California: 6th District COA Endorses Fitzpatrick

The Court of Appeals in the Sixth District has ordered publication of the joint cases in Applied Materials v. Workers’ Compensation Appeals Board (D.C.) and XL Specialty Insurance Company v. Workers’ Compensation Appeals Board (D.C.)[1] In its 74-page opinion, the Court addresses the multiple issues on appeal not only between defendants and applicant but also between defendants over various aspects of liability. The Court rejected all of the arguments defendants made against each other respecting liability, challenging psychiatric injury and substantial evidence on cumulative trauma; however, the two issues the Court decided on issues between applicant and the co-defendants are significant and advance our understanding of the workers’ compensation system.

The facts are long and involved. Applicant sustained a specific injury in 2001 involving her neck and right upper extremity for which an Award of permanent disability benefits was made. She then sustained an additional specific injury to her neck and both upper extremities in 2005 as well as an alleged (and ultimately found) cumulative trauma injury to her neck, both upper extremities and psyche ending in January of 2008. A Petition to Reopen the 2001 injury was also timely filed. Applicant was examined by multiple medical-legal examiners both for her physical injuries as well as her psychological injuries. Ultimately, the physical injuries were determined based upon the report of Dr. Steven Feinberg serving as an AME between applicant and the defendant in the 2001 injury and Dr. Sidle who served as the psychiatric QME for the 2008 cumulative trauma injury claim.

Each of the evaluators saw the applicant on multiple occasions initially not finding her permanent and stationary and entitled to ongoing medical treatment and continuing temporary disability benefits. Dr. Sidle initially saw the applicant in 2011 and recommended a change in her medication and treatment. In 2013 when he saw her, he felt that she was severely depressed and suicidal and that she urgently needed inpatient psychiatric treatment.

Subsequent evaluations with Dr. Sidle revealed applicant had been engaging beginning in approximately 2013 in a sexual relationship with her treating pain management physician. According to the applicant, the doctor had made multiple suggestive comments to her in various times in his office beginning in 2012 indicating they should become involved. Over the ensuing year he engaged in increasingly bold sexually provocative actions and comments. Beginning in 2013, he showed up multiple times at her house and they engaged in sexual intercourse. As a result of this course of conduct the applicant became increasingly anxious and depressed. The applicant ultimately started refusing to engage in sexual activity with her treating physician. The records show that he contacted her over 70 times between May and November of 2013. The injured worker testified her physician controlled her medication and her entitlement to benefits including Social Security Disability as well as workers’ compensation benefits and she felt she was stuck in a relationship because he was her treating physician.

Ultimately, Dr. Sidle diagnosed the applicant as suffering from post-traumatic stress disorder related principally to her relationship with her treating physician although also related to her depression from her physical injuries. The doctor reported her as P & S with a GAF score of 45 which he interpreted as being inconsistent with her ability to be employed. Dr. Sidle opined the principal cause for this impairment was the applicant’s medical treatment at the hands of her treating physician and the relationship that he had forced upon her.

At Trial in May and July of 2017, the only witness was applicant who described her sexual relationship with her treating physician. The WCJ awarded benefits based on specific injuries in 2001, 2005 as well as a cumulative trauma injury ending in 2008 to her neck, both arms and psyche. The WCJ awarded 100% permanent disability benefits based upon the report of Dr. Sidle and his conclusion the injured worker was effectively unable to work as a result of her psychiatric disorder. He did not issue ratings based upon the orthopedic reports which rated well below life pension nor did he rate the GAF score itself. The judge further found the conduct by the applicant’s treating physician arose from the work injury and that the doctors engaging in a sexual relationship with a patient did not take the issue outside the scope of workers’ compensation or the chain of industrial causation. The WCJ was not able to find any precedent on this point but related to other types of misconduct, including medical malpractice, et cetera.

Both defendants appealed on multiple grounds as indicated above. The WCAB initially granted reconsideration for further study but ultimately upheld the Trial judge’s determination of permanent total disability and injury AOE/COE to the psyche. (The WCAB did make adjustments to temporary disability benefits and permanent total disability rates in the decision).

Both defendants filed Petitions for Writs of Review from the WCAB decision upholding the Award of permanent total disability as well as the other complex set of issues. Between the time of the WCJ’s decision and the WCAB decision on reconsideration, the Court of Appeals in the First Appellate District issued its decision in Department of Corrections and Rehabilitation v. WCAB (Fitzpatrick) which clearly caught the Court’s attention. After granting the defendants’ Petitions for a Writ of Review, the Court directed the parties to answer three specific questions involving the permanent disability rating and the applicant’s Permanent Total Disability Award. These questions were:

1. What is the scheduled rating under the 2005 schedule for rating permanent disability in D.C.’s case based on her GAF score of 45? Please provide the rating formula.
2. What was the statutory basis for the Award of 100% permanent disability in this case? Did Dr. Sidle or the WCAB rely on an incorrect legal theory in finding 100% permanent disability? Was the Permanent Disability Award here authorized under Department of Corrections and Rehabilitation v. WCAB (Fitzpatrick) (citation omitted)?
3. Was there a substantial evidence that rebutted the schedule rating for D.C.’s psychiatric disability under the standards described in Fitzpatrick (citation omitted)? Please describe that evidence in detail and explain why or why not, with citations to legal authority and the record file in support of the Writ Petition.

Each of defendants provided impairment ratings based upon the GAF score which resulted in either a 68% or 70% rating depending on the age used for the applicant (based on the date of injury). Applicant did not provide a rating and simply asserted the rating was 100% based upon the report of Dr. Sidle indicating that the applicant was unable to be employed.

