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McGivney v. Aerocet, Inc.

Supreme Court of Idaho

June 13, 2019

EORGE MCGIVNEY, Claimant-Respondent,
AEROCET, INC., Employer, and STATE INSURANCE FUND, Surety, Defendants-Appellants, and QUEST AIRCRAFT, Employer, and FEDERAL INSURANCE COMPANY, Surety, Defendants-Respondents.

          Appeal from the Industrial Commission of the State of Idaho.

         The decision of the Industrial Commission is affirmed and the case is remanded.

          H. James Magnuson, Coeur d'Alene, for Appellants, Aerocet, Inc., and State Insurance Fund. H. James Magnuson argued.

          Bowen & Bailey, LLP, Boise, for Respondents, Quest Aircraft and Federal Insurance Company. William S. Wigle argued.

          Kelso Law Office, Coeur d'Alene, for Respondent, George McGivney. Starr Kelso argued.


         This case involves an appeal brought by Aerocet, Inc., (Aerocet) and its surety, the State Insurance Fund, in which they appeal a decision of the Idaho Industrial Commission (Commission) involving two worker's compensation claims brought by George McGivney (McGivney). The Commission awarded McGivney benefits for injuries he sustained to his left knee while working for both Aerocet and Quest Aircraft (Quest). The Referee consolidated the two cases and issued a recommendation that attributed the vast majority of liability to Quest. The Commission rejected the bulk of the Referee's recommendations and apportioned liability equally between Aerocet and Quest. Aerocet appeals alleging the Commission inappropriately consolidated McGivney's two injury claims. Aerocet also contends the Commission failed to determine McGivney's disability in excess of impairment from his 2011 accident at Aerocet prior to his 2014 accident at Quest, and that the Commission erred in its application of Brown v. Home Depot, 152 Idaho 605, 272 P.3d 577 (2012). Aerocet also maintains the Commission's decision is not supported by substantial and competent evidence. For the reasons stated, we affirm the Commission's decisions. We also deny the requests for attorney fees. We remand the case to the Commission to enable it to calculate the amount due Quest's surety from Aerocet's surety for any amounts overpaid by Quest's surety.


         On May 6, 2011, McGivney injured his left knee at work while working for Aerocet. Part of McGivney's job duties at the time included ascending and descending fifteen to sixteen steep wooden stairs thirty to forty times a day. On one of those trips down the stairs, McGivney felt something "go" in his left knee. Although he did not fall, he reported that he was "kind of" able to walk it off, but his knee kept "catching and locking" and it was "really painful."

         Some two months later, McGivney sought treatment from Dr. Douglas P. McInnis, an orthopedic surgeon. Dr. McInnis identified a tear in the meniscus of McGivney's left knee. He also discovered the presence of progressive arthritis, which pre-existed McGivney's accident. In order to address McGivney's injury, Dr. McInnis offered McGivney two options: Dr. McInnis could either surgically repair the torn meniscus through arthroscopic surgery, which would ease the symptoms; or he could partially replace portions of the knee, which would address the accident symptoms and the pre-existing arthritis. McGivney opted for the former, less invasive surgery. Dr. McInnis performed the meniscus repair on September 12, 2011. Dr. McInnis concluded following surgery that McGivney had sustained a 2% lower extremity impairment. McGivney returned to work at Aerocet with the following restrictions-that he not use stairs and that if an activity hurt his knee, he should discontinue doing it.

         Shortly after returning to work at Aerocet, McGivney accepted a position at Quest, a "sister company" to Aerocet. McGivney began working for Quest in October 2011.

         Roughly two-and-a-half years later, on March 4, 2014, while working at Quest, McGivney reinjured his left knee. After leaving a meeting, McGivney was again descending stairs-this time holding and looking at some papers from the meeting-when he skipped or "overstepped" a step and landed hard on his left leg, which "jarred everything." Initially, McGivney did not give much thought to the event, however, on his way home from work that day, his knee "really started hurting" and by the time he got home it "had swollen up to a pretty good size." Following the second accident, McGivney was seen by Dr. Jeffrey Lyman, also an orthopedic surgeon. Dr. Lyman performed a unicompartmental arthroplasty (partial knee replacement) on McGivney's left knee to address the problems identified. Quest initially declined to pay for McGivney's surgery. As a result, McGivney's private health insurer paid for the surgery. Following the partial knee replacement surgery, McGivney tried to return to work for Quest, but due to an adverse reaction to pain medication and a stressful work environment, he was unable to continue and eventually resigned from his job with Quest.

