MARK C. SHEPARD, Employee, v. LORAM MAINT. OF WAY and LIBERTY MUT. INS. CO., Employer-Insurer/Appellants.

 

WORKERS’ COMPENSATION COURT OF APPEALS
JANUARY 5, 2010

No. WC09-4974

HEADNOTES

TEMPORARY PARTIAL DISABILITY - EARNING CAPACITY.  The employee’s earnings were too insubstantial to establish entitlement to temporary partial disability benefits.  The record does not support the compensation judge’s finding that the employee’s part-time work constituted gainful employment and was not sporadic employment resulting in an insubstantial income, and therefore the compensation judge’s denial of the employer and insurer’s request to discontinue temporary partial benefits is reversed.

Reversed.

Determined by: Rykken, J., Johnson, C.J., and Stofferahn, J.
Compensation Judge: Cheryl LeClair-Sommer

Attorneys: Benjamin J. Heimerl, Germscheid, Heimerl & Lammers, Maplewood, MN, for the Respondent.  Susan K.H. Conley, Arthur Chapman, Kettering, Smetak & Pikala, Minneapolis, MN, for the Appellants.

 

OPINION

MIRIAM P. RYKKEN, Judge

The employer and insurer appeal the compensation judge’s finding that the employee’s part-time work represents gainful employment as the basis for temporary partial disability benefits and appeal from the order denying their request to discontinue temporary partial disability benefits.  We reverse.

BACKGROUND

On November 11, 2006, Mark Shepard, the employee, sustained an admitted work injury to his right knee and low back while working for Loram Maintenance of Way, the employer, which was insured for workers’ compensation liability by Liberty Mutual Insurance Company, the insurer.  On that date, the employee earned a weekly wage of $789.57, which entitled him to a compensation rate of $526.38.  The employer and insurer paid various workers’ compensation benefits, including three weeks of temporary partial disability benefits immediately following his injury, and 104 weeks of temporary total disability benefits, extending through December 19, 2008.

In October 2007, the employee and insurer offered the employee a rehabilitation consultation with Robin Franks, qualified rehabilitation consultant [QRC].  At that point, the employee was residing in the state of New York.  In February 2008, the employee indicated that he wanted to choose his own QRC, and Robin Franks withdrew from the case on March 4, 2008, and advised the Minnesota Department of Labor and Industry that she would close her file.  It is not clear from the record as to what additional communications were conducted between the employee and the QRC.  No further rehabilitation services were provided to the employee at that time.

The employee’s temporary total disability benefits ended in December 2008 at the statutory maximum.  At that time, the employee’s work restrictions included no lifting over ten pounds, frequent position changes, no bending or squatting, and working no more than four hours per day, five days per week.

In January 2009, QRC Franks apparently advised the employee that he was not eligible for job placement services and that he did not qualify for job search assistance since he lived outside of Minnesota.[1]  The employee began working for a friend named Paul Byrnes at PRB Trucking; Mr. Byrnes owned and operated a dump truck service.  Under his agreement with PRB Trucking, the employee had no set hours, and he worked on Fridays and Saturdays, after which he reported his hours “on the honor system.”  He was paid either based on an hourly rate of $7.50 or $8.00, or by the job, to clean, organize, or pick up parts.  According to Mr. Byrnes, who testified by deposition, at certain times the employee would perform a job and Mr. Byrnes would assign a dollar amount for wages as opposed to calculating pay by the hour.  The records in evidence show that the employee earned $20.00 to $25.00 per week for the few hours he worked in January and part of February while working for PRB Trucking.  According to Mr. Byrnes, neither he nor the employee worked later in February because there was no work available for his trucking business.  Mr. Byrnes also explained that “[t]here wasn’t a whole lot to do in the wintertime” and that because his garage was not heated, he did not expect anybody to stand in the cold for any length of time.  He also explained that the employee occasionally helped him at his home with yard work, and that the employee had also assisted with the construction of a shed during 2009, for which Mr. Byrnes paid him cash.

On February 3, 2009, the employer and insurer filed a notice of intention to discontinue temporary partial disability benefits [NOID] on the basis that the employee’s earnings were “so sporadic and insubstantial they do not qualify as gainful employment.”  The employee stopped working for PRB Trucking at that time, evidently because no work was available for the rest of February.  On April 19, 2009, the employee filed an objection to discontinuance.

A hearing was held on June 16, 2009, to address the issue of whether the employer and insurer had reasonable grounds on which to discontinue temporary partial disability benefits as of February 3, 2009.  At the hearing, the parties submitted limited exhibits, including a 2007 report issued following an independent medical examination in 2007, a report from a functional capacity evaluation conducted in August 2008, medical reports completed in early 2009 which list the employee’s work restrictions,[2] notes and a letter drafted by a QRC or case manager associated with the insurer, copies of paychecks issued to the employee, and a temporary partial disability schedule outlining the employee’s claim for benefits.  In her findings and order served and filed July 9, 2009, the compensation judge found that the employee’s part-time employment at PRB Trucking represented more than sporadic employment resulting in an insubstantial income and constituted gainful employment that provided wages on which temporary partial disability benefits could be calculated.  The compensation judge therefore denied the employer and insurer’s request to discontinue benefits.  The employer and insurer appeal.

