DAWN M. SIMONSON, Employee/Appellant, v. DOUGLAS CNTY. and MINN. COUNTIES INTERGOVERNMENTAL TR., Employer-Insurer/Respondents.

The employee appeals from the compensation judge’s finding that the employee failed to rebut the statutory retirement presumption under Minn. Stat. § 176.101, subd. 4, and from the denial of her claim for additional permanent total disability (PTD) benefits.  We reverse.

The employee, Dawn Simonson, began working for the employer, Douglas County, in 1991, at the age of 35.  She worked as a histologist at the Douglas County Hospital, assisting pathologists during autopsies.  As part of her employment, the employee was required to contribute about four percent of her earnings into a retirement account, with a similar contribution made by the employer.  On July 2, 1996, while assisting in the transfer a body, the employee suffered a low back injury.  She has not worked for any employer since that date.

The employer and insurer admitted liability for the employee’s injury and paid wage loss benefits and medical expenses, including payment for eight surgeries to the employee’s back.  (Finding 4.)  The first surgery was in August 1996 and the most recent was in March 2022, resulting in multilevel fusions at the low back, mid back, and neck.  Her diagnoses include “flat back” syndrome, pseudoarthrosis, and right lower extremity paresis.  The employee applied for and was awarded social security disability (SSDI) benefits.^[1]

In 1999, the parties settled the employee’s workers’ compensation claims, agreeing that the employee was permanently and totally disabled retroactive to July 2, 1996, and that all previously paid wage loss benefits were recharacterized as PTD benefits.  This allowed the employer and insurer to offset wage loss benefits by the SSDI benefits received by the employee, which reduced their payout.  The parties agreed to a 19 percent permanent partial disability (PPD) rating.  Medical expenses were not closed out in the stipulation for settlement.  (Ex. J.)

In 2000, the employer and insurer retained a medical expert who rated the employee at 34 percent PPD due to the work injury.^[2]  The employee receives nursing services in her home paid for by the employer and insurer.^[3]  At the time of the hearing, the employer and insurer were providing 30 hours of home nursing services per week, which included dressing, laundry, cleaning, cooking, grooming, and transportation for the employee.  (Finding 5.)

In 2009, the employee’s adult daughter was killed in a car accident.  The employee then adopted and raised her four-year-old granddaughter with no financial support.  When the granddaughter turned 18 in 2023, she moved out of the employee’s home and was no longer financially dependent on the employee.

On March 24, 2023, when the employee reached age 67, the employer and insurer discontinued the employee’s monthly PTD benefits of $1,282.52.  (Ex. H.)  Without monthly PTD benefits, the employee’s only income was her monthly social security retirement (RSDI) benefits^[4] of $815.  Yet, her monthly expenses totaled $1,900.^[5]  To make ends meet, the employee borrowed money and used credit cards, assuming $1,500 in credit card debt, a $4,000 car loan, and over $400 in unpaid electric bills.  (Ex. E.)  She has applied for different types of government assistance.  Her application for general assistance (GA) was denied based on her receipt of RSDI benefits.  She applied for fuel assistance, but had not received a response to her application.  She currently receives food stamps based on a single household^[6] and visits a food shelf near her home about once per month.

During the 27 years the employee received PTD benefits, she put aside no money for retirement.  Her retirement account from her work for the employer from 1991 to 1996 has a current lump sum value of about $16,000.  At the hearing, the employer’s human resources (HR) director testified that the retirement plan pays retirees annuities based on the age of the employee, years of service, the highest five-year earnings, and whether the employee is vested in the plan.  (T. 74.)  The lump value plays no role in the annuity calculation.  There is no evidence in the record that the employee qualified for a retirement annuity or that she had access to the lump sum value of her retirement account.

The employee testified that she had loved her job and that she had no plan to retire.  She testified that at the time she worked for the employer, she knew of others in her department who were working past age 67.  However, the HR director testified that the employer no longer owns and operates the hospital where the employee worked.  He was unaware of how many pathologists and pathology assistants worked at the hospital, or their ages.  While the employer has no mandatory retirement age, he testified that of the over 300 current employees, only nine employees are over the age of 67.

The employee filed a claim petition asserting entitlement to ongoing PTD benefits because she could rebut the retirement presumption under Minn. Stat. § 176.101, subd. 4.  The matter came on for a hearing before a compensation judge on November 30, 2023.  The compensation judge found that the employee had failed to rebut the retirement presumption and denied her claim for additional PTD benefits.  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 finding that the employee did not rebut the statutory retirement presumption set forth in Minn. Stat. § 176.101, subd. 4, as it read at the time of the employee’s injury,^[7] which provided that when a permanently and totally disabled employee receiving PTD benefits reaches age 67, absent rebuttal by the employee, those benefits cease because the employee is presumed retired from the labor market.  The employee argues that the compensation judge’s finding that she did not rebut the presumption is not supported by substantial evidence and is contrary to law.

