KATHLEEN SHAMP, Employee, v. DAYBREAK FOODS, and HARTFORD INS. GROUP, Employer-Insurer/Appellants, and BLUE CROSS/BLUE SHIELD/BLUE PLUS OF MINN., Intervenor.
WORKERS= COMPENSATION COURT OF APPEALS
JUNE 25, 2004
REHABILITATION - RETRAINING. Where the employee had not been successful in alleviating her wage loss after nearly four years of placement assistance, and where there was vocational testimony indicating that additional skills would enhance the employee=s employability, substantial evidence supported the judge=s decision to amend the employee=s rehabilitation plan to provide for exploration of retraining.
ATTORNEY FEES - RORAFF FEES. The compensation judge did not err in concluding that a dispute existed for purposes of establishing eligibility for Roraff fees or in calculating the fee award on a contingent basis, based on the cost of the disputed surgery, without regard to the Irwin factors, pursuant to Cahow v. Brookdale Motors, 61 W.C.D. 427, 438 (W.C.C.A. 2001).
Determined by Wilson, J., Rykken, J., and Johnson, C.J.
Compensation Judge: Gary M. Hall
Attorneys: Adam S. Wolkoff, Law Office of Adam S. Wolkoff, Eagan, MN, for the Appellants. Linda Schoep, Schoep & McCashin, Alexandria, MN, for the Respondent.
DEBRA A. WILSON, Judge
The employer and insurer appeal from the compensation judge=s award of Roraff fees and from his decision that the employee=s rehabilitation plan should be amended to provide for exploration of retraining. We affirm.
On May 22, 1999, the employee sustained a work injury, in the nature of bilateral thoracic outlet syndrome, while employed by Daybreak Foods [the employer], a business apparently dealing with egg production or processing. Rehabilitation records indicate that the employee was earning $6.75 an hour on the date of injury, with an average weekly wage of $212.93. The employee testified that the job provided various fringe benefits, including health insurance, vacation, and sick leave.
In September of 1999, the employee began receiving rehabilitation assistance from QRC Lisa Sabye. Rehabilitation efforts initially focused on returning the employee to work with the employer, but it was eventually determined that all available work there was either too repetitive or involved lifting beyond the employee=s restrictions. In May of 2000, after the employee=s recovery from surgical procedures related to her work injury, the QRC and a placement specialist began providing job placement services to help find the employee alternative employment.
In the late summer of 2000, the employee obtained full-time work, apparently with no wage loss, in a bindery position for a publishing company, but she was forced to leave that job when the job duties caused an increase in her symptoms. The employee subsequently tried several other part-time jobs. Some of these jobs also aggravated her symptoms, and she was never able to obtain a job, or a combination of jobs, within her restrictions, that consistently brought her up to the level of her pre-injury weekly wage.
In late January of 2001, the employee=s treating surgeon, Dr. William Omlie, issued a report recommending that the employee undergo another surgical procedure to treat ongoing symptoms caused by thoracic outlet syndrome on the left. A few weeks later, on February 20, 2001, the employee=s attorney filed a request with the Department for certification of a dispute regarding the proposed surgery. The Department issued a ACertification of Dispute@ two days later, on February 22, 2001. Shortly thereafter, on March 6, 2001, the employee filed a medical request, seeking approval of the surgery. By letter dated March 19, 2001, the employer and insurer informed the Department that they had agreed to pay for the procedure, and, following a telephone conference held on March 27, 2001, an AOrder on Agreement on Medical Request@ was issued, ordering the insurer to pay for the surgery and dismissing the medical request. The employee subsequently underwent the recommended surgery in April of 2001. Placement services resumed after the employee=s recovery from the operation.
In December of 2001, the employee=s attorney filed a statement of attorney fees, seeking fees for work performed in connection with the medical request. The employer and insurer objected, contending in part that there had been no dispute over the employee=s right to surgery and that they had paid for the procedure voluntarily after exercising their right to a second opinion from Dr. Mark Urban on the reasonableness and necessity of the operation. Dr. Urban had conducted a Areview@ of the issue on February 19, 2001, and agreed with the recommendation for surgery. There is no evidence as to when the employer and insurer received his report to this effect.
