JAMES ERKKILA, Employee/Cross-Appellant, v. ARROWHEAD HEATING, a/k/a PETER BERTUCCI, and SAFECO INS. CO., Employer-Insurer/Appellant.

 

WORKERS= COMPENSATION COURT OF APPEALS

MAY 20, 2003

 

 

HEADNOTES

 

PERMANENT PARTIAL DISABILITY - OBJECTIVE FINDINGS; EVIDENCE - EXPERT MEDICAL OPINION.  Where the decision of the judge was reasonably supported by expert medical opinion and was also not otherwise unreasonable in light of the medical record as a whole, there being substantial evidence to support a finding of all three elements required under the rule, the compensation judge=s award of permanent partial disability compensation for a single-level lumbar pain syndrome pursuant to Minn. R. 5223.0390, subp. 3.C.(1), was not clearly erroneous and unsupported by substantial evidence.

 

PENALTIES.  Where any accounting sloppiness on the part of the employer and insurer had ultimately resulted in an overpayment of benefits to the employee that was greater than the $45.99 in overwithheld attorney fees allegedly due to be released to the employee and claimed for over two years, where accounting for the overwithholding was relatively difficult, any delay by the employer and insurer in releasing the sum claimed did not warrant a penalty under Minn. Stat. ' 176.225, subd. 1 or subd. 5.

 

Affirmed.

 

Determined by Pederson, J., Johnson, C.J., and Wilson, J.

Compensation Judge:  Janice M. Culnane

 

OPINION

 

WILLIAM R. PEDERSON, Judge

 

The employer and insurer appeal from the compensation judge's award of permanent partial disability benefits.  The employee cross-appeals from the judge=s denial of a penalty for the employer=s failure to release to the employee $45.99 in overwithheld attorney fees.^[1]  We affirm.

 

BACKGROUND

On or about November 10, 1999, James Erkkila sustained a work-related injury to his back in the process of lifting a trailer in the course of his employment with Arrowhead Heating, a/k/a Peter Bertucci.  Mr. Erkkila [the employee] was forty-seven years old on that date and was earning a weekly wage of $460.00.  Arrowhead Heating [the employer] referred the employee to chiropractor Dr. Brian Plesha, whom the employee saw the following day.  Dr. Plesha reported that the employee had been Aunable to stand erect due to LB pain/spasm@ after his work injury and that the pain was currently even worse.  He diagnosed a sprain/strain and restricted the employee from working for four days.  The employee apparently returned to work, but his pain, stiffness, and spasm persisted.  At the beginning of March 2000, Dr. Plesha restricted him from lifting over twenty-five pounds, from bending, twisting or reaching, and from performing any overhead work.  Restrictions thereafter were gradually relaxed, until, by a Report of Work Ability dated April 12, 2000, Dr. Plesha eventually released the employee to work again without restrictions, recommending, however, that he should use Acaution with heavy lifting@ and be allowed Adiscretion@ in his work activities.

 

On April 20, 2000, the employer and insurer served on the employee a Notice of Intention to Discontinue benefits [NOID], on grounds that the employee had been released to work without restrictions and was currently not working with the employer only due to Athe slow nature of their business.@  The matter was addressed at an administrative conference on May 22, 2000, and on May 25, 2000, the judge denied discontinuance of benefits, concluding that the employee was, in fact, unable to return to his pre-injury level of employment without accommodation.  No appeal was taken from that decision.

