The Full Board, at its meeting held on June 19, 2012, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on November 2, 2010.
The issue presented for Mandatory Full Board Review is whether the claimant is entitled to reduced earnings subsequent to December 31, 2008.
In a reserved decision filed on February 18, 2010, the Workers' Compensation Law Judge (WCLJ) found that the claimant did not voluntarily withdraw from the labor market; made awards for causally related disability for certain periods in 2004 and 2009; made awards for reduced earnings for certain periods in 2004, 2005, and 2006; and held other periods of awards in abeyance, pending further development of the record on the issue of reduced earnings.
In a Memorandum of Decision filed November 2, 2010, the Board Panel majority affirmed the WCLJ's decision, finding that the awards made by the WCLJ were proper since the claimant's reduced earnings are related to his May 7, 1997, accident.
The dissenting Board Panel member would have found that awards after January 2009 should be rescinded, as the claimant voluntarily withdrew from the labor market when his business closed in January 2009 and he is not entitled to reduced earnings after that date, and there is insufficient evidence of the claimant's attachment to the labor market.
In its application for Mandatory Full Board Review filed on December 1, 2010, the carrier argues that the claimant is not entitled to awards after December 2008, because the claimant has voluntarily removed himself from the labor market by failing to engage in an adequate job search.
In a rebuttal filed with the Board on December 21, 2010, the claimant agrees that the Board Panel majority properly found that the claimant maintained an attachment to the labor market.
However, the claimant requests a modification of the decision since the claimant returned to work as of January 18, 2010, and is therefore entitled to reduced earnings during that period of time.
Upon review, the Full Board votes to adopt the following findings and conclusions.
This case is established for a low back injury that resulted from an accident on May 7, 1997, while claimant was employed as a service technician in an automobile dealership. The record reflects that the claimant was classified as permanently partially disabled in March 2005, and has had ongoing treatment since the date of injury, including several surgeries.
The record contains a report of a lumbar spine MRI done on January 28, 2004, which revealed a right paramedian disc herniation with extrusion impinging on a nerve, with foraminal stenosis and marked sclerotic changes throughout the lower back.
Dr. Krawchenko, the claimant's treating neurosurgeon, submitted a report for an examination on March 10, 2004, and reported that the claimant was "trying to carry out his job," and that surgery was discussed. Dr. Krawchenko advised the claimant to avoid prolonged bending, heavy lifting, prolonged turning, and prolonged standing in one position.
In a narrative report for an examination on April 2, 2004, Dr. Krawchenko noted that the claimant reported increasing pain after his March 10, 2004, appointment. The claimant was on pain medication and muscle relaxants, and had many objective findings upon examination. Dr. Krawchenko opined that the claimant was totally disabled.
In a narrative report for an examination on June 28, 2004, Dr. Krawchenko noted that the claimant had some improvement in symptoms after surgery. The claimant was still found to be disabled from the regular duties of his job.
Dr. Krawchenko submitted a C-4 report for an examination on August 23, 2004, and found that the claimant was not disabled from regular work duties, and could do any type of work. Dr. Krawchenko noted that the claimant is "returning to work on 8/27/04 with no restrictions." No narrative report is attached.
Dr. Krawchenko submitted a C-4 report for an examination on January 11, 2005, finding that the claimant was totally disabled and is unable to do his regular work duties. In an attached office note for treatment on December 14, 2004, Dr. Krawchenko noted that the claimant complained of "increasing pain across the lower back, more on the right side, with pain of increasing intensity radiating to the right leg to the foot." The claimant also reported numbness and weakness. The claimant reported no new injuries. The claimant was "doing fairly well" and "had improvement in his severe symptoms" following his April 2004 surgery. "However, over the last few weeks these symptoms have been increasing in intensity." Upon examination, Dr. Krawchenko found increased weakness on the right side, and decreased sensation in the right lower leg and foot. Dr. Krawchenko found that the claimant's increased sciatic and lumbar radiculopathy symptoms on the right side are causally related to his work injury, and recommended an MRI to determine if there is ongoing nerve root compression. Dr. Krawchenko found that the claimant "is to remain on restricted activities, continue with medications, [and is] totally disabled from his occupation."
