BRIAN EIDE, Employee/Appellant, v. TIMBERLAND LUMBER CO. and AON CORP./ CAMBRIDGE INTEGRATED SERVS., Employer-Insurer.

 

WORKERS= COMPENSATION COURT OF APPEALS

AUGUST 19, 2003

 

 

HEADNOTES

 

NOTICE OF DISCONTINUANCE; PRACTICE & PROCEDURE - EXPEDITED HEARING.  Where the employer and insurer did not assert a claim that the employee=s injury was temporary in either of two NOIDs or the petition for discontinuance, the claim was not included in the issues enumerated by the compensation judge at the begin­ning of the hearing, and the employee did not clearly and unambiguously agree to further expansion of the issues, the compensation judge=s finding that the employee=s personal injury was a temporary aggravation of a pre-existing condition and his order permitting the employer and in­surer to discontinue wage loss benefits is reversed.

 

Reversed in part.

 

Determined by Johnson, C.J., Rykken, J., and Stofferahn, J.

Compensation Judge:  Rolf G. Hagen.

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

The employee appeals the compensation judge=s finding that his February 4, 2002 personal injury was a temporary aggravation of a pre-existing low back condition that resolved by September 10, 2002, and the judge=s order allowing the employer and insurer to discontinue wage loss benefits.  We reverse the finding and the order allowing the discontinuance of benefits.

 

BACKGROUND

 

The facts in this case are procedurally complicated but essentially undisputed.  Brian Eide, the employee, sustained a personal injury to his low back on February 4, 2002, while working for Timberland Lumber Company, the employer.  The employer and its insurer accepted liability for the employee=s injury and commenced payment of wage loss benefits to the employee based upon a weekly wage of $711.60.

 

The employer and insurer filed a Notice of Intention to Discontinue workers= compen­sation benefits (NOID) on July 18, 2002, asserting the employee had returned to work at full wage on June 28, 2002.  The employee objected to the proposed discontinuance of benefits and requested an administrative conference.  By an order on discontinuance filed August 23, 2002, Compensation Judge John Ellefson denied the insurer=s request to discontinue the employee=s benefits.

On August 28, 2002, the insurer filed a second NOID, again seeking to discontinue the employee=s benefits.  The insurer had previously scheduled for August 8, 2002, an independent medical examination of the employee with Dr. Jack Drogt.  In the NOID, the insurer contended the employee failed to attend the examination with Dr. Drogt.  The insurer further contended a dispute existed as to the employee=s need for restrictions, if any, and whether he could work full or part time.  The employee again objected to the proposed discontinuance and requested an administrative conference.

 

On September 5, 2002, the insurer filed a petition for discontinuance.  In its petition, the insurer requested a de novo hearing on the order on discontinuance of Judge Ellefson filed August 23, 2002.^[1]  The insurer alleged the following additional grounds for the proposed discontinuance:  the employee was released to return to work by June 28, 2002, and the employer had work available for the employee within his restrictions; since June 28, 2002, the employee had failed to return to work with the employer; the employee was terminated for misconduct pursuant to Minn. Stat. ' 176.101, subd. 1(e); the employee failed to make a reasonable and diligent search for employment; the employee failed to accept physically gainful employment in accordance with the rehabilitation plan; and the employee had withdrawn from the labor market.

 

On September 10, 2002, Dr. Jack Drogt examined the employee at the request of the employer and insurer.  The employee gave the doctor a history of a prior work-related low back injury three or four years before and a history of his February 4, 2002 low back injury.  In his report, the doctor noted an MRI scan was obtained on April 22, 2002, which reflected juvenile discogenic disease at two levels, with degeneration and prominent diffuse thoracolumbar Scheuermann-like changes from T 10-11 to L4-5, and a disc herniation at L4-5 without nerve root impingement.  Following a physical examination, Dr. Drogt diagnosed juvenile discogenic disease and a history of pre-existing low back pain.  The doctor opined the employee=s February 4, 2002 work injury was a temporary aggravation of the juvenile discogenic disease that had resolved.  Dr. Drogt opined the employee was capable of full time employment without restriction.

 

An administrative conference was held on September 24, 2002, on the employee=s objection to the NOID filed on August 29, 2002.  The employer and insurer contended the em­ployee=s benefits should be discontinued because he failed to attend an independent medical eval­uation with Dr. Drogt on August 8, 2002.  The employee contended he missed the IME because he had car trouble.  In an order on discontinuance, filed September 27, 2002, Compensation Judge Harold W. Schultz denied the proposed discontinuance.

