BEFORE THE IOWA WORKERS’ COMPENSATION …



BEFORE THE IOWA WORKERS’ COMPENSATION COMMISSIONER

______________________________________________________________________

:

MICHAEL SHEHAN, :

:

Claimant, :

:

vs. :

: File No. 5029730

DeLONG SPORTSWEAR, INC., :

: A R B I T R A T I O N

Employer, :

: D E C I S I O N

and :

:

EMCASCO INSURANCE COMPANY, :

:

Insurance Carrier, :

Defendants. : Head Note No.: 1804

______________________________________________________________________

STATEMENT OF THE CASE

This is a contested case proceeding in arbitration under Iowa Code chapters 85 and 17A. Claimant, Michael Shehan, sustained a stipulated work injury in the employ of defendant DeLong Sportwear, Inc., on March 19, 2008, and now seeks benefits under the Iowa Workers’ Compensation Act from that employer and its insurance carrier, defendant EMCASCO Insurance Company.

The claim was heard in Des Moines, Iowa, on September 9, 2010, and deemed fully submitted on September 23, 2010, after briefs were due. The record consists of Shehan’s exhibits 1-24, defendants’ exhibits A-N, and the testimony of Shehan and his wife, Deb Shehan.

ISSUES

STIPULATIONS:

1. Shehan sustained injury arising out of and in the course of employment on March 19, 2010.

2. The injury caused temporary disability.

3. Permanent disability, if any, should be compensated by the industrial method (loss of earning capacity).

4. On the date of injury, Shehan had average weekly wages of $164.81, and was married with two exemptions.

5. Entitlement to medical benefits is not in dispute.

6. Defendants voluntarily paid 90.714 weeks of compensation at the rate of $167.39 prior to hearing.

ISSUES FOR RESOLUTION:

1. Extent of temporary disability.

2. Whether the injury caused permanent disability.

3. Extent and commencement date of permanent disability.

4. Whether defendants are entitled to credit for benefits paid.

5. Whether penalty benefits should be assessed.

FINDINGS OF FACT

Michael Shehan, age 61, graduated from high school in 1967 and earned a two-year Associate’s degree in 1969. Shehan also completed an apprenticeship in machine maintenance, but has no other formal training.

Shehan served in the United States Marines from 1969 to 1971 on active duty and as a reserve until his honorable discharge in 1975. His subsequent employment history consists of one month as a production worker for Chamberlain Manufacturing and 32 years as a production worker for John Deere, a nationally known manufacturer of tractors and other heavy machinery. At John Deere, Shehan worked various production jobs: presses, machines, welding, assembly, and, particularly, in machine maintenance. The work had significant physical requirements, such as bending and stooping, along with frequent lifting up to 50 pounds. Shehan retired with a full pension in 2004.

At the time of his retirement, Shehan had no medically-imposed work or activity restrictions, but did have a history of high eye pressure, nonsurgical back problems, and cancer.

Following his retirement from John Deere, Shehan accepted a part time janitor’s job for DeLong Sportswear in October 2004. DeLong Sportswear is a manufacturer of sportswear such as award jackets. Shehan cleaned production areas, the lunch room, and toilet facilities along with providing assistance to the maintenance worker. He describes the job as “not too” physically demanding, but with some required lifting, especially of rain water containers strategically placed under a leaky roof. Shehan worked 6 hours per day to a maximum of 30 hours per week.

On March 19, 2008, Shehan was severely injured in a fall from a ladder. He was first taken to Monroe County Hospital, then transported via life-flight helicopter to Mercy Medical Center in Des Moines. A CT scan disclosed a compression or “burst” fracture at L1 encroaching upon the spinal canal with a hematoma. (Exhibit 3, page 7) An MRI scan on March 20, 2008, disclosed an assortment of disc bulges and endplate spurs at every level from L1 to S1. (Ex. 5, p. 20) An extensive surgical repair was accomplished on March 27, 2008 by Mary Louise Hlavin, M.D., and Paul Conte, M.D., following consultation with Cassim Igram, M.D. Dr. Hlavin described the procedure as: transthoracic corpectomy with takedown of diaphragm and retroperitoneal exposure with L1 corpectomy with a Pyramesh cage and posterolateral plating from T12 to L2. (Ex. 5, p. 32) During his weeks in the hospital, Shehan also experienced catheterization issues which he attributes to faulty placement of a catheter balloon.

