WARREN F. SHELTON, Employee/Appellant, v. INDEPENDENT SCH. DIST. #625, SELF-INSURED/PREFERRED WORKS, Employer, and TWIN CITIES SPINE CTR. and FAIRVIEW HEALTH SERVS., Intervenors.
WORKERS= COMPENSATION COURT OF APPEALS
AUGUST 6, 2003
REHABILITATION - COOPERATION; TEMPORARY TOTAL DISABILITY. The compensation judge erred in denying temporary total disability benefits on job search grounds where the employee was cooperating with rehabilitation assistance during the period at issue.
PENALTIES. Under the circumstances of this case, the compensation judge did not err in awarding a 10% penalty under Minn. Stat. ' 176.225, subd. 1, rather than a 25% penalty under Minn. Stat. ' 176.225, subd. 5.
Affirmed in part and reversed in part.
Determined by Wilson, J., Rykken, J., and Pederson, J.
Compensation Judge: Paul V. Rieke.
DEBRA A. WILSON, Judge
The employee appeals from the compensation judge=s findings denying temporary total disability benefits for certain periods and awarding a penalty of only an additional 10%. We affirm in part and reverse in part.
The employee sustained a work-related injury to his lumbar spine on October 21, 1994, while working for Independent School District #625 [the employer], which was self-insured for workers= compensation liability. In February of 2000, the employee filed a claim petition seeking approval of back surgery. On September 15, 2000, Dr. Manuel Pinto performed a two-level fusion at L4-5 and L5-S1, which he opined was necessitated by the employee=s work injury. The matter proceeded to hearing, and, in findings filed on November 28, 2000, a compensation judge of the Office of Administrative Hearings found that all medical expense claims related to the surgery at L4-5 were compensable but that medical expense claims related to the surgery at L5-S1 were not. Both parties appealed from that decision. On September 17, 2001, this court issued a decision affirming the compensation judge, and the Minnesota Supreme Court affirmed that decision on January 23, 2002.
In the meantime, during the course of the litigation, the employee underwent physical therapy. On February 1, 2001, Dr. Pinto noted that the employee was scheduled to start a work hardening program and that, at the completion of the program, a return to work could be considered. Shortly thereafter, the employee relocated to Texas. The employee returned to see Dr. Pinto for a six-month evaluation on March 23, 2001, at which time Dr. Pinto noted that the employee Awill complete the work hardening program and return to work with the restrictions established by the therapist involved in his work hardening program.@ That same office note reflected that the employee was to begin work hardening in April. However, it was not until September 24, 2001, that the employee was first seen at the Texas Back Institute and began a reconditioning program.
On December 17, 2001, the employee met with Dawn Campbell, a vocational rehabilitation counselor with the Texas Rehabilitation Commission [TRC], and, on January 29, 2002, a functional capacity evaluation [FCE] was performed, which showed the employee to be functioning in the light to medium work category. The recommendation coming out of the FCE was that the employee attend a six-week work hardening program and work with TRC for assistance with vocational counseling. The work hardening program apparently began immediately, and April 16, 2002, office notes from the Texas Back Institute reflect that the employee had finished the work hardening program and that he was to continue to work with TRC to Ahopefully get him back to gainful employment.@ A work hardening exit evaluation indicated that the employee was demonstrating physical capabilities in the medium work category. Meanwhile, Ms. Campbell had interviewed the employee and scheduled vocational and psychological evaluations, which the employee attended in March of 2002. On April 22, 2002, based on the evaluations and the employee=s choice of vocations, Ms. Campbell approved the employee for retraining as a music teacher. The employee filed a claim petition on April 30, 2002, seeking temporary total disability benefits continuing from September 15, 2000, and permanent partial disability benefits.
On August 8, 2002, the employee informed Ms. Campbell that he would like to delay entry into college until the spring of 2003 due to some family responsibilities. The employee began work for Total Enterprises as a shuttle driver in October of 2002. On November 18, 2002, the employer and insurer filed a notice of benefit payment, indicating that it had voluntarily paid benefits for a 12% permanent partial disability of the whole body as well as temporary total disability benefits for the period September 15, 2000, through December 17, 2001.
