DAVID J. GUSTAFSON, Employee, v. ROOS-FRICK, INC., SELF-INSURED/MEADOWBROOK INS. GROUP, Employer/Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
JUNE 23, 2003
NOTICE OF DISCONTINUANCE - PRACTICE AND PROCEDURE - STATUTES CONSTRUED - Minn. Stat. '' 176.238 and 176.239. Where the self-insured employer failed to file a notice of intention to discontinue benefits and did not comply with a compensation judge=s earlier Order on Discontinuance, the compensation judge did not err by concluding that the employer improperly discontinued benefits and by awarding reinstatement of temporary total disability benefits.
Affirmed in part, modified in part.
Determined by Rykken, J., Wilson, J., and Pederson, J.
Compensation Judge: James F. Cannon
MIRIAM P. RYKKEN, Judge
The self-insured employer appeals from the compensation judge=s award of temporary total disability benefits after September 19, 2001, and from the compensation judge=s finding that the employer failed to file a notice of intention to discontinue benefits and did not comply with a compensation judge=s Order on Discontinuance. We affirm in part and modify in part.
On December 8, 2000, David Gustafson, the employee, sustained a work-related left shoulder injury while working as a painter for Roos-Frick, Inc., the self-insured employer. On that date, the employee was 52 years old and earned a weekly wage that entitled him to a base compensation rate of $426.00. The employee initially treated with Dr. David Carlson of Orthopedic Surgical Consultants, P.A., who diagnosed rotator cuff impingement syndrome and associated acromioclavicular degenerative arthritis. Various conservative treatments did not alleviate the employee=s symptoms, and on February 27, 2001, Dr. Carlson performed a left shoulder acromioplasty and distal clavicle excision. On April 24, 2001, Dr. Carlson released the employee to return to work without restrictions, and by April 26, 2001, the employee returned to work at his regular job as a painter. On April 30, 2001, the employer filed a notice of intention to discontinue benefits (NOID) based upon the employee=s return to work at full wage. The employer paid temporary total disability benefits from January 22, 2001 through April 25, 2001.
After a few days at work, however, the employee noticed pain in his left shoulder although he did not immediately report this to the employer. The employee did not work on May 7, 2001, but informed the employer that he was having problems with his shoulder; the employee has not returned to work for the employer since May 7, 2001. On May 9, 2001, the employee consulted his family physician, Dr. William Hammes, and reported continued symptoms. Dr. Hammes recommended work restrictions of no lifting, carrying, pushing/pulling with the left arm, no overhead reaching, and no ladder or stair climbing.
On May 14, 2001, Dr. Carlson completed a Health Care Provider Report form in which he indicated the employee had reached maximum medical improvement (MMI) and had sustained 2% permanent partial disability of the whole body. The employer served the employee with notice of MMI on June 21, 2001, and also served him with a Notice of Benefit Payment, advising of payment of benefits based on a 2% rating.
On May 29, 2001, the employee consulted Dr. Kayvon Riggi for a second opinion concerning his left-sided shoulder and neck pain. In his chart note dated June 5, 2002, Dr. Riggi advised the employee that Ait is very normal for pain to wax and wane, especially with activity, for the first three to six months following surgical intervention; in fact, it will take a full year from the time of surgery to reach maximum medical improvement (i.e., to be able to judge his final outcome),@ and that he expected the employee=s pain to gradually improve for a full year. Dr. Riggi recommended that the employee return to Dr. Carlson for consultation on a postoperative rehabilitation program, work restrictions and determination of final disability status.
The employee remained off work. He objected to the discontinuance of temporary total disability benefits noted in the employer=s NOID of April 30, 2001, and therefore an administrative conference was held on June 14, 2001. By Order on Discontinuance Pursuant to Minn. Stat. ' 176.239, served and filed on June 18, 2001, a compensation judge determined there were reasonable grounds to discontinue the employee=s total temporary disability benefits, and allowed discontinuance of the employee=s temporary total disability benefits. The employee objected to the discontinuance and a hearing was scheduled for August 23, 2001.
In the interim, on July 18, 2001, the employee consulted with an orthopedic surgeon, Dr. Peter Daly, at Dr. Hammes=s referral. Dr. Daly found full range of motion but crepitus and tenderness over the AC joint, evidence of mild to moderate deltoid deficiency and positive impingement sign. Dr. Daly recommended additional physical therapy and deferred any assignment of work restrictions to Dr. Hammes. On August 10, 2001, the employee underwent a pain clinic consultation with Dr. Barbara Seizert, Sister Kenny Institute, also at Dr. Hammes=s referral. Dr. Seizert recommended restrictions extending until October 31, 2001, of no lifting over 20 pounds with the left arm, no overhead reaching, and no resisted abduction or external rotation. Dr. Seizert apparently also recommended a type of physical therapy that the employee was scheduled to commence in late August 2001.