Shehan’s urinary catheterization condition was managed by Stephanie Pothoven, D.O. Substantial care has been given, most recently a surgical cystoscopy with transurethral resection of the prostate accomplished by Dr. Pothoven on April 23, 2010. (Ex. 9, p. 106) Dr. Pothoven’s chart notes of April 25, 2008, offer this comment on the onset of Shehan’s acute symptoms:

Michael presents today for follow up evaluation regarding his acute urinary retention. He recently suffered a fall and suffered a lumbar fracture. A catheter was placed upon admission and traumatized the urethra resulting in gross blood. During his recovery, he has not been able to adequately void and was discharged home on intermittent catheterization. He presents today with his voiding diary, recording all of his voiding volumes and post residual catheter volume. In the last few days, his volumes have been improving and most of the time he appears to be at least emptying his bladder half way. He does continue to have a few larger volume residuals.

(Ex. 9, p. 85)

Shehan continues to experience bladder and continence issues, which he attributes to the improper catheterization following hospital admission. However, on July 22, 2010, Dr. Pothoven completed a checkmark form prepared by defense counsel to signify agreement with each of the following statements:

1. That your diagnosis of Mr. Shehan’s bladder condition is benign prostatic hyperplasia (BPH) with urinary obstruction.

2. That the March 19, 2008 accident did not cause or aggravate Mr. Shehan’s BPH with urinary obstruction.

3. That the need for the surgery performed by you on April 23, 2010 was caused by Mr. Shehan’s BPH with urinary obstruction, a personal condition. The need for the surgery was not related to the March 19, 2008 accident.

4. That you do not recommend any activity restrictions or physical limitations in regard to Mr. Shehan’s bladder or urologic condition.

5. That Mr. Shehan sustained no permanent impairment in regard to his bladder condition.

6. That Mr. Shehan does not have any neurogenic bladder dysfunction.

(Ex. B, pp. 24-25)

It is noted that Dr. Pothoven was not asked and did not answer whether or not Shehan’s bladder condition was caused by improper placement of a catheter upon his hospital admission, as is his theory. However, Shehan had ample time to ask Dr. Pothoven to address that omission, but did not present any contrary evidence. Although Shehan admits to some pre-injury issues with frequent urination, he did not have to self-catheterize (as he did for well over one year post-injury), and had no history of incontinence or the sensation of incomplete bladder emptying as is now the case.

On June 12, 2008, Dr. Hlavin released Shehan to work effective July 1, 2008, with a 30-pound lifting restriction. (Ex. B, p. 15) Shehan immediately returned to his regular job, but with one significant accommodation: instead of working a six-hour shift, he now worked three hours, took a break at home, and returned for another three hours. Shehan continued to work this schedule until DeLong’s closed the plant on June 20, 2009. He thereafter (belatedly) applied for and received unemployment benefits, the eligibility requirements of which include the ability to work and an ongoing search for work. An insurance adjuster for EMCASCO advised Shehan not to apply immediately for unemployment benefits because he would receive workers’ compensation benefits. This proved to be a misrepresentation and no such benefits were forthcoming. Shehan did not find another job during his receipt of unemployment benefits and has now evidently retired entirely from the labor force. In deposition testimony given April 19, 2010, Shehan testified:

Q. So you complied with the Iowa unemployment rules and laws about seeking employment between August of 2009 and March of 2010?

A. Correct.

Q. Have you looked for a job since the Iowa unemployment benefits terminated?

A. Nope.

Q. Do you have any intention or any plans to look for employment?

A. Not at this time, no.

(Ex. I, pp. 66-67)

Dr. Hlavin released Shehan from care on June 10, 2009 with “pain . . . probably 50% reduced from the way it was.” (Ex. 10, p. 116) On the following day, Dr. Hlavin assigned permanent work restrictions: 40 pounds lifting; avoid repetitive lifting, pulling, pushing and bending; stand or sit only one hour at a time. (Ex. 11, p. 117)

On January 11, 2010, Dr. Smith reported:

Mr. Shehan is a gentleman that I followed serially for injuries as a result of a fall. He continues to have problems with numbness in the right foot consistent with radicular findings, and urinary retention, bowel accidents, and erectile dysfunction which are the result of a compression fracture of L1 causing cauda equina syndrome.