In finding that the employee failed to rebut the retirement presumption, the compensation judge considered and weighed some of the factors identified in Davidson v. Thermo King, 64 W.C.D. 380 (W.C.C.A. 2004).  Those factors include the employee’s expressed intent to retire, an application for RSDI benefits, financial need and the adequacy of any pension or other retirement income, whether any retirement discussions were initiated by the employee or by the employer, and whether the employee had sought vocational rehabilitation or looked for other work.

We consider the compensation judge’s reliance on the Davidson factors to be problematic in PTD cases.^[8]  The factors, like so many other sets of caselaw-created factors, are often considered by parties and compensation judges as a checklist where all factors must be considered and weighed equally in every case.  See, e.g., Olson v. 3M Co., 71 W.C.D. 497 (W.C.C.A. 2011) (one factor favored the employee, but three factors favored the employer); Vandervoort v. Olinger Transp., Inc., 70 W.C.D. 1 (W.C.C.A. 2010) (three neutral factors, but one favoring the employee).

Further, Davidson culled the factors from other cases defining “retirement,” most of which did not involve an employee who was permanently and totally disabled.^[9]  In Grunst v. Immanuel-St. Joseph Hosp., 424 N.W.2d 66, 40 W.C.D. 1130 (Minn. 1988), a case involving PTD benefits, the supreme court interpreted Minn. Stat. § 176.101, subd. 8 (1986).  That statute provided that retirement was presumed if an employee was receiving RSDI benefits.  In discussing rebuttal of that retirement presumption, the court stated:

As was recognized in Grunst, seeking vocational rehabilitation and performing a job search are inappropriate factors in determining whether an employee has rebutted the retirement presumption in cases where employees have been adjudicated to be permanently and totally disabled from all work and whose PTD benefits were discontinued.  See Henry, 286 N.W.2d at 723, 32 W.C.D. at 240; Vandervoort, 70 W.C.D. at 6 (when an employee is permanently and totally disabled, failure to seek vocational assistance or look for work should not be considered in a retirement presumption analysis); see also Hellgren v. St. Mary’s Med. Ctr., 74 W.C.D. 737 (W.C.C.A. 2014) (an employee does not voluntarily retire from working when permanently and totally disabled by a work injury).  Similarly, when an employee becomes permanently and totally disabled, especially an employee who was not near retirement age, retirement plans may not have been discussed between the employee and the employer before the work injury, rendering that Davidson factor irrelevant.

Many of the Davidson factors are not relevant in cases involving the discontinuance of PTD benefits.  Moreover, we do not consider tallying the applicable factors for either party to be the appropriate way to measure whether an employee has rebutted the retirement presumption under Minn. Stat. § 176.101, subd. 4, when the employee is receiving PTD benefits.  Instead, we must determine which of the Davidson factors apply in such cases and what other evidence should be considered in evaluating those factors, then leave the weighing of the evidence to the fact finder on a case-by-case basis.  In doing so, we look to the legislative purpose of the Workers’ Compensation Act (WCA) and the public policy considerations of the retirement presumptions. 

The legislative purpose of the WCA is to provide quick and efficient delivery of indemnity and medical benefits to those injured on the job at a reasonable cost to the employer.  Minn. Stat. § 176.001.  The supreme court has stated that a fundamental purpose of the WCA is to ensure that an employee who is not employable as a result of a workplace injury should not be forced to seek public assistance or charity as a means of support.  Such an outcome would undermine the central purpose and design of the workers’ compensation system by placing the burden of an injured employee’s financial situation on society rather than on the industry that caused the employee’s financial circumstances, especially for an employee who is permanently and totally disabled due to a work injury.  Gluba v. Bitzan & Ohren Masonry, 735 N.W.2d 713, 726 (Minn. 2007); see also Wiehoff v. Indep. Sch. Dist. No. 15, 74 W.C.D. 41 (W.C.C.A. 2014) (affirming a compensation judge’s refusal to approve a settlement which closed out medical benefits for an admitted injury where additional extensive medical care was likely, due to the potential cost-shifting consequences from the workers’ compensation insurer to private insurance or to a government program).^[10]

The statutory presumption in Minn. Stat. § 176.101, subd. 4, presents a different legislative public policy.  In this statute, the legislature, in its role as a voice of public policy, determined that injured workers should no longer receive a stream of PTD benefits, wage replacement for those who cannot work for the remainder of their lifetimes due to their work injuries, once an injured worker reached retirement age.^[11]

It is difficult to reconcile these two public policies - placing the burden of PTD benefits on an employer rather than on society versus allowing the discontinuation of PTD benefits.  The fact that the legislative public policy of discontinuing PTD benefits upon an employee reaching age 67 was determined by the 1995 legislature to be rebuttable indicates that there are situations where the public policy of discontinuing PTD benefits is not appropriate, and an employee could effectively rebut the retirement presumption.  Thus, we look to how an employee might do so.

