WILLIAM F. SERRA, Employee/Appellant, v. HANNA MINING CO./NATIONAL STEEL PELLET, SELF-INSURED/MINN. SELF-INSURED SECURITY FUND, Employer.

 

WORKERS= COMPENSATION COURT OF APPEALS

APRIL 12, 2005

 

No. WC04-298

 

HEADNOTES:

 

TEMPORARY PARTIAL DISABILITY - SUBSTANTIAL EVIDENCE.  Where there was no evidence of any non-job-search factors that would have supported the judge=s decision, the compensation judge erred, under the principles articulated in Marsolek v. Geo. A. Hormel & Co., in denying the employee=s claim for temporary partial disability benefits at the temporary total disability rate for the period immediately following the employee=s termination from his post-injury job, during which period the employee had conducted a reasonably diligent search for employment.

 

EARNING CAPACITY; TEMPORARY PARTIAL DISABILITY - IMPUTED WAGE.  Where the employee=s employment in his post-injury job with a bank was terminated after eighteen years and subsequently, after a reasonable job search, he found other work at a convenience store, where there was no evidence that higher paying work was available in the employee=s job market, and where the employee QRC testified that the employee=s earnings at the convenience store properly demonstrated the employee=s current earning capacity, the compensation judge=s finding that the employee=s post-injury wage at the bank, rather than his wage at the convenience store, accurately represented the employee=s earning capacity was clearly erroneous and unsupported by substantial evidence, and the judge=s decision to that effect was reversed.

 

Reversed.

 

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

Compensation Judge: Cheryl LeClair-Sommer

 

Attorneys:  Allan Webb, Burnsville, MN, for the Appellant. T. Michael Kilbury, Peterson, Logren & Kilbury, St. Paul, MN, for the Respondents

 

 

OPINION

 

 

WILLIAM R. PEDERSON, Judge

 

The employee appeals from the compensation judge=s denial of his claim for temporary partial disability benefits from May 3, 2004, through September 2, 2004, and from the judge=s award of temporary partial disability benefits continuing from September 3, 2004, based upon an imputed wage.  We reverse.

 

BACKGROUND

 

The facts in this case are essentially undisputed.  On March 13, 1981, William Serra [the employee] sustained a fracture of his right femur in an automobile accident in the course of his employment as a foreman in training with Hanna Mining Company [the employer], which was self-insured at the time against workers= compensation liability.  The employee was twenty-six years old on the date of his injury and was earning a weekly wage of $453.00.  Following his injury, the employee returned to work for the employer at several light duty positions, but, following multiple surgeries and castings of his fracture, he soon developed additional symptoms and limitations also in his right knee.  Eventually, in July of 1985, the employee was laid off by the employer for economic reasons, and about a month later he and his wife moved from Hibbing to Brainerd, Minnesota, where his wife had accepted a teaching position.  The employee searched for work within his restrictions in the Brainerd area, and eventually, on March 17, 1986, he found a job as a bank teller with the First American Bank of Brainerd, now Bremer Bank.  Thereafter, the employee was paid temporary partial disability benefits based on his actual earnings at Bremer Bank.  Meanwhile, the condition of his right knee had continued to deteriorate, and eventually, in November of 2003, he underwent a total knee replacement, performed by his long-time treating physician Dr. Franklin Sim, at the Mayo Clinic  It is undisputed that the employee has sustained a permanent injury to his right leg and has restrictions that preclude his returning to his pre-injury job.