On August 23, 2001, a hearing was held before Compensation Judge Paul Rieke on the limited issue of whether the employer could discontinue benefits on the basis that the employee was released to return to work by Dr. Carlson with no work restrictions. In his Findings and Order, served and filed on August 24, 2001, the judge found that the employee was unable to perform his regular job, that the employee had work restrictions, that the employer had not provided work within his restrictions, and therefore that the employee=s temporary total disability benefits should not have been discontinued. The employer appealed from the judge=s decision.
During the pendency of the appeal, between November 7 and December 31, 2001, the employee returned to work for a different employer. He remained off work again between January 1 and July 15, 2002, when he returned to work for another employer.
On May 2, 2002, the Workers= Compensation Court of Appeals issued its decision on appeal, affirming Judge Rieke=s decision that the employee=s benefits should not have been discontinued based on his finding that the employee=s pain and disablement related to his work injury prevented him from resuming his job with the employer and limited him to work within physical restrictions. No appeal was taken from this court=s decision. Gustafson v. Roos-Frick, Inc., slip op. (W.C.C.A. May 2, 2002).
The self-insured employer reinstated payment of temporary total disability benefits from May 5, 2001 to September 19, 2001, the date that signified the expiration of the 90-day period following service of notice to the employee that he had reached maximum medical improvement. See Minn. Stat. ' 176.101, subd. 1(j). On May 10, 2002, at the time the employer paid those benefits, the employer filed a Notice of Benefit Payment (NOBP), but did not file a NOID, nor did the employer list any basis in the NOBP for its limitation of benefits through September 19, 2001. Following receipt of the NOBP, the employee objected to the discontinuance or nonpayment of benefits after September 19, 2001, and requested an administrative conference. At that conference, held before Compensation Judge Penny Johnson on June 6, 2002, the employer argued that it did not file another NOID when it reinstated benefits through September 19, 2001, because it was not discontinuing benefits, that no benefits were being paid to the employee while the case was on appeal to the WCCA, and that a NOID in May 2002 would have been inappropriate because there were no current benefits in contention.
Following the conference, Judge Johnson issued an Order on Discontinuance, ruling that there were not reasonable grounds to discontinue the employee=s temporary total disability benefits after September 19, 2001, absent a filing of an NOID. She held that the employer=s discontinuance of the employee=s TTD benefits was improper because the employer failed to file a NOID specifying any basis for discontinuance of TTD benefits as required by Minn. Stat. ' 176.238, subd. 1. Judge Johnson ordered reinstatement of TTD benefits to the date of the conference and continuing, as warranted. She stated that
A Notice of Intention to Discontinue Benefits continues to be required when the insurer alleges a new basis to discontinue benefits, both when benefits are currently being paid and when benefits may ultimately be awarded for the current time period following litigation. The filing of a notice preserves the insurer=s right to claim another basis for discontinuing benefits should benefits be awarded as a result of the litigation. Had the insurer filed a new NOID in this case on another basis (MMI, job search, removal from the labor market), a conference on those issues could have been deferred pending the outcome of the appeal. When benefits were ultimately awarded, a conference would be scheduled to resolve the issues. Because a NOID was not filed regarding any of the additional bases alleged by the insurer, the insurer is obligated to make continuing payments until a notice is filed. Therefore, continuing temporary total benefits from September 19, 2001, are due. The insurer has not filed the required documents to discontinue benefits.
However, the employer did not resume payment of the employee=s temporary total disability benefits. Instead, the employer filed a petition to discontinue benefits on June 17, 2002, and an expedited hearing was scheduled for August 14, 2002. In its petition to discontinue, the employer contended as follows:
That the Order of Judge Johnson is not in conformity with the Minnesota workers= compensation statute and fails to take into account, that the Employee abandoned his job with the above-named Employer, removed himself from the labor market by moving to Florida, has been working, therefore, is not entitled to temporary total disability benefits as ordered by Judge Johnson, has not conducted a diligent effort to find suitable employment and is 90 days post service and filing of MMI. Here, the Employee=s treating physician was Dr. David Carlson and his report stating the Employee reached maximum medical improvement was served on June 21, 2001, therefore, the Self-Insured Employer has paid benefits through 90 days post service of Dr. Carlson=s report and as such, the Employee is not entitled to additional temporary total disability benefits.
