This worker's compensation case involves the question of who is liable for compensation benefits when employment with two successive employers contributes to a worker's disability. The worker in this case, Mac Saling, was employed in 1968 as a harbor master for the City of Ketchikan. On June 13, 1968, he was seriously injured when he picked up a flashlight that had been rigged with explosives.
In October 1973, Saling returned to work. He obtained a job with Ketchikan Gateway Borough as a maintenance foreman at the airport.
The borough has appealed, asking this court to reverse the superior court and reinstate the decision of the Alaska Workmen's Compensation Board. We affirm the result reached by the superior court.
The principal question we address in this case is who must bear the responsibility for the worker's compensation benefits when employment with successive employers contributes to the worker's disability. Before we can address this question, however, we must first consider the parties' factual dispute regarding the cause of Saling's disability.
The board's conclusion
The board's reasoning misinterprets the concept of disability in Alaska worker's compensation law. The Workmen's Compensation Act defines "disability" as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." AS 23.30.265(10). The primary consideration is not the degree of the worker's physical impairment, but rather the loss of earning capacity related to that impairment. Vetter v. Alaska Workmen's Compensation Board, 524 P.2d 264, 266 (Alaska 1974). In determining the extent of Saling's preexisting disability, his demonstrated earning capacity cannot be ignored. See Hewing v. Peter Kiewit & Sons, 586 P.2d 182, 185-86 (Alaska 1978); Hewing v. Alaska Workmen's Compensation Board, 512 P.2d 896, 900 (Alaska 1973). A review of the record reveals no evidence that Saling failed to perform his job duties satisfactorily. When Saling's earning capacity at the time he began work for the borough is compared with his present earning capacity, it is obvious that a change has taken place. We conclude, therefore, that the board's finding of preexisting total disability is not supported by substantial evidence.
The change in Saling's condition raises the question of whether his employment with the borough contributed to his present disability. The board found that Saling's disability was solely the result of the the normal progression of his injuries from the explosion. Implicit in this finding is the rejection of Saling's argument that employment with the borough aggravated his disability. We agree with the superior court that this finding is not supported by substantial evidence.
An important factor in Saling's present disability appears to be the degenerative changes in the right shoulder.
When Saling worked for the borough on the airport ferry system, his duties included dragging chains across the deck, an activity requiring strenuous physical exertion. He later transferred to a maintenance position at the airport where his duties included operating heavy equipment and snow removal machinery. Saling testified that he was first significantly bothered by pain in his right shoulder after he began operating this equipment. His initial visit to a doctor for treatment of the right shoulder was January 7, 1974, and since that time Saling has received periodic injections and medication for pain. In addition, Saling testified that he suffered severe discomfort on those days of heavy equipment operation, which required continuous use of his right shoulder.
Dr. Wilson repeatedly stated his opinion before the board that manual labor contributed to the degeneration:
On cross-examination the attorney for the borough asked, "And if I understand you correctly, it is this manipulation [to operate the prosthesis] that has contributed significantly to the degenerative process which was described?" Dr. Wilson responded, "I think that is so, yes." When pressed, Dr. Wilson explained further:
Two other doctors examined Saling after he began work but before the loader incident. Their reports either do not discuss causation or they assume job-related aggravation.
No evidence contradicts the statements that the problems with the shoulder were aggravated by employment for the borough. The board is entitled to disbelieve evidence and testimony, but where a decision is contrary to record evidence, we have stated that the board should describe the observation providing the basis of its disbelief. Brown v. Northwest Airlines, 444 P.2d 529, 533-34 (Alaska 1968). Because no such statement appears in the record, we conclude that substantial evidence does not support the board's implicit finding that there was no aggravation.
This conclusion brings us to the principal legal question in this appeal: who is liable when employment with successive employers contributes to a worker's disability? Other states have adopted variants of two views when confronted with this question. One view, the last injurious exposure rule, imposes full liability on the employer at the time of the most recent injury that bears a causal relation to the disability. 4 A. Larson, The Law of Workmen's Compensation § 95.12 (1979). The second view apportions the liability among employers according to the causal relation each injury bears to the disability. Id. at § 95.31. We find the last injurious exposure rule more compatible with existing Alaska law.
