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Hodges v. Alaska Constructors, Inc. (4/17/98), 957 P 2d 957
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
J. L. HODGES, )
) Supreme Court No. S-7815
) Superior Court No.
v. ) 4FA-95-1495 CI
ALASKA CONSTRUCTORS, INC., ) O P I N I O N
CIGNA/ALPAC/INA COMPANIES, )
and ALASKA WORKERS' ) [No. 4971 - April 17, 1998]
COMPENSATION BOARD, )
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Mary E. Greene, Judge.
Appearances: Arthur L. Robson, Robson Law
Office, Fairbanks, for Appellee. Robert J. McLaughlin, Mann,
Johnson, Wooster & McLaughlin, P.S., Tacoma, Washington, for
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
J. L. Hodges suffered a lower back injury while working
for Alaska Constructors. The Workers' Compensation Board awarded
him permanent total disability benefits. Hodges then sought
reimbursement for an array of expenses that flowed from his injury
and subsequent workers' compensation proceedings. The Board denied
his request to modify its previous orders. The superior court
affirmed the Board's decision, and Hodges appeals. With one
exception, we conclude that the Board appropriately denied Hodges's
petition for modification and resolved the issues before it. We
remand in order for the Board to determine the costs of Hodges's
attendance at medical depositions and whether his attendance was
necessary and hence compensable.
II. FACTS AND PROCEEDINGS
Hodges suffered a lower back injury while working for
Alaska Constructors on June 6, 1977. [Fn. 1] He underwent a series
of seven back surgeries and was awarded permanent total disability
benefits. The Alaska Workers' Compensation Board (the Board) has
issued five decisions in connection with Hodges's back injury. [Fn.
We briefly summarize the facts from the relevant
proceedings. In Hodges III, the Board increased Hodges's
compensation rate to reflect fringe benefits that Hodges was
receiving at the time of his injury. The Board also ruled that
Alaska Constructors would pay the cost of any medical prescriptions
provided by an agreed-upon mail-order service. Additionally, the
Board denied Hodges's request for reimbursement for chiropractic
treatment of his upper back ailments. The Board found these
treatments to be unrelated to Hodges's lower back injury and
surgeries, and therefore not compensable. Finally, the Board
awarded attorney's fees to Hodges, but denied his request for
penalties against Alaska Constructors for late payment.
Hodges did not seek judicial review of the Hodges III
decision. Instead, he filed an application for adjustment of claim
with the Board in June 1992, almost ten months after the Board's
decision. Hodges sought to re-address the following issues:
compensability of his upper back condition; reimbursement for
medication not acquired through the mail-order program; travel
costs associated with medical treatments; attendance at appellate
proceedings, pre-hearing conferences, and depositions; compensation
for a therapeutic bed and hot tub; and the award of attorney's
fees, costs, and interest.
The Board treated Hodges's application for adjustment as
an application for modification based on mistake or change of
circumstances. After a hearing, the Board issued its Hodges IV
decision in January 1994, resolving most of the travel-related
issues. The parties and the Board agreed to treat Hodges IV as
interlocutory and Hodges was allowed additional time to file
supplemental documentation concerning his other challenges to the
Hodges III decision.
In May 1995 the Board held a hearing to address Hodges's
remaining issues. In Hodges V the Board ruled that Hodges had
failed to justify a modification regarding compensability of his
upper back condition. Because the upper back injury was not
compensable, the Board ruled that the employer was not responsible
for payment of travel expenses associated with treatment of that
injury. The Board also denied Hodges reimbursement of medication
that he did not purchase through his mail-order drug supply
company. The Board then ruled that reimbursement for Hodges's
travel to depositions was not warranted because Hodges had failed
to provide the Board with a list of travel costs.
