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Apportionment and Inconvenient Bedfellows
We are all aware that an employer takes an employee as it finds them, to include poor constitutions and underlying conditions. Although not always an issue, the employer needs to focus on these unknown factors when the employee sustains a work-related injury as they could lead to potentially very expensive claims, both in regard to treatment and possible permanent disability. However, we strive to mitigate our exposure for permanent disability through apportionment which was expanded upon in Senate Bill No. 899, which outlined a revamped Labor Code §4663 and new §4664.
Labor Code §4663 clearly dictates “apportionment of permanent disability shall be based on causation.” (Italics added). The Code itself goes on to outline that a physician who prepares a report which addresses permanent disability must address apportionment of the permanent disability and that the failure to do so renders their opinion as to permanent disability incomplete. The physician needs to consider the direct result of the industrial injury as well as factors before and subsequent to said injury, including prior industrial injuries. If the physician cannot make this determination independently then they must disclose this fact and then seek a consultation from another physician or refer the applicant to another physician who can make this determination.
Going hand in hand with this directive is Labor Code §4664 which states “the employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment” (Italics added). It should be noted that subsection(b) immediately takes into consideration any prior permanent disability award and it is presumed to have existed at the time of any subsequent industrial injury.
With the exception of those cases in which total permanent disability is conclusively presumed, we know that establishing apportionment can significantly affect the outcome of a case and defendant bears the burden of establishing the existence of this factor in a case. However, the ability to apply apportionment to permanent disability to cases in which industrial medical treatment has resulted in permanent disability has become a detail-oriented argument which needs to be established specific to each case and in accordance with developing opinions.
By now we are all familiar with the general finding in Maureen Hikida v. WCAB, (2017) 12Cal.App.5th 1249. In Hikida, the applicant developed carpal tunnel syndrome as a result of her employment. The condition was treated by way of carpal tunnel release, which was unsuccessful and resulted in the applicant’s development of chronic regional pain syndrome (CRPS), a condition that was different than her original diagnosis. Per the AME in this case, applicant’s permanent total disability was due entirely to the effects of the CRPS that applicant developed as a result of the failed carpal tunnel surgery. Although the underlying carpal tunnel diagnosis was apportioned to industrial and non-industrial factors, the AME found no apportionment for the CRPS condition. The Court ultimately decided that disability resulting from medical treatment for which the employer is responsible is not subject to apportionment. This resulted in an un-apportioned permanent disability award to the applicant as a result of the CRPS.
Hikida caused significant disagreements between Applicants and Defendants as to when a permanent disability finding could be apportioned to non-industrial factors. This included arguments by Applicant that apportionment no longer applied if they underwent surgery to treat the industrial injury and a general application by the WCAB that Applicants were entitled to unapportioned awards when permanent disability was caused by reasonable medical treatment for an industrial injury. Fast forward three years and parties have now been given a new perspective as outlined in County of Santa Clara v. WCAB (Justice), (2020) 49 Cal.App.5th 605 (hereinafter, Justice).
In Justice, applicant sustained an admitted injury to the right knee with compensable consequence to the left knee. Applicant ultimately had bilateral total knee replacements. Applicant did have a history of osteoarthritis of the knees, which was documented by the AME through x-rays and MRIs. The AME in this case opined that the need for applicant’s total knee replacement was not required because of the meniscus tear, which she sustained as a result of her industrial injury, but as a result of the underlying arthritis, although he did concede the industrial injury hastened the need for surgery. The medical record was also well documented with regards to treatment for meniscus tear not including total knee replacement and various indications that total knee replacement had been contemplated for “some years” prior to the industrial injury. Applicant was initially awarded an unapportioned award at the trial level based on the trial Judge’s indication that “Hikida is not distinguishable from this case” and “it is far beyond the scope of the WCAB trial judge to decide whether a published Court of Appeal decision was based upon sound policy or otherwise.”
On appeal the Court took into consideration the change in legislation which prompted the changes to Labor Code §4663 and adding of §4664. Specific focus was made on the limitations to apportionment pre-2004 which specifically prevented apportionment based on causation. “The new approach to apportionment is to look at the current disability and parcel out its causative sources- nonindustrial, prior industrial, current industrial-and decide the amount directly caused by the current industrial source.” (Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal.App.4th 1313, 1328.)