In July 2002, the employee filed a claim petition and rehabilitation request, in which he sought payment of temporary partial disability benefits, permanent partial disability benefits, payment of medical expenses, a request for a QRC consultation, rehabilitation services and a claim for penalties related to the self-insured employer=s discontinuance of benefits. Although the employee moved for consolidation of his claims with the employer=s petition to discontinue, that motion was denied. As a result, the hearing on August 14, 2002, held before Compensation Judge James Cannon, was limited to the employer=s petition to discontinue workers= compensation benefits.
In a Findings and Order served and filed September 27, 2002, Judge Cannon found that the self-insured employer had failed to comply with Judge Johnson=s earlier Order on Discontinuance by failing to reinstate payment of the employee=s temporary total disability benefits. Judge Cannon concluded that the employer was legally required to file a NOID at the time it discontinued the employee=s TTD benefits and was legally required to comply with Judge Johnson=s order of June 10, 2002. Judge Cannon therefore awarded TTD benefits to the employee for the periods of time he was off work following September 19, 2001, the date the employer discontinued benefits: September 19 through November 6, 2001, and January 1 through July 14, 2002. The employee returned to work for another employer on July 15, 2002, and for that reason the compensation judge allowed a discontinuance of benefits as of July 14, 2002.
The employer appeals, arguing that, in view of the facts of this case, an NOID was not required at the time it paid benefits, that it was proper to file an NOBP when it paid benefits, and that no temporary total disability benefits were owed beyond September 19, 2001.
STANDARD OF REVIEW
On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted." Minn. Stat. ' 176.421, subd. 1 (1992). Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate." Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
"[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers' Compensation Court of Appeals] may consider de novo." Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
Following receipt of this court=s decision affirming Judge Rieke=s award of temporary total disability (TTD) benefits, the employer paid benefits retroactively between May 5, 2001, and September 19, 2001. Relying on Minn. Stat. 176.101, subd. 1(j), the employer argues that no benefits were due after September 19, 2001, as that signified the end of the 90-day period following the employer=s service of notice of MMI. However, Compensation Judge Cannon found that the employer improperly discontinued benefits, because it failed to file an NOID and failed to comply with an order on discontinuance, and awarded the employee temporary total disability benefits for the periods of time in 2001 and 2002 when the employee was off work. Judge Cannon concluded that it was not appropriate for the self-insured employer to discontinue temporary total disability benefits by filing an NOBP, pursuant to Minn. R. 5220.2630, subps. 1 and 3, and stated that Aan NOBP is only appropriate when there is a final payment under an award, order or stipulation@ (emphasis in the original), and that the employer=s lump sum payment did not represent a final payment of temporary total disability benefits. Citing to Minn. R. 5220.2630, subp. 2 and 4, and Minn. Stat. ' 176.238, subd. 1 and 2(b), Judge Cannon concluded that once the employer has commenced payment of benefits, the employer may not discontinue payment of compensation until it provides the employee with notice in writing of intention to do so. Further, Minn. Stat. ' 176.238, subd. 2(b) states that in discontinuances for reasons other than return to work the employer=s liability to pay compensation continues until the NOID is filed. Accordingly, Judge Cannon found that
the self-insured employer was legally required to file an NOID when it discontinued the employee=s temporary total disability benefits effective as of September 19, 2001. Judge Cannon also found that the employer was legally required to comply with Judge Johnson=s Order on Discontinuance of June 10, 2002.
The issue on appeal, therefore, concerns the legal effect of the employer=s failure to file an NOID and failure to comply with an Order on Discontinuance. On appeal, the employer argues that, as a matter of law, it was not required to pay TTD benefits beyond September 19, 2001, and that the compensation judge erred in awarding the TTD benefits. The employer argues that it acted appropriately by filing an NOBP and that no NOID was required, because at the time it served notice of MMI on June 21, 2001, TTD benefits had already been discontinued pursuant to the initial order on discontinuance filed on June 18, 2001. The employer also argues that its payment issued on May 10, 2002, was a final payment reflecting the remaining benefits owed for the 90-day period post-MMI, that an NOBP was appropriate, and furthermore that Dr. Carlson=s MMI opinion letter, attached to the NOBP, apprised the employee of the basis for the limited payment of TTD benefits. Finally, the employer argues that based on Minn. Stat. ' 176.239, subd. 3, benefits were not payable through the date of the administrative conference of June 2, 2002, due to unusual circumstances (employee=s part-time work in August 2001, alleged lack of job search and alleged removal from labor market).