 

On May 24, 2000, the employee had begun treating with chiropractor Dr. Michael Skorich, who found restricted motion from T7 to T10 and from L4 to S1, together with severe tenderness/hypertonicity/spasm from T7 to T10 and moderate to severe tenderness/hypertonicity/spasm also in the low back.  A Kemp=s test, straight leg raising tests, a Lasegue=s test, and a heel to buttock sacroiliac stretch test were also positive in the low back.  On June 7, 2000, following the denial of the employer and insurer=s request for discontinuance, the employee=s attorney filed a statement of attorney fees, claiming fees in the amount of $255.00, and on June 16, 2000, he apparently filed a medical request, seeking a change of physicians from Dr. Plesha to Dr. Skorich.  The attorney fees requested on June 7, 2000, were awarded by an order issued June 29, 2000, but they were not immediately paid out.  Meanwhile, payment of benefits continued, and additional attorney fees were withheld accordingly.  At a deposition on July 10, 2000, the employee=s attorney apparently asked that withheld attorney fee amounts over and above the $255.00 that had been awarded him on June 29, 2000, be released to the employee.  On July 13, 2000, the employer and insurer served on the employee another NOID, on grounds that the employee had returned to work at full wage, alleging also in part that $920.05 had been withheld from the employee=s benefits as attorney fees.  For the period February 28, 2000, through July 13, 2000, the employer ultimately paid the employee a total of $6,210.32 in wage loss benefits, a figure that apparently proved later to contain an overpayment of $138.06.

 

On July 19, 2000, the employee returned for further treatment with Dr. Skorich, who noted that Abending aggravatesBcauses muscle spasms in LB.@  The employee=s request for a change of physicians was granted by an order issued July 27, 2000, and on July 31, 2000, the employee filed a claim petition, alleging entitlement to temporary total disability benefits from March 2, 2000, through July 13, 2000, to penalties Afor failure to pay attorney fees as awarded,@ and to a consultation with a QRC, all related to his work injury on November 10, 1999.  On that same date, July 31, 2000, the employer and insurer paid to the employee=s attorney the $255.00 in withheld attorney fees that had been ordered paid to him on June 29, 2000.  In their Answer filed August 14, 2000, the employer and insurer alleged in part that the employee had been paid temporary total disability benefits in full for the period March 2, 2000, through July 13, 2000, that he was not due any penalties, and that he had returned to work at the pre-injury employer at his pre-injury wage and so was not entitled to any rehabilitation.

 

On October 18, 2000, Dr. Skorich entered ANone@ in the blank headed AWork restrictions and duration@ on a form for authorizing release of medical and employment information regarding the employee=s condition.  However, in a July 25, 2001, report to the employee=s attorney, Dr. Skorich indicated that an orthopedic examination of the employee on June 8, 2001, had revealed moderate bilateral Atenderness/hypertonicity/spasm@ from T12 through L5, restricted range of motion eliciting pain at L5 on the left, positive Bechterrew=s, straight leg raising, and Lasegue=s tests bilaterally, and a positive Ely heel to buttock sacroiliac stretch test and confirming Yeoman=s test, eliciting sacroiliac pain at L5-S1.  On those findings, Dr. Skorich rated the employee=s work-related permanent partial disability at 7% of the whole body, as a single-level lumbar pain syndrome under Minn. R. 5223.0390, subp. 3.C., which the doctor quoted as requiring Asymptoms of pain or stiffness in the region of the lumbar spine, substantiated by persistent objective clinical findings, that is involuntary muscle tightness in the paralumbar muscles or radiographic, myelographic, CT scan or [sic] MRI scan abnormality not specifically addressed elsewhere in this part.@  Dr. Skorich noted in addition that x-rays the previous year, on February 28 and March 30, 2000, had revealed in part Aa narrowed disc space between L5 and S1, indicating degenerative or traumatic disc injury.@

 

On June 21, 2001, the employee filed a medical request, seeking payment of $462.00 in bills for treatment with Dr. Skorich, and on July 6, 2001, the employer and insurer refused to pay for that treatment, on grounds that the employee had returned in April 2000 to work without other than discretionary restrictions, that the treatment with Dr. Skorich was not reasonable and necessary or causally related to the employee=s work injury, and that the treatment was precluded under the twelve-week provision of Minn. R. 5221.6200, subp. 3, of the treatment parameters.

