Perry v. State ex rel. Wyoming Workers' Safety & Compensation Division

2006 WY 61, 134 P.3d 1242, 2006 Wyo. LEXIS 63

• Court: Wyoming Supreme Court
• Decided: May 16, 2006
• Docket: No. 05-54
• Status: Published

Opinions

KITE, Justice.

[¶ 1] Eleanor L. Perry appeals from the district court’s order affirming the Office of Administrative Hearings’ (OAH) denial of her claim for worker’s compensation benefits. The OAH hearing examiner denied her claim in accordance with the test enunciated in Smith v. Husky Terminal Restaurant, Inc., 762 P.2d 1193 (Wyo.1988), because she was injured while violating a safety regulation. We conclude OAH properly applied the Smith test to Ms. Perry’s claim and there was substantial evidence to support OAH’s factual findings. Consequently, we affirm.

ISSUES

[¶ 2] Ms. Perry articulates a single issue on appeal:

When an employee deviates from a prescribed safety rule resulting in injury, should workerfs] compensation benefits be denied?

The Division phrases the issue a little differently:

In limited situations, an employee can be found to have acted outside the scope of employment by violating a work restriction when the four elements in Smith v. Husky Terminal Restaurant, Inc., 762 P.2d 1193 (Wyo.1988) are present. The issue presented in this appeal is whether the hearing examiner’s application of Smith to Perry’s case was in accordance with law[.]

FACTS

[¶ 3] On October 7, 2003, Ms. Perry began work as a certified nurse assistant (CNA) for Mountain Towers Healthcare and Rehabilitation Center (Mountain Towers) in Cheyenne. Mountain Towers is a nursing home facility. When she began work, Ms. Perry had just finished her training as a CNA, which included education about proper lifting techniques. On her first day of work, Ms. Perry attended Mountain Towers’ employment orientation. The orientation included instructions for lifting patients who required help. Ms. Perry was informed that certain patients were classified as “two-person lifts,” meaning that two people were required in order to lift the patient. Mountain Towers had a written policy forbidding its employees from lifting a patient classified as a “two-person lift” alone, and Ms. Perry signed a document acknowledging the policy. The policy was intended to protect Mountain Towers’ employees and patients. The policy stated that, if another employee was not available to help with a two-person lift, the employee was to make the patient comfortable and wait for assistance. Ms. Perry was informed that violating the two-person lift policy could result in termination from employment with Mountain Towers.

[¶ 4] On October 26 through 27, 2003, Ms. Perry was working a night shift, from 10:00 p.m. through 6:00 a.m. During that shift, there were typically only three people on staff per floor — two CNAs and one licensed practical nurse (LPN). At approximately 2:30 a.m., Ms. Perry was making the rounds to check on patients, when one patient requested assistance in using the bathroom. The patient was classified as a “two-person lift” so Ms. Perry sought help. The other CNA was assisting another patient and could not immediately help Ms. Perry. The LPN refused to help her because lifting was not part of her job duties. Ms. Perry offered the patient a bed pan, but the patient refused and insisted upon getting up to use the bathroom.

[¶ 5] Ms.- Perry assisted the patient to the bathroom and, at some point in the process as she was lifting the patient, the wheelchair moved. In order to prevent the patient from falling, Ms. Perry twisted and strained her lower back. She felt the strain but did not experience pain until after she had finished her shift and returned home. She was scheduled to work the next night, but called in and said she was unable to work because she had injured her back.

[¶ 6] Ms. Perry filed a report of injury in which she stated she injured her lower back when she was “transferring a 2 person transfer by [herself] and twisted and strained [her] back the wrong way while trying not to drop [the] resident as her wheelchair started to move even with [the] locks on.” She sought medical treatment from various doctors for her back injury and requested worker’s compensation benefits as a result of the injury. Mountain Towers objected to Ms. Perry’s request for worker’s compensation benefits, and the Division issued a final determination denying Ms. Perry’s request for benefits on several bases.

