Evensen v. George Risk Indus. ( 2015 )

IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
(Memorandum Web Opinion)
EVENSEN V. GEORGE RISK INDUS.
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
ROBERT EVENSEN, APPELLEE,
V.
GEORGE RISK INDUSTRIES, INC., AND TRAVELERS CASUALTY
INSURANCE COMPANY OF AMERICA, APPELLANTS.
Filed January 27, 2015. No. A-14-601.
Appeal from the Workers’ Compensation Court: MICHAEL K. HIGH, Judge. Affirmed in
part, and in part reversed.
James D. Garriott, of Cassem, Tierney, Adams, Gotch & Douglas, for appellants.
John K. Sorensen, of Sorensen, Hahn & Morgan, P.C., for appellee.
MOORE, Chief Judge, and INBODY and PIRTLE, Judges.
MOORE, Chief Judge.
INTRODUCTION
George Risk Industries, Inc. and Travelers Casualty Insurance Company of America (the
Appellants) appeal from an award of benefits to Robert Evensen entered by the Nebraska
Workers’ Compensation Court. The Appellants assert that the compensation court failed to
provide sufficient credit for indemnity benefits they paid and erred in awarding a waiting time
penalty under Neb. Rev. Stat. § 48-125 (Cum. Supp. 2012) for failure to pay benefits. We find
the Appellants were given the appropriate credit for their previous indemnity payments.
However, we find clear error in the award of a waiting time penalty. Thus, we affirm in part, and
in part reverse.
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BACKGROUND
Evensen began working for George Risk Industries in 1980 in the maintenance
department and after two or three years, he became an assistant toolmaker, making injection
molds. On November 8, 2007, Evensen sustained a work-related injury to his back. Evensen
received medical treatment, but he continued to work until January 7, 2008 when he sustained a
work-related injury to his neck and upper back and aggravated his lower back injury. Evensen
was off work until March 2, 2009, when he returned to part-time, light duty work. On June 12,
he stopped work due to increased pain. Evensen continued to require ongoing medical treatment
after the January 2008 injury and was still receiving medical treatment at the time of trial.
One of Evensen’s doctors referred him for a Functional Capacity Evaluation (FCE),
which was conducted on several dates between October and December 2009. The FCE showed
that Evensen could work at the light physical demand level for activity from above the waist to
shoulder height and at the medium light physical demand level for activity from below the waist
to the knee. The FCE showed that he should avoid overhead lifting, reaching, and lifting from
the floor level.
On February 13, 2010, Dr. Michael Blei examined Evensen for the Appellants and
concluded that Evensen had sustained an 8-percent whole person impairment. Blei agreed that
the work restrictions set forth in the FCE were appropriate. Blei concurred with the
determination of Evensen’s treating physician that Evensen had reached maximum medical
improvement (MMI) by September 22, 2009.
Lisa Porter, a court-appointed vocational counselor, completed a loss of earning capacity
evaluation of Evensen. Porter submitted an initial report, dated July 30, 2012, and completed her
assessment on September 24. In her September report, Porter concluded that Evensen had
sustained a l00-percent loss of earning capacity as a result of his work-related injuries.
Trial was held before the compensation court on October 17, 2012 and was continued to
December 5 to allow for preparation and receipt of a rebuttal loss of earning capacity report.
During the December hearing, the court received a rebuttal loss of earning capacity report
prepared by Ronald Schmidt. Schmidt’s report was dated November 20. Schmidt concluded that
Evensen had lost between 40- and 50-percent of his earning capacity as a result of his
work-related injuries. The court also received a surrebuttal report prepared by Porter. Porter
addressed some concerns raised in Schmidt’s report and again concluded that Evensen had
sustained a 100-percent loss of earning capacity.
