EDWARD PETERSON, Employee, v. ADB CONSTR., and FARMERS INS., Employer-Insurer, and CONCRETE MASONRY, and STATE FUND MUT. INS., Employer-Insurer/Appellants, and BROOKDALE INTEGRATED HEALTH, and NORAN NEUROLOGICAL CLINIC, Intervenors.
WORKERS= COMPENSATION COURT OF APPEALS
SEPTEMBER 13, 2005
APPORTIONMENT - CALCULATION; CALCULATION OF BENEFITS - COMPENSATION RATE. Where the insurer on the risk for the 2003 injury had focused its appeal on the narrow contention that the judge should have based her Kaisershot calculation on the employee=s wage at the time of that 2003 injury rather than on his wage at the time of his 2002 injury, where none of the parties had appealed from the judge=s application of the Kaisershot formula rather than a Kirchner analysis, which would have been more proper, where to reverse and apply Kirchner instead of Kaisershot would only have benefitted the non-appealing insurer on the risk for the 2002 injury, and where the employee could not have been fairly compensated if the judge had applied the Kaisershot formula using the 2003 post-injury wage as argued by the 2003 insurer, the court declined to reverse the compensation judge=s application of the Kaisershot formula based on the employee=s 2002 post-injury wage.
Determined by: Pederson, J., Johnson, C.J., and Wilson, J.
Compensation Judge: Kathleen Behounek
Attorneys: David M. Bialke, Law Office of David M. Bialke, Fridley, MN, for the Respondent Employee. Steven T. Scharfenberg, Lynn, Scharfenberg & Associates, Minneapolis, MN, for the Appellants.
WILLIAM R. PEDERSON, Judge
Concrete Masonry and State Fund Mutual Insurance appeal from the compensation judge=s award of disability benefits based upon the employee=s weekly wage for an earlier injury while in the employ of ADB Construction. We affirm.
For purposes of this appeal, the relevant facts are essentially undisputed. Edward Peterson [the employee] sustained an admitted injury to his low back on August 6, 2002, while working for ADB Construction [ADB] as a concrete laborer and finisher. On that date, the employee was twenty-two years old and earning a weekly wage of $1,145.31, and ADB was insured by Farmers Insurance [Farmers]. Following the injury, the employee developed low back pain, stiffness, and tingling in the right foot. He initially treated at the Columbia Park Medical Group for his symptoms. He received physical therapy, but his symptoms continued, and he sought chiropractic care with Dr. Kent Erickson at Brookdale Integrative Health.
The employee returned to work with ADB following the August 6, 2002 injury. He occasionally performed his regular job duties but primarily performed light-duty work. In November 2002, the employee was laid off for the season by ADB. At that time, however, the employee remained subject to work restrictions due to his work injury. The employee continued to receive chiropractic treatment for his low back through December 2002, when he was released from care to be thereafter treated on an as-needed basis. He apparently continued to seek chiropractic care for his low back symptoms through April of 2003. The employee did not work between November 2002 and September 2003, and noted that his symptoms improved when he was not working.
The employee returned to work in October 2003, for Concrete Masonry as a construction laborer. His duties included lifting and carrying sixty-five- to seventy-pound blocks and moving wheelbarrows loaded with mud. After four days of performing this type of work, the employee again developed low back symptoms. He returned to see Dr. Erickson for treatment and was subsequently referred to Dr. Debra Peven, D.O., at the Noran Neurological Clinic.
On November 7, 2003, the employee filed a claim petition against both ADB and Concrete Masonry, seeking various benefits for periods subsequent to an alleged injury at Concrete Masonry on October 17, 2003. Concrete Masonry and its insurer, State Fund Mutual Insurance [State Fund], denied liability for the claimed October 17, 2003, injury. The matter came on for a hearing before a compensation judge on January 11, 2005. Issues at trial included (1) whether or not the employee had sustained a work related injury on October 17, 2003, while employed by Concrete Masonry, (2) the nature and extent of the employee=s work injury of August 6, 2002, while employed by ADB, and (3) apportionment of liability.
