SCOTTIE REGGS III, Employee/Cross-Appellant, v. KNUTSON CONSTR., and ST. PAUL COS., Employer-Insurer/Appellants, and MN DEP=T OF ECONOMIC SEC., Intervenor.
WORKERS= COMPENSATION COURT OF APPEALS
APRIL 29, 2003
NOTICE OF DISCONTINUANCE - TEMPORARY TOTAL DISABILITY - TERMINATION OF EMPLOYMENT - MISCONDUCT. Where the employee=s post-injury drug screening, required by the employer=s drug and alcohol screening policy, tested positive, and where the employee was discharged from employment due to his failure to attend recommended chemical dependency treatment, also required by the employer=s policy, and where the employer and insurer discontinued the employee=s ongoing temporary total disability benefits on the basis that the employee=s conduct constituted misconduct that terminated his entitlement to temporary total disability benefits, and also constituted a refusal of a job offer, the matter is remanded to the compensation judge for determination of whether the employee demonstrated that his work-related disability is the cause of his inability to find or hold new employment.
NOTICE OF DISCONTINUANCE - TEMPORARY PARTIAL DISABILITY. Where the employee objected to a discontinuance of temporary total disability benefits, where the issue to be addressed at hearing was whether the employer and insurer could discontinue temporary total disability benefits, and where the employee did not claim temporary partial disability benefits at this hearing, the compensation judge erred by addressing an issue not presented to him and the court vacates the denial of temporary partial disability benefits.
Vacated in part and remanded in part.
Determined by Rykken, J., Stofferahn, J., and Pederson, J.
Compensation Judge: James R. Otto
MIRIAM P. RYKKEN, Judge
The employer and insurer appeal from the compensation judge=s finding that the employee was entitled to temporary total disability benefits from April 22 to June 28, 2002. The employee cross-appeals from the compensation judge=s denial of temporary total and temporary partial disability benefits after June 28, 2002. We vacate in part and remand in part.
Scottie Reggs III, the employee, sustained an admitted work related injury on March 9, 2002, while employed as a carpenter by Knutson Construction, the employer, which was insured for workers= compensation liability by the St. Paul Companies. On that date, the employee was 51 years old and earned a weekly wage that entitled him to the maximum compensation rate. On March 9, 2002, the employee fell from scaffolding, sustaining a low back injury. He was treated at the emergency room of Regions Hospital in St. Paul, was diagnosed with rib fractures and transverse process fractures at the L2 and L3 levels, and remained hospitalized for three days.
Before the employee=s discharge from the hospital, the employer=s safety director visited the employee to advise him of light duty employment options the employer had available for him upon his release to return to work, and to arrange for the employee to undergo a drug screening pursuant to the employer=s written drug and alcohol testing policy. This policy required any employee who is involved in an accident involving personal injury or property damage to undergo a drug screening test. The employee agreed to that screening; the results were positive and the safety director thereafter notified the employee of his right to have the sample retested, which the employee declined. The employer also advised the employee, by letter, that in order to comply with the employer=s drug policy, he was expected to undergo substance abuse treatment at his own expense, and that failure to do so would result in a termination of his employment Afor violation of the company substance abuse program.@
After his hospitalization, the employee received follow-up medical treatment including a prescription for a back brace and pain medication, and was paid temporary total disability benefits. On March 19, the employee underwent a chemical dependency evaluation with a representative of the TEAM (Total Employee Assistance Management), an organization with which the employee=s trade union had contracted for such services. The purpose of that evaluation was to determine whether the employee needed chemical dependency treatment. A drug and alcohol counselor, licensed through the state of Minnesota, evaluated the employee and recommended that he enroll in an outpatient chemical dependency treatment program followed by a 12-step program. According to the counselor, the employee=s co-payment for the program would approximate $300.00, with the remainder being paid through the employee=s health insurance which he had available through his union. The employee did not contact the treatment facility to which he was referred, and did not enroll in a treatment program. He testified that he would have been unable to attend a treatment program shortly after his injury, as he would have been physically unable to sit during the treatment program sessions. He also testified that he could not pay the cost of the program.
By March 25, 2002, Dr. Dries, one of the employee=s treating physicians at Regions Hospital, released the employee to light duty work, with restrictions of no lifting for two weeks and no lifting over 10 pounds for six weeks thereafter; the employee did not return to work as of that date. In a report dated April 19, 2002, Dr. Thomas Lange, another one of his treating physicians at Regions Hospital, released the employee to return to light duty work as of April 22, at six hours per day, within revised restrictions. The employee testified that he provided this report of his physical work restrictions to a superintendent for the employer.
