GERALD BAUER, Employee/Appellant, v. FLINT HILLS RES. and ESIS INC., Employer-Insurer/Respondents.

The employee appeals the determination of the compensation judge that the retirement presumption in Minn. Stat. § 176.101, subd. 4, was not rebutted.  As substantial evidence supports the compensation judge’s decision and there was no error of law, we affirm.

The employee in this matter, Jerry Bauer, worked as a production specialist at an oil refinery operated by the employer, Flint Hills Resources, for nearly ten years before his date of injury.  His job involved crawling, climbing, lifting, and working 12-hour shifts.  He had worked as an aircraft mechanic for 17 years prior to working for the respondent.  On June 6, 2016, he sustained an admitted work-related injury to his right knee while working for the employer.  At that time, he was 60 years old.

As a result of his work injury, the employee underwent posterior cruciate ligament reconstruction surgery on April 3, 2017.  Subsequently, he was assigned permanent restrictions which included limited working to 8 hours per day, walking to 33 percent of the day, floor-to-waist lifting to 25 pounds frequently, 35 pounds occasionally, and 40 pounds rarely, limited overhead lifting to 20 pounds frequently, 40 pounds occasionally and 50 pounds rarely, and limited crouching, kneeling, and crawling.  The employer was not able to accommodate these restrictions, so the employee was unable to return to his date-of-injury position.

The employee received long term disability benefits following the work injury.  As a requirement of receiving those benefits, the employee applied for Social Security disability benefits.  His application was approved and he began receiving those benefits on October 1, 2018. They were converted to Social Security retirement benefits when he reached age 65.

Beginning in 2018, the employee received vocational assistance from a qualified rehabilitation consultant and a placement specialist.  The employee completed a transferable skills analysis as well as vocational evaluation testing.  He engaged in an active job search but was unable to find a physically appropriate job.

In October 2019, the parties entered into a stipulation for settlement.  The parties stipulated that the employee was permanently and totally disabled as of the date of injury, June 6, 2016, and that the employer and insurer were entitled to an offset of permanent total disability benefits by Social Security benefits as of October 1, 2018.  They also agreed that the employee would be paid permanent total disability (PTD) benefits as of October 19, 2019 “subject to applicable adjustments and applicable defenses.”  Vocational rehabilitation benefits were closed under the stipulation for settlement and the employee ended his job search.

On June 26, 2022, the employee reached age 67.  On that day, the insurer discontinued payment of PTD benefits in reliance on a statutory presumption of retirement provided by Minn. Stat. § 176.101, subd. 4.  The employee filed a claim petition for reinstatement of PTD benefits from and after June 27, 2022, asserting that he had rebutted the presumption and that he was entitled to PTD benefits through age 72.

At the time of the hearing, the employee was receiving Social Security benefits in the amount of $3,000 per month.  His wife was receiving approximately $1,800 per month in Social Security benefits, plus pension benefits of approximately $2,000 per month.^[1]  The employee also received a lump sum payment of an unknown amount for his pension.  The employee and his wife found it more difficult to pay expenses after his PTD benefits were discontinued, as this resulted in a decrease of monthly income of roughly $800.  For two and a half years preceding the hearing, they had an additional medical expense of $3,700 every three months related to his wife’s medical condition, subject to an annual deductible.  The employee took a lump sum payment for his pension in part to cover the medical bills.  They have neither home nor vehicle loans, and they spend six weeks every winter in Texas visiting relatives.  One of their adult children lives with them but is financially independent.  However, he does not contribute to the household finances.

