P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)




, Claim No.

The commission issued a decision in this matter on October 21, 2003. It reversed a decision issued by the department and found that the applicant (David Kallstrom) had sustained an occupational back injury arising out of and in the course of his employment with Eau Galle Cheese Factory. The commission's decision additionally ordered Eau Galle Cheese Factory and its insurance carrier, Reliance Insurance Company, to pay the applicant certain compensation, including medical expense. The decision also ordered reimbursement of medical expense to a nonindustrial insurance carrier, Benefit Plan Administrators (BPA). The Wisconsin Insurance Security Fund assumed liability for Reliance Insurance after that company became insolvent and entered into liquidation proceedings.

The Fund appealed the commission's decision, and on July 16, 2004, the Pepin County Circuit Court issued an order affirming the commission. The court's order indicated that the Fund was liable for all compensation except for the reimbursement due BPA. Wis. Stat. § 646.31(11) exempts the Fund from paying subrogated recoveries such as that claimed by BPA. The effect of the commission's decision and the circuit court's affirmance was to make Eau Galle Cheese Factory liable for the reimbursement of BPA.

The Fund appealed the circuit court's decision, and on October 20, 2005, the court of appeals issued its decision affirming in part and reversing in part the circuit court's and the commission's decisions. The court of appeals affirmed the commission's finding that the applicant sustained an occupational back injury arising out of and in the course of his employment with Eau Galle Cheese Factory, but reversed the commission's finding that Eau Galle Cheese Factory was required to reimburse BPA for the medical expense it had paid. The court remanded the case to the circuit court with directions to amend its order and direct the commission to delete its finding that Eau Galle Cheese Factory must reimburse BPA. On December 19, 2005, the circuit court entered an order consistent with the direction of the court of appeals.

In accordance with the holding of the court of appeals the commission issued a new decision on January 12, 2006. The new decision again found that the applicant sustained an occupational back injury arising out of and in the course of his employment with Eau Galle Cheese Factory. It also found that Eau Galle Cheese Factory was not required to reimburse BPA, that BPA was required to seek reimbursement from the liquidator of Reliance Insurance Company, and that the Fund was required to pay interest on the compensation awarded to the applicant.

The Fund appealed the finding that it was required to pay interest on the applicant's compensation, and subsequently, the commission and the applicant stipulated to the circuit court that this particular finding had been made in error. On July 24, 2006, the circuit court issued an order remanding the matter to the commission with directions to delete its finding that the Fund must pay interest on the applicant's compensation, and to reissue its decision without other modification. Accordingly, the commission hereby substitutes the following decision for its previous decisions.


The applicant, whose birth date is June 3, 1967, began his employment as a cheesemaker for the employer in 1985. The semiliquid cheese was pumped from a vat onto a table about 10 ft. wide, 45 ft. long, and 5 ft. high. The table had sides to hold the cheese in place. After the whey was drained and the cheese hardened, the applicant and co-workers used long knives to manually cut the cheese into pieces measuring about 18 in. by 18 in. This included reaching into the middle of the table to cut the cheese. The cutting was strenuous work, and after it was done the applicant and his co-workers used steel "safety hoops" to grasp the cheese blocks and manually stack them on a press. The weight of a cheese block with hoops was about 35 pounds.

The applicant went to his chiropractor, Dr. Jacot, on April 12, 2000. He left work early to see Dr. Jacot because he experienced severe lumbar back pain at work that day that went down his right leg, and his leg was going numb. The leg numbness came on gradually and he had never before experienced that particular symptom. When Dr. Jacot saw the applicant he asked him if he had had any injury, and Dr. Jacot testified:

"And I recall him just kind of shrugging and saying I pulled a calf, maybe that did it, but he was searching for a reason that he was having back pain."

The calf pulling occurred at the applicant's father's farm on April 10, 2000, and it involved putting a rope around the calf's legs and helping the mother cow deliver it. When asked why he said this to Dr. Jacot the applicant replied:

"I guess in my mind I was trying to think of why my leg and back were causing problems. I suppose it was the first thing that come (sic) to my mind as to when he asked me the question."

The applicant went back to work but saw Dr. Jeffrey White on May 9, 2000, and related a one-month history of low back and right leg pain. Reference was made to a "similar episode of back pain in May 1999," which got better with a chiropractor and time. Dr. White injected the low back and this helped the leg pain. On August 22, 2000, the applicant saw Dr. David Castleberg with right hip and right leg pain, and Dr. Castleberg diagnosed a herniated disc. He ordered a lumbar MRI on August 28, 2000, and it showed disc bulging at L4-5 and L5-S1, moderately compressing the thecal sac at L4-5.