On April 19, the employee spoke with the safety director, who advised him that the employer would look for modified duty work for him. The record, however, contains no specific job offer or description of a job to be offered to the employee, and the employer=s safety director testified that he did not discuss a specific job with the employee, although the employee referred to a potential guard shack position during his testimony and the safety director testified about a potential guard shack position that would have complied with the employee=s work restrictions. On April 25, 2002, upon being informed that the employee had not entered the recommended chemical dependency treatment program, the employer=s safety director telephoned the employee to verify that information. Based on the employee=s failure to attend a treatment program, the employer advised the employee that his employment was terminated, as required by the employer=s alcohol and drug policy. The employer confirmed this termination in a letter dated April 29, 2002.
The employer and insurer paid temporary total disability benefits through April 22, 2002. Immediately after terminating the employee=s employment, on April 25, 2002, the employer and insurer filed a notice of intention to discontinue benefits (NOID), citing the following reasons:
Employee was released to work within restrictions by Dr. Lange . . . [e]ffective 4/19/02, to a light duty job developed for the employee by Knutson Construction Co. . . . Employee tested positive for marijuana and cocaine intoxication at the time of his injury. He has failed to follow up with chemical dependency treatment which has been recommended and which is required by employer=s written employment policies. Employee is therefore not eligible to return to the work made available for him by Knutson. Accordingly, the employee=s present unemployment is unrelated to his claimed work injury. He has effectively withdrawn himself from the employment market for reasons unrelated to his injury and would be employed at Knutson but for his personal decision not to follow up with recommended chemical dependency treatment. The employee, by his actions, has refused employment otherwise available to him, within his restrictions and has failed to exercise reasonable diligence to obtain employment within his restrictions. . . .[]
The employee filed an objection to discontinuance, and the matter was scheduled for a hearing on an expedited basis, pursuant to Minn. Stat. ' 176.238, subd. 6.
By approximately May 2, 2002, the employee commenced a job search for re- employment as a carpenter, by applying through his local union office. The employee testified that on April 19, 2002, his doctor first advised him that he could return to work and that he had not looked for work before April 19 because the employer had told him that they Ahad a job for me.@ The employee testified that by May 2, 2002, he believed he was physically able to work as a carpenter even though he still was subject to work restrictions resulting from his injury. The employee began receiving unemployment compensation during the week ending May 11, 2002, and by mid-June 2002 was provided rehabilitation assistance by the employer and insurer. On June 10, 2002, Dr. Lange reduced the employee=s restrictions, releasing him to full-time work within certain limitations, including the wearing of a back brace.
On June 20, 2002, Dr. David Boxall examined the employee at the request of the employer and insurer. Dr. Boxall determined that the employee=s injury of March 9, 2002, was a direct cause of his rib fracture and two transverse process fractures. He concluded that the employee would have been temporarily totally disabled from March 9 until approximately mid-April 2002. He concurred with the work restrictions assigned by the employee=s treating physician in April 2002, and opined that by mid-May 2002 the employee could have returned to work on a full-time light-duty basis. He further concluded that by June 20, 2002, the employee was able to return to work full time, including ten hours of overtime per week, with no restrictions pertaining to his lumbar spine or ribs. Dr. Boxall also concluded that the employee had reached maximum medical improvement from his injuries, and recommended no additional medical treatment. The employer and insurer served Dr. Boxall=s report on the employee on June 24, 2002, as notice that he had reached maximum medical improvement.
On June 28, 2002, Dr. Lange re-examined the employee, who reported oblique pain in the sacral area, improvement from wearing his lumbosacral corset, and an increase in his lifting ability and his ability to walk distances. Dr. Lange=s chart note stated that the employee reported he did not want to return to construction work where he would have to work at high places Aas he is quite fearful of falling and being re-injured by a fall.@ Dr. Lange assigned a restriction of no work on scaffolds or roofs and advised that the employee Awould be able to do light construction or indoor work.@ Dr. Lange also referred the employee for an orthopedic consultation with Dr. John Stark, for an assessment of nerve impingement and possible surgical lesion.
The initial day of hearing was held on July 10, 2002, with a second day of hearing held on July 19, 2002. Between hearing dates, on July 17, 2002, the employee began working as a carpenter, setting up tables and booths at a trade show. This was a full-time job, paying $27.06 per hour, which the employee obtained through his local union office.
