STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


KENNETH BRITTENHAM, Applicant

BRITTENHAM FARMS INC, Employer

RURAL MUTUAL INS CO, Insurer

WAUSAU UNDERWRITERS INS CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 95018770


In an order dated June 27, 1996, this commission remanded this case to the Worker's Compensation Division in the Department of Workforce Development (the department) for further proceedings. On remand, the case was assigned to Administrative Law Judge (ALJ) John E. Clarke. Because the parties stipulated to the facts, no hearing was held on remand. ALJ Clarke issued a decision in this matter on September 25, 1997. A timely petition for review of ALJ Clarke's decision was filed.

The issue before ALJ Clarke, and now before the commission, is whether it is appropriate to apportion liability for occupational hearing loss among insurers of a single employer whose employment caused the loss. The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

a. Stipulated facts and procedural posture.

The applicant was born in 1926 and worked for the employer for more than forty years before retiring on June 1, 1989. He filed an application for hearing alleging an occupational hearing loss with a June 1, 1989 date of injury. (1) A 49.07 percent bilateral compensable hearing loss is conceded.

The employer's date-of-injury insurer, Rural Mutual Insurance Company (Rural Mutual) first came on the risk in June 1986. By the time Rural Mutual came on the risk, the applicant already had at least a 36.26 hearing loss, according to a December 1983 audiogram done when the applicant bought a hearing aid. Rural Mutual asked the department to implead Wausau Underwriters Insurance Company (Wausau Insurance), the workers compensation insurer on the risk before Rural Mutual. Rural Mutual hoped to apportion the disability award, so that Wausau Insurance would have to pay for the deafness shown to have been caused by employment while Wausau Insurance was on the risk.

However, the department refused to allow Rural Mutual to implead Wausau Insurance, contending that its long-standing interpretation of Wis. Stat. 102.555 (8) does not allow apportionment between a single employer's insurers in cases of occupational deafness. See July 27, 1995 letter of ALJ Ronald J. Ryan and December 5, 1995 letter of ALJ James O'Malley. However, ALJ O'Malley did acknowledge that the presiding ALJ could implead another insurer if the facts warranted.

The presiding ALJ, James Lawrence, did not believe the facts warranted impleader. On April 19, 1996, ALJ Lawrence issued a decision holding that Rural Mutual alone was liable. Rural Mutual filed a timely appeal of that decision to this commission.

On appeal of ALJ Lawrence's decision, Rural Mutual argued that Wausau Insurance should have been impleaded, and that there is no legislative intent or policy reason for limiting the apportionment provision under Wis. Stat. 102.55 (8) to employers rather than insurers. In support of its position, Rural Mutual pointed out that the statutes frequently use the term "employer" to include "insurer," but when the statutes mean the term to apply to the "employer" only, that intent is usually made clear. Rural Mutual also argued that the department has not explained why, in terms of policy, the apportionment rule in Wis. Stat. 102.555 (8) should not apply to insurers. Its argument, essentially, was that the law favors apportionment when possible.

On June 27, 1996, the commission set aside ALJ Lawrence's order, and ordered that Wausau Insurance be impleaded. The commission's remand order, however, did not expressly decide the question of whether Wis. Stat. 102.555 (8) permitted apportionment of liability among insurers of the same employer. Rather, the commission ordered the impleader of Wausau Insurance to ensure that the most complete record, in terms of evidence and argument, would be before the commission when it decided that question.

On remand, as noted above, the case was assigned to ALJ John Clarke. Again, the parties, now including Wausau Insurance and Rural Mutual, stipulated to the facts as set forth above. ALJ Clarke apportioned the 49.07 percent of total occupational deafness, by finding Wausau Insurance liable for 36.26 of total deafness and Rural Mutual liable for the remaining 12.81 percent of total deafness. Wausau Insurance now petitions for review of ALJ Clarke's decision.

b. Discussion.

Wisconsin Statutes 102.555 (8) states in relevant part:

"An employer is liable for the entire occupational deafness to which his or her employment contributed; but if previous deafness is established by a hearing test or other competent evidence, whether or not the employe was exposed to noise within the 2 months preceding such test, the employer is not liable for such previous loss so established . . ."

The commission at one time interpreted the provision to not permit apportionment between employers, let alone insurers. Rather, the commission construed the statute to mean that if the date of injury employer "contributed" to occupational deafness, it was liable for the entire occupational deafness even if other employers also "contributed." A deduction would be permitted only if some pre-existing, non-occupational deafness was established.

