THOMAS FEMRITE, Applicant

SULLIVAN BROTHERS INC, Employer

KLEMM TANK LINES, Employer

SENTRY INSURANCE A MUTUAL CO, Insurer

FIREMANS FUND INS CO, Insurer

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 makes the following:

1. Posture.

The applicant sustained two conceded back injuries with different employers: (1) an injury at Sullivan Brothers, Inc., in 1993, for which Sentry Insurance is on the risk; and (2) an injury at Klemm Tank Lines in 2000, for which Fireman's Fund Ins. Co. is on the risk. He underwent a laminectomy surgery at L4-5 in 1994 to repair a disc herniation, and a two-level fusion surgery at L4-L5 and L5-S1 in March 2002. The parties agree that the applicant is entitled to compensation for the disability resulting from the injuries and the surgeries. At issue is which of the insurers is liable, or possibly their relative liabilities, for the disability.

ALJ Arnold has held a number of prehearing conferences in this case. Following a prehearing conference in January 2002, she ordered the insurers to pay ongoing temporary total disability in the amount of $185.91 each (without withholding a fee) from January 24 to March 24, 2002, and thereafter-if the applicant underwent the then-proposed March 2002 surgery-to June 24, 2002. See ALJ Arnold's order dated January 30, 2002. By letter dated May 24, 2002, ALJ Arnold extended her payment order to September 5, 2002.

At some point before August 20, 2002, the applicant's attorney informed ALJ Arnold and the other parties that the applicant's treating surgeon expected to declare an end of healing from the March 2002 fusion on September 11, 2002. Accordingly, during an August 30, 2002 pre-hearing conference, the ALJ informed the insurers she expected them to pay temporary total disability to September 12, 2002, and also ordered them to split the medical bills, pending a hearing to determine who actually would be liable for what.

The applicant's attorney then asked for an advance of a portion of the permanent partial disability due the applicant as a result of the surgeries to tide the applicant over until the date of the hearing. Specifically, the applicant's attorney asked for $7,000 by letter dated August 30, 2002, apparently after discussing the pre- hearing conference with the applicant.

On September 11, 2002, ALJ Arnold issued another pre-hearing order noting the applicant's claims for temporary disability to September 12, 2002, and permanent partial disability on a functional basis at a minimum of 20 percent from his fusion surgery. Noting, too, that the eventual permanent partial disability payment would be at least $30,400, ALJ Arnold ordered an advance payment to the applicant of $7,000.

However, the applicant's doctor concluded that the applicant did not actually reach an end of healing on September 12, 2002. Accordingly, on September 18, 2002, the applicant's attorney wrote ALJ Arnold and the other parties, telling them that the applicant had been released to work, but had not yet reached an end of healing. The applicant's attorney indicated further that he would make a temporary total disability claim for the period beginning on September 12, 2202, at the hearing.

By letter dated September 20, 2002, Sentry Insurance asked ALJ Arnold to reconsider her order of payment of the permanent partial disability in the amount of $7,000. She refused and instructed Sentry to pay promptly. This appeal followed.

2. Arguments on appeal

On appeal to the commission, Sentry argues that ALJ Arnold's order was based on the premise an end of healing would be reached on September 12, 2002, and permanent partial disability would become due; this did not happen so the permanent partial disability is not due and has not yet begun to accrue; and therefore, the ALJ lacks authority to order the advance payment of permanent partial disability in this situation.

The applicant responds that this is a "no-harm-no-foul" situation because: the applicant has undergone a two-level fusion for the conceded injuries and is entitled to a code-minimum permanent partial disability on a functional basis at 20 percent (1)  totaling over $30,000; the department usually awards permanent partial disability by filling in "gap" or "empty" weeks prior to the end of healing when no temporary disability compensation has been paid; that given this "filling-in" process, most of the $7,000 ordered paid by the ALJ would be for already-passed "gap" or "empty" weeks anyway; and that any portion actually advanced for future weeks can be discounted to present value at the hearing.

Sentry replies that the ALJ simply lacked authority to advance permanent partial disability before an end of healing, regardless of whether there is a "harm;" that there is a potential harm anyway (if the applicant were to die before reaching an end of healing); and that it would not have objected if the ALJ had simply reinstated her order requiring the payment of ongoing temporary total disability to the date of the hearing.

3. Discussion.

An ALJ's authority to order payment of compensation prior to the hearing where, as here, the only dispute is which insurer must pay, is set out in Wis. Stat. § 102.175(2) which provides:

"102.175 Apportionment of liability. (2) If after a hearing or a prehearing conference the department determines that an injured employee is entitled to compensation but that there remains in dispute only the issue of which of 2 or more parties is liable for that compensation, the department may order one or more parties to pay compensation in an amount, time and manner as determined by the department. If the department later determines that another party is liable for compensation, the department shall order that other party to reimburse any party that was ordered to pay compensation under this subsection."

