                    COURT OF APPEALS OF VIRGINIA


Present: Judges Baker, Benton and Overton
Argued at Salem, Virginia


CITY OF ROANOKE FIRE DEPARTMENT

v.         Record No. 2561-94-3          MEMORANDUM OPINION *
                                      BY JUDGE JOSEPH E. BAKER
JOHN H. ANDERSON                          DECEMBER 19, 1995


         FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

           Monica L. Taylor (James C. Joyce, Jr.;
           Gentry, Locke, Rakes & Moore, on briefs), for
           appellant.
           Mary L. Poletti (Clifton A. Woodrum; Dodson,
           Pence, Viar, Woodrum & Mackey, on brief), for
           appellee.



     The City of Roanoke Fire Department (employer) appeals from

a decision of the Workers' Compensation Commission (commission)

affirming the deputy commissioner's finding that (1) a de facto

award of compensation existed between John H. Anderson (claimant)

and employer, and (2) employer defended the claim without

reasonable grounds.   Employer contends that (1) the de facto
award was erroneously made by the commission, (2) it was

erroneously precluded from presenting evidence that claimant's

disability was unrelated to his occupational disease, (3) it was

erroneously refused permission to proffer evidence in support of

its causation defense; and (4) the commission abused its

discretion in assessing attorney's fees against employer.

     *
      Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
     Claimant is a fire marshal employed by employer.    On May 28,

1992, claimant was found to be suffering from hypertension and

was unable to work as a fire marshal.   Employer accepted

claimant's condition as compensable and an award was entered by

the commission.   Claimant returned to work in October 1992 and

was assigned light-duty work.   Approximately three months

thereafter, he returned to full pre-injury employment.   The

parties executed an agreed statement of facts that terminated

claimant's benefits.
     In July 1993, approximately seven months after claimant's

benefits had been terminated, he again left his work place on the

advice of Dr. Jorge Roman who had previously treated claimant for

hypertension.   From July 14, 1993, until the end of February or

the beginning of March, 1994, for approximately eight months,

employer paid claimant workers' compensation benefits.   Trena

Hicks (Hicks), a claims adjuster for the city, explained that

while a determination is being made whether a disability is

work-related, the city, which is self-insured, pays employees

workers' compensation at two-thirds of their salary rather than

sick leave at one hundred percent of their salary.   This approach

prevents employees from having to pay the city back if it is

later determined that the condition or injury for which they have

been receiving sick leave is actually compensable under the

Workers' Compensation Act.

     When employer advised claimant that it would no longer pay




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benefits, asserting that it had determined that claimant's

disability was not related to his employment, on March 18, 1994,

claimant filed an application for hearing asking that benefits

payments be required to resume.   In that application, claimant

gave July 23, 1992 as the date of injury, stating work-related

hypertension as the basis for the request and "change of

condition" as the reason for the hearing.   Claimant asserted that

the nature of the change was that "[E]mployer cut off benefits in

contradiction of medical reports by treating physician."
     At the outset of the requested hearing, the deputy

commissioner framed the issue:
          This is before us upon the claimant's claim
          requesting resumption of compensation which
          [employer] had been voluntarily paying the
          claimant since July 14th, 1993 but which was
          stopped during March 1994.


No objection was made and, in response, employer stated its

defense:
           Our position is that [claimant's] disability
           is not related to his compensable condition
           but rather is related to his failure to
           follow the directions--medical directions of
           his physicians. Specifically, to take the
           antihypertensive medication and the diuretics
           that were prescribed by his doctor.


Prior to any testimony being taken at the hearing, the deputy

commissioner ruled that the case was not in the proper procedural

posture to permit employer to raise and present evidence on its

causation defense.   Based on this decision, the deputy

commissioner refused to permit employer to proffer any evidence




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regarding such defense.    The deputy commissioner excluded (1)

testimony from Hicks on the question of causation including two

charts related to claimant's medications, prescription records

from the Revco Pharmacy or a proffer of what those records would

show, and (2) testimony from a druggist who had been subpoenaed

to the hearing or a proffer of the testimony of the druggist.

     At the hearing, claimant testified that he had not met with

anyone from the city since June of 1993, and that he had not been

advised either verbally or in writing that the city was only

making workers' compensation payments to him while they

investigated whether his condition was related to his

hypertension.   No supplemental memorandum of agreement was

executed by the parties.
     Hicks testified that the excuse claimant submitted in July

1993 was not specific as to why he was unable to work.    Hicks

advised claimant that she "needed a more definitive excuse

. . . before a decision could be made as to how he would be

carried."   Hicks stated that she discussed with claimant "the

fact that he was certainly entitled to workers' comp or sick

leave but we needed doctor's information in detail to make those

determinations."   Hicks then received a letter from claimant's

counsel asking that Hicks have no further communication with

claimant.

