WILLIAM FREDERICK, Applicant

BURGENER CONTRACT CARRIER, Employer

SOCIETY INSURANCE COMPANY, Insurer

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development previously found that the applicant sustained a compensable injury on April 13, 1998, which resulted in disability. She awarded temporary disability to October 9, 1999, permanent partial disability at 15 percent on a functional basis, and medical expenses. The employer and its insurer (collectively, the respondent) did not appeal that decision, and it is now final.

At issue now is the extent of the applicant's permanent disability on a vocational basis, as well as the respondent's liability for certain medical expenses. In essence the applicant claims he is permanently and totally disabled on a vocational basis, while the respondent concedes only loss of earning capacity at 30 percent.

After a hearing on February 18, 2001, the ALJ found for the applicant, and awarded permanent total disability by decision dated March 1, 2002. The respondent filed a timely petition for review.

The commission has considered the petition and the positions of the parties, conferred with the presiding ALJ concerning witness credibility and demeanor, and it

has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

The applicant sustained work-related injuries on February 21, 1997 and April 13, 1998. Surgery, a cervical fusion at C5-6, was ultimately performed in October 1998, and the treating surgeon credibly related the need for surgery to the April 13, 1998 date of injury. At issue now is the applicant's residual permanent disability from the injury.

Following his cervical fusion surgery on October 27, 1998, the applicant underwent a functional capacity evaluation in the summer of 1999. Thereafter, on October 8, 1999, noting that the applicant was coming along fairly well and that the applicant was radiologically healed, treating surgeon Jensen issued the following restrictions:

"I would release him to a medium work level. He can work an 8-hour day when sitting 5 to 10 hours, but I don't want him to derive any more than 1 to 3 hours per day. He is cleared for repetitive grasping, fine manipulation, and pushing and pulling. He may use his feet for operating foot controls, and he may frequently bend, squat, and twist but only occasionally climb. Presently, these are permanent restrictions."

In a later note dated June 19, 2000, Dr. Jensen reiterated that the applicant had pretty much plateaued in terms of his symptoms, but noted that "he still becomes symptomatic with nearly any exertional activity such as walking more than a quarter mile using his hand and arm to perform any degree of lifting." He said the plan was to have the applicant "continue as he is" and for him to "get by . . . by significantly moderating the level of activity."

Dr. Jensen later ordered further treatment including eventually an MRI and CT scan which revealed a nearly anatomic alignment from the cervical fusion and no acute injury or abnormal subluxation. However, despite the treatment in 2000 and 2001, Dr. Jensen never changed his earlier, permanent work restrictions set in October 1999.

The respondent submits a report from independent medical examiner Richard Lemon, M.D., who examined the applicant in July 2000, and significantly, set more limiting restrictions than Dr. Jensen does. Specifically, Dr. Lemon restricted the applicant to sedentary work with the ability to change position for comfort. He restricted the applicant to five pounds of lifting, with the ability to alternate between sitting and standing.

Ms. Briggs, the applicant's vocational expert, issued her first report dated March 16, 2001, and it concludes the applicant is permanently and totally disabled. Ms. Briggs reached this conclusion based on Dr. Jensen's June 2000 note that the applicant became symptomatic with virtually any activity. She did not discuss the permanent work restrictions set by Dr. Jensen in October 1999.

Ms. Briggs issued a second report on January 24, 2002. She noted Dr. Jensen's October 1999 restrictions in this report, but then stated she was bewildered by the restrictions Dr. Jensen set, that they greatly exceeded his functional capacity as established by the functional capacity evaluation the applicant underwent in the summer of 1999. She concluded by wondering if there had been some sort of mix up or error.

Ms. Briggs did note the report of Dr. Lemon who restricted the applicant to sedentary work so long as he could change his position as needed. Ms. Briggs noted, however, that the applicant was unable to remain sitting or standing for long periods of time, which is required in the vast majority of unskilled sedentary work. Frequent neck flexion, rotation and extension are required as well for such jobs. However, Ms. Briggs did not actually estimate loss of earning capacity based on Dr. Lemon's restrictions.

The employer's vocational expert is Bruce Schuyler. He thought that with Dr. Jensen's restrictions and past work experience, the applicant could work as a parts sales person, a retail sales person, an order filler, a forklift driver, and a telemarketer. In those occupations, he could have expected to earn an average of $22,700 per year in 1998 wages, compared with his average annual wage in 1998 while working for the employer of $31,310. Mr. Schuyler rated loss of earning capacity at 30 to 40 percent.

