GERALD PALLEN, Applicant
WORK INJURY SUPPLEMENTAL BENEFITS FUND, Employer
The applicant submitted a petition for commission review alleging error in the administrative law judge's Findings and Order issued in this matter on October 10, 2007. Briefs were submitted by the applicant and by the Work Injury Supplemental Benefit Fund. At issue is whether or not the applicant is entitled to additional compensation for preexisting disability, pursuant to Wis. Stat. § 102.59.
The commission has carefully reviewed the entire record in this matter and hereby reverses the administrative law judge's Findings and Order. The commission makes the following:
The applicant is conceded to have had a preexisting congenital left hand condition calculated as being equivalent to 253.80 weeks of permanent partial disability. On February 16, 1994, he was working as a truck driver for Kenway Service, Inc. when he slipped on some ice and fell to the ground. He tore his left shoulder rotator cuff and underwent left shoulder surgery on March 24, 1994. It was subsequently discovered that the fall also resulted in a herniated disc at C6-7, and on October 9, 1996, he underwent a fusion procedure at that cervical level. The shoulder injury resulted in 10 percent permanent functional disability at the left shoulder, and his cervical fusion resulted in 10 percent permanent functional disability of the whole body. With the multiple injury variation, the total permanent functional disability attributable to the February 1994 work injury amounted to 155 weeks.
The applicant claimed loss of earning capacity (LOEC) from the work injury of up to 70 percent, but on October 13, 1998, he entered into a compromise agreement with Kenway and its insurer, Milwaukee Mutual Insurance Company. The compromise was full and final and resulted in payment of $60,000 to the applicant, less attorney fees and costs. The compromise did not address liability under Wis. Stat. § 102.59. (1)
Subsequently, the applicant filed a claim for additional compensation with the Work Injury Supplemental Benefit Fund, pursuant to Wis. Stat. § 102.59(1). Initially, the Fund acquiesced in the claim and agreed to pay the applicant $40,100.40 representing the "lesser disability" of 253.80 weeks of permanent disability attributable to the preexisting congenital condition. The reasoning behind the Fund's concession is not revealed in the record, although it appears from correspondence sent by a Fund officer that this officer initially misunderstood the extent of permanent functional disability actually attributable to the 1994 work injury. Payment of the $40,100.80 was formalized in a compromise agreement between the applicant and the Fund, but the department refused to approve the compromise. The department questioned the applicant's qualification for a second injury payment under Wis. Stat. § 102.59, because the 1998 compromise agreement between the applicant and Kenway/Milwaukee Mutual indicated the $60,000 represented payment only for temporary disability and future medical expense. Thus, there was no showing of permanent disability attributable to the 1994 work injury that was in excess of the conceded 155 weeks of permanent functional disability; and the 200-week, second injury threshold of Wis. Stat. § 102.59, was not shown to have been reached.
The applicant claims that he did reach the 200-week threshold of permanent disability attributable to the 1994 work injury by virtue of the alleged fact that he sustained LOEC from that injury in excess of 20 percent. Pre-compromise estimates of LOEC submitted by the vocational experts ranged from 20 percent to 70 percent. The Fund now takes the position that even if the applicant did sustain a 20 percent or greater LOEC attributable to the 1994 work injury, the "permanent disability" referred to in Wis. Stat. § 102.59(1), does not include disability payments for LOEC. The administrative law judge agreed with this argument and dismissed the applicant's second injury claim in an order issued on October 10, 2007. The applicant has petitioned that order to the commission. The ALJ indicated in his order that the Fund stipulated to a "50 to 55 percent" LOEC attributable to the 1994 work injury, but the record contains no evidence of such a stipulation. However, in its arguments the Fund does not address the issue of how much LOEC was sustained, it argues that no LOEC can be considered "permanent disability" for purposes of Wis. Stat. § 102.59.
The Fund's argument is incorrect. While there is no specific definition of "permanent disability" in the statutes, Wis. Stat. § 102.44(3), refers to "permanent partial disability not covered by ss. 102.52 to 102.56." Wis. Stat. § § 102.52 to 102.56, refer to scheduled disabilities, multiple injury variations, occupational deafness, and disfigurement disabilities. LOEC is an unscheduled permanent partial disability "not covered" by one of the aforementioned statutes, but recognized as a "permanent disability" by Wis. Stat. § 102.44(3). Wis. Stat. § 102.44(3), is the statute that incorporates unscheduled permanent disabilities, including LOEC, into Wisconsin's Worker's Compensation Act.