At issue before the compensation judge was the employee=s entitlement to temporary total disability benefits after April 22, 2002. The employer and insurer argued to the compensation judge, and contend on appeal, that by failing to undergo chemical dependency treatment, required by the employer=s policy, the employee refused light-duty work that otherwise was available to him with the employer. Alternatively, the employer and insurer argued that the employee=s employment was terminated for misconductBfailure to attend chemical dependency treatmentBand that his misconduct extinguished his entitlement to temporary total disability benefits. The employer and insurer also argued that the employee was not totally disabled from employment nor did he make a diligent job search after April 22, 2002, and that he effectively withdrew from the labor market for reasons unrelated to his work injury. In his findings and order, the compensation outlined the issues as follows:
Whether Mr. Scottie Reggs III is entitled to receive benefits for temporary total disability from and after April 22, 2002 to date of hearing, or is disqualified because:
a.He refused work otherwise available to him by not attending and completing a chemical dependency treatment program after testing positive for marijuana and/or cocaine following his admitted injury of March 9, 2002; and/or
b.He was not totally disabled from all gainful employment from and after April 22, 2002 and his unemployment subsequent to April 22, 2002 was due to his failure to attend and complete a substance abuse treatment program; and/or
c.Mr. Reggs= termination was due to his failure to attend and complete a substance abuse treatment program as company policy required; and/or
d.Mr. Reggs did not make a reasonable or diligent effort to find work that he could do from and after April 22, 2002 and/or before that date; and/or
e.Mr. Reggs is not entitled to receive temporary total disability because he is 90 days post Maximum Medical Improvement; and in connection therewith; whether and when Mr. Reggs reached Maximum Medical Improvement.
f.Mr. Reggs did not have any physical restrictions due to his personal injury of March 9, 2002 on or after April 22, 2002; and/or
g.Mr. Reggs effectively withdrew from the active employment market for reasons unrelated to his personal injury of March 9, 2002; and/or
h.Mr. Reggs= termination from his employment with Knutson Construction was for misconduct sufficient to terminate any entitlement to temporary total disability from and after his termination.
The compensation judge found that the employee=s work-related injury to his low back on March 9, 2002, caused, significantly aggravated, or accelerated his pre-existing low back condition. Relying in part on the employee=s testimony, which he found to be fully credible, the compensation judge determined that the employee was physically unable to return to light duty work Areasonably available to him by his date-of-injury employer@ on April 23, 2002, but was able to return to light duty work by June 28, 2002. The compensation judge awarded temporary total disability benefits from April 23 to June 28, 2002, and denied the employee=s entitlement to either temporary total or temporary partial disability after June 28, 2002, finding as follows:
Mr. Reggs is disqualified from receiving benefits for temporary total disability or temporary partial disability after June 28, 2002 to date of hearing because he was not totally disabled after June 28, 2002 and because he refused work otherwise available to him by not participating in the recommended substance abuse treatment program or because he found work he could do effective July 17, 2002.
The compensation judge also determined that the employee had not yet reached maximum medical improvement from his injury of March 9, 2002, concluding that the specific nature of his injury was not fully ascertainable as of the date of hearing because the employee=s treating orthopedic surgeon, Dr. John Stark, had yet to examine the employee and make his diagnosis.
The employer appeals from the compensation judge=s award of temporary total disability benefits between April 22 and June 28, 2002. The employee cross-appeals from the compensation judge=s denial of wage loss benefits after June 28, 2002. We vacate in part and remand in part.
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).
Temporary Total Disability Benefits
The compensation judge awarded temporary total disability benefits between April 23 - June 28, 2002, but denied those benefits between June 29, 2002, and the date of hearing. The compensation judge found that the employee was entitled to temporary total disability benefits between April 23 and June 28, 2002, based on the employee=s credible testimony as to his symptoms, the findings on the MRI scan of June 7, 2002, the employee=s work restrictions before April 23, 2002, and Athe fact that he did not reapply for unemployment insurance until on or about May 7, 2002.@ He denied temporary total disability after June 28, 2002, based on three reasons: the employee was not totally disabled after June 28, 2002, Ahe refused work otherwise available to him by not participating in the recommended substance abuse treatment program@ and Ahe found work he could do effective July 17, 2002.@
The employer and insurer appeal from the award of benefits on three grounds: that the employee=s failure to undergo chemical dependency treatment constituted a refusal of an offer of employment within the employee=s work restrictions, that the employee was physically capable of performing light-duty work after April 22, 2002, and that the employee=s failure to undergo treatment also constituted misconduct that extinguished his entitlement to ongoing temporary total disability benefits.
