MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2017 ME 160 Docket: WCB-16-204 Argued: April 11, 2017 Decided: July 20, 2017
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
MICHAEL F. BAILEY
v.
CITY OF LEWISTON et al.
JABAR, J.
[¶1] The City of Lewiston and its insurer, Cannon Cochran Management
Services (referred to collectively as the City), appeal from a decree of the
Workers’ Compensation Board Appellate Division vacating the hearing
officer’s (Goodnough, HO)1 grant of the City’s petition to determine the extent
of Michael F. Bailey’s permanent impairment. See 39-A M.R.S. § 322 (2016).
We affirm the Appellate Division’s decision.
I. BACKGROUND
[¶2] The following facts, which are derived from a 2014 Workers’
Compensation Board decree granting the City’s petition to determine the
1 Pursuant to P.L. 2015, ch. 297 (effective Oct. 15, 2015), Workers’ Compensation Board hearing
officers licensed to practice law are now designated as administrative law judges (ALJ). All of the decisions made by now-ALJ Goodnough however, were made before this change. 2
extent of Bailey’s permanent impairment, are supported by the record. See
39-A M.R.S. §§ 318, 322(3) (2016). Bailey, who at the time of the 2014 decree
was sixty-five-years old, began working as a City of Lewiston firefighter in
1975. On October 21, 2001, he suffered a respiratory work injury and was
subsequently diagnosed with reactive airways deficiency syndrome (RADS).
By way of a Workers’ Compensation Board decree, Bailey began to receive
partial incapacity benefits stemming from that injury in 2004. In 2007, the
City sought review of Bailey’s award of benefits and Bailey sought a
determination of the extent of his permanent impairment. The hearing officer
(Goodnough, HO) denied the City’s petition, but found that Bailey had reached
maximum medical improvement (MMI) and that he had sustained an injury
that resulted in a permanent impairment level of 32%. This determination
was based on the results of an independent medical exam performed pursuant
to 39-A M.R.S. § 312 (2007).2
[¶3] Because the 2007 decree established that Bailey’s permanent
impairment level exceeded 15%, he was eligible to receive ongoing
2 Title 39-A M.R.S. § 312 (2007) has since been amended. P.L. 2015, ch. 297 § 11 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 312 (2016)). 3
compensation without a temporal “cap.” See 39-A M.R.S. § 213(1) (2007).3
The City did not appeal from the 2007 decree.
[¶4] In 2013, the City filed a petition seeking review of the level of
Bailey’s incapacity4 and a second petition seeking to determine the extent of
his permanent impairment. In support of these petitions, the City introduced
the results of an updated medical examination that indicated that Bailey’s
level of permanent impairment had decreased to 0%.
[¶5] The hearing officer rejected Bailey’s claims that the doctrine of res
judicata precluded the City’s petition to determine the extent of his permanent
impairment, concluded that the new medical report constituted a change of
circumstances warranting a new permanent impairment finding, and reduced
Bailey’s permanent impairment level to 0%. The decree terminated Bailey’s
entitlement to further compensation because his 0% permanent impairment
rating ended his eligibility to receive benefits without a temporal restriction
and because he had already received benefits for longer than the limit
established for an injury resulting in 0% permanent impairment. See
39-A M.R.S. § 213(1)(A).
3 Title 39-A M.R.S. § 213(1) (2007) has since been amended. P.L. 2015, ch. 297 § 8 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 213(1) (2016)).
4 The Hearing Officer determined that the City had failed to show any change in the level of
Bailey’s incapacity, and the City did not challenge that issue on appeal to the Appellate Division. 4
[¶6] Bailey subsequently appealed to the Appellate Division. See
39-A M.R.S. § 321-B (2014).5 In a unanimous decision, the Appellate Division
vacated the hearing officer’s decree, concluding that the 2007 determination
of permanent impairment as of the date of MMI was final, and therefore res
judicata principles barred relitigation of that issue. The Appellate Division
further concluded that there existed no significant change of circumstances to
warrant the hearing officer revisiting the issue of Bailey’s MMI.
[¶7] The City successfully petitioned for appellate review of the
Appellate Division’s decision. See 39-A M.R.S. § 322 (2016).