The applicant was referred to Dr. T. S. Thomas on September 13, 2000. Dr. Thomas took a history of lower back and right leg pain that had started insidiously over three months previously, and had been progressive in nature. Dr. Thomas diagnosed degenerative disc disease and a disc herniation at L4-5. On September 19, 2000, he performed a right L4-5 laminotomy and discectomy. The surgery was not successful in relieving the applicant's symptoms, so on October 10, 2000, Dr. Thomas performed a repeat discectomy at L4-5 as well as a laminotomy and discectomy at L5-S1. This surgery did result in improvement of the applicant's symptoms, but he continues to have significant residuals. Dr. Thomas has assessed 15 percent permanent partial disability.

On February 21, 2001, Dr. Thomas signed a WC-16-B which had been filled out by the applicant's attorney. It indicated that the applicant had sustained an occupational back injury attributable to his work with the employer.

On April 26, 2002, Dr. Stephen Barron examined and evaluated the applicant at respondents' request. He opined that the applicant had a preexisting degenerative condition prior to April 12, 2000, but on that date the calf-pulling incident aggravated and accelerated the preexisting condition beyond normal progression. He agreed with Dr. Thomas' assessment of 15 percent permanency.

At the remand hearing held on June 23, 2003, Dr. Barron gave extensive testimony in which he opined that the applicant had preexisting degenerative disc disease that was never shown to have been work-related, and that the specific incident that caused the onset of his back symptoms on April 12, 2000, was the calf-pulling incident. Dr. Barron believed the calf-pulling incident occurred on April 12, 2000. Dr. Barron's opinion relies most heavily on the history taken by Dr. Jacot in his clinic note of April 12, 2000, which simply states, "Injured pulling a calf." Dr. Barron's secondary reliance is upon the fact that the applicant had no treatment for a back problem between June 7, 1999 and April 12, 2000.

In consultation with the commission, the administrative law judge who held the original hearing indicated that he observed nothing in the applicant's demeanor to lead him to suspect his credibility. What the administrative law judge found most persuasive was the fact that after leaving work early to see Dr. Jacot on April 12, 2000, the applicant only mentioned the calf-pulling incident when questioned by Dr. Jacot. Of course, this fact was also the primary support given for Dr. Barron's opinion concerning causation.

Reasonable minds could differ over the significance of the applicant's comment to Dr. Jacot about calf-pulling. However, the applicant did not impress the administrative law judge as being an incredible witness, and the commission infers that the applicant truthfully explained that the calf-pulling was the first thing that came to his mind in response to Dr. Jacot's question. The applicant credibly testified that he was not familiar with the concept of an occupational back injury, and the commission infers that when he spoke to Dr. Jacot on April 12, 2000, it did not occur to him that his regular work activities could have caused the onset of his back problem. Dr. Jacot indicated that he asked the applicant to "think back on anything he had done differently," and the applicant shrugged and mentioned the calf-pulling, because he seemed to be searching for a reason he was having this new back pain. However, the commission did not find credible evidence of an actual injury occurring during the calf-pulling incident. The evidence indicates that this incident occurred on April 10, 2000, or on an earlier date, but that the applicant's symptom onset occurred on April 12, 2000. The applicant credibly testified that he left work to see Dr. Jacot on April 12, 2000, because while at work he not only experienced the onset of severe back pain, but the pain went down his right leg and his leg was going numb. He had never before experienced numbness in his leg.

All these facts support Dr. Thomas' opinion that the applicant sustained an occupational back injury while at work on April 12, 2000. Dr. Barron's refusal to acknowledge that the strenuous work the applicant performed for the employer could have been a material, contributory factor in the onset of his back condition, is not credible.

One fact that diminishes the applicant's case is the description of the injury given on the WKC-16-B that was signed by Dr. Thomas on February 21, 2001. The applicant's attorney wrote the description, which indicates that the applicant " . . . was pulling and felt a pull or a pop in his back with a shocking pain." This description is not consistent with the applicant's testimony in which he described a gradual onset of pain that eventually included a "tingling feeling" and numbness in his right leg. The applicant answered in the affirmative when asked on cross-examination whether (at some unspecified time) he had told Dr. Thomas that he had felt a pull or pop in his back with shocking pain. When answering this question the applicant may have been confused, or he may have been dissembling in order to cover up his attorney's inaccurate understanding of the symptom onset on April 12, 2000. In either case, the applicant's response did reflect poorly on his credibility. Nevertheless, after weighing all the evidence, the commission was convinced that the applicant did sustain a low back and right leg symptom onset while at work on April 12, 2000. The commission was unconvinced that the applicant sustained any significant injury pulling a calf on or about April 10, 2000.

