BSM Crew Service Centre Phils., Inc. vs. Llanita

The conclusive presumption that a seafarer suffers from permanent and total disability arises only when the company-designated physician fails to issue a final and definitive medical assessment within the 120-day period (or the extended 240-day period with justification); where the company-designated physician timely issues a final assessment classifying the disability as partial, the seafarer is not entitled to permanent and total disability benefits notwithstanding the lapse of the 120-day or 240-day period.

Respondent Jay C. Llanita was employed as a seafarer by petitioner BSM Crew Service Centre Phils., Inc., a local manning agency, for and in behalf of Bernhard Schulte Shipmanagement, on board the vessel MV "LISSY SCHULTE" under a POEA-approved employment contract for nine months. The dispute concerns the proper disability grading and benefits payable to Llanita after he suffered injuries from a boiler explosion while on board, and specifically whether the company-designated physician's timely assessment of partial disability precludes an award of permanent and total disability benefits.

Jay C. Llanita was employed by BSM Crew Service Centre Phils., Inc., a local manning agency, for and in behalf of Bernhard Schulte Shipmanagement, as a seafarer on board the vessel MV "LISSY SCHULTE." Their POEA-approved employment contract was for nine months and commenced on October 20, 2009. Llanita boarded the vessel on November 22, 2009.

On May 10, 2010, while Llanita was on board, the vessel's boiler exploded, causing injury to several persons, including Llanita. He was immediately brought to Shahid Mohhamadi Hospital in Iran, where he was found to suffer from cerebral concussion, fracture, and burns. Thereafter, Llanita was medically repatriated on May 21, 2010. He arrived in Manila the next day and was immediately referred to and confined at the Metropolitan Medical Center, Marine Medical Services, where he was treated for several months by the company-designated physician.

Over the course of his treatment, the company-designated physician issued a series of medical reports. A Medical Report dated May 24, 2010 diagnosed Llanita with cerebral concussion, comminuted fracture of the left humerus with closed reduction and external fixation, and fracture of the left elbow with closed reduction. Follow-up reports documented debridement, skin grafting, and ongoing rehabilitation through June and July 2010. On July 26, 2010, Llanita was declared in stable condition, discharged, and advised to continue rehabilitation in his home province and return on August 13, 2010 for re-evaluation. On August 13, 2010, the company-designated physician assessed Llanita at "Grade 10-ankylosis of 1 shoulder and 50% Grade 14 due to scar on the right leg," and advised him to return on September 3, 2010. On September 3, 2010, Llanita was admitted for removal of the fixative device and physical therapy, discharged the next day, and again advised to continue outpatient rehabilitation and return on September 24, 2010 for re-evaluation.

On September 25, 2010, the company-designated physician reiterated his findings that Llanita was suffering from a Grade 10 disability (ankylosis of one shoulder, 20.15%) and 50% of Grade 14 (scar on the right leg, 1.87%), for a total disability grading of 22.02% equivalent to US$11,010.00. One day prior, on September 24, 2010, Llanita had already filed a Complaint before the Labor Arbiter, arguing that he was entitled to permanent and total disability benefits because more than 120 days had lapsed since his repatriation and he remained unfit to return to his duties. While the complaint was pending, Llanita consulted Dr. Ramon Y. Te, Jr., a private doctor, who issued a medical certificate dated March 1, 2011 stating that Llanita must continue rehabilitation and physical therapy for his elbow motion to improve; notably, the certificate did not state that Llanita was unfit for work or suffering from permanent and total disability. On February 11, 2011, the company-designated physician issued another medical certificate, but only because BSM's counsel had inquired about Llanita's case; it merely restated the September 25, 2010 findings.