II. DISCUSSION
[¶8] The central issue on appeal is whether the doctrine of res judicata
prevents a party from seeking to change the permanent impairment level
associated with an employee’s work-related injury after that level has been
established by a prior decree. The City argues that res judicata principles
should not prevent it from seeking to reduce Bailey’s permanent impairment
level and contends that the Appellate Division erred in applying the doctrine
of res judicata to the facts of this case. Bailey, on the other hand, contends
that the Appellate Division’s decision was supported by the plain language of
5 Title 39-A M.R.S. § 321-B (2014) has since been amended. P.L. 2015, ch. 297 § 16 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 321-B (2016)). 5
the statute, relevant case law, and policy concerns, and was therefore not
erroneous. We conclude that the doctrine of res judicata bars relitigation of
the permanent impairment level established for an employee’s work-related
injury and therefore affirm the Appellate Division’s decision.
A. Standard of Review
[¶9] Previously, when a hearing officer or ALJ’s decision was reviewed
by the Appellate Division and subsequently appealed, we would review “the
[hearing officer’s or ALJ’s] decision directly.” Freeman v. NewPage Corp.,
2016 ME 45, ¶ 5, 135 A.3d 340. However, the Legislature has recently
amended the workers’ compensation statute to provide that “only a decision
of the [appellate] division may be reviewed on appeal.” 39-A M.R.S. § 322(1);
see P.L. 2015, ch. 469, § 2 (effective July 29, 2016). Therefore, we now review
decisions of the Appellate Division according to established principles of
administrative law, except with regard to the hearing officer’s or ALJ’s factual
findings.6 See Kroeger v. Dep’t of Envtl. Prot., 2005 ME 50, ¶ 7, 870 A.2d 566
(explaining that we will only vacate an agency’s decision where that decision
“violates the Constitution or statutes; exceeds the agency’s authority; is
procedurally unlawful; is arbitrary or capricious; constitutes an abuse of
6 “[I]n the absence of fraud,” the hearing officer’s or ALJ’s findings of fact are final. 39-A M.R.S.
§ 318 (2016); see 39-A M.R.S. § 322(3) (2016). 6
discretion; [or] is affected by bias or an error of law”). As we have
consistently done in the past, we will continue to afford appropriate deference
to the Appellate Division’s reasonable interpretation of the workers’
compensation statute, see Hackett v. W. Express, Inc., 2011 ME 71, ¶ 9, 21 A.3d
1019, and will uphold the Appellate Division’s interpretation unless “the plain
language of the statute and its legislative history” compel a contrary result.
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2017 ME 160 Docket: WCB-16-204 Argued: April 11, 2017 Decided: July 20, 2017
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
MICHAEL F. BAILEY
v.
CITY OF LEWISTON et al.
JABAR, J.
[¶1] The City of Lewiston and its insurer, Cannon Cochran Management
Services (referred to collectively as the City), appeal from a decree of the
Workers’ Compensation Board Appellate Division vacating the hearing
officer’s (Goodnough, HO)1 grant of the City’s petition to determine the extent
of Michael F. Bailey’s permanent impairment. See 39-A M.R.S. § 322 (2016).
We affirm the Appellate Division’s decision.
I. BACKGROUND
[¶2] The following facts, which are derived from a 2014 Workers’
Compensation Board decree granting the City’s petition to determine the
1 Pursuant to P.L. 2015, ch. 297 (effective Oct. 15, 2015), Workers’ Compensation Board hearing
officers licensed to practice law are now designated as administrative law judges (ALJ). All of the decisions made by now-ALJ Goodnough however, were made before this change. 2
extent of Bailey’s permanent impairment, are supported by the record. See
39-A M.R.S. §§ 318, 322(3) (2016). Bailey, who at the time of the 2014 decree
was sixty-five-years old, began working as a City of Lewiston firefighter in
1975. On October 21, 2001, he suffered a respiratory work injury and was
subsequently diagnosed with reactive airways deficiency syndrome (RADS).