An unrecorded telephone hearing on the attorney fee request was held by Judge James Otto on August 5, 2002. In a decision issued on August 8, 2002, Judge Otto concluded that the employee=s attorney was entitled to a contingent Roraff fee of $1,644.16, calculated on the cost of the surgery. The employer and insurer appealed, and, in a decision issued on December 12, 2002, a panel of this court reversed the award and remanded the matter for both a hearing on the record and factual findings concerning the existence of a dispute.
The matter came on for hearing before Judge Gary Hall on February 3, 2004. In addition to the Roraff fee claim, the employee=s right to continue rehabilitation assistance was at issue. The employer and insurer were requesting that rehabilitation services be terminated; the employee was asking that rehabilitation remain open to explore additional options, including the possibility of retraining. Witnesses at hearing included the employee, the employee=s QRC, and Ione Tollefson, the employee=s independent vocational expert.
In a decision issued on March 3, 2004, the compensation judge concluded that a dispute existed regarding the employee=s right to surgery and that the employee=s attorney was therefore entitled to contingent Roraff fees. The judge further concluded that the employee=s rehabilitation plan should be amended to delete Ajob search assistance@ and to add Aexploration of retraining.@ The employer and insurer appeal.
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 (2004). 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).
The employee received job placement assistance for nearly four years following her work injury, at a cost of more than $30,000. Despite this assistance, she was unable to secure a job, or combination of jobs, that consistently approximated her pre-injury weekly wage. As of the date of hearing, the employee was working irregular hours at two part-time jobs, neither of which provided benefits and neither of which was likely to become full time. One of the employee=s jobs, as a cashier at a grocery store, aggravates her symptoms and is arguably inconsistent with recommended restrictions against repetitive work with the employee=s upper extremities. The employee lives in Browerville, Minnesota, which the vocational experts have indicated is not a thriving labor market. Both Ms. Sabye, the QRC, and Ms. Tollefson, the employee=s independent vocational expert, essentially agree that further placement services are not likely to result in suitable, full-time employment for the employee. Ms. Tollefson further testified that the employee=s current employment situation cannot be characterized as suitable gainful employment and that the employee would Adefinitely@ be more employable with additional skills. QRC Sabye did not disagree as to the unsuitability of the employee=s current jobs. However, unlike Ms. Tollefson, QRC Sabye did not believe that the employee was a candidate for retraining.
In his finding on the issue, the compensation judge wrote as follows:
There was conflicting testimony on whether retraining would help the employee recover her pre-injury economic status. The employee had a relatively low average weekly wage on the date of injury. The likelihood that a high cost, long-term retraining plan would be approved is low. However, there are many short-term, lower cost options, that could help this employee. The employee=s rehabilitation providers have not yet adequately explored those options. The court specifically finds testimony that the employee is not a retraining candidate to be unpersuasive. Based on a preponderance of the evidence this court finds that the Rehabilitation Plan should be amended to delete >job search assistance= and to add >exploration of retraining.=
The employer and insurer contend that substantial evidence does not support the judge=s decision denying their request to terminate rehabilitation services. In support of this argument, the employer and insurer cite evidence indicating that the employee failed to follow up on some job leads and the fact that her own QRC testified that retraining was not appropriate given the kind of entry-level work the employee was doing on the date of injury and was still looking for.
We concede that the evidence supporting the judge=s decision is not extensive; in fact we see no specific evidence in the record to support the judge=s conclusion that there are Amany short-term, lower cost [retraining] options that could help this employee.@ However, it is important to point out that the issue currently before us is not whether retraining is appropriate for the employee but only whether retraining should be investigated. As for evidence indicating that the employee failed to follow up in a timely fashion on some job leads, the QRC testified that the employee was nevertheless generally cooperative with rehabilitation efforts, and the QRC could not say whether the employee was actually qualified for the few jobs that she failed to pursue. In any event, given the apparent agreement between Ms. Sabye and Ms. Tollefson that job search efforts in the employee=s labor market have been exhausted, the importance of the employee=s failure to follow up on a few leads is questionable.
In view of the evidence indicating that further placement assistance is not likely to help the employee obtain suitable employment, and Ms. Tollefson=s testimony that additional skills would make the employee more employable, the record is minimally adequate to support the judge=s decision that the employee=s rehabilitation plan should be amended to provide for exploration of retraining. We therefore affirm that decision.