 

By letter dated October 23, 2002, counsel for the employer and insurer stated they were amending their petition for discontinuance to include an appeal from Judge Schultz=s order dated September 27, 2002.  By letter dated October 24, 2002, the employee objected to the proposed amendment, contending it was an improper expansion of the issues. 

 

The case was heard before Compensation Judge Rolf G. Hagen on October 31, 2002.  Initially, the parties agreed the appeal from Judge Schultz=s September 27, 2002 order would be consolidated with the issues raised in the petition to discontinue.  Judge Hagen then listed the issues to be tried:  whether wage loss benefits could be discontinued because the employee was released to return to work on June 28, 2002 but failed to return to work; whether the employee was released to return to work with restrictions and the employer had work available for the employee within his restrictions; whether the employee was terminated for misconduct; whether the employee withdrew from the labor market; and whether the employee failed to attend an independent medical evaluation.  Counsel for both parties agreed the compensation judge had accurately stated the issues for trial.  (T. 26.)

 

At the hearing, the medical report of Dr. Drogt dated September 10, 2002, was offered into evidence by the employer and insurer.  The employee objected, contending it was untimely^[2] and not relevant to the issues for trial.  The compensation judge admitted the exhibit but allowed counsel for the employee additional time after the hearing within which to file a supplemental medical report.  At the close of the hearing, counsel for the employee withdrew his objection to Dr. Drogt=s report.  (T. 24.)  The employee did not file any medical reports after the hearing.

 

In a Findings and Order filed March 4, 2003, the compensation judge stated the following issues:

 

1.  Whether reasonable grounds exist to discontinue the wage loss benefits of the employee effective June 28, 2002 and/or July 18, 2002 and/or August 1, 2002 and/or whether reasonable grounds exist to suspend the wage loss benefit of the employee from August 8, 2002 to September 10, 2002, upon the alleged grounds that:

 

a.   Employee was released to return to work June 28, 2002 at full wage and did return to work;

b.   The employee was released to return to work with restrictions and at all times relevant herein, the employer had work for employee within his restrictions;

c.   That employee was terminated for misconduct as a result of:

i.    Failure to show up for work or call in;

ii.    Employee materially misrepresented/lied on his original job application with respect to alleged and prior felony convictions;

d.   Employee did withdraw from the labor market;

e.   Employee failed to make a reasonable and diligent job search;

f.    Employee failed to accept gainful employment;

g.   Employee failed to attend an IME.

 

If so, then

 

2.  Whether employee is entitled to wage loss benefits from and after June 28, 2002 as claimed or is disqualified because:

 

a.   Employee was released to return to work on June 28, 2002 at full wage and did return to work;

b.   Employee was released to return to work with restrictions and at all times relevant herein, the employer had work for employee within his restrictions;

c.   Employee was terminated for misconduct as a result of:

i.    Failure to show up for work or call in;

ii.    Employee materially misrepresented/lied on his original job application with respect to alleged prior felony con­vic­tion.

d.   Employee withdrew from the labor market;

e.   The employee failed to make a reasonable and diligent job search;

f.    Employee failed to accept gainful employment;

g.   Employee failed to attend an IME.

 

The compensation judge found the employee was released to return to work, with restrictions and a four-hour time limitation, on July 16, 2002.  Accordingly, the judge denied the request to discontinue benefits based upon the contention that the employee returned to work at full wage.  The judge found the employee was terminated by the employer on August 1, 2002, but such termination was not for misconduct under Minn. Stat. ' 176.101, subd. 1(e)(1).  The judge found the employer did not make a job offer to the employee after August 1, 2002, and denied the proposed discontinuance on the ground the employee failed to accept gainful employment.  The judge found the employee cooperated with his rehabilitation plan and denied the proposed discontinuance on the grounds that the employee withdrew from the labor market and/or failed to make a reasonable and diligent job search.  The compensation judge found the employee was unable to attend the examina­tion with Dr. Drogt on August 8, 2002, due to car problems and denied the discontinuance for failure to attend the examination.  Finally, based upon the medical opinions of Dr. Drogt, the compensation judge found the February 4, 2002 work injury was a temporary aggravation of pre-existing low back problems, which aggravation resolved no later than September 10, 2002.  Accordingly, the compen­sation judge allowed the employer and insurer to discontinue compensation benefits from and after September 10, 2002.  The employee appeals.