(Ex. 11, p. 119)

Dr. Smith rated permanent impairment under the American Medical Association Guides to the Evaluation of Permanent Impairment, Fifth Edition, in several particulars: 15 percent of the whole body for thoracolumbar neurological impairment, 5 percent for station and gait disorders (difficulty with elevation grade, stairs, deep chairs and long distances), 5 percent for bladder impairment, 5 percent for neurological anorectal impairment, and 5 percent for neurological sexual impairment. Total impairment was rated at 35 percent of the body as a whole. (Ex. 11, p. 119)

Occupational physician John D. Kuhnlein, D.O., performed an independent medical evaluation of Shehan on March 16, 2010 and issued his report on April 13, 2010. These excerpts are taken from that report:

Mr. Shehan sustained permanent injuries as a result of the fall and burst fracture of L1 on March 19, 2008. These diagnoses are outlined below:

a. Compression fracture L1 with retropulsion of the spinal canal narrowing greater than 70%, compressing the conus medullaris and all cauda equina nerve roots.

1. Transthoracic L1 corpectomy with diaghragmatic takedown and retroperitoneal exposure, with T12-L2 fusion on March 27, 2008 (Conte, Hlavin, Igram).

2. Diagnosis of acute respiratory failure on the night of the surgery that resolved without sequelae. This was possibly delayed anesthetic recovery in a smoker. He did have right lower lobe atelectasis, and later pneumonia, that resolved clinically with treatment.

3. Cauda equina.

a. Urinary retention with the need to straight cath and increased residual volume. History of traumatic catheterization with possible obstructive uropathy by urodynamic studies.

b. Erectile dysfunction.

c. No true loss of bowel control. He relates that his bowel habits have changed. Even though the records describe constipation, he denies that, he says that his habits are different than they were before.

d. Temperature insensitivity to hot and cold in both buttocks.

4. Right hip contusion – resolved.

5. Aggravation of pre-existing lumbosacral degenerative disc disease.

. . . .

I believe that the March 19, 2008, fall did substantially contribute to a permanent aggravation of his underlying spinal condition. Even though the x-rays today to not show a significant progression of the bony changes in his spine, there is little doubt that the overall spinal dynamics have changed significantly with this injury, which account for the change in lumbar symptoms, and the overall back pain.

. . . .

With respect to the other issues that have arisen as a result of this injury, it looks as though he is going to continue to need to perform the straight catheterization on himself for the foreseeable future. Dr. Pothoven has apparently discussed transurethral prostate resection (TURP) and he is now considering this. If the reason for this is determined to be an obstructive neuropathy related to the traumatic catheterization, then it would be related to the worker’s compensation case. If the findings at surgery are determined to be due to the natural aging process, then it would not be. I would of course defer to Dr. Pothoven’s judgment in this regard.

. . . .

I would suggest that Mr. Shehan lift 20 pounds occasionally from floor to waist, 20 pounds occasionally from waist to shoulder, and 20 pounds occasionally over the shoulder. If he is lifting more than elbow’s distance away from his body, I would suggest that he lift 20 pounds occasionally. I would suggest that Mr. Shehan not work on uneven surfaces. Endurance is an issue, and so he probably is going to have difficulty working full eight-hour shifts. Given the length of time that he has been off work, I would suggest that he start with two-hour-per-day work shifts, gradually progressing as his endurance hopefully improves. He may never be able to work an eight-hour workday again.

I think that Mr. Shehan can occasionally walk, sit or stand. He should be able to change positions on an as needed basis. He can occasionally crawl or bend. He can work at or above shoulder height on an occasional basis. This is because of the “moment arm” phenomenon in the lumbar spine seen with such injuries. He can occasionally use vibratory or power tools at or above shoulder level. If he is traveling, it is probable that Mr. Shehan is going to need to stop from time to time to address not only his urinary issues, but to stretch his back.