Finding that Hodges's hot tub treated his entire back,
not all of which was compensable, the Board ordered that the
employer reimburse Hodges only $4,640 of the approximately $15,000
that Hodges had spent on the installation of a gazebo-covered hot
tub. For similar reasons, the Board found that Hodges's
therapeutic needs did not require a king-size therapeutic bed. The
Board ordered Alaska Constructors to reimburse Hodges the cost of
a queen-size therapeutic bed. Finally, the Board denied penalties
for late payment of the bed and hot tub expenses and granted Hodges
forty hours' worth of attorney's fees totaling $5,000.
Hodges appealed the final decision and order of the Board
in Hodges V to the superior court, which affirmed the decision in
its entirety. Hodges appeals.
A. Standard of Review
This court does not give deference to the decision of a
superior court acting as an intermediate court of appeal. See
Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233 (Alaska
1992). Instead, we "independently review the merits of an
administrative determination." Id.
"When an administrative decision involves expertise
regarding either complex subject matter or fundamental policy
formulation, we defer to the decision if it has a reasonable
basis." Keane v. Local Boundary Comm'n, 893 P.2d 1239, 1241
(Alaska 1995). The scope of review for an agency's application of
its own regulations to the facts is limited to whether the agency's
decision was arbitrary, unreasonable, or an abuse of discretion.
See Rose v. Commercial Fisheries Entry Comm'n, 647 P.2d 154, 161
The substitution-of-judgment standard is appropriate
"where the knowledge and experience of the agency is of little
guidance to the court or where the case concerns 'statutory
interpretation or other analysis of legal relationships about which
courts have specialized knowledge.'" Earth Resources Co. v. State,
Dep't of Revenue, 665 P.2d 960, 965 (Alaska 1983) (quoting Kelly v.
Zamarello, 486 P.2d 906, 916 (Alaska 1971)).
We employ the substantial evidence test "to review
factual determinations made by an agency in the course of its
proceedings." Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).
We have held that
[s]ubstantial evidence is "such relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion." The Board's decision need not be the only possible
solution to the problem, for it is not the function of the court to
reweigh the evidence or choose between competing inferences, but
only to determine whether such evidence exists.
Interior Paint Co. v. Rodgers, 522 P.2d 164, 170 (Alaska 1974)
B. Timeliness of the Application for Modification
As a preliminary matter, we address Alaska Constructors's
contention that Hodges's application for adjustment failed to meet
the statutory and regulatory requirements governing modification of
Board orders. First, Alaska Constructors argues that Hodges's
application for adjustment was not filed within the one-year time
limit prescribed by AS 23.30.130. [Fn. 3] It complains that the
Board only decided to treat Hodges's application for adjustment as
a petition for modification after more than a year passed from the
decision in Hodges III.
The record indicates, however, that Hodges filed an
application for adjustment of claim on June 8, 1992, less than one
year after the decision in Hodges III was issued on August 23,
1991. It is this date that controls under AS 23.30.130. [Fn. 4]
Moreover, the Board "acts within its jurisdiction with respect to
modification of the original claim when it decides whether the
limitations period has run." Hulsey v. Johnson & Holen, 814 P.2d
327, 328 (Alaska 1991).
Second, Alaska Constructors contends that the application
for adjustment is not the functional equivalent of a petition for
modification. The Board's action was appropriate, however, because
it has discretion to review an award of compensation "[u]pon its
own initiative, or upon the application of any party in interest."
AS 23.30.130(a). We have upheld similar Board action in the past.
See Hulsey, 814 P.2d at 328 (concluding Board correctly treated
petition to "reopen"claims as petition for modification); see also
Metcalf v. Felec Servs., 784 P.2d 1386, 1387 (Alaska 1990) (noting
that Board treated request for reconsideration as petition to
C. Compensability of the Upper Back Condition
Following Hodges IV, and upon stipulation of the parties,
Hodges was given additional time to submit evidence to demonstrate
a link between his 1977 accident and his upper back problems for
which he sought compensation. In Hodges V, the Board found that
[t]he employee has failed to submit any
evidence to indicate the employee did not have upper back problems
prior to the 1977 accident or that the 1977 accident aggravated or
accelerated the preexisting conditions.
