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Appellate Division Split Decision Creates New Standard for Permanent Total Disability

On 11/16/17, the Appellate Division, Third Department, decided Wohlfeil v. Sharel Ventures, LLC. This split 3-2 decision represents a marked departure from previous practice and precedent on how non-statutory permanent total disabilities are determined. Because it is a 3-2 split decision, the employer and carrier have an appeal as of right to New York State’s highest appellate court, the New York Court of Appeals. It is unknown at this time if the carrier/employer will pursue such an appeal.

At issue was a claim for permanent total disability versus permanent partial disability.  Claimant’s treating physician issued a report with a Class 5F permanent partial disability ranking under the 2012 Guidelines. He also opined a "less than sedentary" work capacity. The carrier’s IME consultant opined a Class 4G permanent partial disability under the 2012 Guidelines.  During deposition testimony, the treating physician said that he gave the claimant, “rather significant restrictions” and that the claimant was “not…capable of performing any type of gainful employment at this time.” The carrier’s IME consultant testified during his deposition that “It was unlikely claimant would ever be able to return to meaningful employment.” 

The WCLJ classified claimant with a permanent partial disability and a 75% loss of wage earning capacity. A three-member Board Panel affirmed on appeal. 

The Appellate Division majority reversed, relying on the above statements from the physicians. The Court stated, “Since the Board’s findings as to claimant’s ability to perform some type of sedentary work are contrary to the consistent medical proof presented, the Board’s finding of a permanent partial disability and a 75% loss of wage earning capacity is not supported by substantial evidence….”  Had the Court stopped there and remanded the case for further proceedings regarding claimant’s exertional capacity, this decision would be arguably consistent with previous precedent. However, the Court went a step further and classified claimant with a permanent total disability, stating, “The operative standard here is gainful employment, not some undefined type of limited sedentary work.” (emphasis added). The Court did not define the term “gainful employment.” This statement departs from past precedent, because a claimant has always been considered partially disabled if there is any form of work he or she can do, however limited.  The “gainful employment” standard described by the Court here represents a re-definition of the standard for finding total disability.

Both physicians opined permanent partial disabilities under the Board’s 2012 Guidelines in their reports and only opined total disabilities off-the-cuff during their depositions. The Board's decision finding a 75% loss of wage earning capacity was based on the 2012 Guidelines. The Board is entitled to apply the Guidelines it has promulgated to ensure consistency in disability assessments. The Court’s decision conflicts with previous precedent holding that the Board, in its role as fact finder, is entitled to selectively adopt and reject portions of medical opinions and testimony so long as the final result is based on substantial evidence. In this case, the Board rejected the total disability statements from the treating physician and IME consultant and credited the permanent partial disability assessment from the treating physician based on the 2012 Impairment Guidelines. If previous precedent were applied here, this decision should have been affirmed as a legitimate exercise of the Board’s fact-finding powers to selectively adopt and reject portions of an expert’s medical opinion.   

The Court’s decision is further inconsistent with its previous holding in Burgos v. Citywide Insurance Program, which held that a claimant’s exertional ability is irrelevant to the degree of medical impairment.  In that case, the Court rejected a claimant’s argument that a less than sedentary exertional capacity represents a de facto permanent total disability.  Ironically, the New York Court of Appeals, affirmed the Appellate Division’s Burgos holding the very day the Appellate Division issued this decision.  The Court’s decision here appears to rely heavily on the treating physician’s testimony that claimant has a less than sedentary exertional capacity.  In this vein, the “gainful employment rather than some undefined type of limited sedentary work” standard appears to establish a de facto permanent total disability in cases where a claimant has a less than sedentary exertional capacity in direct contravention to the Court’s holding in Burgos.

The Court’s holding also blurs the distinction between the medical issue of permanent total disability and the functional/vocational issue of total industrial disability.  Permanent total disability is purely a question of medical impairment whereas total industrial disability applies to permanently partially disabled claimants who meet various requirements for functional and vocational limitations.

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