The Labor Arbiter ruled that Llanita was only suffering from a Grade 10 and 50% Grade 14 disability and was not entitled to full permanent and total disability benefits, as the company-designated physician issued his evaluation within the 120- and 240-day periods. The NLRC affirmed, giving greater weight to the company-designated physician's assessment, which was based on several months of evaluation, over Dr. Te's single-visit certificate. The Court of Appeals reversed, awarding US$60,000.00 in permanent total disability benefits, reasoning that the company-designated physician's assessment was issued after the lapse of the 120-day period and that the February 11, 2011 medical certificate was issued 277 days from the accident—beyond even the 240-day extended period.

• Proper Disability Grading: Petitioners argued that Llanita is not entitled to full disability benefits because the company-designated physician assessed him as suffering only from a combined maximum disability of Grade 10 and 50% of Grade 14 under the POEA Contract.
• 120-Day Rule Does Not Automatically Confer Total Disability: Petitioners maintained that mere inability to work for more than 120 days does not mean that Llanita is suffering from total and permanent disability entitling him to maximum disability compensation.
• Credence to Company-Designated Physician: Petitioners contended, citing Magsaysay Maritime Corporation vs. Simbajon, that disability benefits must be based on the schedule in the POEA Standard Employment Contract and not the mere lapse of 120 days, and that the company-designated physician's assessment deserves more credence for being more thorough and exhaustive.

• Similar Findings by Both Physicians: Respondent argued that both the company-designated physician and Dr. Te supposedly made similar findings that Llanita can no longer go back to active sea duties after sustaining his injuries.
• Self-Serving Findings: Respondent contended that the company-designated physician's findings are self-serving.
• Incapacity Since May 2010: Respondent averred that he has been incapacitated to work since May 2010 and should be compensated for permanent and total disability.

• Timeliness of Assessment: Whether the company-designated physician issued a final and definitive medical assessment within the 120-day period prescribed by the rules.
• Entitlement to Permanent and Total Disability Benefits: Whether Llanita is entitled to full permanent and total disability benefits based on the mere lapse of the 120-day period, notwithstanding the company-designated physician's timely assessment of partial disability.
• Binding Effect of Company-Designated Physician's Findings: Whether the medical findings of the company-designated physician are binding where the seafarer's doctor of choice did not issue a conflicting definitive assessment and the dispute was not referred to a third doctor.

• Timeliness of Assessment: Yes. The company-designated physician issued his assessment on August 13, 2010—95 days from injury and 84 days from repatriation—and reiterated the same findings on September 25, 2010—138 days from injury and 127 days from repatriation—both within the 120-day period.
• Entitlement to Permanent and Total Disability Benefits: No. The conclusive presumption of permanent and total disability arises only when the company-designated physician fails to issue any final assessment within the prescribed 120-day or 240-day period; where a timely final assessment of partial disability is issued, the seafarer is not entitled to maximum benefits.
• Binding Effect of Company-Designated Physician's Findings: Yes. The company-designated physician's findings were upheld because Llanita did not properly question them: his doctor of choice did not declare him unfit for work or permanently and totally disabled, and the supposed conflicting assessments were not referred to a third doctor for final and binding resolution.

• Timeliness of Assessment: The Court applied the established four-part rule governing seafarer disability claims: (1) the company-designated physician must issue a final medical assessment within 120 days from the seafarer's report; (2) if no assessment is issued within 120 days without justification, the disability becomes permanent and total; (3) if there is sufficient justification (e.g., further treatment needed), the period extends to 240 days, with the employer bearing the burden of proving justification; and (4) if no assessment is issued within the extended 240-day period, the disability becomes permanent and total regardless of justification. The Court found that the company-designated physician assessed Llanita at Grade 10 and 50% of Grade 14 on August 13, 2010—95 days from injury and 84 days from repatriation—and reiterated those findings on September 25, 2010—138 days from injury and 127 days from repatriation. Both dates fall within the 120-day period. The CA erred in reckoning the period from the February 11, 2011 medical certificate, which was merely a restatement of the September 25, 2010 findings issued at counsel's request, not a new assessment. No further check-ups were required after September 25, 2010.