By way of a Workers’ Compensation Board decree, Bailey began to receive
partial incapacity benefits stemming from that injury in 2004. In 2007, the
City sought review of Bailey’s award of benefits and Bailey sought a
determination of the extent of his permanent impairment. The hearing officer
(Goodnough, HO) denied the City’s petition, but found that Bailey had reached
maximum medical improvement (MMI) and that he had sustained an injury
that resulted in a permanent impairment level of 32%. This determination
was based on the results of an independent medical exam performed pursuant
to 39-A M.R.S. § 312 (2007).2
[¶3] Because the 2007 decree established that Bailey’s permanent
impairment level exceeded 15%, he was eligible to receive ongoing
2 Title 39-A M.R.S. § 312 (2007) has since been amended. P.L. 2015, ch. 297 § 11 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 312 (2016)). 3
compensation without a temporal “cap.” See 39-A M.R.S. § 213(1) (2007).3
The City did not appeal from the 2007 decree.
[¶4] In 2013, the City filed a petition seeking review of the level of
Bailey’s incapacity4 and a second petition seeking to determine the extent of
his permanent impairment. In support of these petitions, the City introduced
the results of an updated medical examination that indicated that Bailey’s
level of permanent impairment had decreased to 0%.
[¶5] The hearing officer rejected Bailey’s claims that the doctrine of res
judicata precluded the City’s petition to determine the extent of his permanent
impairment, concluded that the new medical report constituted a change of
circumstances warranting a new permanent impairment finding, and reduced
Bailey’s permanent impairment level to 0%. The decree terminated Bailey’s
entitlement to further compensation because his 0% permanent impairment
rating ended his eligibility to receive benefits without a temporal restriction
and because he had already received benefits for longer than the limit
established for an injury resulting in 0% permanent impairment. See
39-A M.R.S. § 213(1)(A).
3 Title 39-A M.R.S. § 213(1) (2007) has since been amended. P.L. 2015, ch. 297 § 8 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 213(1) (2016)).
4 The Hearing Officer determined that the City had failed to show any change in the level of
Bailey’s incapacity, and the City did not challenge that issue on appeal to the Appellate Division. 4
[¶6] Bailey subsequently appealed to the Appellate Division. See
39-A M.R.S. § 321-B (2014).5 In a unanimous decision, the Appellate Division
vacated the hearing officer’s decree, concluding that the 2007 determination
of permanent impairment as of the date of MMI was final, and therefore res
judicata principles barred relitigation of that issue. The Appellate Division
further concluded that there existed no significant change of circumstances to
warrant the hearing officer revisiting the issue of Bailey’s MMI.
[¶7] The City successfully petitioned for appellate review of the
Appellate Division’s decision. See 39-A M.R.S. § 322 (2016).
II. DISCUSSION
[¶8] The central issue on appeal is whether the doctrine of res judicata
prevents a party from seeking to change the permanent impairment level
associated with an employee’s work-related injury after that level has been
established by a prior decree. The City argues that res judicata principles
should not prevent it from seeking to reduce Bailey’s permanent impairment
level and contends that the Appellate Division erred in applying the doctrine
of res judicata to the facts of this case. Bailey, on the other hand, contends
that the Appellate Division’s decision was supported by the plain language of
5 Title 39-A M.R.S. § 321-B (2014) has since been amended. P.L. 2015, ch. 297 § 16 (effective
Oct. 15, 2015) (codified at 39-A M.R.S. § 321-B (2016)). 5
the statute, relevant case law, and policy concerns, and was therefore not
erroneous. We conclude that the doctrine of res judicata bars relitigation of
the permanent impairment level established for an employee’s work-related
injury and therefore affirm the Appellate Division’s decision.
A. Standard of Review
[¶9] Previously, when a hearing officer or ALJ’s decision was reviewed
by the Appellate Division and subsequently appealed, we would review “the
[hearing officer’s or ALJ’s] decision directly.” Freeman v. NewPage Corp.,
2016 ME 45, ¶ 5, 135 A.3d 340. However, the Legislature has recently
amended the workers’ compensation statute to provide that “only a decision
of the [appellate] division may be reviewed on appeal.” 39-A M.R.S. § 322(1);
see P.L. 2015, ch. 469, § 2 (effective July 29, 2016). Therefore, we now review
decisions of the Appellate Division according to established principles of
administrative law, except with regard to the hearing officer’s or ALJ’s factual
findings.6 See Kroeger v. Dep’t of Envtl. Prot., 2005 ME 50, ¶ 7, 870 A.2d 566
(explaining that we will only vacate an agency’s decision where that decision
“violates the Constitution or statutes; exceeds the agency’s authority; is
procedurally unlawful; is arbitrary or capricious; constitutes an abuse of
6 “[I]n the absence of fraud,” the hearing officer’s or ALJ’s findings of fact are final. 39-A M.R.S.