Furthermore, much of the evidence the
employee submitted in response to our request in Hodges IV, was not
presented at the hearing prior to Hodges III. Since the evidence
is new, the employee is required to state the reason why, with due
diligence, the new evidence could not have been produced at the
time of the hearing. . . . The employee has failed to do so.
Hodges proposes a variety of arguments to explain why the
Board's decision is flawed. Hodges claims that the Board placed
insufficient weight on the opinions of his treating physicians and
ignored "exceptionally voluminous"evidence that supports these
doctors' conclusions. Hodges points to a number of depositions and
medical reports, some of which link his lower back injury to his
upper back problems, and he argues that the Board erred by finding
to the contrary.
Alaska Constructors claims that Hodges did not satisfy
the prerequisite of 8 Alaska Administrative Code (AAC) 45.150(d)(2)
(1996) that a party moving for modification explain why newly
submitted evidence was not available at the prior hearing. [Fn. 5]
Alternatively, Alaska Constructors contends that none of the
evidence submitted with the petition for modification tends to show
a causal link between Hodges's upper back problems and his June 6,
We conclude that the Board properly denied Hodges's
request for modification because Hodges failed to explain why
"newly discovered evidence supporting the allegation could not have
been discovered and produced at the time of the hearing." 8 AAC
45.150(d)(2). We have consistently held that an allegation of
mistake should not serve as "'a back-door route to retrying a case
because one party thinks he can make a better showing on the second
attempt.'" Interior Paint Co., 522 P.2d at 169 (quoting 3 Arthur
Larson, The Law of Workmen's Compensation sec. 81.52, at 354.8
(1971)); cf. Burrell v. Burrell, 696 P.2d 157, 163 (Alaska 1984)
(holding that motion for relief from judgment under Civil Rule
60(b) does not allow for relitigation of issues previously
It is apparent from the record that Hodges sought to
relitigate the issues with evidence that could have been submitted
prior to the Board's decision in Hodges III. The bulk of Hodges's
new evidence consists of depositions taken in 1993 relating to
medical diagnosis and treatment that had occurred years earlier.
Hodges failed to explain adequately why the evidence
could not have been produced at the time of the hearing that
preceded the Board's decision in Hodges III. The only explanation
Hodges offered the Board for failing to introduce this evidence
sooner is contained in two sentences of an affidavit that Hodges's
That your affiant could not produce or
introduce evidence at the July 1991 hearing, which evidence was
developed by following procedure adopted by affiant. The wisest
and best way was to file the application with the Board (which was
in fact filed) in June of 1992. [Fn. 6]
Therefore, we hold that the Board acted within its province in
denying modification of its previous decision concerning the
compensability of Hodges's upper back condition. [Fn. 7]
Our holding here resolves Hodges's claim for
reimbursement for travel related to medical treatment. Under 8 AAC
45.084, the employer is responsible for paying transportation
expenses for an employee's travel to receive medical treatment for
work-related injuries. Because we affirm the Board's determination
that Hodges's upper back condition is non-compensable,
reimbursement for travel costs associated with treatment of that
condition is inappropriate.
D. Reimbursement of Prescription Medication
Hodges contends that he should have been reimbursed for
his purchases of Fentanyl Patches, prescribed to manage Hodges's
pain, and that the Board was mistaken in deciding otherwise.
Alaska Constructors argues that the Board reasonably determined
that Hodges failed to meet the requirement of showing factual
errors or mistakes of law made by the Board.
By the terms of the decision in Hodges III, Hodges was to
fill all of his prescriptions through a mail-order drug supply
company. Despite the company's statement to the contrary, Hodges
maintained that it was illegal to send narcotic pain medication
though the mail. Though Hodges's drug supply company could not use
the postal mail to send a class-II narcotic such as Fentanyl
interstate, it could legally use other shipping methods to do so.