The compensation judge denied the employee's claim for permanent total disability benefits, finding that he had retired as of June 26, 2022, and that he did not rebut the retirement presumption.  In making these determinations, the compensation judge relied on the employee’s prior deposition testimony that he planned to retire at age 67 and that he and his wife had made financial arrangements so that he could retire at age 67.  She also relied on the fact that the employee did not pursue potential sources of additional income.  Specifically, he had not asked their employed adult son who lives with them to contribute financially to the household, nor had he looked for part-time work to supplement his income.  The compensation judge also noted that despite the additional medical expense, the employee and his wife were still able to pay all their basic expenses, including the copays for the medication, with some money still left over each month.  In her memorandum the compensation judge stated, “I am not convinced that the employee’s more recent financial situation would, more likely than not, have prevented him from retiring at age 67.”  The compensation judge also found that a 2018 amendment to Minn. Stat. § 176.101, subd. 4, is substantive, rather than procedural, and was therefore not retroactive.  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).

On the employee’s date of injury, Minn.  Stat. § 176.101, subd. 4, provided:

Here, the insurer discontinued PTD benefits on June 21, 2022, the employee’s 67th birthday.  The issue at the hearing was whether the employee had rebutted the retirement presumption and the compensation judge concluded that he had failed to do so.  The determination of whether the employee has presented sufficient evidence to rebut the presumption of retirement is a question of fact for the compensation judge.  Olson v. 3M, 71 W.C.D. 497 (W.C.C.A. 2011).  The question for this court is whether the decision of the compensation judge is supported by substantial evidence when considering the record as a whole.  If so, the decision is to be affirmed.  Hengemuhle, 358 N.W.2d at 59, 37 W.C.D. at 239.

In determining whether the employee had rebutted the retirement presumption, the compensation judge analyzed the factors set forth in Davidson v. Thermo King.  64 W.C.D. 380 (W.C.C.A. 2004), for determining whether an employee is “retired.”  Those factors include: the employee’s expressed intent to retire or continue working, application for Social Security retirement benefits, evidence of a financial need for employment income, including the adequacy of a pension or other retirement income, whether the employee or the employer initiated a discussion of retirement, and whether the employee actively sought alternative employment or was working.

The compensation judge noted that the employee admitted that his original plan was to retire at age 67, as his wife would no longer need his health insurance at that time.  From this, the compensation judge inferred that the employee had intended to retire as soon as he and his wife could afford to do so, and no later than age 67.

As for Social Security retirement benefits, the compensation judge found that the employee applied for Social Security disability benefits, and that he was required to make this application to receive long term disability benefits.  That factor did not seem to influence the judge’s decision.  There was no discussion by the compensation judge or either party as to who initiated retirement discussions, but the evidence shows that the employer did not have a designated retirement age.

As to the financial need factor, the compensation judge found that the employee and his wife had made financial arrangements for his retirement by age 67, including paying off their home mortgage as well as both of their car loans.  The compensation judge also noted that, by the time the employee stopped working in 2017, both he and his wife were receiving Social Security benefits and his wife was also receiving her pension.  The compensation judge also made findings regarding their monthly household income, as well as the employees wife’s increased medical expense due to a prescription related to a medical diagnosis in 2021.  She found that the employee and his wife had about $1,000 left each month after paying necessities.

In finding that the employee had failed to meet his burden to rebut the retirement presumption, the compensation judge noted that, despite a claimed financial need, the employee had not looked for work.  She concluded that if there was truly a financial need, the employee and his wife could have asked their adult son, who lives with them, to contribute to the household finances, but had not.  She also concluded that if they were in fact experiencing a financial need, the employee could have sought part-time work to supplement his income, but had not, despite being capable of sedentary work.  The compensation judge did not make a specific finding that the employee’s claim of financial need did not in itself rebut the presumption, but she did note that the employee was able to meet his expenses despite having to be careful and “budget.”

In Vandervoort v. Olinger Transp., 70 W.C.D. 1 (W.C.C.A. 2010), this court held that where the parties had stipulated that an employee who had not yet reached age 67, that he was permanently totally disabled, the employee is not required to conduct a job search in order to rebut the retirement presumption.  In Vandervoort, the compensation judge had relied on the employee’s failure to seek rehabilitation assistance or seek employment as a basis to find that he had not rebutted the retirement presumption.  This court stated that “given the stipulation as to permanent total disability, the employee had no reason to request rehabilitation services or seek employment.  As such we cannot agree with the judge's conclusion that the employee’s failure to seek rehabilitation assistance or seek employment suggests that the employee had voluntarily retired.”  Id., 70 W.C.D. at 6.

