Okamura that he had not noticed the shoulder pain until a few days after the work accident because his back had been so sore. Dr. Okamura stated that his initial impression was that Panoke had tendinitis and labral tears in both shoulders, but requested permission to obtain an MRI on both Panoke's shoulders.
On September 8, 2004, Reef and Seabright sought a second opinion on Panoke's condition from Deborah Agles, M.D. Dr. Agles examined Panoke and his medical records, and noted that Panoke had been involved in a motor vehicle accident in 1991 that resulted in fractures to both of his shoulders and hospitalization for one week. Dr. Agles opined that Panoke's current shoulder injuries had not been caused by the June 17, 2004 work accident due to the lack of close temporal proximity between the shoulder pain and the accident, Panoke's inability to account for the development of the shoulder symptoms, and Panoke's history of prior shoulder injuries. Seabright then informed Dr. McCaffrey, the State Disability Compensation Division (DCD), and Panoke's attorney that Reef and Seabright were controverting Panoke's bilateral shoulder injury diagnoses.
On November 6, 2004, Reef and Seabright denied Dr. McCaffrey's request for the shoulder MRIs based on Dr. Agles's report. Panoke then requested a DCD hearing to review the denial. On February 15, 2005, Seabright obtained another medical opinion regarding Panoke's shoulders from Clifford Lau, M.D., an orthopedic surgeon. Dr. Lau agreed with Dr. Agles that Panoke's shoulder injuries were not a result of his June 17, 2004 work accident. Dr. Lau also opined that Panoke's ongoing back pain was more likely a result of psychological factors than the June 17, 2004 accident. Based on Dr. Lau's report, Reef and Seabright terminated Panoke's TTD benefits effective April 6, 2005. Panoke then amended his request for a DCD hearing to include review of Reef's termination of TTD.
On June 13, 2005, the DCD Director determined that Panoke's shoulder injuries were a result of the June 17, 2004 accident, and that "[Reef] ha[d] not provided sufficient evidence to support its denial of a shoulder injury." The Director therefore ordered Reef to pay for medical care, services, and supplies for Panoke's injuries, including both shoulder injuries. The Director also ordered Reef to pay TTD compensation for the periods of June 20, 2004 through June 22, 2004 and June 30, 2004 through April 5, 2005. Reef and Seabright filed a notice of appeal to the LIRAB, and a motion to stay the payments ordered by the Director. The LIRAB denied Reef and Seabright's motion to stay on August 5, 2005.
Panoke underwent Dr. Okamura's recommended shoulder MRIs, and Dr. Okamura diagnosed him with labral tears and rotator cuff tendon tears in both shoulders, and requested permission to perform surgery. Reef and Seabright authorized the shoulder surgery, but reserved their right to seek reimbursement for any medical expenses paid in the event that the LIRAB overturned the Director's order. Dr. Okamura performed surgery to repair the rotator cuff and superior labral on Panoke's right shoulder on February 3, 2006.
Between March and June 2006, the parties disputed whether TTD was due to be paid to Panoke. Panoke argued that "[t]here can be no dispute that [Panoke] has been disabled following his surgery, however, [Seabright] has failed to pay TTD." Reef and Seabright, however, argued that they "ha[d] not received certificates of disability from [Panoke's] treating physicians." As a result of this dispute, on June 7, 2006, Panoke moved for temporary remand to the DCD to request the Director to compel Reef and Seabright to pay TTD and assess penalties against them. On June 26, 2006, the LIRAB temporarily remanded the case to the DCD.
Reef and Seabright argued to the Director that the disputed period of TTD payments dated from April 6, 2005 (the day after the last day of TTD ordered by the Director on June 13, 2005) through February 2, 2006 (the day before Panoke's right shoulder surgery). Reef and Seabright stated that they had paid TTD for the period dating from February 3, 2006 to September 15, 2006, while Panoke was recovering from surgery, and for the periods previously ordered by the Director. Reef and Seabright claimed that their denial of TTD payments for the disputed period was justified, first because of Dr. Lau's opinions that Panoke's shoulder injuries were not caused by the June 17, 2004 accident and that Panoke could return to light work, and, second, because Dr. McCaffrey had not submitted any valid certifications of disability.