On June 3, 2014, the compensation court entered an award of benefits to Evensen. The
court noted that Evensen made no claim for unpaid or underpaid indemnity benefits through June
12, 2009. The court determined that when Evensen ceased work on June 12, his condition was
stabilized and that his date of MMI was June 13. The court further determined that Evensen was
permanently and totally disabled from and after June 13 and ordered the Appellants to pay
permanent total disability benefits starting June 13 for as long as Evensen remained permanently
and totally disabled. The court determined that Evensen had sustained a 100-percent loss of
earning capacity. In addressing Evensen’s claim for penalties for the balance of unpaid
indemnity, the court stated:
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Evensen makes a claim for penalties for indemnity benefits remaining unpaid as of the
time of trial which were over and above the payments made on the basis of the 8 percent
impairment rating given by [Blei]. There is merit to this position at least up to the 40
percent loss of earning power rating provided by [Schmidt]. An Impairment rating does
not equate to a loss of earning power. There may have been an overpayment of certain
benefits in the case but the calculations for the period of time from June 12, 2009,
through the initial trial date in this case of October 17, 2012, show that for that period of
time there was no controversy that [Evensen] was entitled to at least a 40 percent loss of
earning power payment.”
The court calculated, based on 40-percent of the benefits to which Evensen was entitled during
that period, that there was no dispute that the Appellants owed at least $36,957.32. The court
calculated that from June 13, 2009 through October 17, 2012, the first trial date, the Appellants
paid permanent partial disability payments totaling $13,097.67 based on Blei’s 8-percent
impairment rating. The court determined that the Appellants had underpaid indemnity benefits
during this period by $23,859.65, but it credited them with the $13,097.67 they did pay. The
court assessed a 50-percent waiting time penalty of $11,929.83 on the underpaid amount. The
court ordered the Appellants to pay certain unpaid medical bills, expenses, and lost salary
Evensen’s wife sustained because she was required to drive him to and from certain medical
appointments.
ASSIGNMENTS OF ERROR
The Appellants assert that the compensation court erred in (1) providing them with credit
only for indemnity paid through June 12, 2009 and not for benefits paid after that date and (2) in
awarding a 50-percent waiting time penalty of $11,929.83 under § 48-125 for failing to pay
benefits based on a report that had not been received or even prepared at the time of trial.
STANDARD OF REVIEW
The judgment made by the compensation court shall have the same force and effect as a
jury verdict in a civil case. Clark v. Alegent Health Nebraska, 285 Neb. 60, 825 N.W.2d 195
(2013). A judgment, order, or award of the compensation court may be modified, reversed, or set
aside only upon the grounds that (1) the compensation court acted without or in excess of its
powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient
evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings
of fact by the compensation court do not support the order or award. Id.
On appellate review, the findings of fact made by the trial judge of the Workers’
Compensation Court have the effect of a jury verdict and will not be disturbed unless clearly
wrong. Clark v. Alegent Health, supra. If the record contains evidence to substantiate the factual
conclusions reached by the trial judge in workers’ compensation cases, an appellate court is
precluded from substituting its view of the facts for that of the compensation court. Id. An
appellate court is obligated in workers’ compensation cases to make its own determinations as to
questions of law. Id.
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ANALYSIS
Credit for Indemnity Paid.
The Appellants assert that the compensation court erred in providing them with credit
only for indemnity paid through June 12, 2009 and not for benefits paid after that date. Their
argument is based on an incorrect reading of the compensation court’s award. On the final page
of the award, the court stated, “[Appellants] are entitled to a credit for payment to [Evensen] of
indemnity benefits actually paid up through June 12, 2009, and as more specifically set forth
above.” As we have already noted, in the analysis portion of the court’s award, it determined that
from June 13, 2009 through October 17, 2012, the Appellants owed indemnity benefits of at least
$36,957.32. The court calculated that from June 13, 2009, through October 17, 2012, the first
trial date, the Appellants paid permanent partial disability payments totaling $13,097.67 based on
Blei’s impairment rating. The court determined that the Appellants had underpaid indemnity
benefits during this period by $23,859.65, but it credited them with the $13,097.67 they did pay.
This assignment of error is without merit.
Waiting Time Penalty.
The Appellants assert that the compensation court erred in awarding a 50-percent waiting
time penalty of $11,929.83 under § 48-125 for failing to pay benefits based on a report that had
not been received or even prepared at the time of trial. Specifically, the Appellants argue that the
court incorrectly based its award of waiting time penalties on Schmidt’s November 20, 2012 loss
of earning capacity report.
