JOSHUA M. JOHANNSEN, Employee, v. NATIONAL STEEL PELLET CO., SELF-INSURED, adm=d by MINNESOTA SELF-INSURERS= SECURITY FUND (SISF), Employer/Appellant.

 

WORKERS= COMPENSATION COURT OF APPEALS

JANUARY 31, 2005

 

No. WC04-224

 

HEADNOTES

 

TEMPORARY PARTIAL DISABILITY - EARNING CAPACITY.  Where the employee returned to work on a part-time basis and remained under work restrictions related to his work injury, substantial evidence supports the compensation judge=s finding that the employee=s loss of earnings during two periods accurately represented his earning capacity and therefore served as a basis for calculation of temporary partial disability benefits.

 

Affirmed.

 

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

Compensation Judge: Peggy A. Brenden

 

Attorneys:  John P. Bailey, Bemidji, MN, for the Respondent.  T. Michael Kilbury, Peterson, Logren, & Kilbury, Minneapolis, MN, for the Appellant.

 

 

OPINION

 

MIRIAM P. RYKKEN, Judge

 

The self-insured employer appeals from the compensation judge=s award of temporary partial disability benefits.  We affirm.

 

BACKGROUND^[1]

 

On March 5, 2001, Joshua M. Johannsen, the employee, sustained an admitted closed head injury while employed as a maintenance mechanic at National Steel Pellet Company, the employer, which was self-insured for workers= compensation liability.  On that date, the employee was 23 years old and earned a weekly wage of $978.31.  The employee was struck on the back of his head by a thick piece of metal machine liner weighing an estimated 150 - 200 pounds.  He was treated for headaches, a stiff neck, and seizure activity.  As a result of his injury, the employee has experienced difficulties with fatigue, dizziness, balance, and cognitive functioning, and he was disabled from all work for approximately six months.  The employer has provided various workers= compensation benefits, including rehabilitation services.^[2]

 

By September 2001, the employee was released to part-time work, 6 hours per day or 30 hours per work, with restrictions of no operation of heavy equipment, no walking on catwalks, no climbing, and no lifting over 50 pounds.  In addition to those restrictions, the employee cannot work at heights or around open moving equipment.  He returned to modified duty with the employer in September 2001 and worked there until the plant temporarily shut down in October 2001.  In October 2001, the employer began providing rehabilitation assistance to the employee.  The employee returned to work for the employer on December 23, 2001, after the plant re-opened.

 

According to a neuropsychological evaluation conducted in January and February 2002, the employee continued to exhibit some cognitive deficits related to his head trauma, as well as some depressive symptoms including changes in his sleep pattern, fatigue, general loss of energy and physical pain.

 

In May 2002, the employee was released to work 8 hours per day, within work restrictions of no alternating schedules, working only on the ground, no climbing or ladder work, and no working near open machinery.  The employee continued working until May 11, 2002, and in May or June 2002, the employee=s position with the employer was terminated based on his inability to resume his usual and customary maintenance position.

 

In June 2002, the employee=s qualified rehabilitation consultant (QRC) developed a new rehabilitation plan, which provided for job placement services and vocational testing.  A job placement plan and agreement (JPPA) was approved by the employee and employer.  The JPPA, which originally extended from June 5 to September 5, 2002, and which apparently was later extended, set forth the goal of returning the employee to maintenance mechanic work or any physically suitable job.  The plan also outlined the employee=s responsibilities for conducting a job search, submitting job logs and maintaining contacts with the QRC.  An August 2002 neuropsychological evaluation indicated that the employee  continued to experience cognitive and memory problems.  Rehabilitation records reflect that, although the employee and QRC conducted a job search, the employee apparently was unable to locate physically suitable employment until April 2003.

 

On April 26, 2003, the employee accepted a position with Clyde=s Lakeside Dock Service in Walker, Minnesota, installing docks and lifts and delivering boats.  The position was seasonal and weather-dependent.  Although the employee=s QRC originally informed the employer  that the employee was to work 40 hours per week in this job, the employee later advised that the position was seasonal and part-time and that he did not typically work 40-hour weeks.  Most work was available in the spring and fall, with less work available during mid-summer. The employee testified that, when he started working for Clyde=s, he had no restrictions on lifting or carrying but was restricted from working above ground level, operating heavy equipment or machinery, working around moving parts, or maintaining the commercial license needed to drive a truck.

