DELANE OVERTURF, Applicant
FORWARD MANAGEMENT, Employer
SOCIETY INSURANCE A MUTUAL CO, Insurer
The applicant submitted a petition for commission review alleging error in the administrative law judge's Findings and Order issued in this matter on June 18, 2009. Forward Management and Society Insurance Company (respondents) submitted answers to the petition and briefs were submitted by the parties. At issue are: (1) When the applicant was injured on June 7, 2006, was he performing services for Forward Management as a covered employee or as a statutory independent contractor, pursuant to Wis. Stat. § 102.07(8); and (2) if the former, what are the nature and extent of disability and liability for medical expense attributable to the effects of the work injury of June 18, 2009?
The commission has carefully reviewed the entire record in this matter, and after consultation with the administrative law judge regarding the credibility and demeanor of the witnesses, hereby reverses his Findings and Order. The commission makes the following:
The applicant, whose birth date is August 9, 1960, operated a sole proprietorship named DLO Enterprises, through which he performed carpentry work for different customers. For an unspecified period of time, one of DLO's customers had been Forward Management, a company that manages rental and commercial properties, and also performs construction remodeling, repair, and painting services. On June 7, 2006, the applicant was performing carpentry work on Forward Management's president's (Dan Schmidt's) house, when he fell more than 20 feet off scaffolding and sustained traumatic brain injuries that have left him with neurocognitive deficits. The threshold issue is whether at the time of injury he was performing his services as a covered employee, or as a statutory independent contractor not covered by the Act.
Pursuant to Wis. Stat. § 102.07(8), independent contractors are covered under the Act unless they perform their services in accordance with all nine of the statutory conditions. The applicant concedes that he met the first two conditions of maintaining a separate business and holding a federal identification number.
With respect to statutory condition 3, there was no written contract between DLO and Forward Management or Schmidt, regarding the work to be done on Schmidt's house. Most of the time the applicant did have written contracts with Forward Management when he performed services for them; however, for the work on Schmidt's house the applicant entered a verbal agreement with a representative of Forward Management to perform carpentry work as needed for $25 per hour. The applicant billed Forward Management on DLO letterhead at the rate of $25 per hour for the week that he performed on the house. This verbal contract was a valid contract.
However, the other requirement of statutory condition 3 is that the independent contractor "controls the means of performing the services or work." Forward Management had a working foreman who was in charge of the project. This foreman set the hours of work and directed what work would be done at any particular time. Respondents assert that the applicant was an expert carpenter and did not need direction on how to perform his carpentry work, and that is an accurate assertion as far as it goes. However, it is evident that the applicant did the work assigned by the foreman at the time he assigned it to be done, the same as any of the other carpenters on the job, who it is conceded were Forward's employees. Forward Management, not the applicant, controlled the means of performing the work, and the third statutory condition was therefore not satisfied.
With regard to statutory condition 4, the applicant quite clearly did not incur the main expenses related to the remodeling of the Schmidt house, and that condition was also not satisfied.
With regard to statutory condition 5, the applicant was responsible for satisfactory completion of his work, and if he did not complete it properly, he would not be paid. At one point the applicant hung a door in an unsatisfactory fashion, and he was not paid for this work. Accordingly, statutory condition 5 was satisfied.
With regard to statutory condition 6, the applicant was not paid on a commission or a competitive bid basis. Respondents argue that he was paid on a per job basis, because he charged $25 per hour for each "job" that he did. However, the applicant was not hired for a specific carpentry job, he was hired to do whatever carpentry work the foreman would ask him to do on any particular day. This does not qualify as "per job" compensation, and therefore statutory condition 6 was not satisfied.
With regard to statutory condition 7, payments to the applicant were based on how much labor he provided on a daily basis to the Schmidt house remodeling project. He had no contract under which he could have realized a profit or loss. Respondents argue that because on at least one occasion the applicant had to redo unsatisfactory work without pay he suffered a contractual loss. This argument has previously been considered and rejected by the commission. Any employee who fails to do his work is subject to not being paid. As the commission stated in Shilling v. Premium Coatings Co., WC Claim No. 1999-025933 (LIRC Feb. 7, 2001):
"If he does a poor job, he might have to redo his work without pay, but that is not the same as operating at a loss. If the customer does not pay Mr. Schaefer, and Mr. Schaefer fails to honor his contract with the applicant, the applicant might not be paid. However, this risk of nonpayment is borne under any contract, including contracts under which statutory employees work. The seventh condition, to have meaning, must apply to situations where the worker is paid under the contractor, but still sustains a loss."
Accordingly, statutory condition 7 was not satisfied.
With regard to condition 8, the applicant did have recurring business liabilities which arose from operating DLO, i.e. vehicle expense, tools, phone, advertising, etc. (Schedule C tax returns at Society Exhibits 4 and 5). This statutory condition was satisfied.
