Wis.LIRC WC Decision: Tweedt - June 29, 2000 - ND � 5.40 - Standard Provisions for Retraining Benefits - Vocational Rehabilitation - no "highly material" mis-representation to DVR as to applicant's pre-injury wage - vocational retraining is about restoring capacity and potential, not merely pre-injury wage

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

DAVID L TWEEDT, Applicant

PYGMALIAN TRUCKING, Employer

LAKE STATES INSURANCE COMPANY, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1997051628

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.

ORDER

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

Dated and mailed June 29, 2000
tweedda.wsd : 101 : 3 ND � 5.40

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

1. Procedural facts.

The applicant hurt his back in August 1997 when the gravel truck he drove for the employer tipped over. He now has symptomatic lumbar spondylosis with disc herniation. He seeks compensation under Wis. Stat. � � 102.43(5) and 102.61 for vocational retraining administered by the division of vocational rehabilitation (DVR). He is in the midst of coursework to be retrained as a technical writer.

On appeal, the employer and its insurer (collectively, the respondent) argue that the applicant misrepresented his pre-injury wages to DVR, telling the vocational specialist retained by DVR (Debra Thompson) (1 ) he made $36,000 to $38,000 (2 ) annually when he instead made closer to $24,000. The respondent goes on to assert that the misrepresentation was highly material in that it led DVR to approve retraining when it would not have otherwise. Indeed, the DVR witness (John Sinclair) admitted he likely would not have approved retraining if the applicant had made $24,000 before the injury and could return to work paying that much. Transcript, page 48.

The ALJ rejected the respondent's argument. He ordered payment of benefits under Wis. Stat. � � 102.43(5) and 102.61. The respondent appeals.

2. Applicable law.

Under Wis. Stat. � � 102.43(5) and 102.61, if a worker is entitled to receive and has received workers compensation, and is entitled to receive and is receiving instruction under the federal vocational rehabilitation laws, he is eligible for certain expenses as well as weekly payments at the temporary total disability rate. Under Massachusetts Bonding & Ins. Co. v. Industrial Commission, 275 Wis. 505 (1957), the authority of the commission and the workers compensation division in such cases is somewhat limited, at least once it is determined that the applicant has a compensable injury and DVR certifies the worker for retraining.

In Massachusetts Bonding, the injured worker was certified for retraining by DVR's predecessor agency, even though he had been gainfully employed since the time of his injury. Because he was certified, however, the Industrial Commission awarded vocational rehabilitation benefits. Massachusetts Bonding appealed, essentially asking for a reversal of the finding that the worker was eligible to be retrained given his condition.

The court refused, focusing on the narrow scope of review of the Industrial Commission under Wis. Stat. � 102.61. The court noted that the duty to interpret and administer the vocational rehabilitation laws was imposed on the predecessor to DVR. The court noted that the Industrial Commission had no power to review the acts of the DVR-predecessor. The court held that the Industrial Commission must find that an injured worker receiving retraining authorized by the DVR-predecessor is entitled to it, unless the commission concluded that (a) highly material facts were withheld or misrepresented to the DVR-predecessor or (b) the DVR-predecessor's interpretation of the vocational rehabilitation laws was so far outside the reasonable scope of interpretation as to be an abuse of administrative power. (3 ) Massachusetts Bonding, at 275 Wis. 512.

3. Discussion.

In this case, the applicant told vocational specialist Thompson that he had a pre- injury wage of $36,000 to $38,000 annually. See Exhibit 6, last and third from last page. Ms. Thompson identified a number of jobs the applicant still had the capacity to do. Exhibit 6, second from last page. Ms. Thompson recommended a job search, though she noted the jobs she listed as having transferable skills would not pay $36,000-$38,000. If the job search did not pan out, she recommended retraining. After reviewing Ms. Thompson's recommendation, and noting the applicant's independent job search efforts, DVR counselor Sinclair certified the applicant for retraining. Transcript, pages 36-40.

As noted above, the respondent disputes the applicant's representation that his wage was $36,000-$38,000 when injured. His gross income history on a calendar year basis is:

1990 $9,657
1991 $20,549
1992 $27,893
1993 $32,071 (4 )
1994 $8,352
1995 ($1,788)
1996 $29,617
1997 $17,997 (this is the year of injury)

Using these figures, the respondent's vocational expert estimated an annual wage of $24,000.

For some period of time in 1996, the applicant worked as a long distance trucker for JB Hunt. (5 ) According to the applicant, he left the JB Hunt job to work as a short hauler for Robert Neff when the applicant's father was declared terminally ill. After his father died, the applicant continued to work for Robert Neff for almost a year to the day, or from August 1996 to August 1997. Transcript, page 19. During that one-year period, he earned $30,041. He was terminated from the job with Robert Neff, but had arranged re-employment with to JB Hunt, where he planned to start work after a vacation. Just before the vacation, though, he took the short truck driving assignment with the employer.

The applicant's testimony suggests that that he expected to earn more with JB Hunt than he had with Robert Neff. In addition, the applicant had earned over $32,000 in a full year in employment for Roehl Transport in 1993. Even the respondent's vocational expert admits long distance truckers can make up to $50,000 and that with JB Hunt the applicant could make over $40,000. Transcript, page 65. The respondent, however, relies on the $24,000 figure given by its vocational expert as the basis for its contention that the applicant withheld or misrepresented highly material facts when he told the DVR counselor he made $36,000-$38,000.