     Hicks further testified that Dr. Roman, claimant's treating

physician, failed to supply her with medical reports until




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February 1994 when she stopped paying his charges for services

and medications.    The prescriptions, she said, raised questions

in her mind whether the claim was compensable.    She added, "I'd

get one piece of information which would say he was having

headaches not related to the job.    Then when I'd question a

prescription for pain medication they'd say, 'No, I think it's

secondary to hypertension.'"    According to Hicks, these records

also showed a problem with claimant's compliance with Dr. Roman's

prescriptions for medications.
        Hicks testified that she did not reach an agreement with

claimant in regard to compensation or compromise of his claim.

However, she did testify that "there was an assumption that

[claimant] does have hypertension and we had approved his claim.

We had not denied it."     She further testified that payments to

claimant were "being carried [on the books] as Workers' Comp pay,

in all honesty."     (Emphasis added.)

        Upon this record, the deputy commissioner ruled from the

bench that there was a "de facto award" in place by virtue of
employer's voluntary payment of workers' compensation, and he

entered a supplemental award in favor of claimant for

compensation during his recurrent incapacity beginning July 14,

1994.    The ruling from the bench was later memorialized in an

opinion dated August 8, 1994.    In that opinion, the deputy

commissioner also assessed claimant's attorney's fee in the

amount of $700 against employer "for having defended this matter




                                 - 5 -
without reasonable ground."

     Employer filed an application for review and, after

consideration thereof, the commission affirmed the decision of

the deputy commissioner.

     The deputy commissioner and the commission relied upon

National Linen Services v. McGuinn, 5 Va. App. 265, 362 S.E.2d

187 (1987), to support their decisions that employer's conduct

created a de facto award.     McGuinn is factually distinguishable

from the case before us, however, the principle is on point.
     In McGuinn, the initial injury occurred in August 1983.

Without executing a memorandum of agreement or requesting the

commission to enter an award, National paid McGuinn benefits from

November 1983 to December 1984.    On December 19, 1984, McGuinn

returned to light duty but could not perform the work.    When

McGuinn failed to work, National discontinued payments.    On

January 23, 1985, McGuinn filed an application for hearing,

claiming continued entitlements and that National had refused to

execute and file a memorandum of agreement.    National did not

contest McGuinn's claim of a compensable injury.    Instead, it

defended on the ground that McGuinn had failed to market his

remaining capacity.   In an en banc decision, this Court held,
"that because National Linen paid compensation benefits to

McGuinn for thirteen months and failed to file with the

commission a memorandum of agreement" a de facto award had been

established which National was obligated to honor.     McGuinn,




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5 Va. App. at 270, 362 S.E.2d at 189.    This Court added that if

that award is to be altered, the burden is on National to prove

by a preponderance of the evidence "a change in condition" as

required by Code § 65.1-93.     Id., 362 S.E.2d at 190.

     McGuinn does not prohibit evidence that claimant's condition

is not compensable, and neither the deputy commissioner nor the

commission make that assertion.    The deputy commissioner refused

to consider the causation evidence saying that the posture of

this case did not require it.    In approving that ruling, the

commission said:
            The employer sought to introduce evidence
          that the claimant's disability was not caused
          by his work-related hypertension, but by his
          failure to take his medications. The Deputy
          Commissioner ruled that having reached an
          agreement on compensability, the employer
          could not now challenge causation. We find
          that the Deputy Commissioner's procedural
          ruling is correct. Because there was a de
          facto award in effect, the employer must
          comply with Virginia Code § 65.2-708 and Rule
          1.4(C). This entails paying compensation
          through the date of the filing of an
          application for a change in condition. In
          this case, the employer unilaterally
          terminated compensation in March, 1994,
          forcing the claimant to hire legal counsel
          and deplete his accrued sick and holiday pay.


(Emphasis added.)

     We hold that, under the facts of this case, the commission

did not err when it held that employer's assumption that the

claim was compensable, together with the fact that the

investigation continued for more than eight months even after

claimant returned to light duty, sufficiently supported the


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award.   We further hold that the award having been established,

the burden was on employer to specifically plead a change of

condition pursuant to the requirements of Code § 65.2-708 if it

wished to present the evidence refused by the deputy.   Until

then, the case was not in a posture to consider that evidence.

     Finally, employer asserts that the commission abused its

discretion when it assessed attorney's fees to employer.    The

award of fees is left largely to the discretion of the commission

and will not be disturbed in the absence of an abuse of

discretion.   Jensen Press v. Ale, 1 Va. App. 153, 159, 336 S.E.2d

522, 525-26 (1985).   We cannot say that the commission's

determination that an award of fees should be made discloses an

abuse of its discretion.

     Accordingly, the decision of the commission is affirmed.

                                                   Affirmed.




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