                                               Tuesday        18th

             August, 1998.




Rusty's Welding Service, Inc. and
 Harleysville Mutual Insurance Company,                       Appellants,

against        Record No. 2552-97-1
               Claim No. 173-33-21

Edward Wayne Gibson,                                          Appellee.

                   Upon a Petition for Rehearing En Banc

   Before Chief Judge Fitzpatrick, Judges Benton, Coleman, Willis,
Elder, Bray, Annunziata, Overton, Bumgardner and Senior Judge Baker*



             On July 21, 1998 came the appellee, by counsel, and filed a

petition praying that the Court set aside the judgment rendered herein

on July 7, 1998, and grant a rehearing en banc thereof.

             On consideration whereof, the petition for rehearing en banc

is granted, the mandate entered herein on July 7, 1998 is stayed

pending the decision of the Court en banc, and the appeal is

reinstated on the docket of this Court.

             The parties shall file briefs in compliance with Rule 5A:35.

It is further ordered that the appellee shall file with the clerk of

this Court ten additional copies of the appendix previously filed in

this case.
____________________

          *Judge Baker participated in the decision of this petition
for rehearing en banc prior to the effective date of his retirement on
July 31, 1998 and thereafter by his designation as senior judge
pursuant to Code § 17-116.01.


                          A Copy,

                               Teste:

                                         Cynthia L. McCoy, Clerk

                               By:

                                         Deputy Clerk




                                 -2-
                    COURT OF APPEALS OF VIRGINIA


Present: Judges Baker, Annunziata and Senior Judge Cole
Argued at Richmond, Virginia


RUSTY'S WELDING SERVICE, INC. AND
 HARLEYSVILLE MUTUAL INSURANCE COMPANY
                                             OPINION BY
v.     Record No. 2552-97-2          JUDGE ROSEMARIE ANNUNZIATA
                                            JULY 7, 1998
EDWARD WAYNE GIBSON


         FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
            S. Vernon Priddy, III (Sands, Anderson,
            Marks & Miller, on brief), for appellants.

            No brief or argument for appellee.



       Rusty's Welding Service, Inc. (employer) appeals the

commission's award of benefits to Edward Wayne Gibson (claimant).

Employer contends the award is barred by principles of res

judicata and that the award improperly required employer

simultaneously to pay permanent partial disability (PPD) and

temporary partial disability (TPD) benefits.     We agree with

employer's claim of res judicata, and reverse.
       While carrying a bottle of acetylene on November 12, 1994,

claimant sustained an injury by accident to his back.    Employer

accepted the injury as compensable and paid benefits.    In

applications filed July 16, 1996 and October 29, 1996, claimant

sought an increase in TPD benefits, an order holding employer

responsible for medical expenses for claimant's left knee, and an

award of PPD benefits for a 40% impairment to claimant's left

leg.   All of claimant's requests were based upon the medical
opinion of Dr. Gurpal S. Bhuller.

     After an on-the-record review, Deputy Commissioner Gorman

issued an opinion on March 4, 1997, in which he wrote that Dr.

Bhuller did not adequately explain how claimant's leg injury was

caused by the compensable back injury.   Deputy Commissioner

Gorman also noted that Dr. Bhuller did not explain that the 40%

leg impairment was permanent or that claimant had reached maximum

medical improvement.   He wrote that, "on the evidence before us

we cannot conclude that maximum medical improvement has been

reached and accordingly deny permanent partial disability

benefits at this time."   Deputy Commissioner Gorman ordered

employer's insurance carrier to submit a report showing

claimant's earnings and employer's payments to claimant, and

concluded as follows:
          Accordingly, the claimant's application is
          DENIED insofar as it has requested permanent
          partial disability benefits for the left leg
          and is DENIED to the extent requesting
          payment for medical treatment to the left
          knee. In all other respects, the claimant's
          application is continued on the Dispute
          Resolution Docket in accordance with the
          provisions of this opinion with the carrier
          to comply with the ORDERS stated above.


Neither party sought review of this opinion.

     On April 9, 1997, claimant filed another application seeking

PPD benefits for a 40% impairment in his left leg.   In support of

his application, claimant submitted an additional opinion of Dr.

Bhuller explaining claimant's 40% impairment in his left leg and

stating that claimant had reached maximum medical improvement.



                                -4-
In an opinion filed May 29, 1997, Deputy Commissioner Link

awarded claimant PPD benefits for a 40% loss of use of his left

leg.   Deputy Commissioner Link ordered employer to pay claimant a

lump sum of $25,767.70 in accrued benefits.