There is no evidence that the claimant sought treatment between August 23, 2004, and December 14, 2004. However, Dr. Storrs, the carrier's consulting neurosurgeon, submitted an IME-4 report for an examination on September 17, 2004, and diagnosed post-op lumbar fusion L4-L5 for recurrent herniated disc, L4-L5, L5-S1, and residual low back syndrome manifested by subjective complaints of back pain, and reduced range of motion of the spine. Dr. Storrs opined that the claimant was temporarily partially disabled to a moderate degree, due to a significant decrease in range of motion of the lumbar spine, persistent pain, and use of narcotic medications. Dr. Storrs further opined that the claimant would likely have a permanent disability and should be re-evaluated in six months. Dr. Storrs noted that although the claimant is working in his own business, he is still having back pain, spasm, and restricted range of motion. Dr. Storrs recommended restrictions to avoid heavy lifting (over 20 pounds), prolonged bending, and stooping, crawling, and climbing.
The record shows that the claimant continued treatment for ongoing complaints of pain and symptoms of radiculopathy in 2005, 2006, 2007, and 2008, and the record contains several medical opinions of the claimant's ongoing disability during this period.
On July 14, 2008, Dr. Montalvo performed surgery on the claimant to implant a spinal column stimulator. On October 8, 2008, Dr. Montalvo noted that the claimant asked if he could return to work, and that Dr. Montalvo released the claimant to return to light duty work.
Dr. Beane, the claimant's primary care physician, submitted a letter dated December 31, 2008, and opined that the claimant is not employable on a full time basis and is deemed permanently partially disabled.
Dr. Krawchenko submitted a C-4 report for an examination on October 12, 2009, and found that the claimant is totally disabled, causally related to the May 7, 1997, work injury.
The record contains several other reports showing that the claimant continued treatment for ongoing complaints of pain and symptoms of radiculopathy, in 2008, 2009, and 2010.
The claimant testified at the hearing held on December 23, 2008, that he has been unable to perform work for his businesses, Trailblazers Cafe and Judy & Judy, since July 14, 2008, and that his wife was performing the work.
The claimant testified at the hearing held on October 14, 2009, that in August 2004, his doctor filed a report indicating that he was able to return to work. However, the claimant told his doctor that he would not be returning to work as a mechanic but was going to open his own business so that he could do work that was "more back friendly" (Hearing Transcript, 10/14/09, p. 8). He was unable to continue working as a mechanic because he could not physically get to the places he needed to get to fix things. He has been on medications (heavy narcotics, muscle relaxants, antispasms, and antidepressants) for treatment of his work injury since 1997. The medications affect his cognitive abilities including his memory and ability to focus, and warn against operating machinery or driving. He and his wife opened a business (a cafe and sporting goods store) on Labor Day 2004. He did customer service work for the business. He was an employee of the business and received a W-2. After a few years, he no longer received wages. The business did not survive because in 2005, a manure spill in Lewis County cut off fishing and sporting sales, and also because of the downturn in the economy at the end of 2006. The business ceased operations just before Christmas 2008. He has continued to look for work. He has put in applications but did not have the list with him when he testified. He identified three places where he applied for work and that those were the only places he could remember. He confirmed that he applied to other places and that he had a list which he would give to the carrier. He looks in the paper every Sunday, and he uses several job search websites on a daily basis. He has also contacted VESID and is waiting to hear from them to set up a date to complete his paperwork. He has restrictions to avoid lifting over 25 pounds, and to avoid sitting or standing for long periods of time. He describes his limitations to prospective employers.
Summary of Issues Raised and Prior Findings
At the hearing held on March 8, 2005, the parties agreed that the claimant should be classified as permanently partially disabled but did not "worry about a rate because he's working in his own business at this point" (Hearing Transcript, 3/8/05, p. 4). In the resulting decision filed on March 14, 2005, the WCLJ classified the claimant as permanently partially disabled, as of March 8, 2005, and found no compensable lost time, without prejudice to reduced earnings, for the period from August 27, 2004, to March 9, 2005.
At the hearing held on December 23, 2008, the parties agreed that the period of March 9, 2005, to July 14, 2008, would be found as "no compensable lost time," without prejudice to reduced earnings based upon the claimant's business earnings. The carrier also agreed to awards for the period from July 14, 2008, to October 8, 2008, at the total disability rate, and for the period from October 8, 2008, to November 8, 2008, at the moderate partial disability rate, with awards continuing after November 8, 2008, at the mild partial disability rate, on a tentative basis, with the claimant to produce up to date medical evidence of a disability within 30 days.
