










2015 VT 42











Smiley v. State (2013-257)
 
2015 VT 42
 
[Filed 06-Mar-2015]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions by email at: JUD.Reporter@state.vt.us or by
mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801, of any errors in order that corrections may be made before this
opinion goes to press.
 
 



2015 VT 42



 



No. 2013-257



 



Curtis Smiley 


Supreme Court




 


 




 


On Appeal from




     v.


Department of Labor




 


 




State of Vermont


May  Term, 2014




 


 




 


 




Anne
  M. Noonan, Commissioner




 
Christopher McVeigh of McVeigh ¨ Skiff, Burlington, for
  Plaintiff-Appellant
 



William J. Blake of Ellis Boxer & Blake PLLC,
Springfield, for Defendant-Appellee.
 
PRESENT:  Reiber, C.J., Dooley, Skoglund, Robinson and
Crawford,[1]
JJ.
 
 
¶ 1.            
DOOLEY, J.   Claimant appeals two decisions in which
the Commissioner of the Department of Labor concluded, as a matter of law, that
the State did not waive its statute-of-limitations defense and was entitled to
summary judgment based on that defense.  We concur that the State did not
waive the affirmative defense by agreeing to claimant’s request for an
impairment rating.  We conclude, however, that the commissioner erred by
holding that a regulation requiring employers/insurers to determine, at the time
an employee with a work-related injury reaches a medical end result, whether
the employee has any permanent impairment was not in effect. 
Nevertheless, we hold that violation of the regulation does not toll the
statute of limitations and affirm the commissioner’s ruling that the instant
claim for permanent partial disability benefits was barred by the applicable
statute of limitations.
¶ 2.            
On January 20, 1996, claimant injured his left ankle during the scope of
his employment as a game warden with the State of Vermont.  On July 8,
1996, his treating orthopedic physician indicated in medical notes that: (1) it
had been six months since claimant had undergone surgery on his ankle; (2)
claimant was back at work and able to walk without limitation but still had
trouble with stairs; (3) his limitations were characteristic of someone who had
fractured his ankle six months earlier; (4) he was offered physical therapy but
declined; (5) it generally takes a year to fully recover from such an injury; (6)
claimant agreed to return for physical therapy if his situation did not improve
within that time frame as expected; and (7) he would be seen again “as
needed.”  Based on that evidence, the commissioner found that “as of July
1996 [claimant] knew, or should have known, that he had reached an end medical
result, and that whatever deficits he was left with were likely permanent in
nature.”[2]
¶ 3.            
Meanwhile, on May 15, 1996—approximately four months after claimant’s
injury and two months before his orthopedic physician wrote the July 8 note—the
Department of Labor promulgated Workers’ Compensation Rule 18(a), which states,
in relevant part, as follows:
The employer (insurer) shall take action
necessary to determine whether an employee has any permanent impairment as a
result of the work injury at such time as the employee reaches a medical end
result. . . . A determination as to whether the claimant has any permanent
impairment shall be made within 45 days of filing the notice of termination.
Before the
department’s promulgation of Rule 18(a), a claimant could investigate a
permanent impairment after reaching a medical end result by either directly
obtaining an impairment rating from a qualified physician or asking the
employer to arrange obtaining the rating; however, there was no express
regulatory obligation on the part of the employer—irrespective of any request
from the injured employee—to determine whether the employee had a permanent
impairment.  This was the holding of Longe v. Boise Cascade Corp.,
171 Vt. 214, 762 A.2d 1248 (2000), a case in which the claimant applied in 1991
for benefits based on a 1983 injury and argued that because the employer had an
obligation to determine whether the claimant had a permanent partial
impairment, the statute of limitations was tolled.  We held that the
workers’ compensation statute imposed no obligation on an employer to
investigate whether an employee had a permanent impairment or to inform a
potential claimant of the right to permanent partial disability benefits. 
Id. at 225-26, 762 A.2d at 1257-58.
¶ 4.            
Claimant took no further action in this case until the fall of 2010,
when he asked his employer’s (the State of Vermont’s) workers’ compensation
adjuster to schedule a permanency evaluation for his 1996 injury.  In
response, the adjuster scheduled an independent medical evaluation with a
physician, who concluded that claimant had a one percent permanent impairment
rating attributable to the 1996 injury.  Claimant arranged for a second
evaluation with a physician, who reached the same conclusion.
¶ 5.            
On May 16, 2011, the State filed a form denying permanent benefits to
claimant, asserting that the claim for permanent partial disability benefits
was time barred because the six-year statute of limitations had expired.[3]  Attached to the form was a letter
in which the State’s workers’ compensation adjuster stated that, although the
statute of limitations had run, she offered to pay the one percent impairment
to claimant if he agreed to forego any claim for interest and penalties. 
In June 2011, claimant filed an application for a hearing on his claim for
permanent partial disability benefits related to his 1996 work injury.  On
September 7, 2011, the State answered claimant’s hearing request by pleading
the statute of limitations as an affirmative defense.
¶ 6.            
In November 2011, the State moved for summary judgment, arguing in part
that it had not waived its statute-of-limitations defense by scheduling
claimant’s permanency evaluation.  On April 15, 2012, in the first of the
decisions being appealed, the commissioner granted the State summary judgment
on the waiver issue, while preserving the issue of whether the State had any
obligation in this case pursuant to Rule 18(a) to determine whether claimant
had a permanent partial impairment.  In February 2013, the State filed
another motion for summary judgment, arguing that claimant’s request for
permanent partial benefits was barred by the applicable statute of limitations
insofar as Rule 18(a) did not retroactively apply to this case.  On June
3, 2013, the commissioner granted the State’s motion for summary judgment,
concluding as a matter of law that Rule 18(a) did not apply retroactively and
claimant knew or should have known that he had reached a medical end result as
of July 8, 1996.