Mr. Schuyler did note that in the applicant's social security hearing, the social security ALJ read Dr. Jensen's October 1999 restrictions to permit modified sedentary work performed mainly while sitting, but allowing sitting and standing at will, no overhead work, and no repetitive activity of the left arm. Mr. Schuyler went on to estimate a 40 to 50 percent loss of earning capacity based on employment as a telemarketer and order filler. Mr. Schuyler went on to rate a similar 40 to 50 percent loss of earning capacity for Dr. Lemon's restrictions of sedentary work not exceeding five pounds of lifting and the need to change position.

At the hearing, the applicant testified to his severe, continuing symptoms. In addition, the respondent introduced the testimony of a private investigator who observed the applicant carry four twelve packs of soda (two twelve packs in each arm), and travel an hour and a half with no stops to a car show. In rebuttal, the applicant testified that carrying the four twelve packs was stupid, that the pain thereafter resulted in the worst day of his life requiring him to take two pain pills, and that he was able to recline en route to the car show.

The applicant claims permanent total disability on an odd-lot basis. In general, workers with unscheduled disability normally are eligible for permanent disability based on loss of earning capacity as well as their functional loss. Wis. Stat. § 102.44 (3), and Pfister and Vogel Tanning Co. v. DILHR, 85 Wis. 2d 552 (1979). Awards for loss of earning capacity are based on wage loss, age, education, training and a variety of other factors set out in sec. DWD 80.34, Wis. Adm. Code., that arise from the physical or mental limitations caused by a work injury. Similar factors are set out in the seminal "odd-lot" case, see Balczewski v. DILHR, 76 Wis. 2d 487, 495 (1977), under which a worker may be found permanently and totally disabled if unable to secure continuing and gainful employment because his injury limits him to performing services so limited in quality, dependability or quantity that a reasonably stable market for them does not exist.

Under either analysis, a worker's "functional capacity" or "physical and mental limitations" is a medical question; a vocational expert cannot supply that part of the equation. Thus, while Ms. Briggs may opine what the applicant's vocational loss is given specific work restrictions reflecting his physical capacity to work, she cannot say what those restrictions are or what his residual physical capacity is.

The commission appreciates that Ms. Briggs regarded Dr. Jensen's October 1999 work restrictions as either issued in error or are out-of-date. In that case, however, the restrictions should have been clarified with Dr. Jensen. Ms. Briggs may not simply develop her own set of work restrictions that she feels are more accurate than those set by Dr. Jensen and Dr. Lemon as the basis for her expert vocational opinion.

The commission therefore adopts as most credible the expert vocational opinion of Mr. Schuyler. The commission therefore finds that the applicant has sustained a loss of earning capacity at 50 percent, or five hundred weeks of permanent partial disability compensation, accruing as of October 8, 1999. As of February 1, 2003, 173 weeks have accrued, while 327 remain unaccrued.

However, the applicant's compensation is subject to a reduction due to the social security reverse offset under Wis. Stat. § 102.44(5) from April 1, 1999 until January 1, 2002. The department's calculation of the applicant's award thus begins on April 1, 1999, when the offset began, while the applicant was still receiving temporary total disability.

The effect of the social security reverse offset, was to limit the applicant's compensation for temporary total disability from April 1, 1999 to October 9, 1999 (27 weeks and two days) to $129.26 per week, with an additional twenty percent attorney fee of $25.85. In total, the applicant is entitled to $3,533.11 for this period while her attorney is entitled to $706.57.

The applicant became entitled to permanent partial disability compensation on October 9, 1999. From that date to January 1, 2002, a period of 116 weeks and 2 days, the social security reverse offset limited the applicant's permanent partial disability compensation to $113.33 per week, while his attorney was entitled to a fee at twenty percent of that rate, or $22.67 per week. During this period, the applicant accrued $13,184.06 in permanent disability compensation, while his attorney accrued $2,637.28 in fees.

The effect of the social security reverse offset ended in this case with a redetermination on January 1, 2002. From that date, to the effective date of this award, February 1, 2003, a period of 56 weeks and four days, the applicant is entitled to permanent partial disability compensation at the statutory maximum for injuries in 1998, $179 per week. Accounting for the approved attorney fee of twenty percent, compensation accrued to the applicant during this period at the weekly rate of $143.30 and to his attorney at the rate of $35.80, totaling $8,114.67 for the applicant and $2,028.67 for his attorney.

In all, accrued benefits due the applicant total $24,831.84 ($3,533.11 plus $13,184.06 plus $8,114.67.) According to the department's calculations, however, the respondent actually paid the applicant $28,565.91 in compensation for this period, resulting in an overpayment $3,734.07.