• Entitlement to Permanent and Total Disability Benefits: The Court clarified that the presumption of permanent and total disability after the lapse of the 120-day/240-day period arises only when the company-designated physician fails to issue a medical evaluation within the prescribed period. If within such period the company-designated physician issues a final and definitive evaluation that the seafarer suffers only from permanent and partial disability—as in this case—a claim for total and permanent disability cannot be sustained. The mere lapse of the 120-day/240-day period does not automatically entitle a seafarer to permanent and total disability benefits. The CA's reliance on the principle that disability is understood more as loss of earning capacity than medical significance was misplaced, because the company-designated physician had already issued a definitive assessment within the period. The NLRC committed no grave abuse of discretion, having judiciously reviewed the records and based its ruling on substantial evidence; the CA therefore had no basis to reverse and modify the NLRC's factual findings.

• Binding Effect of Company-Designated Physician's Findings: The Court acknowledged that the company-designated physician's findings are not automatically final or binding, as a seafarer has the prerogative to consult a doctor of his choice and seek a second opinion. If the findings of the seafarer's doctor differ from those of the company-designated physician, the dispute must be referred to a third doctor whose evaluation shall be final and binding. In this case, however, Llanita's doctor of choice, Dr. Te, did not state that Llanita was suffering from permanent and total disability or that he was unfit for work; the certificate merely advised further rehabilitation. Moreover, the supposed conflicting assessments were never referred to a third doctor. Given that Llanita did not properly question the company-designated physician's findings through the established mechanism, and that his own doctor's certificate—based on a single visit—deserved scant consideration compared to the company-designated physician's months of evaluation, the Court upheld the partial disability grading.

• 120/240-Day Period for Company-Designated Physician's Assessment — The company-designated physician must issue a final medical assessment on the seafarer's disability grading within 120 days from the time the seafarer reported to him. If the physician fails to give an assessment within 120 days without justifiable reason, the seafarer's disability becomes permanent and total. If there is sufficient justification (e.g., the seafarer required further medical treatment or was uncooperative), the period is extended to 240 days, with the employer bearing the burden of proving justification. If the physician still fails to give an assessment within the extended 240-day period, the disability becomes permanent and total regardless of any justification. In this case, the Court applied the doctrine by finding that the company-designated physician issued his assessment within the 120-day period, precluding the presumption of permanent and total disability.

• Conclusive Presumption of Permanent and Total Disability — The presumption that a seafarer is suffering from permanent and total disability after the lapse of the 120-day/240-day period arises only when the company-designated physician fails to issue a medical evaluation of the seafarer's fitness or unfitness within the prescribed period. If a final and definitive assessment is issued within the period—even one classifying the disability as partial—the seafarer's claim for total and permanent disability cannot be sustained. The mere lapse of the period does not automatically entitle a seafarer to maximum benefits.

• Non-Automatic Binding Effect of Company-Designated Physician's Findings; Third-Doctor Referral — The company-designated physician's assessment is not automatically final, binding, or conclusive on the claimant, labor tribunal, or courts. The seafarer may dispute the assessment by consulting a doctor of his choice for a second opinion. If the findings of the seafarer's doctor differ from those of the company-designated physician, the dispute must be referred to a third doctor, whose evaluation shall be final and binding on both parties. In this case, the doctrine was applied to uphold the company-designated physician's findings because the seafarer's own doctor did not issue a conflicting definitive assessment and the matter was not referred to a third doctor.

• Grave Abuse of Discretion as Basis for CA Review of NLRC Findings — Factual findings of labor officials exercising quasi-judicial functions are accorded great respect and even finality when supported by substantial evidence, but they are not infallible. The Court of Appeals may reverse or modify the NLRC's factual findings under Rule 65 only upon a clear showing of grave abuse of discretion—i.e., when the findings were arrived at arbitrarily or in disregard of the evidence on record. In this case, the NLRC committed no grave abuse of discretion, as its ruling was based on substantial evidence and a judicious review of the records.

