LIONEL L. LANN, Employee/Appellant, v. STAN KOCH & SONS TRUCKING, SELF-INSURED/RTW, INC., Employer/Cross-Appellant.

WORKERS’ COMPENSATION COURT OF APPEALS
DECEMBER 12, 2011

No. WC11-5256

HEADNOTES

PERMANENT TOTAL DISABILITY - INSUBSTANTIAL INCOME.  Substantial evidence supported the compensation judge’s conclusion that the employee earnings were not insubstantial, and the judge did not err in denying permanent total disability benefits, especially where vocational opinions supporting the employee’s claim were based on outdated restrictions.

CREDIT & OFFSETS.  Where the employee elected to receive Minnesota workers’ compensation benefits, the employer and insurer were entitled to a credit for proceeds from the employee’s third-party suit and settlement, despite the fact that the third-party suit and resulting settlement took place in Georgia.

Affirmed.

Determined by: Wilson, J., Johnson, J., and Stofferahn, J.
Compensation Judge: Catherine A. Dallner

Attorneys: Raymond R. Peterson, McCoy, Peterson & Jorstad, Minneapolis, MN, for the Appellant.  Gregg A. Johnson and Adam J. Brown, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Cross-Appellant.

 

OPINION

DEBRA A. WILSON, Judge

The employee appeals from the judge’s findings that the employee is not permanently totally disabled and that the self-insured employer is entitled to a credit for the employee’s recovery in a third-party action.  The employer cross-appeals from the judge’s finding that the amount of that credit cannot be determined.  We affirm.

BACKGROUND

The employee began working for Stan Koch & Sons Trucking [the employer] in August of 2000, as a truck driver.  On June 1, 2004, he sustained a work-related cervical spine injury in Georgia when his vehicle was struck by a logging truck operated by Charles Allen Johnson.  The employee stopped working for the employer on or about June 24, 2004.  He treated with a number of medical providers and underwent a cervical discectomy with decompression and interbody fusion at C6-7 in January of 2006.  The employee subsequently developed a pseudoarthrosis at C6-7 and his surgeon, Dr. George Stefanis, has recommended another surgical procedure.  The employee does not want to undergo that procedure.

At the time of his injury, the employee was living in Milan, Georgia, a town of approximately 800 people, and he continued to live there through the date of hearing.  He elected to receive Minnesota workers’ compensation benefits, and he worked with John Busse, a qualified rehabilitation consultant [QRC] from Minnesota, and Patricia Bell, a vocational rehabilitation nurse/counselor in Georgia, from March of 2006 through the fall of 2008.[1]

In August of 2006, Dr. Stefanis released the employee to work four hours a day, with restrictions,[2] and the employee began working for his nephew in a business called Race Coaches.  The employee had no physical problems performing this work.

The employee brought a third-party liability claim in Georgia against Charles Allen Johnson, seeking damages for his accident-related injuries.  After mediation on or about September 6, 2006, the parties reached a settlement.  The settlement agreement provided for payment of $400,000 to the employee, minus attorney fees of $75,000 and costs of approximately $600.[3]

On or about October 23, 2006, the employee increased his work hours to six hours per day and was working with a ten-pound lifting limit, in accordance with new restrictions by Dr. Stefanis.  He earned $150 a week for this work.  When his nephew could no longer provide employment for him, the employee obtained a job in a parts store in downtown Milan, filling out invoices, answering phones, and picking up parts.  He worked at this job, a few hours a day, for about one month and then quit due to a personality conflict.  Thereafter, the employee worked for several different employers, from four to six hours per day.

The employee began working for a friend in a business called ATTCO Sales in February of 2008.  His job duties include pulling paint and supply orders and driving a pickup truck to deliver paint and supplies.  The employee worked approximately four to six hours a day, his hours limited only by the availability of work and not his medical limitations or restrictions.  From August of 2006 to the date of the hearing in December of 2010, the employee worked four to six hours per day and earned $125 to $150 per week.

Ms. Bell and Mr. Busse closed their rehabilitation files in November of 2008. Formal placement assistance was never provided because the employee was always able to find work on his own.

On July 29, 2009, at the request of his attorney, the employee was examined by Dr. Steven Lebow.  In his report, Dr. Lebow rated permanent partial disability and agreed with Dr. Stefanis’ restrictions of ten pounds lifting and no more than six hours of work a day.  On August 12, 2009, the employee filed a claim petition seeking, in part, permanent total disability benefits from April 25, 2005, and continuing.

