This case has been remanded to this court by the Minnesota Supreme Court for further consideration.  We remand it to the Office of Administrative Hearings for an evidentiary hearing in accord with the decisions of the supreme court and of this court.

Todd C. Allan sustained an admitted work-related injury to his low back on September 28, 2010.  The employee filed a claim petition in March 2013 alleging he was entitled to permanent total disability benefits.  The employee’s claim was heard by a compensation judge on November 15, 2013.  Issues for determination were:

The employee was 48 years old at the time of his injury and needed to establish “at least a 17% permanent partial disability rating of the whole body” to meet the threshold for permanent total disability benefits.  Minn. Stat. § 176.101, subd. 5(2)(i).  The employee claimed a 21% permanent partial disability from the work injury, relying on the opinion of a treating physician, Dr. Mark Halstrom.  The compensation judge accepted the opinion of the independent medical examiner, Dr. Paul Cederberg, that the employee’s permanent partial disability from the 2010 work injury was 10%.

The employee also alleged he had a pre-existing permanent partial disability of 10%, which when combined with the 10% permanent partial disability from the work injury, met the statutory threshold for the award of permanent total disability benefits.  The pre-existing disability claimed by the employee was for the loss of teeth as rated by Minn. R. 5223.0320, subp. 7.  In response to the employee’s claim, the employer argued that this rating could not be used to meet the statutory threshold because the employee’s loss of teeth was corrected by the use of dentures.  The employer cited to Yureko v. Prospect Foundry, 262 Minn. 480, 115 N.W.2d 477, 22 W.C.D. 180 (1962).  The compensation judge accepted the employer’s argument and determined the employee had not reached the 17% permanent partial disability threshold.

The employee appealed the decision of the compensation judge to this court.  In our decision, we identified the issue for consideration as whether the employee’s pre-existing permanent partial disability from a condition not related to his employment could be used to satisfy the statutory threshold required for an award of permanent total disability benefits.  We concluded that the permanent partial disability rating from the loss of teeth could be used in that regard.  We noted that even though the employee used dentures, he was still entitled to a rating of permanent partial disability for loss of teeth under the applicable rules.  As to the argument that the employee had no functional loss, we noted that the statutes and rules provide that permanent partial disability is payable for loss of use or function, so that a functional loss must be presumed from the application of the appropriate rule.  As to the use of a non-work-related pre-existing condition for the threshold permanent partial disability, we referred to our decision in Frankhauser v. Fabcon, Inc., 57 W.C.D. 239 (W.C.C.A. 1997), summarily aff’d (Minn. Oct. 28, 1997) as well as subsequent decisions.

The decision of this court was appealed by the employer to the Minnesota Supreme Court.  The supreme court reversed this court’s decision and remanded the case for further proceedings.

Permanent total disability is defined as any injury “which totally and permanently incapacitates the employee from working at an occupation which brings the employee an income.”  Minn. Stat. § 176.101, subd. 5(2).^[1]  The supreme court explained that definition in Schulte v. C.H. Peterson Constr. Co., 278 Minn. 79, 83, 153 N.W.2d 130, 133-34, 24 W.C.D. 290, 295 (1967), stating that “a person is totally disabled if his physical condition, in combination with his age, training, and experience, and the type of work available in his community, causes him to be unable to secure anything more than sporadic employment resulting in an insubstantial income.”

In amending the statute in 1995, the legislature added the provision that, in addition to meeting this vocational test, the injured employee must also establish what the statute refers to as “threshold criteria” of permanent partial disability.  The extent of permanent partial disability necessary to meet the threshold depends on the employee’s age on the date of the injury.  Since Mr. Allan was 48 years old on the date of injury, he must establish that he has at least a 17% permanent partial disability.  Minn. Stat. § 176.101, subd. 5(2)(i).

The workers’ compensation statute provides that permanent partial disability benefits are paid for “functional loss of use or impairment of function.”  Minn. Stat. § 176.021, subd. 3.  The statute further directs the commissioner of the Department of Labor and Industry to prepare a schedule of permanent partial disability and requires permanent partial disability benefits to be paid “in accordance with the disability ratings established under this subdivision.”  Minn. Stat. § 176.105, subd. 1.  The disability schedules are set out in Chapter 5223, Minnesota Rules.

Although permanent partial disability is compensation for loss of use or function, the schedule prepared by the commissioner rarely refers to functional loss.  Ratings in the schedule are instead based almost completely on medical procedures, diagnoses, radiographic studies or findings on examination.  The compensation judge in this case accepted the opinion of the IME doctor, Dr. Cederberg, that Mr. Allan had a 10% permanent partial disability from the work injury based on Minn. R. 5223.0390, subp. 3.C., for symptoms of pain or stiffness in the lumbar spine at multiple levels substantiated by objective clinical findings and radiographic studies.  How this disability rating results in loss of use or function is not addressed in the rule.

The role of the disability schedule in meeting the threshold criteria for permanent total disability has previously been an issue.  The Minnesota Supreme Court discussed the question in Gluba v. Bitzan & Ohren Masonry, 735 N.W.2d 713, 67 W.C.D. 228 (Minn. 2007), a case in which the employee had challenged the constitutionality of the threshold criteria and argued that there was no connection between the threshold ratings and employability.  The court rejected that argument, concluding that the threshold criteria “reflects the legislature’s belief that the nature and extent of a workers’ physical impairment is a relevant factor in determining his employability.”  Id. at 723, 67 W.C.D. at 240.  However, the court also noted “it could be argued that the PPD ratings are not well suited to serve as such a proxy because the schedule approach that Minnesota uses to calculate the ratings focuses on functional loss of use, which is distinct from ability to work.”  Id. at 724, 67 W.C.D. at 241.

In its review of the present case, the supreme court concluded that, “for the purpose of determining whether an employee is eligible for permanent-total-disability benefits under Minn. Stat. § 176.101, subd. 5(2), a disability that contributes to the employee’s permanent-partial-disability rating must affect the employee’s ability ‘to secure anything more than sporadic employment resulting in an insubstantial income.’”  Allan v. R.D. Offutt Co., 869 N.W.2d 31, 37, 75 W.C.D. 401, 410 (Minn. 2015).

The issue of whether the permanent partial disability ratings used to meet the statutory threshold affected the employee’s employability was not raised by the parties at the hearing, addressed by the compensation judge, or considered by this court.  As a result, we conclude this case must be remanded to a compensation judge for an evidentiary hearing.

At the hearing, the employee must present evidence as to the functional loss represented by the ratings of permanent partial disability from the disability schedule which he claims may be used to meet the statutory threshold.  The employee must also present evidence as to how any such functional loss affects the employee’s ability “to secure anything more than sporadic employment resulting in an insubstantial income,” considering the employee’s age, training, experience, and work available in the community.  See Schulte, 278 Minn. at 83, 153 N.W.2d at 133-34, 24 W.C.D. at 295.

Remanded.