DAVID VANDERZEE (DEC'D), Applicant
EDWARD BROS INC, Employer
LIBERTY MUTUAL INS CO, Insurer
It is conceded that the deceased worker, David Vanderzee, sustained a compensable low back injury arising out of and in the course of his employment with the employer on January 25, 2001. It is also conceded that on September 23, 2003, Mr. Vanderzee died from causes unrelated to his work-related low back injury. Temporary total disability payments were made to the decedent from January 25, 2001 to September 23, 2003, in the total amount of $77,119.46. No compensation was conceded or paid for permanent partial disability.
At issue are whether the deceased worker's dependents, Roxanna Vanderzee (wife), Kathleen Michelle Vanderzee (daughter), and Phillip Allen Vanderzee (son), have standing to claim death benefits pursuant to Wis. Stat. § 102.47(2); and if so, what shall be the amount and distribution of such death benefits.
Originally, an issue regarding an outstanding medical expense was also raised, but the insurance carrier subsequently paid this expense, and it is no longer at issue.
The commission has carefully reviewed the entire record in this matter, and hereby reverses the administrative law judge's Findings and Order issued in this matter on September 2, 2005. The commission makes the following:
"102.47 Death benefit, continued. If death occurs to an injured employee other than as a proximate result of the injury, before disability indemnity ceases, death benefit and burial expense allowance shall be as follows:
(2) Where the injury proximately causes permanent partial disability, the unaccrued compensation shall first be applied toward funeral expenses, not to exceed the amount specified in s. 102.50. Any remaining sum shall be paid to dependents, as provided in this section and ss. 102.46 and 102.48, and there is no liability for any other payments."
The administrative law judge (ALJ) ruled that this statute does not give the dependents standing to claim a death benefit in these circumstances, because no permanent disability was formally established or awarded prior to the applicant's death. The ALJ also cited the fact in order to award death benefits in this case, she would have to make her own factual determination concerning the extent of permanent partial disability, which she believed would require her to disregard Wis. Stat. § 102.51(5). That statute provides in relevant part:
"No dependent of an injured employee shall be deemed a party in interest to any proceeding by the employee for the enforcement of the employee's claim for compensation, nor with respect to the compromise thereof by such employee."
It is important to recognize that the compensation made available to surviving dependents in Wis. Stat. § § 102.46, 102.47(1), and 102.47(2), is compensation for death benefits. It is not compensation paid to the injured worker. A Chapter 102 death benefit is an independent right made available to dependent survivors who claim the statutory benefit after the injured worker dies. The statute at issue, Wis. Stat. § 102.47(2), provides a death benefit equivalent to the amount of the injured worker's unaccrued permanent partial disability. In other words, if it is determined that the deceased worker would have received permanent partial disability if he/she had lived, an amount equivalent to the amount of that unaccrued permanent partial disability is payable to the dependent survivors as a death benefit. The statute does not provide that this unaccrued permanent partial disability must have been quantified or awarded prior to the worker's death. The statutory requirement for entitlement is that the injury "proximately causes permanent partial disability." Whether the injury caused permanent partial disability presents a factual question that must be resolved in every case in which permanent partial disability is claimed. It may be a more difficult factual question for the department or the commission to resolve when the injured worker dies prior to its resolution, but unless it is incapable of resolution, the terms of Wis. Stat. § 102.47(2) require that it be done.(1) In Milwaukee v. Industrial Commission, 185 Wis. 307, 308, 201 N.W. 251 (1924), a post-death assessment of the amount of permanent partial disability was performed in order to calculate the death benefit available under a predecessor statute to Wis. Stat. § 102.47(2). The fact that dependent survivors exercise their own independent, statutory right to the death benefit provided under Wis. Stat. § 102.47(2), was acknowledged in Milwaukee v. Industrial Commission, 185 Wis. at 309-10, and again in International Paper Company v. LIRC, 2001 WI App 248, 248 Wis. 2d 348, 358-59, 635 N.W.2d 823.
Respondents make an argument based on the statute's use of the phrase "unaccrued compensation," asserting that this phrase can only be interpreted to refer to a specific award of compensation that has been made but not yet fully paid. There is no support for this argument in the statutes or in the case law. The phrase "unaccrued compensation" as used in Wis. Stat. § 102.47(2), is a term of art that merely assists in the calculation of the death benefit amount. If at the time of death, the injured worker was receiving a conceded or adjudicated amount of permanent partial disability, (2) the unpaid (unaccrued) balance of that permanent partial disability remaining as of the time of death defines the death benefit amount. When the extent of permanent partial disability caused by the work injury has not been resolved prior to the injured worker's death, the fact finder must first determine the extent of permanent partial disability caused. Then the entire amount represented by that permanent partial disability, which at that time will have been unpaid (unaccrued), will define the death benefit amount.