With respect to statutory condition 9, by operating a sole proprietorship, the applicant was taking some risk that his receipts might not exceed his expenditures. While the risk was minimal, it was enough to satisfy this condition.
In summary, statutory conditions 3, 4, 6 and 7 were not satisfied, and by operation of Wis. Stat. § 102.07(8), the applicant was a covered employee under the Act when he was injured on June 7, 2006.
Nature and extent of disability and liability for medical expense
Respondents asserted that should the commission find the applicant was a covered employee, it should remand the matter to the department, because the department did not previously issue a decision covering nature and extent of disability or liability for medical expense. However, the notice of hearing issued on February 18, 2009, appropriately listed "Primary Compensation" and "Medical Expense" as the issues to be addressed. At the hearing held on April 30, 2009, the parties fully addressed these issues, and submitted substantial evidence in the form of testimony and exhibits relevant to nature and extent of disability and liability for medical expense. There has been no lack of due process in this matter. The commission possesses the authority and duty under Wis. Stat. 102.18(3), to make original findings of fact and conclusions of law, as long as the parties were properly apprised of the issues, afforded opportunity for representation by counsel, and given full and fair opportunity to submit evidence regarding the issues. That is what occurred in this case.(1)
The applicant's treating physician, Dr. Charles Miley, opined that as a result of the injury of June 7, 2006, the applicant is 59 percent permanently disabled on a functional basis due to cognitive difficulties, difficulty walking, emotional disturbance, and vertigo. Dr. Miley wrote on August 7, 2008:
"Therefore, although well motivated, it is obvious to me that, while he could perform simple tasks in a supervised setting, he could not do this without close supervision and certainly not in a swift and consistent manner. Because of his difficulty concentrating and learning, it is obvious to me that he really could not carry out new work duties and work obligations in a satisfactory manner unless he was closely and consistently supervised, and unless the duties were very simple."
The applicant underwent two neuropsychological evaluations performed by Dr. Jerry Halsten, a licensed psychologist and Ph.D. The first took place on January 19, 2007, and the second on July 20, 2007. In the first evaluation, Dr. Halsten opined:
"He currently demonstrates moderate residual neurocognitive functioning and neurobehavioral deficits. The patient's neurocognitive deficits include slowed information processing speed, impaired learning and memory, visual-spatial problem-solving deficits, and impaired fine motor dexterity. The patient's neurobehavioral changes include difficulty initiating daily tasks, lack of concern for his normal activities, irritability, and loss of libido. The combination of neurocognitive and neurobehavioral deficits is likely to prevent the patient from successful return to construction contracting at this point and the patient's future improvement in these areas is likely to be slow and gradual, suggesting that he will not soon return to this type of employment successfully."
In the second evaluation, Dr. Halsten indicated that the applicant continued to exhibit moderate neurocognitive and neurobehavioral deficits.
At the insurer's request, Dr. Marc Novom examined the applicant on December 16, 2008, and submitted a written evaluation dated January 8, 2009. Dr. Novom noted the applicant was "surprisingly quick-witted" and able to respond appropriately to questions addressing basic reasoning and orientation. There was a negative Romberg sign. Dr. Novom noted a slight deficit in right leg movement, but no impairment of upper extremity coordination. Dr. Novom also commented regarding the video surveillance that took place over seven days between April and October of 2008. He noted that the applicant performed the regular work of a carpenter with no apparent difficulty, including operating a hand-held drill overhead, carrying lumber, operating a table saw that he lifted out of his truck and carried, and lifting a tool belt overhead before placing it around his waist. Dr. Novom opined that the applicant had reached a healing plateau when Dr. Miley examined him on March 27, 2008 (Dr. Miley assessed a healing plateau when he examined the applicant on June 27, 2008). Dr. Novom assessed three percent permanent functional disability for the traumatic brain injury, and opined that the applicant was capable of working
full-time as a carpenter, without restriction.
At the applicant's request, Gregory Wisniewski submitted a vocational evaluation dated August 27, 2008. Based on Dr. Miley's medical opinion, Wisniewski opined that the applicant was permanently and totally disabled. He emphasized Dr. Miley's statement that the applicant could work only in a "closely and consistently supervised" setting. There is no updated opinion from Wisniewski relative to Dr. Novom's medical assessment.
At the insurer's request, Michael Campbell submitted a vocational evaluation dated April 6, 2009. Campbell agreed that accepting all of Dr. Miley's opinions, there would be a total loss of earning capacity. However, accepting Dr. Novom's opinion, Campbell assessed either no loss of earning or a 60-to-70 percent loss. The latter assessment was based on acceptance of Dr. Miley's opinion given on August 7, 2008, that the applicant could work with close and consistent supervision.
