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


DAVID GALE, Applicant

BILLS TAXIDERMY, Employer

WORKER'S COMPENSATION DECISION
Claim No. 93058503


The administrative law judge issued his Findings of Fact and Interlocutory Order in this case on February 15, 1995, following a hearing on November 22, 1994. Both parties submitted timely petitions for commission review of the administrative law judge's Findings and Order. Thereafter, both parties submitted briefs.

Prior to the hearing, the employer conceded jurisdictional facts. The issues are: the amount of applicant's average weekly wage, whether at the time of the alleged injury the applicant was performing services growing out of and incidental to employment, whether the alleged injury arose out of the applicant's employment, the nature and extent of disability, and liability for medical expenses.

The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. After consulting the administrative law judge concerning the credibility and demeanor of the witnesses, the commission hereby sets aside his Findings of Fact and Interlocutory Order, and substitutes the following therefor:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant was born in 1965, and is a taxidermist. He began working for the employer, William Brown, a sole proprietor doing business as Bill's Taxidermy, in the summer of 1992. At first, the applicant was considered a "subcontractor," although he worked at the employer's premises and was paid at an hourly rate rather than by the job.

On or about June 1, 1993, the employer began to consider the applicant a formal "employe." He worked as an "employe" until he was discharged by the employer on October 4, 1993. As of June 1, 1993, the employer began withholding income taxes, and started paying FICA and UC taxes. When the applicant became an "employe," the employer told him he had worker's compensation coverage.

The employer in fact never carried worker's compensation insurance, apparently relying on advice from an accountant that it was not necessary. The questions of coverage and the duty to insure were not at issue at the hearing. The employer concedes it was subject to the worker's compensation laws.

As of June 1, 1993, the applicant was paid $10.00 per hour, and was hired to work 40 hours per week. However, he averaged only 27.29 hours per week from June 1 until his discharge on October 4, 1993, although more work was available according to the employer. From mid-June to mid-July 1993, the applicant worked for another employer (Neco Hammond), but otherwise fails to explain fully why he worked for the respondent- employer only part-time.

The applicant earned $4,905 during the months the employer considered him an "employe", according to his W-2 for 1993 (Exhibit L). He worked 491.25 hours during this 18-week period from June 1 to October 4, 1993, for an average of 27.29 hours per week. No one disputes this calculation.

The applicant alleges a low back injury on July 28, 1993 when he fell off a broken chair at work. The employer admitted that he heard a crash and saw the applicant on the floor. The applicant suffered immediate pain in his back, and subsequent pain in his knees and head as well. However, the applicant was able to finish out the day.

The applicant began treating with Michael D. Plooster, M.D., on August 2, 1993. Dr. Plooster's notes refer to the applicant falling on his left hip from a broken chair at work. The doctor noted complaints of pain, weakness and achiness. The doctor also noted that the applicant had not missed work, but that the applicant told the doctor he could not do his full duty. Significantly, Dr. Plooster also noted prior back problems, specifically disk, problems in the "distant past."

Dr. Plooster diagnosed acute sciatica syndrome involving the "SI nerve root" on the right. He prescribed some pain medications and told the applicant to be very careful about his activity. He released the applicant to "light medium work" which allowed lifting up to 30 pounds. In fact, Dr. Plooster wrote an "attending physician's return to work" slip dated August 2, 1993, setting out these restrictions.

The applicant returned to Dr. Plooster on several occasions thereafter. On August 9, the doctor noted that the straight-leg-raising orthopedic test was positive, so he ordered an MRI. That was done on August 10, and showed a small lateral disc herniation at L5-S1. On August 12, 1993, Dr. Plooster noted radicular symptoms and diagnosed back sprain and herniated disc.

