PENALTIES. The compensation judge’s award of penalties under Minn. Stat. § 176.225, subds. 1 and 5, should have considered not only late payments made by the employer, but also undisputed and unpaid medical expenses.
Compensation Judge: Kathleen Behounek
Attorneys: Jeremiah W. Sisk, Mottaz & Sisk Injury Law, Coon Rapids, Minnesota, for the Appellant. Jeffrey J. Lindquist, Gries Lenhardt Allen, P.L.L.P, St. Michael, Minnesota, for the Respondents.
Affirmed, in part, and vacated and remanded, in part.
GARY M. HALL, Judge
The employee appeals from the compensation judge’s denial of his claim for wage loss benefits, and from the compensation judge’s award of penalties against the employer, the amount of which he alleges is inadequate. We affirm in part and vacate and remand in part.
The employee, Ted Larson, was employed as a sales manager by the employer, Viking Coca-Cola Bottling Company (“Viking”). He managed client accounts, supervised sales staff, and occasionally assisted with deliveries. On July 19, 2018, while assisting with a delivery of a keg of beer, the employee sustained an injury to his right hip. He eventually developed a Staph aureus infection in his right hip that required extensive medical treatment including hip replacement surgery and permanent physical restrictions of no lifting more than 75 pounds.
Throughout the course of his treatment, surgeries, and hospitalizations, the employee would return to work at Viking in his usual sales manager position. His job description continued to include a requirement of occasional lifting up to 150 pounds, however, he testified that Viking had worked with him to accommodate his physical restrictions. Following his hip replacement surgery, the employee returned to Viking on May 20, 2019. That same day, the employee voluntarily resigned from his position. Shortly thereafter, he began employment as a sales manager for a brewing company. This position offered a lower base salary, but the employee believed it would provide better long-term opportunities in terms of earnings and other benefits. After that brewing company went out of business, the employee later obtained a sales manager position at another brewing company, at which he earned a salary similar to what he earned at Viking. The employee’s new positions were both within his permanent physical restrictions.
The employer initially denied primary liability for the employee’s right hip injury. After having filed a claim petition, the employee submitted for an independent medical evaluation at the request of the employer. Based upon the opinions of the evaluator, the employer withdrew its primary liability denial and the employee’s claim petition was withdrawn and dismissed by order on March 21, 2019. On April 2, 2019, counsel for the employee sent via email a summary of the employee’s claim and the outstanding intervention claims to counsel for the employer. The employer then filed a notice of benefit reinstatement on April 12, 2019, indicating payment of temporary total disability benefits. A notice of primary liability determination was filed on May 9, 2019. The following day, counsel for the employer notified the medical providers via email that the employee’s claim would be accepted, and he requested confirmation of outstanding balances and properly coded bills for processing payment. Payments were initiated on May 16, 2019.
The employee filed a claim petition seeking temporary partial disability benefits and penalties against the employer. The matter came on for hearing before a compensation judge on February 4, 2020. By Findings and Order dated April 28, 2020, the judge denied the employee’s claim for wage loss benefits, concluding that the employee’s reduction of earnings after his resignation from Viking was not causally related to his work injury. The judge awarded penalties against the employer for delayed payment of the employee’s medical expenses, though she declined to award the extent of penalties sought by the employee. 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 employee appeals from the compensation judge’s denial of his claim for temporary partial disability benefits, and from the award of only a portion of the penalties sought against the employer.
The compensation judge denied the employee’s claim for temporary partial disability benefits to compensate him for wage loss he alleges to have suffered as a result of his work injury following his resignation from Viking.
An employee is entitled to payment of temporary partial disability benefits “only while the employee is employed, earning less than the employee’s weekly wage at the time of the injury, and the reduced wage the employee is able to earn in the employee’s partially disabled condition is due to the injury.” Minn. Stat. § 176.101, subd. 2(b). The compensation judge found that the employee experienced a reduction in earnings after having voluntarily resigned his employment with Viking, but concluded that the reduction in earnings was not causally related to his work injury and denied benefits.
On appeal, the employee argues that his entitlement to wage loss benefits is established by the fact that his position at Viking was not within his physical restrictions, that his subsequent employment was within his physical restrictions, and that Viking had not offered another suitable position. There is no evidence in the record that Viking modified the job description or offered an alternative position, nor is there evidence that Viking refused to accommodate the employee’s restrictions. The employee had been considering a job offer from another employer and resigned from Viking the same day he returned from leave following his hip replacement surgery. He testified that one reason he resigned was that he knew he would be required to perform duties beyond his physical restrictions because he performed those duties prior to his injury. The compensation judge considered this testimony to be speculative.
Having not been persuaded by the employee’s statement that he resigned because of what he expected his job duties would require, the compensation judge considered the remainder of the employee’s testimony with respect to his decision to resign from his position at Viking and to pursue employment elsewhere. The employee testified that he believed that because Viking had not supported him after his injury, the company would not support him when he returned. He testified that he was concerned he would be injured again because his division was underfunded and understaffed. The employee had been presented with an employment opportunity that would allow him to work from home, while his position at Viking required a lengthy commute on top of long hours. He believed that his new position had potential for ownership and eventual higher earnings.
