The employee appeals from the compensation judge’s denial of her claim for penalties against Hennepin County Medical Center (HCMC).^[1]  We affirm.

The employee, Tania Carroll, sustained three work-related low back injuries while working as a registered nurse for the first of the employers herein, Allina Mercy Hospital.  The first injury occurred on August 5, 2009.  The employee later experienced a more pronounced exacerbation of her low back pain while performing her regular duties in July 2010, and this was eventually referred to as a new Gillette injury culminating on July 24, 2010.^[2]  The employee proceeded with a decompression surgery at L4-5 on September 24, 2010, which was performed by Dr. Kyle Uittenbogaard of Metropolitan Neurosurgery.  The employee returned to work at Allina Mercy Hospital after her surgery, but she sustained another low back injury on December 10, 2010, when she had to catch a falling patient.  On January 4, 2011, Dr. Uittenbogaard provided the employee with a light-duty work release to begin on January 15, 2011.  The employee was told to lift no more than ten pounds.  This restriction was to continue indefinitely.

The employee stopped working at Allina Mercy Hospital and took a new job at Fairview Health Services in March 2011.  She submitted her job description for the position at Fairview to Dr. Uittenbogaard’s office.  The employee received a prescription note indicating that she could perform the expected tasks with Fairview and that she was cleared to work in the new position.  Doctor Uittenbogaard provided a report to the employee’s attorney, dated April 18, 2011, indicating that the employee had reinjured her back at work on December 10, 2010.  He noted that the employee “will need assistance in transferring patients and with heavy lifting.”  However, he stated that “[h]er activity restrictions are as tolerated.”

The employee continued to treat with Dr. Uittenbogaard and PA Young into late 2011.  The employee stopped working in February 2012 and took a leave of absence for unrelated medical problems.  In March 2012, the employee and Allina Mercy Hospital entered into a full, final, and complete settlement related to the employee’s work injuries of August 5, 2009, July 24, 2010, and December 10, 2010.  The settlement closed any further claims for wage loss benefits related to those three injuries, but it left open future reasonable, necessary, and causally related medical treatment and expenses.

The employee continued to have back and leg symptoms, and she saw Dr. Uittenbogaard again in March 2012.  She asked Dr. Uittenbogaard about a fusion surgery, but he wanted to pursue conservative strategies before considering additional surgery.  The employee testified that she brought up the fusion because she had heard about fusion surgeries, and she was wondering whether further surgery might resolve her symptoms.

The employee decided to return to nursing in the summer of 2012.  She applied for a floor nurse position at Hennepin County Medical Center, the other employer herein, which was advertised online.  The online advertisement contained a brief job description but did not outline job duties or physical requirements for the job.  The employee applied and was contacted by Mary Fodstad, the nurse recruiter at HCMC.  An interview was set up for the employee with Michelle Bender, the nurse manager at HCMC.  Ms. Bender testified by deposition, which was taken on September 13, 2012, that she did not review a job description with the employee at her interview, and they did not discuss the physical requirements of the job.  Physical requirements were handled by the Employee Occupational Health Department of HCMC.  They were addressed only after a job offer had been made.  Ms. Bender felt the employee was a good match for the position and notified Ms. Fodstad that she could move forward with the hiring process.

On August 7, 2012, Ms. Fodstad offered the employee a floor/staff nurse position that involved less than 40 hours of work per week.  The employee accepted the position, and she was referred to Janet McAllister, the employee occupational health supervisor.  Ms. McAllister met with the employee on August 10, 2012.  The employee completed a pre-placement screening form.  Ms. McAllister went through that form with the employee.  The form contained a list of questions, including a section referred to as “restrictions/limitations,” which included several yes or no boxes next to the questions in that section.  One of the questions asked the employee whether she had ever had an accident or injury that affected her work or required modification to work assignments.  The employee indicated that she did have such an accident, and she indicated that this would have happened in “8/2009.”  The next question asked what limitations the employee had, and she indicated “Ø lifting.”  The next question asked the employee whether those limitations were still in effect, and the employee indicated “no.”