 

On August 15, 2001, the employee=s attorney wrote to counsel for the employer and insurer, in part reiterating evidence discussed at a settlement conference two weeks earlier, that, instead of $920.05 having been withheld in attorney fees, as had been represented on the July 13, 2000, NOID, $966.04 had been withheld.  The employee=s attorney recounted that this error had resulted in an overwithholding of about $46.00, which was to have been released to the employee as temporary total disability benefits but, implicitly, had not been.  The employee=s June 21, 2001, medical request for payment of expenses of treatment with Dr. Skorich was considered at an administrative conference on August 17, 2001, on which date the employee also amended his claim petition to allege entitlement to additional compensation, for the 7% whole-body impairment rated by Dr. Skorich.  On August 21, 2001, the employee=s attorney wrote again to counsel for the employer and insurer, stating in part Aplease release the escrowed attorney=s fees to [the employee] as requested on August 1, 2001.@  On August 23, 2001, the employer and insurer denied the employee=s amended claim petition for benefits including permanent partial disability compensation, but on August 28, 2001, their attorney wrote to the employee=s attorney, agreeing to Arelease any [attorney] fees to the employee if they are being withheld.@  On October 2, 2001, the employee=s attorney wrote again to counsel for the employer and insurer, complaining that the employee still had not received any escrowed fees.  The employee=s medical request for payment of his bill with Dr. Skorich had by that date been granted by a decision and order filed September 19, 2001, and on October 3, 2001, the employer and insurer requested a formal hearing on that matter.  On October 8, 2001, counsel for the employer and insurer wrote to the employee=s attorney, apparently enclosing evidence intended to demonstrate Athat the attorney fees were released to the employee and there are no additional attorney fees being held by the employer and insurer.@

 

On November 12, 2001, the employee was examined for the employer and insurer by chiropractor Dr. Rick Reidt.  After interview of the employee, review of his medical records, and physical examination that revealed Ano objective findings that would substantiate any ongoing problems,@ Dr. Reidt concluded in part that the employee=s work injuries had completely resolved and that the employee was no longer subject to any physical restrictions.  Dr. Reidt concluded further that the employee was no longer in need of any further medical or chiropractic treatment, having reached maximum medical improvement [MMI] already by April 11, 2000, from the work injuries at issue, having sustained no permanent partial disability as a result of those work injuries. 

 

The claim petition and request for formal hearing were consolidated for hearing, and on July 15, 2002, the insurer=s claims adjuster, Norman McNary, testified by deposition, in part that the figure of $920.05, alleged in the July 13, 2000, NOID as the amount of attorney fees paid to date to the employee=s attorney, was incorrect and that the more accurate figure was $966.04.  The consolidated matter eventually came on for hearing on August 20, 2002, where the parties stipulated to a settlement of Dr. Skorich=s chiropractic bills and the employer and insurer agreed to pay to the employee=s attorney, Aas an additional award,@ a penalty of $140.25 for their Afailure to pay the $255.00 [in attorney=s fees] to [the employee=s attorney] in a timely manner.@  According to the judge=s eventual Findings and Order, issues actually litigated at the hearing included the following: (1) the employee=s entitlement to compensation for a permanent partial disability rated at 7% of his whole body under Minn. R. 5223.0390, subp. 3.C.(1); (2) the employee=s entitlement to an additional $45.99 in temporary total disability benefits for the period February 29, 2000, through July 13, 2000, which had been mistakenly withheld as attorney fees; and (3) the employee=s entitlement to an additional award of a penalty pursuant to Minn. Stat. ' 176.225, subd. 1 or 5, for the insurer=s failure to release that $45.99, as requested by the employee in July 2000.  By that same Findings and Order, filed October 18, 2002, the compensation judge concluded in part that the employee was entitled to the permanent partial disability compensation at issue but was not entitled to an additional $45.99 in temporary total disability benefits or to any penalty based on any failure by the employer and insurer to pay such benefits.  The employer and insurer appeal from the award of permanent partial disability benefits, and the employee appeals from the judge=s denial of the employee=s claim for a penalty on the employer and insurer=s failure to pay $45.99 in overwithheld attorney fees upon the employee=s long-standing request.

