In re Lawson Grp.

175 N.H. 397

288 A.3d 424

APPEAL OF The LAWSON GROUP & a. (New Hampshire Compensation Appeals Board)

No. 2021-0243

Supreme Court of New Hampshire.

Argued: May 4, 2022

Opinion Issued: August 16, 2022

Bernard & Merrill, PLLC, of Manchester (Gary S. Harding on the brief and orally), for petitioner The Lawson Group.

John M. Formella, attorney general, and Anthony J. Galdieri, solicitor general (John F. Brown, attorney, on the brief and orally), for the State.

HICKS, J.

Petitioner The Lawson Group, the third-party administrator for the self-insured petitioner, Summit Packaging Systems (the employer), appeals a decision of the New Hampshire Compensation Appeals Board (CAB) upholding the decision of the respondent, the State Special Fund for Second Injuries (Second Injury Fund), to decline to reimburse The Lawson Group for benefits paid to the claimant. We affirm.

The following facts either were found by the CAB or relate the content of documents in the record. The employer hired the claimant in 2005 as a laborer and machine operator. The claimant was injured at work in January 2016, when she tried to catch a 65-pound spool of tubing as it fell. She first sought medical treatment on January 13, 2016, reporting that she had radiating pain into her left arm, numbness and tingling into her left index finger, and neck pain, and denying that she had any prior left arm or neck complaints. She was returned to work with modifications. At the end of January 2016, the claimant had an MRI scan, which showed disc degeneration, spondylolisthesis, facet hypertrophy, and foraminal stenosis at C5/6 and C6/7. She was referred to Dr. Sinkov, who administered trigger point injections for cervical nerve impingement. The claimant continued to work with job modifications and continued to receive medical treatment until September 12, 2016, when Dr. Sinkov performed a discectomy and fusion. The claimant was out of work following the surgery, but returned in December 2016 in a modified duty capacity. In 2017, the CAB found that the claimant's "surgery and subsequent treatment were and are related to the work injury" she suffered in January 2016.

In August 2018, The Lawson Group applied to the Second Injury Fund for reimbursement. The Lawson Group appended to its application: (1) a July 2018 certification from Dr. Forrest, stating that the claimant's preexisting permanent impairment was "C6-7 radiculopathy" on her left side, and that her subsequent work-related injury was the September 2016 cervical surgery; (2) a sworn statement by a representative of the employer that records attached to the statement "pre-date the date of the work-related injury that is the basis for reimbursement by the Second Injury Fund"; and (3) certain of the claimant's medical records from January 13, 2016, to March 2, 2018.

In a February 2019 letter, the Second Injury Fund denied The Lawson Group's application because The Lawson Group had failed to: (1) establish that the claimant's surgery constituted a subsequent disability by injury; and (2) demonstrate that the employer knew that the claimant had any permanent impairment before her surgery. The Lawson Group appealed to the CAB.

Following a March 2020 hearing, the CAB upheld the Second Injury Fund's denial of reimbursement. The CAB subsequently granted The Lawson Group's motion for rehearing and reheard the matter in December 2020. In a March 2021 decision, the CAB upheld the Second Injury Fund's decision to deny The Lawson Group's application for reimbursement because The Lawson Group had failed to: (1) "meet the written documentation requirement" of RSA 281-A:54, III (2010); (2) "show a subsequent disability by injury"; and (3) "show a prior and permanent injury." The Lawson Group moved for reconsideration, which the CAB denied. This appeal followed.

Our standard of review of CAB decisions is established by statute. See Appeal of Hartford Ins. Co., 162 N.H. 91, 92, 27 A.3d 838 (2011) ; RSA 541:13 (2021). All findings of the CAB upon all questions of fact properly before it are deemed prima facie lawful and reasonable. RSA 541:13. Accordingly, our review of the CAB's factual findings is deferential. Appeal of Hartford Ins. Co., 162 N.H. at 93, 27 A.3d 838. As the appealing party, The Lawson Group has the burden of demonstrating that the CAB's decision is reversible. See Appeal of Doody, 172 N.H. 802, 806, 235 A.3d 1000 (2020). We will not disturb the CAB's decision absent an error of law, or unless, by a clear preponderance of the evidence, we find it to be unjust or unreasonable. Id. at 805, 235 A.3d 1000 ; see RSA 541:13.

