PERMANENT TOTAL DISABILITY - SUBSTANTIAL EVIDENCE. Substantial evidence, including expert medical opinion, expert vocational opinion, and the employee’s testimony supported the finding that the employee is permanently totally disabled.
JOB SEARCH - SUBSTANTIAL EVIDENCE. The compensation judge’s conclusion that a job search was futile is substantially supported by the record in this case, where the employee credibly testified regarding his physical limitations, the employee had not been released to work for any significant period, a QRC opined that the employee was not qualified for rehabilitation services, and a job survey showed positions available for which the employee lacked both required experience and skills.
PERMANENT TOTAL DISABILITY - INSUBSTANTIAL INCOME. Where the employee’s highest net income from rental properties came to no more than $42.77 per week and he was otherwise unable to work, the compensation judge correctly determined that the employee’s earnings were insubstantial and the employee was permanently totally disabled.
Compensation Judge: William J. Marshall
Attorneys: David W. Blaeser, Woodbury, Minnesota, for the Respondent. Michael J. Koshmrl and Tom W. Atchison, Heacox, Hartman, Koshmrl, Cosgriff, Johnson, Lane & Feenstra, P.A., St. Paul, Minnesota, for the Appellant.
Disposition: Affirmed as Modified.
PATRICIA J. MILUN, Chief Judge
The self-insured employer appeals the compensation judge’s determination that the employee was permanently disabled. Based on the evidence in the record, we affirm, as modified.
On May 30, 2003, the employee, Patrick Blomme, was working for the self-insured employer, Independent School District No. 413, when he suffered a work injury to his low back. Immediately following the injury, the employee pursued conservative treatment, but the treatment was not successful and the employee underwent an L4-5 to L5-S1 fusion on June 6, 2005. Within four months after the surgery, the employee returned to work full time as an adult foster care provider. In March 2006, the employee entered into a stipulation with the self-insured employer settling all benefits on a full, final and complete basis except for future non-chiropractic medical care. An award on stipulation was served and filed on April 6, 2006. Since the settlement, the employee has undergone multiple lumbar surgeries and additional treatment modalities which have affected his ability to work.
The employee last worked in late December 2006, performing adult foster care services between 8 and 30 hours per week. He filed for social security disability in January of 2007. Ten months later, the employee underwent his second fusion surgery in the nature of posterolateral spinal instrumentation from L3 through S1.
On April 2, 2009, the employee underwent an anterior instrumented fusion at the L3-4 level.
On May 19, 2011, the employee underwent a posterolateral fusion at L3-4 and a revision surgery for removal of hardware from the L4-5 level due to nonunion with the L3-4 fusion. The employee was subsequently released to work on September 8, 2011, after the employee reported a marked reduction in pain. However, the employee’s low back pain returned by December 2011, and at that point his ability to work changed. Dr. Carlson diagnosed the employee with chronic back pain.
In 2012, the employee began treating with James T. Brunz, M.D. Dr. Brunz continued a regimen of conservative treatment to the employee’s low back condition. Dr. Brunz also ordered a spinal cord stimulator trial which was unsuccessful as it failed to relieve the employee’s low back pain.
In 2013, the employee underwent an independent medical examination (IME) conducted by Kristen Zeller, M.D., at the request of the self-insured employer. Dr. Zeller was of the opinion that the employee was capable of light-duty work from 2007 onward, with the exception of those periods immediately following the employee’s surgeries.
Since December 2007, the employee’s work status has varied. The employee underwent a functional capacity evaluation (FCE) in June 2008. The FCE noted a number of self-limiting behaviors that were inconsistent with physical impairments and objective observations. Even with the noted self-limiting behaviors, the employee’s performance was assessed at the sedentary/light categories of work. In November 2015, Dr. Brunz noted the employee’s work restrictions as set forth in his 2008 FCE.
On February 23, 2016, this court granted the employee’s petition to vacate the April 5, 2006, Award on Stipulation.