The screening form also included a section entitled “neck/back/shoulder.”  The employee answered no to all of the questions raised, which included questions about whether the employee had any neck, back, or shoulder pain, whether she had seen a physician, chiropractor, or therapist within the last two years for those problems, whether she had any restrictions for those problems in the last two years, and whether the restrictions were still in effect.  The employee testified at hearing that upon review of those questions, she realized that she should have answered yes to the questions regarding pain, treatment, and restrictions within the last two years.  The screening form also asked the employee whether she had ever filed a workers’ compensation claim.  The employee checked yes for that question.

In a nurse comments section on the screening form, the following was written: “2009 low back surgery Sept 2010.”  Janet McAllister testified at the hearing, and she indicated that she did not go over every section of the form with the employee.  She confirmed that she wrote the nurse comments on the form.  She also indicated that she only made additional inquiry regarding the sections where the employee answered yes to the questions posed.  The employee provided information regarding her back surgery, and because the surgery was within two years of hiring, Ms. McAllister indicated that HCMC policy required Ms. McAllister to obtain any information regarding any relevant restrictions that the employee had with respect to the prior injury and surgery.  Therefore, she asked the employee to provide her with a written doctor’s statement confirming she had no restrictions, as the employee had indicated in the form.

Following her meeting with Ms. McAllister, the employee called Metropolitan Neurosurgery and requested a physician work release note indicating that she had no restrictions.  The employee testified that she understood that she had no restrictions based on Dr. Uittenbogaard’s April 2011 indication that she could perform activities as tolerated.  Therefore, she simply called the office to provide written confirmation of that status.  A work status form was completed by Metropolitan Neurosurgery and was faxed directly to HCMC Employee Occupational Health.  The form states that “Tanya (sic) is able to work full time without restrictions.”  The compensation judge found that “it is unclear who signed the form.”  Janet McAllister said that she received the form and found it sufficient to clear the employee for the floor nurse position.  The compensation judge noted that Ms. McAllister was asked a hypothetical at the hearing in this matter.  He described the hypothetical as follows:

Ultimately, HCMC hired the employee on August 22, 2012, and she worked in the floor nurse position without any problems until October 30, 2012.  The employee testified that she still had some residual back pain at that time, but she managed by being careful with her activities.  She took ibuprofen for flare ups or occasionally something stronger if she was home.

On October 30, 2012, the employee was in a patient room along with a physical therapist.  The therapist requested that the employee assist with moving the patient.  The employee said she felt she could assist because the therapist just wanted her “as backup” and not actually to lift.  However, the process was awkward, and the patient dropped back.  The employee was holding on to the patient’s transfer belt at the time.  The employee said she had right-sided low back pain and pain going down her leg as the day went on.

The employee testified that she reported the October 30, 2012 injury to her charge nurse, Chedia Miguel, on the date of injury.  In a September 24, 2013 deposition, Ms. Miguel indicated that she did recall the employee telling that she injured her back working with a patient.  She did not recall when the report was made.  The compensation judge determined that the employee did report the injury to the charge nurse, Ms. Miguel, on October 30, 2012.  He also found that the employee did not report the incident to her nurse manager, Linda Serchon.^[3]

The employee continued working on October 30, 2012, despite Ms. Miguel’s suggestion that she pursue medical attention.  The employee said she was hesitant to seek medical attention and was hoping that the issues would get better.  She had also just agreed to pick up an extra four-hour shift because the unit was short staffed.  The employee took some ibuprofen and worked her entire shift on October 30, 2012.  The employee was scheduled to be off on October 31, and she rested and used ice and heat for her back.  She said she started to feel better, but she worked a full shift on November 1, 2012, which made her back feel worse.  On November 2, 2012, while at work bending over to give medication to a patient, the employee felt a sharp pain and decided that she needed to be seen by medical providers.  After finishing her shift, she went to the Employee Occupational Health Department and informed Janet McAllister that she would contact her primary, physician’s assistant Russell Young, to see if she could get oral steroid medication.  She testified that she made several phone calls to Mr. Young and eventually did get the medication without being seen.^[4]  Mr. Young also provided the employee with a work release for some additional time off.

