Wis.LIRC WC Decision: Cole - July 29, 1999 - ND � 5.31 - Non-Schedule Injury - "odd-lot" doctrine; � 5.35 Social Security Disability Income Offset

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

CRAIG COLE, Applicant

ROADMASTER CORP, Employer

ZURICH INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1996022902

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 second, third and fourth full paragraphs on page 7 of the ALJ's decision, and substitute:

"The applicant became eligible for social security disability in September 1996. Through August 31, 1999, temporary total and functional, permanent partial disability benefits have accrued, as more particularly set forth in Amended Appendix A of this order. The applicant and his attorney were entitled to payments in the sum of $25,250.65 through August 31, 1999. They were paid a total of $24,675.52, leaving $575.13 owing as of August 31, 1999. Of that sum, the applicant is owed $565.46 and Attorney Meier is owed $9.67. In addition, Attorney Meier is entitled to costs in the sum of $602.65 which shall be paid from the respondent's "reverse offset savings" and not deducted from compensation due the applicant.

"Beginning on October 1, 1999, the applicant shall receive $585.87 per month and Attorney Meier shall receive $119.77 per month until January 1, 2002.

"The social security offset shall end on January 1, 2002 due to a redetermination. By that time, 240.667 weeks of permanent partial disability will have accrued, leaving 359.333 weeks of unaccrued permanent partial disability compensation. At the weekly rate of $169 per week (the maximum for injuries in 1996) the sum of unaccrued permanent partial benefits as of January 1, 2002 will be $60,727.27. Of that amount, 20 percent ($12,145.46) shall be due in fees to Attorney Meier, with remainder ($48,581.82) due in benefits to the applicant.

"Beginning January 1, 2002, then, the applicant shall receive $585.87 per month and Attorney Meier shall receive $146.47 per month until the balances due them are exhausted."

2. Delete the ALJ's first and second paragraphs of the ALJ's INTERLOCUTORY ORDER and substitute:

"Within 30 days from the date of this order, the employer and its insurer shall pay the applicant, Craig A. Cole, Five hundred sixty-five dollars and forty-six cents ($565.46) in disability compensation, and to his attorney, James A. Meier, the sum of Nine dollars and sixty- seven cents ($9.67) in fees plus Six hundred two dollars and sixty-five cents ($602.65) in costs.

"Beginning October 1, 1999 and on the first day of each month thereafter through December 31, 2001, the employer and its insurer shall pay the applicant Five hundred eighty-five dollars and eighty- seven cents ($585.87) per month and shall pay his attorney One hundred nineteen dollars and seventy-seven cents ($119.77) per month.

"Beginning on January 1, 2002, and continuing on the first day of each month thereafter, the employer and its insurer shall pay all of the following:

1. To the applicant Five hundred eighty-five dollars and eighty-seven cents ($585.87) per month until the additional amount of Forty-eight thousand five hundred eighty-one dollars ($48,581.82) has been paid.

2. To the applicant's attorney One hundred forty-six dollars and forty-seven cents ($146.47) per month until the additional amount of Twelve thousand one hundred forty-five dollars and forty-six cents ($12,145.46) has been paid."

3. Delete APPENDIX A of the ALJ's Order and substitute AMENDED APPENDIX A attached to this decision therefor.

ORDER

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

Dated and mailed July 29, 1999
colecr.wmd : 101 : 7 ND � 5.31 � 5.35

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The applicant suffered a conceded, compensable neck injury which was treated by cervical discectomy and fusion. Following the surgery, his treating surgeon, Kimball S. Fuiks, M.D., opined the applicant could return to work subject to a 25- pound lifting restriction, which might be increased to 30 to 45 pounds if his performance upon returning to work was satisfactory. Dr. Fuiks also noted the condition should not greatly interfere with the applicant's future employment activities. By the time Dr. Fuiks wrote this note in May 1997, the applicant had already tried unsuccessfully to return to work with the employer.

The issue before the ALJ, and now before the commission, is the extent of permanent vocational loss as a result of the injury and resulting work restrictions. The ALJ concluded that the applicant had a permanent restriction against lifting more than 25 pounds. He also concluded that, despite the applicant's pre-existing learning disabilities, the applicant could work in several unskilled sedentary and light jobs noted by the applicant's vocational expert, Timothy Greenya, in his report (including cleaning or custodial work, lighter hand or bench work, and routine or repetitive machine operator jobs.) In light of the jobs identified by Mr. Greenya, the fact the applicant had found part-time work after his injury, and the factors identified in Wis. Admin. Code � DWD 80.34, the ALJ concluded the applicant had not established a prima facie case of odd-lot unemployability under Balczewski v. ILHR Department, 76 Wis. 2d 487, 493-496 (1977), but instead had proven a loss of earning capacity at 60 percent.