In his application for modification, Hodges stated that
he learned in 1993 that his drug supply company could deliver
class-II narcotics. The Board, however, found that Hodges was made
aware as early as 1991 that his company used alternatives to the
postal mail system. The Board held in Hodges V that Hodges was
dilatory in acquainting himself with the mail-order service and
failed to demonstrate any erroneous facts in
Hodges III or any changes in condition since
that decision, as related to the prescription medication. We
further find [Hodges's] mistaken belief on the law is not proper
grounds for a determination of modification.
We agree with the Board's reasoning. Hodges failed to
explain which facts supported his allegation of mistake of fact, as
required by 8 AAC 45.150(d)(2). While Hodges argued in his request
for modification that the Board made a mistake in requiring him to
obtain his prescription medications "in contravention of Federal or
State law,"this was not the case. Therefore, we conclude that the
Board did not err in denying Hodges reimbursement for medication
not ordered through the mail-order service.
E. Reimbursement for Hodges's Therapeutic Hot Tub and Bed
In Hodges IV, the Board found Hodges's request for the
provision of a therapeutic bed and hot tub to be compensable. It
required Hodges to submit records detailing his costs and evidence
that he had submitted those costs to his employer. After reviewing
that evidence, and that of the employer in rebuttal, the Board in
Hodges V ruled that Hodges's purchases were excessive and required
Alaska Constructors to pay only a reasonable, specified portion of
the costs. Hodges appeals.
1. The hot tub
Hodges submitted bills totaling approximately $15,000 for
the purchase and installation of a gazebo-covered, outdoor hot tub.
[Fn. 8] Alaska Constructors proffered evidence that an alternative
bathtub whirlpool could have been installed in Hodges's home for a
total cost of only $4,640. After examining the testimony of Joyce
Heisler, a hot tub vendor, and Dr. D. L. Hill, the chiropractor who
prescribed the hot tub, the Board ruled that reimbursement for the
hot tub should be limited to $4,640. The Board concluded:
We recognize Ms. Heisler and Dr. Hill both
believe the employee should have a deep tub with water jets placed
for adjustment to a number of body parts. We find, however, that
both witnesses made this determination based on the employee's
entire back problems, particularly his upper back. We have already
found that the employee's upper back problems are not compensable
under this claim. Therefore, we find any hot tub ordered under
this claim, would not need to treat the upper back. Since the tub
costing $4,640.00 adequately treats the lower back, we find such a
Hodges argues that he should have been fully reimbursed
for the hot tub he purchased. Alaska Constructors maintains that
the Board correctly decided the issue.
The Board's decision was supported by substantial
evidence. In his deposition, Dr. Hill commented on Hodges's
purchase of the outdoor hot tub and whether it conformed to the
prescription he had written for him: "It is more than I had in
mind, to be honest with you. When I wrote the prescription, I
didn't envision . . . the patient building a gazebo and spending
Furthermore, the record supports the Board's finding that
the experts' testimony was based upon the faulty assumption that
Hodges's upper back treatment was compensable. Dr. Hill remarked
that the requirements of a beneficial hot tub included that "he
could immerse up to his neck in it." Heisler commented that the
alternative proposed by Alaska Constructors might not be as
comfortable because Hodges would not receive a benefit to all parts
of his body, including the upper neck.
The Board is authorized to choose between conflicting
medical testimony and reports. The function of the courts is not
to reweigh the evidence or to choose between competing inferences,
but only to determine whether substantial evidence exists. See
Interior Paint Co., 522 P.2d at 169-70. There is substantial
evidence supporting the inferences drawn by the Board with regard
to the extravagance of Hodges's purchase. Therefore, we conclude
that the Board's determination of this issue was not in error.