¶ 7.            
Our review is limited to the following questions certified for appeal:
(1) whether the commissioner erred by concluding as a matter of law that the
State did not waive its right to deny the instant claim on
statute-of-limitations grounds by arranging for claimant to undergo a
permanency evaluation; (2) whether the claim was barred as a matter of law by
the applicable statute of limitations; and (3) whether the commissioner erred
by concluding as a matter of law that the State was not barred from asserting
the statute of limitations based on a regulatory duty to investigate the extent
of claimant’s permanent impairment.  We will uphold the commissioner’s
findings unless they are clearly erroneous, but our review of the
commissioner’s interpretation of law not within her expertise is nondeferential
and plenary.  See Sanz v. Douglas Collins Constr., 2006 VT 102,
¶ 5, 180 Vt. 619, 910 A.2d 914 (mem.).
¶ 8.            
On appeal to this Court, claimant argues that the commissioner erred in
granting summary judgment to the State, the moving party, by making inferences
in favor of the State with respect to the waiver question and when claimant
reached a medical end result.  Claimant also argues that the commissioner
misinterpreted this Court’s legal precedent in determining that Rule 18(a)
should not be applied retroactively to his claim in this case.  For its
part, the State contends that the commissioner’s decisions were correct in all
respects.
¶ 9.            
We begin with the waiver question.  The commissioner rejected
claimant’s waiver argument, noting that in past cases the payment of medical
bills alone has not been considered a waiver of an employer’s right to contest
other aspects of an injured worker’s claims for benefits, and stating that the
evidence, even considered most favorably to claimant, does not demonstrate a
clear and unequivocal intent on the part of the State’s workers’ compensation
adjuster to waive a statute-of-limitations defense.  On appeal, claimant
argues that, in determining the issue of waiver on summary judgment, the commissioner
erroneously gave the State, the moving party, rather than him, the nonmoving
party, the benefit of all reasonable inferences.  According to claimant, a
reasonable inference would have been that the adjuster knew or should have been
aware of the statute-of-limitations defense for a fourteen-year-old claim.
¶ 10.        
The commissioner and the parties have analyzed this issue under the
general legal maxim that a waiver is an intentional relinquishment of a known
right involving “both knowledge and intent on the part of the waiving
party.”  LaFrance Architect v. Point Five Dev. S. Burlington, LLC,
2013 VT 115, ¶ 38, ___ Vt. ___, 91 A.3d 364 (quotation omitted). 
Viewed as such, a waiver may be express or implied, but before a waiver may be
implied, “caution must be exercised both in proof and application,” such that
“[t]he facts and circumstances relied upon must be unequivocal in
character.”  Holden & Martin Lumber Co. v. Stuart, 118 Vt. 286,
289, 108 A.2d 387, 389 (1954).
¶ 11.        
In this case, claimant is not alleging the existence of an express
waiver, but rather asks this Court to find a waiver based solely on the
insurance adjuster’s agreement, at claimant’s request, to schedule a permanent
impairment evaluation.  He contends that the adjuster should have been
aware of a potential statute-of-limitations defense to his long-delayed claim,
and that such a defense, if successful, would have acted as a complete bar to
his claim, making any permanency evaluation unnecessary.  He asserts that,
at minimum, the state of the evidence was such that, giving him as the
nonmoving party the benefit of all rational inferences, the court erred by
granting the State summary judgment on the question of waiver.
¶ 12.        
We agree with the commissioner that, as a matter of law, claimant cannot
unequivocally demonstrate an implicit waiver under the circumstances of this
case.  As the commissioner pointed out, even if employers think they may
have a viable statute-of-limitations defense, they may want to first discover
the extent of the claim before deciding whether to waive or assert the
defense.  Cf. Carter v. Cont’l Tel. Co., 373 N.W.2d 524, 526 (Iowa
Ct. App. 1985) (declining to find waiver of statute-of-limitations defense
despite supervisor’s statement in pre-hearing letter that although claim could
be barred by statute-of-limitations he preferred not to base his decision on
any statutes).  Even assuming that the State’s workers’ compensation
adjuster knew of a potential statute-of-limitations defense and believed that
it could be successfully asserted in this case, nothing in the record remotely
suggests that the adjuster intended to waive that defense by acceding to
claimant’s request that she arrange a permanency evaluation.  Accordingly,
we answer the first certified question—whether the commissioner erred in
declining to find a waiver based on the adjuster granting claimant’s request to
schedule a permanent impairment evaluation—in the negative.[4]
¶ 13.        
Before addressing the second certified question—whether the applicable
statute of limitations bars the instant claim for permanent partial disability
benefits—we will address the third certified question—whether the commissioner
erred in concluding as a matter of law that the State was not barred from
asserting a statute-of-limitations defense based on its failure at the time
claimant reached a medical end result to determine whether he had a permanent
impairment.  We analyze this question in two parts: (1) whether Rule 18(a)
should be applied to the instant case; and (2) if so, whether a violation of
Rule 18(a) tolls the statute of limitations.  
¶ 14.        
Rule 18(a) requires an employer/insurer at the time an employee with a
work-related injury reaches a medical end result to “take action necessary to
determine whether [the] employee has a permanent injury” as a result of the
injury.  The rule further provides that determination of whether an
employee has a permanent impairment from a work-related injury must be made
within forty-five days of the termination of temporary benefits for the injury
based on the employee having reached a medical end result.  As noted,
claimant was injured in January 1996, and Rule 18(a) was promulgated in May
1996, at least several months before plaintiff reached a medical end result
with respect to his work-related ankle injury.
¶ 15.        
The commissioner cited the general rule that the right to workers’
compensation benefits is controlled by the law in place at the time of the
work-related injury, and then concluded that Rule 18(a) could not be applied