2. Roraff Fees
In our prior decision, this court remanded the Roraff fee claim for a hearing on the record and a factual determination as to whether a genuine dispute existed, over the surgery proposed by Dr. Omlie, so as to warrant an award of fees under Minn. Stat. ' 176.081, subd. 1. On remand, Judge Hall noted the timing of events, from Dr. Omlie=s January 30, 2001, report recommending surgery, to the March 27, 2001, conference and subsequent order on agreement requiring the insurer to pay for the proposed procedure, before concluding that a dispute over surgery in fact existed. In this appeal, as in the last appeal, the employer and insurer contend that there was in reality no dispute but rather only a short delay, prior to their voluntary agreement to pay, occasioned by their exercise of their right to secure a second opinion on the surgery. Notwithstanding the Department=s certification, a compensation judge could perhaps have concluded that no real dispute existed over the surgery. See Biederman v. Win Stevens Buick, 58 W.C.D. 497 (W.C.C.A. 1998) (certification of a dispute does not by itself establish that Roraff fees are payable); see also Abernathy v. Asplundh Tree Expert, slip op. (W.C.C.A. Mar. 15, 2000) (the fact that an employer and insurer arrange for an independent medical exam does not automatically establish the existence of a dispute for purposes of determining a Roraff fee claim). We would also note that, in our view, the employee=s subjective belief that a dispute existed is not the dispositive fact in evaluating a fee claim. However, in addition to the events noted by the compensation judge, rehabilitation records contain an important piece of evidence tending to establish that the employer and insurer intended to refuse to pay for the proposed surgery: in response to a February 8, 2001, call from the QRC regarding authorization for surgery, the insurer=s claims representative Aleft a message stating that the surgery is not authorized. They have taken it to a hearing and are awaiting a judge=s decision.@ Based on this evidence, and given the Department=s certification, substantial evidence supports the judge=s conclusion that a dispute existed, over the proposed surgery, for purposes of establishing eligibility for a Roraff fee award.
The employer and insurer also contend that, even assuming that a dispute existed, the compensation judge erred in awarding a contingent Roraff fee, calculated on the cost of the surgery, rather than evaluating the reasonableness and amount of the fee under the factors contained in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999). However, this argument was considered and rejected in Cahow v. Brookdale Motors, 61 W.C.D. 427, 438 (W.C.C.A. 2001). Pursuant to Cahow and the statute, the employee=s attorney is entitled to Roraff fees, calculated using the 25/20 formula applied to the value of the disputed surgery, without regard to the Irwin analysis. Id. The judge=s award is therefore affirmed.
 See Roraff v. State of Minnesota, 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 There is little information in the record concerning the exact nature of the employer=s business.
 However, at hearing, the QRC indicated that the job was full time, in which case the employee=s weekly wage would have been $270.00.
 Judge Otto was not available to consider the fee issue.
 Physicians= opinions as to recommended restrictions vary, and the judge was not asked to determine exactly which restrictions are appropriate. While at least one doctor has indicated that no restrictions are necessary, the employer and insurer do not contend, on appeal, that rehabilitation services should be terminated on that basis. Clearly the judge=s decision as to ongoing rehabilitation was based on an implicit conclusion that the employee continues to be subject to restrictions related to her bilateral thoracic outlet syndrome injury and resulting surgeries.
 The compensation judge clearly weighed the employee=s past job search in reaching his decision, explaining in his memorandum as follows:
The employee has expressed a preference to avoid work in group homes, to avoid positions that require night or weekend shifts, and to avoid a return to service/retail work. Nonetheless, she had followed up on most leads which fell outside her preferences and has attempted some of those positions. Overall her job search had been adequate and reasonable. To the extent her efforts fell short, the lapses did not significantly affect the outcome here.
 In his memorandum, Judge Hall wrote, in part,
With regard to the Remand on attorney fees, this court has found that a genuine dispute did indeed exist in this case. By failing to comply with the notice requirements of Minn. Rules Part 5221.6050 or otherwise adequately providing information to this employee to alleviate her concerns, the employee reasonably believed that there was a dispute for which she required legal assistance. Additionally, the employee=s attorney reasonably relied on the certification of dispute issued by the Department of Labor and Industry as an indication that the insurer was given adequate time and information to take a position on liability.
 The hearing referenced by this message apparently related to the employer and insurer=s request to discontinue wage loss benefits based on the employee=s alleged attainment of maximum medical improvement [MMI]. Presumably, a finding in the employer and insurer=s favor on MMI would have bolstered the argument that additional surgery was not appropriate.