 

The employee worked for Bremer Bank until May 3, 2004, when this employment was terminated for reasons unrelated to his work injury.  On May 24, 2004, the employer filed a Notice of Intention to Discontinue [NOID] the employee=s temporary partial disability benefits on grounds that the employee had been terminated by his post-injury employer for cause.  The employer=s request to discontinue benefits was denied, pursuant to an Order on Discontinuance issued July 7, 2004, in which the employer was ordered to pay the employee at his full compensation rate for temporary total disability.^[1]  The employer filed a Petition to Discontinue Benefits on August 5, 2004.  In its petition, the employer alleged as follows:  (1) that the employee had been separated from physically suitable alternative employment as a bank teller for reasons unrelated to his March 13, 1981, work injury; (2) that the employee=s present loss of earning capacity was unrelated to the work injury; (3) that the employee had not reasonably or diligently searched for alternative suitable employment; and (4) that there is no evidence linking the employee=s current loss of employment and/or earning capacity to the work injury.  In the alternative, the employer alleged that, if the employee is entitled to temporary partial disability benefits, such benefits must be calculated by using the differential between the date of injury wage and the wage that the employee was earning when he was separated from the bank teller position.

 

The employee was unemployed from May 3, 2004, until September 3, 2004, when he commenced employment at a Super America store.  Since September 3, 2004, the employee has worked close to full-time hours at a wage of $7.00 an hour.

 

The employer=s Petition to Discontinue Benefits came on for hearing before a compensation judge on September 24, 2004.  The parties stipulated that the employee had sustained a personal injury arising out of and in the course of his employment with the employer on March 13, 1981; that the employee=s weekly wage on the date of injury was $453.00; that the employee had left his employment at Bremer Bank on May 3, 2004, for reasons unrelated to the work injury; and that, when he left the employment at Bremer Bank, the employee had been earning $429.00 a week. Witnesses at trial included the employee and qualified rehabilitation consultant Michael Trossen.  The employee testified that he began searching for other work within his restrictions the day following his termination from Bremer Bank.  He testified that he had contacted the Minnesota Job Service, that he had performed a daily search of the online job bank, that he had regularly checked the newspapers, and that, early in his search, he had been assigned the rehabilitation assistance of Mr. Trossen, with whom he had signed a rehabilitation plan and job placement plan and agreement [JPPA] within a week.  Mr. Trossen testified that the employee had been fully compliant with the rehabilitation plan and the JPPA and had fulfilled all expectations that Mr. Trossen had had for him.  Mr. Trossen testified also that the employee=s restrictions did play a role in establishing the direction for the employee=s job search and that, except for several positions that were explored and found to be beyond the employee=s restrictions, the job search had focused on physically suitable positions.  Mr. Trossen agreed that, as of the date of trial, $7.00 an hour was what the employee had been offered and what he had shown that he could earn.

 

In a findings and order issued October 28, 2004, the compensation judge determined that the employer and insurer had established reasonable grounds to discontinue the employee=s temporary partial disability benefits as of May 3, 2004, by which date the employee had ceased working due to reasons unrelated to the work injury.  The judge concluded that benefits were properly suspended as of May 3, 2004, until such time as the employee could prove a nexus between his loss of earnings and his work injury.  The judge found that the employee did perform a diligent search for employment from May 3, 2004, through September 2, 2004, but that he had not Arehabilitated the nexus between the lack of earnings and the work injury [until] September 3, 2004 when he obtained another job,@ concluding that the overwhelming reason for the employee=s loss of earnings between May and September was not his work injury but his loss of the bank teller job.  Finally, the judge found that the employee=s earnings at Bremer Bank at the time of the termination on May 3, 2004 - - and not his current wages at Super America - - reflect the employee=s current injury-diminished earning capacity.  The employee appeals.

 

DECISION

 

Citing Marsolek v. Geo. A. Hormel & Co., 438 N.W.2d 922, 41 W.C.D. 964 (Minn. 1989), the compensation judge concluded, in denying the benefits at issue, that the employee=s entitlement to benefits was properly Asuspended@ when he was terminated by Bremer Bank and that his loss of earning capacity during his subsequent period of unemployment, May 3 through September 2, 2004,  was not causally related to his disability.  Noting that the employee=s physical capacity due to the work injury did not change in any manner as of May 3, 2004, the judge explained in her memorandum that the employee=s unemployment during this period was related not to the employee=s work injury or restrictions but to the employee=s own actions.