Section 48-125 requires an employer to pay the 50-percent waiting-time penalty in the
following circumstances: if (1) the employer fails to pay compensation within 30 days of the
employee’s notice of a disability and (2) no reasonable controversy existed regarding the
employee’s claim for benefits. Manchester v. Drivers Mgmt., 278 Neb. 776, 775 N.W.2d 179
(2009). A reasonable controversy may exist (1) if there is a question of law previously
unanswered by the appellate courts, which question must be answered to determine a right or
liability for disposition of a claim under the Nebraska Workers’ Compensation Act, or (2) if the
properly adduced evidence would support reasonable but opposite conclusions by the Nebraska
Workers’ Compensation Court concerning an aspect of an employee’s claim for workers’
compensation, which conclusions affect allowance or rejection of an employee’s claim, in whole
or in part. Id. Whether a reasonable controversy exists under § 48-125 is a question of fact. Id.
To avoid the penalty provided for in § 48-125, an employer need not prevail in the employee’s
claim-it simply must have an actual basis in law or fact for disputing the claim and refusing
compensation. Stacy v. Great Lakes Agri Marketing, Inc., 276 Neb. 236, 753 N.W.2d 785
(2008).
The Appellants paid permanent disability benefits based upon Blei’s 8-percent
impairment rating from June 13, 2009 to the first trial date on October 17, 2012. There is no
evidence in the record that any other impairment rating, or loss of earning capacity opinion, was
completed until September 24, 2012. Further, there is no evidence in the record that the
Appellants possessed Porter’s report for more than 30 days as of October 17. Trial was continued
to December 5, and on that date, the court received Schmidt’s November 20 report into evidence.
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The Appellants argue further that there is no evidence that they possessed Schmidt’s report for
more than 30 days as of either trial date. Evensen argues that the trial court correctly assessed
waiting time penalties because there was evidence in the record that would have supported a
finding of total permanent disability even if no loss of earning power reports had been
completed. The question is not, however, whether the court correctly determined that Evensen
was totally and permanently disabled. The question is whether there was a reasonable
controversy as to Evensen’s loss of earning capacity above the 8-percent paid by the Appellants
and whether the trial court erred in basing its finding of no reasonable controversy as to at least a
40-percent loss on Schmidt’s report.
We find that the compensation court clearly erred in basing its award of waiting time
penalties on the 40-percent loss of earning capacity set forth in Schmidt’s November 20, 2012
report. While there may have been evidence to support a finding of total disability prior to the
formal reports prepared in 2012 as argued by Evensen, the trial court obviously relied upon the
reports both in determining the extent of Evensen’s earning capacity and in its determination that
no reasonable controversy existed. There is no evidence that either loss of earning report was
received more than 30 days before the commencement of trial. Porter’s September 24, 2012
report showing a 100-percent loss of earning capacity was received into evidence on the first trial
date of October 17, less than 30 days later. At the close of evidence on October 17, trial was
continued so that the Appellants could obtain a rebuttal loss of earning power report. Thus, as of
October 17, there was still a reasonable controversy as to the degree of Evensen’s loss of earning
capacity. The Appellants offered Schmidt’s rebuttal report, dated November 20, at the continued
trial on December 5. At that point, there was no longer a reasonable controversy at least to a
40-percent loss of earning capacity. However, the trial court awarded the waiting time penalty
from June 13, 2009 to October 17, 2012, a period ending more than a month prior to the date of
Schmidt’s report. It was clear error for the trial court to base its award of waiting time penalties
for this period on the loss of earning capacity set forth in Schmidt’s November 20, 2012 report,
and we reverse that portion of the award. We further observe that less than 30 days had elapsed
from the time of Schmidt’s report to the second trial date on December 5. There was no
additional evidence offered or received on that date about payments made by the Appellants.
Accordingly, any award of waiting time penalties as of December 5 based on Schmidt’s report
would have been premature as well.
CONCLUSION
The compensation court correctly credited the Appellants for indemnity benefits paid
from Evensen’s date of MMI through the first trial date. The court erred in awarding waiting
time penalties based on Schmidt’s loss of earning capacity report, and we reverse that portion of
the award.
AFFIRMED IN PART, AND IN PART REVERSED.
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