ROBERT MAXFIELD, Employee/Appellant, v. STREMEL MFG. and SENTRY INS. GRP., Employer-Insurer/Respondents.

The employee appeals from the compensation judge’s denial of his claim for permanent total disability benefits, and from the amount of interest awarded for a late payment of temporary partial disability benefits.  We affirm in part, reverse in part, vacate in part, and remand in part.

Robert Maxfield, the employee, is 76 years old.  He receives a pension and social security retirement benefits totaling about $50,000 per year.

The employee sustained a work-related low back injury in 1991 while working as an iron worker for the employer, Stremel Manufacturing.  The employer and its insurer admitted liability and paid various workers’ compensation benefits, including 10.5 percent permanent partial disability.^[1]  The employee has permanent work restrictions of no lifting over 20 pounds and limited bending, stooping, pushing, and pulling.  The employee was unable to return to work for the employer and underwent retraining as a paralegal in 1995.  He worked as a document coder for two years and worked for a repair shop owned by his half-brother, beginning in 1998.  He was laid off from that position in December 2014.  He was subsequently called back for part-time work in March 2015 and worked until he was permanently laid off in August 2015.  As of March 2015, the employee was released for full-time work with restrictions.

In September 2015, the employee began looking for jobs as a paralegal with the assistance of a qualified rehabilitation consultant (QRC) from Rehab Results.  The employee filed a rehabilitation request for rehabilitation benefits.  The employer and insurer denied the request, asserting the employee could work without restrictions, that he had retired, and that he was claiming permanent total disability benefits.  Thereafter, the employee conducted a mostly self-directed job search.

At a prior hearing, the employee claimed entitlement to temporary partial disability benefits, additional permanent partial disability benefits, permanent total disability benefits after August 2015, ongoing rehabilitation assistance, and payment of rehabilitation expenses.  The matter came on for hearing, and in her Findings and Order dated June 13, 2016, Compensation Judge Nancy Olson awarded temporary partial disability benefits and ongoing rehabilitation assistance.  She denied additional permanency, payment of rehabilitation bills, and permanent total disability benefits.  The judge found that the employee had rebutted the retirement presumption because he had continued to work beyond age 72 and conducted a job search, indicating that he had not intended to retire.  The judge further found that his job search was poorly directed and that the rehabilitation services he had received did not assist him in conducting an adequate job search.  The employee appealed the denial of permanent total disability benefits and the denial of payment of the vocational rehabilitation bills.  This court affirmed the compensation judge’s denial of the employee’s claim for permanent total disability benefits, but remanded for payment for the rehabilitation consultation.^[2]

The parties attempted to negotiate a settlement through April 3, 2017.  On June 7, 2017, the employer and insurer paid the employee the temporary partial disability benefits awarded by Judge Olson.

On March 27, 2017, the employee filed a rehabilitation request seeking vocational rehabilitation services.  A rehabilitation plan and job placement plan and agreement (JPPA) were prepared, authorizing 60 days of vocational rehabilitation and placement services.  The employee conducted a job search for 60 days with the assistance of a QRC from Rehab Results during the spring of 2017.  A rehabilitation closure form was filed on July 17, 2017, due to the expiration of the JPPA.

The employee did not find work and in July of 2017, he filed a claim petition seeking permanent total disability benefits as well as penalties and interest for late payment of temporary partial disability benefits.  At the request of the employer and insurer, the employee underwent an evaluation by vocational expert Suanne Grobe Renheim on September 26, 2017.  Ms. Grobe Renheim opined that the employee had not conducted a reasonable and diligent job search.  She determined that the employee had self-limited his return to work efforts, that the job placement efforts were ineffective, and that the employee was physically capable of full-time, light-duty work.  She opined that thousands of jobs existed within the employee’s restrictions and within his geographical area which he would be qualified to perform.  She concluded that the employee was not permanently and totally disabled.