By the end of August, the doctor noticed little improvement and that the applicant's symptoms (including radiating pain into the foot) appeared to be even a little worse. He prescribed physical therapy. In September, Dr. Plooster noted that the applicant continued to work full-time and had gone deer hunting. In a report dated December 22, 1993, Dr. Plooster diagnosed facet syndrome precipitated by an event in July 1993. The doctor noted continuing symptoms on March 30, 1994, and opined that the applicant did not have a surgical problem, and that his symptoms would continue into the indefinite future.

Dr. Plooster prepared a practitioner's report on May 23, 1994. In it, he stated that the work injury caused disability by aggravation, acceleration and precipitation of a pre-existing degenerative condition beyond normal progression. He reported the applicant could return to work with permanent restrictions as of March 30, 1994. He attached a functional capacity report which basically restricted the applicant from bending, squatting, crawling, climbing or reaching more than occasionally, and from ever lifting more than 50 pounds.

Dr. Plooster also assessed permanent partial disability at 2 percent compared to disabilty to the body as a whole. He opined that further treatment might be necessary, and that medical treatment he had rendered to date was reasonable and necessary. He also stated that the applicant did not have any pre-existing disability.

In fact, the applicant had been given a 4 percent or 5 percent disability rating under the AMA standards in 1991 following a non-work car accident in 1990 causing a back injury. Material about this injury is in applicant's Exhibit A and respondent's Exhibit 1. Significantly, an MRI done in October 1990 (after this car accident) was normal; it did not show the herniation which was noted by Dr. Plooster after the July 1993 work injury. Further, the medical records dealing with the 1990 car crash indicate that the applicant had no treatment for that injury after January 1991, although he continued to complain of pain in June 1991 when he was examined by an insurer's doctor. Exhibit 2.

The applicant asked Dr. Plooster to comment on the disc herniation which appeared in the August 1993 MRI but not the October 1990 MRI. Dr. Plooster refused to conclude "absolutely" that the work injury caused the herniation, and stated that he did not believe the herniation had any clinical significance anyway.

The applicant then asked Dr. Plooster to comment on the disability rating the applicant was given after the 1990 car accident. The doctor noted that the applicant had informed him about prior back problems in the initial visit and that the applicant told him the prior back problems were not symptomatic prior to the work injury. Dr. Plooster admitted he was not aware that the applicant had previously been rated for permanent disability, but concluded:

"Knowledge of such prior restrictions would not have changed my assessment of the permanency which [the applicant] sustained as a result of the July 26, 1993 accident. You have asked various questions regarding the prior permanency awards given by other physicians. It is my opinion that these prior permanency awards had no bearing on the patient's permanency rating assigned by me at 2% based on his work injury of July 26, 1993.

"It is my opinion that Mr. Gale's back injury of July 26, 1993 did indeed aggravate and accelerate a progressively deteriorating condition beyond its normal progression. It is my opinion that Mr. Gale's condition did not return to its pre-injury state as a consequence of the injury of July 26, 1993."

Dr. Plooster's letter dated September 20, 1994; Exhibit B.

The employer submitted no report from a medical expert to counter Dr. Plooster's opinions.

The applicant also offers a report of vocational expert on loss of earning capacity. His expert, Leslie Goldsmith, did not discuss the 1990 car accident or the disability therefrom. He did note that the pain from the injury caused the applicant to quit a part-time factory job at Neco Hammond where the applicant earned $8.00 per hour. He concluded:

"As for his present capacity and loss, it seems to me that he is still capable of working full-time as a taxidermist, as demonstrated by his post-injury employment history, both working for himself and for someone else. Based on his account to me at the interview, he has been able to work successfully in the same three situations that existed before the injury: an employee of another taxidermy shop, subcontractor, and self-employment. I have no verification of his post-injury income, but it appears that he is earning about the same level of income for his services as before.... [The applicant] states that his post-injury earnings are less due to his part-time status. But Dr. Plooster's restrictions do not preclude full-time work. I would therefore conclude that he probably has not suffered any loss of actual earnings because of his back injury.

