STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

DARLENE K HERDT, Applicant

LINCOLN WOOD PRODUCTS, Employer

WAUSAU INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1979018557

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own, except that it makes the following modifications:

1. Delete the eighth (last) paragraph of the ALJ's Findings of Fact, and substitute:

"The applicant also incurred reasonable and necessary medical expense as outlined in Exhibit B. According to Exhibit B, Wisconsin Laborers (a/k/a Wisconsin Sheet Metal Workers Health and Benefit Fund), a non-industrial insurer, paid $1,033.16 toward the medical expenses resulting from the injury; it is entitled to reimbursement under Wis. Stat. § 102.30(7). Exhibit B also documents $211.80 in out of pocket medical costs incurred by the applicant. Finally, Exhibit B, indicates that the sum of $525.50 remains outstanding to Froedtert Memorial Lutheran Hospital (Froedtert).

"Exhibit A documents additional out-of-pocket expenses for mileage and lodging incurred well in advance of the hearing. However, Exhibit A was not submitted at least 15 days before the hearing, and the applicant has not shown good cause for failing to do so. Consequently, the additional expenses are denied under Wis. Stat. § 102.17(8).

"Exhibit A also indicates that at least some portion of the $525.50 shown in Exhibit B to be outstanding to Froedtert has since been paid by Wisconsin Laborers. No supporting documentation to establish the payment is attached. Accordingly, it is assumed that the $525.50 remains outstanding to Froedtert, and it is entitled to reimbursement. However, if the Froedtert bill has in fact been paid in part or whole by Wisconsin Laborers, the insurer shall instead reimburse Wisconsin Laborers in that amount.

"The applicant became totally disabled on October 24, 1984, the date that Dr. Gabriel wrote that she may have reached a healing plateau. As of July 1, 1999, 766 weeks and 1 day in permanent total disability have accrued at the weekly rate of $178.53 (two-thirds the applicant's conceded wage average weekly wage of $267.80). The total amount accrued to July 1, 1999 in permanent total disability thus equals $136,783.74.

"The applicant approved a 20 percent attorney fee on the additional amounts awarded under Wis. Stat. § 102.26. Under Wis. Admin. Code § 80.43(3), fees are not allowed on permanent total disability compensation awards due beyond 500 weeks. During the first 500 weeks of the applicant's permanent total disability, the respondent paid the applicant at the permanent partial disability rate of $65 per week. The fee due the applicant's attorney, then, is 20 percent of 500 weeks at the $113.53 per week difference between the permanent partial and permanent total disability rates. This amounts to $11,353, which has all accrued. To date, the respondent has been paid $1,675.48 in fees, leaving a total due the applicant's attorney within 30 days of $9,677.52.

"The amount currently due the applicant within 30 days is $85,446.71. This equals the total amount accrued to July 1, 1999 ($136,783.74), less the amount previously paid to the applicant ($39,984.03), less the amount actually paid the applicant's attorney ($1,675.48), and less the amount now due the applicant's attorney ($9,677.52). Beginning August 1, 1999, the respondent shall pay the applicant at the monthly rate of $773.63, for life.

"This order shall be left interlocutory."

2. The ALJ's Order is deleted and second, third and fourth paragraphs of the commission's Interlocutory Order is substituted therefor:

INTERLOCUTORY ORDER

The findings and order of the administrative law judge, as modified, are affirmed.

Within 30 days from the date of this order, the employer and its insurer shall pay all of the following:

1. To the applicant, Darlene K. Herdt, Eighty-five thousand four hundred forty-six dollars and seventy-one cents ($85,446.71) in disability compensation.
2. To the applicant's attorney, James Kurth, Nine thousand six hundred seventy-seven dollars and fifty-two cents ($9,677.52) in attorney fees.
3. To Froedtert Memorial Lutheran Hospital, Five hundred twenty-five dollars and fifty cents ($525.50) in medical treatment expense.
4. To Wisconsin Laborers (a/k/a Wisconsin Sheet Metal Workers Health and Benefit Fund), One thousand thirty-three dollars and sixteen cents ($1,033.16) in reimbursement of medical expense.
5. To the applicant, Two hundred eleven dollars and eighty cents ($211.80) in out-of-pocket medical expense.

Beginning on August 1, 1999, and on the first day of each month beginning thereafter, the respondent and its insurer shall pay the applicant Seven hundred seventy-three dollars and sixty-three cents ($773.63) per month for as long the applicant may live.

Jurisdiction is reserved to permit further findings and orders as warranted.

Dated and mailed June 30, 1999
herdt.wmd : 101 : 7 ND § 5.31

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

1. Overview.

The applicant worked for the employer as a sorter and bearer, and later as a machine operator. She sustained a work injury to her back on March 1, 1979. She underwent a two level discectomy, three level fusion, on August 22, 1979. Based on a diagnosis of pseudoarthrosis (a false fusion), she underwent refusion at two levels in March 1980. She had a third procedure in March 1983.