In a Findings and Order issued March 14, 2005, the compensation judge found that the employee sustained a work-related injury on October 17, 2003, as a result of his work activities at Concrete Masonry. She determined also that the employee=s work injuries of August 6, 2002, and October 17, 2003, were both permanent injuries to the employee=s low back and that each was responsible for 50% of the employee=s disability, need for medical care, and need for rehabilitation assistance. She awarded the employee temporary total disability benefits for the period of October 21, 2003, through April 4, 2004, and temporary partial disability benefits based upon the employee=s actual earnings from April 5, 2004, through the date of hearing. At finding 19, the judge determined that the employee was entitled to payment of disability benefits based upon his higher weekly wage of $1,145.31, at the time of his August 6, 2002 work injury. She ordered ADB/Farmers to be the paying agent for benefits due to the employee, and she ordered Concrete Masonry/State Fund to reimburse ADB/Farmers for 50% of the benefits paid to or on behalf of the employee, subject to application of the Kaisershot formula. See Kaisershot v. Archer Daniels Midland Co., 23 W.C.D. 706 (Indus. Comm=n 1966). Concrete Masonry/State Fund appeal solely from the judge=s basing of her award on the employee=s August 6, 2002, weekly wage.
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).
"[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), summarily aff=d (Minn. June 3, 1993).
Concrete Masonry/State Fund contend that the sole issue on appeal is whether the compensation judge erred as a matter of law in basing her award on the weekly wage of $1,145.31 that was in effect on August 6, 2002. They contend, citing Kloss v. E&H Earthmovers, 472 N.W.2d 109, 44 W.C.D. 530 (Minn. 1991), that, in cases where multiple injuries contribute to an employee=s total disability, the employee is entitled to the compensation rate in effect at the time of the last injury. Here, they argue, the compensation rate should have been determined based on the employee=s wage at the time of his October 17, 2003, work injury, not on his wage at the time of his August 6, 2002, injury. We are not persuaded.
Case law establishes two methods for calculating the compensation rate to be applied and the employer/insurers= relative liability for temporary total disability benefits in cases where more than one injury is a substantial contributing cause of the employee=s disability. One method is by application of the Kaisershot formula, and the other method is by application of the analysis set out in Kirchner v. County of Anoka, 339 N.W.2d 908, 36 W.C.D. 335 (Minn. 1983).
In Kirchner, the employee sustained a work-related injury in 1977, which reduced his earning capacity and gave rise to a claim for temporary partial disability benefits. The employee sustained a second work injury in 1979, rendering him totally disabled. The Minnesota Supreme Court held that the first insurer was responsible for continuing temporary partial disability benefits at the 1977 wage rate and that the second insurer was to pay, concurrently, temporary total disability benefits based on the employee=s 1979 part-time wage. Kirchner v. County of Anoka, 339 N.W.2d 908, 913, 36 W.C.D. 335, 342 (Minn. 1983). In a second proceeding in the Kirchner matter, four years later, the court clarified that the combined amount of temporary partial and temporary total disability benefits may not exceed the statutory maximum for temporary total disability benefits in effect for the injury that caused the employee=s total disability and that, Awhen temporary partial and temporary total disability benefits are reduced because of a statutory maximum, the obligation of the earlier insurer is calculated first and the later insurer pays the remainder.@ Kirchner v. County of Anoka, 410 N.W.2d 825, 829, 40 W.C.D. 197, 202 (Minn. 1987). Whereas the Kaisershot formula had been devised primarily to ensure an equitably proportionate contribution by each employer/insurer, the Kirchner analysis was devised primarily to ensure that the injured employee receives benefits representative of his total loss of earning capacity due to all work-related injuries.
