JASON EBENSTEINER, Employee/Appellant, v. KLAPHAKE FEED MILL and WESTFIELD GROUP, Employer-Insurer/Respondents, and CTR. FOR DIAGNOSTIC IMAGING, Intervenor.

The employee appeals from the findings and order of the compensation judge awarding sanctions against the employee pursuant to Minn. Stat. § 176.081, subd. 12. We affirm.

The employee sustained a work-related injury to his neck and low back on August 21, 2015, while he was working for Klaphake Feed Mill. The employer and its insurer admitted liability for the injury and paid workers’ compensation benefits. The employee was provided with the services of a QRC, Linda Sabye, in June 2016 and in November 2016 he had anterior cervical fusion surgery at C5-6 as a result of his work injury.

The employee filed a request to change QRCs in February 2017. After an administrative decision was issued denying the request, the employee filed a request for a formal hearing on the issue. A notice was sent to the parties on June 12, 2017, advising that the hearing on the employee’s request would be held on July 14, 2017, in St. Paul. The employer and insurer filed a petition to discontinue benefits on June 15, alleging that the employee was failing to cooperate with rehabilitation efforts. A deposition of the employee was set for July 7 but the employee did not attend, stating that he was unable to travel from his home in Sauk Centre to the deposition in St. Paul because of his back pain.

The employee also did not appear at the hearing on July 14. After speaking with the employee by telephone, his attorney told the court and opposing counsel that the employee’s “condition got to the point where he just physically didn’t feel like he could continue the journey.” (T. 3-4.) After further discussion, it was decided that the hearing would be rescheduled and set in Alexandria, closer to the employee’s home.

The employee’s deposition was taken by the employer’s attorney on August 3, 2017. On the question of his non-appearance at the July 14, hearing, the employee testified that he had left his house between 7:00 and 8:00 that morning and had driven as far as St. Cloud when his back pain made it impossible to continue. He also said he was accompanied by his daughters and they had lunch at a Burger Time restaurant and then returned home. He testified that he “no longer wanted to endure any more pain and agony than what I had already.” (Ex. D of Ex. 8, deposition at 36-37.) The employee was asked about his physical activity at home and he testified that he did not mow his yard or do similar tasks and that he paid someone to mow his yard.

The employer and insurer had retained the services of an investigation firm to conduct surveillance of the employee on July 14 and 15. The video taken throughout the day on July 14 showed the employee sitting on the front steps of his house throughout the morning. He did not leave his house and did not travel to St. Cloud. Video from the surveillance on July 15 showed the employee over the course of the day, mowing his yard with a riding mower, using an electric trimmer around trees, and filling a bird feeder in his yard. The surveillance video was provided to the employee’s attorney on August 8. The employer and insurer filed a motion for sanctions pursuant to Minn. Stat. § 176.081, subd. 12 and Minn. R. 1420.3700. The employee objected to the motion.

The compensation judge assigned to this matter issued an order on his own motion consolidating the motion for sanctions with the employee’s request to change QRCs and the employer and insurer’s petition to discontinue. The consolidated pleadings were heard in Alexandria on September 14. There was extensive testimony by the QRC at the hearing. At the conclusion of her cross-examination by the employee’s attorney, the employee withdrew his request to change QRCs and the parties agreed to suspend rehabilitation services. The employer and insurer then withdrew the petition to discontinue benefits. The parties agreed the only issue for the compensation judge’s determination was the employer’s motion for sanctions. (T. 99-101.)

The employee testified at the hearing, initially on examination by the employer’s attorney. The employee evaded answering questions as to the truthfulness of his deposition testimony, claiming difficulty with his memory because of pain. At one point, he stated he did not recall if he had tried to drive to St. Cloud on July 14 (T. 151), but he also agreed with his attorney that he had not been “upfront” about whether he had driven to St. Cloud on July 14. (T. 152.) He further indicated that he did not think he would have physically been able to drive to the hearing on that date because of his pain. (T. 157-58.)

The compensation judge issued his Findings and Order on December 7, 2017. The judge determined that the employee acted in bad faith by not attending the hearing in St. Paul on July 14. The compensation judge also found that the employee had misrepresented to the court through his attorney that he tried to attend the hearing. The compensation judge further determined the employee gave false testimony at his deposition when he testified under oath that he had attempted to drive to the hearing on July 14. The compensation judge concluded the employee’s failure to attend the hearing “was not substantially justified and there are no other circumstances that make the sanctions unjust.” (Finding 11.)

The compensation judge ordered sanctions of $2,344.30 against the employee to be deducted from any future benefits owed to the employee. The employee has appealed.

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 employee appealed the compensation judge’s award of sanctions and also raised a number of subsidiary issues relating to that award.

Minn. Stat. § 176.081, subd. 12, allows for the imposition of sanctions on a party who “fails to appear” at a hearing. The party may be required to pay the “reasonable expenses including attorney fees, incurred by the other party due to the failure to appear.” Id. Sanctions are not to be imposed if the compensation judge finds that “noncompliance was substantially justified or that other circumstances would make the sanctions unjust.” Id. The employee argues on appeal that imposition of sanctions in this case is not appropriate as a matter of law. We disagree.

It is uncontroverted that the employee did not appear at the hearing on July 14 and that, through his attorney, he misrepresented to the court his reason for not attending the hearing. The employee seeks to excuse his conduct by referring to his serious medical condition. There is, however, no medical evidence supporting the employee’s contention that he was unable to travel. Further, surveillance video showed the employee engaged in physical activity that was inconsistent with his deposition and hearing testimony, and would appear to be inconsistent with his claimed inability to travel.