Both sides obtained expert vocational reports based on the work restrictions set by a treating doctor, Y. H. Gabriel, M.D., in 1984. He (and treating surgeon Sanford Larson) rate functional permanent partial disability at 30 percent compared to permanent total disability. See, for example, Exhibit May 7, 1985 practitioner's report of Gabriel. Dr. Gabriel also set work restrictions for an eight- hour work day at one to four hours of standing/walking; three to five hours of sitting; no lifting; no use of her feet for repetitive motions; no bending; and only occasional squatting or climbing. See Exhibit 3, page 8, and Exhibit D, page 2.

The applicant testified that her condition, if anything, has gotten worse since Dr. Gabriel set these restrictions. Transcript, page 18. The primary issue in this case is the extent of the applicant's loss of earning capacity for her unscheduled injury, given Dr. Gabriel's uncontested restrictions. Both sides have submitted reports from vocational experts on this question.

The applicant's initial expert, Jeanne Krizan opined in 1985 that, based on Dr. Gabriel's restrictions and without retraining, the jobs available to the applicant did not exist in sufficient numbers to suggest a reasonable opportunity for retraining. Stated another way, Ms. Krizan opined without retraining the applicant was permanently and totally disabled on an odd-lot basis. Exhibit F, report of Krizan page 10; Krizan letter dated January 10, 1986. On the other hand, Ms. Krizan opined that the applicant could reduce her loss of earning capacity to 30 percent, if she was successfully retrained.

More recently, the applicant has submitted the report of Michael J. Guekenberg, dated November 3, 1997. Exhibit D. He concludes that the applicant is permanently and totally disabled on an odd-lot basis, noting her significant restrictions set by Dr. Gabriel; her lack of transferable skills; her 11th grade education with GED; and the fact she was 50 years old and had not worked in over 18 years since the time of the injury.

The expert of the employer and insurer (collectively, the respondent), Lawrence Hollingsworth, initially estimated loss of earning capacity at 25-30 percent in his opinion rendered in 1985. Exhibit 3. In his report dated January 16, 1998, however, Mr. Hollingsworth opined:

"Examples of work/jobs performable by Mrs. Herdt include: general office clerk, ward clerk, hand package, receptionist, etc.

"It is further belief of the undersigned that Mrs. Herdt would benefit from the assistance of professionally trained workers (DVR counselors, state Job Service workers etc.) in the job seeking process. These services are freely available to Mrs. Herdt but, their employment is strictly and solely dependant upon Mrs. Herdt's decision to use them.

"Considering the above facts and information, it is the opinion of the undersigned that Darlene Kay Herdt has sustained or developed a condition that may reasonably be expected to result in a vocational handicap approximating 70 to 75 percent. This is based on the number of jobs from Mrs. Herdt's ability to chose to perform [sic] which were traditionally open to her."

Exhibit 2, pages 12-13.

Two final points. The record establishes that the applicant has made little effort to return to work after her three back surgeries. The applicant did make some effort to obtain rehabilitative services from the DVR. (1) DVR recommended retraining, but the insurer indicated they would not voluntarily pay for it, (2) so the applicant did not pursue it.

2. Legal standards.

The primary issue in "odd-lot cases" is whether, given an injured worker's functional restrictions from the work injury, as well as his age, training, education, efforts to find work and various other factors set out in Wis. Admin. Code § DWD 80.34(1), the injured worker has suffered a permanent and total impairment of earning capacity. Under the "odd-lot" rule, the commission must find a person permanently and totally disabled on a vocational basis if, given the restrictions from the work injury, the only work still available to the applicant is "odd-lot" jobs of the type not regularly and continuously available in the general labor market.

In application, the odd-lot doctrine is an evidentiary rule triggered when an injured worker shows that only odd-lot work is available to him or her. Balczewski v. DILHR, 76 Wis. 2d 487, 497 (1977). The court of appeals summarized the Balczewski decision as stating that:

"Once the claimant prima facie proves 100 percent disability upon the basis of future unemployability, the burden is upon the employer to rebut that prima facie showing and to demonstrate `that some kind of suitable work is regularly and continuously available to the claimant.' That court stated, in employment of the odd-lot doctrine for nonscheduled industrial injuries, that the crucial factor in establishing permanent total disability was proof of total and permanent impairment of earning capacity.... If evidence of the degree of physical disability coupled with other factors `such as mental capacity, education, training or age, establish prima facie that the employe will be unable to obtain regular and continuous employment and is therefore in the "odd lot" category.' The burden then switches to the employer to show regular and continuous employment is available."