[¶ 7] The case was referred to OAH, and a hearing examiner held a contested case hearing on May 6, 2004. The Division argued there were several reasons to deny Ms. Perry’s request for worker’s compensation benefits, including: Ms. Perry failed to timely report her injury to her employer and to the Division, her back injury was preexisting, her back injury did not occur while she was at work, and she was injured while violating a safety regulation. The hearing examiner found Ms. Perry had reported her injury in a timely fashion, she was injured while at work, and she did not suffer from a preexisting condition which would prevent her from obtaining worker’s compensation benefits. However, the hearing examiner found Ms. Perry had violated Mountain Towers’ safety rule prohibiting unassisted two person lifts and concluded, under the holding in Smith, she was not entitled to worker’s compensation benefits. Ms. Perry petitioned the district court for review of the OAH decision, and the district court affirmed. She, subsequently, filed a notice of appeal from the district court’s order.

STANDARD OF REVIEW

[¶ 8] “ ‘When considering an appeal from a district court’s review of agency action, we accord no special deference to the district court’s conclusions. Instead, we review the case as if it had come directly to us from the administrative agency.’ ” Newman v. State ex. rel Wyo. Workers’ Safety and Comp. Div., 2002 WY 91, ¶7, 49 P.3d 163, 166 (Wyo.2002) quoting French v. Amax Coal West, 960 P.2d 1023, 1027 (Wyo.1998).

[¶ 9] Ms. Perry and the Division each presented evidence to OAH. Upon appeal from a contested case hearing where both parties have presented evidence, we apply the substantial evidence standard to review the agency’s findings of fact. See KG Constr., Inc. v. Sherman, 2005 WY 116, ¶9, 120 P.3d 145, 147-48 (Wyo.2005); Robbins n State ex rel. Wyo. Workers’ Safety & Comp. Div., 2003 WY 29, ¶18, 64 P.3d 729, 732 (Wyo.2003). Substantial evidence is more than a scintilla of evidence. It consists of relevant evidence which a reasonable mind might accept in support of the agency’s conclusions. Id. However, even if the factual findings are found to be supported by substantial evidence, the ultimate agency decision may still be found to be arbitrary or capricious for other reasons. Thus, the appellate court does not examine the record only to determine if there is substantial evidence to support the agency’s decision, but it also must examine all of the evidence in the record to determine whether the hearing examiner could have reasonably made its finding and order. Newman, ¶24, 49 P.3d at 172.

[¶ 10] An administrative agency’s conclusions of law are not entitled to the same deference as its factual findings. Diamond B Serv’s, Inc. n Rohde, 2005 WY 130, ¶12, 120 P.3d 1031, 1038 (Wyo.2005). We review an agency’s conclusions of law de novo, and “we will affirm an agency’s legal conclusion only if it is in accordance with the law.” Id. quoting DC Production Service v. Wyo. Dep’t of Employment, 2002 WY 142, ¶7, 54 P.3d 768, 771 (Wyo.2002).

DISCUSSION

[¶ 11] Ms. Perry claims the hearing examiner erred by ruling that she should be denied benefits for violating the two-person lift rule. The hearing examiner relied upon our decision in Smith in concluding Ms. Perry was not entitled to worker’s compensation benefits. Smith was a cook at a truck stop restaurant and had previously suffered back pain, although it was not clear her prior back pain was job related. Smith, 762 P.2d at 1194-95. She sought medical treatment for her back condition, and her physician ordered her not to lift anything weighing more than fifteen pounds. Id. at 1195. Smith’s employer received a letter from her doctor containing the lifting restriction and discussed the restriction with her. The doctor’s letter was posted above the manager’s desk, and Smith was instructed “to have someone else lift any heavy items for her if that became necessary.” Id. One night, Smith attempted to drain a bucket of marinated chickens and injured her back. Id. at 1195. She sought worker’s compensation benefits for her injury, but her employer objected because her injury resulted from her violation of the lifting restriction. Id. at 1196. The district court denied benefits,¹ and Smith appealed.