         On July 28, 2014, McGivney filed a pro se worker's compensation complaint seeking worker's compensation benefits from Quest and its surety, Federal Insurance Company. On November 21, 2014, McGivney, who was by now represented by counsel, filed an additional worker's compensation complaint against Aerocet and its surety. On April 29, 2015, McGivney moved to consolidate both cases before the Commission because they involved "intertwining facts," records, and testimony. On May 12, 2015, counsel for both Aerocet and Quest took McGivney's deposition. Some time that day, Aerocet filed an objection to the consolidation of McGivney's claims. On May 19, 2015, the Referee presiding over the case denied Aerocet's objection and ordered the cases consolidated because consolidation "could result in judicial economy." However, the Referee left open the possibility of separating the two claims at a future date when he wrote, "[a]s the matter unfolds, counsel for [Aerocet and the] State Insurance Fund may renew his objection if warranted." Counsel for Aerocet never renewed his objection to consolidation, in spite of the Referee's specific invitation to do so if an objection were warranted.

         On September 11, 2015, McGivney moved to compel Quest and its surety to pay his past due temporary disability and medical benefits. On September 28, 2015, the Commission granted McGivney's motion. The claims went to hearing before the Referee on November 8, 2016. On October 12, 2017, the Referee issued his Findings of Fact, Conclusions of Law, and Recommendation. The Referee determined, in reliance on Brown v. Home Depot, 152 Idaho 605, 272 P.3d 577 (2012), that a claimant's disability is appropriately determined at the date of hearing rather than the date of medical stability. The Referee also concluded that 1) McGivney's condition was not due to a pre-existing condition unrelated to work; 2) McGivney was entitled to a 21% lower extremity permanent partial impairment ("PPI") rating as a result of his 2014 incident; 3) McGivney was entitled to a permanent partial disability ("PPD") rating of 40% inclusive of his 21% PPI; 4) apportionment of benefits paid or payable by Quest between Quest and Aerocet was not appropriate; and 5) McGivney was not entitled to an award of attorney fees against Quest.

         The Commission reviewed the Referee's Findings of Fact, Conclusions of Law, and Recommendation. On December 22, 2017, it issued its own Findings of Fact, Conclusions of Law, and Order in which it declined to adopt many of the Referee's recommendations. The Commission also relied on Brown to determine that McGivney's disability should be determined as of the date of the hearing. The Commission also agreed with the Referee that McGivney's condition was not due to a pre-existing condition, and that McGivney was not entitled to an award of attorney fees from Quest. However, the Commission concluded that McGivney suffered a greater degree of permanent partial disability than the Referee recommended. Due to his injury-related work restrictions, his age, his lack of formal education, and his spotty work history since 2014, the Commission concluded that McGivney suffered a 50% permanent partial disability, inclusive of his 21% permanent partial impairment.

         The Commission also disagreed with the Referee's conclusion that apportionment between Aerocet and Quest was inappropriate. The Commission concluded that responsibility for the medical expenses incurred for McGivney's left knee arthroplasty (partial knee replacement) and the related treatment should be apportioned equally between Aerocet and Quest from June 25, 2014, forward. The Commission also concluded that responsibility for any total temporary disability benefits payable to McGivney should be apportioned equally between Aerocet and Quest from June 25, 2014, forward. (Quest was liable for any total temporary disability benefits from the time of the 2014 injury until June 24, 2014, the day before McGivney's surgery.) To the extent that Quest had overpaid time loss benefits to McGivney, Quest was entitled to reimbursement from Aerocet. Aerocet and its surety, the State Insurance Fund, timely appealed the Commission's decision. (Hereafter, for ease of reference, Aerocet and its surety, the State Insurance Fund, will be collectively referred to as "Aerocet." In addition, Quest and its surety, Federal Insurance Company, will be referred to as "Quest.")


         "When this Court reviews a decision of the Industrial Commission, it exercises free review over questions of law, but reviews questions of fact only to determine whether substantial and competent evidence supports the Commission's findings." Bradford v. Roche Moving & Storage, Inc., 147 Idaho 733, 736, 215 P.3d 453, 456 (2009) (quoting Eacret v. Clearwater Forest Indus., 136 Idaho 733, 735, 40 P.3d 91, 93 (2002)). "Substantial and competent evidence is relevant evidence that a reasonable mind might accept to support a conclusion." Id. "Because the Commission is the fact finder, its conclusions on the credibility and weight of the evidence will not be disturbed on appeal unless they are clearly erroneous." Id. "This Court does not weigh the evidence or consider whether it would have reached a different conclusion from the evidence presented." Id. "Whether a claimant has an impairment and the degree of permanent disability resulting from an industrial injury are questions of fact." Id.

         III. ANALYSIS

         A. The Referee did not abuse his discretion in consolidating McGivney's two cases.

         Aerocet argues that the Commission erred by implicitly accepting the Referee's consolidation of the two cases. Aerocet contends that the Commission should have determined McGivney's impairment from the 2011 injury separately from the 2014 injury. Specifically, Aerocet argued that it was "entitled to a separate determination of Claimant's disability in excess of impairment, if any, from the 2011 injury to the same extent as if the 2011 claim was not consolidated," and that the ...

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