The applicant claimed temporary total disability for the period of September 19, 2000 until November 27, 2000, a period of exactly ten weeks. These dates are consistent with the opinion given by Dr. Thomas, who released the applicant to light duty on November 27, 2000. The applicable rate of temporary total disability is $369.88 per week for a ten-week total of $3,698.80.

The next issue to be addressed is loss of earning capacity. Both Dr. Thomas and Dr. Barron assessed 15 percent permanent functional disability, even though Dr. Barron did not attribute this disability to the work injury. The applicant has had two low back surgeries and continues to experience significant low back pain, particularly with prolonged activity. He attempted to return to his employment with the employer but was unable to physically tolerate it. Considering the nature of the injury and the applicant's residuals, Dr. Thomas' physical restrictions are accepted as credible.

The applicant was 36 years old on the date of the June 2003 hearing. He has a high school education, and started working with the employer right after high school. He first found employment as a security guard after he could no longer work with the employer. He subsequently found employment with a manufacturer in Minnesota, where he manually punches out magnets that are used for badges. His hourly wage in this new employment is $9.85, and he was earning $12.25 per hour with the employer when he was injured. He averaged 45 hours of work per week for the employer, and works 40 hours per week with the new employer. The vocational experts have assessed loss of earning capacity at anywhere from 5 percent to 40 percent.

After considering all the relevant factors and the opinions of the vocational experts, the commission finds that the applicant has sustained a 25 percent loss of earning capacity attributable to the compensable back injury of April 12, 2000. This amounts to 250 weeks of permanent partial disability at the applicable rate of $184.00 per week, for a total of $46,000.00, all of which has accrued.

The applicant's attorney is entitled to a 20 percent fee against the awards for temporary total disability and permanent partial disability, as well as $873.31 in costs. Reference was made in the applicant's testimony to an additional cost that may have been incurred for Dr. Jacot's testimony given at the hearing held on June 5, 2002. No dollar amount for such cost was submitted in the record, and therefore the commission cannot order it paid, other than to instruct the applicant that he owes such cost to Attorney Klemp if Attorney Klemp provides him with proof that he incurred it.

The applicant also incurred the following reasonably required medical expenses: Ihle Orthopedic Clinic, Ltd., of Eau Claire, in the amount of $1,272.92; and miscellaneous medical expenses which the applicant paid out of his own pocket in the amount of $391.88.

The applicant additionally submitted a reimbursement claim for $27,155.36 in medical expense paid by Benefit Plan Administrators, c/o Health Care Cost Recovery, Inc.; however, pursuant to Wis. Stat. § 646.31(11), neither the Wisconsin Insurance Security Fund nor Eau Galle Cheese Factory is liable for such reimbursement. BPA must present any claim it has for reimbursement to the liquidator of Reliance Insurance in the liquidation proceedings.

Dr. Thomas credibly opined that the applicant may require additional medical treatment and/or sustain additional disability in the future, and therefore the order will be left interlocutory.



The Findings and Order of the administrative law judge are reversed. Within 30 days from this date, the Wisconsin Insurance Security Fund shall pay to the applicant compensation in the amount of thirty-eight thousand eight hundred eighty-five dollars and seventy-three cents ($38,885.73); to applicant's attorney, Jeffrey J. Klemp, fees in the amount of nine thousand nine hundred thirty-nine dollars and seventy-six cents ($9,939.76), and costs in the amount of eight hundred seventy-three dollars and thirty-one cents ($873.31); to Ihle Orthopedic Clinic, Ltd., of Eau Claire the sum of one thousand two hundred seventy-two dollars and ninety-two cents ($1,272.92); and to the applicant as reimbursement for medical expense, the sum of three hundred ninety-one dollars and eighty-eight cents ($391.88).

Jurisdiction is reserved for such further findings and orders as may be warranted.

Dated and mailed August 14, 2006
kallsda2 . wpr : 185 : 2  ND 2.4  3.4

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner


In its decision, the court of appeals described the controversy surrounding reimbursement of BPA as:

" . . . a choice between putting an expense burden on a solvent nonindustrial insurer or on an insured employer whose insurance carrier is in liquidation."

Additionally the court stated:

"Nothing before us suggests that Kallstrom's right to compensation is at stake. Rather, it is the right of Kallstrom's health care insurer to reimbursement that the Commission seeks to enforce."

Finally, the court noted:

"Nothing in this opinion or in the Commission's order prevents Kallstrom's health care insurer from seeking reimbursement from the liquidator of Reliance Insurance."

Each of these statements from the court clarifies its holding that BPA is not to be reimbursed by the Fund, by Eau Galle Cheese Factory, or by the applicant. BPA is required to seek reimbursement from the liquidator of Reliance Insurance.


Attorney Jeffrey J. Klemp
Attorney Christopher Walther


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