The employee tried to return to work on November 14, 2012, when her release expired, but she experienced worsening right low back pain and symptoms into her right leg.  She saw P.A. Young on November 15, 2012 and was referred to Dr. Jeffrey Pinto at the Institute for Low Back and Neck Care for additional diagnostics.  The employee was also given a work release note for light-duty work with no patient lifting for the remainder of the month.

Dr. Pinto originally recommended continued light duty along with injections and physical therapy.  When that strategy did not provide relief, the employee underwent a fusion surgery with Dr. Pinto at L4-5, which was performed on February 4, 2013.  The employee attempted to return to work at HCMC in April 2013, on light-duty, but she had a return of low back and leg irritation in June 2013.  She was taken off work and given a sedentary work release in August 2013, but HCMC was unable to provide her with work within the restrictions.

In the meantime, the employee filed a claim petition on February 7, 2013, in which she alleged that any and all of the injuries at Mercy and HCMC were substantial contributing factors in her low back condition and need for surgery.  HCMC filed an answer denying primary liability, notice of an injury, and responsibility for any requested benefits, including the surgery.

The employee filed amendments to the claim petition in April and June 2013, alleging additional periods of disability.  HCMC filed an amendment to their answer in July 2013, asserting that the employee made false representations regarding her condition to HCMC at the time of her hire and asserted what is referred to as a Jewison defense.^[5]  The employee then amended her claims to include penalties claims against HCMC.

The case came on for hearing on January 29, 2014 before Compensation Judge Paul Rieke.  The issues included whether the employee sustained a low back injury at HCMC on October 30, 2012, whether any or all of the injuries at Allina Mercy Hospital and HCMC were substantial contributing factors in the employee’s low back injury and need for medical treatment, including the surgery, whether the claims against HCMC were barred by the Jewsion defense, and whether HCMC was liable for penalties related to its defenses and denials.

There were three different medical opinions provided to the compensation judge to address the relationship of the various injuries to the employee’s current condition.  Dr. Mark Thomas had previously performed independent medical examinations on behalf of Allina Mercy Hospital with regard to the employee’s prior injuries while working there.  Dr. Thomas examined the employee again in May 2013 and provided an IME report, in which he opined that the employee’s current condition was 90 percent attributable to the October 2012 injury and 10 percent attributable to the 2009 and 2010 injuries.  Dr. Mark Larkins examined the employee in May 2013 and provided an independent medical examination report at the request of HCMC.  He concluded that that employee’s current condition was 20 percent attributable to the most recent injury in October 2012, which he opined was a permanent aggravation of the 2009 injury, and 80 percent attributable to the prior injuries of 2009 and 2010.  Dr. Pinto, the employee’s treating surgeon, provided an opinion dated May 8, 2013, indicating that the employee’s current condition was 25 percent attributable to the October 2012 injury and 75 percent attributable to the 2009 and 2010 injuries.

In addition to the causation and medical issues, HCMC raised a number of different defenses, including a notice defense and a Jewison defense.  The employee argued that these defenses were frivolous given the circumstances of the case and sought penalties in the amount of up to 55 percent of any compensation awarded as related to the October 30, 2012, work injury against HCMC pursuant to Minn. Stat. § 176.225, subds. 1 and 5.  The compensation judge ultimately concluded that all of the employee’s low back injuries substantially contributed to her need for treatment following the October 30, 2012, work injury.  He apportioned 50 percent of the treatment expenses to Allina Mercy Hospital and 50 percent to HCMC for all medical treatment after October 30, 2012.  The compensation judge determined that the employee’s claims were not barred against HCMC pursuant to their notice defense, the Jewison defense, or any of HCMC’s other defenses.  The compensation judge also denied the employee’s claim for penalties against HCMC.  The employee now appeals the compensation judge’s denial of her claim for penalties.