In the present case, Concrete Masonry/State Fund do not challenge the compensation judge=s findings regarding the significance of the employee=s 2002 injury. Although the employee was not receiving temporary partial disability benefits at the time of his 2002 injury, actual receipt of benefits is not determinative; instead, eligibility for temporary partial disability benefits is the determinative factor for application of Kirchner. See Geller v. Curran-Houston, Inc., 58 W.C.D. 66 (W.C.C.A. 1997). Here, the judge did not issue a specific finding that the employee sustained a loss of earning capacity following the 2002 injury, but we believe that such a finding is implicit in the judge=s Findings and Order. The judge found that the employee=s low back symptoms did not fully resolve and that he was never released to return to work without restrictions following the 2002 injury. She concluded that the 2002 injury was permanent in nature and a substantial contributing cause of the employee=s subsequent disability and need for medical treatment. The employee=s weekly wage was $1,145.31 on August 6, 2002, and only $600.00 when he returned to work with Concrete Masonry in October 2003. There is a presumption that actual wages are representative of an injured employee=s earning capacity, see, e.g., Owens v. Pako Corp., 386 N.W.2d 711, 38 W.C.D. 627 (Minn. 1986), and there is no suggestion here on appeal that the presumption has been rebutted.
Concrete Masonry/State Fund have focused their appeal on the narrow issue of the proper wage rate upon which to calculate temporary total disability benefits. They assert that the judge should have calculated the employee=s benefits on the $600.00 wage at the time of the 2003 injury rather than the wage of $1,145.31 in 2002. None of the parties appealed from the judge=s use of the Kaisershot formula, and we acknowledge that under Kaisershot an employee=s compensation rate after a second injury cannot normally be determined on the basis of his wages at the time of the first injury. To that extent, there is merit in the appellants= argument that their liability cannot be based on the employee=s wages prior to their injury. Nevertheless, in light of the rationale behind the Kirchner decisions, we cannot agree that the employee in this case would be fairly compensated if his benefits were based solely on his reduced wages at the time of the second injury, without taking into consideration his loss of earning capacity consequent to his first injury. Under the facts presented here, the judge should have applied a Kirchner analysis in order to fairly compensate the employee. That being said, we decline to reverse the judge=s application of the Kaisershot formula using the employee=s 2002 weekly wage. To apply Kirchner instead of Kaisershot, as would have been more proper here, would only benefit the non-appealing employer and insurer, and to use the 2003 wage in the judge=s Kaisershot application, as the appellant has proposed, would work an injustice on the employee. Accordingly, we affirm the compensation judge=s Findings and Order.
 Findings 14, 17, and 18 are slightly inconsistent with Orders 3 and 4. We presume that the parties can reconcile the judge=s Findings and Order with the facts surrounding the dates of the employee=s total disability and the date he returned to work.
 Strictly applying the Kaisershot formula as argued by Concrete Masonry/State Fund, using the employee=s 2003 weekly wage, would result in the following apportionment, for a total compensation rate of $400.00:
1) Compensation rate: 8/6/02 $750.00
Compensation rate: 10/17/03 $400.00
2) 750.00 x 50% = $375.00
400.00 x 50% = $200.00
3) 375/575 = 65%
200/575 = 35%
4) ADB/Farmers $400 x .65 = $260.00
Concrete Masonry/State Fund $400 x .35 = $140.00
Under a strict Kirchner analysis, ADB/Farmers would pay temporary partial disability benefits of 66 2/3 percent of the difference between $1,145.31 and $600.00, or $363.54, and Concrete Masonry/State Fund would pay temporary total disability benefits based on their compensation rate, subject to a maximum for combined temporary partial disability and temporary total disability of $750.00, or $386.46, for a total compensation rate of $750.00.
Under Kaisershot as applied by the judge, using the employee=s 2002 weekly wage, the respective contributions of the employers and insurers would be the following, still for a total compensation rate of $750.00:
1) compensation rate: 8/6/02 $750.00
compensation rate: 10/17/03 $400.00
2) $750 x 50% = $375
$400 x 50% = $200
3) $375/575 = 65%
$200/575 = 35%
4) ADB/Farmers $750 x .65 = $487.50
Concrete Masonry/State Fund $750 x .35 = $262.50