After careful consideration, the commission concludes that the respondent's position is not tenable. It is not clear from the record exactly what Ms. Thompson asked the applicant about his wage. Ms. Thompson evidently did not ask the applicant what he earned in any given calendar year. Instead, the applicant told Ms. Thompson his annual pre-injury wage was $36,000 to $38,000. The commission cannot conclude that statement was a highly material misrepresentation for several reasons.

First, when asked what his wage is at a given point in time, a reasonable person does not generally offer some composite of his taxable income over the past 8 calendar years. Instead, a reasonable person assumes that he is asked what he can expect to earn over the next 12 months. Thus, in analyzing the applicant's alleged misrepresentation, one must recall that he had earned over $30,000 from Neff in August 1996 to August 1997, and expected to earn more at JB Hunt before he was injured in August 1997. In this light, the $36,000-$38,000 range that the applicant gave to Ms. Thompson, while perhaps optimistic estimate, does not rise to the level of misrepresentation. Further, if a precise past earnings record were highly material to DVR's decision, one might have expected DVR to demand for W- 2s, tax returns, or similar information, rather than just asking a worker what he makes.

Second, even assuming the $36,000 figure is inaccurate and the $30,000 the applicant had recently earned in a year with Neff is more reasonable, the respondent still faces a problem. Its vocational expert, Mr. Moglowski testified that the jobs listed by the DVR counselor as those involving transferable skills which the applicant could perform post-injury translated to $22,000 to $24,000 in average annual income. (6 ) Transcript, pages 59-61. This is still substantially less the $30,000 the applicant had earned in one years' employment driving truck for Neff.

Third, of course, vocational retraining is about restoring earning capacity and potential. See Wis. Adm. Code � 80.49 (1). It is not aimed at simply restoring pre-injury wages. The applicant was a truck driver who had made about $30,000 a year driving truck for Neff and $32,000 working for Roehl Transport; he expected to make substantially more working for JB Hunt; the respondent's vocational expert testified he had the potential to make over $40,000 with JB Hunt; but the applicant is now limited to employment averaging $22,000 to $24,000. Under these facts, the commission cannot credit the respondent's claim of a highly material misrepresentation here, if there is any misrepresentation at all.

cc: ATTORNEY JOHN A BECKER
BECKER FRENCH & DEMATTHEW

ATTORNEY THEODORE T BALISTRERI
OTJEN VAN ERT LIEB & WEIR SC

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Footnotes:

(1)( Back ) Thompson is a contract vocational evaluator who does vocational evaluations for DVR. After reviewing her report, an actual DVR employe or counselor comes up with the vocational rehabilitation plan. Transcript, page 36.

(2)( Back ) Ms. Thompson reports the applicant told her this, and the applicant does not deny it. Transcript, page 43.

(3)( Back ) Recent statutory changes do not over-rule Massachusetts Bonding. See, for example, footnote 191 in DWD's publication WKC-1-P (4/2000) Worker's Compensation Act of Wisconsin with amendments to January 1, 2000. Mr. Sinclair's testimony regarding recent developments in DVR practice is worth noting. Previously, DVR followed a special, segregated procedure for people who sought DVR services following work injuries. In general, DVR policy required first that an effort be made to return the injured worker to his or her old job or some other job with the employer, then that he or she try to find work in the general labor market. Only after these efforts to find suitable work have failed is an injured worker certified for retraining. This procedure is reflected in the rules dealing with the situations were an injured worker elects to obtain rehabilitative services from a private rehabilitation counselor because DVR is unable to provide services that the applicant is eligible for. See Wis. Admin. Code � DWD 80.49 (8), (9) and (10). However, according the hearing testimony, following a federal audit, DVR has abandoned its separate policy for workers compensation injury. Instead, it applies the same standard-does the person seeking services have a physical or mental impairment that results in substantial impairment to employment-regardless of whether the person's impairment arises from a work injury or not. See DVR program policy, updated January 15, 1999, at Neal & Danas, Workers Compensation Handbook, App. 4, page 64 (4th ed. 1997). According to the DVR witness Sinclair, those services include retraining, if the worker desires it, without really much in the way of a required job search. Transcript, pages 37-39 and 49-52.

(4)( Back ) The figures for 1992 and 1993 reflect employment with Roehl Trucking, evidently for a full calendar year. See exhibit 4.

(5)( Back ) The commission is uncertain when in 1996 the applicant started at JB Hunt, but he did not work there in 1995 according to his social security record, and evidently he left the job in August 1996.

(6)( Back ) The respondent's vocational expert himself opined that the applicant could find work after his injury that paid more than what the DVR counselor had determined. But given the Massachusetts Bonding decision, that does not matter. The commission may not credit the respondent's vocational expert over that of the DVR counselor, again unless there is misrepresentation or an abuse of discretion, and the respondent makes no such claim with respect to the DVR's estimate of post-injury capacity.

At the time of the hearing, the applicant was being paid over $700 a week to drop off papers for a newspaper. This is $35,000 per year. From this, however, the applicant had to pay all his own expenses, including gasoline, vehicle maintenance, and to pay a helper. The record establishes that the applicant's expenses amounted to 80 cents on the dollar, so that he could expect to earn $7,000 annually from this employment.