In reviewing cases 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, “[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.”  Northern States Power Co. v. Lyon Foods Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).  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.”  Id.

“[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 Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).

On appeal the employee is seeking penalties pursuant to Minn. Stat. § 176.225, subds. 1 and 5.  Minn. Stat. § 176.225, subd. 1, allows for an award “in addition to the total amount of compensation awarded, of up to 30 percent of that total amount” where an employer and insurer has committed certain actions, including interposing a defense that “does not present a real controversy but which is frivolous or for the purpose of delay” or “frivolously denied a claim.”  For the purpose of section 176.225, subd. 1, “‘frivolously’ means without a good faith investigation of the facts or on a basis that is clearly contrary to fact or law.”^[6]  Minn. Stat. § 176.225, subd. 5, states that “[w]here the employer is guilty of inexcusable delay in making payments, the payments which are found to be delayed shall be increased by 25 percent.”

Whether a penalty is appropriate pursuant to Minn. Stat. § 176.225 generally rests within the sound discretion of the compensation judge.  See, e.g., Villella v. Ford Motor Co., 68 W.C.D. 80, 90 (W.C.C.A. 2008) (citing Maxfield v. Stremel Mfg. Co., slip op. (W.C.C.A. Jan. 6, 1999)); see also Thompson v. Nelson Constr. Co., 50 W.C.D. 222, 230 (W.C.C.A. 1993).  An employer is not liable for penalties if it refuses to pay benefits that are the subject of a real controversy.  Grover v. City of St. Paul, 55 W.C.D. 397, 403 (W.C.C.A. 1995).  An award of penalties is not appropriate where an employer and insurer have interposed a good faith defense.  See Heise v. Honeywell, Inc., 48 W.C.D. 523, 539-40 (W.C.C.A. 1993).  Even in a case where the evidence is not sufficient to support a denial of benefits, it may be “sufficient to render the issue of the employee’s entitlement to those benefits genuine and so to defeat the employee's allegation of a frivolous denial of a claim or of a frivolous, unreasonable, or vexatious delay in payment of benefits pursuant to Minn. Stat. § 176.225, subd. 1.”  Maxfield, slip op. (citing Jackson v. Eveleth Mining Co., 49 W.C.D. 591, 598 (W.C.C.A. 1993) (which stated, “in the normal situation, [this court] might not consider penalties appropriate where there is at least a minimal colorable defense to primary liability”) and Minter v. Ford Motor Co., slip op. (W.C.C.A. June 6, 1991) (stating that where there are colorable factual or legal arguments related to the issues, a penalty pursuant to Minn. Stat. § 176.225, subd. 1, is not appropriate)).

The employee argues that HCMC’s defenses and denial of her claims amounted to a “frivolous denial” and “inexcusable delay” because it “did not offer any colorable defenses and therefore, a finding of penalties is appropriate.”

In his memorandum of law, the compensation judge carefully summarized and addressed HCMC’s various arguments and defenses, all of which raised a number of purported questions and inconsistencies surrounding the employee’s claims.  For example, HCMC argued that the employee was already considering fusion surgery for her low back before being hired at HCMC.  It argued that the employee failed to report her injury properly to her supervisor, Linda Serchon, even though that procedure was clearly indicated in the online employee manual.  HCMC argued that even if the employee did sustain an injury on October 30, 2012, it was inconsistent that she would work a 12-hour shift on that date and then be able to complete two additional full shifts on November 1, 2012, and November 2, 2012.  Furthermore, HCMC argued that the employee has never been able to identify the physical therapist that she said she was working with, which has caused HCMC to doubt whether the injury occurred at all.  In addition, HCMC argued that the employee has been inconsistent regarding what time of day the injury occurred, and she has indicated both 10:00 a.m. and 1:00 p.m. as times of injury.  The compensation judge ultimately rejected HCMC’s arguments and defenses.  He went on to explain that although HCMC’s arguments and defenses were not successful, they did not rise to the level of being presented in bad faith or frivolous so as to justify penalties.