It is inferred from the opinions of Dr. Miley, Dr. Halsten, and Dr. Novom that the applicant sustained a permanent cognitive deficit from the work injury of June 7, 2006. Dr. Novom acknowledged that the applicant sustained an organic brain injury that principally manifests itself as personality change and impaired mental concentration. However, Dr. Miley's opinion that the applicant could not carry out new work duties and work obligations without close and consistent supervision is not credible. The video surveillance reveals that the applicant is capable of performing carpentry work independently. The video surveillance also leads to the inference that the applicant does not have a significant problem with vertigo or balance, consistent with Dr. Novom's opinion. Dr. Novom's assessment of a three percent permanent functional disability is credible, but acceptance of that assessment does nn ot support a prima facie case for permanent total disability.
The applicant was 48 years old at the time of the April 2009 hearing. He has a high school education, with a varied employment history that primarily involved carpentry and roofing work. At the time of his June 2006 work injury he was charging $25 per hour for his carpentry work as the sole proprietor of DLO. When he analyzed the applicant's pre-injury earning capacity, Michael Campbell assumed a 40-hour work week. Of course, as a sole proprietor the applicant could have ended up working more or less than 40 hours in any given week. Campbell described a number of jobs the applicant could do even assuming Dr. Miley's physical restrictions, and on that basis he opined that the applicant sustained a 60-to-70-percent loss of earning capacity. Campbell opined that there was no loss of earning capacity based on Dr. Novom's opinion that the applicant could work as a full-time carpenter. Gregory Wisniewski based his opinion of permanent total disability on his interpretation of Dr. Miley's physical restrictions.
The commission finds credible Dr. Novom's opinion that the applicant has maintained the ability to perform full-time carpentry work. However, the neurocognitive deficit sustained in the work injury is likely to have some effect on the applicant's work performance, particularly his ability to problem solve more complicated carpentry projects. Considering all the relevant factors outlined in Wis. Admin. Code ch. DWD 80.34, the commission finds that the June 2006 work injury has resulted in a 55 percent loss of earning capacity to the applicant.
Dr. Miley's opinion that the applicant reached his healing plateau on June 27, 2008, is accepted as credible. Dr. Novom's opinion that a healing plateau was reached on March 27, 2008, is rejected because he did not examine the applicant until December 16, 2008. The conceded average weekly wage is $1,000, which translates into a weekly rate for temporary total disability of $666.67. However, hearing testimony from James Jones indicates that the applicant did perform carpentry work for wages during a brief period in late 2007 and/or early 2008. The record is unclear as to whether or not the applicant also performed work for wages during any additional time period between June 27, 2006 and June 27, 2008. Accordingly, the applicant shall submit to Society Insurance a summary of the wages he earned in all weeks during the aforementioned two-year period, and Society Insurance shall thereupon make immediate payment of the temporary disability due in accordance with that summary. Jurisdiction will be reserved with respect to any dispute that may arise concerning the wages earned during this period.
The 55 percent loss of earning capacity would result in 550 weeks of permanent partial disability at the applicable rate of $252 per week, with accrual beginning on June 28, 2008. However, the file before the commission indicates that a social security disability offset may be due pursuant to Wis. Stat. § 102.44(5), and the matter will therefore be remanded to the department for accurate calculation of the accrued and unaccrued permanent partial disability, in accordance with the commission's findings.
The applicant's attorney is entitled to a 20 percent attorney's fee against the disability amounts due the applicant, together with reasonable costs, if any.
Reasonably required medical expenses are due in the amount of $4,495.17 to Dean/Medicare; and reimbursement to DHFS in the amount of $42,589.67.
The applicant may require additional medical treatment, and there may be other issues arising from the work injury (mentioned in briefing was a possible claim for a safety violation). Accordingly, jurisdiction will be reserved with respect to any issues not determined herein on a final basis. The commission's determinations regarding permanent disability, and regarding temporary disability through the date of hearing, are final.
NOW, THEREFORE, this
The matter is remanded to the department for calculation of the temporary disability and permanent partial disability compensation due the applicant, less attorney fees and costs, in accordance with the above findings.
Jurisdiction is reserved with respect to the possibility of additional medical treatment, with respect to the aforementioned calculations, and with respect to any unresolved issues stemming from the work injury of June 7, 2006.
Dated and mailed March 15, 2010
overtde : 185 : 5 ND 2.13, 5.31
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
In consultation with the commission, the administrative law judge did not recall any credibility/demeanor impressions that would have affected the factual issues surrounding the question of whether or not the applicant's services were performed in accordance with all the conditions set forth in Wis. Stat. § 102.07(8). The commission learned that it had no disagreement with the administrative law judge regarding the relevant facts, and the commission's reversal of his decision was based on analysis of the statutory conditions in light of those facts.
With regard to the issues of nature and extent of disability and liability for medical expense, the administrative law judge additionally indicated that the applicant's credibility/demeanor at the hearing would not have affected his decision on those issues, had he decided them.
cc:
Attorney James Gallanis
Attorney Jack Ebbott
[ Search Decisions ] - [ WC Legal Resources ] - [ LIRC Home Page ]