The ALJ's concern with Wis. Stat. § 102.51(5), is misplaced, because a death benefit claim is not a "proceeding by the employee for the enforcement of the employee's claim for compensation." It is a proceeding by the dependent survivors to claim their statutory death benefits. The purpose of Wis. Stat. § 102.51(5), is to prevent dependents from joining as parties to the injured worker's claim for compensation to which he/she is entitled. Injured workers may claim permanent partial disability pursuant to rights provided in Wis. Stat. § 102.44(3), or in Wis. Stat. § 102.52 through 102.56. Such claims are not claims for the death benefit provided in Wis. Stat. § 102.47(2).
The ALJ also relied on an isolated quote from State v. LIRC & Olivia McKenzie, 136 Wis. 2d 281, 292-93, 401 N.W.2d 585 (1987):
". . . under Section 102.47(2), spouses of deceased persons who are permanently partial disabled do not recover the disability payments as such. Rather, the disability payments that have been awarded but not yet paid are payable to the surviving spouse as "death benefits"." (emphasis added by the ALJ).
The court in State v. LIRC was dealing with a surviving wife's claim for permanent total disability benefits that would have been paid to the deceased worker during his lifetime, had he submitted a claim for them (he died from occupational lung disease without ever submitting a worker's compensation claim). The wife's separate claim for death benefits, made pursuant to Wis. Stat. § 102.47(1), was not at issue and was conceded and paid. The court held that the wife could not claim the permanent total disability benefits that her deceased husband could have claimed while he was alive, because his right to claim compensation ceased with his death. The above-quoted phrase, "disability payments that have been awarded but not yet paid" was used in a hypothetical, illustrative context, and was not intended to define the parameters of a death benefit claim under Wis. Stat. § 102.47(2). The court was merely explaining that under either Wis. Stat. § 102.47(1) or 102.47(2), dependents do not recover the same statutory compensation that is available to the injured worker during his/her lifetime. Rather, the dependents' recovery is in the form of a death benefit calculated by reference to the unaccrued permanent partial disability attributable to the decedent's work injury. The full paragraph from the State v. LIRC decision, which was partially quoted by the ALJ, clearly distinguishes between lifetime benefits paid to an injured worker, and death benefits paid to surviving dependents.
"Section 102.47(1), Stats. (1979), provides for a death benefit for a dependent. It is not a procedure to recoup total disability benefits that were not timely claimed by the worker. Even under sec. 102.47(2), spouses of deceased persons who were permanently partially disabled do not recover the disability payments as such. Rather, the disability payments that have been awarded but not yet paid are payable to the surviving spouse as 'death benefits.'" Id. at 292-93.
In its illustration of a claim under Wis. Stat. § 102.47(2), the court assumed a circumstance in which permanent partial disability had been awarded but not paid during the decedent's lifetime. It did not preclude the circumstance in which permanent partial disability had been caused but not awarded during the decedent's lifetime.
Accordingly, the dependents in this case are entitled to claim the death benefit allowed under Wis. Stat. § 102.47(2). This means that the commission must first determine what permanent partial disability was caused by the work injury.
Arguments are made by the parties concerning whether or not the decedent had reached a healing plateau prior to his death on September 23, 2003. Apparently, they assume that in order for the commission to assess the permanent partial disability caused by the work injury, the decedent must have reached a healing plateau prior to his death. However, regardless of whether or not the decedent had reached a healing plateau by September 23, 2003, it would be nonsensical to assert that healing continued after his death. (3) The commission's assessment of permanent partial disability will be based on the factors that would have been relevant once the decedent had reached a healing plateau and had claimed permanent partial disability. It is clear from the evidence of record that at the time of his death, the decedent was very close to this point in his recovery.
Dr. Stiehl re-evaluated the decedent on March 3, 2003, and opined that given the decedent's status at that time, he would assess five percent permanent functional disability for mechanical low back pain. However, Dr. Stiehl noted that were rehabilitation and work hardening to go well, permanent disability could be minimal or possibly even zero.