§ 318 (2016); see 39-A M.R.S. § 322(3) (2016). 6
discretion; [or] is affected by bias or an error of law”). As we have
consistently done in the past, we will continue to afford appropriate deference
to the Appellate Division’s reasonable interpretation of the workers’
compensation statute, see Hackett v. W. Express, Inc., 2011 ME 71, ¶ 9, 21 A.3d
1019, and will uphold the Appellate Division’s interpretation unless “the plain
language of the statute and its legislative history” compel a contrary result.
Guiggey v. Great N. Paper, Inc., 1997 ME 232, ¶ 10, 704 A.2d 375.
B. Res Judicata and Permanent Impairment
[¶10] “It is well established that a valid judgment entered by a court, if
not appealed from, generally becomes res judicata and is not subject to later
collateral attack.” Standish Tel. Co v. Saco River Tel. & Tel. Co., 555 A.2d 478,
481 (Me. 1989) (emphasis omitted). Likewise, “valid and final decisions of the
Workers’ Compensation Board are subject to the general rules of res judicata
and issue preclusion.” Grubb v. S.D. Warren Co., 2003 ME 139, ¶ 9, 837 A.2d
117. Accordingly, “[a]bsent specific statutory authority, the Board may not
reopen or amend a final decision. Such a rule ensures finality of workers’
compensation decisions and effectuates the legislative desire for speedy and
summary disposition of workers’ compensation cases.” Guar. Fund Mgmt. 7
Servs. v. Workers’ Comp. Bd., 678 A.2d 578, 583 (Me. 1996) (footnote omitted)
(citations omitted) (quotation marks omitted).
1. Statutory Authority
[¶11] The workers’ compensation statute provides that “[e]mployees
with work-related injuries may be entitled to incapacity benefits for either
total or partial incapacity, based on the difference between the employee’s
pre-injury wage and post-injury earning capacity.” Morse v. Fleet Fin. Grp.,
2001 ME 142, ¶ 5, 782 A.2d 769; see 39-A M.R.S. §§ 211-213 (2016). When an
injured worker is granted partial incapacity benefits, his entitlement to
receive compensation is capped at 2607 weeks unless it is determined that his
“permanent impairment . . . resulting from the personal injury is in excess of
15%8 to the body,” in which case there is no statutory cap. 39-A M.R.S.
§ 213(1). “Permanent impairment,” as defined by the statute, means “any
anatomic or functional abnormality or loss existing after the date of maximum
medical improvement that results from the injury.” 39-A M.R.S. § 102(16)
7 A claimant may petition for an extension, but the statute provides that such an extension may
not exceed an additional 260 weeks. See 39-A M.R.S. § 213(4) (2016). 8 The Legislature requires that the permanent impairment percentage threshold be reviewed
yearly “so that 25% of all cases with permanent impairment will be expected to exceed the threshold and 75% of all cases with permanent impairment will be expected to be less than the threshold.” 39-A M.R.S. § 213(2). The current threshold is 11.8%. 14 C.M.R. 90 351 002-1 § 1(1) (2014). 8
(2016) (emphasis added). “Maximum medical improvement” is defined as
“the date after which further recovery and further restoration of function can
no longer be reasonably anticipated, based upon reasonable medical
probability.” Id. § 102(15).
[¶12] Read together, the above provisions provide for a 260-week cap
for payment of benefits unless the injured employee’s (1) “anatomic or
functional abnormality” (2) exceeding 15% to his body (3) persists after the
date on which “further recovery . . . can no longer be reasonably anticipated,
based upon medical probability.” 39-A M.R.S. §§ 102(15)-(16), 213.
[¶13] Here, the Appellate Division’s conclusion that relitigation of
Bailey’s permanent impairment level was barred by the doctrine of res
judicata is supported by the statute’s plain language and legislative history.