The claim petition went to hearing in January of 2003, at which time the parties stipulated that maximum medical improvement [MMI] had been reached and notice served on May 9, 2002. In addition to claims raised in the claim petition, the employee was alleging entitlement to the maximum penalty available under Minn. Stat. ' 176.225 for the employer=s wrongful delay in paying benefits. In findings and order filed on February 11, 2003, the compensation judge found, in relevant part, that the employee did not reasonably pursue physical or vocational rehabilitation efforts from March 23, 2001, through September 23, 2001, and was not entitled to temporary total disability benefits during that period, that the employee did not make a reasonably diligent effort to find suitable work from May 1, 2002, to August 7, 2002 (90 days post-MMI), and was not entitled to temporary total disability benefits during that period, and that a penalty of an additional 10% was reasonable for the employer=s unreasonable delay in paying benefits for wage loss and permanency. The employee appeals.
STANDARD OF REVIEW
In reviewing cases on appeal, the Workers= Compensation Court of Appeals must determine whether Athe 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, Athey 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, A[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975). Findings of fact should not be disturbed, even though the reviewing court might disagree with them, Aunless 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.@ Id.
1. Temporary Total Disability
The employee contends that the lack of a smooth transition from treatment with Dr. Pinto in Minnesota to the Texas Back Institute was due solely to the employer=s failure to approve the program. However, the employee testified that he was aware of the Texas Back Institute in November of 2000, when he first began considering a move to Texas. When asked why he did not pursue treatment with the Texas Back Institute before September 2001, he testified, AI needed to find where it was, and I finally found where it was. And two, I was continuing with what Dr. Pinto had set me up with, doing my own workout at home and walking.@ Given the employee=s own testimony, substantial evidence supports the compensation judge=s finding that the employee did not reasonably pursue physical rehabilitation from March 23, 2001, through September 23, 2001, and that he is not entitled to temporary total disability benefits during that period.
The judge=s denial of temporary total disability benefits from May 1, 2002, to August 7, 2002 (90 days post-MMI), is more problematic. The employee testified that he was released from his work hardening program in May of 2002 and started to look for work at that time. The judge=s finding that the employee did not present any job logs and was not able to indicate many specific places where he looked for work suggests that the judge did not find the employee=s testimony regarding job search to be credible.
The compensation judge also noted, however, that the employee was working with TRC from December 1, 2001, through January 15, 2002, and from February 26, 2002, until approximately May 1, 2002, in efforts to become employable and employed. TRC records reflect that efforts were directed toward retraining and not a job search. There is no evidence that the employer attempted to provide rehabilitation assistance to the employee or objected to the direction that the employee=s rehabilitation took in Texas. At oral argument, counsel for the employer argued that the employee did not request rehabilitation assistance from the employer, that the employer did not know that the employee had relocated to Texas, and that the employer therefore did not have the opportunity to provide or monitor rehabilitation services. We are not persuaded.
The employer had notice of the employee=s move to Texas when the claim petition was filed on April 30, 2002, as the employee listed a Texas address, and the employer had notice that the employee was seeking rehabilitation benefits and had received rehabilitation assistance in Texas no later than the filing of the amended claim petition on May 1, 2002. Therefore, during this period of claimed temporary total disability (May 1, 2002, through August 7, 2002), the employer did know the employee had relocated to Texas, was seeking rehabilitation services, had received rehabilitation benefits from TRC, and was seeking temporary total disability benefits. Yet the employer provided no rehabilitation services during this time.
Where an employee is receiving rehabilitation assistance, the employee=s eligibility for temporary total disability benefits depends largely on the employee=s cooperation with rehabilitation. Carlson v. Independent Sch. Dist. #709, slip op. (W.C.C.A. Oct. 27, 1984). Ms. Campbell, the employee=s vocational rehabilitation counselor at TRC, testified that she looked at the employee=s FCE results and found that his physical restrictions prevented him from utilizing any of his transferable skills. She therefore looked at jobs for which the employee could be retrained. The employee=s Individualized Plan for Employment [IPE], dated April 22, 2002, listed an employment goal of music teacher and called for the employee to attend community college beginning in the fall of 2002, to maintain a 2.0 grade point average, to take 12 credit hours per semester, to maintain contact with his counselor once every four months, and to become employed after completing the steps on the IPE. While no active rehabilitation services were being provided to the employee from May 1, 2002, through August 7, 2002, the employee was supposed to pre-register for classes, and the August 8, 2002, note of Ms. Campbell indicates that the employee had done so. There is no evidence that the employee failed to cooperate with rehabilitation efforts in Texas from May 1, 2002, through August 7, 2002, and no evidence that he was directed to make a job search. Rather, he had been approved for retraining and was waiting for school to start in the fall. Under these circumstances, we conclude that the compensation judge erred in finding that the employee=s failure to look for work from May 1, 2002, to August 7, 2002, disqualified him from receiving temporary total disability benefits. We therefore reverse the judge=s denial of benefits for that period.