       On review, the commission acknowledged that Dr. Bhuller's

opinion submitted in support of the May 29, 1997 award "was not

based on a contemporaneous evaluation but represented a more

complete discussion of the basis for the disability rating."    The

commission also acknowledged that the issue addressed in the May

29, 1997 opinion was identical to the issue addressed in the

March 4, 1997 opinion. The commission held as follows:
          [T]he issue was not determined with finality.
           The Deputy Commissioner specifically stated
          that, based "on the evidence before us,"
          permanent partial disability benefits were
          denied "at this time" [emphasis added]. The
          Commission interprets the Opinion of March 4,
          1997, to have left the issue of permanent
          partial disability unresolved for future
          determination.


The commission also held that it had discretion to order

simultaneous payment of TPD and PPD benefits.

       Employer argues that the award of PPD benefits on claimant's

second application is barred by the doctrine of res judicata.
Unlike questions of fact, which are binding on this Court if

supported by evidence, we review questions of law de novo.

Sinclair v. Shelter Constr. Corp., 23 Va. App. 154, 156-57, 474

S.E.2d 856, 857-58 (1996) (citing City of Waynesboro v. Harter, 1

Va. App. 265, 269, 337 S.E.2d 901, 903 (1985)).



                                 -5-
     The doctrine of res judicata is applicable to decisions of

deputy commissioners and the full commission.       K & L Trucking

Co., Inc. v. Thurber, 1 Va. App. 213, 219, 337 S.E.2d 299, 302

(1985).   Generally, "[r]es judicata precludes the re-litigation

of a claim or issue once a final determination on the merits has

been reached."   Gottlieb v. Gottlieb, 19 Va. App. 77, 81, 448

S.E.2d 666, 669 (1994) (citing Commonwealth ex rel. Gray v.

Johnson, 7 Va. App. 614, 617-18, 376 S.E.2d 787, 788 (1989)).

Therefore, absent fraud or mistake, "the decisions of the

Commission or its deputy commissioners from which no party seeks

timely review are binding upon the Commission."       Thurber, 1 Va.

App. at 219, 337 S.E.2d at 302.    There is no question in this

case that claimant's first and second applications were identical

for the purposes of res judicata.       In both proceedings, claimant

sought PPD benefits on the basis of a 40% impairment in his left

leg from the same injury, under the same legal theory, against

the same employer, on the basis of the same medical examination.
 See Balbir Brar Assocs., Inc. v. Consolidated Trading & Servs.

Corp., 252 Va. 341, 346, 477 S.E.2d 743, 746 (1996) (citing Smith

v. Ware, 244 Va. 374, 376, 421 S.E.2d 444, 445 (1992)).

     As the party seeking to assert res judicata, employer must

prove that the deputy commissioner rendered a final opinion in

its favor.   Straessle v. Air Line Pilots' Ass'n, Int'l, 253 Va.

349, 353, 495 S.E.2d 387, 389 (1997) (citing Bates v. Devers, 214

Va. 667, 671, 202 S.E.2d 917, 921 (1974)).      Generally, a judgment



                                  -6-
is final for the purposes of res judicata when "nothing more is

necessary to settle the rights of the parties or the extent of

those rights."   8B Michie's Jurisprudence, Former Adjudication or

Res Judicata § 13 (1994).     The commission "interpret[ed] the

Opinion of March 4, 1997, to have left the issue of permanent

partial disability unresolved for future determination" and,

thus, held that the former adjudication was not final.

     We hold that the commission erred.     "While proceedings

before the commission must comply with the requirements of due

process, deputy commissioners generally have broad discretion to

adapt the conduct of hearings to the circumstances of the case."
 Daniel Constr. Co. v. Tolley, 24 Va. App. 70, 78, 480 S.E.2d

145, 149 (1997) (citing Kum Ja Kim v. Sportswear, 10 Va. App.

460, 470, 393 S.E.2d 418, 424 (1990)).    As the commission noted,

Deputy Commissioner Gorman wrote in the body of the opinion that

PPD benefits were denied "at this time."    Nevertheless, Deputy

Commissioner Gorman ordered that "claimant's application is

DENIED insofar as it has requested permanent partial disability

benefits for the left leg."    This denial of claimant's

application is all the more clear when contrasted with the issue

of TPD benefits, which Deputy Commissioner Gorman ordered

"continued on the Dispute Resolution Docket."    Neither party

sought review of the deputy commissioner's decision, and the time

for requesting such a review has expired.     See Faison v. Hudson,

243 Va. 413, 419, 417 S.E.2d 302, 305 (1992) ("[A] judgment is



                                  -7-
not final for the purposes of res judicata . . . when it is being

appealed or when the time limits fixed for perfecting the appeal

have not expired.").   Thus, the opinion of March 4, 1997 fully

determined the rights of the parties with respect to claimant's

application for PPD benefits for a 40% impairment of his left leg

and was final for purposes of res judicata.