The remaining 327 weeks in permanent partial disability accruing after February 1, 2001 total $58,533. Accounting for the twenty- percent attorney fee leaves $46,826.40 in total unaccrued benefits to the applicant, and $11,706.60 in unaccrued attorney fees. The applicant's unaccured benefits, however, must be reduced by a current overpayment in benefits, calculated by the department at $3,734.07, resulting in an amount remaining to be paid to the applicant as it accrues of $43,092.33. The unaccrued portion of the attorney fee is subject to an interest credit of $2,177.99, leaving a present value for the unaccrued fee of $9,528.61.

The total in fee, without deducting the interest credit for advance payment, is $17,079.12 (the sum of $706.57 plus $2,637.28 plus $2,028.67 plus $11,706.60.) The department records show that the respondent paid the applicant's attorney $7,1441.48 (1)  in fee in this period. Subtracting that amount and that interest credit leaves a net fee currently due the applicant's attorney of $7,759.65. In addition, the applicant's attorney is entitled to legal costs of $1,04.97, which in this case shall be paid from the "reverse offset savings" rather than deducted from the applicant's award. (2)

No amount is currently due the applicant. Rather, the applicant has a current overpayment of $3,734.07, which shall be offset by permanent partial disability accruing after February 1, 2003 at the monthly rate of $775.67. After the monthly payments have offset the overpayment, the respondent shall pay the applicant $775.67 per month, until the additional amount of $43,092.33 has been paid.

Regarding medical expenses, the ALJ found the claimed expenses reasonable and necessary with two exceptions. This finding has not been challenged on review, and the commission adopts it. Accordingly, the commission awards medical expenses as set out below.

Finally, given the nature of the applicant's injury and treatment to date, this order shall be left interlocutory in the event the applicant sustains additional disability or medical expense in the future.

The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are affirmed in part and reversed in part. Within 30 days, the employer and its insurer shall pay all of the following:

1. To the applicant's attorney, the sum of Seven thousand, seven hundred fifty-nine dollars and sixty-five cents ($7,759.65) in fees and One thousand, forty-seven dollars and ninety-seven cents ($1,047.97) in costs.
2. To Spine Care Specialists of Wisconsin, Twenty dollars ($20.00).
3. To Wausau Hospital, One hundred three dollars and ten cents ($103.10).
4. To Radiology Associates, Forty-five dollars ($45.00).
5. To Security Health Plan, the sum of One hundred seventeen dollars and seventy-one cents ($117.71).
6. To the applicant, Eighteen dollars and fifty-six cents ($18.56) as out of pocket medical expenses.

No amount is currently due the applicant for disability compensation, though compensation for permanent partial disability accrues, beginning on March 1, 2003, at the monthly rate of Seven hundred seventy-five dollars and sixty-seven cents ($775.67). The employer and its insurer may retain the permanent partial disability as it accrues until Three thousand seven hundred thirty-four dollars and seven cents ($3,734.07) has been recovered. Thereafter, the employer and its insurer shall pay the applicant Seven hundred seventy-five dollars and sixty-seven cents ($775.67) per month, until the additional amount of Forty-three thousand ninety-two dollars and thirty-three cents ($43,092.33) has been paid.

Jurisdiction is reserved for further orders and awards as are warranted, consistent with this decision.

Dated and mailed January 10, 2003
fredewi . wrr : 101 : 1   ND  § 5.21 § 5.31

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

The commission conferred with the presiding ALJ concerning witness credibility and demeanor. Her impression was that the applicant's testimony was truthful and no-nonsense. She told the commission, too, that he genuinely seemed in pain at the hearing. She did not believe that incident where he was videotaped carrying four twelve packs of soda necessarily reflected an ability to work beyond the restrictions set by the doctors.

However, the commission reverses the ALJ's award, not because of a different impression of witness credibility. Rather, as explained above, the commission believes that the opinion offered by the applicant's vocational expert in support of his claim for permanent total disability is not adequately supported.

cc: 
Attorney William A. Wulf
Attorney David A. Piehler

Appealed to Circuit Court.

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(1)( Back ) Added to the $28,565.91 that the department reported the respondent paid the applicant, the respondent's total payments for the April 1 to October 9, 1999 period of TTD and for PPD equal $35,707.39, or $301.11 less the $36,008.50 shown as paid for this period in the WC-13 submitted by Mr. Piehler on April 19, 2002. The commission assumes that the department's more recent figures are correct.

(2)( Back ) See: Letter from Chris M. Faulhaber, Workers Compensation Division Administrator, to "All Insurance Carriers and Self-Insured Employers" dated August 1, 1987, regarding "Social Security Reverse Offset Section 102.44(5)," page 9, point 7 (reprinted at Neal & Danas, Worker's Compensation Handbook, App. 4, pgs. 39, 47 (4th ed. 1997).) 

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