"There may be times when he cannot fully function as a taxidermist, particularly when required to lift more than the 50 pound limit imposed by Dr. Plooster. It is therefore entirely possible, if not probable, that during the course of his career he will experience a loss of income because he is unable to find or hold jobs. Perhaps more importantly, as we have seen in the instance of the factory job, there will be other jobs which he clearly cannot do, such as [jobs requiring repetitive bending or full-time sitting or standing]. Before the injury, Mr. Gale could resort to this type of work in order to supplement his income. This option is no longer available to him, thus he has experienced a loss of access to the job market. There will be other jobs he can do, such as sedentary production, retail sales, and janitorial/cleaning ... [which] pay in the $5.00 to $6.00 range and typically do not pay as well as factory work. I therefore conclude that Mr. Gale will likely experience a decrease in his long-term earning capacity which I would rate at 15 to 20 percent. [Emphasis supplied.]"

Exhibit B, pages 4 and 5.

The employer did not offer its own report from a vocational expert to counter Mr. Goldsmith's.

The commission concludes that the applicant suffered a work-related injury on July 28, 1993. The injury caused temporary disability through March 30, 1994 when the applicant was released to work with permanent restrictions by Dr. Plooster. The applicant is thus entitled to compensation for temporary disability from the time of his discharge on October 4, 1993 to the healing plateau date of March 30, 1994, a period of 25 weeks and one day.

During this period of temporary disability, the applicant earned wages from self-employment or other employers. Specifically, applicant's Exhibit K shows $810 from Dan's Taxidermy. Further, the employer submitted a computer-printout from Neco Hammond which shows $1,032.65 paid in wages between January 8 and February 26, 1994. Exhibit 6. The parties agree that the applicant earned $760 in wages from Animal Arts Taxidermy. Finally, the applicant also admits $79.12 in self-employment during this period. See Exhibit K. These earnings, totaling $2,681.77, must be taken into account when determining the applicant's award for temporary partial disability under sec. 102.43 (2), Stats.

Before doing so, however, the commission must determine the applicant's temporary total disability rate, which in turn depends on his average weekly wage. The applicant contends the average weekly wage should be expanded to full time at 40 hours per week. The employer contends that the average weekly wage should be restricted to his actual earnings from the employer at the 27.29-hour per week average set out above.

The general rule is that part-time hours are expanded to full-time hours, normally assumed to be 40 hours per week, for the purposes of determining the statutory "average weekly wage." Sections 102.11 (1)(a) and (c), Stats. See Neal & Danas, Worker's Compensation Handbook, sec. 4.6 to 4.8 (3d ed. 1990).

There are two provisions affecting this general rule. First, under sec. 102.11 (1)(f)2, Stats., a part-time worker's temporary disability rate is limited to his actual part-time wages if the part-time worker restricts his availability to part-time work and does not work elsewhere. Assuming that the applicant here restricted his availability, his temporary disability rate (as distinguished from his average weekly earnings) would be restricted to his actual wages from the employer.

Stated another way, the law does not prohibit the expansion to a full-time wage in this case, even if the applicant restricted himself to part-time work. Rather, the applicant's temporary disability rate based on the "expanded wage" may not exceed $272.90 (his actual average weekly hours of 27.29 times his $10.00 wage rate) under sec. 102.11 (1)(f)2, Stats. This limit is actually higher than the applicant's $266.67 temporary total disability rate using the expanded weekly wage of $400. Thus, sec. 102.11 (1)(f)2, Stats., does not affect this applicant's average weekly wage.

The second situation affecting the "expansion" of part-time wages applies to a worker who is a "member of a regularly scheduled class of part time employes." Such a worker's average weekly wages are not expanded, but are instead the greater of his actual part-time earnings or 24 times his hourly wage. This exception grows out of the Supreme Court's holding in Carr's Inc. v. Industrial Commission, 234 Wis. 2d 466, 290 N.W. 170 (1940), and codified at sec. IND 80.59, Wis. Adm. Code, and sec. 102.11 (1)(f)1, Stats.