     The commission did not find that claimant's second

application was based on a change in condition.   Indeed, the

commission found that the medical evidence from Dr. Bhuller which

claimant submitted in support of his second application merely

"represented a more complete discussion of the basis for the

disability rating."    Furthermore, our review of the record shows

that claimant's second application was not based upon "a change

in physical condition [or] any change in the conditions under

which compensation was awarded, suspended, or terminated which

would affect the right to, amount of, or duration of

compensation."   Code § 65.2-101 (defining "change in condition").

Instead, "it was based upon the same medical results and

findings as the first claim," explained in greater detail.
Childress v. Beatrice Pocahontas Co., 6 Va. App. 88, 93, 366

S.E.2d 722, 724 (1988); cf. Wood v. Allison Apparel Mktg., Inc.,

11 Va. App. 352, 355, 398 S.E.2d 110, 112 (1990) (finding no res

judicata bar where "the applications concerned injuries of

different natures, derived from different circumstances,

predicated on different medical diagnoses, and involving



                                 -8-
different legal foundations").   Claimant's second application

was, therefore, barred by res




                                 -9-
judicata.   We reverse the decision of the commission and dismiss

claimant's application. 1

                                         Reversed and dismissed.




    1
     Given our disposition of employer's res judicata claim, we
do not reach employer's second argument on appeal.




                               -10-
Baker, J., dissenting.

     Because I believe the majority has incorrectly applied the

principle of res judicata, I respectfully dissent.    I also

believe the majority erroneously finds that the commission did

not treat claimant's second application as one for a change in

condition and that the application was not based upon a change in

an attending physician's opinion.

     In arriving at its decision, the majority concludes that

claimant's second application for a permanent disability rating

was "based upon the same medical results and findings as the
first claim."   (Emphasis added).   No evidence in this record

proves that the "same medical" evidence was in the first and

second applications for a permanency rating.   When the first

application was considered by the deputy commissioner, the

attending physician had expressed no opinion as to whether

claimant had reached maximum improvement from his work-related

injury.   Until the deputy or commission has received medical

evidence that the injured employee has attained maximum medical

improvement, the deputy is without authority to make an award for

permanent injury.   See County of Spotsylvania v. Hart, 218 Va.

565, 568, 238 S.E.2d 813, 815 (1977).   Therefore, on the first

application for an award based on permanency, the deputy

correctly ruled that "at this time" claimant's request had to be

denied because the compensation provided by Code § 65.2-503 is

not awardable "until the injury has reached a state of




                               -11-
permanency, i.e.[,] maximum [medical] improvement, when the

degree of loss may be medically ascertained."    See id.; Nicely v.

Virginia Elec. & Power Co., 195 Va. 819, 823, 80 S.E.2d 529, 531

(1954).

     The deputy commissioner's use of the words "claim denied,"

preceded by the phrase "at this time" due to premature

application filed before maximum improvement has been "medically

ascertained," was not a final determination on the merits of the

matter at issue as required for proper application of the

doctrine of res judicata.    See Cook v. Clinchfield Coal Co., 215

Va. 599, 212 S.E.2d 263 (1975).    In Cook, the record disclosed

that claimant's prior application "was dismissed by the deputy

commissioner because the medical evidence at the hearing before

him failed to disclose the existence of any occupational

disease."    The Court held as follows:
            Since claimant could not prove his 1968 claim
            by medical evidence before the deputy
            commissioner, he was not barred from filing
            his second claim when he obtained a positive
            diagnosis on June 13, 1973 . . . .

Id. at 600, 212 S.E.2d at 264.    Similarly, here, claimant was not

barred from filing his second application when he reached maximum

medical improvement.    Compare AMP, Inc. v. Ruebush, 10 Va. App.

270, 275, 391 S.E.2d 879, 881 (1990) (noting that res judicata

ordinarily applies to bar relitigation of "[t]he issue of

causation in [industrial accident] cases" because it "is not an
issue subject to change" (second emphasis added)).




                                 -12-
     In this case, no evidence concerning maximum medical

improvement was before the deputy at the hearing on the first

application.   In its opinion, the commission decided that the

deputy's decision on the first application was not intended to be

a final decision which would support the application of res

judicata as a bar to the second application.    If credible

evidence in the record supports that decision, we are required to

affirm the commission's judgment.
     The majority fails to give appropriate deference to the

findings of fact implicit in the commission's award.    As the

majority asserts, whether res judicata applies is a legal

question subject to de novo review on appeal.     See Sinclair v.