“Whether reduced earning capacity is attributable to the disability or to some other factor is a question of fact for the compensation judge.” Borchert v. Am. Spirits Graphics, 582 N.W.2d 214, 215, 58 W.C.D. 316, 318 (Minn. 1998) (citing Dorn v. A.J. Chromy Constr. Co., 310 Minn. 42, 245 N.W.2d 451 (1976)). In this case, the compensation judge weighed the evidence and testimony offered by the employee and concluded that the employee’s resignation was not due to his work injury, and that in failing to establish that his reduced wages after his resignation was causally related to his work injury, he was not entitled to wage loss benefits under Minn. Stat. § 176.101, subd. 2. Because substantial evidence in the record supports the compensation judge’s factual determinations on this issue and her denial of benefits, we affirm.
The compensation judge assessed penalties against the employer for late payments of medical expenses through the date of the hearing, and for three outstanding intervention claims. The compensation judge did not assess penalties for nearly $125,000.00 of medical expenses that were undisputed but remained unpaid at the time of the hearing. On appeal, the employee seeks additional penalties against the employer for the $125,000.00 in unpaid medical expenses.
As a result of his work injury, the employee incurred over $175,000.00 in medical expenses. Liability was accepted in March 2019. Nearly one year later, as of the date of the February 2020 hearing, the employer had paid only $51,324.82 in medical benefits. The compensation judge found that nearly all of those payments were inexcusably delayed and subject to a 25 percent penalty under Minn. Stat. § 176.225, subd. 5. Intervention claims had been filed prior to the hearing with outstanding amounts from three providers, totaling just over $17,000.00. The compensation judge concluded that the employer’s failure to pay those three claims, which were incurred prior to the employer’s withdrawal of its primary liability denial, constituted unreasonable delay and a 5 percent penalty of the fee scheduled amounts of those claims was assessed under Minn. Stat. § 176.225, subd. 1(2). No other penalties were assessed.
At hearing, counsel for the employee indicated that nearly $125,000.00 of medical expenses remained unpaid. Claim summaries were admitted into evidence, along with copious bills and statements. (Pet. Exs. N, P, BB.) The transcript contains reference to an agreement between counsel with respect to an intent to pay those unpaid medical expenses, though no formal stipulations were outlined on the record or noted by the compensation judge.
On this record, it is not clear to this court that the compensation judge considered the nearly $125,000.00 of undisputed and unpaid medical expenses when awarding penalties against the employer. Penalties were only assessed against the amount of three intervention claims (appx. $17,000.00) and against the amount paid by the employer between May 13, 2019, and the February 4, 2020, hearing (appx. $51,000.00). Since penalties were justified under Minn. Stat. § 176.225 for late payments made during that time period, penalties on nearly $125,000.00 of undisputed and unpaid medical expenses would also appear to be justified.
Whether the assessment of a penalty is appropriate is generally a fact question for a compensation judge. Bell v. State, Dep’t of Transp., 73 W.C.D. 767 (W.C.C.A. 2013). The compensation judge made the factual determination that penalties were appropriate in this case. However, this court reviews the compensation judge’s application of the penalty provisions to the undisputed facts on a de novo basis. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993). The evidence shows that the employee incurred over $175,000.00 in medical expenses, and that nearly the entire amount was paid late or remained unpaid by the date of the hearing below. We see no reason to distinguish between late payments and undisputed non-payments. Because the compensation judge assessed penalties against only a portion of the late and unpaid medical expenses, we vacate the compensation judge’s award of penalties and remand the matter for a determination of an appropriate penalty under Minn. Stat. § 176.225, subds. 1 and 5, that considers both late, and undisputed and unpaid, medical expenses as claimed by the employee.
 Minn. Stat. § 176.225, subd. 1(2) provides an increase in compensation of up to 30 percent of the total amount of payments that are determined to have been unreasonably or vexatiously delayed.
 Attorney Sisk: “[W]ith the stipulation, as I understand, the employer and insurer will be paying the medical bills as we’ve asserted and drawn. So if that stipulation holds fast, then obviously that’s not an issue that needs to be addressed.”
Attorney Lindquist: “And we do so stipulate.” (T. 7.)
 Under Minn. Stat. § 176.135, subd. 6, an employer is required to pay or deny a medical bill within 30 days of receipt. For purposes of the 30-day requirement, the compensation judge determined that the employer’s payments made after May 13, 2019, which was 30 days after the employer filed its notice of benefit reinstatement, were late. (Findings 16 and 17.) In her memorandum, the judge stated that payments made after 30 days following Attorney Sisk’s April 2, 2019, emailed claim itemization were late. (Mem. p. 9.)