As was alluded to in Grunst, the primary factor in determining whether the retirement presumption has been rebutted in a PTD case should be an employee’s financial predicament.  The determination of whether the financial consequences created by the permanently incapacitating injury is sufficient to rebut the presumption is not made using a formula nor by weighing of “equal” factors.  Rather, the analysis is of a “hypothetical nature” which will vary case by case.  Grunst, 424 N.W.2d at 69, 40 W.C.D. at 1135.

An employee’s financial predicament depends, in part, on whether an employee is entitled to RSDI benefits or has other pension, retirement, or savings accounts, what type of payments an employee is receiving beyond workers’ compensation PTD benefits, and whether those payments are sufficient to meet such an employee’s expenses.  In circumstances where an employee has applied for RSDI, rather than SSDI benefits, it may be due to financial need or may show an intent to retire.  An employee’s necessary household expenses, such as housing, utilities, transportation, clothing, food, and insurance, must be evaluated.  Whether an employee spends frivolously may also be examined when basic needs cannot be met.  As noted in Gluba, another consideration is whether an employee needs to seek public assistance.^[12]

Each case is decided on its own unique set of facts.  Whether an employee rebutted the retirement presumption is a fact question for the compensation judge, with the goal being to determine, based upon the objective information available regarding an employee’s financial situation and considering such an employee’s subjective statement on retirement intent,^[13] whether that employee would have retired on or before reaching age 67.

Here, because the employee has reached age 67, the statutory presumption that she is retired and is no longer entitled to receive PTD benefits applies, and in order to continue receiving PTD benefits, she must rebut the presumption with more than a statement that she is not retired.  The employee started working for the employer at age 35.  She suffered a disabling work injury at age 40, has undergone numerous surgeries and other medical procedures, has not worked since, and was declared permanently and totally disabled.  The employer and insurer have paid for home nursing services for years, currently about 30 hours per week.  The employee is married, but the record does not indicate whether her spouse lives with her, incurs expenses, or contributes any income to the household.  The record shows her food stamps allotment is based upon a single household.

The employee provided evidence that her financial need for continued PTD benefits is significant.  Before her PTD benefits ended on March 24, 2023, she received $1,282.52 per month in such benefits.  The employee also receives RSDI benefits of $815 per month, has no other income, and is ineligible for GA payments.  Her monthly expenses total about $1,900.  She has a pending claim for fuel assistance, receives a food stamp allotment, and visits the food shelf regularly.  As stated above, the employee uses a credit card to make up the difference between her expenses and her income.  Her credit card debt and vehicle debt amount to a combined $5,500 and she has over $400 in unpaid electric bills.  The federal poverty guidelines for a single household in 2023 was $14,580 per year, which is $1,215 per month.  (Ex. K.)  The employee’s current income is $400 per month lower than the poverty guidelines and over $1,000 below her regular monthly expenses.

The compensation judge found the employee’s testimony regarding her financial need to be credible and persuasive.  The compensation judge did not find her statement that she had not planned to retire at age 67 compelling.  He then determined that since one Davidson factor favored the employee and one did not, the employee failed to rebut the presumption.^[14]

The factors that are relevant in determining whether an employee has rebutted the retirement presumption in PTD cases are not functionally equivalent, and instead should be given different weight depending on the facts of the individual case.  In this case, the evidence of the employee’s financial needs is significantly in her favor, and the compensation judge found this evidence persuasive.  When receiving PTD benefits, the employee’s annual income was over $25,000, and she could meet her expenses.  After discontinuance of her PTD benefits, her annual RSDI income amounts to $9,780 per year, far below the poverty line, and she is falling into debt.  We consider this scenario to be that which concerned the Gluba court – a disabled employee who can get by while receiving PTD benefits, but without those benefits, is unable to meet her basic needs and risks becoming a ward of the state.  While we agree that substantial evidence also supports the compensation judge’s determination that the employee’s subjective statement was not persuasive, given her age at the date of her disablement, her subjective statement would carry little weight regardless, as there is no evidence that her statement was based on anything more than speculation.  Moreover, her failure to provide a compelling statement of no intent to retire does not counterbalance the evidence of her financial need.