Shelter Constr. Corp., 23 Va. App. 154, 156-57, 474 S.E.2d 856,

857-58 (1996).   However, we must give deference to any findings

of fact made by the commission in awarding permanent partial

disability if those findings are supported by credible evidence

in the record, regardless of whether contrary evidence exists or

contrary inferences may be drawn.     See Code § 65.2-706(A);

Stenrich Group v. Jemmott, 251 Va. 186, 192, 467 S.E.2d 795, 798

(1996); Roanoke Belt, Inc. v. Mroczkowski, 20 Va. App. 60, 68,

455 S.E.2d 267, 271 (1995).

     When claimant filed his second application, he attached what

the commission termed "a new medical report from his treating

physician, Dr. Gurpal S. Bhuller," in which Bhuller fully

explained claimant's 40% permanent partial impairment rating.




                               -13-
Dr. Bhuller's report also contained claimant's statement that his

"symptoms still persist" and Dr. Bhuller opined, for the first

time, that claimant had reached maximum medical improvement.

Therefore, Dr. Bhuller's report of March 12, 1997 provides

credible evidence to support the commission's finding that

claimant's reaching maximum medical improvement was a change in

condition over his status at the time of his prior application,

and such a finding is implicit in the commission's award.     See
Sergio's Pizza v. Soncini, 1 Va. App. 370, 375-76, 339 S.E.2d

204, 207 (1986) (holding that commission may treat application

for original injury or disease as application for review on

change in condition, even where application does not use such

terminology, and may conduct such review sua sponte at any time,

subject to due process limitations); see also Code § 65.2-708.

     Furthermore, nothing in the record establishes that claimant

had, in fact, reached maximum medical improvement prior to his

first application.   Employer, as the party seeking application of
res judicata, bears the burden of proving by a preponderance of

the evidence that an issue previously raised was decided on the

merits.   See, e.g., Fodi's v. Rutherford, 26 Va. App. 446, 449,

495 S.E.2d 503, 505 (1998).    Dr. Bhuller discussed claimant's

condition with him and confirmed that claimant's "symptoms still

persist[ed]" before Bhuller opined that claimant had reached

maximum medical improvement.   For these reasons, I would hold

that credible evidence in the record supports the commission's




                                -14-
implicit finding that claimant's reaching maximum medical

improvement was a change in condition permitting re-examination

of his entitlement to payment of the rating.

        On the issue of accrual of the benefits, however, the

commission said that, "[b]ased on the medical records, the

earliest date on which [claimant] could have reached maximum

medical improvement was August 1, 1996."    (Emphasis added).   As a

result, it held that "[o]nly the compensation . . . that had

accrued from August 1, 1996, should have been awarded in lump

sum."    This statement conflicts with the commission's finding on

the res judicata issue, as discussed above.     Therefore, I would

remand the case to the commission with instructions to make

consistent findings on the date of maximum medical improvement as

applied both to the issue of res judicata and the issue of

accrual of the award.

        Because I would find the record supports the commission's

finding that the doctrine of res judicata did not apply, I would

reach employer's second assignment of error.

        Employer contends the commission erroneously ordered

employer to pay the permanent partial disability benefits

simultaneously with ongoing temporary partial disability

benefits.    Code § 65.2-503 provides that "[c]ompensation awarded

pursuant to this section [for a scheduled impairment] . . . shall

be payable after payments for temporary total incapacity pursuant

to § 65.2-500 . . . [but] may be paid simultaneously with



                                 -15-
payments for [temporary] partial incapacity pursuant to

§ 65.2-502."   (Emphasis added).   Employer contends the statutory

language provides employer, rather than the commission, with the

discretion to make simultaneous or successive payments of

temporary partial and permanent partial disability benefits.

     I disagree.   The commission has the power under the Workers'

Compensation Act to enter awards granting or denying benefits

under the Act and dictating the terms under which those benefits

will be paid as long as those terms do not conflict with the

requirements of the Act.   See, e.g., Code §§ 65.2-101, 65.2-201.

Therefore, the only reasonable construction of Code § 65.2-503,

which provides that payments for a rating "may be paid

simultaneously with payments for [temporary] partial incapacity,"

(emphasis added), is that the commission has discretion to order

such payments.   In cases where the commission does not order such

payments, employer would be free to make simultaneous payments

voluntarily.

     For these reasons, I would (1) affirm the commission's

authority to order the simultaneous payment of temporary partial

and permanent partial disability benefits and (2) remand the

matter to the full commission with instructions to make

consistent findings on the date of maximum medical improvement as

applied both to the issue of res judicata and the issue of

accrual of the award.




                               -16-