[¶ 12] In reviewing the case, we looked to the definition of an “injury” which qualifies for compensation under the worker’s compensation system. The statutory definition of a compensable injury requires that an injury “arise out and in the course of employment.” Wyo. Stat. Ann. § 27-14-102(a)(xi) (LexisNexis 2005). The determination of whether an injury arose out of and in the course of employment is a question of fact. Farman v. State ex rel. Wyo. Workers’ Comp. Div., 841 P.2d 99, 102 (Wyo.1992). In considering the employer’s defense that Smith violated a known safety rule, we stated: “[pjrecedent concerning the type of misconduct that is a deviation from the scope of a particular employment focuses on whether the employee knowingly does certain work specifically prohibited, as opposed to an employee’s doing authorized work in an unauthorized way.” Smith, 762 P.2d at 1196. We stated:

Professor Larson articulates this distinction as the difference between a work restriction on the ultimate work to be done and a work restriction concerning the method by which the ultimate work is to be done. 1A A. Larson, Workmen’s Compensation Law, § 31.00 at 6-8 to 6-14 (1985). A specific restriction on the ultimate work to be done can restrict a task of the same character as. other tasks which are not prohibited, and still place the prohibited task outside the scope of an employment.

Id. (some citations omitted). In order to help with making that distinction, we adopted the following test in Smith:

[A]n employee can be found to have acted outside the scope of employment by violating a work restriction when the following elements are shown: (1) the employer expressly and carefully informs the employee that she must not perform a specific task or tasks while in his employ; (2) the employee knows and understands the specific restriction imposed; (3) the employer has not knowingly continued to accept the benefit of a violation of the restriction by the employee; and, (4) the injury for which benefits are claimed arises out of conduct that clearly violates the specific restriction.

Id. at 1196-97. We recognized the test is restrictive and “there are limited situations in which an employer can put on evidence to refute an employee’s preponderance showing that the work causing her injury occurred within the scope of her employment because a work restriction was violated.” Id. at 1196.

[¶ 13] In the case at bar, the hearing examiner found Ms. Perry had violated the rule prohibiting her from performing a two-person lift unassisted and, under Smith, she was not entitled to benefits. The factual record clearly supports the hearing examiner’s conclusion. The first and second elements of the Smith test require the employer expressly and carefully inform the employee she must not perform a specific task while in its employ and the employee know and understand the restriction. At the contested case hearing, Lacrecia Patterson, Mountain Towers’ executive director, testified all employees receive instruction on safety policies when they are hired. Mountain Towers had a written policy stating the two-person lift restriction, and Ms. Perry signed a document acknowledging the policy. Ms. Perry testified that, at her employment orientation, Mountain Towers instructed she was not to perform a two-person lift without assistance. She acknowledged performing a two-person lift alone was a serious violation of Mountain Towers’ safety policies, which could result in disciplinary action, including termination. Obviously, there was ample evidence to support a finding that the first two elements were satisfied.

[¶ 14] The third element of the Smith test is the employer did not knowingly accept the benefit of a violation of the restriction by the employee. This element was contested at the hearing. Ms. Perry testified she was instructed to honor the patients’ rights to privacy and she believed, at the time she was injured, she was complying with the requirement by helping the patient use the restroom. She also testified the “graveyard shift” was habitually understaffed, causing her to have to choose between honoring the patient’s rights and complying with the two-person lift restriction. In fact, she testified she had violated the two-person lift rule several times in her short tenure with Mountain Towers. Thus, she claimed Mountain Towers accepted the benefit of her violation of the two-person lift restriction.

[¶ 15] The record contains no evidence to support Ms. Perry’s claim the graveyard shift was understaffed in accordance with industry or legal standards. Furthermore, Ms. Perry did not testify she had notified Mountain Towers prior to her injury about the perceived staffing problem. Although evidence showing other- employees routinely violated the two-person lift policy may have supported Ms. Perry’s claim of understaffing, no such evidence exists in the record. To the contrary, Ms. Patterson denied knowledge of prior incidences of employees violating the two-person lift rule, and she testified violating the policy was a serious breach of Mountain Towers’ employment regulations which could result in termination of employment. Ms. Patterson also testified Mountain Towers did not benefit from violation of the rule because it placed both the employee and the patient at risk.