On September 5, 2017, Michael Anderson, R.N., C.D.M.S., Q.R.C., issued a rehabilitation consultation report from a statutory rehabilitation consultation. QRC Anderson noted that Dr. Brunz had not released the employee to work due to the frequency and extent of the employee’s chronic pain symptoms. QRC Anderson concluded that the employee was not eligible for rehabilitation services and that he was, from an expert rehabilitation perspective, considered permanently and totally disabled from work.
On September 7, 2017, Dr. Zeller conducted a follow-up IME on behalf of the self- insured employer. Dr. Zeller restated her opinion that the employee was capable of light-duty employment, subject to a 20-pound lifting restriction and frequent change of position. Dr. Zeller referenced the occasional maintenance work done at the employee’s rental properties in arriving at this opinion.
On October 17, 2017, Kate Schrot, M.S., C.D.M.S., Q.R.C., conducted an independent vocational evaluation (IVE) on behalf of the self-insured employer and she noted that the employee performed light maintenance work, assisted by his wife, on the rental properties that they own. QRC Schrot also noted that the employee claimed that he was diagnosed with a learning disability. She performed a labor market survey and concluded that there were clerk, customer support, and healthcare support positions available that were within the employee’s physical restrictions. Even though a number of the jobs found required skills and experience that the employee plainly lacks, QRC Schrot was of the opinion that the employee could find employment in the current Marshall, Minnesota, labor market with vocational rehabilitation assistance.
On December 14, 2017, Dr. Brunz provided a narrative report indicating that the employee was totally disabled from 2006 onward.
Since 2001, the employee and his spouse jointly owned several single-family residences that are rented. The employee and his spouse are responsible for the maintenance of the residences. Some of the work is performed by the employee and his spouse and other work is hired out. From 2009 through 2014, the employee and his spouse experienced losses on the properties ranging from $3,367.00 to $10,470.00. In 2015, the employee and his spouse earned $2,446.00 and in 2016, $4,911.00. The two largest expenses in years with losses were depreciation and repairs.[1]
On January 3, 2017, the employee filed a claim petition seeking benefits. The matter came on before a compensation judge on December 15, 2017. The issue presented to the judge was whether the employee was permanently and totally disabled from January 1, 2007, to the present. Testimony was heard from the employee, several members of his family, an employee of the self-insured employer, QRC Anderson, and QRC Schrot. In Findings and Order served and filed March 5, 2018, the compensation judge found that the employee was entitled to permanent total disability benefits from January 1, 2007, onward, and awarded permanent total disability benefits as well as permanent partial disability benefits. The self-insured employer appeals the finding that the employee was permanently and totally disabled.
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(3). 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).
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), summarily aff’d (Minn. June 3, 1993).
The self-insured employer contends that the compensation judge erred in finding that the employee was permanently and totally disabled because the employee was physically capable of work and failed to perform a reasonably diligent job search. The self-insured employer suggests that the employee’s failure to engage in a job search is due to his employment as the manager of his two rental properties he and his wife owned over the past six years. The self-insured employer maintains that ownership of rental residential real estate properties is gainful employment on a regular basis yielding substantial income, and therefore, the employee is not permanently and totally disabled. The employee maintains that the compensation judge’s findings were supported by substantial evidence regarding his ability to seek and hold gainful employment and therefore the award of permanent total disability benefits should be affirmed.
Under Minn. Stat. § 176.101, subd. 5, an employee is entitled to permanent total disability benefits when that employee is totally and permanently incapacitated from working at an income-earning occupation and the employee has a qualifying injury or percentage rating of permanent partial disability of the whole body. See 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); see also McClish v. Pan-O-Gold Baking Co., 336 N.W.2d 538, 542, 36 W.C.D. 133, 139 (Minn. 1983).