 

The employer agreed to pay temporary partial disability benefits, based on the employee=s work for Clyde=s, even after finding out that the job was part-time.  In June 2003, the employer withdrew its request for assignment of an outside placement vendor but authorized the QRC to continue to provide job leads to the employee in an attempt to locate a higher-paying job for him.  The QRC continued to provide rehabilitation assistance to the employee and also briefly explored the option of retraining.   The employee continued to work for Clyde=s until November 2003.

 

At some point in 2003, National Steel Pellet Company, the employer, was sold to U.S. Steel.  National Steel Pellet defaulted on its workers= compensation obligations.  Since the Minnesota Self-Insurers= Security Fund (SISF) is the statutory guarantor for the former self-insured employer, that entity continued to administer this claim.^[3]

 

Before his seasonal work with Clyde=s ended in November 2003, the employee contacted Gerald Albrecht, his father-in-law, to inquire about potential employment.  Mr. Albrecht is a contractor who provides roadway maintenance in Koochiching County, and, once the employee  stopped working for Clyde=s, he began working for Mr. Albrecht.  The employee worked one eight-hour day per week, earning $10.00 per hour and $80.00 per day, performing mechanical equipment maintenance.

 

On December 16, 2003, the employer filed a notice of intention to discontinue benefits (NOID), seeking to stop paying temporary partial disability benefits, based upon the termination of the employee=s employment with Clyde=s.  Following a discontinuance conference held on January 8, 2004, a compensation judge granted the discontinuance of temporary partial disability benefits.  The judge concluded that  the employee was released to full-time employment but was underemployed and that there was no vocational testimony presented to support the employee=s contention that his employment was appropriate.  The employee objected to the discontinuance of benefits, and the matter was set on for hearing.

 

The employer continued to provide rehabilitation assistance to the employee, but, at the discontinuance conference, the parties agreed to a change in QRC.  The new QRC, a registered nurse, conducted a  rehabilitation consultation and issued an initial rehabilitation report on January 23, 2004.  According to that report, the employee indicated that since his 2001 injury he had experienced difficulty with his memory, verbal recall, reading comprehension and computing mathematics.  The initial rehabilitation plan was to include medical management services to identify the employee=s cognitive ability, to determine whether any remedial assistance could be provided to improve his cognitive functioning, and also to evaluate what other opportunities were available for the employee for suitable employment.  In her report of February 24, 2004, the QRC indicated that the employee was being referred for a neuropsychological evaluation and that  the goal of service was to assist the employee Athrough the medical phase and in his return-to work efforts once medically stable.@  On  March 23, 2004, the QRC reported that the employee had been evaluated by a physician for U.S. Steel and that the employee continued to work one day per week with his father-in-law.  In her report of April 21, 2004, which is the latest report in the hearing record, the QRC advised that the neuropsychological consultation had been rescheduled, that the employee had returned to seasonal weather-dependent work, and that there was a possibility that the employee could return to work for U.S. Steel-Minntac, the successor company to National Pellet.

 

The employee=s work for Mr. Albrecht ended on March 25, 2004, and on April 16, 2004, the employee returned to work for Clyde=s Lakeside Dock Service.  He worked approximately 30 hours per week, performing the same types of tasks for Clyde=s that he had performed in 2003.

 

On April 28, 2004, Dr. Daniel Wallerstein, D.O., conducted a physical medicine evaluation of the employee.  At that evaluation, the employee reported continued poor sleep,  memory problems, fatigue, headaches and neck pain.  The employee also reported ongoing limited concentration and a tendency to be easily frustrated.  Dr. Wallerstein recommended physical therapy instruction to strengthen the employee=s upper thorax and scapular stabilizing muscles, in addition to a follow-up neuropsychological evaluation.

 

On June 2, 2004, a hearing was held to address the employee=s objection to discontinuance.  The compensation judge ordered temporary partial disability benefits reinstated from November 21, 2003, the date when the employee had commenced working for Mr. Albrecht.  The compensation judge found that the earnings from the work the employee performed for Mr. Albrecht between November 20, 2003, and March 25, 2004, as well as from the work he performed for Clyde=s between April 16, 2004, and the date of the hearing, accurately reflected his earning capacity.  The judge found that the employee was temporarily partially disabled during those periods, and that his March 5, 2001, injury substantially contributed to that disability.  The employer and SISF appeal.