However, following a circuit court reversal of one of its decisions in 1991, the commission changed its policy. (2) The commission now construes Wis. Stat. 102.555 (8) to permit apportionment between successive employers. Thus, if a second employer proves by a reliable audiogram that the applicant already had hearing loss at the time he began working for it, the second employer is liable only for the additional occupational loss. (3)

Should apportionment in hearing loss cases also be permitted between successive insurers of the same employer? The first argument against apportionment between insurers of the same employer is simply that the Wis. Stat. 102.555 (8) does not expressly provide for apportionment between insurers but rather only between employers and then on the basis of the occupational deafness to which the employers' employment contributed.

However, Rural Mutual argues that the statutes use the term "employer" in many instances in which it may only reasonably be construed to include "insurers" as well. As an example, Rural Mutual points to use of the term "employer" in Wis. Stat. 102.03 (1) and 102.06 which set out situations where "an employer" is liable, but which cannot be reasonably read to preclude the liability of an insurer. Rural Mutual goes on to argue that the legal requirement that employers procure insurance has created a virtual identity between employers and insurers. See Wis. Stat. 102.28 and 102.30 (5). In addition, those situations in which an employer, and not an insurer, is to be held liable are carefully spelled out. See for example Wis. Stat. 102.35 (3) and 102.31 (c)1.

However, the commission must disagree. Insurers are not obligated to pay workers compensation simply by operation of Wis. Stat. 102.03 (1) and 102.06 which generally state the conditions under which employers are liable under the act. Rather, insurers are liable because employers are required to procure workers compensation insurance under Wis. Stat. 102.28 (2) under policies regulated under Wis. Stat. 102.31.

Stated another way, the "virtual identity" of an employer and its insurer regarding the payment of compensation means an insurer may raise its insured-employer's defenses against applicants and other employers. However, the commission declines to apply the concept of identity between an employer and its insurer to implicitly grant two insurers of the same employer the same rights against one another as two employers have against each other.

Rural Mutual also argues that there is no legislative history indicating an intent not to apportion between insurers of one employer under Wis. Stat. 102.555 (8). It points out that the statutory policy is to apportion liability, not to apportion employers. However, the commission must also reject this argument. First, the commission may only refer to legislative history when a statute is ambiguous or unclear. Marshall-Wis. v. Juneau Square, 130 Wis. 2d 112, 133 (1987). The commission is not persuaded that the term "employer" is ambiguous in this context. Second, if the term were ambiguous, Rural Mutual might reasonably be expected to offer legislative history to prove affirmatively its position rather than relying on the absence of contrary legislative history. Third, Wis. Stat. 102.555 (8) does not simply apportion liability, nor does it simply apportion employers. Rather, the statute apportions liability between employers under certain circumstances.

Rural Mutual also mentions policy reasons for allowing apportionment between insurers. However, to the extent a policy choice has been announced by the courts, it is that the last insurer is liable for the entire disability in cases of occupational disease. In Travelers Ins. Co. v. ILHR Department, 85 Wis. 2d 776, 782, (Ct. App., 1978), the court of appeals states:

"Judicial construction of [Wis. Stat. 102.01 (2)(f), the definition of `date of injury' in cases of occupational disease] has imposed the entire liability upon the last employer whose employment caused the disability resulting from the disease, without contribution from prior employers whose employment also caused the disease. The liability of each employer's insurer is determined in the same manner. If a single employer has successive insurers, liability is imposed upon the insurer whose policy was in force at the time the disability occurred."

See also Shelby v. DILHR, 109 Wis. 2d 655, 664-65 (Ct. App., 1982). The rationale for a no-apportionment rule is that the law of averages will equalize any disproportionate burden on a particular employer or insurer over time. Employers Mut. Liability Ins. Co. v. McCormick, 195 Wis. 410, 415-16 (1928).

Rural Mutual argues the Travelers holding does not apply because "occupational hearing loss is not just another form of occupational disease" subject to the general rule against apportionment. However, Rural Mutual also recognizes that the court did categorize occupational hearing loss as occupational disease in Dischler v. Industrial Commission, 10 Wis. 2d 637 (1960). Of course, Dischler was decided prior to the enactment of Wis. Stat. 102.555 (8). (4) However, Wis. Stat. 102.55 (8) merely sets out specialized rules for dealing with occupational hearing loss; the commission cannot conclude the enactment of subsection (8) changed the accepted character of the occupational hearing loss injuries from occupational disease to accident. Indeed, Dischler specifically held that a worker could not apportion an occupational hearing loss claim by asserting multiple dates of injury without actually ending the employer-employe relationship, Id., at 10 Wis. 2d 642, a principle essentially adhered to under Wis. Stat. 102.555 (4).

Finally, Wis. Stat. 102.555 viewed as a whole supports a construction of subsection (8) which allows apportionment between employers, but not insurers of the same employer. The commission recognizes an exception to the Travelers rule against apportionment in occupational disease cases where there are two distinct dates of injury. (5) Under Wis. Stat. 102.555 (4), however, a date of injury may only be established by ending noisy employment, either by separating from the employer or by transferring away from noisy work. A worker who continues in working for the same employer in noisy employment ordinarily could not establish a date of injury, even if he had a hearing loss, without separating from employment. On the other hand, changing jobs from one employer to another provides a "date-of- injury" cut-off under Wis. Stat. 102.555 (4)(c) which is not present when a worker continues to work for one employer who contracts with a second insurer.

