ALVIN V. AHO, Employee, v. DULUTH TRANSIT AUTH., and STATE FUND MUT. INS. CO., Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
MARCH 1, 2006
CREDITS & OFFSETS - SOCIAL SECURITY OFFSET. The purpose of the offset provision in the Workers= Compensation Act is to reduce the duplication of benefits between the Social Security system and the workers= compensation system, not to reduce the insurer=s obligation to pay benefits, and where any application by the employee for Social Security benefits would not alter either the effects of the employee=s injury or the causal relationship between the injury and disability, there was no basis under the act to reverse the compensation judge=s denial of the employer and insurer=s request that the employee be compelled to apply for Social Security benefits as a condition for receipt of permanent total disability benefits, so as to Amitigate damages.@
Determined by: Pederson, J., Rykken, J., and Stofferahn, J.
Compensation Judge: Jerome G. Arnold
Attorneys: Russell J. LaCourse, LaCourse Law Office, Duluth, MN, for the Respondent. Andrew W. Lynn, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Appellants.
WILLIAM R. PEDERSON, Judge
The employer and insurer appeal from the compensation judge=s determination that the Minnesota Workers= Compensation Act does not impose a duty or obligation upon a permanently and totally disabled employee to apply for social security disability benefits and from the judge=s consequent denial of their petition to discontinue the employee=s weekly disability benefits for the employee=s refusal or failure to do so. We affirm.
For purposes of this appeal, the relevant facts are essentially undisputed. Alvin Aho [the employee] sustained admitted work injuries to his neck on February 23, 1981, December 24, 1996, and March 12, 2001, while working as a bus driver for the Duluth Transit Authority [the employer]. On March 12, 2001, the employee was fifty-six years old and earning a weekly wage of $726.36, and the employer was insured by State Fund Mutual Insurance Company [the insurer]. The employee did not return to work following his March 12, 2001, injury, and the employer and insurer have paid total disability benefits since that date. Although possibly entitled to Social Security Disability Insurance [SSDI] benefits as well, the employee has chosen not to apply for SSDI benefits. The insurer has offered to underwrite any legal fees or costs associated with such an application, but the employee has declined.
On April 27, 2005, the employer and insurer filed a Petition to Discontinue the employee=s permanent total disability benefits, on grounds that the employee=s failure to apply for SSDI benefits, which prevented the insurer from coordinating those benefits with workers= compensation benefits under Minn. Stat. ' 176.101, subd. 4, constituted a refusal to mitigate damages, a duty, they now argue, that is implicitly imposed upon the employee by Chapter 176 and that is ongoing Athroughout our civil legal system.@
The case was heard before a compensation judge at the Office of Administrative Hearings on August 4, 2005. In a Findings and Order filed September 19, 2005, the judge concluded that the employee=s failure to make application for SSDI benefits did not provide grounds to discontinue the employee=s benefits. The employer and insurer appeal.
The compensation judge determined that the employee=s refusal or failure to make application for SSDI benefits while receiving an ongoing flow of weekly indemnity benefits under the Minnesota Workers= Compensation Act does not constitute a basis upon which to discontinue those benefits. In a memorandum accompanying his decision, the judge viewed the issue raised by the insurer as whether an employee must attempt to lessen the financial obligation of the insurer by making application for SSDI benefits that may be available to him when receiving weekly indemnity benefits designated by the insurer as permanent total disability benefits. Rather than characterizing the employee=s application for SSDI benefits as damage mitigation, as argued by the insurer, the judge construed the insurer=s position as requesting a shifting of the insurer=s financial burden to the Social Security system. The judge found no duty or obligation implicit in the Minnesota Workers= Compensation Act requiring the employee to apply for government disability benefits. He agreed with the employee that the offset provisions contained in Minn. Stat. ' 176.101, subd. 4, are intended to prevent a duplicative receipt of both government and workers= compensation benefits, not to reduce the insurer=s burden to pay benefits owed under the workers= compensation laws.