On October 13, 2006, the Director issued a decision. The Director credited Dr. McCaffrey's reports, and ordered Reef and Seabright to pay TTD benefits for the period of April 6, 2005 through September 19, 2006. The Director also ordered Reef and Seabright to pay additional TTD payments upon the receipt of future medical certifications. However, the Director declined to impose penalties against Reef and Seabright for late TTD payments. Reef and Seabright appealed the Director's decision to the LIRAB, and filed a motion to stay payments. On December 8, 2006, the motion to stay payments was denied. Panoke underwent surgery on his left shoulder on October 20, 2007.
C. Appeal to the LIRAB
The LIRAB trial was held on April 9, 2010. The issues relevant to this appeal that were to be determined at the trial were:
a. Whether Claimant sustained bilateral shoulder injuries on June 17, 2004, arising out of and in the course of employment.
c. What is the period of temporary total disability resulting from the work injury of June 17, 2004.
d. Whether Employer is liable for a penalty for late payment of temporary total disability benefits for the period April 6, 2005 to February 2, 2006.
Two witnesses testified at the trial, Dr. Peter Diamond and Panoke. After Dr. Diamond was qualified as an expert in the area of orthopedic surgery, he testified to the following. Dr. Diamond determined that the injuries to both of Panoke's shoulders were the result of degenerative, long-term conditions, including arthritis. The arthritis may have been caused by a previous trauma injury, such as a fracture. Dr. Diamond also determined that the labral and rotator cuff tears in Panoke's shoulders were most likely not the result of the June 17, 2004 work accident.
Dr. Diamond gave several reasons for his opinion that the tears were not caused by the June 17, 2004 work accident. First, the mechanism of Panoke's injury that caused his back injury was not consistent with the shoulder injuries. Usually, tears in the shoulder like Panoke's are caused by a compression injury of the shoulder joints, rather than a pulling (traction) injury, which is what occurred in Panoke's case. According to Dr. Diamond, it is possible to cause tearing of the labrum or rotator cuff through a traction injury, but this would usually also cause damage to the biceps, which Panoke lacked. Second, it is very unlikely that someone would have a sudden tear of the labrum and not have any pain symptoms immediately. Dr. Diamond also opined that it is unlikely that Panoke's back pain would have masked his shoulder pain, particularly when Panoke complained of pain in his knee immediately following his back injury.
On cross-examination, Dr. Diamond was questioned as to whether Panoke's general job duties as an ironworker, such as pulling up objects by rope, or pulling down on a rope or chain, could have resulted in Panoke's degenerative shoulder conditions. Dr. Diamond answered that although heavy labor such as Panoke's might increase the risk of arthritis, it is uncommon for heavy work to cause degenerative shoulder problems. Dr. Diamond also testified that a patient with preexisting labrum tears would be more susceptible to traction injuries resulting in labrum tears. When asked if it was possible that Panoke's June 17, 2004 work accident had aggravated Panoke's arthritic condition or the labral tearing "even to the slightest degree, " Dr. Diamond responded that it was possible, but later testified that he did not think it was probable. Dr. Diamond testified that he estimated a twelve- to eighteen-month recovery time from Panoke's shoulder surgery.
Panoke testified to the following. When the concrete panel Panoke was helping to move slipped, he let go of the panel to move away after straining against the weight for a few seconds, and his body was jerked forward. He experienced an immediate, sharp, and excruciating pain in his back, but he did not have any shoulder pain. Panoke's shoulder pain started "maybe a week, a week and a half, maybe two weeks later [than the accident]." At first it was not intense, but the pain got worse over time, and Panoke still experienced significant pain at the time of the LIRAB trial. Following his second shoulder surgery, Panoke's TTD checks had stopped coming, and he was living on the beach because he had no other place to go.