(Ex. 13, pp. 136-139)

Dr. Kuhnlein rated total impairment at 39 percent of the whole person. (Ex. 13, p. 140) However, six percent was attributed to bladder dysfunction. Dr. Pothoven performed surgery subsequent to Dr. Kuhnlein’s report and resulted in the opinion that no causal nexus to the injury appeared. Since Dr. Kuhnlein agreed in advance to defer to Dr. Pothoven’s opinion, his rating of total impairment is deemed to be closer to 33 percent.

DeLong’s and EMCASCO contend that Dr. Kuhnlein’s opinions should not be given any weight. That contention is expressly rejected. Dr. Kuhnlein is a respected occupational physician whose opinions have often been received in agency litigation, usually following an independent medical evaluation. Dr. Kuhnlein’s credibility is enhanced by his willingness, when appropriate, to offer opinions contrary to the interests of the consulting party. The restrictions recommended by Dr. Hlavin are not inconsistent with those recommended by Dr. Kuhnlein, and both opinions are reasonably consistent with Shehan’s current and ongoing symptoms.

Each party retained a vocational consultant: Steve Mootz for Shehan, Ginny Peterson for DeLong/EMCASCO. Mootz actually provided vocational services, while Peterson did not. Job-seeking services were in Shehan’s area of residence around Albia, Iowa because Shehan complains of vision problems while driving, especially at night. Shehan apparently applied for only one position, as a city engineer technician. (Ex. 14) As noted, he remains unemployed. Peterson prepared a labor market survey showing a number of possible jobs in Centerville and Ottumwa among other small cities, but did not identify any in Albia. (Ex. A) She nevertheless concluded that “there appears to be a variety of potential, viable alternative employment opportunities with the Albia IA area for Mr. Shehan that appears to fall within his background, education, training, transferrable skill set and medical restrictions from Dr. Hlavin.” (Ex. A, p. 9) It is noted that the John Deere plant where Shehan worked until retirement is located in Ottumwa, Iowa.

CONCLUSIONS OF LAW

DeLong and EMCASCO first dispute that Shehan’s admitted work injury resulted in permanent disability. As claimant, he has the burden of proving by a preponderance of the evidence the injury is a proximate cause of the disability on which his claim is based. A cause is proximate if it is a substantial factor in bringing about the result; it need not be the only cause. A preponderance of the evidence exists when the causal connection is probable rather than merely possible. Blacksmith v. All-American, Inc., 290 N.W.2d 348 (Iowa 1980).

That contention is easily disposed of. As the result of his work injury, Shehan underwent a multilevel spinal fusion with resulting physical impairment and the imposition of permanent activity restrictions. He has ongoing pain and discomfort. He has sexual dysfunction. In short, he has permanent disability directly caused by the work injury.

Shehan’s injury is to the body as a whole and, as the parties stipulate, should be compensated by the industrial method as loss of earning capacity.

Permanent partial disability that is not limited to a scheduled member is compensated industrially under section 85.34(2)(u). Industrial disability compensates loss of earning capacity as determined by an evaluation of the injured employee’s functional impairment, age, intelligence, education, qualifications, experience and ability to engage in employment for which the employee is suited. Second Injury Fund of Iowa v. Shank, 516 N.W.2d 808. 813 (Iowa 1994), Guyton v. Irving Jensen Co., 373 N.W.2d 101, 104 (Iowa 1985), Diederich v. Tri-City R. Co., 219 Iowa 587, 258 N.W. 899 (1935).

The concept of industrial disability is similar to the element of tort damage known as loss of future earning capacity even though the outcome in tort is expressed in dollars rather than as a percentage of loss. The focus is on the ability of the worker to be gainfully employed and rests on comparison of what the injured worker could earn before the injury with what the same person can earn after the injury. Second Injury Fund of Iowa v. Nelson, 544 N.W.2d 258, 266 (Iowa 1995), Anthes v. Anthes, 258 Iowa 260, 270, 139 N.W.2d 201, 208 (1965).