The employee argues that HCMC failed to present any evidence that the employee did not sustain a work injury on October 30, 2012.  She cites Zwieg v. Pope Douglas Solid Waste, 65 W.C.D. 553 (W.C.C.A. 2005) and argues that HCMC could not maintain its denial of the injury after its medical expert acknowledged that there was a permanent aggravation at HCMC.  In Zwieg, the employee sustained an admitted hernia injury.  65 W.C.D. at 554.  After surgery, he reported increasing hernia pain, but the employer and insurer denied ongoing liability and sent the employee for an IME.  Id. at 554-55.  The IME doctor concluded that the employee’s second hernia was causally related to the employee’s initial injury.  Id. at 555-56.  This court affirmed the compensation judge’s conclusion that the employer and insurer did not unreasonably, vexatiously, or inexcusably delay payment of temporary total disability benefits before they received the IME report.  Id. at 558.  However, once the employer and insurer received the report, they no longer had a defense to payment of temporary total disability benefits, and this court reversed the denial of penalties after the receipt of the report and remanded for further proceedings to determine the penalty amount.  Id. at 558-59.  The Minnesota Supreme Court affirmed this court’s decision in Zwieg v. Pope Douglas Solid Waste, 704 N.W.2d 752, 65 W.C.D. 563 (Minn. 2005).

Here, unlike Zwieg, HCMC did not admit liability for any injury, even up to the hearing.  Although they did receive an IME report indicating that there could be some liability apportioned to an injury on October 30, 2012, that opinion assumed that an injury had occurred.  HCMC maintained that no injury occurred, and it raised a number of questions regarding the employee’s credibility in that regard.  Credibility determinations are the unique function of the trier of fact.  See Even v. Kraft, Inc., 445 N.W.2d 831, 42 W.C.D. 220 (Minn. 1989).  If the compensation judge determined that the employee had not testified credibly with regard to the questions raised by HCMC and whether she sustained an injury at all, he would not have needed to follow the opinions of any medical expert.  See, e.g., Felton v. Anton Chevrolet, 513 N.W.2d 457, 50 W.C.D. 181 (Minn. 1994) (stating that questions of medical causation, as with other factual determinations, fall within the province of the compensation judge).  Although the compensation judge did not agree with HCMC, the questions it raised were sufficient to require a credibility determination from the compensation judge and, thus, HCMC did raise a colorable defense as to whether the injury occurred, despite the IME opinion.

The employee argues that “HCMC failed to offer any evidence to carry all elements of a prima facie case for a Jewison defense.”  Therefore, she argues that there was no real controversy concerning that defense and that penalties should have been awarded.

The compensation judge found that the employee’s claims were not barred by the Jewison defense.^[7]  The compensation judge explained and carefully analyzed this finding in his memorandum of law.  With regard to the first element of the Jewison defense, the compensation judge determined that if there were any misrepresentations made by the employee, “they were in the box checking part of the health form she completed.”  He indicated that any wrongly checked boxes were not, ultimately, misrepresentations of her back condition, but they were errors that the employee corrected by revealing treatment she had when speaking with Ms. McAllister.  Therefore, he determined that any errors in checking boxes relating to restrictions did not meet the Jewison standard of knowing and willful misrepresentation.  The compensation judge also determined that the second and third elements of Jewison had not been established.  With regard to the second element, the compensation judge found that the employee did not make a false representation in obtaining a no-restriction release from her doctor.  Ms. McAllister did not question the release, and the compensation judge did not find it to be a false representation as considered under the Jewison defense.  With regard to the third element of the Jewison defense, the compensation judge found that there was no evidence submitted to indicate that the employee’s work injury would not have been disabling absent the pre-existing conditions or that the employee’s pre-existing condition increased her risk of disability from a reasonably foreseeable accident.  He concluded that these were medical questions that were not posed to the physicians who offered opinions on the case.

