Ryan v. State

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PATRICK RYAN, Appellant, v. STATE OF MISSOURI, SECOND INJURY FUND, Respondent.

No. ED112149

Court of Appeals of Missouri, Eastern District, Fourth Division

November 26, 2024

Appeal from the Labor and Industrial Relations Commission

Michael S. Wright, Judge

Introduction

Patrick Ryan ("Ryan") appeals the Labor and Industrial Relations Commission's ("Commission") decision denying his claim against the Second Injury Fund ("Fund") for permanent total disability ("PTD") benefits. This appeal turns on the application of § 287.220.3^[1]("Subsection 3") of the Missouri Workers' Compensation Act ("Act") which applies to all PTD claims against the Fund. Pertinent to this appeal is the first condition of Subsection 3, that provides a claimant is entitled to PTD benefits if the claimant has at least one qualifying pre-existing disability equaling a minimum of 50 weeks of permanent partial disability ("PPD"), and which is "[a] direct result of a compensable injury as defined in section 287.020." §§ 287.220.3(2)(a)a-287.220.3(2)(a)a(ii).

The basic questions before this Court are: 1) whether a portion of a prior award of enhanced PPD can be considered in a subsequent PTD claim against the Fund in determining if the claimant has met the 50-week statutory threshold; and 2) whether a portion of a prior award of enhanced PPD can be considered a direct result of a compensable injury. This Court concludes the answer to both questions is: Yes. Accordingly, the Commission's award denying Ryan Fund benefits is reversed.

Background

A. The Missouri Workers' Compensation Act and the Second Injury Fund

Before discussing the facts and merits of Ryan's appeal, we review the purpose and function of the Act and the Fund. In 1925, the Act established the rights and responsibilities of employees and employers in the event an employee suffers an on-the-job injury that results in measurable disability to an identifiable part of the body or to the body as a whole ("BAW"). See Gunnett v. Girardier Bldg. &amp Realty Co., 70 S.W.3d 632, 635 n.2 (Mo. App. E.D. 2002); § 287.190. The legislature amended § 287.220 in 1943 to establish the Fund to encourage the employment of the partially handicapped, that is, an employee with one or more pre-existing disabilities. See Fed. Mut. Ins. Co. v. Carpenter, 371 S.W.2d 955, 957 (Mo. 1963); see also Lawrence v. Treasurer of State-Custodian of Second Injury Fund, 470 S.W.3d 6, 9 n.1 (Mo. App. W.D. 2015). The Fund's framework ensures "[t]he employer is liable only for the disability resulting from the work-related compensable injury, and the [Fund] is liable only for the percentage of disability which exceeds the sum of the two disabilities by reason of their combination." Searcy v. McDonnell Douglas Aircraft Co., 894 S.W.2d 173, 178 (Mo. App. E.D. 1995) (overruled on other grounds). The Fund becomes liable when the pre-existing disability is combined with the compensable disability from the primary injury and results "in a greater degree of disability than the sum of the two disabilities, that is, a synergistic enhancement in which the combined totality is greater than the sum of the independent parts." Id. As a result, "[t]he employer is liable only for the disability resulting from the work-related compensable injury, and the Second Injury Fund is liable only for the percentage of disability which exceeds the sum of the two disabilities by reason of their combination." Id.

For purposes of Fund liability, a claimant's injuries are characterized as PPD or PTD. PPD "is a disability that is permanent in nature and partial in degree." Jim Plunkett, Inc. v. Ard, 499 S.W.3d 333, 339 (Mo. App. W.D. 2016) (internal quotations and citation omitted). Conversely, "[PTD] arises when the employee's injury is such that the employee has become permanently unemployable on the open labor market and is entitled to benefits through the remainder of the employee's lifetime." Nivens v. Interstate Brands Corp., 585 S.W.3d 825, 835 (Mo. App. W.D. 2019).

Until 2013, Missouri workers could make claims for PPD and PTD benefits from the Fund. That changed when the legislature amended § 287.220 to "limit the number of workers eligible for fund benefits because the Fund was insolvent." Treasurer of State v. Parker, 622 S.W.3d 178, 181 (Mo. banc 2021). The legislature created two subsections: Subsection 2 is limited to compensable work injuries occurring before January 1, 2014, and Subsection 3, the provision at issue here, is limited to compensable work injuries occurring after January 1, 2014. Id.