2. The therapeutic bed
Hodges spent $2,950 on a king-size therapeutic bed. He
contended that he needed that size because he was married at the
time of his purchase. He argues that the king-size bed was the
only size with independent adjustments for the two sides. Alaska
Constructors contends that for $1,000 less, Hodges could have
purchased a smaller bed that would have been adequate for his
The Board relied on Dr. Hill's comment that size is not
that important to the bed's therapeutic effect, and required Alaska
Constructors to reimburse Hodges the cost of a queen-size
therapeutic bed of similar quality. Hill's testimony constitutes
substantial evidence in support of the Board's decision. We
therefore conclude that the Board did not err in finding that a
queen-size therapeutic bed would adequately serve Hodges's medical
F. Reimbursement for Travel Costs to Attend an Appellate
Proceeding, Prehearing Conferences, and Depositions
Hodges challenges the Board's denial of reimbursement for
his travel to the superior court hearings, three pre-hearing
conferences, and medical depositions. He argues that he qualified
for reimbursement of these expenses under 8 AAC 45.180(f). [Fn. 10]
Subsection (a) of 8 AAC 45.180 states that "[t]his
section does not apply to fees incurred in appellate proceedings."
The regulation does not mention costs, but such an interpretation
would not be unreasonable. As Alaska Constructors contends, Alaska
Appellate Rule 508(d) governs the award of costs associated with
appellate proceedings in the superior court. [Fn. 11] Therefore,
the Board did not abuse its discretion when it denied Hodges's
claim for reimbursement for travel expenses to attend appellate
hearings in the superior court.
The Board's decision to deny travel reimbursement for
Hodges's attendance at three pre-conference hearings was based upon
the Board's reasonable interpretation of existing regulations.
Subsection (f)(13) of 8 AAC 45.180 provides that in the Board's
discretion, "reasonable travel costs incurred by an applicant to
attend a hearing"will be awarded "if the board finds that the
applicant's attendance is necessary." In Hodges IV, the Board
found that Hodges's "physical attendance at the prehearing was not
necessary." Having reviewed the record, we conclude that the
Board's finding on this issue was not erroneous.
Finally, Hodges challenges the Board's denial of his
claim for reimbursement for travel to medical depositions.
Subsection (g) of 8 AAC 45.180 provides that costs incurred for
travel to depositions not resulting from Smallwood objections may
only be awarded if attendance at the deposition is reasonable.
Before determining whether to reimburse Hodges for his travel
costs, the Board in Hodges IV requested that Hodges submit a list
of depositions for which he claimed compensation and a description
of his participation and the reasons for his attendance. Hodges
provided this list, the necessary discussion, and an introduction
stating that the total costs for all depositions attended "probably
does not total $200." However, noting that Hodges had failed to
itemize the travel costs and produce an affidavit stating that the
costs were incurred in connection with his depositions, as required
by 8 AAC 45.180(f), the Board denied Hodges's request.
In Hodges IV, the Board requested only that Hodges submit
a list of depositions and a description of his participation,
without mention of the regulatory requirement that Hodges submit
itemized costs and an affidavit. Hodges complied with this
request. Given the specificity of its earlier order and Hodges's
subsequent compliance, the Board should have provided Hodges with
notice and an additional opportunity to satisfy the requirements of
8 AAC 45.180(f) by submitting the necessary itemization and
affidavit. We therefore remand this issue to the Board to allow
Hodges to submit a list of travel costs in accordance with the
regulation. The Board should determine whether Hodges's attendance
was reasonable and hence compensable.
We AFFIRM the Board's decisions in Hodges IV and Hodges
V in all respects except the denial of Hodges's claim for
reimbursement for travel to medical depositions, and we REMAND that
issue for proceedings consistent with this opinion.
Hodges suffered a less debilitating back injury at the same
workplace in April 1977. He also sought chiropractic treatment
between early 1975 and April 1976 after suffering a back sprain
while working for Bechtel Corporation.
See Hodges v. Alaska Constructors, Inc., AWCB Decision No. 90-
0030 (Feb. 27, 1990) (Hodges I); No. 90-0083 (Apr. 25, 1990)
(Hodges II); No. 91-0028 (Aug. 23, 1991) (Hodges III); No. 94-0011
(Jan. 27, 1994) (Hodges IV); No. 95-0157 (June 8, 1995) (Hodges V).