The appropriate factors for apportionment include “pathology, asymptomatic prior conditions and retroactive prophylactic work preclusions, provided there is substantial medical evidence establishing that these other factors have caused permanent disability” (City of Petaluma v. Workers’ Comp. Appeals Bd. (2018) 29 Cal.App.5th 1175, 1184 (Petaluma).) The Justice Court relied heavily on Petaluma to justify application of apportionment to this case based on the cause of the final disability. Applicant’s underlying pathology of arthritis was considered a “substantial causal factors in the permanent disability”. Using Labor Code §4663 the Court asserted “The agreed medical examiner’s initial report, five supplemental reports, and two depositions were unrebutted and constituted substantial medical evidence that Justice’s preexisting knee pathology was a significant causal factor in producing her permanent disability following total knee replacement surgery.”
The Justice Court clarified the misunderstandings generated by Hikida, including the misconception that the employer is responsible for the consequences of medical treatment, without apportionment. In Hikida, the permanent total disability was entirely due to the CRPS which developed after the unsuccessful carpal tunnel surgery and can be distinguished and limited to apply in cases where the medical treatment is the sole cause of the permanent disability. Justice is distinguishable in that the industrial meniscus tear did not prompt the need for the total knee replacement and the surgery itself improved the applicant’s overall condition to include an increased ability to walk and engage in weight-bearing activities, despite a generally higher impairment finding due to the post-surgical status as outlined in the AMA Guides. Because of the indirect causal relationship in applicant’s pre-existing arthritis and the total knee replacement, a finding was made for applicant which found her permanent disability apportioned to the industrial injury and the extensive preexisting knee pathology.
Because the issues are not entwined enough there is a third case which needs to be considered and which could further complicate an apportionment analysis, Durazo v. Solomon Dental Corporation, 2020 Cal. Wrk. Comp. P.D. LEXIS_. Durazo was litigated subsequent to Hikida, with the trial court finding applicant was entitled to an un-apportioned permanent disability award based on the opinions of the treating physician and the findings of Hikida. The applicant sustained an admitted left knee injury and underwent epicondylar knee replacement with inconsistent opinions between the PTP and PQME as to its result. Applicant did have a history of preexisting osteoarthritis but the PTP opined the permanent disability was solely the result of the work-related injury. The PQME however, found apportionment to preexisting factors. The matter has been returned to the trial court for further proceedings which should take into consideration the findings of Justice, as that opinion issued after the parties had requested reconsideration of the underlying opinion.
The Durazo case does pose potential conflict to Justice and Hikida, which the Court appeared to take into consideration when it opined “that if a conflict exists between Justice and Hikida, then the WCAB is free to choose between the conflicting lines of authority until either the Supreme Court resolves the conflict or the Legislature clears up the uncertainty by legislation”. However, the facts of the case were not developed to fit into a Justice analysis so it is unclear if this case is potentially distinguishable or if it could be a direct conflict. Both cases involve knee injuries where the applicant had a history of arthritis and ultimately required knee surgery. However, the extent of injuries, usual medical care for the exact injury sustained and extent of the pre-existing condition are likely to become significant factors in the determination of whether apportionment should be applied. What does appear to be evident in all these cases is the relevance of the diagnoses of the applicant’s injury, carpal tunnel syndrome compared to CRPS and a torn meniscus as opposed to arthritis, especially when considering the treatment plan for each diagnosis. It also appears that the parties, and more importantly, Defendant, need to ensure the medical record is properly developed to include seeking the expert opinion on applicant’s course of care and what, if any, factors could influence that care.
The applicability of apportionment on a case by case basis is not a debate which will be over soon. However, by staying on top of the medicals on the file, and ensuring a thorough medical history is developed, Defendant can put themselves into a better position to argue for the application of apportionment where we can establish the industrial injury is not the sole cause of the permanent disability.
By Justine N. Barraza, Esq., Associate Attorney, Riverside Office October 2020