In sum, the commission must conclude that Wis. Stat. 102.555 (8) does not permit apportionment between successive insurers for hearing loss during continuous employment with one employer.

Rural Mutual has filed a cross-petition requesting the commission to order Wausau Insurance to reimburse it for the hearing aid the applicant purchased in December 1983 when Wausau Insurance was on the risk. The commission first notes that the cross-petition which the commission received on October 17, 1997, may not be timely under Wis. Admin. Code LIRC 1.026. Nonetheless, given the commission's broad scope of review, the commission considered this issue.

In Vanroy v. Thilmany Pulp & Paper Company, WC Claim no. 96031330 (LIRC, June 5, 1997), affirmed sub nom International Paper Company v. Vanroy, case no. 97CV532 (LIRC, January 8, 1998), the commission ordered the date of injury insurer to pay for a hearing aid purchased years earlier. The commission analogized the case to the situations covered by Wis. Stat. 102.42 (1) which allows the retroactive payment of medical expenses incurred before a worker knows he has an occupational disease. The commission's rationale was that a worker cannot establish a date of injury without retiring or separating from employment (6), and that it seemed unfair (and contrary to the evident purpose of Wis. Stat. 102.42) to put the worker in the situation of choosing between quitting and receiving compensation for a hearing aid. While Vanroy did not involve a dispute between insurers, the commission applies the same rationale here. The insurer on risk on the date of injury, Rural Mutual, remains liable for the cost of the hearing aid. (7)

c. Award.

As stated above, the parties stipulated to a 49.07 percent binaural hearing loss. The applicant is thus entitled to 105.99 weeks of permanent partial disability benefits under Wis. Stat. 102.555 (4). At the weekly rate of $125 per week (the statutory maximum for injuries in 1989), the total amount awarded for permanent partial disability equals $13,248.75, all of which has accrued.

The applicant also incurred reasonable and necessary medical expenses for a hearing aid purchased in December 29, 1983 in the amount of $1,378.95 to relieve the effects of the work injury.

Because Rural Mutual is liable for both the disability compensation and the expense of the hearing aid awarded hereunder, and because it has previously paid both amounts in full, no award is made under this order.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

ORDER

The findings and order in ALJ Clark's September 25, 1997 decision are modified to conform to the foregoing and, as modified, affirmed in part and reversed in part.

No additional award for compensation or reimbursement is made. The application as it pertains to Wausau Underwriters Insurance Company is dismissed.

Dated and mailed: March 5, 1998
brittke . wrr : 101 : 8 ND 5.19  3.43

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

cc: ATTORNEY MARK W ANDREWS
WINNER WIXSON & PERNITZ

ATTORNEY DOUGLAS JOHNSON
JOHNSON LAW OFFICES

ATTORNEY ERIC D HENDRICKSON
STILP AND COTTON


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Footnotes:

(1)( Back ) Under Wis. Stat. 102.555 (4), the date of injury for a worker claiming occupational deafness is the occurrence of an event (retirement, termination, layoff or transfer) that takes the applicant out of the noisy environment.

(2)( Back ) Werner Weiss v. Weyerhaeuser Company, WC Claim no. 89-001113 (LIRC, April 18 1990), reversed Weyerhaeuser Company v. LIRC and Weiss, Case no. 90-CV-374 (Marathon County Cir. Ct., November 14, 1990).

(3)( Back ) Werner Weiss v. Weyerhaeuser Company, WC Claim no. 89-001113 (LIRC, April 16 1991) (after remand); Herbert Hall v. Algoma Hardwoods, Inc., WC claim no. 92025988 (LIRC, October 31, 1994).

(4)( Back ) Wisconsin Statutes 102.555 generally was in effect, though it was numbered Wis. Stat. 102.565.

(5)( Back ) Eisner v. Wis. Pak, Inc., WC Claim no. 87-044815 (LIRC, February 14, 1991). See also, Neal and Danas, Worker's Compensation Handbook 3.4 and 3.43 (4th ed., 1997).

(6)( Back ) See Dischler, supra.

(7)( Back ) See also Carla Vaquera v. Wisconsin Porcelain Co., Inc., WC claim no. 94-44791 (LIRC, December 4, 1996), affirmed sub. nom United Wisconsin Insurance Company and Wisconsin Porcelain Co., Inc., v. LIRC and Carla Vaquera, case no. 96-CV- 009721 (Wis. Cir. Ct. Milwaukee County, September 23, 1997), appeal pending.