AS 23.30.130 provides, in relevant part:
(a) Upon its own initiative, or upon the
application of any party in interest on the ground of a change in
conditions . . . or because of a mistake in its determination of
fact, the board may, before one year after the date of the last
payment of compensation benefits . . . or before one year after the
rejection of a claim, review a compensation case. . . .
Alaska Constructors's argument that this court's consideration
is barred under the doctrines of issue and claim preclusion is
equally unpersuasive. Because the Board is statutorily authorized
to rehear and modify an award, res judicata does not apply. See
Suryan v. Alaska Indus. Bd., 12 Alaska 571, 573 (D. Alaska 1950).
8 AAC 45.150(d) states:
A petition for a rehearing or modification
based on an alleged mistake of fact by the board must set out
specifically and in detail
. . . .
(2) the facts alleged to be erroneous, the
evidence in support of the allegations of mistake, and, if a party
has newly discovered evidence, an affidavit from the party or the
party's representative stating the reason why, with due diligence,
the newly discovered evidence supporting the allegation could not
have been discovered and produced at the time of the hearing. . .
When asked at oral argument before this court why he did not
appeal Hodges III, Hodges's attorney replied:
To be candid, at the time where we would lose
on the appeal, because of the palliative issue, I didn't feel that
was worthwhile. Secondarily, I felt that if they are not going to
rely on the little reports that come in, I had better augment it.
I did a televised deposition, got all the records, everything else,
put the whole thing there and my philosophy was to push the Board
to pay attention. Tried, it obviously didn't work.
. . . .
Rather than appeal forthwith, I would take the
opposite route in which I have a year to pile the evidence in, do
things like take the deposition of Dr. Oakley and get his records,
and take other depositions which I proceeded to do and then ask the
Board to consider the generic situation: is the upper back injury
As a result, it is unnecessary for us to address whether the
Board's decision was supported by substantial evidence. We also
reject Hodges's argument that the resolution of this matter is
guided by our recent opinion in Williams v. State, Department of
Revenue, 938 P.2d 1065 (Alaska 1997), decided after both parties
had filed their briefs, but before Hodges had filed his reply
brief. Williams does not establish new law. Rather, it clarifies
our prior holdings regarding the statutory presumption of
compensability. See Gillispie v. B & B Foodland, 881 P.2d 1106
(Alaska 1994); Childs v. Copper Valley Elec. Ass'n, 860 P.2d 1184
(Alaska 1993); Big K Grocery v. Gibson, 836 P.2d 941 (Alaska 1992).
Hodges did not raise the presumption issue in his petition for
adjustment, nor did he appeal the Hodges III decision to the
superior court. At no time after Hodges III did Hodges raise the
presumption issue in his points on appeal. "A point omitted from
appellant['s] Statement of Points on Appeal ordinarily will not be
considered by this court." Forquer v. State, Commercial Fisheries
Entry Comm'n, 677 P.2d 1236, 1241 n.4 (Alaska 1984). "Attention to
the issue in a reply brief does not resuscitate it." Braun v.
Alaska Commercial Fishing and Agric. Bank, 816 P.2d 140, 145
The total cost for the outdoor hot tub was $14,575.13. Hodges
spent $5,694 on the apparatus and approximately $9,000 to lay
cement and provide electric power to his backyard where the hot tub
Additionally, the record reveals that Hodges could have
purchased a nearly identical gazebo-covered hot tub unit for
$3,733.89, at a savings of approximately $2,000.
8 AAC 45.180(f) provides in part:
The applicant must file a statement listing
each cost claimed, and must file an affidavit stating that the
costs are correct and that the costs were incurred in connection
with the claim. . . .
Appellate Rule 508(d) provides:
When costs are awarded in the appellate court,
they shall include, unless the court otherwise orders and subject
to Rules 210(b)(6) and (c)(6), the filing fee, the costs of
preparing the transcript, premiums for any bond under Rule 204(c)
or 204(d), and the costs of duplicating and mailing briefs and
excerpts of records. Duplicating costs will not be awarded in
excess of the rate generally charged by printers in the city in
which counsel is located.