[¶ 16] With regard to this particular incident, Ms. Perry did not testify as to how long she and the patient would have had to wait for assistance from the other CNA. Instead, she simply asserted she was required to violate the safety regulation in order to make the patient comfortable and to comply with her obligation to respect the patient’s right to privacy. In doing so, she injured herself and nearly dropped the patient, which were exactly the dangers the policy was designed to prevent. Substantial evidence supports the hearing examiner’s conclusion that Mountain Towers did not knowingly accept the benefit of Ms. Perry’s violation of the two-person lift restriction.

[¶ 17] The record also supports the hearing examiner’s finding the final element of the Smith test was satisfied. Ms. Perry admitted her back injury occurred because she performed a two-person lift by herself. She strained her back when she twisted to prevent the patient from falling. In fact, Ms. Perry’s own statement in her employee incident report acknowledged her violation of the policy caused her injury. One question on the report asked: “What were you doing at the time of the incident, and what could you have done to prevent this incident?” Her handwritten answer stated: “I could [have] had 2 people to help with the transfer if the other CNA would have helped....”

[¶ 18] Ms. Perry seems to acknowledge the record supports the hearing examiner’s factual findings, and she does not seriously contest those findings. Instead, she approaches the issue from another angle by arguing her injury arose out of and in the course of her employment because her violation of the lifting rule was not a departure from the ultimate work to be performed but was merely an unauthorized method of performing the ultimate work. Relying on Professor Larson’s treatise, she claims her injury is compensable because she violated a proscribed means or method of performing the ultimate work but she did not stray from the ultimate work she was hired to perform. Specifically, Ms. Perry claims her act in performing a two-person lift without assistance was part of her ultimate work, which included lifting patients and helping them to the restroom. She argues the unassisted two-person lift was simply a prohibited method of performing her ultimate work, and she is, therefore, entitled to worker’s compensation benefits.

[¶ 19] As we recognized in Smith, the distinction between whether a restriction is upon the ultimate work to be done versus a restriction on the method to accomplish the ultimate work is not always easy to make. The difficulty is in determining the ultimate work to be accomplished by the worker. Professor Larson described the problems as follows:

§ 33.02 Misconduct Which Is Not a Deviation from Employment [1] Distinction Between Prohibited Thing and Method

We have here to do with a simple distinction: that between “thing” and “method.” Rules and prohibitions may define the ultimate “thing” which claimant is employed to do, or they may describe the methods which he may or may not employ in accomplishing that ultimate “thing.” The only tricky feature of this distinction is that it can, by a play upon words, be converted into a contradiction of itself. For example, it seems clear enough that if the claimant’s main job is to lift flour sacks, the raising of the flour sacks is the “thing” for which he is employed. If, in violation of instruction, he rigs up a rope hoist to do the job, it should be clear enough that his departure is merely from the method prescribed.

Yet the argument will sometimes be seen that the violation is one of a rule limiting the “thing,” because the “thing” for which the claimant is employed is “to lift flour sacks by hand and not by hoist.” Of course, by so blending ultimate object and method, one can convert all instructions on method into delimitations on the scope of employment, and end by reducing the distinction to absurdity.

2 Larson’s Worker’s Compensation Law, § 33.02[1] (2005).

[¶ 20] Recognizing the inherent difficulty with distinguishing between the ultimate work and a method of performing the ultimate work, we adopted the test articulated in Smith to provide a methodology for making that distinction. The Smith test is restrictive and only limits the scope of employment, and thereby the compensability of the injury, when the rule against performing a certain task has been clearly communicated to the employee and the employer has not knowingly accepted the benefit from the employee’s violation of the rule. This is consistent with cases from other jurisdictions which recognize a specifically delineated safety rule may limit the scope of employment so long as it is clearly explained to the employee. Compare, Ramsdell v. Horn, 781 P.2d 150 (Colo.Ct.App.1989) (allowing worker’s compensation benefits to epileptic employee who violated employer’s general directive not to work “up high”) with Bill Lawley Ford v. Miller, 672 P.2d 1031 (Colo.Ct.App.1983) (denying benefits to family of intoxicated worker who was killed while working after he had been expressly directed to cease working). See also, Saunders v. Industrial Comm’n, 301 Ill.App.3d 643, 235 Ill.Dec. 490, 705 N.E.2d 103 (1998) (denial of benefits to worker injured while riding double on a forklift in violation of employer’s clear directive); Scheller v. Industrial Comm’n, 134 Ariz. 418, 656 P.2d 1279 (Ct.App.1982) (denying benefits to security worker who pursued criminals off the employer’s premises in violation of employer’s prohibition against leaving the premises). See also, L. Sharp, Violation of Employment Rule as Barring Claim For Workers’ Compensation, 61 A.L.R.5th 375 (1998) (collecting cases).