The department's interpretative note provides:

"⁹³ This authorizes the department to order interim payments in order to relieve the hardship for an injured employee where the only issue is which party is responsible for payment."

DWD Worker's Compensation Act, with amendments to January 1, 2002, form WKC-1-P (R. 07/2002).

Moreover, an ALJ's authority under Wis. Stat. § 102.175(2) would seem to include the authority to order the advance payment of unaccrued permanent partial disability in "hardship" cases, as Wis. Stat. § 102.32(6m), as renumbered from Wis. Stat. § 102.32(6) by 2001 Wis. Act 37, provides:

"102.32(6m) The department may direct an advance on a payment of unaccrued compensation or death benefits if the department determines that the advance payment is in the best interest of the injured employee or the employee's dependents. In directing the advance, the department shall give the employer or the employer's insurer an interest credit against its liability. The credits hall be computed at 7%."

The factors the department is required to consider before "order[ing] the partial or full payment of unaccrued compensation to an employee or his or her dependents pursuant to [Wis. Stat. § 102.32 (6)]" are set out in Wis. Admin. Code § DWD 80.39.

However, Sentry Insurance asserts the ALJ nonetheless lacks the authority to order the advance payment of permanent partial disability in this case, pointing to recently-amended Wis. Stat. § 102.32(6) which provides:

"102.32 (6) If compensation is due for permanent disability following an injury or if death benefits are payable, payments shall be made to the employee or dependent on a monthly basis. Compensation for permanent disability that results from an injury for which the employer or the employer's insurer concedes liability and that is based on a minimum permanent disability rating promulgated by the department by rule shall begin within 30 days after the end of the employee's healing period or within 30 days after the employer or the employer's insurer receives a medical report that provides a permanent disability rating, whichever is later. Compensation for permanent disability that results from an injury for which the employer or the employer's insurer does not concede liability or that is based on a permanent disability rating that is above a minimum permanent disability rating promulgated by the department by rule shall begin within the later of those 30-day periods unless within the later of those 30-day periods the employer or insurer notifies the employee that the employer or insurer is requesting an examination under s. 102.13 (1) (a), in which case compensation for permanent disability shall begin within 30 days after the employer or insurer receives the report of the examination or within 90 days after the date of the request for the examination, whichever is earlier. Payments for permanent disability, including payments based on minimum permanent disability ratings promulgated by the department by rule, shall continue on a monthly basis and shall accrue and be payable between intermittent periods of temporary disability so long as the employer or insurer knows the nature of the permanent disability."

The commission is not certain that Wis. Stat. § 102.32(6) actually governs an ALJ's authority -- under Wis. Stat. § 102.175(2) or otherwise -- to advance code-minimum permanent partial disability before an end of healing. Rather, Wis. Stat. § 102.32(6) suggests that an insurer is not obligated to begin paying permanent partial disability on its own until the end of healing in the normal course. The point of the statutory language seems to be to require insurers to pay undisputed, code-minimum permanent partial disability without being ordered to do so by an ALJ, not to limit an ALJ's authority to make orders under Wis. Stat.. §§ 102.175(2) and 102.32(6m).

Nonetheless, the commission concludes the best course at this point is to return the parties to the status they were in before ALJ Arnold modified her prior prehearing orders on the assumption the applicant would reach an end of healing on September 12, 2002. Pursuant to Wis. Stat. § 102.175(2), therefore, the commission shall order the continued payment of temporary total disability at the rates previously set out by ALJ Arnold, until the hearing scheduled in this case for December 5, 2002.

The administrative law judge's prehearing order dated September 11, 2002, is reversed.

From September 12, 2002 to December 5, 2002, the insurers, Sentry Insurance and Fireman's Fund Ins. Co., shall each pay temporary total disability benefits to the applicant, Thomas J. Femrite, at the rate of One hundred eighty-five dollars and ninety-one cents ($185.91) per week, without withholding attorney fees. As of November 20, 2002, each insurer owes Mr. Femrite One thousand eight hundred fifty-nine dollars and ten cents ($1,859.10).

Jurisdiction is reserved on all issues.

Dated and mailed November 19, 2002
femritt . wrr : 101 : 6  ND § 3.43  § 5.16 

David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

cc: 
Mr. Troy D. Thompson
Mr. John D. Neal
Mr. Todd A. Becker

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(1)( Back ) See Wis. Admin. Code § DWD 80.32(11). 

uploaded 2002/12/03