Impairment of physical capacity creates an inference of lessened earning capacity. Changes in actual earnings are a factor to be considered but actual earnings are not synonymous with earning capacity. Bergquist v. MacKay Engines, Inc., 538 N.W.2d 655, 659 (Iowa App. 1995), Holmquist v. Volkswagen of America, Inc., 261 N.W.2d 516, 525, (Iowa App. 1977), 4-81 Larson’s Workers’ Compensation Law, §§ 81.01(1) and 81.03. The loss is not measured in a vacuum. Such personal characteristics as affect the worker’s employability are considered. Ehlinger v. State, 237 N.W.2d 784, 792 (Iowa 1976). Earning capacity is measured by the employee's own ability to compete in the labor market. An award is not to be reduced as a result of the employer’s largess or accommodations. U.S. West v. Overholser, 566 N.W.2d 873, 876 (Iowa 1997), Thilges v. Snap-On Tools Corp., 528 N.W.2d 614, 617 (Iowa 1995).

The refusal of defendant-employer to return claimant to work in any capacity is, by itself, significant evidence of a lack of employability. Pierson v. O’Bryan Brothers, File No. 9512062 (App. January 20, 1995). Meeks v. Firestone Tire & Rubber Co., File No. 876894, (App. January 22, 1993); see also Larson, Workers’ Compensation Law, Section 57.61, pps. 10-164.90-95; Sunbeam Corp. v. Bates, 271 Ark 609 S.W.2d 102 (1980); Army & Air Force Exchange Service v. Neuman, 278 F. Supp 865 (W.D. La 1967); Leonardo v. Uncas Manufacturing Co., 77 R.I. 245, 75 A 2d 188 (1950).

While the impairment rating does not set an absolute minimum level of industrial disability in all cases it is, nevertheless, material evidence that must be factored into the determination of lost earning capacity. In all but the rarest of industrial disability cases, the impairment rating is the minimum level of compensation owed to a claimant by virtue that the impairment rating signifies the extent of the claimant’s loss of use of the whole body. Ferch v. Oakview, Inc., File No. 5010952 (App. April 13, 2006).

Assessments of industrial disability involve a viewing of loss of earning capacity in terms of the injured workers’ present ability to earn in the competitive labor market without regard to any accommodation furnished by one’s present employer. Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 158 (Iowa 1996); Thilges v. Snap-On Tools Corp., 528 N.W.2d 614, 617 (Iowa 1995). Ending a prior accommodation is not a change of condition warranting a review-reopening of a past settlement or award. U.S. West v. Overholser, 566 N.W.2d 873 (Iowa 1997). However, an employer’s special accommodation for an injured worker can be factored into an award determination to the limited extent the work in the newly created job discloses that the worker has a discerned earning capacity. To qualify as discernible, employers must show that the new job is not just “make work” but is also available to the injured worker in the competitive market. Murillo v. Blackhawk Foundry, 571 N.W.2d 16 (Iowa 1997).

Total disability does not mean a state of absolute helplessness. Permanent total disability occurs where the injury wholly disables the employee from performing work that the employee’s experience, training, education, intelligence and physical capacities would otherwise permit the employee to perform. McSpadden v. Big Ben Coal Co., 288 N.W.2d 181 (Iowa 1980). The pertinent question is whether “there [are] jobs in the community that the employee can do for which the employee can realistically compete.” Second Injury Fund of Iowa v. Shank, 516 N.W.2d 808 (Iowa 1994). The test has been further described by the agency as follows:

The focus for evaluating total disability is on the person’s ability to earn a living. Diederich v. Tri-City R. Co., 219 Iowa 587, 594, 258 N.W. 899, 902 (1935). The question is not whether the person is physically and mentally capable of working because virtually anyone who is conscious is capable of performing some type of work. The question is whether the person is capable of performing a sufficient quantity and quality of work that an employer in a well-established branch of the labor market would employ the person on a continuing basis and pay the person sufficient wages to permit the person to be self-supporting.

Tobin-Nichols v. Stacyville Community Nursing Home, File No. 1222209 (App.Dec. 2003)

Michael Shehan is 61 years old, has a perhaps outdated associate’s degree, and a 32-year work history as a production worker in a heavy equipment plant. He also has experience as a factory janitor. Although Shehan is not well motivated to return to active employment, he undoubtedly had the capacity to do so prior to the work injury of March 19, 2008.