Minn. Stat. ' 176.225 provides in part as follows:
Subdivision 1. Grounds. Upon reasonable notice and hearing or opportunity to be heard . . . a compensation judge . . . shall award compensation, in addition to the total amount of compensation award, of up to 30 percent of that total amount where an employer or insurer has:
(a) instituted a proceeding or interposed a defense which does not present a real controversy but which is frivolous or for the purpose of delay; or,
(b) unreasonably or vexatiously delayed payment; or
(c) neglected or refused to pay compensation; or
(d) intentionally underpaid compensation; or
(e) frivolously denied a claim; or
(f) unreasonably or vexatiously discontinued compensation in violation of sections 176.238 and 176.239.
* * *
Subd. 5. Penalty. Where the employer is guilty of inexcusable delay in making payments, the payments which are found to be delayed shall be increased by 25 percent.
At hearing, counsel for the employee indicated that the employee=s claim Ais for penalties against the employer and insurer=s payments in that they delayed or neglected to make payment without any justification.@ Later in his opening statement, counsel stated Awe=re claiming penalties at the maximum amount, or 30 percent, because of their wrongful delay and denial in paying these benefit to Mr. Shelton.@
Evidence regarding the employee=s claim for penalties came via attorney argument at trial and post-hearing briefs with supporting documentation. It appears to be undisputed that the employer had agreed, at the time of the hearing on the claim for the fusion surgery, to pay temporary total disability benefits associated with the surgery if the surgery were found to be compensable. The compensation judge=s decision as to the compensability of the surgery was appealed to this court by both parties, and then to the supreme court, before a final decision was filed on January 23, 2002. However, it appears that no payments were made until November 18, 2002, ten months after the supreme court=s decision.
The employer argued at hearing, and again on appeal, that efforts were made, immediately after the final decision in the matter, to ascertain what temporary total disability benefits were associated with the surgery but that it took time to obtain authorizations and the necessary records. The compensation judge found that the final authorizations were sent in June of 2002, that payments were not made until November of 2002, and that at least some minimum payment of wage loss benefits and permanent partial disability benefits was due before November 2002 given the fact that the employee had undergone the surgery. The compensation judge then found that the employer had Aneglected and refused to make appropriate payments on a timely basis@ and that a 10% penalty was reasonable Afor unreasonable delay in benefit payments.@
On appeal, the employee contends that the statute Arequires@ a 25% penalty for this type of Ainexcusable delay.@ We note, however, that the compensation judge did not make a finding of inexcusable delay; rather, he found unreasonable delay, neglect, and refusal to pay on a timely basis. The grounds for a penalty found by the compensation judge clearly fall within Minn. Stat. ' 176.225, subd. 1(b) and (c), which allows for a penalty of Aup to 30 percent.@ Minn. Stat. ' 176.225, subd. 1 (emphasis added). The employee=s counsel=s opening statements at hearing in fact suggest that he was seeking a penalty under Minn. Stat ' 176.225, subd. 1, as he was requesting a penalty of 30%.
Whether a penalty is appropriate under Minn. Stat. ' 176.225 is generally a question of fact for the compensation judge, and the amount of a penalty under Minn. Stat. ' 176.225 is generally within the discretion of the compensation judge. Saarela v. Sun Country Airlines, slip op. (W.C.C.A. Sept. 25, 1998). Under the circumstances present here, we find no basis to increase the compensation judge=s penalty award.
 See Shelton v. Independent Sch. Dist. #625, slip op. (W.C.C.A. Nov. 28, 2000), for additional background information.
 An amended claim petition was filed on May 1, 2002, seeking rehabilitation benefits and stating that TRC had provided rehabilitation benefits. A second amended claim petition specified that the employee was seeking benefits for a 20% permanent partial disability of the body as a whole.