The issue of sanctions was previously considered by this court in Lees v. G & S Roofing Inc., slip op. (W.C.C.A. June 9, 1999), a decision cited by the employee in support of his argument that sanctions were not warranted. The compensation judge in that case had imposed sanctions because the employee had failed to appear at two hearings, once due to his vehicle breaking down on his way to a hearing, and later due to his incarceration at the time of another hearing. This court remanded the case back to the compensation judge for further consideration of whether the award of sanctions was warranted or whether the employee’s conduct was substantially justified. The facts in Lees bear no similarity to those in the present case.

Here, the judge found the employee had acted in bad faith in failing to appear at the July 14 hearing and had misrepresented to the court, through his attorney, his reasons for not attending. The compensation judge determined that the employee’s failure to attend the hearing was not substantially justified and that there were no other circumstances that made the sanctions unjust. We are satisfied that the judge’s analysis in this case is consistent with the standard set out in Lees.

Substantial evidence supports the compensation judge’s conclusion that sanctions were warranted.

The compensation judge awarded sanctions of $2,344.30, the amount requested by the employer and insurer. Of that amount, $1,469.50 was attributed to employer and insurer’s attorney’s additional expenses and time spent preparing for a hearing that did not take place. The remaining $875.60 awarded was attributed to the QRC’s expenses for eight hours of travel time on the day of the hearing, mileage, and parking.

The employee appealed the amount of sanctions awarded for the attorney’s expenses but did not address the issue in his brief. Pursuant to rule, that issue is deemed waived. Minn. R. 9800.0900, subp. 1.

The employee also contests the amount of the award attributed to the QRC’s expenses. The employee argues the award is not allowable under Minn. Stat. § 176.102, which provides that an employee may not be required to pay a QRC’s bill when the employer has been relieved from payment of the bill. The cited statute does not apply here. The award to the QRC is not for rehabilitation services she provided but is instead for the QRC’s expenses as a witness traveling to a hearing that did not take place due to, as the judge found, the employee’s unjustified failure to appear at the scheduled hearing.

Substantial evidence supports the amount of the sanctions awarded by the compensation judge.

The employee argues that he was prevented from presenting testimony at the hearing which would lay a foundation as to why an award of sanctions was unjust. The employee refers to his cross-examination of Steve Lieffring, the investigator who surveilled the employee on July 14 and 15. The employee wanted to examine Mr. Lieffring’s cellphone to see whether communication had occurred between Mr. Lieffring and the insurer or the employer and insurer’s attorney on those dates. The compensation judge refused to allow that examination.

The employee argues in his brief that allowing this line of inquiry would have established what the employer “was up to.” (Appellant’s brief at 17.) This argument mischaracterizes the issue before the compensation judge. The issue at hearing was whether the employee’s admitted failure to attend the July 14 hearing, his failure to provide truthful answers in his deposition, and his testimony at the hearing, supported a factual determination that sanctions were appropriate or whether his conduct was substantially justified. The employer and insurer’s actions in arranging for surveillance, insisting that the employee be present at the hearing, and asking the employee questions during the deposition that elicited false testimony, are irrelevant to the motion for sanctions against the employee. The employee seems to suggest he was somehow set up by the employer and insurer, but the evidence shows that they simply took action to verify their suspicions of the employee’s credibility.

The employee presented a similar argument in his brief by asserting that the compensation judge erred in denying his motion to compel discovery of all communications between the QRC, the insurer, and Best Doctors, a firm retained by the employer to conduct a review of the employee’s medical records. The employee argued at the hearing that his motion was necessary to establish the basis of his request to change QRCs. However, the employee withdrew that request later in the hearing. (T. 77.) The employee provides no explanation of how this issue is relevant to the issue of sanctions and we are unable to discern any such reason in our review.

The employee contends that the compensation judge erred by consolidating for hearing the motion for sanctions, the employee’s request to change QRCs, and the employer and insurer’s petition to discontinue for hearing. Minn. R. 1420.2500, subp. 1, allows a compensation judge to consolidate related cases on the judge’s own motion when certain criteria are met:

The employee’s failure to appear for his July 7 deposition, the concerns raised at a pretrial conference as to whether the employee would attend the scheduled hearing, and his failure to attend the July 14 hearing, all made the employee’s credibility a prominent issue in the pleadings previously filed by the parties as well as in the motion for sanctions. Given the circumstances, it was appropriate and consistent with Minn. R. 1420.2500 for the compensation judge to consolidate all pleadings for a single hearing.

The employee states in his brief that the parties agreed that the employee sustained a work injury to his low back and neck on August 21, 2015. According to the employee, the compensation judge erred by not setting out this agreement of “fundamental facts” in the findings and order. We disagree.

The employee cites to Minn. Stat. § 176.371 as authority for his argument. That section addresses the award or disallowance of compensation or other order by the compensation judge and requires that the judge’s decision include a “determination of all contested issues of fact and law.” Id. (emphasis added). There is no requirement for the judge to include agreements of the parties where the judge’s decision is not contrary to the stipulation.

Given the withdrawal of all issues except for the motion for sanctions, this stipulation was not relevant to the compensation judge’s decision in the matter and the compensation judge did not err by failing to include the stipulation in the findings and order.

The employee argues in his brief that the compensation judge erred by failing to address an intervenor’s claim. That issue was not raised in the employee’s notice of appeal and will not be considered. See Minn. R. 9800.0900, subp.1.

The decision of the compensation judge is affirmed in all respects.