 

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.

 

DECISION

 

1.  Permanent Partial Disability

 

The compensation judge concluded that the employee sustained a 7% whole-body impairment, as rated by Dr. Skorich, as a result of his work injury.  The employer and insurer contend on appeal that there was inadequate foundation for Dr. Skorich=s opinion.  They argue, based on Dr. Skorich=s quotation of the requirements of the rule at issue, that Dr. Skorich was apparently of the understanding that the rule under which he rated the employee=s permanent partial disability, Minn. R. 5223.0390, subp. 3.C.(1), requires certain symptoms, persistent objective clinical findings, Aor@ any radiographic abnormality rather than Aand@ any radiographic abnormality, as the rule actually requires.  They contend that such a misconception on the part of Dr. Skorich would constitute a failure of supportive foundation for his rating of the employee=s permanency, primarily in that Athe employee in this case has had no persistent objective clinical findings that would warrant a 7% rating.@  We are not persuaded.

 

In the memorandum accompanying her Findings and Order, the compensation judge acknowledged adverse examiner Dr. Reidt=s Aopinion that uncomplicated spinal injuries resolve within 12 weeks of onset.@  The judge rejected that opinion, however, concluding that Athis employee=s condition is clearly more than an uncomplicated spinal strain,@ as evident in the employee=s long history of ongoing and chronic symptomology, despite a change of jobs and measures taken by the employee to minimize his symptoms.  The employer and insurer argue that the judge here Aseems to indicate that the employee had subjective complaints@ but that she Afails to point to any evidence in the record of persistent objective clinical findings@ (emphasis in original).  They argue that, on the other hand, Dr. Reidt found on examination of the employee Ano objective clinical evidence to support a 7% rating,@ specifically Ano evidence of swelling or spasm, and he found normal range of motion.@  To the contrary, however, the compensation judge cited Dr. Skorich=s documentation of Ainvoluntary muscle tightness@ (emphasis added), which is supported in the medical record, beside other evidence reasonably construed as persistent objective clinical findings.  In May of 2000 Dr. Skorich found severe Atenderness/hypertonicity/spasm@ in the employee=s thoracic back, moderate to severe similar conditions in the employee=s low back, and positive responses to a Kemp=s test, straight leg raising tests, a Lasegue=s test and a heel-to-buttock sacroiliac stretch test.  At an examination of the employee two months later, in July 2000, Dr. Skorich found that Abending aggravatesBcauses muscle spasms@ in the employee=s low back.  At an examination nearly a year later, in June 2001, Dr. Skorich again found tenderness/hypertonicity/spasm in the employee=s thoracic and lumbar back, together with restricted range of motion, positive Bechterrew=s, straight leg raising, and Lasegue=s tests, and a positive heel-to-buttock sacroiliac stretch tests with confirming Yeoman=s test.  While these findings of Dr. Skorich over the course of a little over a year may not appear to constitute more than minimal evidence of Apersistent objective clinical findings,@ we conclude that they satisfy the clinical findings requirement of Minn. R. 5223.0390, subp. 3.C.(1), clearly weighed as they were by Dr. Skorich and apparently by the compensation judge.

 

In her memorandum, the compensation judge also concluded that the employee=s involuntary muscle tightness was Aassociated@ by Dr. Skorich Awith radiographic evidence.@  The employer and insurer argue further that, while Dr. Skorich did identify on x-rays some disc space narrowing Aindicating degenerative or traumatic disk injury,@ the doctor was Anot specific, and no doctor recommended further diagnostic testing,@ and Adegenerative changes alone are not enough to support a permanency rating.@  We conclude, however, that Dr. Skorich was entitled to rely on his reading of the x-ray results as support for his finding of radiographic abnormality and that the compensation judge was entitled in turn to credit that conclusion by the doctor.