The employee was examined by Dr. Mark Larkins on November 19, 2009, at the request of the employer.  Dr. Larkins diagnosed pseudoarthrosis and opined that the employee could work full time with restrictions against lifting more than ten pounds and repetitive lifting or bending.  It was his opinion that the employee could not return to the type of work he had held on the date of injury.

The employee was seen again by Dr. Stefanis on August 16, 2010.  At that time, the employee was released to work full time, forty hours a week, with a lifting restriction of up to twenty-five pounds.

When the claim petition proceeded to hearing, it was stipulated that the employee met the statutory permanent partial disability threshold for permanent total disability.  Issues included whether the employee was permanently totally disabled as a result of his work injury, whether the employer was entitled to a credit for the employee’s recovery in the third-party action and, if so, in what amount, and whether the judge had jurisdiction to decide the credit issue.  In findings and order filed on February 17, 2011, the judge found that the employee was not permanently totally disabled as a result of his work injury and that the judge lacked jurisdiction to interpret Georgia statutes or case law.  The judge further concluded that the employer was entitled to a credit pursuant to Minnesota statutes but that the amount of the credit could not yet be determined, ruling that that issue would have to be resolved in a later proceeding, if necessary.  Both parties appealed, and when a transcript of the hearing was requested, it was determined that the audio recording of the hearing was not available due to an “IT technical problem.”  Pursuant to order of this court, the parties each submitted a proposed statement of proceedings to the judge, and, on July 25, 2011, the judge issued a “Statement Of 12/16/2010 Proceeding.”

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 (2010).  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 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

1. Permanent Total Disability

An employee is permanently totally disabled when the employee’s physical disability “causes the employee to be unable to secure anything more than sporadic employment resulting in an insubstantial income.”[4]  Minn. Stat. § 176.101, subd. 5; see also Schulte v. C.H. Peterson Constr. Co., 278 Minn. 79, 153 N.W.2d 130, 24 W.C.D. 290 (1967).  In her memorandum, the compensation judge described the evidence as showing that the employee had been working twenty to thirty hours a week over the past four and a half years, earning $500 to $600 per month, and she concluded that his employment was not sporadic or insubstantial.  The employee contends that the judge’s denial of permanent total disability benefits is clearly erroneous and not supported by substantial evidence.  We are not persuaded.

The employee contends initially that his work was sporadic because his hours at work fluctuated based upon how he was feeling on any given day, and he was able to take time off work as needed when he was in pain.  However, the Statement of Proceedings is the only evidence that we have as to the employee’s testimony at hearing, and we cannot consider an attorney’s recollection of testimony that is not included in that statement.  There is no indication in the Statement of Proceeding that the employee ever missed work or altered his work schedule due to pain or his restrictions.  Rather, the Statement of Proceedings indicates that the employee’s work hours with his current employer were limited only by the availability of work, that the employee typically worked from 10:00 a.m. to 4:00 p.m., and that the employee missed work only because of an illness of his wife’s.  The compensation judge was clearly entitled to conclude that the employee’s work has not been sporadic.

The employee also contends that his employment has resulted in insubstantial income.  In making this argument, the employee compares his pre-injury wage to his wages since his surgery.[5]    However, comparison of date of injury earnings and current earnings is not determinative for purposes of evaluating what constitutes insubstantial income.  Sigurdson v. Joyce Int’l, slip op. (W.C.C.A. Sept. 22, 2005).

The employee also argues that his income is insubstantial because it is “marginal” and “below the poverty guidelines.”  However, the employee’s vocational witness, Dr. Philip Haber, testified that the employee’s wage was competitive for the type of work that he was doing in his geographical location, and QRC Busse testified that the employee’s jobs have provided a wage comparable to other wages paid in Milan, Georgia, where the employee lives.  Whether an employee’s earnings represent insubstantial income is a fact question for the compensation judge.  See Atkinson v. Goodhue County Co-op Elec. Ass’n, 55 W.C.D. 150 (W.C.C.A. 1996).  The record also supports the conclusion that the employee’s income was not insubstantial.

The compensation judge also suggested that the easing of restrictions by Dr. Stefanis in August of 2010 and the employee’s lack of a job search thereafter was a factor in her denial of permanent total disability benefits.  The employee contends that Dr. Stefanis’ restrictions should not be adopted and that no one has recommended a structured job search.  Again, we disagree.  Dr. Stefanis has been the employee’s treating doctor since November 4, 2004, and the doctor that the employee has relied upon for his work restrictions.  A judge’s choice between expert opinions is generally accepted, unless there are facts assumed by the expert that are not supported by the evidence.  Nord v. City of Cook, 360 N.W.2d 337, 37 W.C.D. 364 (Minn. 1985).  The judge’s choice of opinions is therefore affirmed.