Saling's situation is analogous to the situation of aggravation of a preexisting nonwork-related condition. In that situation we have consistently held the employer liable for the worker's entire disability.
Id. at 210 (footnotes omitted). Once the employer's liability for the entire disability is established, the employer has recourse to the second injury fund, AS 23.30.205.
Extending the Thornton rule to govern preexisting work-related conditions would result in the adoption of the "last injurious exposure" rule. We believe that, where the preexisting condition is work-related, this rule would also operate effectively in conjunction with the second injury fund to provide a workable approach to the cumulative injury situation. We therefore extend the Thornton rule to the facts of
For relief from part of its compensation liability, the borough should now proceed against the second injury fund pursuant to AS 23.30.205. The fund will reimburse the borough for all compensation paid to Saling after 104 weeks, if the borough can show that its liability to Saling was greater by reason of the combined effects of the preexisting condition and the subsequent work-related aggravation.
We believe that last injurious exposure rule, in conjunction with the second injury fund provisions, provides a reasonably equitable approach that is easier to administer than a judicially adopted rule of apportionment. The last injurious exposure rule has the advantage of simplicity. Apportionment would require that the board calculate the amount each variable contributed to the disability. This calculation would often be difficult, if not impossible in some situations, and would require a costly and time consuming parade of expert witnesses.
The borough maintains that strict application of the last injurious exposure rule produces a distorted result in this case. It suggests that we limit application of the rule to those cases where the last injurious exposure is the "substantial cause" in producing disability. The Thornton rule imposes liability whenever employment
We recognize, however, that some inequity is inherent in this rule. In many cases it will operate to impose a disproportionately higher burden of liability upon the last employer. The risk of this liability may ultimately discourage hiring of the partially disabled. The second injury fund, which has the primary purpose of removing obstacles to hiring the handicapped, however, is the legislature's response to this problem. Christ, 513 P.2d at 1093; H&M Logging Co., 492 P.2d at 100. The rule will operate in those same cases to create a windfall to previous employers. Any liability imposed by the second injury fund contribution required by AS 23.30.040
We note that California has devised a scheme which combines the advantages of both methods.
Colonial Insurance Co. v. Industrial Accident Commission, 29 Cal.2d 79, 172 P.2d 884, 886 (1946).
The superior court found the board clearly mistaken in its conclusions and awarded Saling attorney's fees in the amount of $2,624.85 for services before the board and for fees incurred on appeal to the superior court. Upon a motion to reconsider, the court modified the award to order the board on remand to consider apportionment of
The Workmen's Compensation Act provides for awards of attorney's fees to the worker in AS 23.30.145. Subsection (c) empowers the superior court to allow or increase an award of attorney's fees on review of a compensation order.
We find an award of costs and attorney's fees entirely appropriate in this case. While it was uncontested that some employer would be liable for some compensation, a hearing before the board was necessary to determine the issues of causation and successive employers.
The decision of the superior court reversing the determination of the Alaska Workmen's Compensation Board is AFFIRMED.
We do not address these factual disputes, however, because we find that Saling's employment with the borough aggravated his preexisting condition. Under the rule of liability we adopt herein, aggravation of a preexisting condition alone is sufficient to impose liability on the borough for Saling's total disability.
The compensation rate thus determined is then subject to the maximum rate established by the schedule set forth in AS 23.30.175, construed in Wien Air Alaska v. Arant, 592 P.2d 352, 356-57 n. 15 (Alaska 1979).
We note that some courts which have construed similar statutory language will compute benefits on the basis of the wage in effect on the date of incapacity when that date differs from the date of injury. Annot., 86 A.L.R. 524 (1933). Other courts rigidly apply the statutory computation formula. See, e.g., Soto v. City of Tucson, 8 Ariz.App. 199, 445 P.2d 82, 84-85 (1968). Since the issue is not now before us, we do not address it here. Note, however, that in Hood v. State, 574 P.2d 811 (Alaska 1978), we held that a workman injured in 1973 was entitled to the higher benefits provided by a 1975 amendment to the Workmen's Compensation Act, which was in effect by the time his condition was rated as permanent partial disability.