 

In that the decision of the judge was both supported by expert medical opinion and not unreasonable in light of the medical record as a whole, there being substantial evidence to support a finding of all three elements required under the rule, we affirm the compensation judge=s award of permanent partial disability compensation pursuant to Minn. R. 5223.0390, subp. 3.C.(1).  See Nord v. City of Cook, 360 N.W.2d 337, 342-43, 37 W.C.D. 364, 372-73 (Minn. 1985) (a trier of fact's choice between experts whose testimony conflicts is usually upheld unless the facts assumed by the expert in rendering his opinion are not supported by the evidence); Hengemuhle, 358 N.W.2d at 59, 37 W.C.D. at 239.

 

2. Penalty

 

Among issues litigated before the compensation judge were the employee=s entitlement to have released to him, as additional wage replacement benefits, $45.99 in overwithheld attorney fees, together with an additional award as a penalty, pursuant to Minn. Stat. ' 176.225, subd. 1 or 5, for the employer and insurer=s failure to release that amount upon request over two years earlier.  The compensation judge denied both claims, and the employee appeals from the denial of the penalty.^[2]  Minn. Stat. ' 176.225, subd. 1, provides that a judge Ashall@ award to the employee a penalty of up to thirty percent of the total amount of compensation awarded where the 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 vexationsly 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 1765.239.

 

Minn. Stat. ' 176.225, subd. 1.  That same subdivision provides that, A[f]or purposes of this section, Afrivolously@ means without a good faith investigation of the facts or on a basis that is clearly contrary to fact or law.@  Id.  Subdivision 5 of that same section provides that, where an employer is guilty of Ainexcusable delay@ in making payments, Athe payments which are found to be delayed shall be increased by 25 percent.@  Minn. Stat. ' 176.225, subd. 5.

 

In this case, the employer and insurer ostensibly Aoverwithheld@ attorney fees by $45.99 and then failed to release that amount to the employee despite the employee=s attorney=s several requests that they do so over the course of over two years.  In her memorandum, the compensation judge explained that she had denied release of the $45.99 to the employee because the employee had already received all benefits due him and that, because Anothing additional is owed the employee, there are no grounds for penalties.@  The judge explained that A[t]he withholding of an attorney fee by an employer is not what determines whether or not the fees may be characterized as attorney=s fees@ such as would rightly be the property of the employee if they had been mistakenly overwithheld from the employee=s benefits.  The judge went on to state that, Asince [the employee=s attorney] has been paid in full and since the employee has been paid an amount which exceeds the wage loss claimed, there is no additional money owed to the employee.@  On cross-appeal, the employee requests that this court reverse the judge=s denial of a penalty for the employer=s refusal to release the $45.99 while it appeared to be the property of the employee.  Emphasizing that the insurer=s claims adjuster admitted during deposition testimony that he simply didn=t know how the apparent Aoverwithholding@ of apparent Aattorney fees@ had occurred, the employee argues that

 

[t]he employer and insurer should be penalized, in some fashion, for their recalcitrance and sloppy claims handling.  Otherwise, it is the injured worker who bears the brunt of clearing up the insurer=s mistakes.  The insurer is in a much better position to absorb the costs of litigation necessitated by their own malfeasance.

 

We are not persuaded.

As both the compensation judge and the employer and insurer have emphasized, any accounting sloppiness on the part of the employer and insurer in this case has also resulted in an overpayment of benefits to the employee.  Indeed, the employee=s attorney was presumably as capable of discovering earlier the overpayment of benefits that ultimately nullified the employee=s entitlement to the $45.99 at issue as was the insurer capable of discovering earlier the apparent error in its withholding of attorney fees.  Particularly given the very small sum at issue and the relative difficulty of accounting for the error alleged,^[3] any delay by the employer and insurer in releasing the sum does not in our opinion constitute an action warranting the penalty claimed, particularly in light of the overpayment to the employee.  We conclude that the judge=s denial of a penalty in this circumstance was not at all unreasonable.  Therefore we affirm that denial.