EDWIN I. SKARI, Employee, v. AERO SYS. ENG’G, INC., and CHUBB & SON GROUP, Employer-Insurer/Appellants.

EDWIN I. SKARI, Employee, v. AERO SYS. ENG’G, INC., and CHUBB & SON GROUP, Employer-Insurer/Petitioners.

WORKERS’ COMPENSATION COURT OF APPEALS
SEPTEMBER 21, 2010

No. WC10-5093
No. WC10-5095

HEADNOTES

PRACTICE & PROCEDURE - TEMPORARY ORDER; STATUTES CONSTRUED - MINN. STAT. § 176.191, SUBD.1; PERMANENT TOTAL DISABILITY - DISCONTINUANCE.  Minn. Stat. § 176.191 specifically provides that benefits paid pursuant to a temporary order may be discontinued under the provisions of Minn. Stat. § 176.239.  Where permanent total disability benefits were being paid pursuant to a 2002 temporary order, and a stipulation for settlement in 2005 provided solely for payment of contribution and reimbursement by other insurers, stating only that Chubb would remain the paying agent for permanent total disability benefits, there was no adjudication of liability for benefits, and the compensation judge erred in finding she lacked jurisdiction under Minn. Stat. § 176.239 to consider Chubb’s NOID seeking to discontinue permanent total disability benefits.

Reversed and remanded.
Petition to discontinue permanent total disability benefits dismissed.

Determined by: Johnson, C.J., Wilson, J., and Stofferahn, J.
Compensation Judge: Jane Gordon Ertl

Attorneys: Raymond R. Peterson, McCoy, Peterson & Jorstad, Minneapolis, MN, for the Respondent.  Thomas F. Coleman and Whitney L. Teel, Cousineau McGuire, Minneapolis, MN, for the Appellants/Petitioners.

 

OPINION

THOMAS L. JOHNSON, Judge

The employer and insurer appeal the compensation judge’s dismissal of their Notice of Intention to Discontinue Permanent Total Disability Benefits (NOID) and petition this court to discontinue permanent total disability benefits.  We reverse the dismissal of the NOID and remand the case to the compensation judge for a hearing on the issues raised by the NOID.  The petition to discontinue permanent total disability benefits is dismissed.

BACKGROUND

Edwin I. Skari, the employee, sustained personal injuries on May 19, 1987, April 28, 1992, and April 26, 2000, all arising out of his employment with Aero Systems Engineering, Inc., formerly known as Fluidyne, Inc.  The employer was insured by TransAmerica Insurance Company [TIG] on May 19, 1987, insured by Hartford Insurance Company [Hartford] on April 28, 1992, and by Chubb & Son Group [Chubb] on April 26, 2000.  The employer and its insurers admitted liability for the employee’s personal injuries.

In September 2000, Chubb filed a petition with the Office of Administrative Hearings seeking a temporary order for the payment by Chubb of temporary total disability benefits to the employee, commencing September 18, 2000.  A Temporary Order was served and filed on September 18, 2000, ordering Chubb to make payment of the benefits.  Thereafter, Chubb filed a petition for contribution seeking contribution from Hartford for a portion of the temporary total disability benefits being paid to the employee.  In September 2001, Chubb moved to join TIG as a party to its contribution claim.  By order dated October 27, 2001, TIG was joined as a party to the proceedings.

In January 2002, Chubb filed a notice seeking to discontinue temporary total disability benefits on the basis that the employee had reached the 90-day post maximum medical improvement date.  In February 2002, the employee filed a claim petition contending he was permanently and totally disabled by reason of the combined effects of the three personal injuries.  By order dated June 19, 2002, the employee’s claim petition was consolidated with Chubb’s petition for contribution.

A Temporary Order was served and filed on June 19, 2002, ordering Chubb to pay permanent total disability benefits to the employee commencing January 17, 2002.  The order states it was based upon an oral request by the employee for the payment of benefits.  An Order Amending Temporary Order was served and filed July 26, 2002, amending the commencement date of payment of permanent total disability benefits to March 5, 2002.