The employer and insurer first argue that the employee=s failure to undergo chemical dependency treatment, required for continued employment by the employer=s drug and alcohol testing policy, constituted a refusal of a light-duty job offer. The employer and insurer argue that the employee is no longer entitled to temporary total disability benefits because he refused to accept light-duty employment that would have been available to him had he not failed to enter drug treatment, relying on Minn. Stat. 176.101, subd. 1(i), which states, in part, that
(i) Temporary total disability compensation shall cease if the employee refuses an offer of work that is consistent with a plan of rehabilitation filed with the commissioner . . . or, if no plan has been filed, the employee refuses an offer of gainful employment that the employee can do in the employee=s physical condition. Once temporary total disability compensation has ceased under this paragraph, it may not be recommenced.
When addressing the period of time from April 22 to June 28, 2002, the compensation judge focused on evidence concerning the employee=s medical condition and made no reference to his alleged refusal of a job offer. It is not evident whether the compensation judge considered the effect of the employee=s failure to undergo chemical dependency treatment on his ongoing entitlement to benefits between April 22 and June 28, 2002, and, specifically, whether that constituted a refusal of a job offer, in view of the employer=s policy that the employee=s return to work was contingent upon his attendance at chemical dependency treatment. The only reference in the findings to a refusal of a job offer is in the compensation judge=s denial of temporary total disability benefits after June 28, 2002, in part because the employee Arefused work otherwise available to him.@ But, based on the record, there was no job offer presented to the employee after April 22, 2002, and there was no ongoing employment relationship between the employer and employee after the employee=s job termination on April 22, 2002, as was implied by the compensation judge when he referred to the employee=s refusal of work still available to him by June 28, 2002.
Although not entirely clear, it appears that the compensation judge instead based his award of benefits on the employee=s incapacity to perform even light-duty work available with the employer. First of all, there was no light-duty work available after the employee=s job was terminated. And the record lacks support for a conclusion that the employee was physically incapable of performing any work during this period of time. No physician restricted the employee entirely from work during this period of time; by April 19, 2002, the employee=s treating physician released him to return to work with light-duty restrictions, and lessened those restrictions on June 7, 2002, and the employee testified that he considered himself physically able to return to construction work by May 2, 2002, the date when he began applying for other construction jobs.
Because it is unclear whether the compensation judge considered the effect, if any, of the employee=s failure to attend chemical dependency treatment and whether that constituted a refusal of a job offer under Minn. Stat. ' 176.101, subd. 1(i), we therefore remand to the compensation judge for reconsideration of that issue, and for reconsideration of the employee=s entitlement to temporary total disability benefits, as the judge=s conclusion on the job offer issue may affect his conclusions on the employer and insurer=s alternative arguments on appeal.
The employer and insurer argue, alternatively, that the employee=s discharge for misconductBfailure to comply with the employer=s alcohol and drug policyBwas justifiable and should suspend his entitlement to ongoing temporary total disability, citing to Marsolek v. George A. Hormel Co., 438 N.W.2d 922, 924, 41 W.C.D. 964, 968 (Minn. 1989). In Marsolek, the Minnesota Supreme Court has held that Aa justifiable discharge for misconduct suspends an injured employee=s right to wage loss benefits; but the suspension of entitlement to wage loss benefits will be lifted once it has become demonstrable that the employee=s work-related disability is the cause of the employee=s inability to find or hold new employment.@ The employer and insurer argue that the compensation judge erred by Anot determining whether the employee=s conduct constituted misconduct and then by not ruling as to what effect the employee=s conduct has on his entitlement to temporary total disability benefits from the date of discontinuance forward.@ (Er. Brief, P. 14.)
Once an employee is discharged for misconduct, as in Marsolek, a determination of whether an employee=s work-related disability is the cause of his inability to find or hold new employment, and therefore whether he is entitled to wage loss benefits, Ashould be made upon consideration of the totality of the circumstances including the usual work search >requirements.=" Marsolek, 438 N.W.2d at 924, 41 W.C.D. at 968. In this case, therefore, the question is whether the employee was justifiably discharged for misconduct so as to suspend his entitlement to temporary total disability benefits and whether the employee demonstrated thereafter, by conducting a diligent job search, that his wage loss was due to his work-related disability rather than his misconduct. As the supreme court stated in Redgate v. Sroga=s Standard Service, 40 W.C.D. 948, 421 N.W.2d 729 (Minn. 1988):
. . . a diligent job search remains relevant in determining total disability. The injured employee proves total disability by showing that work the employee is capable of doing is unavailable, and unavailability is shown by a diligent job search to no avail. A failure to make a diligent job search goes A to the evidentiary weight of the assertion that [the employee] is totally disabled.@ (Citation omitted.) . . .[A]n employee . . . must prove total disability by showing unavailability of suitable work after a diligent search.