retroactively to this case because it was a substantive rather than procedural
rule that fundamentally altered the employer’s obligations.  In so ruling,
the commissioner relied upon our decision in Sanz, where we held that an
amendment to the workers’ compensation law requiring employers to pay benefits
in a lump sum upon an injured employee’s request could not be applied
retroactively because it affected the preexisting rights and obligations of
both employees and employers.  2006 VT 102, ¶ 13.
¶ 16.        
We agree with claimant that the commissioner erred in concluding that
Rule 18(a) is substantive in nature and should not be applied in this
case.  At the outset of our discussion, we note that although this case
involves a new rule rather than a statute, our analysis for this purpose is
essentially the same as if we were dealing with a statute.  Accordingly,
in determining the appropriateness of retroactive application, the considerations
are the same.  See Chatham Cnty. Dep’t of Family & Children Servs.
v. Williams, 471 S.E.2d 316, 317 (Ga. Ct. App. 1996) (stating that
administrative rules and regulations follow same general rule of retroactive
application as statutes).
¶ 17.        
“[I]n general, new statutes do not apply to cases that are pending at
the time of the effective date of the new statute,” but “there is an exception
for statutes that are solely procedural or are remedial in nature.”  Myott
v. Myott, 149 Vt. 573, 575, 547 A.2d 1336, 1338 (1988); see 3B N. Singer
& J.D. Shambie Singer, Statutes & Statutory Construction § 75:3,
at 69-70 (7th ed. 2011) (“A remedial or procedural statute may apply
retroactively, unless it interferes with vested or substantive rights.”). 
As a leading commentator on statutory construction explains:
A remedial statute that does not take
away vested rights can operate retroactively in the absence of language
manifesting a contrary intent.  Likewise, where a new statute deals only
with procedure, prima facie it applies to all actions—to those which have
accrued or are pending, and to future actions.
2 N. Singer &
J.D. Shambie Singer, Statutes and Statutory Construction § 41.4, at 431-32
(7th ed. 2009); see also Connair v. City of New Haven, 737 A.2d 971, 973
(Conn. App. Ct. 1999) (“Procedural statutes generally are applied retroactively
absent a clear expression of legislative intent to the contrary.” (quotation
omitted)); Luetzinger v. Treasurer of Mo. Custodian of Second Injury Fund,
895 S.W.2d 591, 594 (Mo. Ct. App. 1995) (“Statutory amendments to remedial
statutory provisions . . . should be applied retroactively
to pending cases.”).  
¶ 18.        
The question then becomes whether a retroactive application would affect
the substantive rights of the parties.  Generally, courts and commentators
have stated that provisions are merely procedural in nature if they “control
only the method of obtaining redress or enforcement of rights and do not
involve the creation of duties, rights, and obligations.”  Harris v.
DiMattina, 462 S.E.2d 338, 340 (Va. 1995); see also State v. Washington,
830 So. 2d 288, 290 (La. 2002) (“Procedural laws prescribe a method for
enforcing a substantive right and relate to the form of the proceeding or
operation of laws.”); 2 N. Singer, supra, § 41.4, at 421-23
(2009) (“A procedural law concerns the manner and order of conducting suits or
the mode of proceeding to enforce legal rights, and a substantive law is one
that establishes the rights and duties of a party.”).
¶ 19.        
We conclude that Rule 18(a) should be applied in this case.  The
rule affects only procedural rights and obligations of the parties in that it
dictates the mode or method of proceeding to enforce substantive rights under
the remedial law.  See Rauch v. Workers’ Comp. Appeal Bd., 808 A.2d
291, 294 (Pa. Commw. Ct. 2002) (“A statute is procedural if it provides the
method for enforcing a right, but it has no impact on a claimant’s legal
entitlement under the facts of a particular case.”).  Claimant had not
reached a medical end result prior to the promulgation of Rule 18(a), which
imposes procedural duties on employers/insurers at the time injured workers
reach a medical end result.  See Jones v. Indus. Comm’r, 780 N.E.2d
697, 701 (Ill. App. Ct. 2002) (stating that, in determining whether to apply a
statute retroactively, court must determine if statute would attach “new legal
consequences to events completed before its enactment”).  Thus, this is
not a case where the new rule interfered with any preexisting rights or
obligations.  See Sanz, 2006 VT 102, ¶ 12 (“When a post-injury
amendment does not fundamentally change preexisting rights, it may be applied
in a pending action.”); see also 2 N. Singer, supra, § 41.4, at
417-18 (2009) (“The presumption against applying a newly enacted statute
retrospectively exists as a matter of fairness, so that people have
opportunities to know what the law is and to conform their conduct
accordingly.”).
¶ 20.        
The commissioner relied upon Sanz in support of her conclusion
that Rule 18(a) could not be applied retroactively, but Sanz is
distinguishable from the instant case.  For one thing, Sanz dealt
with an amendment to a statute, and thus its holding is based on 1 V.S.A.
§ 214(b), which concerns the effect or repeal of an act or provision of a
statute.  2006 VT 102, ¶ 13 (“[W]e hold that 1 V.S.A.
§ 214(b)(2) prohibits retroactive application of 21 V.S.A. § 652(b)
to injuries that predate its enactment.”).  More significantly, in Sanz
we refused to apply retroactively a statutory amendment that obligated an
employer to grant a claimant’s request to provide benefits in a lump sum rather
than on a weekly basis over several years because the amended law fundamentally
altered both the employer’s payment obligations and the claimant’s right to
benefits.  Id.  In this case, Rule 18(a) did not fundamentally
alter the parties’ substantive rights or obligations under the statute, but as
stated above, merely changed a part of the procedure for obtaining those rights
or enforcing those obligations.  Cf. Rauch, 808 A.2d at 295-96
(distinguishing substantive statutory change allowing lump-sum payment of
benefits and holding that statutory amendment allowing diminishment of benefit
based on employee’s refusal to submit to vocational interview was procedural in
nature and could be applied retroactively because it was enforcement mechanism
that had no effect on underlying substantive right to benefits). 
Accordingly, we answer, in part, the third question by holding that employer
had a duty under Rule 18(a) to determine whether claimant had a permanent
impairment.
¶ 21.        
This brings us to the second part of the third certified
question—whether a violation of Rule 18(a) tolls the statute of
limitations.  The commissioner did not reach this part because she found
