Employer Foodliner, Inc., and its insurer appeal from the compensation judge’s denial of discontinuance and award of various benefits.  We vacate and remand the matter to the compensation judge for consideration of certain surveillance evidence and additional findings regarding it.

On October 13, 1989, William Herman sustained a work-related injury to his low back arising out of and in the course of his employment as a mechanic with Polka Dot Dairy.  Mr. Herman [the employee] was twenty-seven years old on that date and was earning a weekly wage of $398.97.  Polka Dot Dairy [Polka Dot] and its insurer, Home Insurance Company [Home], acknowledged liability for the low back injury and commenced payment of benefits, including, on March 2, 1992, an anterior and posterior fusion at L5-S1 of the employee’s spine, performed by orthopedic surgeon Dr. John Stark. The employee’s complaints subsequently came to include complaints of cervical and thoracic pain as well, and on September 28, 1993, osteopath Dr. Bruce Bartie performed a transthoracic discectomy/fusion at T7-8 of the employee’s spine.  Polka Dot and Home denied liability for any thoracic injury related to the 1989 lumbar injury, and ensuing litigation over the employee’s claims eventually ended with a decision of the supreme court in June of 1994, summarily affirming this court’s March 9, 1994, affirmance of a compensation judge’s denial of compensation for a thoracic injury.  The parties subsequently reached a stipulation for settlement, and, pursuant to an award on stipulation issued November 14, 1994, Polka Dot and Home paid certain benefits and closed out others, leaving open only medical benefits related to the employee’s low back, subject to all defenses.  Subsequent to that settlement, Home evidently became insolvent, and the Minnesota Insurance Guaranty Association [MIGA] replaced it as Polka Dot’s insurer.

On August 25, 2008, about nineteen years after his injury with Polka Dot, the employee sustained another work-related injury to his low back, when he fell from a truck in the course of his work as a driver with Foodliner, Inc. [Foodliner].  The employee was forty-six years old on the date of this injury and was earning a weekly wage of $944.44.  Foodliner and its insurer, Zurich/Cottingham & Butler Claim Services, Inc. [Zurich], acknowledged liability for the injury and commenced payment of benefits.

On October 23, 2008, the employee was examined for Foodliner and Zurich by orthopedic surgeon Dr. Thomas Nelson.  In his report on November 6, 2008, Dr. Nelson diagnosed lumbar degenerative disc disease status post L5-S1 posterior-superior fusion, with no evidence of radiculopathy on physical examination, which Dr. Nelson expressly noted to be the same as the employee’s diagnosis had been before his August 25, 2008, injury.  In the course of his report, Dr. Nelson noted that he had reviewed a surveillance video of the employee that had been made on September 30 and October 3, 2008.  He described what he saw on the video as follows:

On November 5, 2008, the employee returned to Dr. Stark to seek treatment for this second lumbar injury.  Dr. Stark diagnosed an injury to the L3-4 disc, immediately above the employee’s fusion, and he ordered both a CT scan and an MRI scan.  The scans ordered by Dr. Stark were both conducted on November 18, 2008, and, taken together, were read to reveal (1) a solid spinal fusion at L5-S1 with no residual stenosis, (2) mild L4-5 and L3-4 disc degeneration with minimal retrolisthesis at each level and mild narrowing of the central canal at each level, and (3) mild facet arthropathy at L4-5 and L3-4 with mild narrowing of the neural foramen on the left at L4-5.  In light of these scans and other findings, on December 9, 2008, Dr. Stark recommended an epidural steroid.

The month before, on November 10, 2008, Foodliner and Zurich had filed a notice of intention to discontinue [NOID] the employee’s temporary total disability benefits, apparently in light of the surveillance video.  An administrative conference was held, pursuant to which the employee’s benefits were discontinued apparently as of December 6, 2008.  On December 22, 2008, the employee filed an objection to discontinuance, along with a rehabilitation request and a medical request, alleging entitlement to benefits consequent to his work injury on August 25, 2008.  The employee’s complaints of back and leg pain continued, and on January 6, 2009, Dr. Stark recommended a decompressive hemilaminotomy at L4-5 bilaterally, which Foodliner and Zurich denied.  On February 17, 2009, the employee filed a claim petition, alleging entitlement to the surgery that had been proposed by Dr. Stark and naming Polka Dot and the Special Compensation Fund [the Fund] along with Foodliner and Zurich as the liable parties.  On February 23, 2009, the employee amended his petition, this time naming Home/MIGA as the liable insurer for Polka Dot.  In an answer dated March 3, 2009, Polka Dot and Home/MIGA admitted insurance coverage but denied the employee’s entitlement to benefits, asserting also that the court had no subject matter jurisdiction over MIGA.