 

DECISION

 

Expansion of Issues

 

The employer argues that the compensation judge improperly expanded the issues at the hearing by addressing the entire time period from November 21, 2003, to the date of the hearing.  The NOID filed on December 16, 2003, had referred to a discontinuance of benefits after the employee left the employ of Clyde=s Lakeside Dock Service.  In other words, the employer asserted that no temporary partial disability benefits were payable during the period of time that the employee worked for Mr. Albrecht, from November 2003 until April 2004.  By the time of the hearing in June 2004, the employee had stopped working for Gerald Albrecht and had returned to work for Clyde=s.  The employer alleges that the hearing was limited to the issue of whether the Albrecht employment supported temporary partial disability payments and that, since the employee was no longer working for Mr. Albrecht at the time of the hearing, the compensation judge=s award of temporary partial disability benefits based on the employee=s work for Clyde=s was an improper expansion of the issues.  We disagree.

 

Minn. Stat. ' 176.238, subd. 5, provides that a hearing pursuant to a petition to discontinue benefits Ashall be limited to the issues raised by the [NOID] or petition [to discontinue benefits] unless all parties agree to expanding the issues.@  Cf. Putnam v. Yellow Freight Systems, slip op. (W.C.C.A., Oct. 26, 1995).  In its December 16, 2003, notice of intention to discontinue benefits, the employer alleged that:

 

The approved employment was seasonal.  Clyde=s Lakeside Service employment has ended.  The alleged current employment is not reflected in the rehab plan and the employer/insurer has not been provided with any information on the current alleged employer or employment.

 

At the outset of the hearing, the compensation judge outlined the issues to be addressed at the hearing and the stipulations reached by the parties. She stated that AAt issue in today=s case is temporary partial disability from November 20th, 2003, and to the present and continuing.@  The judge then asked counsel if there were any correction or additions either to the issues or the agreements as she had outlined them.  Counsel for both parties indicated that there were no corrections or additions.  (T. 4-5.)  Later, upon learning that the employee had been re-employed at Clyde=s in 2004, the compensation judge also inquired whether there was a continuing issue about entitlement to temporary partial disability even though the employee was re-employed at Clyde=s.  Counsel for the employer and SISF answered in the affirmative.  (T. 13-14.)

 

Based on the discussions held between the judge and counsel at the outset of the hearing, we conclude that the compensation judge did not improperly expand the issues by determining the employee=s entitlement to temporary partial disability benefits after the employee stopped working for Gerald Albrecht and returned to work for Clyde=s.

 

Temporary Partial Disability

 

The compensation judge concluded that the employee had been temporarily partially disabled from employment since November 21, 2003, that his earnings from his work since that date  accurately reflected his earning capacity, and that he therefore was entitled to temporary partial disability benefits, based on his actual earnings, during the periods of November 21, 2003, through March 25, 2004, and continuing from April 16, 2004, Aas long as his disability shall warrant.@  The employer alleges that substantial evidence does not support the compensation judge=s findings that the employee=s part-time wages were representative of the employee=s earning capacity.

 

To demonstrate entitlement to temporary partial disability benefits, an employee must show a work-related physical disability, an ability to work subject to the disability, and an actual loss of earning capacity that is causally related to the disability.  See Krotzer v. Browning-Ferris/Woodlake Sanitation Serv., 459 N.W.2d 509, 43 W.C.D. 254 (Minn. 1990); Dorn v. A.J. Chromy Constr. Co., 310 Minn. 42, 245 N.W.2d 451, 29 W.C.D. 86 (1976).  Where a disabled employee is released to work on a full-time basis but works only at a part-time job, the employee may still be eligible for temporary partial disability benefits if any wage loss is causally related to the personal injury.  Nolan v. Sidal Realty, 53 W.C.D. 388, 394 (W.C.C.A. 1995).  See also Giles v. State, Dep't of Transp., 59 W.C.D. 1 (W.C.C.A. 1999).