From the beginning of the Act in 1911, LOEC has been an element of all compensation awarded for permanent disability. This is explained in Northern States Power Company v. Industrial Commission, 252 Wis. 70, 71-72, 30 N.W.2d 217 (1947). It was also stated in that case:
But since an award for permanent disability is to be made for all time at the end of this period it must be based upon some sort of prediction as to impairment of earning capacity. It appears to us that the legislature has specifically chosen in the case of nonschedule permanent partial disabilities the method of comparing the severity of the injuries causing such a disability with those causing permanent total disability. Id. at 76. (emphasis added).
In Kurschner v. ILHR Dept., 40 Wis. 2d 10, 161 N.W.2d 213 (1968), the court reversed the commission's finding of a 15 percent permanent partial disability award for an unscheduled back injury, because the award had been based on the functional effects of the injury without regard to the effects on the injured worker's earning capacity. Id. at 18-20. The court repeated the above quote from Northern States Power, and in explaining how permanent partial disability should be calculated under Wis. Stat. § 102.44(3), wrote:
Thus it appears that the injuries of an applicant (non-schedule but permanent total or partial) are to be compared medically with injuries that would render a person permanently totally disabled for industrial purposes as provided in sec. 102.44(2), Stats., and not to injuries that would totally disable a person functionally without regard to loss of earning capacity. (Emphasis in original) Id. at 18.
The Fund argues that Wis. Stat. § 102.59(1), uses the term "permanent disability" but does not use the term "loss of earning capacity," and therefore LOEC awards should not be included in computing permanent disability for purposes of that statute. However, Wis. Stat. § 102.44(3), and the case law, make it abundantly clear that under Chapter 102 every award for permanent disability includes an allowance for loss of earning capacity. Chapter 102 does not include any reference to LOEC other than by reference to permanent disability in Wis. Stat. § 102.44(3), but LOEC is permanent disability, and is an integral part of Wisconsin's worker's compensation system.
The Fund also argues that to include LOEC as permanent disability in claims under Wis. Stat. § 102.59, would result in an unanticipated and unmanageable number of claims against the Fund. However, Wis. Stat. § 102.59(1), and its predecessor statutes have been in force for decades. Any claim under the statute requires preexisting permanent disability equivalent to at least 200 weeks, together with permanent disability of at least 200 weeks from a subsequent work injury. Experience has shown that this is not so common a scenario as to constitute any threat to the solvency of the Fund.
Accordingly, the commission finds that LOEC is "permanent disability" for all purposes, including those of Wis. Stat. § 102.59. As previously noted, the record contains no verification of any stipulation as to the amount of LOEC the applicant sustained from the 1994 work injury. However, it appears that the Fund does not dispute that the applicant sustained LOEC in excess of the preexisting permanent disability percentage (25.38 percent). Therefore, the commission will award what appears to be the lesser disability of 253.80 weeks ($40,100.40), pursuant to Wis. Stat. § 102.59. If the Fund disputes LOEC greater than 25.38 percent, then it should notify the commission within 30 days from the date of this decision, and the commission would in that case modify its order to include a remand to the department for hearing on the extent of LOEC attributable to the 1994 work injury (This would only be for purposes of computing the claim under Wis. Stat. § 102.59).
Now, therefore this:
The Findings and Order of the administrative law judge are reversed. Within 30 days from this date, the Work Injury Supplemental Benefit Fund shall pay to the applicant the sum of Thirty-two thousand eighty dollars and thirty-two cents ($32,080.32); and to the applicant's attorney, David Schoshinski, fees in the amount of Eight thousand twenty dollars and eight cents ($8,020.08).
Jurisdiction is reserved to allow the Fund 30 days from this date to contest the commission's finding that the applicant sustained loss of earning capacity from the 1994 work injury in excess of 25.38 percent.
Dated and mailed June 26, 2008
pallege . wrr : 185 : 8 ND § 5.37
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
cc:
Attorney Daniel R. Schoshinski
Attorney Jennifer Sloan Lattis
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