Advance Die Casting Co. v. LIRC, 154 Wis. 2d 239, 251-52 (Ct. App. 1989).

Professor Larson has noted that in odd-lot cases "it is not unreasonable to place the burden of proof on [the employe] to establish the unavailability of work to a person in his circumstances, which normally would require a showing that he has made reasonable efforts to secure suitable employment." 4 Arthur Larson and Lex K. Larson, Workers' Compensation Law, sec. 57.61(d) (MB, 1998). Thus, to make the prima facie case of odd-lot unemployability, the commission requires applicants undertake reasonable efforts to find work, keeping in mind that what is reasonable differs from case to case. Frederick T. West v. LIRC and Roadway Express, Case no. 95-2622 (Wis. Ct. App., June 11, 1996.)

Two recent court of appeals cases have focused on what happens once an applicant has established that he or she cannot find work that is regularly and continuously available (that is, that the worker is odd-lot.) Rogelio Cabral v. LIRC, case no. 94-3309-FT (Wis. Ct. App., December 12, 1995) and Harry Morey v. LIRC, case no. 95-0673-FT (Wis. Ct. App., March 21, 1996). Cabral and Morey re-emphasize that once an applicant has made a prima facie case under Balczewski, the employer then has to provide proof that the applicant cannot only perform work in the regular labor market, but that such work is actually available.

Balczewski indicates that an employer must do more than offer an opinion that a worker can do certain types of select sedentary work, and then "round out the case for noncompensability by adding a presumption that [such] work is available" simply by proximity to the Milwaukee labor market. Id., at 76 Wis. 2d 495-96. The commission has recently been reminded that an employer may not rebut a prima facie odd-lot case by simply listing the jobs its expert believes the applicant can do, and then presuming they are available. Cabral, slip. op., at page 11.

Odd-lot cases, then, come down to two questions: (a) has the applicant made a prima facie case that work is not regularly and continuously available on the job market given her restrictions, and (b) if so, has this showing been rebutted by the employer who establishes that such work is in fact actually available? See Cabral, slip op., at page 11.

3. Discussion.

The commission agrees with the ALJ that the applicant has met her burden of showing she is available only for odd-lot work. Her experts opine she is, and the respondent rejected Ms. Krizan's suggestion she be retrained. The employer evidently has not offered her work within her restrictions. Her work restrictions and functional permanent partial disability following her three back surgeries are significant; even the respondent's vocational expert rates loss of earning capacity at 70-75 percent and suggests that finding work will require help from a vocational service.

Against this is the fact the applicant has not made much effort to look for work following her three back surgeries. However, DVR's ultimate recommendation was not a job search, but rather retraining for which the respondent would not accept liability under Wis. Stat. § 102.61 voluntarily. In addition, the applicant's uncontested restrictions include no bending and no lifting. The commission concludes the applicant's job search effort was not unreasonable given these restrictions following significant back injuries.

The commission must also conclude that the respondent has failed to rebut the applicant's prima facie odd-lot case. While the respondent's expert states that certain types of work is within her restrictions, he identifies no positions that are actually available. If anything, his report suggests such positions are not actually available, as he indicates she might need Job Service or DVR to find work for her. Under Balczewski (and given the recent Moray and Cabral holdings), the commission concludes that the ALJ correctly determined that the applicant is permanently and totally disabled on an odd-lot basis.

The other issues raised in the respondent's petition (the disputed medical expense and the computation of the award) have been addressed in the material included in this ALJ's findings by amendment.

NOTE: During the briefing of this case, the respondent asserted that the ALJ's order understated the prior payments made by the insurer on this claim. By letter dated May 3, 1999, the applicant's attorney objected to the respondent's attempt to supplement the record regarding the prior payments made for permanent disability. However, the applicant's attorney agreed to waive the objection if the respondent provided photocopies of the checks issued in payment, provided the photocopies also showed endorsement.

By letter dated June 1, 1999, the respondent's attorney provided photocopies of the checks, showing endorsement. The respondent's attorney then summarized the payment record as showing $39,984.03 in payment to the applicant for permanent disability since the October 24, 1984 healing plateau, $1,675.48 in payment to the applicant's attorney, and $3,900 withheld in attorney fees pending approval of the Worker's Compensation Division. To date, the applicant's attorney has not objected to these figures.

The commission accordingly recalculated the award to July 1, 1999, accepting as accurate the payment figures given by the respondent's attorney in his June 1, 1999 letter.

cc: ATTORNEY JAMES KURTH

ATTORNEY MARK W PARMAN
STILP & COTTON

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Footnotes:

(1)( Back ) The Division of Vocational Rehabilitation, now in the Department of Workforce Development.

(2)( Back ) See page 9 of the respondent's March 17, 1999 brief at pages 9-10.