The self-insured employer contends that the compensation judge improperly relied on the medical opinions of Dr. Brunz to establish permanent total disability. Specifically, the self-insured employer points to the evidence that the employee experienced significant improvement after the 2008 surgery and was released to work for a few months in 2011. In addition, Dr. Brunz tied work restrictions in 2015 to the result of the 2008 FCE. Given the significant improvement in pain for significant periods after the 2008 surgery, the FCE, and the refusal to engage in a job search, the self-insured employer contends that Dr. Brunz’s opinion on the extent and date of disability is unsupported by the evidence. The self-insured employer asserts these are undisputed facts in the record that can only be reconciled by accepting Dr. Zeller’s medical opinions over those of Dr. Brunz. We are not persuaded by this argument.
This court will generally affirm a compensation judge’s findings of fact based on the choice between expert opinions, “so long as the accepted opinion has adequate foundation.” Smith v. Quebecor Printing, Inc., 63 W.C.D. 566, 573 (W.C.C.A. 2003) (citing Nord v. City of Cook, 360 N.W.2d 337, 37 W.C.D. 364 (Minn. 1985)), summarily aff’d (Minn. Aug. 15, 2003). As the employee’s treating physician, Dr. Brunz has a well-founded opinion regarding the employee’s condition. That opinion was necessarily informed by subsequent events as the course of the employee’s treatment went on. While the employee’s condition improved from time to time over the course of 11 years, the condition was fluid, not static. A reasonable inference from the employee’s medical record is that none of those improvements were sufficiently lasting to allow the employee to return to work. The contradictions claimed by the self-insured employer affect the weight of the evidence, which was resolved by the compensation judge in favor of the employee.
At hearing, the self-insured employer introduced evidence that the employee was observed working, including carrying a bundle of shingles up a ladder. The employee introduced evidence disputing this contention. As with all matters involving conflicting testimony, the compensation judge is in a unique position to observe the witnesses. See Brennan v. Joseph G. Brennan, M.D., 425 N.W.2d 837, 839-40, 41 W.C.D. 79, 82 (Minn. 1988) (assessment of a witness's credibility is the unique function of the trier of fact) (citing Spilman v. Morey Fish Co., 270 N.W.2d 781, 31 W.C.D. 187 (Minn. 1978)). The compensation judge, having heard the testimony of a number of witnesses, concluded that the employee was not capable of work. The judge’s findings are supported by substantial evidence in the record.
As a general rule, an injured employee who is able to work must conduct a reasonably diligent job search to establish entitlement to total disability benefits. The burden of proving an adequate job search is on the employee. Redgate v. Sroga's Standard Serv., 421 N.W.2d 729, 733, 40 W.C.D. 948, 954 (Minn. 1988). Where such a job search would be futile, the lack of a job search goes to the weight of the evidence as to whether an employee is totally disabled. Scott v. Southview Chevrolet Co., 267 N.W.2d 185, 188-89, 30 W.C.D. 426, 432 (Minn. 1978). In resolving the issues regarding job search, the judge can consider the effects of the work injury, the employee’s work history, and the extent of vocational assistance received. Crocker v. HMS Host Corp., No. WC06-304 (W.C.C.A. June 14, 2007).
The compensation judge was presented with two competing vocational opinions on the employee’s ability to work. QRC Schrot’s opinion was that the employee was capable of work within his restrictions, but the compensation judge found this opinion lacking analysis of the employee’s history of work restrictions and the varied ability to work over significant periods of time between major surgeries. The judge believed these omissions were significant enough to discount QRC Schrot’s opinion. The judge accepted the opinions of QRC Anderson as more aligned with the evidence and therefore more persuasive than the opinions of QRC Schrot.
In this matter, the employee was not medically released to work for more than a few months over an 11-year period. The employee was determined to be totally disabled for receipt of SSDI benefits. QRC Anderson concluded that the employee was not eligible for rehabilitation services, and the employee received none over that period. QRC Schrot maintained that the employee could find employment within his abilities, but most of the available job openings identified require skills and experience that the employee does not possess. The judge found credible the employee’s testimony regarding the effects of his pain symptoms on his ability to work. This is substantial evidence supporting the compensation judge’s conclusion that a job search was not feasible.
