Arnstrom v. Excalibur Cable Communication, Ltd.

LAWRENCE F. RODOWSKY, Judge, retired, specially assigned. In this workers’ compensation case the insurer denied coverage. Thereafter the claimant undertook and completed vocational rehabilitation before the Workers’ Compensation Commission (the Commission), the employer, or the insurer learned that any services had been rendered. The question presented is whether this lack of notice, in and of itself, excuses the insurer from paying the reasonable costs of the vocational rehabilitation services. ⁵⁵⁵ Jasen C. Amstrom (Arnstrom), the appellant, was injured in an automobile accident on January 24, 1995.

In February he filed a claim with the Commission alleging that the accident arose out of and in the course of his employment by one of the appellees, Excalibur Cable Communication, Ltd. That company’s insurer, Injured Workers Insurance Fund (IWIF), raised, inter alia, the issue of whether Arnstrom was an independent contractor. The compensation claim did not come on for hearing before the Commission until July 1998. Meanwhile, in April 1996, on his own initiative, Amstrom applied for vocational rehabilitation with the Division of Rehabilitation Services (DORS), a division of the State Department of Education. Maryland Code (1978, 1999 Repl.Vol.), § 21-304(a) of the Education Article (ED). 1 According to a letter of June 25, 1997, from DORS to Arnstrom’s counsel, DORS “provided and/or paid for the following services: disability assessment, guidance and counseling, training, and rehabilitation technology evaluation.” DORS also “approved” the purchase of equipment and software.

The cost of the equipment, rehabilitative services, and administrative expenses approximated $55,000. In October 1997 Arnstrom started his own telecommunications business in which he continues to be suitably and gainfully employed. In December 1997 Arnstrom raised with the Commission issues of medical expenses and temporary total disability, but did not claim reimbursement on behalf of DORS. At the hearing in July 1998 the Commission found that Arnstrom’s injury was compensable, awarded temporary total disability benefits to December 31,1996, and awarded temporary partial disability benefits from January 1, 1997, to October 5, 1997. ⁵⁵⁶ Arnstrom raised the issue of permanent partial disability with the Commission in December 1999, and in February 2000 he supplemented that issue by claiming, for the first time, reimbursement for DORS. 2 At a hearing in March 2000 the Commission awarded permanent partial disability benefits, but it deferred ruling as to the reimbursement of DORS.

The deferred issue was decided on June 27, 2000, following a hearing which was essentially a legal argument. At that hearing IWIF told the Commission the following: “Oh, I think clearly he’s entitled to vocational rehabilitation services and I have — and I have no basis to complain about the ultimate result. The concern is the expense of the result and whether under the supervision of the Commission and/or under the oversight of [IWIF], had we had knowledge that this much expense would have been involved — .” IWIF further said that “[t]he complaint [is] that we would not have spent this much money.” There was no testimony that the rehabilitative services by or through DORS were unnecessary or that the cost of those services was unreasonable. The Commission ordered IWIF to reimburse DORS.

IWIF sought judicial review in the Circuit Court for Charles County. Cross motions for summary judgment were filed. At the hearing on those motions IWIF told the court, in part, as follows: “There’s not any complaint other than the fact that the Commission did not comply with its own statute and own rules, and I think an administrative body ... is required to ⁵⁵⁷ comply with its own rules. This agency did not do so ... and that decision cannot be permitted to stand.” The circuit court granted summary judgment in favor of IWIF, essentially on the ground that Amstrom’s failure to comply with the procedure set forth in Maryland Code (1991), § 9-673 of the Labor and Employment Article (LE) caused him to lose his entitlement to vocational rehabilitation services.