On cross-examination, Panoke testified that after his second shoulder surgery, Dr. McCaffrey told him he could return to work with modified light duty, but that Reef did not have any light duty work at that time. Panoke did not look for work outside of Reef. Panoke also testified that in 1990 or 1991, he broke both of his shoulders after he fell from a moped and landed with both arms.
In their post-hearing brief, Reef and Seabright relied on the reports of Drs. Agles and Lau, and the trial testimony of Dr. Diamond, to support their argument that Panoke's shoulder injuries were not caused by the June 17, 2004 work accident.
Reef and Seabright further argued that Panoke was not entitled to TTD benefits beyond December 17, 2005, based on Dr. Diamond's opinion that Panoke's back injury had achieved maximum medical improvement eighteen months after the June 17, 2004 accident.
Panoke argued in his post-hearing memorandum that his shoulder injuries were caused by the June 17, 2004 work accident. Panoke argued that this was established because he was able to perform his work duties before June 17, 2004 without problem, there were no intervening incidents between June 17, 2004, and the onset of his shoulder pain, his previous shoulder injuries had resolved, and his attending physicians concluded that his shoulder injuries were work-related.
Panoke also argued that the reports of Drs. Agles and Lau could not be relied upon because Dr. Agles had not examined Panoke's shoulders, and because neither Dr. Agles nor Dr. Lau considered whether the June 17, 2004 accident could have exacerbated Panoke's pre-existing condition. Panoke further argued that Dr. Diamond's reports were flawed because Dr. Diamond failed to consider whether the June 17, 2004 accident exacerbated Panoke's shoulder injuries, and because Dr. Diamond's testimony, that the type of tears Panoke suffered to his shoulders "usually" involve compression mechanisms or bicep injuries, was irrelevant.
Panoke next argued that he was entitled to continuing TTD benefits from June 21, 2004 through July 12, 2007. Panoke relied on the Work Star reports for this period placing Panoke off work.
Finally, Panoke argued that Reef and Seabright should have been required to pay a twenty percent penalty for late payments of TTD under HRS § 386-92.
On June 14, 2011, the LIRAB issued its decision. The LIRAB made the following findings of fact (FOF) relevant to this appeal:
7. On July 2, 2004, Claimant sought treatment with Todd M. Uchima, [physician assistant] for Dr. McCaffrey and/or Dr. McCaffrey with complaints of pain in his upper back, lower back, and right hip.
Claimaint's Pain diagram noted that he experienced burning pain in his posterior right shoulder, aching in his left scapular region, and low back burning and stabbing pain, and pins and needles in his right hip. Claimant rated his pain at 10/10. The [LIRAB] notes, however, that two other pain diagrams of the same date do not indicate any right shoulder symptoms.
10. On July 16, 2004, Claimant sought treatment with Dr. McCaffrey with complaints of pain in his low back and left shoulder. According to Claimant's July 16, 2004 pain diagram, he had pa m his right and left shoulder, his right hip, and his right leg.
18. On August 31, 2004, Claimant informed Gary Y. Okamura, M.D. that he first noticed shoulder pain a few days after the subject accident, because his back was so sore. Claimant rated the pain on his right shoulder at 6/10 and on the left shoulder at 4/10.
20. At Employer's request, Deborah A. Agles, M.D. examined Claimant on September 8, 2004. Claimant's pain drawing noted right shoulder aching. Claimant informed Dr. Agles that his right shoulder began hurting about one week after the June 17, 2004 work accident. He was unable to describe how the shoulder was injured, but assumed it was due to the heavy lifting. Claimant had no complaints regarding the left shoulder. Dr. Agles did not, however, examine Claimant's shoulders.