that Rule 18(a) was not applicable.  In fact, the State argued before the
commissioner that the statute of limitations barred the claim even if Rule
18(a) applied.  We reach the question of whether claimant is time barred
from raising his claim for permanent partial disability benefits fourteen years
after he reached a medical end result, despite the applicability of Rule 18(a).
¶ 22.        
This issue is identical to that decided in Longe, except for the
presence of Rule 18(a).  In Longe, the claimant suffered a
work-related back injury in 1983 and received temporary partial disability
workers’ compensation benefits, but after a successful operation returned to
work and did not claim permanent partial disability benefits.  He suffered
another back injury in 1991 and claimed permanent partial disability in 1993,
but the employer argued that because the injury was a recurrence of the 1983
injury, benefit eligibility had to be based on the original injury.[5] 
It further argued that the statute of limitations had run on the 1983 injury so
no claim based on that injury could result in the award of workers’
compensation benefits.  The commissioner awarded benefits for both the
1983 and 1991 injuries, concluding that the limitation period for the 1983
injury claim was tolled because employer had a duty to investigate whether the
claimant had suffered a permanent impairment as a result of the 1983 injury
and, if so, to inform the claimant of his right to permanent partial disability
benefits.  In the absence of such investigation and notification, the
commissioner ruled that the limitation period was tolled as of the date that
duty arose.
¶ 23.        
This Court reversed the commissioner’s decision with respect to the 1983
injury and held that the workers’ compensation statute imposed no obligation on
an employer to investigate whether an employee had a permanent impairment or to
inform a potential claimant of the right to permanent partial disability
benefits.  Id. at 226, 762 A.2d at 1258.  Specifically, we
rejected the notion that the discovery rule, which we have used in some
contexts to toll a limitation period until an injury has become reasonably
discoverable and apparent, imposes a duty on the employer to determine when an
injury accrued and to inform the employee of the potential availability of
permanent partial disability benefits.  Id. at 219-20, 221-22, 762
A.2d at 1253-54, 1255-56.  We went on to examine other statutory
provisions and found no statutory duty of investigation or notification.  Id.
at 223, 762 A.2d at 1256.
¶ 24.        
We also went on to examine the law in other jurisdictions, concluding
that the majority rule is that “absent a statutory duty, or circumstances
sufficient to invoke the doctrines of equitable estoppel or equitable tolling,
an employer has no duty to inform an employee of his or her rights under the
workers’ compensation laws.”  Id.  In view of the majority
rule, we analyzed the case under the doctrines of equitable estoppel and
equitable tolling, concluding that neither applied.  Id. at 224-25,
762 A.2d at 1257.  We did analyze a Department of Labor rule requiring an
employer, upon the filing of a claim, to determine whether compensation is due
and, if so, to enter into an agreement with the claimant, but we concluded that
the employer had satisfied the rule.  Id. at 225, 762 A.2d at
1257-58.[6]
¶ 25.        
The holding of Longe is explicitly stated: “absent a statutory
duty or circumstances sufficient to invoke the doctrines of equitable estoppel
or equitable tolling, an employer has no duty to inform an employee of his or
her rights under the Act.”  Id. at 226, 762 A.2d at 1258.  We
explained that our ruling is consistent with the principle that persons are
presumed to know the law.  Id.
¶ 26.        
Although we analyze the question in more detail below, we can summarize
at the outset that claimant does not meet the Longe standard to avoid
the applicable statute of limitations and therefore cannot prevail on his
claim.  There has been no relevant statutory amendment, and neither
equitable estoppel nor equitable tolling apply on the facts of this case. 
The question then is whether the Longe holding should be modified to
recognize that breach of a duty imposed by rule, and not by statute, has equal
tolling effect.  We hold that it does not.
¶ 27.        
The Commissioner of the Department of Labor has rule-making authority
for workers’ compensation proceedings.  21 V.S.A. § 602(a); see Miller
v. IBM, 163 Vt. 396, 398, 659 A.2d 1126, 1127 (1995).  Section 602(a)
provides that “[a]ll process and procedure under the provisions of this chapter
shall be as summary and simple as reasonably may be” and that “[t]he
Commissioner may make rules not inconsistent with such provisions for carrying
out the same . . . .”  Rules are presumed valid, based in part
on the acceptance of the construction of a statute by an administrative agency
that implements it “absent compelling indication of error.”  Miller,
163 Vt. at 399, 659 A.2d at 1127.  The issue here is not whether the rule
is valid, but whether noncompliance with Rule 18(a) tolls the applicable
statute of limitations.
¶ 28.        
The applicable limitation period in this case is contained in a very
simple and direct statute of limitations: “Proceedings to initiate a claim for
benefits pursuant to this chapter may not be commenced after six years from the
date of injury.”  1993, No. 225 (Adj. Sess.), § 10 (codified as 21
V.S.A. § 660).[7]  The
limitation period for workers’ compensation claims originally was derived from
that for contract actions generally, which was six years.  See Fitch v.
Parks & Woolson Mach. Co., 109 Vt. 92, 98-99, 191 A. 920, 923
(1937).  Following Fitch, the Legislature placed this limitation
period in the workers’ compensation statute.  There is nothing in the
statute to suggest that the limitation period is suspended because the employer
has failed to investigate whether the injury has caused a permanent disability
or to notify the employee of a potential claim.  Our discussion of
statutory construction in Longe is directly applicable here.
¶ 29.        
As evidenced by 21 V.S.A. § 660, the Legislature knows how to
create an equitable tolling provision when it wishes to do so.  However,
the Legislature did not impose a duty on employers beyond that set forth in
§ 691.  Nor did the Legislature provide a tolling provision applicable
to the six-year statute of limitations for proceedings under the Act.  Longe,
171 Vt. at 223, 762 A.2d at 1256.  The commissioner has no power to create
a tolling provision by rule if it is inconsistent with the statute.  21
V.S.A. § 602(a).  This is exactly what the commissioner’s decision