Except for the very limited circumstances referenced in 39-A M.R.S. §§ 319
and 321, the workers’ compensation statute provides no opportunity for a
redetermination of a hearing officer’s or ALJ’s findings regarding permanent
impairment or MMI. Cf. Hird v. Bath Iron Works Corp., 512 A.2d 1035, 1038
(Me. 1986) (concluding that the commission exceeded its authority in
applying the doctrine of equitable estoppel where there was no “express or
implied legislative authority” to do so). 9
[¶14] This is in direct contrast to the statute’s inclusion of explicit
procedures for adjusting benefit levels when an injured employee’s ability to
be gainfully employed changes. See, e.g., 39-A M.R.S. § 205(9) (2016). We
apply the “changed circumstances” test in those cases, requiring the party
seeking to “increase or decrease compensation in a workers’ compensation
case when a benefit level has been established by a previous decision . . . to
show a change of circumstances . . . which may be met by either providing
comparative medical evidence, or by showing changed economic
circumstances.” Grubb, 2003 ME 139, ¶ 7, 837 A.2d 117 (quotation marks
omitted) (citations omitted) (petition to recalculate benefit level); see
McIntyre v. Great N. Paper, Inc., 2000 ME 6, ¶¶ 1, 5-6, 743 A.2d 744 (petition
for review of incapacity); Folsom v. New England Tel. & Tel. Co., 606 A.2d 1035,
1036-1038 (Me. 1992) (petition for review of incapacity).
[¶15] This distinction between the determination of MMI and
permanent impairment on one hand and an employee’s level of incapacity on
the other reflects the Legislature’s crafting of the workers’ compensation
statute to create a dichotomy of injured workers. See 39-A M.R.S. § 213(1)(A),
(2). Those who have suffered workplace injuries that do not result in
permanent impairment levels in excess of a specified whole person 10
percentage are eligible to collect compensation for no more than 260 weeks.
Id. § (1)(A). On the other hand, those who have suffered particularly severe
injuries that nonetheless result in only partial disability are eligible to receive
ongoing benefits without temporal limitations. Id. The permanent
impairment determination does not, however, govern whether a claimant is
actually entitled to receive benefits, either during or beyond the 260-week
limit. See 39-A M.R.S. § 205(9). Whether an employee actually qualifies to
receive incapacity benefits is subject to a determination pursuant to
39-A M.R.S. § 205(9).
[¶16] A determination of permanent impairment as of the date of MMI
is the method by which the Legislature chose to differentiate between these
two classes of injured workers. If a party were able to disturb a permanent
impairment finding so as to either terminate an employee’s eligibility to
receive ongoing benefits or award such eligibility after it had already been
denied, the statute would be completely circumvented and the provisions
creating the temporal dichotomy rendered superfluous. See State v.
Thompson, 2008 ME 166, ¶ 12, 958 A.2d 887 (“We give statutory language its
plain meaning and do not treat language as superfluous or meaningless . . . .”). 11
[¶17] Finally, by granting preclusive effect to decrees that establish
MMI and permanent impairment for work-related injuries, the Legislature has
minimized the expense and uncertainty associated with ongoing and
repetitive litigation and helped to fulfill its “desire for speedy and summary
disposition of workers’ compensation cases.” Dunphe v. O’Connor, 1997 ME
147, ¶ 4, 697 A.2d 421 (quotation marks omitted).
2. Change of Circumstances
[¶18] The City next contends that the Appellate Division erred in
concluding that the City failed to show a sufficient change of circumstances to
warrant relitigation of the issue of Bailey’s permanent impairment level.
Because a “changed circumstances” analysis does not apply to a permanent
impairment finding, that argument is unpersuasive. See 39-A M.R.S. § 205(9).
Therefore, the Appellate Division did not err in declining to apply that analysis
here.
[¶19] For the reasons set forth above, we affirm the decision of the
Appellate Division vacating the hearing officer’s grant of the City’s petition to
determine the extent of Bailey’s permanent impairment.
The entry is:
Judgment affirmed.
John H. King, Jr., Esq. (orally), Norman, Hanson & DeTroy, LLC, Portland, for appellant City of Lewiston and Cannon Cochran Management Services
Benjamin DeTroy, Esq. (orally), Leary & DeTroy, Auburn, for appellee Michael J. Bailey
James J. MacAdams, Esq., Nathan A. Jury, Esq., and Donald M. Murphy, Esq., MacAdam Law Offices, Portland, for amicus curiae the Maine Building Trades
Workers’ Compensation Board Appellate Division case number 14-0050 FOR CLERK REFERENCE ONLY