In this case, the applicant was the employer's only worker and was hired to work full time. He is not a member of a regularly-scheduled class of part-time employes. The Carr's Inc. exception does not apply.

In sum, the commission expands the applicant's average weekly wages to $400 per week. This results in a temporary total disability rate of $266.67. However, because the applicant earned some money while he was temporarily disabled, he is not eligible for temporary total disability. Instead, the applicant is entitled to temporary partial disability.

Under sec. 102.43 (3), Stats., temporary partial disability is paid at the temporary total disability rate, reduced by the same proportion as the applicant's "actual wage loss" bears to the average weekly earnings. The department's footnote to sec. 102.43 (3), Stats., explains:

"In the case of partial disability occasioning a wage loss, proportionate compensation is paid. For example if an employe earns 50 percent of his or her wage, the employe would also be entitled to 50 percent of the compensation for temporary total disability."

DILHR Worker's Compensation Act of Wisconsin, publication WKC-1-P R.05/92), note 109.

The first step in determining temporary partial disability using this proportional offset is to determine the applicant's earnings from his discharge in October 4, 1993 to his healing plateau on March 30, 1994 (hereafter the TPD period) at a weekly rate. The total earnings during the TPD period were $2,681.77. Averaging this over the 25.167 weeks of the TPD period comes to $106.56 per week. The second step is to determine actual wage loss. In this case, the "actual wage loss" equals the expanded average weekly wage minus the applicant's weekly earnings ($400 minus $106.56), or $293.44. The third step is to determine the proportion of the actual wage loss to the average weekly wage ($294.13 divided by $400) or 0.7336. The fourth step is to apply this decimal fraction to the applicant's temporary total disability rate of $266.67, yielding the applicant's temporary partial disability rate of $195.63. The final step is to multiply the $195.63 temporary partial disability rate by the 25.167 weeks in the TPD period, yielding a total award for temporary disability of $4,923.42.

The next issue is permanent partial disability. The commission concludes from Dr. Plooster's note in Exhibit B that he rated the 2 percent in addition to the previous impairment, or, more accurately, that he thought the work injury caused an additional 2 percent permanent partial disability to the body as whole. He specifically said that the 2 percent permanent partial disability he rated for the work injury was not affected by the prior rating under the AMA standards for the automobile accident. He also stated that, after the work injury, the applicant's back did not return to its pre-injury state.

The employer asserts that the applicant misrepresented to Dr. Plooster that his prior injury was in the "distant past" when it was only 2.5 years earlier. However, the commission cannot agree that the applicant misrepresented his medical history to Dr. Plooster on this point. Moreover, Dr. Plooster was subsequently informed about the date of the prior problem and the treatment the applicant received for it. Nonetheless, he reiterated his opinion that the work injury caused the disability.

Further, the facts remain that the applicant had apparently stopped treating for the June 1990 car accident injury in January 1991, that he did fall off a chair at work in July 1993, and that he sought treatment for his back on a fairly regular basis thereafter. Finally, the employer did not offer the report of any medical expert offering contrary medical opinion on causation or extent of permanent disability.

The commission therefore finds that the applicant sustained permanent partial disability on a functional basis at 2 percent compared to a permanent total disability to the body as a whole. This results in 20 weeks of permanent partial disability at the rate of $152 per week (the statutory maximum rate for injuries occurring in 1993.) The applicant is thus entitled to an award of $3,040 for permanent partial disability, all of which has accrued.

However, the commission declines to award any amounts beyond this for loss of earning capacity. Mr. Goldsmith's report at most supports a future loss of earning capacity in a speculative amount. The applicant has the burden of proof on this issue, and that Mr. Goldsmith's report left the Commission with a legitimate doubt. Thus, taking into account the effect that the applicant's permanent restrictions has on his present and potential earnings in view of the factors set out in sec. Ind. 80.34, Wis. Adm. Code, the commission cannot conclude that the applicant's loss of earning capacity exceeds the amount already awarded for functional disability.