The compensation judge’s determination that the employee has not rebutted the presumption is manifestly contrary to the evidence, and we reverse the compensation judge’s Finding 27 and Order 1.  Based on substantial evidence in the record, a reasonable mind could only conclude that the employee successfully rebutted the retirement presumption contained in Minn. Stat. § 176.101, subd. 4, and is entitled to ongoing PTD benefits.  Compare LaGasse v. Horton, 982 N.W.2d 189, 201-02 (Minn. 2022) (the W.C.C.A. must affirm a compensation judge’s findings where “there is any evidence in the record that a reasonable mind might accept as adequate to support” the findings).

We are mindful of arguments put forth by the employer and insurer urging us to affirm the compensation judge’s findings.  The employer and insurer assert that Grunst requires an evaluation of the employee’s intent to retire by determining when the employee would have retired had the work injury not occurred at all and had the employee not been permanently and totally disabled.  We disagree.  The interpretation of this case, keeping in line with the underlying public policies of the WCA, compels a comparison of what the employee’s financial position would have been but for the work injury, with the employee’s financial situation given the total disablement caused by the work injury.

The employer and insurer also argue that the employee was paid essentially the equivalent of her take-home pay in the form of PTD benefits and should have saved money akin to her Public Employee Retirement Association (PERA) savings, but chose not to do so.^[15]  Yet, we note that in the years from age 40 through age 67, she received no cost-of-living-adjustment (COLA) on her PTD benefits for the first four years and a maximum of two percent COLA after that.  See Minn. Stat. § 176.645, subds. 1 and 2.  All the while, the employee was financially responsible for her young granddaughter.  The failure of the employee to save money under these circumstances does not suggest, as the employer and insurer infer, that the employee put herself in her financial predicament.

The employer and insurer further assert that $16,000 in the employee’s PERA account was appropriately considered by the compensation judge.  The compensation judge mentioned that the lump sum amount was “not insignificant” in denying the claim.  However, the employer’s HR director testified that PERA retirement payments are based on the employee’s age, whether she was vested in the PERA plan, and the highest five years of her wages.  The lump sum amount of the retirement account is irrelevant to the amount of the retirement benefit paid.^[16]  Other than the employee’s age, the information needed to determine the employee’s retirement benefit, if any, is not in the record.  Her eligibility for any income from that account is, therefore, unknown.  Because there is no evidence that the employee is eligible for any PERA payments, and because the lump sum value plays no role in the employee’s entitlement to PERA benefits, the compensation judge erred by considering this amount in his analysis.

The employer and insurer also presented evidence that most employees who work for the employer retire at or before age 67.^[17]  While we agree that looking at employees of a similar age in a similar job may be appropriate to consider in some circumstances where employees generally retire at an age younger than 67, the statutory presumption already considers that many employees retire by age 67.  In this case, evidence as to the age of other employees at the time they retired from the employer is not an important consideration.  Further, the analysis is what would the employee have done, not what most employees of the employer, including those the employee claimed to have worked with, have done.

Finally, citing Juntunen v. Carlton Cnty., 982 N.W.2d 729 (Minn. 2022), the employer and insurer argue that the burden of proof to rebut the presumption of retirement in Minn. Stat. § 176.101, subd. 4, is a higher level of proof than a preponderance of the evidence.  They argue that Juntunen requires “‘substantial proof to the contrary’” to rebut the presumption.  Id. at 741 (quoting Linnell v. City of St. Louis Park, 305 N.W.2d 599, 601, 32 W.C.D. 602, 605 (Minn. 1981) (emphasis added)).  The court also stated that the party seeking to rebut a presumption “must make a strong showing by introducing substantial evidence to rebut the presumption.”  Id.(citing Jerabek v. Teleprompter Corp., 255 N.W.2d 377, 380 (Minn. 1977) (quotations omitted)).

Juntunen, however, interpreted the presumption found in Minn. Stat. § 176.011, subd. 15(e), which involves post-traumatic stress disorder.  Under that statute, the presumption may be rebutted by “substantial factors” brought by the employer or insurer.  The presumption at issue in this case differs in that it does not require “substantial factors” for rebuttal.  In fact, the supreme court has held that the burden of proof to overcome the presumption under Minn. Stat. § 176.101, subd. 4, is a preponderance of the evidence in a case involving the same version of the retirement presumption as here.  Frandsen v. Ford Motor Co., 801 N.W.2d 177, 181, 71 W.C.D. 377, 381 (Minn. 2011) (inaction by an employer did not waive the retirement presumption).  Guided by the supreme court, we believe that the preponderance standard applies here.^[18] 

The employee must overcome the statutory retirement presumption to prove her claim.  The preponderance of the evidence, and in fact the overwhelming evidence, is that she has done so.  The compensation judge’s finding that she had not rebutted the presumption is manifestly contrary to the evidence.  For all the reasons set forth here, we reverse.