The Court clearly was most focused in this case on two issues. The first being whether the applicant’s treating physician’s relationship with the applicant constituted a work event such that benefits were payable as a compensable consequence. The second question being whether the 100% Permanent Total Disability Benefit Award was supported by substantial evidence and whether Fitzpatrick required a different level of evidence in order to rebut the Permanent Disability Rating Schedule.

As to the nature and extent of injury issue and whether the applicant’s relationship with her treating physician constituted a compensable consequence of her industrial injury, the Court had absolutely no difficulty. As the Court noted, this was not a consensual relationship as a patient is incapable of consenting to a sexual relationship with her treating physician, citing Business & Professions Code §729 which provides physicians who engage in sexual intercourse or contact with a patient are guilty of a criminal offense. Consent by the victim is not a defense in that circumstance. It also provides that a physician shall not be guilty of sexual exploitation for touching any intimate part of the patient unless touching is outside the scope of the medical examination and treatment or is done for sexual gratification.

Here, it was clear the activities engaged in by the applicant’s treating physician were for sexual gratification. The Court also noted the opinion of Dr. Sidle the applicant was very vulnerable and felt trapped in the relationship with the PTP and further that the physician had lost his license as a result of his conduct. The Court simply rejected the concept that this could be in any way, shape, or form be considered a consensual relationship; it clearly arose from the applicant’s relationship with her treating physician in the course of the workers’ compensation injury and therefore falls within the course and scope of a work-related injury.

The Court also noted the PTP was treating the applicant for the effects of multiple injuries even though some of the injuries at the time were not admitted and he was not authorized to treat by both defendants. As the Court, however, opined since the treatment was actually necessary to cure relief from the effects of all of the injuries, his service as a treating physician was for the purposes of all three injuries and therefore all three bore responsibility for the physician’s misconduct and the subsequent disability.

On the issue of applicant’s Permanent Total Disability Award, the Court clearly focused on the issue with whether Fitzpatrick allowed for the “alternate path” under Labor Code §4662(b) for disability “according to the fact”. Applicant argued the Court should reject the 1st District’s opinion and hold Fitzpatrick was incorrectly decided. While asserting Fitzpatrick had reversed significant appellate law on this issue, the applicant attorney did not cite a single case where Court of Appeal had ever affirmed the application of Labor Code §4662(b) as an alternate path to permanent disability. While there were several board panel or writ denied cases which were cited, the Court of Appeal noted none of those are binding on an appellate court.

The Court of Appeal found the Trial Judge based his decision upon Labor Code §4062(b) “disability in accordance with the fact” based on the reporting of Dr. Sidle. The Court found this to be clear and reversable error. As Fitzpatrick held, permanent disability is determined first in accordance with the scheduled rating and the factors enumerated in §4660 and the language of that section makes this step mandatory. The court also reviewed the multiple ways to rebut this schedule in addition to getting a permanent total disability under the schedule before concluding:.

“Our review of the records supports the conclusion that worker relied on the alternative path to support her claim of permanent total disability. As noted, the joint Pre-Trial Conference Statement indicated that she claimed total PD under §4662(b), and she cited both §4662(b) and Anaya in her answer to the Petition for Reconsideration. Dr. Sidle (psychiatric QME) reported that her GAF score was 45, which he understood to mean ‘that she cannot hold the job’ and would be ‘considered totally disabled.’ But a GAF scored results in permanent disability rating of 68% or 70% out of the 2005 schedule not total disability. Dr. Sidle’s opinion is also consistent with the argument worker makes in this proceeding based on the definition of permanent total disability and the introduction to the 2005 schedule, legal argument which we have rejected.”

The court’s holding opined:

“…we conclude that the 100% PD Award must annulled because: (a) the psychiatric reports of the WCAB relied on do not constitute substantial evidence since Dr. Sidle relied on an incorrect legal theory, the alternative path theory, that was rejected in Fitzpatrick (citation admitted) and (b) workers’ evidence with otherwise insufficient to rebut the scheduled rating for her psychiatric disability.”

On remand the court also instructed the issue of apportionment to be readdressed by Dr. Sidle as he apparently did not address that issue to the court’s satisfaction.

Summary and Conclusions:

The multiple holdings in this case are well worth reading for the additional determinations made by the Court. I have highlighted the issues involving compensable consequence injury and application of Labor Code § 4662(b) as the most important issues the Court addressed However, there are other holdings on some novel but less broadly applicable issues which might very well have applicability to future cases and should be noted.

Certainly to this commentator, the Court’s holding on the issue of the compensability of the applicant's psychiatric disorder arising out of the sexual misconduct of the PTP is not surprising. It certainly appears the physician “groomed” the applicant over a period of a couple of years to get her to participate in a sexual relationship. She was clearly vulnerable and felt trapped in great part because of his control over her benefits. It is somewhat surprising this issue had never come up quite in this context. We can always hope this will be the first and last case we have to have on this topic, but that may be hopeless optimism.

The Court’s upholding of the principles in Fitzpatrick, and specifically rejecting the “alternate path” theory under Labor Code § 4662(b), should put that issue to rest. Applicant's attorney made a conscious and concerted effort to get the appellate court to reject the rational of Fitzpatrick. However, the arguments that Fitzpatrick was an aberration and reversal of prior appellate law was simply unsupported by any authority. The Petitioners also did an excellent job of laying out to the Court how similar the rating issues were between this case and Fitzpatrick especially since the GAF scores were identical. The Court did its work in thoroughly discussing the rating system, the cases on rebuttal and agreeing with Petitioners there were ways to PTD; applicant simply had not gotten there. It is somewhat puzzling that the WCAB in its decision did not address the Fitzpatrick holding which certainly appeared to apply to the facts of this case.

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^[1] Since this case involves allegations of sexual abuse, the Court referred to the injured worker by her initials or the status designation “Worker” to protect her privacy.