Id. at 954, 421 N.W.2d at 733 (citing Schulte v. C.H. Peterson Construction Co., 278 Minn. 79,153 N.W.2d 130, 24 W.C.D. 290 (1967)). In this case, the compensation judge made no findings concerning the employee=s job search after April 22, 2002.
It is not clear from the findings and order whether the compensation judge fully considered the issues outlined at the hearing. We therefore vacate the compensation judge=s award of temporary total disability benefits from April 23 to June 28, 2002, and vacate his denial of benefits after June 28, 2002. We remand for a reconsideration of the issue, including a determination whether the employee=s failure to undergo the recommended chemical dependency treatment constituted a refusal of a job offer and, if so, what is the effect, if any, of that refusal on the employee=s entitlement to ongoing temporary total disability benefits. We also remand for determination of whether, through his job search after April 22, the employee demonstrated that his work-related disability was the cause of his inability to find or hold new employment. The compensation judge should base his decision on the existing record.
Temporary Partial Disability Benefits
The compensation judge also found that the employee was not entitled to temporary partial disability benefits after June 28, 2002, even though temporary partial disability benefits were not at issue. The hearing was set to address the employee=s objection to discontinuance of temporary total disability benefits, and the parties agreed that the issue to be addressed at hearing was whether the employer and insurer could discontinue temporary total disability benefits as of April 23, 2002. The employee became re-employed on July 17, 2002, three days before the second day of hearing. The employee did not claim temporary partial disability benefits at this hearing, and the compensation judge erred by addressing an issue not presented to him. See e.g., Kulenkamp v. Timesavers, Inc., 420 N.W.2d 891, 894, 40 W.C.D. 869, 872 (Minn. 1988) (Abasic fairness requires that the parties in a workers= compensation proceeding be afforded reasonable notice and an opportunity to be heard before decisions concerning entitlement to benefits can be made@); see Minn. Stat. ' 176.371 (A[a]ll questions of fact and law submitted to a compensation judge at hearing shall be disposed of . . . .@). We therefore vacate the compensation judge=s denial of temporary partial disability benefits.
 The employer and insurer also appealed from the compensation judge=s finding that the employee has not yet reached maximum medical improvement from his March 9, 2002, injury. Since they did not address that issue in their brief on appeal, we consider that issue to be waived. Pursuant to Minn. R. 9800.0900, subp. 1, A[i]ssues raised in the notice of appeal but not addressed in the brief shall be deemed waived and will not be decided by the court.@
 To clarify, Dr. Lange=s April 19, 2002, note entitled ARamsey Report of Work Ability Form@ lists specific work restrictions, and states in the margin: AGuard Shack OK.@
 In the NOID, the employer and insurer also alleged that the employee=s intoxication was the proximate cause of his injury and therefore denied compensability. However, at the hearing, the employer and insurer withdrew that defense for purposes of the discontinuance hearing.
 The employee apparently was scheduled for an examination with Dr. Stark on July 26, 2002, one week post-hearing.
 Although on June 7, 2002, Dr. Lange referred the employee for an MRI scan, that scan was not conducted until July 3, 2002.
 The employer and insurer also argue that the employee=s failure to abide by the employer=s policy by undergoing chemical dependency treatment constituted Amisconduct@ that extinguished his entitlement to ongoing temporary total disability benefits. The employer and insurer cite to, by analogy, Minn. Stat. ' 176.101, subd. 1(e)(1), which states that
if temporary total disability compensation ceased because the employee returned to work, it may be recommenced if the employee is laid off or terminated for reasons other than misconduct if the layoff or termination occurs prior to 90 days after the employee has reached maximum medical improvement.
We find this provision to be inapplicable to this case. The statute precludes recommencement of temporary total disability benefits after an employee has returned to work and then is discharged for misconduct, and does not apply to terminate an employee=s ongoing entitlement to temporary total disability benefits. In this case, the employee did not return to work for the employer after his injury, so the statutory provisions concerning cessation and recommencement of benefits do not apply and are not determinative of the employee=s claim in the present case for ongoing temporary total disability benefits.