does here.
¶ 30.        
We have held that the equitable doctrines of estoppel or equitable
tolling can suspend the operation of the statute of limitations in workers’
compensation cases.  This is because we have recognized that use of these
equitable doctrines is consistent with the general statute of limitations for
contract cases.  See Beebe v. Eisemann, 2012 VT 40, ¶¶ 13-18,
192 Vt. 613, 49 A.3d 160 (mem.) (equitable estoppel); Kaplan v. Morgon
Stanley, 2009 VT 78, ¶¶ 11-12, 186 Vt. 605, 987 A.2d 258 (mem.)
(both); Lodge at Bolton Valley Condo. Ass’n v. Hamilton, 2006 VT 41,
¶¶ 9-10, 180 Vt. 497, 905 A.2d 611 (mem.) (both).  As we held in Longe,
equitable estoppel does not apply in a case like this because it requires that
claimant show that employer “intended that claimant not file a claim, or that
[employer’s] inaction was such that claimant had a ‘right to believe’ that
[employer] intended that claimant not file a claim.”  Longe,
171 Vt. at 224, 762 A.2d at 1257 (quoting Beecher v. Stratton Corp., 170
Vt. 137, 140, 743 A.2d 1093, 1096 (1999)).  Claimant has not alleged this
element in this case, and no finding of the commissioner is consistent with the
establishment of this element.
¶ 31.        
Longe also analyzed equitable tolling, noting that this doctrine
requires either that “ ‘(1) the defendant actively misled the plaintiff or
prevented the plaintiff in some extraordinary way from filing a timely lawsuit;
or (2) the plaintiff timely raised the precise claim in the wrong
forum.’ ”  Id. at 224-25, 762 A.2d at 1257 (quoting Beecher.,
170 Vt. at 143, 743 A.2d at 1098).  We found in Longe that neither
of the alternative elements applied.  Neither of the alternative elements
apply in this case as the commissioner found.
¶ 32.        
In essence, the commissioner’s decision has expanded equitable estoppel
or equitable tolling by reading a critical element out of each so that the
employer’s inaction alone allows the limitation period to be suspended
forever.  This use of equitable doctrine eliminates the statutory
limitation period in favor of one created by the commissioner.  This is
beyond the commissioner’s power.  Therefore, the second certified
question—whether the claim was barred as a matter of law by the applicable
statute of limitations—is answered in the positive.
¶ 33.        
There is a second reason why claimant cannot prevail in the face of the
statute of limitations.  Because the commissioner has applied a version of
equitable tolling beyond the limits of the governing statute, her analysis is
subject to other equitable doctrines, particularly laches.  Many courts
have applied laches in workers’ compensation cases, particularly where
equitable principles are employed to defeat the strict application of a statute
of limitations.  See Loffa v. Motor Club of Am. Ins. Co., No.
L-1820-06, 2008 WL 680357, at *5 (N.J. Super. Ct. App. Div. 2008) (equitable
tolling defeated by laches); Anaya v. City of Santa Fe, 451 P.2d 303,
305 (N.M. 1969) (workers’ compensation claim barred by laches); Wieneck v.
Drake Bakery, 960 N.Y.S.2d 240, 241 (App. Div. 2013) (laches applies to
workers’ compensation proceedings); Daugherty v. Cherry Hosp., 670
S.E.2d 915, 919-20 (N.C. Ct. App. 2009) (workers’ compensation claim barred by
laches); Duncan v. Gaffney Mfg. Co., 53 S.E.2d 396, 399-400 (S.C. 1949)
(tolling defeated by unreasonable delay); Richey v. Dickinson, 598
S.E.2d 307, 309-10 (S.C. Ct. App. 2004) (claim defeated by laches); Correll
v. E.L. White & Co., 81 S.W.2d 1095, 1097 (Tex. Civ. App. 1935) (claim
defeated by laches); Reinsurance Fund v. Labor Comm’n, 2012 UT 76,
¶ 36, 289 P.3d 572 (in case of unreasonable delay in filing claim, equity
bars recovery).  In order for laches to apply, a party must have
“ ‘fail[ed] to assert a right for an unreasonable and unexplained period
of time when the delay has been prejudicial to the adverse party, rendering
it inequitable to enforce the right.’ ”  Geico Ins. Co. v.
Bernheim, 2013 VT 77, ¶ 16, 195 Vt. 73, 86 A.3d 400 (quoting Stamato
v. Quazzo, 139 Vt. 155, 157, 423 A.2d 1201, 1203 (1980)); see also In re
McCarty, 2013 VT 47, ¶ 15, 194 Vt. 109, 75 A.3d 589 (“Laches
involves prejudice, actual or implied, resulting from the delay.  It does
not arise from delay alone, but from delay that works disadvantage to another.”
(quotation omitted)).
¶ 34.        
Both elements of laches are met in this case as a matter of law. 
When claimant reached the medical end result, the treating physician released
claimant to return to work believing that over time his condition would return
fully to normal.  Presumably, an evaluation done on behalf of the employer
within forty-five days as required by Rule 18(a) would have reached the same
conclusion.  Eventually, claimant knew that the doctor’s expectation would
not be realized.  He has held that information for up to fourteen years
without any action.  There was no way for the State to know there was a
lingering disability.
¶ 35.        
There is another point about the time limit that Rule 18(a) imposes on
the employer.  The obligation imposed by Rule 18(a) must be discharged
within forty-five days after claimant reaches a medical end result. 
Claimant is presumed to know the law as we emphasized in Longe. 
Thus, claimant is presumed to know fourteen years ago that employer violated
the rule.  For both the above reasons, claimant’s delay in filing his
claim is unreasonable.
¶ 36.        
The result here is a unique kind of prejudice to the employer. 
This case involves a relatively small recovery because of the small percentage
disability involved, but a large amount of interest.  Nearly two-thirds of
the benefits claimant would recover will be interest.[8] 
This is because the commissioner’s award includes interest at the statutory
rate, 21 V.S.A. § 664, and the statutory rate in Vermont is twelve
percent, 9 V.S.A. § 41a(a).  No financial institution would have paid
interest at this rate during the period over which it is accruing in this
case.  Thus, interest at the statutory rate is a form of penalty imposed
on the employer, and if the claimant is not in immediate need for the money,
the financial incentive is to delay a claim as long as possible to realize the
high rate of interest.  We conclude that this is prejudice as a matter of
law.
¶ 37.        
In summary, we conclude that Rule 18(a) was in effect when claimant
reached a medical end result but that claimant’s claim is barred by the statute
of limitations contained in 21 V.S.A. § 660(a) or, alternatively,
laches.  
The first
question certified by the commissioner for this appeal is answered in the
negative; the second is answered in the positive; and the third is answered in
the negative.  The commissioner’s decisions are affirmed.
 