The employee contends, by contrast, that the employer=s failure to comply with Judge Johnson=s order render the employer liable, as a matter of law pursuant to Minn. Stat. '' 176.238 and 176.239, for payment of the TTD benefits awarded by Judge Cannon. We agree. Temporary total disability benefits are due under the provisions of Minn. Stat. '' 176.238 and 176.239, and related rules. Judge Rieke=s earlier decision, and this court=s affirmance of that decision, ordered continuing payment of benefits, and therefore triggered the employer=s ongoing liability for payment of TTD. Judge Johnson=s order for reinstatement of benefits confirmed the employer=s ongoing liability.
This court has said on several occasions that a compensation judge=s order for benefits through the date of hearing Aand continuing@ triggers the need to comply with the statutory provisions on discontinuance. Minn. Stat. ' 176.238, subds. 1 and 2, provide that AExcept as provided in section 176.221, subdivision 1, once the employer has commenced payment of benefits, the employer may not discontinue payment of compensation until it provides the employee with notice in writing of intention to do so,@ and that A[t]he notice to the employee and the copy to the division shall state the date of intended discontinuance and set forth a statement of facts clearly indicating the reason for the action.@
In this case, the employer filed a NOBP, but did not file an NOID as required by the statute, nor did it provide an explanation for the discontinuance of benefits after September 19, 2001, even though the employer was apparently discontinuing benefits based on expiration of the 90-day period post-service of notice of MMI. After the administrative conference held on June 6, 2002, Compensation Judge Penny Johnson ordered continued payment of TTD benefits. Pursuant to Minn. R. 5220.2640, subp. 3, the employer was liable, at a minimum, for payment of TTD benefits through the conference on June 6, 2002. And, as determined by Judge Cannon, pursuant to Minn. Stat. ' 176.239, the order on discontinuance issued after that conference required the employer to pay ongoing TTD benefits to the employee.
Minn. Stat. ' 176.239, subd. 9, states, in part, that
The commissioner=s decision under this section is binding upon the parties and the rights and obligations of the parties are governed by the decision.
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If the commissioner has denied a discontinuance or otherwise ordered commencement of benefits, the employer shall continue paying compensation until an order is issued by a compensation judge, the court of appeals, or the supreme court[.]
In addition, if an employer files a petition to discontinue benefits, the Aemployer shall continue payment of compensation until the filing of the decision of the compensation judge and thereafter as the compensation judge, court of appeals, or the supreme court directs. . .@ Minn. Stat. ' 176.238, subd. 5. Judge Cannon concluded that the employer should have reinstated payment of temporary total disability benefits as required under Judge Johnson=s Order on Discontinuance. He also concluded that if the employer had been successful on any basis for discontinuance following a hearing, it then could have claimed a credit for overpayment of temporary total disability benefits against any benefits payable to the employee currently or in the future, pursuant to Minn. Stat. ' 176.179. Judge Cannon awarded payment of ongoing TTD benefits between September 19 and November 6, 2001, and again from January 1 through July 14, 2002, those periods when the employee was not working. He did not err in awarding benefits during those periods of time, and we therefore affirm that award. Therefore, the employer must reinstate payment of temporary total disability benefits from September 19, 2001, and pay those benefits as ordered by Compensation Judge Cannon.
The employer also argues that the compensation judge should have considered the bases for discontinuance listed in its petition to discontinue--the employer=s contentions that the employee had abandoned his job with the employer, removed himself from the labor market by moving to Florida, and had not conducted a diligent effort to find suitable employment. However, at hearing the parties presented oral argument focusing on the issues originally addressed by the order on discontinuance; no testimony and only very limited documentation was presented in support of the employer=s additional defenses to payment of TTD benefits. In view of the arguments presented at the hearing and in view of the compensation judge=s discontinuance of benefits after July 14, 2002, we find no error in the judge=s failure to address the additional issues listed in the employer=s petition to discontinue. The employer can still raise these issues as part of the litigation on the pending claim petition. Cf. Zerwas v. St. Paul Structural Steel Co., slip op. (W.C.C.A. Jan. 28, 1994).
Modification of Finding No. 7
The employer also appeals from the wording of the compensation judge=s Finding No. 7, asserting that Compensation Judge Cannon=s finding does not accurately state the order for payment issued by Compensation Judge Rieke in his findings and order of August 24, 2001. We agree. Although the wording of Judge Cannon=s Finding No. 7 does not materially differ from Judge Rieke=s finding nor does it alter the effect of that order, we modify Finding No. 7 to read as follows:
7. On June 29, 2001, the employee filed an Objection to Discontinuance, and an expedited hearing on the Objection to Discontinuance was held on August 23, 2001. On August 24, 2001, Compensation Judge Paul V. Rieke issued a Findings and Order, in which he held that based on a preponderance of the evidence at the hearing the employee still had physical work restrictions due to the work-related injury, and ordered the self-insured employer to pay all appropriate wage loss benefits provided by statute to the employee from the date of the discontinuance subject to the employee=s attorney=s fee provided herein.
