ALLEN MCKISSIC, Employee/Respondent, v. BOR-SON CONSTR., INC., and GALLAGHER BASSETT SERVS., INC., Employer-Insurer/Respondents, and ANTHONY MCKISSIC, Appellant.

Anthony McKissic, the employee’s brother, appeals from the compensation judge’s determination that the employer and insurer’s direct deposit of money into the employee’s bank account for nursing services provided to the employee by his brother was not an overpayment.  He also appeals from the compensation judge’s finding that although he was not provided notice of his right to intervene, such failure did not prejudice his rights.  We reverse.

The employee, Allen McKissic, sustained multiple severe injuries when he fell from a scaffolding while working for the employer, Bor-Son Construction, Inc. on July 9, 1999.  The employee was standing on a scaffold when a plank broke causing the employee to fall more than 40 feet, breaking his right wrist, left leg, and left foot, as well as sustaining fractures to his spine.  After the injury, the employee was hospitalized for more than a month and was diagnosed with cauda equina syndrome, L4 burst fracture treated with L3-5 transpedicular fixation and fusion, left ankle fracture treated with open reduction and internal fixation, right Colles fracture, and neurogenic bowel and bladder.  On the date of injury, the employee was 34 years old and was working full time earning $22.00 per hour.

Upon release from the hospital in August 1999, the employee could not care for himself due to the effects of the work injury.  The employee returned home to his parents who helped him with his activities of daily living including bathing, dressing, putting on and removing a back brace, and toileting.  The employee was deemed to be entitled to permanent total disability benefits on July 9, 2001.^[1]  The employee filed a claim petition requesting payment of nursing services provided to him by his parents beginning on August 13, 1999.

On October 4, 2005, Compensation Judge Patterson issued a findings and order awarding some but not all of the employee’s claimed nursing services provided by his parents.  She ordered that beginning on August 10, 2005, the employee required home health aide services of six hours per day being provided by his parents to be paid at $10.00 per hour, subject to the terms and conditions of the Minnesota Workers’ Compensation Act.  She ordered payment of the nursing services to be made directly to the employee’s parents.  No appeal was taken from this findings and order.

The employee received nursing services provided by his mother and father until their deaths in 2007 and 2018, respectively.  Since August 2005, when the nursing services were first awarded, the employee has continued to experience significant symptoms including chronic pain, decreased mobility, bowel and bladder incontinence, and difficulty ambulating requiring assistance with dressing, bathing, meal preparation, house cleaning, transportation/shopping, laundry, toileting, and paperwork/bill paying.

In 2018, the employee moved to Las Vegas, Nevada to reside with Anthony McKissic, his brother, who had previously provided nursing services to the employee at certain times from 2005 through 2018 when the employee’s parents were unavailable or unable to provide the services.  Since 2018, the employee’s brother has provided the identical nursing services to the employee that their parents provided prior to their deaths.

After the death of the employee’s father, the employer and insurer discontinued paying for the employee’s needed nursing services.^[2]  On May 21, 2021, the employee filed a medical request for payment of nursing services provided to him by his brother.  Compensation Judge N. Amee Pham heard the medical request on February 8, 2022.^[3]  Counsel for the employee and the employer and insurer were the same at this hearing as the counsel during the 2005 hearing.

In an April 11, 2022, findings and order, the compensation judge awarded the brother-provided nursing services from February 2018 to the present and continuing.  The employee and his brother testified at the hearing and were found credible.  Unlike the 2005 order, this findings and order did not specify to whom payment of the awarded nursing services should be made.  The employee’s brother was not a party to the case, was not served with a notice of his right to intervene, and was not served with a copy of the findings and order.^[4]  After issuance of the findings and order, no party moved to amend the findings and order to identify to whom payment for the awarded nursing services should be made.^[5]  No appeal was taken by the parties from the April 11, 2022, findings and order.

On April 21, 2022, the employer and insurer made a direct deposit into the employee’s bank account in the amount of $79,067.77.  No explanation was given to the employee for the direct deposit.  On May 3, 2022, counsel for the employer and insurer emailed the employee’s counsel inquiring whether payment of the awarded nursing services should be made to the employee or his brother.  On May 9, 2022, the employee’s counsel replied, identifying the employee’s brother as the person to whom payment should be made for the awarded nursing services.  (Ex. 2.)

Subsequent direct deposits were made into the employee’s bank account in the amounts of $1,668.38 on May 9, 2022, two payments on June 2, 2022, and again one payment on June 30, 2022.  On June 29, 2022, the employer and insurer also made a direct deposit into the employee’s bank account in the sum of $18,388.46.

Beginning in August 2022, the employer and insurer started making monthly nursing services payments in the sum of $1,668.38 to the employee’s brother.  In September 2022, after trying to discover why he had not been paid for the nursing services he provided to the employee since February 2018, the employee’s brother hired a lawyer.  On September 7, 2022, the employer and insurer’s attorney sent the employee’s brother’s counsel a copy of the April 11, 2022, findings and order.  On September 22, 2022, the employee’s brother filed a motion for a determination that he had not received notification of his right to intervene.  The employer and insurer filed a petition to discontinue on November 21, 2022.  The petition sought reimbursement from the employee for the money that had been directly deposited into his bank account.  The employer and insurer asserted that this money was received by the employee in bad faith, citing Minn. Stat. § 176.179.  The pleadings were consolidated and came before the compensation judge for a hearing on March 21, 2023.