 



 


 


FOR THE COURT:




 


 


 




 


 


 




 


 


 




 


 


Associate
  Justice



 
 
¶ 38.         ROBINSON,
J., concurring and dissenting.   I note at the outset that this
conversation necessarily takes place in something of a time warp.  The
majority’s opinion begins with the premise that a claim for permanent partial
disability benefits is subject to its own statute of limitations, even if the
claimant has initiated a claim for the underlying work-related injury within
the applicable limitations period.  As the majority acknowledges, ante,
¶ 28 n.7, the Legislature amended the law effective May 26, 2004, and made
it clear that, while a claimant’s initiation of workers’ compensation
proceedings is subject to the statute of limitations, specific claims for the
various benefits to which an injured worker with a compensable injury is
entitled—such as a claim for permanent partial disability benefits—are not each
individually subject to a separate statute of limitations.  See 21 V.S.A.
§ 660(a); 2003, No. 132 (Adj. Sess.), § 6 (shortening statute of
limitations to three years and providing that section “shall not be construed
to limit subsequent claims for benefits stemming from a timely filed
work-related injury claim”).  If claimant had been injured on May 27,
2004, and had duly filed a report of injury and generic claim for benefits at
that time, the statute of limitations would have no bearing on the impact of a
comparable delay in seeking permanent partial disability benefits.
¶ 39.         I
point this out not because the majority’s focus on pre-2004 law is
inappropriate; it is not.  Claimant here was injured in 1996.  See Carter
v. Fred’s Plumbing & Heating Inc., 174 Vt. 572, 574, 816 A.2d 490, 493
(2002) (mem.) (noting, in workers’ compensation case, that appropriate statute
of limitations is one in effect when cause of action accrued).  I
emphasize the clear state of our current law on this point because the notion
that a workers’ compensation case is open-ended, and that a claimant may not be
statutorily barred from pursuing a claim for benefits years after an injury,
and even years after the claim for benefits has arisen, is not particularly
shocking or unusual.  This is one of the most striking features
distinguishing workers’ compensation from its tort-law cousin.
¶ 40.         Even
under the pre-2004 regime, when this Court construed the workers’ compensation
laws to subject claims for permanent partial disability benefits to their own
separate statute of limitations, the limitations clock did not begin ticking
until the claimant reached a medical end result.  Kraby v. Vt. Tel. Co.,
2004 VT 120, ¶ 6, 177 Vt. 614, 868 A.2d 689 (mem.).  A medical end
result (also called an “end medical result” or “maximum medical improvement”)
is “the point at which a person has reached a substantial plateau in the
medical recovery process, such that significant further improvement is not
expected, regardless of treatment.”  Workers’ Compensation Vocational
Rehabilitation Rule 51.1100, 3 Code of Vt. Rules 24 010 012-1, available at
http://www.lexisnexis.com/hottopics/codeofvtrules.  This point may not
arrive until years after the initial injury.  See, e.g., Laumann v.
Dep’t of Pub. Safety, 2004 VT 60, ¶ 2, 177 Vt. 52, 857 A.2d 309
(noting that worker “reached medical end result . . . more than
three and a half years from the date of the incident”); E.H. v. Mack Molding
Co., No. 14-09WC, 2009 WL 1648082, at *4 (Vt. Dep’t of Labor May 13, 2009)
(commissioner accepted opinion testimony of claimant’s treating physician that
it could take claimant “up to five years to reach end medical result”).
¶ 41.         I
also flag the 2004 amendment in order to emphasize the temporal limits of the
majority’s critique of the requirement now reflected in Workers’ Compensation Rule
18.1100, 3 Code of Vt. Rules 24 010 003-4.[9]  That rule provides that once the
injured worker reaches a medical end result, the employer or insurer must take
action to determine whether the employee has any permanent impairment as a
result of the work injury.  The majority reasons that in Longe v. Boise
Cascade Corp., 171 Vt. 214, 762 A.2d 1248 (2000), this Court found no
statutory basis to support the argument that an employer’s failure to
investigate whether the injured worker has a permanent impairment tolls the
statute of limitations associated with that claim.  Claimant here is
arguing that employer’s failure to investigate whether claimant suffered a
permanent partial disability (as required by Rule 18.1100) has tolled the
applicable statute of limitations—the same argument presented in Longe. 
Because the Legislature has made no changes to the statute with respect to
tolling, the majority argues, the Court’s decision in Longe applies with
equal force here, and there is no tolling of the statute of limitations. 
The commissioner’s adoption of a rule suggesting otherwise does not affect the
analysis since only the Legislature can change the law as it relates to tolling
of the statute of limitations.
¶ 42.         Putting
aside the merits of this argument as it relates to this pre-2004 injury, the
Legislature’s elimination of any distinct statute of limitations for
permanent partial disability claims renders the majority’s appraisal of the
former Rule 18(a) obsolete as it relates to injuries that arose on or after May
26, 2004.  I digress to stress that the majority’s opinion is a limited
response to a case that arose in the context of a since-abandoned statutory
scheme.
¶ 43.         Even
in the context of the old framework, I find the analysis problematic because it
relies on an after-the-fact assumption that the claimant reached a medical end
at a specified time, such that the limitations clock started ticking, when
there was no contemporaneous medical evidence to support the claim.  This
is contrary to the clear requirement in workers’ compensation law that once a
claim is accepted or established, the burden of establishing that the claimant
has reached a medical end point falls on the employer.
¶ 44.         Bear
in mind that “successful return to work” and “end medical result” are distinct
concepts, with different ramifications.  The former means that the
claimant has demonstrated “the physical capacity and actual ability to perform
the duties of the job, without disabling pain and/or imminent risk of
re-injury.”  Workers’ Compensation Rule 18.1410, 3 Code of Vt. Rules 24
010 003-14.  The latter means that the claimant has “reached a substantial
plateau in the medical recovery process, such that significant further improvement
is not expected, regardless of treatment.”  Workers’ Compensation
Vocational Rehabilitation Rule 51.1100, 3 Code of Vt. Rules 24 010 012-1. 
A claimant who has reached a medical end—with his or her condition having
improved as much as it is likely to—may or may not be able to return to work.
¶ 45.         Similarly,
a successful return to work does not imply that a claimant has reached a
medical end point; often a claimant is able to perform the duties of his or her