In 2005, the employee, the employer, TIG, Hartford, and Chubb entered into a settlement, which stated, in part:

By virtue of a Temporary Order served and filed on 6/19/02 and an Amended Temporary Order served and filed on July 26, 2002, the parties hereto have stipulated that the Employee is permanently totally disabled and has been permanently and totally disabled retroactive to March 5, 2002.  Pursuant to the Temporary Order and Amended Temporary Order, the Employer and Chubb have been paying the Employee permanent total disability at the weekly compensation rate of $595.49, subject to the Social Security disability offset from and after March 5, 2002.

(Stip. for Settlement, ¶ XIII.)  The settlement agreement further contained a paragraph setting forth the terms and conditions of the settlement which provided that TIG and Hartford would each reimburse Chubb a percentage of the wage loss benefits Chubb had paid to the employee, and stated that Chubb would remain the paying agent for permanent total disability benefits.  The insurers agreed to pay $3,000.00 to the employee’s attorney for attorney fees under Minn. Stat. § 176.191, agreed to pay his taxable costs, and provided for $13,000.00 in contingent attorney fees to be withheld from permanent total disability benefits.  (Stip. For Settlement, ¶ XXII.)  An Award on Stipulation was served and filed on April 8, 2005.

The employer and Chubb filed a Notice of Intention to Discontinue in September 2009, seeking to discontinue payment of permanent total disability benefits under Minn. Stat. § 176.101, subd. 4,[1] on the basis that the employee would reach the age of 67 years on October 3, 2009.  A conference was held on the NOID under Minn. Stat. § 176.239, and by order dated October 27, 2009, a compensation judge allowed the employer and Chubb to discontinue payment of permanent total disability benefits.  The employee requested a formal hearing pursuant to Minn. Stat. § 176.238.  In a Findings and Order served and filed March 18, 2010, a compensation judge found the judge lacked jurisdiction to discontinue permanent total disability benefits under Minn. Stat. §§ 176.238 and 176.239 because those sections do not apply to an employee who has been adjudicated permanently and totally disabled.  The compensation judge ordered the employer and insurer to recommence payment of permanent total disability benefits.  The employer and Chubb appealed from the compensation judge’s decision.  Thereafter, the employer and Chubb filed with this court a Petition to Discontinue Permanent Total Disability Benefits.  By order dated May 17, 2010, the two cases were consolidated.

DECISION

Payment of benefits under a temporary order is governed by Minn. Stat. § 176.191, subd. 1, which provides, in part:

At any time after a temporary order is issued, the paying party may request to discontinue payment of benefits based on new evidence that benefits are not payable under this chapter by following the procedures of section 176.238 or 176.239.

Minn. Stat. § 176.238 specifies procedures for discontinuing workers’ compensation benefits and for resolution of requests by an employer and insurer to discontinue benefits.  Minn. Stat. § 176.239 sets forth procedures for obtaining an expedited interim administrative decision in disputes over discontinuance of compensation benefits.  Both statutes, however, contain a subdivision that states,

This section shall not apply to those employees who have been adjudicated permanently and totally disabled, or to those employees who have been administratively determined pursuant to division rules to be permanently totally disabled.

Minn. Stat. §§ 176.238, subd. 11, and 176.239, subd. 10.