As to the employee’s other argument, we acknowledge that no vocational expert has recommended a formal job search.  QRC Busse testified that he could not think of any course of rehabilitation that would substantially improve the employee’s income.  However, Mr. Busse also testified that he had had no contact with the employee since he closed his file in November of 2008, at a time when the employee was limited to ten pounds lifting and part-time work.  Mr. Busse further testified that he had not pursued retraining because the employee did not have the capacity to work on a full-time basis, which is no longer the case.  Dr. Haber testified, in December of 2010, that he did not recommend further rehabilitation assistance after meeting with the employee in 2009.  His 2009 report indicated, in part, that he would not recommend retraining because the employee was unable to tolerate full-time light/sedentary work.  Dr. Haber did not evaluate the employee after July of 2009, however, and there was no evidence that he ever reviewed Dr. Stefanis’ updated restrictions allowing the employee to work full time with a twenty-five pound lifting limit.  We would also note that the employee admitted that he had not looked for work since he began his part-time job at ATTCO in February of 2008.

The judge did not err by considering the fact that the expert vocational opinions were not based on current restrictions.  Her denial of benefits for permanent total disability is affirmed.

2. Credit

The compensation judge concluded that she did not have jurisdiction to interpret statutes or case law of the state of Georgia.  The judge also found that the employer was entitled to a credit pursuant to Minn. Stat. § 176.061, subd. 5, for the employee’s recovery in the third-party action in Georgia.  The employee appeals from that finding.  The employer cross-appeals from the judge’s finding that she lacked the information necessary to perform the calculations required by Minn. Stat. § 176.061, subd. 6, and her order that the credit be determined in a separate hearing, if necessary.

The employee elected to receive Minnesota workers’ compensation benefits and, therefore, to forego workers’ compensation benefits in Georgia.  See Smith v. Integrity Plus, slip op. (W.C.C.A. Dec. 18, 2000).  As such, Minnesota workers’ compensation laws apply, and, pursuant to Minn. Stat. § 176.061, an employer or insurer is entitled to a credit for the employee’s recovery in any third-party action arising out of the same injury for which the employer or insurer made payment of workers’ compensation benefits.  In his brief and at oral argument, the employee cited no Minnesota statute or case law to support the conclusion that a credit is unavailable simply because the third-party action took place in Georgia.  We affirm the judge’s finding that the employer is entitled to a credit against any future Minnesota workers’ compensation benefits that the employer is obligated to pay the employee.[6]

The compensation judge’s finding that the court was not provided with the amounts necessary to perform the calculations required by Minn. Stat. § 176.061, subd. 6, is also affirmable.  Again, we have only the Statement of Proceedings and the exhibits to rely upon for review.  The Release of All Claims and Agreement received into evidence at hearing confirms that the amount of the third-party settlement was $400,000.  In an unappealed finding, the compensation judge found that $75,000 in attorney fees was withheld.  However, the Statement of Proceedings and exhibits do not give the exact amount of the costs.  That figure is necessary to do the required calculations.

The employer argues that the employee’s failure to object to the employer’s calculations, submitted post-hearing, constitutes acceptance of those calculations.  We do not agree.  Those calculations were simply “arguments” made to the compensation judge, and the employee’s attorney indicated at oral argument that he had never agreed to the calculations.  The judge’s finding that additional information is necessary to make the calculations required by Minn. Stat. § 176.061, subd. 6, is affirmed.[7]



[1] The employee worked with a QRC assigned by the employer beginning in approximately the fall of 2005.  He then requested a change of QRC and began receiving assistance from Mr. Busse and Ms. Bell.

[2] It appears that the employee was always examined at Dr. Stefanis’ office by N.S. Anderson, physician assistant, who prepared the office notes that both he and Dr. Stefanis initialed.

[3] According to an unappealed finding.

[4] It is undisputed the employee’s condition meets the threshold permanent partial disability requirements set forth in Minn. Stat. § 176.101, subd. 5.

[5] The employee’s average weekly wage on the date of injury was $1042.55, and his wage since the date of injury has ranged from $125 to $150 per week.

[6] It was impossible to determine from the record whether benefits were being paid at the time of the hearing and would continue to be paid into the future.  Clearly the employee has recovered the maximum allowable number of weeks of temporary total disability benefits, and permanent total disability benefits were denied.  We are unable to determine if permanent partial disability benefits or temporary partial disability benefits remain payable.

[7] The parties offered explanations at oral argument as to why more detailed information was not presented at hearing.  However, these arguments are not supported by the appeal record.  It would be inappropriate for this court to modify the judge’s decision on the basis of mere unsupported allegations.