job well before his or her condition improves to its maximum extent.  In
fact, when a claimant’s temporary disability benefits end on account of a
return to work, that claimant is entitled to resume temporary total
disability benefits upon notice to the carrier that his or her return to work
has proven unsuccessful, despite reasonable good-faith efforts—unless
the employer or insurer has filed a Form 27 (Notice of Intention to Discontinue
Payments) based on claimant’s reaching of an end medical result.  Workers’
Compensation Rules 18.1200-.1420, 3 Code of Vt. Rules 24 010 003-14 to
-15.  In this case, even though claimant had successfully returned to
work, employer’s exposure to continuing temporary total disability benefits, or
to temporary partial disability benefits, continued indefinitely because
employer never filed a Form 27.  Had claimant’s return to work failed at
some point, employer would have been presumptively back on the hook for
temporary total or temporary partial disability benefits unless and until it
filed a Form 27 discontinuance.  A discontinuance, in turn, must be filed
with “adequate, written medical documentation” in order to be effective.  Id.
18.1200, 3 Code of Vt. Rules 24 010 003-14.
¶ 46.         In
short, wholly apart from the requirements of Rule 18 concerning the employer’s
obligation to investigate permanent partial disability, the statutory and
regulatory scheme assigned to the employer the burden of demonstrating medical
end point.  Wood v. Fletcher Allen Health Care, 169 Vt. 419,
422-23, 739 A.2d 1201, 1204-05 (1999) (citing Merrill v. Univ. of Vt.,
133 Vt. 101, 105, 329 A.2d 635, 637 (1974)); see also Peabody v. Home Ins.
Co., No. 69-98WC, 1998 WL 940287, at *4 (Vt. Dep’t of Labor Dec. 23, 1998)
(“The burden is on the employer to demonstrate that the claimant has reached a
medical end result.”).  The medical end point was, in turn, the starting
point for the six-year limitations period for filing a claim for permanent
disability benefits under the old framework.
¶ 47.         With
that in mind, I consider the summary judgment record here.[10]  There is no dispute that the last
medical record concerning claimant’s condition prior to his 2010 impairment
rating was from Dr. Thatcher on July 8, 1996.  There can be no dispute that
Dr. Thatcher did not conclude that claimant had reached a medical end
result at that time.  Instead, Dr. Thatcher noted that he offered claimant
physical therapy, but claimant was not interested.  He wrote, “If he does
not improve over the next several months, which I think he will, then he will
get in touch with us for some PT.  In general, it takes a year to
completely recover from such an injury.”  Claimant saw Dr. Thatcher
approximately six months after his injury.
¶ 48.         There
can be no doubt, as a matter of law, that if employer had filed a Form 27
discontinuance, asserting that claimant had reached a medical end and attaching
this record, it would have been rejected.  The doctor’s clear statement
that he expected claimant to improve over the next several months, and that the
typical time to fully recover from such an injury was a year, flies in the face
of the suggestion, adopted by the commissioner, that claimant reached a medical
end on July 8, 1996.  Likewise, if employer had filed a Form 27 six months
later, with no new medical evidence, and no affirmation that claimant’s
condition had improved and then plateaued as expected, it would not have met
the requirements of Rule 18.1200.
¶ 49.         I
have no reason to think that claimant did not reach a medical end result at
some point along the way—whether in a month, six months, a year, or more. 
But we also have no basis for ascertaining when that happened.  Instead,
here we are a decade and a half later, retroactively reconstructing the record
and making what is, at best, an educated guess.  And we are doing that
despite the fact that throughout the entire period, employer bore the burden of
providing evidence to support discontinuing benefits on the ground that
claimant had reached a medical end result.  Of course, employer had no
pressing incentive to do so, because claimant had returned to work. 
Although the potential for payment of additional temporary disability benefits
remained, employer here did not have the same incentive to expeditiously secure
a determination of medical end result that employers have in cases in which the
claimant does not return to work.  In fact, its incentives may have
pointed the other way: further evaluation could well have exposed employer to
further liability for medical care, temporary disability benefits, or permanent
disability benefits.  But, incentive or not, in the framework of the
workers’ compensation system, if employer wanted to claim the benefits of
claimant’s “medical end” status, it had the burden of taking the necessary
steps to establish the status.
¶ 50.         That
brings me to a second major distinction between the workers’ compensation
process and ordinary personal-injury tort cases.  In workers’ compensation
cases, the employer has a tremendous amount of power to direct the claimant to
see providers of the employer’s choosing from time to time.  Workers’
Compensation Rule 13.0000, 3 Code of Vt. Rules 24 010 003-9.  Employer not
only had the duty to establish when claimant reached a medical end result, if
it intended to rely on that determination, but it had the ability to do so
easily—in fact, more easily than a claimant who is unfamiliar with the
exact questions to ask, and the process for securing such opinions.[11]
¶ 51.         Under
these circumstances, I do not see how employer can invoke the statute of
limitations that applied to claimant’s permanent partial disability
claim.  I am not resting my analysis primarily on employer’s failure to
secure an impairment rating—although as a practical matter the determination of
medical end and impairment evaluation are often (though not always) part of the
same medical assessment.  And I am not arguing that employer’s failure in
this regard tolled the statute of limitations.  I am arguing that
the clock never started running in the first place, because the power and the
responsibility to establish a condition precedent to the ticking of the
clock—claimant’s medical end status—fell to employer.  Because employer failed
to act, the clock never started ticking.  No assessment by a medical
expert more than a decade later can retroactively change that history.
¶ 52.         For
that reason, I respectfully dissent.  Although I concur in the majority’s
judgment as to the first certified question, and concur in its conclusion that
Workers’ Compensation Rule 18(a) applies to injuries sustained prior to the
effective date of the rule, I would answer the second certified question in the
negative and conclude that the statute of limitations does not bar claimant’s
claim for permanent partial disability benefits.[12]



 


 


 




 


 


 




 


 


 




 


 


Associate Justice



 
 







[1] 
Justice Crawford was present for oral argument, but did not participate in this
decision.