LE § 9-673 in relevant part provides: “(a) Referral to provider, obtaining plan. — The Commission shall: “(1) refer a covered employee who is entitled to vocational rehabilitation services under § 9-672 3 ... to an appropriate vocational rehabilitation provider; and “(2) obtain ... a vocational rehabilitation plan.... “(c) Notice. — On receipt of a vocational rehabilitation plan, the Commission promptly shall give written notice of the contents of the plan to each party. “(d) Hearing. — (1) Within 15 days after the day of written notification by the Commission of the contents of the vocational rehabilitation plan, any party in interest may request a hearing to contest the plan. “(2) At the hearing, the parties may present additional evidence as necessary. “(3) After the hearing, the Commission shall: “(i) wholly or partly accept or reject the vocational rehabilitation plan; and “(ii) pass an appropriate order about vocational rehabilitation of the covered employee.” ⁵⁵⁸ Arnstrom appealed to this Court from the reversal of the Commission’s order. The parties correctly have identified the question presented here to be one of statutory construction. Under the familiar rules of statutory construction we seek to ascertain and effectuate the legislative intent, the primary source of which is the language of the statute. The inquiry, however, does not end there necessarily, inasmuch as a statute is to be construed reasonably with reference to its purpose.

Fikar v. Montgomery County, 333 Md. 430, 434-35 , 635 A.2d 977, 979 (1994). The purpose of the notice provisions of LE § 9-673 is to give the insurer the opportunity to question the need for, scope of, and cost of a proposed vocational rehabilitation plan. Because that opportunity was not furnished here, IWIF submits that it has no liability for rehabilitation. In other words IWIF treats compliance with the scheme of § 9-673 as a condition precedent to vocational rehabilitation benefits.

On the other hand, Arnstrom points out that § 9-673 applies only to a “covered” employee, a status which IWIF contested, and that, by the time the coverage issue was resolved, he had completed his vocational rehabilitation. He argues that the Workers’ Compensation Act should be construed “to carry out its general purpose.” LE § 9-102(a). Those components of vocational rehabilitation that involve “assessment, counseling, job placement, etc .... [which are] provided directly to the beneficiary, are clearly intended to prepare the beneficiary to return to the workplace.” Fikar, 333 Md. at 438 , 635 A.2d at 980 . Inasmuch as he successfully returned to the workplace, Arnstrom contends that the purpose of the vocational rehabilitation entitlement conferred by LE § 9-672 has been achieved and that the entitlement should be paid.

Discussion The statutes and the rules of the Commission do not expressly impose on a claimant an obligation to seek, within a determinable period of time, a ruling that the claimant’s case ⁵⁵⁹ is eligible for vocational rehabilitation services. This is undoubtedly due to the fluid nature of the relationship between medical treatment and vocational rehabilitation. One commentary has said: “Most commonly, vocational rehabilitation is not an issue until the claimant has achieved, or almost achieved, maximum medical improvement. Courses of treatment might fall short of a physician’s expectations.

For a variety of reasons operations might prove to be less than successful. The delay in implementing vocational rehabilitation does nothing more than prolong the time that a claimant is out of the workplace. The rehabilitation process should be initiated while medical treatment is on-going rather than awaiting the claimant’s complete recuperation.” R.P. Gilbert & R.L. Humphreys, Jr., Maryland Workers’ Compensation Handbook § 9.0-4.2, at 191 (2d ed. 1993) (Gilbert & Humphreys). LE § 9-673, on which IWIF relies, does not require the claimant to initiate the process therein set forth; rather, that statute places the obligation on the Commission to identify covered employees whose cases are appropriate for vocational rehabilitation (“The Commission shall ... refer”).

The statutes further contemplate that cases where a covered employee is a suitable candidate for vocational rehabilitation also will be identified for the Commission by the insurer. See LE § 9-675. That section reads: “(a) 1st report. — When a covered employee has received temporary total disability benefits continuously for 6 months, the insurer or self-insurer shall submit to the Commission a vocational rehabilitation progress report on the form that the Commission requires. “(b) Further reports. — After submitting a report under subsection (a) of this section, the insurer or self-insurer shall submit further vocational rehabilitation progress reports to the Commission every 120 days or sooner as requested by the Commission. ⁵⁶⁰ “(c) Failure to submit report. — Fine.—If the Commission finds that an insurer or self-insurer has failed to submit a report within the time period required by this section, the Commission may impose a fine not exceeding $500 on the insurer or self-insurer.” Gilbert & Humphreys observe that LE § 9-675 presents, with respect to vocational rehabilitation, “[t]he one temporal requirement which practitioners should note[.]” § 9.0-4, at 190 n. 16. That the obligation is on the Commission to identify claimants whose cases are appropriate for vocational rehabilitation services is confirmed by ED § 21-307.