• "Simply put, the presumption that the seafarer is suffering from a permanent and total disability after the lapse of the 120-day/240-day period only arises when the company-designated physician fails to issue a medical evaluation of the fitness or unfitness of the seafarer within the prescribed period. If within such period, the company-designated physician issues a final and definitive evaluation that the seafarer is only suffering from permanent and partial disability (such as in this case), then a seafarer's claim for total and permanent disability cannot be sustained." — This passage articulates the ratio decidendi: the conclusive presumption of permanent and total disability is triggered only by the failure to issue any assessment within the prescribed period, not by the mere lapse of time.

• "Clearly, therefore, the mere lapse of the 120-day/240-day period does not automatically entitle a seafarer to permanent and total disability benefits." — This sentence distills the Court's core holding and corrects the CA's erroneous application of the 120-day rule.

• "His assessment, however, is not automatically final, binding or conclusive on the claimant, the labor tribunal or the courts, as its inherent merits would still have to be weighed and duly considered. The seafarer may dispute such assessment by seasonably exercising his prerogative to seek a second opinion and consult a doctor of his choice." — This passage defines the doctrine on the non-automatic binding effect of the company-designated physician's findings and the seafarer's right to a second opinion, a principle frequently cited in seafarer disability jurisprudence.

• Elburg Shipmanagement Phils., Inc. vs. Quiogue, Jr., 765 Phil. 341 (2015) — Controlling precedent for the four-part rule governing the 120/240-day period within which the company-designated physician must issue a final medical assessment; the Court applied this framework to determine that the assessment was timely issued.
• Hubilla vs. HSY Marketing Ltd., Co., 823 Phil. 358 (2018) — Followed for the principle that the CA may overturn the NLRC's factual findings only upon a showing of grave abuse of discretion, i.e., when findings are arrived at arbitrarily or without substantial evidence.
• Andrada vs. Agemar Manning Agency, Inc., 698 Phil. 170 (2012) — Followed for the doctrine that the company-designated physician's assessment is not automatically final or binding and that the seafarer may consult a doctor of choice for a second opinion.
• Dionio vs. Trans-Global Maritime Agency, Inc., G.R. No. 217362, November 19, 2018 — Followed for the rule that conflicting assessments between the company-designated physician and the seafarer's doctor of choice must be referred to a third doctor whose evaluation is final and binding.
• Ilustricimo vs. NYK-Fil Ship Management, Inc., 834 Phil. 693 (2018) — Followed for the same third-doctor referral principle.
• Magsaysay Maritime Corporation vs. Simbajon, 738 Phil. 824 (2014) — Cited by petitioners for the propositions that disability benefits must be based on the POEA Standard Employment Contract schedule and that the company-designated physician's assessment deserves greater credence.
• Libres vs. National Labor Relations Commission, 367 Phil. 180 (1999) — Cited for the principle that the CA's jurisdiction under Rule 65 over NLRC decisions is confined to issues of want or excess of jurisdiction and grave abuse of discretion.
• Aldaba vs. Career Philippines Ship-management, Inc., 811 Phil. 486 (2017) — Cited for the exception allowing the Court to resolve questions of fact when the CA's findings differ from those of the NLRC and Labor Arbiter.

• POEA Standard Employment Contract — The governing contract under which the company-designated physician is tasked with assessing the seafarer's disability grading, and which provides the schedule of disability gradings (Grade 1 being permanent unfitness, through Grade 14). The Court applied the contract's disability grading schedule to confirm that Llanita's Grade 10 and 50% of Grade 14 ratings constitute partial, not total, disability.
• Rule 45, Rules of Court — The procedural vehicle for the petition, under which only questions of law are generally reviewable, with the exception that questions of fact may be resolved when the CA's findings differ from those of the labor tribunals.
• Rule 65, Rules of Court — The procedural basis for the CA's review of the NLRC decision, confining the CA's inquiry to whether the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction.

Gesmundo, C.J. (Chairperson), Caguioa, Carandang, and Zalameda, JJ., concurred.