 

On appeal, the employee argues that the compensation judge erred in her application of the holding in Marsolek, having addressed her analysis to the wrong question.  The pertinent question, he contends, is not AWhy was the employee separated from a post-injury job?@ but, rather, AWhat is the demonstrated role of the work injury in the employee=s ongoing wage loss?@.  The employer argues that the judge=s finding on causation is amply supported by the record.  As the judge noted, it argues, the employee stipulated that his loss of the Bremer Bank job was for reasons unrelated to the work injury and the employee=s restrictions were no different after the loss of that job from what they had been before its loss.  These additional considerations, the employer contends, support the judge=s suspension of benefits through September 2, 2004.  The employer argues that the employee=s job search is only one factor to consider under Marsolek and that, when it is viewed in light of the Atotality of the circumstances,@ the decision of the judge is supported by substantial evidence.  Under the facts presented here, we agree with the appellant employee.

 

To prove entitlement to temporary partial disability benefits, an employee must demonstrate a work-related physical disability and an actual loss of earning capacity causally related to the disability.  Krotzer v. Browning-Ferris, 459 N.W.2d 509, 43 W.C.D. 254 (Minn. 1990).  The presence of physical restrictions and the effect of such restrictions on an employee=s ability to work is a central consideration in determining entitlement to wage loss benefits.  See, e.g., Kautz v. Setterlin Co., 410 N.W.2d 843, 40 W.C.D. 206 (Minn. 1987).  A job that is no longer available to an employee is of little or no value for purposes of determining entitlement to wage loss benefits.  Tottenham v. Eaton Char-Lynn Corp., 43 W.C.D. 71 (W.C.C.A. 1990).

 

Whether the employee in the present case was terminated for misconduct or for some other reason is not clear from the record.  However, it is well settled that termination from employment for reasons not connected to the work injury does not preclude an award of temporary partial disability benefits.  See Marsolek v. Geo. A. Hormel Co., 438 N.W.2d 922, 41 W.C.D. 964 (Minn. 1989); Johnson v. State, Dep't of Veterans Affairs, 400 N.W.2d 729, 39 W.C.D. 367 (Minn. 1987; Mayer v. Hormel Foods Corp., slip op. (W.C.C.A. Apr. 18, 2001).  In such a case, the question remains whether there is a causal relationship between the work injury and the wage loss, and such a relationship is still best proven by a reasonably diligent job search.  See, e. g., Marsolek, 438 N.W.2d at 924, 41 W.C.D. at 968.  Here, the judge found that the employee performed a diligent job search from May 3 through September 2, 2004.  It is evident from the record that the employee was subject to physical restrictions related to his work injury at all times during the period of his claim.  Nor does the employer argue that he was not.  The fact that the employee lost his post-injury job for reasons unrelated to his injury or that he remains physically able to perform such a job is not relevant to the question of whether the employee=s actual loss of earning capacity is causally related to the work injury.  An injured employee establishes such a causal relationship Aby showing that the work the employee is capable of doing is unavailable, and unavailability is shown by a diligent job search to no avail.@  Redgate v. Sroga=s Standard Service, 421 N.W.2d 729, 733, 40 W.C.D. 948, 954 (Minn. 1988).

 

While we grant that the court=s language in Marsolek apparently permits a judge to consider factors in addition to job search in making the causal relationship determination, we find no evidence of any such factors that would support the judge=s decision.  We agree with the employee that, under the principles articulated in Marsolek, the compensation judge erred in denying the temporary partial disability benefits claimed from May 3 through September 2, 2004.  Therefore, we reverse the determination of the judge and award benefits during that period at the employee=s full compensation rate for his temporary total disability.