On March 16, 2009, Dr. Nelson submitted a supplemental report on his October 23, 2008, evaluation of the employee, after reviewing additional medical records and imaging studies.  Dr. Nelson indicated in his report that the additional records did not change his opinion, either with regard to the employee’s diagnosis or with regard to causation of his condition.  Noting that the employee had only low back pain with minimal complaints of leg pain, Dr. Nelson opined that the mild foraminal stenosis at L4-5 on the left that was found evident on the employee’s CT scan would not have been caused by an acute event such as that experienced by the employee on August 25, 2008.  He opined further that, while the surgery recommended by Dr. Stark at L4-5 might alleviate the employee’s leg pain, it was unlikely to alleviate his back pain, which was more mechanical and due to multilevel degenerative disc disease.  It was also the doctor’s opinion that the employee’s work injury at Foodliner on August 25, 2008, was not a substantial contributing factor in any need for surgery, although his October 1989 injury at Polka Dot, which led to his need for fusion at L5-S1, would be such a factor in the employee’s ongoing degenerative disc disease condition.

On May 5, 2009, Dr. Stark assessed severe low back pain related to transitional level lateral recess stenosis “due to a combination of new injuries and a predisposition of the previous fusion situation.”  With that, he directed the employee to remain off work until after the recommended surgery was accomplished.

On May 26, 2009, the employee was examined for Polka Dot and Home/MIGA by orthopedic surgeon Dr. Mark Engasser.  Dr. Engasser noted early in his report that the employee “cannot recall any specific treatment for his low back over the years until after his injury in August 2008.”  Dr. Engasser’s own medical review, however, noted treatment for the employee’s low back on dozens of occasions at at least a dozen different facilities during that time, beginning with treatment at the River Valley Clinic on June 21, 1985, when the employee is reported as complaining of low back pain that had been going on for “quite a few months.”  He noted also Dr. Nelson’s having reviewed a surveillance video of the employee taken on September 30 and October 3, 2008, and he acknowledged all of the content of that video that had been reported by Dr. Nelson.  Dr. Engasser’s diagnosis was as follows:  (1) lumbar disc degeneration L5-S1 status post anterior posterior fusion March 2, 1992; (2) status post thoracic discectomy, decompression and fusion T7-8 September 28, 1993; (3) multilevel lumbar degenerative disc and facet disease with mild facet arthropathy L4-5 and L3-4 and mild narrowing of the neural foramen on the left at L4-5; and (4) nonorganic pain elements.  It was Dr. Engasser’s opinion that the employee was not a candidate for the lumbar decompression surgery at L4-5 recommended by Dr. Stark, that he “is indeed performing active physical activity which seems to be discordant with what he has been telling me,” and that “there is obviously a discrepancy between the [employee’s] perceived disability and the activity which he is demonstrating on video.”  The doctor acknowledged that he had not personally reviewed the surveillance video, as had Dr. Nelson, but, having noted that the employee also had positive Waddell’s findings on examination, he expressly suggested in this context that, “if [the employee] is physically active, the issue of patient veracity needs to be addressed.”  Finally, it was Dr. Engasser’s opinion that the treatment that the employee had received following his work injury of August 25, 2008, was not at all related to his work injury at Polka Dot in October of 1989 and was entirely consequent to his injury at Foodliner on August 25, 2008.

In a letter dated September 1, 2009, responding to a letter from the employee’s attorney, Dr. Stark opined that the employee’s current low back condition was 50% due to his October 1989 work injury and 50% due to his August 2008 work injury.  He opined further that the two injuries share equally in the employee’s need for surgery and “psychological and social support, which will undoubtedly . . . follow this unreasonable delay in needed medial treatment.”  Dr. Stark indicated that he believed that the employee had sustained additional permanent partial disability from the psychologic and social impact of this delay.  There is no evidence that Dr. Stark ever reviewed the surveillance video.

On October 13, 2009, Dr. Nelson submitted yet another supplemental report, in response to Dr. Stark’s September 1, 2009, letter to the employee’s attorney.  In his report, Dr. Nelson noted in part that the employee had evidently reported to various medical providers a broad range of heights from which he said that he had fallen to injure himself on August 25, 2008 - - all the way from four feet to as many as seven feet.

The matter came on for hearing on October 15 and 28, 2009.  The parties stipulated at hearing in part that certain medical expenses incurred with Intervenor Dr. Stark in the amount of $2,003.45 were reasonable and necessary, their causal relationship to a work injury being the only related issue in dispute.  Issues at hearing included the following:  (1) whether Foodliner and Zurich had reasonable grounds to discontinue the employee’s rehabilitation services as of December 22, 2008, and whether QRC Norris’s services were reasonable and entitled to reimbursement; (2) whether Dr. Stark’s bills and the employee’s related out-of-pocket expenses were causally related to a work injury or injuries and, if so, which injury or injuries; (3) whether the surgery proposed by Dr. Stark and/or the bill for $1,841.00 at the Center for Diagnostic Imaging was reasonable, necessary, and causally related to a work injury or injuries and, if so, which injury or injuries; (4) whether reasonable grounds existed to discontinue temporary total disability benefits as of December 6, 2008; and (5) whether the court had subject matter jurisdiction over MIGA.