29. By letter dated January 31, 2005, Dr. McCaffrey opined that Claimant sustained a "[b]ilateral shoulder sprain with chronic persistent dysfunction, right greater than left." Dr. McCaffrey noted that Claimant had no history of ongoing shoulder problems or medical treatment for the shoulders, and that Claimant "fully and totally" recovered from the prior motor vehicle accident-related shoulder trauma, without residual symptoms or impairment. Dr. McCaffrey further noted that Claimant had been involved in heavy work activities and recreational pursuits and was clinically asymptomatic before the subject work accident.
31. Clifford K.H. Lau, M.D. examined Claimant at Employer's request. In his report dated February 15, 2005, Dr. Lau noted Claimant's report that he developed pain in the front of his right shoulder and the back of his left shoulder about a week after the subject accident. Claimant also informed Dr. Lau that he had no problems with his moped accident-related shoulder injuries after they healed.
Dr. Lau opined that Claimant's subject complaints exceeded his objective findings and that his examination showed "multiple inconsistencies."
Dr. Lau opined that Claimant suffered a strain to his lower back as a result of the June 17, 2004 work injury and that Claimant's current problems were not related to that work injury. He further opined that, based on the "time sequence and development of the shoulder complaints, " Claimant's shoulder complaints were not related to the subject work accident. Dr. Lau explained that "development of neck pain and severe shoulder pa at 3-4 weeks following an injury is not medically probable unless there was loss of consciousness or change to his mental status."
43. A September 21, 2005 MR arthogram [sic] ("MRA") of [Panoke's] left shoulder revealed:
1. ... evidence of degenerative joint disease.
2. Moderate degenerative joint disease of the AC joint ....
3. High grade partial tear of the supraspinatus tendon .... There is also a tear involving the . . . infraspinatus tendon.
4. Stellate tear and degeneration of the superior labrum which extends into the posterior labrum. The anterior labrum is grossly normal.
44. A September 21, 2005 MRA of [Panoke's] right shoulder revealed:
1. Degenerative changes of the glenohumeral joint and AC joint. ...
2. Partial tear along the articular surface of the suprasp atus tendon near its insertion site.
3. Superior labral tear near its base. The superior labrum is of increased intensity related to degeneration.
45. By letter dated September 30, 2005, Dr. Okamura reported his impressions as:
1. Right shoulder superior labral tear
2. Right shoulder partial rotator cuff tendon tear.
3. Left shoulder superior labral tear.
4. Left shoulder partial versus full thickness rotator cuff tear.
47. Dr. Lau prepared a supplemental report dated October 28, 2005. He acknowledged that Claimant had a "pain problem." He continued to opine, however, that Claimant's shoulder conditions were not related to the June 17, 2004 work injury. If the work accident caused the rotator cuff and labral tears to both shoulders, the significant force would have been applied to both shoulders, and "the pain would have been substantial and presentation would have occurred immediately or at least within several days to a week."
48. Dr. Agles prepared a supplemental report dated November 15, 2005.
[Dr. Agles] continued to opine that Claimant's shoulder symptoms were not related to the subject accident, given the lack of temporal association and Claimant's inability to describe how the shoulders were injured. Dr. gles noted Claimant's pre-existing shoulder pathology wherein Claimant had bilateral fractures and a left shoulder strain that was sustained while resisting arrest.
50. On December 9, 2005, Claimant sought treatment with Dr. Baloy th complaints of painin both shoulders, his lower back, buttocks, right upper leg, and right foot. Dr. Baloy noted Claimant's "work status" as "off duty."
51. On December 30, 2005, Claimant sought treatment with Dr. Baloy with complaints of pain in both shoulders, his lower back, buttocks, right leg, and right foot.
53. On January 26, 2006, Claimant sought treatment with Dr. McCaffrey with complaints of pain
both shoulders, his mid to low back, right buttock, and right posterior thigh. Dr. McCaffrey noted Claimant's "work status" as "off duty."
57. On March 9, 2006 and April 11, 2006, Claimant sought treatment with Dr. McCaffrey with complaints of painin both shoulders, his ...