In this case, the compensation judge considered whether the employee had sought rehabilitation assistance and part time work to supplement his income.  Although under Vandervoort, an employee who has been adjudicated to be permanently and totally disabled prior to age 67 is not required to job search to rebut the retirement presumption, whether an employee has engaged in a job search remains an appropriate consideration when determining an employee’s financial need.  The compensation judge found that no physician had told the employee that he could not work, and the employee was aware that he could earn a certain amount and still receive his Social Security benefits.  Despite this, the employee had not engaged in a job search.  In this case, the compensation judge considered the lack of job search in context of the analysis of whether the employee had demonstrated a financial need that would support a rebuttal of the retirement presumption.  The compensation judge found that the employee had retired as of June 26, 2022, at age 67, and that he did not rebut the retirement presumption.  Substantial evidence of record supports these conclusions, and they are affirmed.

In 2018 the Minnesota Legislature enacted changes to portions of Minn. Stat. § 176.101.  One change was the removal of the retirement presumption at issue, substituting it with the termination of permanent total disability at age 72.  The employee argues that the compensation judge committed an error of law by failing to apply the age 72 nonrebuttable presumption to the case at hand.  We are not persuaded.

Minn. Stat. § 645.21 states “no law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.”  Nothing in the legislative documentation suggests that the changes were to be an exception to this rule, or that they should be applied retroactively.  In fact, session law outlining the changes as eventually enacted specifically provides that “unless otherwise specified, this article is effective for employees with dates of injury on or after October 1, 2018.”^[2]

The substantive rights of the employer and employee are fixed by the law in effect on the date of injury. Joyce v. Lewis Bolt & Nut Co., 412 N.W.2d 304, 307, 40 W.C.D. 209, 213 (Minn. 1987).  The employee, however, argues that the changes to Minn. Stat. § 176.101, subd. 4, are procedural, rather than substantive, and therefore should be applied retroactively.  The employee maintains that since employees could rebut the age 67 retirement presumption and then potentially receive benefits to age 72, there is no additional substantive benefit created by the legislative amendment.^[3]  However, an entitlement to an additional benefit is much different than the possibility of rebutting a presumption that would end an entitlement.  The employee also argues that very few cases would be affected by a retroactive application of the 2018 amendments to the statute.  There is no evidence regarding how many cases would be affected, including the number of cases that have been previously tried or resolved on the same issue.  Determination of whether a provision is procedural or substantive is a question of law, regardless of the number cases it may affect.

Finally, appellant argues that the amendment to the law should be considered procedural, or else it would yield unfair results to different employees, of the same age, but injured on different dates.  It is well established that in claims under the Workers’ Compensation Act, the law on the date of injury controls, except as noted above.  Joyce, 412 N.W.2d at 307.  As pointed out by the compensation judge, if there is no ability to have a start date for a law or an amendment, every amendment would apply to all dates of injury, a result that is untenable.  The compensation judge’s finding that the October 1, 2018, amendment to the retirement presumption is not retroactive is affirmed.

Appellant also argues dismissal of the claim petition with prejudice was error since the appellant has the right to rebut the retirement presumption at a later date.  The compensation judge determined that the employee has not rebutted the retirement presumption based on his current situation. That determination was based on the evidence presented at hearing. Thus, she dismissed the claim petition by which this claim was brought, with prejudice.  This did not dismiss any potential future claim petition brought forth by the employee.  While under res judicata concepts, certain claims might be foreclosed, the compensation judge did not bar the employee from pursuing a subsequent claim to rebut the retirement presumption.  See Maxfield v. Stremel, 79 W.C.D. 753 (W.C.C.A. 2019).  The compensation judge did not err in dismissing the employee’s claim petition with prejudice.