(Added words are italicized.)
Modification of Finding No. 21
At Finding No. 21, Compensation Judge Cannon referred to the employee=s entitlement to temporary partial disability benefits for those periods he worked after September 19, 2001. The employee=s claim for temporary partial disability was not at issue at the hearing before Compensation Judge Cannon, and is being litigated separately through a claim petition. It appears, therefore, that any reference to temporary partial disability benefits was inadvertent and represents a typographical error, and we therefore modify Finding No. 21 to delete the statement that the employee is not entitled to temporary partial disability benefits for certain periods of time.
Credit due for Overpayment
In August 2001, the employee apparently returned to work on a temporary, part-time basis. At Order No. 2, and pursuant to Minn. Stat. ' 176.179, Judge Cannon ordered a credit to the employer for its overpayment of temporary total disability benefits mistakenly paid for a portion of August 2001.
Neither party appeals Judge Cannon=s order for a credit for an overpayment. However, the employer requests that this matter be remanded so that Order No. 2 can be clarified or modified to reflect the exact amount of credit due to the employer.
We agree that the record does not contain adequate information on which to calculate the amount of credit owed to the employer. The record contains the employee=s tax returns from 2001, but no specific wage information reflecting the wages earned in August 2001. We affirm the compensation judge=s order for a credit for an overpayment. However, if the parties cannot reach agreement on the amount of credit due to the employer, they can submit this issue to the compensation judge for determination at the upcoming hearing on the employee=s pending claim petition.
The record does not indicate whether Dr. Carlson examined the employee after April 24, 2001.
Although not clear from the record, it appears that this information was disclosed or became known to the employer at the hearing held on August 14, 2002, and through an exhibit attached to the employee=s post-hearing brief.
Minn. R. 5220.2630, subp. 1-4, state, in part, as follows:
5220.2630. Discontinuance of Compensation
Subpart 1. Generally. When an insurer proposes or intends to reduce, suspend, or discontinue an employee=s benefits, it shall file one of the following documents described in this part. A form need not be filed when an insurer increases or decreases an employee=s periodic temporary partial benefit due to changes in the employee=s earnings while employed, provided that a payment continues to be made based on the employee=s actual earnings.
Subp. 2. Petition
The filing of a petition to discontinue compensation with the division under part 1415.1000 and Minnesota Statutes, section 176.238, subdivision 5, commences a formal action to reduce, suspend, or discontinue compensation.
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Subp. 3. Notice of benefit payment.
A. The employer or insurer may make a lump sum or final payment of the benefit indicated by the filing of a notice of benefit payment with the division and service of the notice on the other parties at the time that the payment occurs when the payment represents:
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(3) a final payment under an award, order, or stipulation.
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Subp. 4. Notice of intention to discontinue benefits.
A. To discontinue temporary total, temporary partial, or permanent total benefits in situations not specified in subpart 3, the employer or insurer must serve upon the employee and filed with the division a notice of intention to discontinue benefits or a petition under subpart 2.
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B. A notice of intention to discontinue benefits must be fully completed and on the form prescribed by the commissioner, containing substantially the following:
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(5) the legal reason or reasons for the proposed discontinuance or reduction, stated in language which may easily be read and understood by a person of average intelligence and education, and in sufficient detail to inform the employee of the factual basis for the discontinuance or reduction;
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C. The liability of the insurer to make compensation payments continues at least until the notice of intention to discontinue benefits is received by the division and served on the employee and the employee=s attorney, except that benefits may be discontinued on the date the employee returned to work and temporary partial benefits may be discontinued as of the date the employee ceased employment. . . .
See Dills v. Seco, Inc., slip op. (W.C.C.A. Nov. 14, 1996); Kimber v. Michael Osterman, Sr., slip op. (W.C.C.A. Aug. 13, 1996); Donnahue v. Glory Shine Cleaning, Inc., slip op. (W.C.C.A. June 13, 1996). See also Minn. R. 5220.2720, subp. 1C (allowing assessment of a penalty for improper discontinuance where Athe discontinuance occurred without notice despite a final decision of a compensation judge . . . requiring payment of ongoing benefits@).
Although Judge Johnson=s order reinstated payment after September 19, 2001, the employee does not appeal from Judge Cannon=s denial of benefits between November 7 and December 2001 and after July 14, 2002, and therefore we do not address whether the employee is entitled to benefits for those periods of time.