The applicant also approved an attorney fee of 20 percent under sec. 102.26, Stats. The percentage fee is based on the additional temporary total and permanent partial benefits awarded under this decision. The total fee is thus $1,592.68 {20 percent of ($4,923.42 plus $3,040.00)}. Costs of $714.80 were also established. Both amounts shall be deducted from the applicant's total award and paid within 30 days.

The next issue is medical expenses. The applicant incurred the following reasonable and necessary medical treatment expense to cure and relieve the effects of the work injury: $752.50 from St. Clare Hospital, none of which has been paid; $629.50 from Orthopedic Specialists, of which $483.00 was paid by Mutual of Omaha and $150.87 was paid by the employer's wife ; $180 from Physical Therapy Associates, none of which has been paid. All of this treatment (except for two office visits to Dr. Plooster) was rendered during the healing period. Further, Dr. Plooster specifically stated his treatment was reasonable and necessary, and again there is no contrary opinion.

The last issue is the applicant's request for an interlocutory order on his unreasonable refusal to rehire and failure to insure penalty claims. Under sec. 102.18 (4)(a), Stats., unless liability for an unreasonable refusal to rehire claim is specifically mentioned in an order, the order is deemed not to affect the liability, so an interlocutory order retaining jurisdiction is not strictly necessary. Further, neither penalty issue was noticed for hearing.

In sum, jurisdiction is retained for future medical treatment expense and with respect to issues raised in the application but not noticed for hearing. With respect to the issue of primary compensation, however, this order is final.

Now, therefore, the Labor and Industry Review Commission makes this

INTERLOCUTORY ORDER

The decision of the administrative law judge is affirmed in part and reversed in part, consistent with the foregoing. Accordingly, within 30 days from the date of the decision, the employer and its insurer shall pay all of the following: (1) To the applicant, David Gale, the sum of Five thousand six hundred fifty-five dollars and ninety-four cents ($5,655.94) for disability. (2) To the applicant's attorney, Robert A. Kay, the sum of One thousand five hundred ninety-two dollars and sixty-eight cents ($1,592.68) as attorney fees and Seven hundred fourteen dollars and eighty cents ($714.80) as costs. (3) To St. Clare Hospital, the sum of Seven hundred fifty-two dollars and fifty cents ($752.50) for medical treatment expense. (4) To Physical Therapy Associates, the sum of One hundred eighty dollars and no cents ($180.00) for medical treatment expense. (5) To Mutual Omaha, the sum of Four hundred eighty- three dollars and no cents ($483.00) in reimbursement of medical treatment expense. Jurisdiction is retained to issue such further orders as are warranted, consistent with this decision.

Dated and mailed June 20, 1995
ND 4.7

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner

MEMORANDUM OPINION

The commission conferred about witness credibility and demeanor with the administrative law judge who presided at the hearing. Transamerica Ins. Co. v. ILHR Department, 54 Wis. 2d 272, 283-84 (1972). The administrative law judge found the applicant to be a credible witness with respect to the facts of the injury. The commission does not dispute that assessment, and did not modify the administrative law judge's order on the basis of a different view of the credibility of the witnesses who testified.

First, as noted in his decision, the administrative law judge awarded no permanent disability because he was "unable to conclude that the 2 percent permanent partial disability found by Dr. Plooster is in addition to the previously found 4 or 5 percent impairment." The commission reached the opposite conclusion for the reasons set out above.

The administrative law judge also stated that he believed the applicant limited himself to part-time work. The commission accepts this credibility determination. However, it expanded the applicant's wage to full-time, as set out above, based on its reading of sec. 102.11, Stats.

cc: ATTORNEY ROBERT A KAY

ATTORNEY JEAN M WILSON
CROSS JENKS MERCER & MAFFEI


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