STANDARD OF REVIEW

On appeal, the Workers' Compensation Court of Appeals must determine whether "the 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.  Substantial evidence supports the findings if, in the context of the entire record, "they 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, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless 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.”  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

DECISION

In order 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).  Once an employee has returned to work and is earning wages, the employee’s actual post-injury earnings are presumed to be an accurate reflection of the employee’s current earning capacity.  Roberts v. Motor Cargo, Inc., 104 N.W.2d 546, 21 W.C.D. 214 (Minn. 1960).  This presumption may, however, be rebutted by evidence which establishes the employee’s post-injury earnings are not an accurate reflection of the employee’s earning capacity.  Mitchell v. White Castle Systems, Inc., 290 N.W.2d 753, 32 W.C.D. 288 (Minn. 1980).  To be entitled to temporary partial disability benefits, an employee must be gainfully employed, working at something more than “sporadic employment resulting in an insubstantial income.”  See Schulte v. C.H. Peterson Constr. Co., 278 Minn. 79, 153 N.W.2d 130, 134, 24 W.C.D. 290, 295 (1967); Hubbell v. Northwoods Panelboard, 45 W.C.D. 515 (W.C.C.A. 1991).  An employee is only entitled to temporary partial benefits for weeks during which he worked.  Parson v. Holman Erection Co., 428 N.W.2d 72, 41 W.C.D. 129 (Minn. 1988).

The employee worked approximately two or three hours per week, and testified that the work was seasonal in nature and that he and Mr. Byrnes hoped that more work would be available later in the year.  The employer and insurer argue that the employee’s earnings can only be described as sporadic and insubstantial, and that the compensation judge’s finding to the contrary must be reversed, citing other cases where employees earning a small amount were found to be earning an insubstantial income.  See Herrly v. Walser Buick, slip op. (W.C.C.A. 1988); Caron v. Beatrice/Hunt Wesson, slip op. (W.C.C.A. Aug. 12, 1991).  We note that “[w]hat constitutes sporadic employment resulting in an insubstantial income is a factual issue, the resolution of which depends not solely on the amount of income earned or the number of hours worked.”  Hildebrandt v. City of St. Louis Park, slip op. (W.C.C.A. Sept. 13, 2004).  When evaluating an employee’s claim for temporary partial disability benefits, a compensation judge may consider such factors as the number of hours the employee worked during a pay period, the salary or hourly wage earned, the reason the employee worked less than full time, the number of hours available with the employer, the nature of the employee’s activities, the facts and circumstances surrounding the employment, and any restrictions on the employee’s work activities.  See Stevens v. S.T. Servs., slip op. (W.C.C.A. Nov. 14, 1991).  In this case, the compensation judge considered factors such as those listed above in determining whether the employee’s work for PRB Trucking constituted gainful employment, and considered them within the context of the employee’s employment situation at the time of the NOID on February 3, 2009.

We acknowledge that what constitutes sporadic employment resulting in an insubstantial income is a factual issue, the resolution of which depends not solely on the employee’s income nor the hours he worked each week, to be decided by the compensation judge as the trier of fact.  See Hildebrandt, slip op. (W.C.C.A. Sept. 13, 2004).  It is the function of this court, however, to determine whether “the findings of fact and order were clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.”  Minn. Stat. § 176.421, subp. 1(3).  The question here is whether the record supports the compensation judge’s decision that the employee, who received wages from very part-time work, could be considered to be gainfully employed, such that he would be entitled to temporary partial compensation.

We conclude that the record does not support the compensation judge’s determination that the employee’s employment during the five weeks at issue, in January and February 2009, represented gainful employment and more than sporadic employment resulting in an insubstantial income.  In our judgment, the employee’s earnings from that employment were simply too insubstantial to establish entitlement to temporary partial disability benefits.  See Johnson v. Laraway Roofing, No. WC05-109 (W.C.C.A. Sept. 22, 2005) (this court reversed an award of temporary partial disability benefits based on weekly wages of $20.00, $21.47, and $50.07 as too insubstantial to establish entitlement to temporary partial disability benefits); Stack v. City of Blaine, slip op. (W.C.C.A. Mar. 31, 1992); Kosloske v. Harmon Glass Co., slip op. (W.C.C.A., July 13, 1991); Dumonceaux v. John's Construction Co., 41 W.C.D. 855 (W.C.C.A. 1988) (affirmance of a denial of temporary partial benefits based on the compensation judge's determination that the $1.00 per day the employee earned from his wife's daycare was insubstantial and sporadic and did not accurately reflect the employee's earning capacity).  We therefore reverse the judge’s decision, and conclude that the employer and insurer had reasonable grounds on which to discontinue temporary partial disability benefits as of February 3, 2009.



[1] According to copies of typed notes drafted by the QRC, contained in Employer’s Exhibit No. 2, and also according to the employee’s testimony.

[2] The exact dates of these report forms are illegible.