The two subsections outline two different frameworks to determine Fund benefits. Subsection 2 retained the pre-amendment framework for Fund benefits, requiring an employee to demonstrate the pre-existing disability was a hindrance or obstacle to employment and, if the disability was to the BAW, at least 50 weeks or if the disability was to a major extremity, at least fifteen percent. § 287.220.2. Conversely, Subsection 3 eliminated all PPD claims against the Fund and limited the Fund's liability to PTD claims that could satisfy the new, more stringent requirements of Subsection 3 at issue here. And Subsection 3 omitted both the "hindrance or obstacle" requirement and any reference to a minimum percent of disability. Parker, 622 S.W.3d at 181; compare § 287.220.2 with § 287.220.3.

B. Factual Background relevant to this appeal

Beginning in eighth grade, Ryan worked in various trades over five decades. After high school, Ryan worked at Burlington Northern Railroad doing heavy labor. He then worked at Quincy Soybean for twenty-five years loading, unloading, and repairing river barges. Next, Ryan worked at Pillsbury General Mills for approximately four years doing machinery repairs and general maintenance work. Last, Ryan worked for the Hannibal Board of Public Works ("Employer") for approximately ten years before the 2015 primary injury giving rise to this case. Throughout his career, Ryan suffered several work-related injuries.

1. 2004 - right knee

In 2004, at Pillsbury General Mills, Ryan suffered an injury to his right knee. Ryan underwent several surgeries and eventually had a knee replacement. The 2004 right knee injury resulted in a workers' compensation settlement for 75% of the right knee or 120 weeks of PPD.

2. 2007 - left shoulder and cervical spine

In 2007, while working for Employer, Ryan hurt his left shoulder and cervical spine when he fell six to seven feet onto a concrete floor. Ryan eventually underwent surgery for each injury. He brought claims against Employer for the primary injuries and against the Fund for the disability that resulted from his pre-existing 2004 injury in combination with the primary injuries to his left shoulder and cervical spine. Ryan settled with Employer for 25% PPD (58 weeks) of the left shoulder and 25% PPD (100 weeks) of the BAW referable to the cervical spine.

Ryan's claims against the Fund proceeded to trial. The Administrative Law Judge ("ALJ") entered its award in favor of Ryan. Consistent with the settlement, the ALJ found the 2007 injury caused 25% PPD (58 weeks) to the left shoulder and 25% of the BAW (100 weeks) for the cervical spine. The ALJ found Ryan had a 75% pre-existing disability to the right knee (120 weeks) from the 2004 injury. The ALJ concluded the 2004 pre-existing injury and 2007 primary disabilities combined for 278 weeks of PPD or 69.5% of the BAW. The ALJ then awarded to Ryan and against the Fund enhanced PPD of 15% or 42 weeks on top of the 278 weeks pursuant to § 287.220, RSMo 2011. The Fund did not appeal the award and paid it.

3. 2011 - right shoulder and spine

Ryan's third work-related injury occurred while working for Employer in 2011. Ryan fell down a flight of stairs, landed on his back, and injured his right shoulder and spine. He brought claims against Employer and the Fund. Ryan and Employer settled the right shoulder claim for 20% PPD or 46.4 weeks and his spine claim for 20% PPD or 80 weeks of the BAW. Ryan's claim against the Fund then proceeded to trial to determine the disability that resulted from the combination of his 2011 primary injuries and his 2004 and 2007 pre-existing disabilities.

ALJ David Zerrer ("ALJ Zerrer") ^[2] entered an award in favor of Ryan. ALJ Zerrer initially found Ryan had 404.4 weeks of total disability which derived from his 2011 primary claims and all of his pre-existing PPD's: (1) 2011 right shoulder - 46.4 weeks, (2) 2011 BAW at the spine -80 weeks, (3) 2004 left shoulder - 58 weeks, (4) 2004 BAW at the cervical spine - 100 weeks, (5) 2007 right knee - 120 weeks.

Then ALJ Zerrer concluded the 2004, 2007, and 2011 disabilities combined for greater disability than their simple sum and awarded enhanced PPD of 15% to the 404.4 weeks of total disability for an enhanced PPD award of 60.66 weeks against the Fund pursuant to § 287.220, RSMo 2011. Again, the Fund did not appeal the 2011 award and paid it.

4. The case at bar: 2015 - right shoulder and cervical spine

Ryan's primary injuries at issue here occurred on August 14, 2015, when he hurt his spine and right shoulder handling a heavy object at work. He brought claims against Employer and the Fund. Ryan and Employer settled the cervical spine claim for an approximate 12.5% or 50 weeks of the BAW and 12.5% or 29 weeks of the right shoulder. Ryan's claim against the Fund proceeded to trial in which Ryan asserted he was now PTD based on the disability from the 2015 primary injuries together with his 2004, 2007, and 2011 pre-existing disabilities.

Ryan supported his claim of PTD with a medical expert who examined him on June 6, 2017 and testified by deposition. The medical expert opined Ryan is PTD as a direct result of his 2015 primary injuries in combination with...