 

On appeal, the employer argues that the employee=s actual earnings from his part-time employment did not accurately reflect his earning capacity because the employee did not make a diligent search for work.  Whether wage loss during part-time employment is a result of the personal injury is generally a question of fact.  Nolan, 53 W.C.D. at 394.  In deciding this issue, a compensation judge may consider any relevant evidence on the issue, including, as the employer advocates, the nature and extent of the employee=s job search.  Stauty v. Luigino=s, Inc., 52 W.C.D. 119 (W.C.C.A. 1994); see, e.g., Denardo v. Divine Redeemer Memorial Hosp., 450 N.W.2d 290, 293, 42 W.C.D. 626, 631-32 (Minn. 1990) (supreme court held that where a part-time position was all that the employee was able to obtain because of her disability, that part-time wage was the most reliable evidence of the employee=s earning capacity).  In the present case, the compensation judge did in fact discuss the employee=s job search as follows:

 

The employee has made a lengthy job search.  He has followed up on leads provided to him by his QRC as well as leads he has generated on his own.  The employee is clearly an individual who wanted to work and is willing to take any reasonable action to return to work within his physical limitations.  I find little merit in the employer=s suggestion the employee=s work search thus far has been less than reasonable and diligent.

 

(Memo., p. 5.)  More importantly, the reasonableness and diligence of the employee=s job search is only one factor for the compensation judge to consider and is not an absolute prerequisite to receipt of temporary partial disability benefits.  Nolan, 53 W.C.D. at 394.  More relevant to an analysis of entitlement to temporary partial disability in the present case is the employee=s cooperation with rehabilitation.  See Schreiner v. Alexander Construction, 48 W.C.D. 469 (W.C.C.A. 1993).  The judge concluded that the employee had cooperated with rehabilitation; that finding is supported by the extensive rehabilitation records in evidence.  At the time the employee began working for Mr. Albrecht in November 2003, he continued to work with a QRC.  The parties agreed to a change in QRC in January 2004, and the focus of the employee=s rehabilitation by January 2004 was medical management through a new QRC.  There is no indication in the rehabilitation records, from either QRC, that the employee was not cooperating with rehabilitation efforts.  It also does not appear  from the record that the employee=s physical restrictions had changed since those outlined by his treating physician in May 2002.

 

In her memorandum, the compensation judge referred to the presumption that actual earnings accurately reflect an employee=s earning capacity and referred to the employer=s argument at the hearing that the presumption should not apply in this case.  Although the judge made no specific finding as to whether the presumption of earning capacity applied in this case, she thoroughly explained the bases for her conclusion that the employee had established a loss of earning capacity causally related to his work injury, citing to the employee=s search for employment, his cooperation with rehabilitation, the lack of any other job offers, and the fact that the Awork he has done has benefitted each employer and allowed the employee to be physically active and mentally engaged.@  (Memo, p. 5.).  In addition, the judge, citing to Patterson v. Denny=s Restaurant, 42 W.C.D. 868 (W.C.C.A. 1989), concluded that the Aemployer=s suggestion that the employee could be earning more at this stage in his rehabilitation, is a >theoretical possibility= unsupported by the evidence.@

 

In the present case, whether or not the presumption applies, there is substantial evidence in the record, including testimony, medical records and rehabilitation records, to support the  compensation judge=s determination that the employee=s wage loss continued to be causally related to his work injury, that his wages earned while working for Mr. Albrecht in 2003 and 2004, and for Clyde=s in 2004, accurately reflected his earning capacity, and therefore that he is entitled to temporary partial disability benefits.   We therefore affirm that decision.

 

Burden of Proof

 

The employer also claims that the compensation judge impermissibly shifted the burden of proof at the hearing, arguing that the employee did not show a reasonable and diligent job search.  In this case, there is no indication that the compensation judge erroneously placed the burden of proof on the employer.  Whether the wage loss during part-time employment is a result of the personal injury is generally a question of fact, and, as discussed above, the compensation judge reached her conclusions and made factual findings about the employee=s entitlement to temporary partial disability by considering the employee=s medical history, physical restrictions, job search, and  cooperation with rehabilitation.  We conclude that the compensation judge did not erroneously shift the burden of proof to the employer on the issue of the employee=s entitlement to temporary partial disability.