The self-insured employer contends that the employee cannot qualify for permanent total disability because he engages in the rental of properties and is therefore employed. Under Minn. Stat. § 176.101, subd. 5, an employee is permanently and totally disabled when “unable to secure anything more than sporadic employment resulting in an insubstantial income.” The self-insured employer notes that the employee receives $18,000.00 per year in gross rents paid and contends that the employee performed work that was regular and not sporadic at these properties since 2001.
The self-insured employer argued that the employee conducted maintenance work that was both frequent and regular. The employee testified that the work he performed in maintaining the two rental properties was infrequent and of short duration. This testimony was accepted by the judge and supported by the substantial evidence in the record.[2] Thus, the only remaining question for the judge was whether the income derived from those rental properties was substantial.
The self-insured employer’s mention of gross rental income without the deduction of rental expenses is not persuasive as the expenses of renting the properties are necessary for the generation of income and not available to the employee after the expenses are paid. Similarly, the self-insured employer suggests that claimed depreciation should be treated as income to the employee. There is no basis for such treatment on this record as depreciation is a legitimate expense necessary for the generation of income. Preussner v. Timmer, 414 N.W.2d 577, 579 (Minn. Ct. App. 1987). The compensation judge properly limited the inquiry to net income in determining whether the employee was earning substantial or insubstantial income.
In Finding 26.g., we find the compensation judge correctly listed the employee’s earnings from 2015 and 2016. However, we find the remainder of the finding is incorrect because the remaining figures presented were annual losses, not earnings. Accordingly, we modify finding 26.g. to clarify that the figures presented from 2009 through 2014 are losses.
The self-insured employer maintains that the employee’s income is substantial as a whole. We disagree. Taking the average of all the reported earnings and losses in the record, the employee and his spouse experienced an annual loss of $3,896.25. That figure meets the standard for insubstantial income given the facts in this case. Limiting the analysis to the year with the highest earnings figure, 2016, the employee and his spouse had net earnings of $4,911.00. As testimony in the record indicated that the employee and his spouse were joint owners of the properties and shared the work, the judge could reasonably have concluded that half of the earnings, $2,455.50, was attributable to the employee.
The employee’s attributable earnings in 2016, $2,455.50, amounts to $47.22 per week. The compensation judge could reasonably conclude that this amount constitutes insubstantial earnings within the meaning of Minn. Stat. § 176.101, subd. 5. See Johnson v. Laraway Roofing, No. WC05-109 (W.C.C.A. Sept. 22, 2005), summarily aff’d (Minn. Feb. 6, 2006) (weekly earnings ranging from $20.00 to $50.07 not substantial earnings). Whether averaging the earnings and losses or using the single best year’s earnings, the employee has demonstrated that his work was sporadic and his income was insubstantial, thereby qualifying for permanent total disability benefits.[3]
Substantial evidence in the record supports the compensation judge’s findings and conclusion that the employee is permanently and totally disabled from 2007 onward. The employee has affirmatively demonstrated that a job search would be futile and therefore the lack of a job search is not a bar to receiving permanent total disability benefits. The employee’s earnings have been shown to be insubstantial in some years and nonexistent in others. As an appealed finding incorrectly states losses as income earned for all but two of the years for which evidence was provided, that finding is modified to denote the employee’s losses. In all other respects, the Findings and Order, served and filed March 5, 2018, is affirmed.
[1] Ex. 19.
[2] The case cited in support by the self-insured employer, Norgren v. Aramark, 68 W.C.D. 607 (W.C.C.A. 2008), involved an employee who served as on-site caretaker for a 48-unit apartment complex and performed various duties on a daily basis, for which she received approximately $1,000.00 per month in compensation. The maintenance duties of the employee in this proceeding bear no relation to that amount and frequency of work.
[3] It bears noting that this argument assumes all of the earnings are compensation for work. Because the net earnings are derived from investment properties, the proper approach would be to treat a portion of those earnings as a return or loss on investment and not entirely as earnings from employment.