 

DECISION

 

The employee contends the issue of whether his February 4, 2002 injury was a temporary aggravation of a pre-existing condition was not raised by either NOID or the petition for discontinuance.  Nor, the employee argues, did the compensation judge list the question of a temporary aggravation in the issues to be decided  The employee contends he had no notice the tem­porary aggravation claim would be an issue at the hearing.  By unilaterally expanding the issues, the employee argues, the compensation judge effectively denied the employee the opportunity to present evidence on the issue.  The employee contends the compensation judge exceeded his authority and committed an error of law by deciding the case on an issue not properly before the court.  Accordingly, the employee asks this court to reverse the decision of the compensation judge.

 

In response, the insurer argues the issue of a temporary aggravation was properly before the compensation judge.  The report of Dr. Drogt concluded the employee=s February 4, 2002 injury was temporary and had resolved by September 10, 2002.  In his opening statement, counsel for the employer and insurer claimed benefits should be discontinued because the employee=s injury was temporary and ended by September 10, 2002.  The compensation judge admitted Dr. Drogt=s report into evidence but offered the employee 30 days to respond to the report.  The employee apparently decided not to do so and ultimately withdrew his objection to the report.  Thus, the respondent argues, the employee had adequate notice and a reasonable opportunity to be heard on the issue.  Further, by withdrawing his objection to the report, the respondent contends the employee implicitly, if not expressly, agreed to expand the issues at the hearing.

 

Where a petition to discontinue has been timely filed, an expedited hearing before a compensation judge shall be held within 60 calendar days after the Office of Administrative Hear­ings receives the file from the Commissioner of the Department of Labor and Industry.  AThe hearing shall be limited to the issues raised by the notice or petition unless all parties agree to expanding the issues.@  Minn. Stat. ' 176.238, subd. 6.  In this case, a hearing was held to resolve the issues contained in the petition for discontinuance.  The employee, however, agreed at the hearing to include as an issue the request to discontinue benefits based upon the employee=s failure to attend the IME on August 8, 2002.  Clearly, the parties agreed to expand the issues beyond those asserted in the petition to discontinue.  The question, however, is whether the employer=s claim the employee=s injury was temporary was properly an issue before the compensation judge.

 

In civil practice, Minn. R. Civ. Proc. 15.01 requires that amendments to pleadings be liberally allowed.  See, e.g., Nelson v. Glenwood Hills Hosp., 240 Minn. 505, 62 N.W.2d 73 (1953).  An amendment may be allowed even if it changes a party=s legal theory.  LaSalle Cartage Co. v. Johnson Bros. Wholesale Liquor Co., 302 Minn. 351, 225 N.W.2d 233 (1974).  In deciding whether an amendment should be allowed, the trial court should consider the stage of the proceedings.  Hughes v. Micka, 269 Minn. 268, 130 N.W.2d 505 (1964).  Denial of a proposed amendment to add claims or defenses shortly before trial, however, is not necessarily an abuse of discretion.  Sheehan v. St. Peter=s Catholic Sch., 291 Minn. 1, 188 N.W.2d 868 (1971).

 

Minn. Stat. ' 176.238 provides a specific procedure for resolving workers= compensation disputes regarding the continuation of wage loss benefits.  In most cases, the hearing is expedited to afford the parties a prompt decision on the issues.  When the hearing is expedited, however, the responding party has a very limited period of time to perform discovery and obtain medical records and medical reports.  Basic fairness requires 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.  Kulenkamp v. Timesavers, Inc. 420 N.W.2d 891, 40 W.C.D. 869 (Minn. 1988).  Accordingly, we conclude any expansion of the issues beyond those raised in the notice or petition to discontinue must be made by clear and unambiguous agreement of the parties.  We find no such agreement here.

 

The claim that the employee=s injury was temporary and ended on September 10, 2002, was not asserted in either NOID or the petition for discontinuance.  The temporary aggravation claim was not an issue enumerated by the compensation judge prior to the hearing and both parties agreed the judge accurately stated the issues.  Although the employee withdraw his objection to the admission of Dr. Drogt=s report, we do not construe this decision as a clear and unambiguous agreement to further expand the issues to include the temporary aggravation claim.^[3]  The compensation judge=s finding that the employee=s February 4, 2002 personal injury was a temporary aggravation of a pre-existing low back condition that resolved no later than September 10, 2002 is accordingly reversed, as is the judge=s order that the employer and insurer may discontinue wage loss benefits effective September 10, 2002.