[¶21] When compared with the facts of Smith, Ms. Perry’s actions were similarly outside the scope of her employment and constituted a. prohibited “thing” not a “method”. Ms. Perry was specifically directed not to perform a two-person lift alone. She was clearly aware of the rule and the fact the patient was classified as a two-person lift. Ms. Perry knew she was violating the rule, doing a prohibited thing and risking termination from her position when she did it. The dissent in Smith argued the evidence was unclear as to whether the bucket of chicken Ms. Smith lifted exceeded the fifteen-pound weight limitation. Smith, 762 P.2d at 1198-99 (UrbigMt, J. dissenting). No similar uncertainty existed in this case.

[¶ 22] Although her argument is not well developed, Ms. Perry seems to also argue the test articulated in Smith is inconsistent with the concept that the worker’s compensation system is not intended to be a fault-based system. As we have explained in prior opinions, the worker’s compensation system in Wyoming is authorized by Art. 10, § 4 of the Wyoming Constitution and provides tort immunity to employers in exchange for employees receiving a type of industrial-accident insurance. Spera v. State, ex rel., Wyo. Workers’ Comp. Div., 718 P.2d 1155, 1156 (Wyo.1986). Thus, the worker’s compensation system is not a tort-based system but is, instead, based upon contract. Id.

“The amendment to Art. 10, § 4 of the Wyoming Constitution and subsequent enabling legislation did not contemplate that tort law would hold any office in the Worker’s Compensation Act except that the employer could defend against claims of the injured employee on the grounds that he or she was culpably negligent. Soon after the amendment to Art. 10, § 4 of the Wyoming Constitution, this court said that the Wyoming worker’s compensation scheme was in the nature of an industrial-accident policy.”

Id., quoting Cottonwood Steel Corp. v. Hansen, 655 P.2d 1226, 1236 (1982).

“Instead of suing his employer for negligence and having to prove duty, breach, proximate cause, and damages, the worker in our state must file for worker’s compensation benefits for which his employer is ultimately liable. Baker v. Wendy’s of Montana, Inc., Wyo., 687 P.2d 885, 888 (1984). Essentially, the system provides disability insurance coverage for the worker. His right to benefits arises when certain conditions precedent occur, primarily, when he suffers a disabling work-related injury.”

Spera, 713 P.2d at 1157 (emphasis added). Thus, the concept of fault does not enter the calculation so long as the employee is engaged in work-related activities when injured.² The principles of Smith look at the threshold question — whether the injury occurred while the employee was engaged in a task which is part of the employee’s work. Until that requirement is satisfied, the employee does not qualify for his contractual right to worker’s compensation benefits. Thus, the Smith ruling simply delineates a method for determining the parameters of the work which is covered by worker’s compensation; it does not inappropriately incorporate fault principles into the worker’s compensation analysis.

[¶ 23] Affirmed.

KITE, J., delivers the opinion of the Court; HILL, C.J., files a dissent, in which BURKE, J., joins.

1 . At the time Smith was decided the district court sat as the fact finder. The worker's compensation system was subsequently revised by the legislature, and OAH was designated to conduct the contested case proceedings under the Worker’s Compensation Act. See Wyo. Stat. Ann. §§ 27-14-101 et. seq. (LexisNexis 2005).

2 . The Division apparently argues on appeal that Ms. Perry’s claim also could be denied pursuant to § 27-14-102(a)(xi)(C), because her injury resulted solely from her culpable negligence. The statutory defense of culpable negligence was not addressed during the administrative hearing. Consequently, we will not consider that argument for the first time on appeal. See Holloway v. Wyo. Game and Fish Comm'n, 2005 WY 144, ¶12, 122 P.3d 959, 962 (Wyo.2005).