 

The employee contends also that the judge erred in finding that the employee retained an imputed earning capacity equal to his ending wage at Bremer Bank.  The employer, on the other hand, contends that questions of Aability to earn@ are questions of fact and that the judge=s determination imposing an imputed earning capacity is supported by substantial evidence.  We agree with the employee, that the judge erred in imputing a wage from a post-injury job no longer available to the employee.  See, e.g., Larson v. Gorman Foundry, 60 W.C.D. 257 (W.C.C.A. 2000); Mayer v. Hormel Foods Corp., slip op. (W.C.C.A. Apr. 18, 2001); Millerbernd v. Spectrol, Inc., 47 W.C.D. 479 (W.C.C.A. 1992).

 

A disabled employee=s earning capacity is the level of compensation that the employee can obtain by employment that he can do that is actually available to him in his or her employment community.  Patterson v. Denny=s Restaurant, 42 W.C.D. 868 (W.C.C.A. 1989).  Actual earnings are presumed to be a fair measure of earning capacity, see, e.g., Roberts v. Motor Cargo, Inc., 258 Minn. 425, 104 N.W.2d 546, 21 W.C.D. 214 (1960), and this presumption is Aa rule of law dictating decision on unopposed facts,@ Jerabek v. Teleprompter Corp., 255 N.W.2d 377, 29 W.C.D. 621 (Minn. 1977).  While there may be circumstances in which this presumption can be rebutted with evidence indicating that the employee=s ability to earn is different from his post-injury wage, Einberger v. 3M Co., 41 W.C.D. 727, 739 (W.C.C.A. 1989), evidence in rebuttal must be more than evidence of a hypothetical job paying a theoretical wage, Saad v. A.J. Spanjers Co., 42 W.C.D. 1184, 1194 (W.C.C.A. 1990).

 

In the present case, there is no evidence in the record as to why the employee lost the job at Bremer Bank.  The job was no longer available to the employee after May 3, 2004.  Once the employee had found post-injury employment following his termination from the bank, the employee=s actual earnings became presumptively representative of his post-injury earning capacity.  The compensation judge correctly noted that the concept of earning capacity is not static.  See Tottenham v. Eaton Char-Lynn Corp., 43 W.C.D. 71, 78 (W.C.C.A. 1990) (AAn employee=s earning capacity is neither static nor amenable to a final determination valid for all future periods.@).  An employee=s earning capacity depends directly on the employee=s value in the labor market in light of his age, experience, disabilities and restrictions.  To impute an earning capacity in the absence of evidence establishing that a job affording the imputed level of compensation is actually available is to essentially deny the employee the possibility of proving a causal relationship between subsequent demonstrated wage loss and the employee=s disability.  This would render meaningless the employee=s right to redeem eligibility to benefits as established in Marsolek, wherein the court stated,

 

a justifiable discharge for misconduct suspends an injured employee=s right to wage loss benefits; but the suspension of entitlement to wage loss benefits will be lifted once it has become demonstrable that the employee=s work-related disability is the cause of the employee=s inability to find or hold new employment.  Such a determination should be made upon consideration of the totality of the circumstances including the usual work search Arequirements.@

 

Marsolek, 438 N.W.2d at 924, 41 W.C.D. at 968.

 

The employer appears to argue, from a previous determination by this court,^[2] that the  employee=s bank teller position represented an accurate reflection of the employee=s reduced earning capacity which is binding on the employee unless his subsequent claim for temporary disability benefits is also occasioned by a substantial worsening of his medical condition.  We disagree.

 

The judge=s and the employer=s emphasis on the circumstances surrounding the employee=s termination is misplaced.  At the time that he accepted the position at Super America, the employee had a physical disability and work restrictions causally related to his work injury.  After performing a reasonably diligent work search, he accepted the only job that he has been offered.  There is no evidence that the employee rejected any jobs that paid more than his earnings at the convenience store.  QRC Trossen testified that the employee=s earnings at Super America demonstrated the employee=s current earning capacity.  We therefore conclude that the judge erred in applying an imputed earning capacity to the employee=s claim for temporary partial disability benefits continuing from September 3, 2004.  We therefore reverse the finding and order of the compensation judge and direct the employer to pay temporary partial benefits calculated on the employee=s actual earnings.