Unisea, Inc. v. De Lopez, 435 P.3d 961

Background

In June 2013 Sofia Morales de Lopez fell at work and suffered orthopedic injuries and psychiatric conditions; she received TTD benefits and entered the reemployment process, electing the $13,500-max job dislocation benefit in April 2014.
In November 2014 a three-doctor EME panel (orthopedist, neurologist, psychiatrist) issued reports: the orthopedist and neurologist found the physical injuries medically stable and rated a 5% whole‑person PPI; the psychiatrist said the psychiatric condition was not yet stable.
Morales continued to receive TTD tied to her psychiatric condition; she obtained a second psychiatric EME in November 2015, which yielded a 10% psychiatric whole‑person PPI; an addendum in Feb 2016 reported the combined whole‑person rating as 15%.
Employer Unisea paid nothing based on the 2014 physical rating and delayed payment until Feb 2016 (after the addendum); Morales sought penalties and interest for late payment and sought to rescind her earlier election of the job dislocation benefit.
The Board denied penalties, reasoning no “true whole person” rating existed until the combined rating; the Workers’ Compensation Appeals Commission reversed, holding parts of PPI and the job dislocation benefit were due upon each specialty rating and penalties were appropriate.
The Supreme Court affirmed the Commission: payments or controversions were due within 21 days of each separate valid PPI rating under the AMA Guides; employer’s unexplained delay without controversion warranted penalties; Morales could not rescind her job‑dislocation election on equitable grounds.

Issues

Issue	Plaintiff's Argument (Morales)	Defendant's Argument (Unisea)	Held
When is PPI compensation "due" after multiple specialty ratings?	Each specialty may be rated when that condition reaches MMI; employer had to pay or controvert within 21 days of each rating.	Payment is due only after a final combined whole‑person rating (i.e., after all conditions reach medical stability).	Held: PPI (or uncontested part) is due within 21 days of each valid specialty/organ rating under the Guides; employer must pay uncontested amounts or timely controvert.
Whether job dislocation benefit must be paid in part after an initial PPI rating	Employer had to pay at least the portion corresponding to the initial 5% orthopedic rating when first given.	Job dislocation payment not payable until final combined PPI rating; paying earlier risks overpayment.	Held: Job dislocation benefit payable (or must be controverted) when employee has elected it and has been given a PPI rating; partial payments correspond to individual ratings and Guides combination prevents double recovery.
Whether employer’s delay justified avoiding penalty (good‑faith controversion defense)	N/A (claimant seeks penalty).	Delay was reasonable because no final combined rating existed; employer sought clarification from its doctors.	Held: Employer’s unexplained delay without timely controversion does not avoid penalty; Sumner/Hammer require payment or controversion within 21 days.
Whether Morales can rescind her 2014 job dislocation election on equitable grounds due to delay	Delay and nonpayment frustrated her bargain and justify rescission or estoppel relief.	The election is a statutory selection effective upon filing; employer had no role in the election; equitable relief not warranted.	Held: Commission properly rejected equitable rescission/estoppel; statutory election stands and remedy is statutory penalty, not rescission.

Key Cases Cited

Sumner v. Eagle Nest Hotel, 894 P.2d 628 (Alaska 1995) (PPI lump‑sum payment becomes due within 21 days of notice of a PPI rating)
Hammer v. City of Fairbanks, 953 P.2d 500 (Alaska 1998) (employer must timely pay uncontested PPI portions and controvert the remainder rather than delay seeking clarification)
Harris v. M‑K Rivers, 325 P.3d 510 (Alaska 2014) (statutory scheme expects prompt employer payment unless controverted)
Alaska Airlines, Inc. v. Darrow, 403 P.3d 1116 (Alaska 2017) (distinguishing impairment compensation from disability; PPI awarded independent of earning capacity)
Land & Marine Rental Co. v. Rawls, 686 P.2d 1187 (Alaska 1984) (interest due on untimely compensation)
Harp v. ARCO Alaska, Inc., 831 P.2d 352 (Alaska 1992) (good‑faith controversion protects employer from penalty)