Now, according to Dr. Hlavin, he has a 40-pound lifting restriction, is to avoid repetitive lifting, pulling, pushing and bending, and can stand or sit only one hour at a time. Dr. Kuhnlein’s recommendations are somewhat more restrictive, match Shehan’s ongoing symptoms better, and are offered by an occupational physician. They are seen as complementary to the Hlavin restrictions.

What is most significant, especially for a factory production worker, is the inability to sit or stand more than one hour. Although DeLong for nearly a year until the plant shutdown offered continued employment, it was with an accommodation not likely to be and certainly not shown to be commonly available: work three hours / off two hours / work three hours. Given all the restrictions recommended by Drs. Hlavin and Kuhnlein, Shehan is not capable of performing a sufficient quantity and quality of work in a well-established branch of the labor market to earn wages sufficient to remain self-supporting. He is accordingly entitled to permanent total disability benefits from the date of injury.

Defendants are entitled to dollar-for-dollar credit for benefits paid. No issue has been raised as to whether defendants should have some nature of “credit” for the wages Shehan earned for the accommodated work offered, but it is noted that DeLong received actual labor services in return for those wages.

Shehan also claims entitlement to penalty benefits under Iowa Code section 86.13. Iowa Code section 86.13 permits an award of up to 50 percent of the amount of weekly benefits delayed or denied if a delay in commencement or termination of benefits occurs without reasonable or probable cause or excuse. The standard for evaluating the reasonableness of delay in commencement or termination is whether the claim is fairly debatable. Where a claim is shown to be fairly debatable, defendants do not act unreasonably in denying or delaying payment. In the absence of a reasonable excuse for delay in payment of benefits, penalty benefits are mandatory. Robbennolt v. Snap-On Tools Corp., 555 N.W.2d 229 (Iowa 1996). In determining the amount of penalty, the commissioner should consider such factors as the length of the delay, the number of delays, the information available to the employer regarding the employee’s injuries and wages, and prior penalties imposed against the employer under section 86.13. Id. A reasonable cause or excuse exists if either (1) the delay was necessary for the insurer to investigate the claim or (2) the employer had a reasonable (“fairly debatable”) basis to contest entitlement to benefits. Christensen v. Snap-On Tools Corp., 554 N.W.2d 254 (Iowa 1996).

Because no temporary disability benefits are awarded in the presence of a permanent total disability award, penalty benefits cannot be based on nonpayment of healing period/temporary total disability benefits.

Given that Shehan actually worked nearly a year in accommodated employment, it is fairly debatable for defendants to contend that he is not subject to permanent total disability. Permanency benefits were apparently commenced on August 20, 2008, but only paid through March 3, 2009. This was only 28 weeks (the equivalent of 5.6 percent of the body as a whole), and no further payments were made until March 12, 2001. (Ex. F, p. 42) Given the severe work restrictions and physical impairment that Shehan sustained, such a minimal token payment was clearly unreasonable. Fifty percent of one year’s benefits, 26 weeks, is an appropriate assessment.

ORDER

THEREFORE, IT IS ORDERED:

Defendants shall pay permanent total disability benefits at the rate of one hundred sixty-seven and 39/100 dollars ($167.39) per week commencing March 19, 2008, and continuing during such time as Shehan remains under a total industrial disability.

Defendants shall have dollar-for-dollar credit for benefits paid.

Accrued weekly benefits shall be paid in a lump sum together with statutory interest.

Defendants shall pay twenty six (26) weeks of penalty benefits at the rate of one hundred sixty-seven and 39/100 dollars ($167.39). Interest shall accrue from the filing date of this decision.

Defendants shall file subsequent reports of injury as required by this agency.

Costs are taxed to defendants.

Signed and filed this __20th __ day of January, 2011.

________________________

DAVID RASEY

DEPUTY WORKERS’

COMPENSATION COMMISSIONER

Copies to:

Coreen K. Sweeney

Joseph A. Quinn

Attorney at Law

700 Walnut St., Ste. 1600

Des Moines IA 50309

cksweeney@

jquinn@

Kelly L. McCarty

Attorney at Law

801 Grand Ave., Ste. 3700

Des Moines, IA 50309-8004

Mccarty.kelly@

DRR/kjw

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