The employer and insurer assert that the compensation judge erred as a matter of law by finding no duty by the employee to make application for SSDI benefits. They argue that the employee had such a duty Aakin to the duty to mitigate that runs through so much of our civil litigation.@ They argue that, for injured workers who are permanently and totally disabled, coordination of permanent total disability benefits and federal disability benefits has been deemed an essential part of the compensation system of the state of Minnesota. Therefore, they contend, it is incumbent upon the injured worker who is receiving permanent total disability benefits to make a good faith application for social security benefits, especially when the insurer has offered to underwrite the cost of such application. We are not persuaded.
Minn. Stat. ' 176.101, subd. 4, addresses the coordination of permanent total disability benefits with government disability and retirement benefits. The pertinent portion of the statute reads as follows:
This compensation shall be paid during the permanent total disability of the injured employee but after a total of $25,000 of weekly compensation has been paid, the amount of weekly compensation benefits being paid by the employer shall be reduced by the amount of any disability benefits being paid by any government disability benefit program if the disability benefits are occasioned by the same injury or injuries which gave rise to payments under this subdivision. This reduction shall also apply to any old age and survivor insurance benefits.
Minn. Stat. ' 176.101, subd. 4. While the plain language of the statute provides for an offset for government benefits being paid, it clearly does not impose an obligation upon the injured employee to make application for such benefits. Even if, as the employer and insurer argue, the law implicitly imposes upon the employee a duty to mitigate damages - - and it is debatable whether any true mitigation doctrine is applicable in the no-fault workers= compensation system - - we do not view the employee=s alleged duty to apply for Social Security benefits as a mitigation of damages but merely as a shifting to the Social Security system some of the liability for those damages.
In Potucek v. City of Warren, the supreme court did note that, A[i]n recognition that workers= compensation is but one element of a system of wage-loss protection, the Minnesota legislature early on provided a means for coordinating workers= compensation with the Federal social security system and the state pension system.@ Potucek v. City of Warren, 535 N.W.2d 333, 53 W.C.D. 88 (Minn. 1995) (footnote omitted). The Court=s reference to workers= compensation as but one element of a system of wage loss protection does not, however, imply that an injured worker must apply for benefits other than workers= compensation. It simply means that, where more than one source of wage-loss protection may exist, the benefits may be subject to coordination. The purpose of the offset provision is to reduce the duplication of benefits between the Social Security system and the workers= compensation system, Kloss v. E. & H. Earthmovers, 472 N.W.2d 109, 44 W.C.D. 530 (Minn. 1991), not to reduce the insurer=s obligation to pay permanent total disability benefits. Whether or not the employee applies for SSDI benefits does not alter either the effects of the employee=s injury or the causal relationship between the injury and the employee=s disability. While the workers= compensation act may impose certain obligations upon an injured worker who seeks to establish entitlement to benefits under the statute, we find no basis in the act, either implied or otherwise, to require an employee to apply for SSDI benefits as a condition for payment of permanent total disability benefits. Accordingly, we affirm the determination of the compensation judge.
 State Fund Mutual also insured the employer on the date of the employee=s 1996 injury, while Travelers Insurance Company provided coverage for the employer in 1981.
 The employer and insurer cite the following: the duty to diligently seek employment, Redgate v. Sroga=s Standard Service, 421 N.W.2d 729, 40 W.C.D. 933 (Minn. 1988); the duty to best utilize skills to reduce the need for temporary partial disability, Stevens v. S.T. Services, slip op. (W.C.C.A. Nov. 14, 1991); the duty to cooperate with medical treatment, Dotolo v. EMC Corp., 375 N.W.2d 25, 38 W.C.D. 205 (Minn. 1985), and Fenton v. Murphy Motor Freight Lines, 297 N.W.2d 294, 33 W.C.D. 194 (Minn. 1980); and the duty to cooperate with rehabilitation, Mayer v. Erickson Decorators, 372 N.W.2d 729, 38 W.C.D. 107 (Minn. 1985).
 In an entirely different context, the Minnesota Supreme Court held that the unreasonable failure to mitigate damages is Afault@ which can be apportioned under the comparative fault statute, Minn. Stat. ' 604.01, subd. 1a (1980). Lesmeister v. Dilly, 330 N.W.2d 95, 103 (Minn. 1983).