Dr. Johnson noted in a letter dated March 3, 2005, that the decedent had undergone physical therapy and work hardening, but that the work hardening program had been terminated in the summer of 2003, because the decedent had reached the limits of recovery. Dr. Johnson indicated that he saw the decedent on September 23, 2003, shortly before he was shot to death, and advised him to continue stretching exercises and anti-inflammatory medication for his S-1 radiculopathy. Dr. Johnson completed a Functional Capacity Evaluation placing limits on sitting, standing, and walking, no lifting over 19 pounds, and no bending or twisting at the waist. He also opined that the decedent's condition would cause him to miss work more than three times per month, and assessed five-to-seven percent permanent functional disability.
The fact that the decedent's work hardening and physical rehabilitation did not improve his condition leads to the inference that Dr. Johnson's assessment of 5 percent permanent functional disability is credible. This was the same functional disability rating Dr. Stiehl gave under the assumption that rehabilitation and work hardening might not be successful. The decedent's injury was unscheduled, and therefore the permanent partial disability attributable to it includes not only functional disability but also loss of earning capacity. (4)
The vocational assessments of loss of earning capacity range from 40 percent to permanent total disability. The decedent was 47 years old on September 23, 2003, he completed the ninth grade and obtained a GED. He served in the Navy for 20 years where he performed machinist and security duties. After the Navy he worked as a truck driver for several different employers, and his employment with the employer was from September 2000 until his injury on January 25, 2001. Unfortunately, there is uncertainty concerning his average weekly wage with the employer. The ALJ indicated in her written hearing notes that at one point $829.88 per week was conceded. However, ultimately the issue was left open for submission of post-hearing information, and respondents' attorney submitted a post-hearing letter and exhibit (Respondents' Exhibit 7) indicating the correct wage was $705.45 per week. If $705.45 is the correct average weekly wage, there was an overpayment of temporary total disability in the amount of $12,218.06, which respondents request to be offset against any additional award. The ALJ did not address the wage issue in her order, because she found no death benefits were due.
Given the uncertainty in the record regarding the correct average weekly wage, the commission is unable to make an informed assessment of loss of earning capacity. Accordingly, the commission will remand the matter to the department for resolution of the average weekly wage and loss of earning capacity issues. The amount of loss of earning capacity found by the department will be the permanent partial disability caused by the work injury, and will quantify the amount of the death benefits. However, should the resolution of the average weekly wage issue result in an overpayment of temporary total disability, that overpayment amount shall offset against the permanent partial disability, and thus reduce the death benefits by a like amount. This is because overpayments of temporary disability offset against permanent disability payments, and vice versa. See McCune v. Industrial Commission, 260 Wis. 499, 501-02, 50 N.W.2d 683 (1952); Harnischfeger Corp. v. LIRC and Frank Luksic, Jr., No. 00-CV-002225 (Wis. Cir. Ct. Milwaukee County January 29, 2001); and Jeannette Joyce Rose v. Daimler Chrysler Corp., WC Claim No. 1999-054818 (LIRC September 28, 2001).
After making its findings regarding the amount of permanent partial disability, and thus the amount of death benefits, the department shall distribute the death benefits pursuant to the statutes regulating such distribution (Wis. Stat. § 102.47 through 102.51).
In order to make this an appealable order, and because it is clear from the evidence that even the lowest loss of earning capacity assessment would exceed the alleged overpayment amount of $12,218.06, death benefit awards of $100.00 each shall be ordered paid to Roxanna Vanderzee, Kathleen Michelle Vanderzee, and Phillip Allen Vanderzee, less attorney fees.
NOW, THEREFORE, this
The matter is remanded to the department for resolution of the average weekly wage and loss of earning capacity issues, and for resolution of the death benefits due in accordance with the above findings.
Dated and mailed January 26, 2006
vandeda . wpr : 185 : 2 ND § 6.2 § 6.9
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
NOTE: The commission's reversal of the administrative law judge's decision was based on a legal analysis that differed from the administrative law judge's analysis concerning the threshold issue of standing. Accordingly, credibility was not at issue.
cc:
Roxanna Vanderzee
Attorney Richard A. Fortune
Attorney Peter L. Topczewski
Jennifer Lattis
Abby Butler
Appealed to Circuit Court. Reversed August 25, 2006. Appealed to the Court of Appeals. Circuit Court decision reversed, LIRC decision reinstated, Edward Bros. and Liberty Mutual v. LIRC and Vanderzee, 2007 WI App 128, 300 Wis.2d 638, 731 N.W.2d 302
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