The compensation judge, in Findings and Order served and filed July 12, 2023, determined the employee knew the direct deposits into his bank account following the April 11, 2022, order were payments for the nursing services provided to him by his brother and that the employee had paid his brother $27,500.00.  The judge made no finding that the receipt of the payments by the employee was not in good faith but determined that no overpayment had occurred pursuant to Minn. Stat. § 176.179.  She further found that the employee’s brother could have been identified as a potential intervenor and placed on notice of his right to intervene before the hearing on February 8, 2022, and was not put on notice.  The compensation judge concluded, however, that the failure to place the employee’s brother on notice of his right to intervene did not materially prejudice him because he had participated in the hearing of February 8, 2022.  Based upon these findings, the respective motions brought by the employee’s brother and the employer and insurer were denied by the compensation judge.  The employee’s brother 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).

Minn. Stat. § 176.135, subd. 1(b), provides that “the employer shall pay for the reasonable value of nursing services provided by a member of the employee’s family in cases of permanent total disability.”  To establish compensability of nursing services provided by a family member in a permanent total disability case, the employee must prove: (1) the services for which compensation is sought fall within the broader type of general nursing care reimbursable under subdivision 1(b); (2) the services are reasonable and necessary in the context of the employee’s needs and limitations and the time and circumstances in which the services are provided; and (3) the reasonable value of the compensation services.  See Lundeen v. Horizon Fabricators, Inc., 56 W.C.D. 336 (W.C.C.A. 1997); Greenwald v. City of Robbinsdale, 47 W.C.D. 155 (W.C.C.A. 1992).

The employee has required home nursing services since his initial discharge from the hospital in August 1999.  After the employee was determined to be permanently and totally disabled in 2001, either his parents or his brother have continuously provided daily nursing and home health aide services to him.  The compensation judge remarked in her April 2022 memorandum that since the time of the 2005 decision, which initially awarded the employee the nursing services benefit under Minn. Stat. § 176.135, subd. 1(b), the employee’s condition and physical capabilities had not improved and his medical condition was unchanged or worse.

Prior to February 2018, the employee received nursing services from his parents, with occasional assistance from his brother and from a nephew.^[6]  Following the death of the employee’s father in 2018, the employer and insurer ceased paying for the employee’s nursing services.  Though payment for employee’s nursing care ended, the employee’s brother continued to furnish the identical nursing services to the employee as had been provided by their parents.  Had the employee’s brother not provided these nursing services, the services of a home health aide or personal care attendant would have been required to meet the employee’s needs.  In the decision of April 11, 2022, the employer and insurer were ordered to pay for nursing services supplied by the employee’s brother from and after February 2018.  The findings and order did not indicate to whom the employer and insurer should send the payments.

On appeal, the employee’s brother claims that the payments the employee received after the initial hearing constituted an overpayment to the employee.  An overpayment may be recovered by an employer and insurer through a credit on further payments of benefits to an employee when the employee received compensation in good faith, did not obtain the benefit through fraud, or did not know the compensation was paid under mistake of fact or law.  Minn. Stat. § 176.179.   

The employer and insurer made a direct deposit into the employee’s bank account, the same account that they had made other regular payments for workers’ compensation benefits, for the awarded nursing services.  Based upon the record before the court, the employee did not receive any written instruction, direction, or identification from the employer and insurer regarding this initial $79,067.77 deposit.  Twelve days after this first direct deposit, counsel for the employer and insurer contacted the employee’s counsel seeking direction to whom payment should be made.  Yet, after being told that the employee’s brother was to be paid, the employer and insurer continued to directly deposit money into the employee’s bank account, including four separate deposits of $1,668.38 each and a $18,388.46 deposit.  Each time, the employee did not receive guidance or information regarding the purpose of those deposits.  The employee testified at the hearing that he did not know why these funds appeared in his bank account and that he did not know that the funds were meant for his brother.  The compensation judge nevertheless found the employee knew these deposits were for nursing services provided by his brother and determined that no overpayment had occurred.

The compensation judge, however, did not make findings indicating that the employee knew the payments were made under a mistake of fact or law, determining any timeframe as to when the employee allegedly knew the payments were meant for his brother, or addressing whether the employee received the payments in good or bad faith.  While the employee became aware at some point that the funds were payment for his brother’s personal care services, the only date for this knowledge supported by the record is well after the employee’s receipt of the payment.

The record shows that the employee had difficulty in managing his finances and required assistance in paperwork and bill paying, that the prior payments for nursing services were apparently made directly to the employee’s parents, that the payments at issue were deposited into the same account where his other ongoing workers’ compensation benefits are deposited, and that he was not informed as to the basis for these payments at the time they were made.  Under these circumstances, the compensation judge’s finding that the employee knew the payments were for nursing services provided by his brother is not sufficient to support a determination that the payments deposited in the employee’s bank account by the employer and insurer did not result in an overpayment to the employee, therefore, we reverse that determination.  The employer and insurer have a right to recoup the overpayment paid to the employee against his future benefits under Minn. Stat. § 176.179.^[7]

The remaining issue is determining the method of compensating the employee’s brother for the nursing services he has performed and which were awarded in the April 11, 2022, decision.  While the employee’s brother has been receiving payments for those services since August 2022, he did not receive payments for February 2018 through July 2022.  The compensation judge found that the employee had paid his brother the sum of $27,500.00.^[8]

In keeping with the 2005 findings and order, where the employer and insurer were ordered to directly pay the employee’s parents for the nursing services that they provided, and in keeping with the current payments being made directly by the employer and insurer to the employee’s brother, the employer and insurer shall directly pay the employee’s brother for the nursing services provided from February 2018 through July 2022.  The amounts previously deposited into the employee’s bank account are to be paid directly by the employer and insurer to the employee’s brother, less a credit for the $27,500.00 paid by the employee to his brother.^[9]  As noted above, the employer and insurer may take a credit for the overpayment against future benefits paid to the employee.^[10]