That section reads: “(a) Administration of program. — The State Board of Education and the State Workers’ Compensation Commission shall administer jointly the program established in this section. “(b) Program established. — The State Workers’ Compensation Commission: “(1) Shall establish a rehabilitation program; “(2) May employ the necessary rehabilitation counselors and clerical staff to review all reports and claims; “(3) Shall select from the reports and claims filed loith it those for which rehabilitation services appear to be appropriate; “(4) After proper investigation, shall refer appropriate cases to [DORS]; “(5) On request of [DORS], shall make available to [DORS] a complete medical evaluation, including a prognosis of work potential of any worker whose case it refers to [DORS]; and “(6) Shall pay the salaries of the employees of the workers’ compensation rehabilitation program and all necessary expenses incurred: “(i) In investigating and reviewing all reports and claims; and ⁵⁶¹ “(ii) For supplies, furniture, and office space. (Emphasis added). 4 At the time of Arnstrom’s injury, while he was receiving vocational rehabilitation services, and when the order appealed from was entered on June 27, 1998, the Commission’s rule dealing with vocational rehabilitation was former COMAR § 14.09.01.20. See 18 Maryland Register 1188 (May 3, 1991). In relevant part this rule provided: “C. The rehabilitation evaluation agency to which the claimant is referred shall send copies of its reports to all parties.

Parties may controvert a report only when it is accompanied by a statement from the Rehabilitation Office indicating that the report constitutes a plan of rehabilitation or a recommendation against rehabilitation. A party desiring to controvert a proposed rehabilitation plan shall submit a request for a hearing reflecting the controversion to the Rehabilitation Office not later than 15 days from the date of the Commission’s notification.... “D. Parties desiring to proceed with private vocational rehabilitation services shall notify the Rehabilitation Office before proceeding. Within 10 days after receiving a report from the private agency, the parties shall file a copy with the Commission.” In the instant matter the record is silent as to the identity of the provider or providers of vocational rehabilitation services to Arnstrom, other than DORS, and on whether any reports were sent. Absent any evidence that Arnstrom even received a report from a “rehabilitation evaluation agency” or from a “private vocational rehabilitation service[ ],” Arnstrom ⁵⁶² cannot be faulted for IWIF’s not having received any report or for Arnstrom’s not having filed a copy of any report with the Commission.

Although Amstrom did not notify the Commission that he “desir[ed] to proceed with private vocational rehabilitation services,” (former COMAR § 14.09.01.20D) services rendered by DORS would not be “private.” Even if the services arranged by DORS were “private,” it is undisputed that Arnstrom’s case was appropriate for vocational rehabilitation. Thus, the purpose of notice to the Commission, as provided in former COMAR § 14.09.01.20D, would have been satisfied here. 5 Absent any express provisions in the statutes or rules conditioning a claimant’s entitlement to insurer payment of vocational rehabilitation services on the claimant’s having given the insurer or the Commission notice that those services are desired or are being obtained, the question arises whether that condition should be implied. A number of cases involving essentially this same question arose under a statute previously in effect in Florida. Fla Stat. § 440.49(1)(a) (1981) read in part: “When an employee has suffered an injury covered by this chapter and it appears that the injury will preclude the ⁵⁶³ employee from earning wages equal to wages earned prior to the injury, the employee shall be entitled to prompt rehabilitation services.

The employer or carrier, at its own expense, shall provide such injured employee with appropriate training and education for suitable gainful employment .... If such services are not voluntarily offered or accepted, the Division of Workers’ Compensation of the Department of Labor and Employment Security, upon application of the employee, employer, or carrier, after affording the parties an opportunity to be heard, may refer the employee to a qualified physician or facility for [ ] evaluation. ... On receipt of such report, and after affording the parties an opportunity to be heard, the deputy commissioner may order that the service and treatment recommended in the record, or such other rehabilitation treatment service deemed necessary, be