On appeal, the employer and Chubb assert they are paying permanent total disability benefits pursuant to a temporary order, not pursuant to the terms of the stipulation for settlement.  They argue there has been no adjudication that the employee is permanently and totally disabled so they are entitled to discontinue benefits under Minn. Stat. § 176.238.  Alternatively, the employer and Chubb petition this court to discontinue permanent total disability benefits.  The employee asserts the permanent total disability benefits were being paid pursuant to an award on stipulation, not pursuant to a temporary order.  The employee contends an award on stipulation constitutes an adjudication within the meaning of Minn. Stat. § 176.239, subd. 10.  Accordingly, the employee argues the compensation judge properly held she lacked jurisdiction to discontinue permanent total disability benefits under Minn. Stat. § 176.239.  The respondent further contends the employer and insurer failed to reserve in the stipulation for settlement the right to discontinue permanent total disability benefits under the retirement presumption of Minn. Stat. § 176.101, subd. 4.  Since they failed to reserve that right, the employee contends it has been waived and the payment of permanent total disability benefits may not be discontinued.  In support of that position, the employee cites Tambornino v. Health Risk Mgmt., No. WC10-5045 (W.C.C.A. Mar. 18, 2010).

In Cook v. J. Mark, Inc., 51 W.C.D. 432 (W.C.C.A. 1994), this court held an award on stipulation constitutes an “adjudication” within the meaning of Minn. Stat. § 176.238, subd. 11.  In Ruby v. Mueller Pipelines, 69 W.C.D. 453 (W.C.C.A. 2009), this court held that Minn. Stats. §§ 176.238 and 176.239 are inapplicable for the purpose of discontinuing permanent total disability benefits to an employee who is receiving those benefits pursuant to an award on stipulation.  See also Haberle v. Erickson Mills, Inc., 58 W.C.D. 478 (W.C.C.A. 1998).  The issue in this case is whether the employee is being paid permanent total disability benefits pursuant to an award on stipulation or pursuant to a temporary order.

In the Ruby decision, the parties entered into a written settlement in which they agreed the employee “shall be paid permanent total disability benefits pursuant to Minn. Stat. § 176.101, subd. 4.”  Thus, incorporated in that settlement document, was an agreement by the insurer to make payment of permanent total disability benefits to the employee.  Since the Ruby decision, several other cases have come before this court on a petition to discontinue permanent total disability benefits at age 67.  See, e.g., Bescheinen v. Independent Sch. Dist. #181, No. WC10-5078 (W.C.C.A. July 15, 2010); Stans v. N & D Constr., No. WC10-5076 (July 16, 2010); Campeau v. National Purity, Inc., No. WC10-5080 (W.C.C.A. July 20, 2010).  In each of those cases, the settlement document contained an agreement that the employer and the insurer would pay permanent total disability benefits to the employee.

In the present case, the stipulation for settlement contains no language obligating the insurer to pay permanent total disability benefits to the employee.  Instead, the parties acknowledged that, by virtue of a Temporary Order and Amended Temporary Order, they “stipulated that the Employee is permanently and totally disabled,” and that the employer and Chubb “have been paying” permanent total disability benefits pursuant to the temporary orders.  The terms and conditions of the settlement relate solely to the allocation of liability for weekly benefits among the insurers, payment of medical expenses, taxable costs, and attorney fees.  The only reference to the payment of permanent total benefits is paragraph 3 of section XXII which states, “Chubb shall continue to remain the paying agent with respect to permanent total disability benefits.”  (Stip. for Settlement, ¶¶ XXIII, XXII.)  At the time the Award on Stipulation was issued in April 2005, Chubb was already paying permanent total disability benefits to the employee and had been paying those benefits since March 5, 2002.  The stipulation does not obligate Chubb to do anything more than they were already doing under the terms of the temporary orders.

The employee is being paid permanent total disability benefits pursuant to the terms of the temporary orders, and not pursuant to the terms of the stipulation for settlement.  There has been no adjudication that the employee is permanently and totally disabled.  Minn. Stat. § 176.191 specifically provides that benefits paid pursuant to a temporary order may be discontinued under the provisions of Minn. Stat. § 176.239.  We, therefore, reverse the finding that the compensation judge lacked jurisdiction to hear the case.  The case is remanded to the compensation judge to afford the parties a hearing on the issues raised by the NOID.



[1] Minn. Stat. § 176.101, subd. 4, provides in part: “Permanent total disability shall cease at age 67 because the employee is presumed retired from the labor market.  This presumption is rebuttable by the employee.”