[2]
 Neither claimant nor his employer contested this finding by the
commissioner, and we accept it as binding upon us.


[3] 
The limitations period has since been reduced to three years.  21 V.S.A.
§ 660(a).


[4] 
We note that, in a different context, we have recognized an
“insurance-defense-waiver rule” under which “an insurer waives additional defenses
that are not raised or reserved in an initial denial of coverage.”  Progressive
Ins. Co. v. Brown, 2008 VT 103, ¶ 6, 184 Vt. 388, 966 A.2d 666. 
There is also a corollary principle that “when an insurer with full knowledge
of the facts affecting coverage elects not to take advantage of an exclusion,
the insurer waives the right to later deny coverage” unless it signs a
non-waiver agreement with the insured.  Vt. Ins. Mgmt., Inc. v.
Lumbermens’ Mut. Cas. Co., 171 Vt. 601, 603, 764 A.2d 1213, 1215 (2000)
(mem.).  Here, neither principle is applicable.  At the time the
adjuster granted claimant’s request for a permanency evaluation, the insurer
was certainly not denying a claim—none had yet been made—and did not have “full
knowledge of all the facts” regarding any potential additional coverage for
benefits.  Rather, the insurer granted claimant’s request for an
evaluation to gain a full knowledge of the facts regarding the potential
claim.  Our holding on the waiver issue in this case should have no impact
on the above principles.  


[5] 
This question was important because the claimant worked in a paper mill that
was owned by one corporation in 1983 and a different corporation in 1991. 
The two corporations disputed which was liable for claimant’s benefits.


[6]
 Although Rule 18(a) had been adopted by the time of our decision in Longe,
it was not cited by the parties or addressed in our decision.  In Longe,
unlike this case, the claimant had reached a medical end result long before the
commissioner adopted Rule 18(a).


[7] 
The limitation period is now three years, and there have been some minor
wording changes in the governing sentence.  See 21 V.S.A. § 660(a)
(“Proceedings to initiate a claim for work-related injury pursuant to this
chapter may not be commenced after three years from the date of
injury.”).  In addition to reducing the limitations period, a 2004
amendment added the following sentence: “This section shall not be construed to
limit subsequent claims for benefits stemming from a timely filed work-related
injury claim.”  With respect to cases where the date of injury occurred
before the effective date of the 2004 amendment, we had held that a claim for
permanent partial disability benefits was independently subject to the statute
of limitations even though claimant had received temporary partial disability
benefits.  See Kraby v. Vt. Tele. Co., 2004 VT 120, ¶ 6, 177
Vt. 614, 868 A.2d 689 (mem.).  Although it is not before us, the 2004
amendment apparently changes this result.


[8] 
Calculation of claimant’s potential benefits was made using the maximum weekly
compensation rate of $655 for the compensation year from June 1, 1995 to June
1, 1996, adjusted annually by 1.011 percent.  With the 1% impairment
rating multiplied by 405 weeks, claimant potentially could have received over
$2700.  See Workers’ Compensation Rules 11.2200, 16.1000, 3 Code of Vt.
Rules 24 010 003-8, 13, available at
http://www.lexisnexis.com/hottopics/codeofvtrules.  Calculation of the
interest accrued on claimant’s benefits through 2010 was made using the
statutory 12 percent interest rate.  Claimant potentially could receive
over $4600 in interest alone, for a total of over $7300 in benefits.  


[9] 
The commissioner adopted this rule in 2001.  It is the successor to Rule
18(a), discussed in the majority opinion.


[10] 
The majority states that the commissioner “found” that claimant reached a
medical end point on July 8, 1996.  Ante, ¶ 2.  Insofar
as the commissioner decided this case on summary judgment, without an
evidentiary hearing, I treat the commissioner’s determination on this point as
a legal conclusion based on the summary judgment record rather than as a
finding of fact.  Consistent with this posture, our review of the
commissioner’s determination of law should be deferential.  Cyr v.
McDermott’s, Inc., 2010 VT 19, ¶ 14, 187 Vt. 392, 996 A.2d 709
(“[W]hile we require the Commissioner’s conclusions to reflect the correct
interpretation of the law, we will uphold the Commissioner’s construction of
the workers’ compensation statutes absent a compelling indication of error.”
(alteration and quotation marks omitted)).


[11] 
For this reason, I don’t accept the majority opinion’s narrative that only
claimant knew whether his condition had stabilized and that there was no way
for employer to know he had a lingering disability.  See ante,
¶ 34.  In workers’ compensation cases, claims adjusters closely
monitor, and in some cases effectively manage, the course of a claimant’s
medical treatment.  Those adjusters are intimately familiar with the
applicable laws and medical concepts, and are quite experienced in setting up
evaluations for a determination of medical end point, as well as for impairment
ratings.  The suggestion that claimant hid the ball here, and that
employer bears no responsibility for creating the situation giving rise to this
case ignores the reality that employer had both the duty and the power to close
the deal and for whatever reason—perhaps neglect, perhaps a strategic
calculation—failed to do so.


[12] 
I would not reach the question of whether the employer’s failure to secure an
impairment rating for the claimant tolled the statute of limitations because I
conclude that the limitations period never began running due to the employer’s
failure to file a discontinuance documenting claimant’s medical end.