At hearing, Foodliner and Zurich offered into evidence a copy of four surveillance reports and two video surveillance CDs with video clips corresponding to those reports, the clips made on September 30, 2008, October 3, 3008, December 19, 2008, and December 24/26, 2008.  The employee’s attorney objected to the CDs in the event they should prove, upon viewing, to be edited, as the attorney for Foodliner and Zurich expected they would.  The compensation judge admitted the surveillance reports without qualification and admitted the two CDs “subject to cross-examination.”  In the course of the hearing, the testifying investigator from the surveillance company, Gary Hahn, acknowledged under cross-examination that he did not personally produce the report and video clip from December 24/26, 2008, that those had been produced by his partner, Matt Ebert.  The compensation judge subsequently removed those pieces of evidence from the record, explaining, “It doesn’t have the proper foundation.  I’m sorry I didn’t understand that when we first went through this but this is all from the report of Mr. Ebert who is not here for testimony.”  The remaining video clips showed the employee involved in the various arguably very back-stressful activities referenced in the IME reports of Drs. Nelson and Engasser.  Also admitted into evidence at hearing were extensive records of the employee’s medical treatment for back complaints at several different care facilities, including the Mayo Clinic and the River Valley Clinic, for several years prior to and following his injury with Foodliner.  The employee himself also testified at hearing, in part that he had been essentially pain free for many years up until his injury with Foodliner.

By findings and order filed March 5, 2010, the compensation judge concluded in part (1) that, consequent to his work injury at Foodliner on August 25, 2008, the employee was restricted from any return to work until after surgery is performed and that reasonable grounds did not exist to discontinue either his rehabilitation benefits or his temporary total disability benefits; (2) that the rehabilitation services provided by QRC Norris were reasonable and causally related to the employee’s work injury and were subject to reimbursement by Foodliner and Zurich, who also were responsible for continued services by QRC Norris; (3) that the medical services by Dr. Stark that were at issue were causally related to the employee’s August 2008 work injury and compensable, and that certain itemized out-of-pocket expenses of the employee, as well as the proposed surgery by Dr. Stark and the December 2008 expenses at the Center for Diagnostic Imaging, were also reasonable, necessary, and causally related to that same injury and so were payable by Foodliner and Zurich; (4) that reasonable grounds did not exist to discontinue the employee’s temporary total disability benefits as of December 6, 2008; and, finally, (5) that the Special Compensation Fund did not have any liability for benefits claimed by or owed to the employee related to the August 25, 2008, work injury.  On those findings, having found also that she did not have jurisdiction to determine claims for reimbursement and/or contribution against MIGA or to decide issues of contribution/reimbursement or apportionment of medical expenses claimed owed by Polka Dot-Home/MIGA, the compensation judge ordered MIGA and the Special Compensation Fund dismissed from the action and Foodliner and Zurich to pay all benefits due to the employee as indicated above.

In the memorandum accompanying her decision, the judge explained that she had found the medical opinions of Dr. Stark more persuasive than those of the independent medical examiners, Drs. Engasser and Nelson.  She explained further that, while she had not excluded Dr. Engasser’s opinion for having been made in light of and apparently in reliance on the surveillance videos,^[1] she herself had apparently not considered the videos, because they “were not accepted into evidence at the hearing, because they did not have sufficient evidentiary foundation to be admitted at the hearing.”  Foodliner and Zurich appeal.

“[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers’ Compensation Court of Appeals] may consider de novo.”  Krovchuk v. Koch Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).

The compensation judge found Foodliner and Zurich liable for all benefits at issue, having relied in part on Dr. Stark’s expert medical opinions over those of Drs. Nelson and Engasser.  In so concluding, the judge indicated expressly that the surveillance videos on which Dr. Engasser appears to have materially relied in forming his causation opinion “were not accepted into evidence.”  It is clear, however, as Foodliner and Zurich have contended, that three of the four video clips that were offered into evidence, together with their accompanying narrative reports, were formally admitted into evidence by the judge, and were retained in evidence.  The employee expressly conceded this fact at oral argument of this matter.  Foodliner and Zurich contend that, having clearly admitted them into the evidence of record, the compensation judge erred by not considering those three video clips in her deliberations and addressing their content in her findings and order.  They argue that what is visible on those clips directly calls into question the credibility of the employee’s report to Dr. Stark of incapacitating pain since the date of his injury.  Since Dr. Stark relied in part on that report in forming his medical opinion and evidently did not see the clips, and since the judge in turn relied on that opinion of Dr. Stark in assessing the degree of the employee’s disability, the employee’s credibility in light of those video clips was a critical issue that was, they argue, reversible error for the judge not to address.  We agree that the judge erred in not considering and addressing the admitted video clips.

Minnesota Statutes § 176.371 provides that “[t]he compensation judge to whom a petition has been assigned for hearing, shall hear all competent, relevant evidence produced at the hearing.”  Clearly the three surveillance video clips and reports here at issue are relevant to the credibility of the employee’s claim for benefits, and, contrary to the judge’s recollection that they had been excluded from evidence on grounds of foundation, they clearly were included in the record at the time of trial.  Those materials were clearly influential in the rejected expert medical opinion of Dr. Engasser and perhaps in that of Dr. Nelson, and, having been properly made part of the record, they should have been considered by the judge in her deliberations and addressed by the judge in her decision.  On this conclusion, we have no recourse but to vacate and remand the matter to the compensation judge, for new and additional findings made after such consideration.