The ALJ's decision reflects a careful and thorough consideration of the issue at hand. True, Mr. Greenya opined that the sedentary and light jobs within the applicant's intellectual capacity were limited in number, and that the applicant would probably not be considered a good candidate for the jobs given his work restrictions. However, those facts support a considerable loss of earning capacity at the rate awarded by the ALJ. Those facts do not show that the services the applicant can now perform are so limited in quality, dependability, and quantity that a reasonably stable market for them does not exist. Balczewski, at 76 Wis. 2d 493. The commission therefore affirms the ALJ's conclusion that the applicant has not made his prima facie case of permanent total disability based on odd-lot unemployability.

NOTE: The applicant's disability benefits in this case are subject to a "social security reverse offset" under Wis. Stat. � 102.44(5). In a letter to ALJ Doody dated February 15, 1999, the respondent contended that the proper disability rate payable to the applicant between the date of the order and January 1, 2002, should be $466.47 per month rather than the $598.91 figure used in the order. The respondent did not explain further, and the commission concluded the respondent simply overlooked the effect of "Index" of 1.110 applied to the "Initial 80% ACE" as of January 1, 1999, in the calculation of the benefits due after the offset.

However, the commission also observes that the monthly payment to the applicant after application of the offset is $598.91, an amount actually greater than the $585.87 that the applicant would have received had there been no offset (1 ). Accordingly, the commission concluded that the amount payable to the applicant between January 1, 1999 and January 1, 2002 should be limited to $585.87.

On this point, the commission believes it makes little sense for an offset applied to reduce worker's compensation benefits (2 ) to instead increase them. Because the amount of the social security benefit itself is not affected and because the amount of the worker's compensation benefits payable to the applicant would actually be higher, the applicant would not "receive the same total amount from the combined benefits that he would have received before the offset was figured on the worker's compensation benefits." See DWD Worker's Compensation Act of Wisconsin, WKC-1-P (R.2/99), footnote 152.

The department addressed a similar concern in an August 1, 1987 letter from Division Administrator Chris M. Faulhaber to all insurers and self- insured employers on the subject of the social security reverse offset. (3 ) The letter, at point I 5, states that no offset should be taken if the amount calculated after the offset exceeds the total PPD, which in this case is $169 per week or $732.33 per month. Moreover, at point I 7, the letter also states that no offset should be taken if the amounts payable to the applicant and his or attorney exceed the total PPD rate.

In this case, of course, the total of the amounts calculated for the applicant and his attorney is less than $169 per week (or $732.33 per month.) Nonetheless, the fact that his attorney receives relatively less does not change the fact the applicant receives a higher benefit than he would have had there been no offset. Nor has the commission overlooked the requirement that attorney fees and costs be excluded from the calculation of the offset. In this case, the fees and costs were not deducted from the applicant's benefit after calculation of the offset but awarded as an additional amount to the benefit from the "reverse offset savings." (4 )

Finally, the commission wishes to make two additional points. First, the fee for the applicant's attorney was intentionally left at $119.77 for the period in question. Second, the limitation imposed on the applicant's benefits by the commission in this case would only apply to weeks in which an attorney fee would be deducted from the benefit if no offset were calculated.

cc: ATTORNEY JAMES A MEIER
MEIER WICKHEM LYONS & SCHULZ SC

ATTORNEY OYVIND WISTROM
LINDNER & MARSACK SC

[APPENDIX OMITTED IN HTML COPY]

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Footnotes:

(1)( Back ) The statutory maximum PPD rate for an injury in 1996 was $169 per week, multiplying this figure by 52 weeks and dividing by 12 months leaves the monthly figure of $732.33; deducting the 20 percent attorney fee under Wis. Stat. � 102.26 yields $585.87.

(2)( Back ) Wis. Stat. � 102.44(5)(intro.)

(3)( Back ) The letter is reproduced at Neal & Danas, Workers Compensation Handbook, Exhibit 4G (4th ed. 1997).

(4)( Back ) The commission amended the ALJ's order to eliminate the deduction of the costs from the applicant's award. See Faulhaber letter, point I 7.