The employee cites the cases of Mork v. Healthsystem Minn., slip op. (W.C.C.A. Sept. 24, 1999) and Griffiths v. Duluth Transit Auth., 60 W.C.D. 472 (W.C.C.A. 2000) to argue that HCMC provided no evidence to support its Jewison defense.  These cases, however, are distinguishable from the present case.  In Mork, slip op., the employer referred the employee to a specialist physician, who concluded that the employee had contracted an allergic condition related to her employment.  The self-insured employer filed a notice accepting primary liability for the condition, and it conceded, on the date of hearing, liability for a period of temporary partial disability benefits at issue.  As such, this court concluded that “There is simply no factual dispute and no differing medical opinion relative to the employee’s entitlement to benefits during this period of time.”  Here, by contrast, there were factual disputes relating to the employee’s injury at HCMC in the form of the credibility questions raised and whether the employee sustained an injury at HCMC.

In Griffiths, this court imposed a penalty on the employer and insurer for a frivolous petition to vacate an award on stipulation.  60 W.C.D. at 484.  Griffiths is distinguishable because that case involved a petition to vacate brought before this court.  Id. at 473.  The present case is an appeal to this court from a decision of the Office of Administrative Hearings.  Therefore, the question of whether a penalty is appropriate is, in this case, a factual determination best left to a compensation judge.  See Johnson v. Apple Valley Health Care Ctr., 63 W.C.D. 434, 438-39 (W.C.C.A. 2003).

The compensation judge determined although the Jewison defense, which he described as HCMC’s “predominant defense,” was unsuccessful, assertion of that defense did not rise to the level of being frivolous.  We agree.  An employer need only raise a colorable defense to avoid penalties, and it need not establish a prima facie case relating to every element of a defense, as the employee argues.  There were sufficient questions raised by HCMC to establish at least a colorable Jewison defense.  For example, as the compensation judge noted in his memorandum, the employee admitted that she answered questions on her pre-employment questionnaire incorrectly, and the compensation judge explained that this “resulted in Hennepin County questioning the reported work injury.”  As such, it was reasonable to deny penalties based on the Jewison defense.

The employee further argues that it was frivolous to maintain a notice defense.  She essentially argues that HCMC should have conducted more of an investigation and admitted that there was an injury even if questioning apportionment of liability.  We disagree, given the procedural history and circumstances of this case.  A notice defense would typically contain an analysis of the time within which an employee reported an injury, as the employee argues.  However, in this case, even that determination required a credibility determination.  The compensation judge explained his determination that the employer’s witness, Ms. Miguel, did recall the employee telling her about the injury, but she could not recall when it was reported.  The compensation judge did conclude that the employee testified credibly that she reported the injury to Ms. Miguel on October 30, 2012.  The compensation judge explained that he did consider HCMC’s initial investigation,^[8] and he stated that “a more thorough investigation by the adjuster may have been justified, but the adjuster had to make the initial primary liability decision quickly.”  The compensation judge addressed questions about whether the employee did actually report the injury, to whom she reported it, and when it was reported.  He also noted, in his memorandum, that the employee had not shown that irrefutable evidence of the injury was later presented to the adjuster.  Based on the other credibility issues involved and the questions raised with regard to the employee’s report of the injury, HCMC did raise a colorable notice defense.

Finally, the employee argues that it was frivolous to maintain a fraud defense.  There are elements of fraud implicit within a consideration of the Jewison defense, including determinations of whether an employee has made false representations with regard to his or her condition.  This case hinged largely upon a credibility determination, and, as the compensation judge indicated, HCMC’s primary defenses included the Jewison defense and the primary liability questions with regard to whether an injury actually occurred at HCMC or not.  Again, even though the fraud defense was not successful, it was, at least, colorable given the circumstances of the case and the credibility questions raised.

This case ultimately hinged on questions of credibility regarding the occurrence of the employee’s injury at HCMC, her reporting of that injury, and her explanation with regard to her pre-existing condition.  Given the nature of the credibility questions raised, substantial evidence supports the compensation judge’s determination that HCMC did raise, at least, colorable defenses, and we affirm the compensation judge’s denial of penalties in this case.