PROVIDENCE WASHINGTON INS. CO. v. BONNER

OPINION

MATTHEWS, Justice.

I. CASE HISTORY

Lester Bonner was a lineman with the Chugach Electric Association. In 1978, Bonner slipped while working and injured his back. He was disabled for about three weeks and returned to work "with no further difficulties." On October 5, 1979, Bonner suffered a second on-the-job injury. He was out of work for about three weeks. He returned for a week, and then took six weeks vacation because he was still sore. He returned to work on January 10; he suffered increasing pain; he ultimately was disabled by the pain and did not return to work after March 10, 1980.

Chugach Electric Association switched workers' compensation carriers on January 1, 1980; Providence Washington replaced Industrial Indemnity. Providence Washington paid Bonner worker's compensation benefits following his disability beginning in March, 1980, until April, 1981, when it ceased payments, evidently because it decided that the disability had nothing to do with Bonner's employment in 1980. Bonner thereupon filed a claim for compensation with the Workers' Compensation Board.

A hearing on Bonner's claim was held on September 10, 1981. That Bonner was disabled and entitled to benefits was not disputed. The sole matter in dispute at the hearing was which Chugach worker's compensation insurance carrier was liable for the payments.

Bonner's medical records, his deposition, and the deposition of one of his doctors were admitted into evidence at the hearing. In addition, Bonner testified.

The Board concluded that once an employee establishes a preliminary link between his disability and employment, in a case involving aggravation of pre-existing conditions, "the last employer [or, as the case may be, the last insurer in single-employer situations such as this] must come forward with substantial evidence that the last employment was not a substantial factor in bringing about the employee's disability."

The Board found that "sufficient evidence has been produced to establish a preliminary link between the employee's disability and his employment after January 1, 1980." It further found that "Providence Washington has failed to produce evidence overcoming the presumption. Providence Washington produced evidence that the October 1979 incident was a substantial factor, but evidence was not produced showing that employment after January 1, 1980, was not a substantial factor contributing to his disability."

The Board found Providence Washington liable for Bonner's compensation benefits, and the superior court affirmed.

II. PRESUMPTION OF COMPENSABILITY

On appeal to this court, Providence Washington argues that, in general, no presumption of compensability arises in the absence of a specific traumatic event, where there is a pre-existing condition. In the absence of a trauma, there must be a "demonstrated physical change," the insurer argues, or there is no preliminary link between the disability and the current employment. Applying these standards, Providence Washington concludes there is not substantial evidence to support the Board's findings.1

In our view, Providence Washington's argument equates the "preliminary link" necessary to establish the presumption of compensability with the "substantial evidence" required on appeal to support the Board's decision in cases where the presumption has been rebutted. Such a characterization is erroneous.

We discussed the nature of the showing necessary to establish a "preliminary link" sufficient to give rise to the presumption of compensability in Burgess Construction Co. v. Smallwood, 623 P.2d 312, 315-16 (Alaska 1981):

In this passage, we noted that the necessary "preliminary link" was established by expert testimony that working conditions had accelerated the pre-existing condition. 623 P.2d at 316. Similarly, in the other post-Smallwood cases (none of them relying solely upon the presumption of compensability to establish a claim) in which aggravation or acceleration has been involved, there has been either a specific traumatic event or expert testimony pointing to a possible causal link between the disability and the aggravation.2 However, such a showing has not been held necessary as a matter of law merely to establish the presumption of compensability. See Burgess Construction Co. v. Smallwood, 623 P.2d at 316-17.3 Providence Washington's contention that the presumption of compensability cannot attach in the aggravation/acceleration context without a specific traumatic event or a "demonstrated physical change" is without merit. All that is at issue in cases where the presumption alone is relied upon to support an award of compensation, and where there is no substantial evidence to rebut the presumption, is whether the Board's decision to apply the presumption is erroneous. Given the testimony and evidence in this case,4 and the Board's familiarity with the medical issues involved,5 the Board's determination that the presumption attached was not error. Therefore, since it is not contested by Providence Washington that it failed to rebut the presumption with substantial evidence, the Board's decision on the merits must be affirmed.

III. ATTORNEY'S FEES

The superior court awarded full attorney's fees in the amount of $1,250 for Bonner's attorney's work in the appeal. Providence Washington asserts that an award of full fees was improper.

We have previously taken the position that attorney's fees on an appeal in a worker's compensation case should be a reasonable fee, i.e., a full fee for the reasonable time and expense of litigating the case on appeal adjusted, if necessary, to reflect the statutory attorney's fee award from the Board. See Wien Air Alaska v. Arant, 592 P.2d 352 (Alaska 1979). Given that test, Providence Washington has not demonstrated an abuse of discretion.6

AFFIRMED.

RABINOWITZ, Justice, concurring.

I write separately to note that for the first time we are applying the pro-worker presumption of AS 23.30.120(1) to a dispute between insurance companies. We foreshadowed this approach in Ketchikan Gateway Borough v. Saling, 604 P.2d 590 (Alaska 1979), which established the "last injurious exposure" rule for assigning liability to successive employers, and Parker Drilling Co. v. Wester, 651 P.2d 842 (Alaska 1982), which extended this rule to successive insurance carriers. Today's decision makes clear that when a worker is admittedly disabled and a "preliminary link" connects the injury to the worker's most recent employer or compensation carrier, and that employer or carrier does not come forward with substantial evidence to oppose the statutory presumption of compensability, it will have the entire burden of paying compensation. In other words, carriers in Industrial Indemnity's position can use the statutory presumption against carriers like Providence Washington. In my view the rule adopted today will simplify proceedings before the Board and thus reduce the hazards interinsurer disputes pose for the injured worker.