Before addressing the parties’ arguments, we provide a brief overview of the Second Injury Fund for context. "The second injury fund was created to encourage employers to hire or retain employees with permanent physical or mental impairments of any origin by reducing the employer's liability for workers’ compensation claims." Appeal of Hartford Ins. Co., 162 N.H. at 93, 27 A.3d 838 (quotation omitted). The implementing statute provides, in relevant parts:

I. If an employee who has a permanent physical or mental impairment, as defined in RSA 281-A:2, XIV, from any cause or origin incurs a subsequent disability by injury arising out of and in the course of such employee's employment on or after July 1, 1975, which results in compensation liability for a disability that is greater by reason of the combined effects of the preexisting impairment than that which would have resulted from the subsequent injury alone, the employer or the employer's insurance carrier shall in the first instance pay all awards of compensation provided by this chapter. However, the commissioner shall reimburse such employer or insurance carrier from the special fund created by RSA 281-A:55 for all compensation payments subsequent to those payable for the first 104 weeks of disability. Provided, however, that prior to the first 104 weeks of disability, the employer shall be reimbursed 50 percent after the first $10,000 paid on all compensation for temporary total, temporary partial, permanent partial, permanent total, medical, or rehabilitation benefits for all injuries occurring on or after January 1, 1991.

....

III. In order to qualify under this section for reimbursement from the special fund, an employer shall establish by written records, or by affidavit executed at the time of hire or retention in employment, that the employer had knowledge of the employee's permanent physical or mental impairment at the time that the employee was hired or at the time that the employee was retained in employment after the employer acquired such knowledge.

RSA 281-A:54, I, III (2010). RSA 281-A:2, XIV, in turn, defines a "permanent physical or mental impairment" for the purpose of the Second Injury Fund as "any permanent condition that is congenital or due to injury or disease and that is of such seriousness as to constitute a hindrance or obstacle to obtaining employment or to obtaining employment if the employee should become unemployed." RSA 281-A:2, XIV (2010). When considering whether a permanent condition "constitute[s] a hindrance or obstacle to obtaining employment," id., the proper "inquiry [is] whether the impairment is such that an employer who knew of it and its extent would more likely than not significantly consider it when making a decision to hire or retain the employee." Appeal of Hartford Ins. Co., 162 N.H. at 97, 27 A.3d 838 (quotation omitted).

Thus, to qualify for reimbursement from the Second Injury Fund, a carrier must pay workers’ compensation benefits to (1) an employee with a permanent physical or mental impairment from any cause or origin who (2) incurs a subsequent disability by injury (3) arising out of and in the course of his employment that (4) results in a greater workers’ compensation liability by reason of the combined effects of the preexisting impairment than would have resulted from the subsequent injury alone. Further, the [carrier] must establish by written records that the employer had knowledge of the permanent physical or mental impairment at the time that [the] employee was [hired or] retained in employment after the employer acquired such knowledge.

Appeal of CNA Ins. Cos., 143 N.H. 270, 273, 722 A.2d 496 (1998) (quotations, citation, and ellipsis omitted) (interpreting prior version of statute).

On appeal, The Lawson Group argues that the CAB erroneously determined that The Lawson Group had failed to prove the claimant had a "permanent physical ... impairment" and that she incurred "a subsequent disability by injury." RSA 281-A:54, I; see RSA 281-A:2, XIV. For the purposes of this appeal, we assume without deciding that the claimant's January 2016 injury constitutes a "permanent physical ... impairment" and that her September 2016 surgery constitutes a "subsequent disability by injury" for the purposes of the Second Injury Fund. RSA 281-A:54, I; see RSA 281-A:2, XIV. Nonetheless, we uphold the CAB's decision because, as the CAB correctly ruled, The Lawson Group failed to establish that the employer "had knowledge" that the claimant's January 2016 injury resulted in a "permanent physical ... impairment" when it retained her after the injury but before the surgery. RSA 281-A:54, III; see Appeal of CNA Ins. Cos., 143 N.H. at 275, 722 A.2d 496.

Our decision in Appeal of CNA Insurance Cos. is dispositive. The claimant in Appeal of CNA Insurance Cos. injured his knee at work in April 1985, about 20 years after he began employment with Harris Graphics. Appeal of CNA Ins. Cos., 143 N.H. at 270, 722 A.2d 496. Following arthroscopic surgery in May, he returned to work in July with modified responsibilities. Id. at 270-71, 722 A.2d 496. In September, the claimant injured his back when his knee gave out as he picked up a casting from a pallet and fell backwards. Id. at 271, 722 A.2d 496. The claimant's employment was terminated on March 9, 1986. Id. Harris Graphics and its workers’ compensation carrier...