A hearing was held on December 20, 2018.  In a decision dated March 25, 2019, Compensation Judge Miriam Rykken found that the employee had failed to prove he was permanently and totally disabled and denied his claim.  The judge awarded penalties for late payment of temporary partial disability benefits and awarded interest beginning 14 days after settlement negotiations broke down.  The employee appeals.

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 compensation judge found that the employee failed to prove that he was permanently and totally disabled from April 2, 2016, through the date of hearing.  The judge noted that the employee conducted little or no job search during most of the period in question, and specifically found that his job search was self-limited.  While the judge noted that the employee did conduct a job search with the assistance a QRC for a short period, she found that this search did not adequately target areas where the employee could use his transferable skills, did not include part-time work, and involved limited contact with prospective employers.  The compensation judge adopted the opinion of the independent vocational evaluator that the employee had not conducted a reasonable and diligent job search, that the employee was capable of a full-time job search and full-time work, that his job search since his layoff in 2015 was self-limiting, and that he was not permanently and totally disabled as a result of his 1991 work injury.  That opinion was based upon adequate foundation.  Substantial evidence therefore supports the compensation judge’s finding that the employee did not prove that he was permanently and totally disabled and we affirm on this basis.^[3]

As a separate ground for denial of permanent total disability benefits, the compensation judge found that the employee failed to rebut the statutory presumption of retirement under Minn. Stat. § 176.101, subd. 8 (1990),^[4] in Finding 25.  We note that the statutory presumption was not at issue at the 2018 hearing.  In the June 2016 Findings and Order, Judge Olson found that the employee had rebutted the retirement presumption.  This finding was not appealed and is res judicata as to the application of the statutory presumption.^[5]  We therefore vacate the compensation judge’s finding that the employee had not rebutted the presumption of retirement.

The employer and insurer did, however, raise a defense of retirement in their post-hearing brief.  Retirement is an affirmative defense and the employer and insurer bear the burden of proof to show that the employee had retired from the labor market.^[6]  Although the compensation judge discussed factors bearing on this affirmative defense, she did not make a determination on this issue.  Nonetheless, because we have affirmed the judge’s denial of permanent total disability benefits on other grounds as outlined above, we need not remand to the compensation judge for consideration of this issue.  The affirmative defense of retirement remains available to oppose permanent total disability claims going forward.

On June 7, 2017, the employee received payment for the temporary partial disability benefits awarded in the June 13, 2016, Findings and Order.  After the hearing on December 20, 2018, Judge Rykken found the delay in payment resulted from the parties’ good faith efforts to engage in settlement discussions through April 3, 2017.  The judge found the payment was not due until 14 days after the negotiations stopped and ordered the employer and insurer to pay interest only from April 18, 2017, to the date payment was made.  The employee appealed the amount of interest awarded on the late payment, asserting that interest should have been due from the date the benefits were awarded by the compensation judge in June 2016, not the date the settlement negotiations broke down.  We agree and reverse.

Payments ordered by a compensation judge and not appealed “shall be made within 14 days of the filing of an appropriate order . .  by a compensation judge . . . .”  Minn. Stat. § 176.221, subd. 8.  The payment was ordered in the June 13, 2016, Findings and Order, and was not appealed.  Pursuant to Minn. Stat. § 176.221, subd. 7, payments not made when due “shall bear interest from the due date to the date payment is made . . . .”  In Oseland v. Crow Wing Cty., a decision filed after the hearing below, the Minnesota Supreme Court held that interest payable to an employee for overdue workers’ compensation benefits is not a penalty and that interest is owed  from the date the late payment was due regardless of the reason for the delay.   Here, the efforts by the parties to negotiate a settlement, whether or not in good faith, did not change the length of time the payment was late and interest accrued.  The holding in Oseland applies in this case and requires calculating the interest earned on the benefits from the due date of the payment.  As a matter of law, we reverse Finding 31 and Order 4 and remand to the compensation judge to determine the interest owed to the employee from 14 days after the payment was ordered, June 27, 2016.