In a memorandum of law dated February 9, 2009, the carrier argued that WCL § 25-a applies to transfer liability to Special Funds Conservation Committee, as of September 13, 2007, and specifically requested that awards "should reflect the prior periods of time as no compensable lost time or reduced earnings and no longer without prejudice to reduced earnings."
In a reserved decision filed on April 2, 2009, the WCLJ found that WCL § 25-a is inapplicable at this time, and directed the claimant to produce proof of his reduced earnings for certain periods prior to the next hearing. Awards were made as agreed to at the December 23, 2008, hearing, and also for the period from December 24, 2008, to March 30, 2009, and continuing, at the tentative mild rate of $89.56 per week. The carrier filed an application for administrative review of the issue of WCL § 25-a liability, but did not request review of any of the awards that were made in the April 2, 2009, reserved decision. The WCLJ's April 2, 2009, reserved decision was affirmed by a Board Panel decision filed August 13, 2009.
On May 28, 2009, the claimant submitted income tax documentation for the years from 2004 to 2008, in support of his claim for reduced earnings for those years.
At the conclusion of the October 14, 2009, hearing, the WCLJ directed the parties to submit written summations on the issue of reduced earnings on or before November 1, 2009, and in the decision filed on October 19, 2009, the WCLJ again directed awards for the period from December 24, 2008, to March 30, 2009, and continuing, at the tentative mild rate of $89.56 per week.
On November 3, 2009, the Board received the carrier's memorandum of law on the issue of reduced earnings. In the memorandum of law, the carrier argued that the claimant is not entitled to reduced earnings for the loss of income related to his self-employment because even though he could have returned to unrestricted work as a mechanic, he chose to open his own business instead. In its memorandum, the carrier relied on Dr. Krawchenko's report for the examination on August 23, 2004, in which Dr. Krawchenko found no disability and returned the claimant to work without restrictions as of August 27, 2004. The carrier also argued that the claimant is not entitled to compensation for the time period after December 2008, because he has failed to show that his loss of employment subsequent to the closing of his business is related to his disability.
At the hearing on November 24, 2009, the carrier explained its argument and clarified that it was not the carrier's position that the claimant left his prior job as a mechanic to engage in a private business venture for purely economic reasons, rather the carrier's position was that the subsequent loss of earnings due to the business' failure (i.e. after December 2008) was unrelated to the claimant's disability.
In the decision filed on November 30, 2009, awards were brought up to date at the tentative mild rate of $89.56 per week, "subject to reduced earnings," and the claimant was directed to produce additional information concerning his job search efforts.
On December 21, 2009, the claimant submitted a written record of his job search efforts during the period from December 20, 2008, to December 17, 2009 (ECF Doc ID #160493378, pp. 2, 5-6).
As noted above, in the reserved decision filed on February 18, 2010, the WCLJ found that the claimant remained attached to the labor market, was entitled to actual reduced earnings, and made awards as follows: from August 27, 2004, to September 4, 2004, at the moderate rate of $179.12 per week; from September 4, 2004, to December 31, 2004, at the reduced earnings rate of $155.87 per week; from December 31, 2004, to December 31, 2005, at the reduced earnings rate of $149.27 per week; from December 31, 2005, to December 31, 2006, at the reduced earnings rate of $224.91 per week; and from November 26, 2009, to February 16, 2010, and continuing, at the moderate rate of $179.12 per week. Awards for the period from December 31, 2006, to July 14, 2008, and for the period from November 8, 2008, to December 31, 2008, were held in abeyance, pending the parties' production of documents and memoranda on the issue of reduced earnings and further development of the record on that issue; a reserved decision would be issued for these awards upon receipt of documents and memoranda of law. Awards that had previously been made were modified as follows: from December 31, 2008, to October 12, 2009, at the moderate rate of $179.12, less six days worked; and from October 12, 2009, to November 26, 2009, at the temporary total rate of $358.25. The WCLJ noted that the awards for the period from July 14, 2008, to November 8, 2008, were previously made in the decision filed on December 29, 2008.
"[A] central question for the Board to resolve, before awarding wage replacement benefits in a nonschedule permanent partial disability case, is 'whether a claimant has maintained a sufficient attachment to the labor market' (Burns v Varriale, 9 NY3d 207 ; see Matter of Jordan v Decorative Co., 230 NY 522 ). By finding alternative work consistent with his or her physical limitations, or at least showing reasonable efforts at finding such work, the claimant can prove to the Board that the cause of his or her reduced income is a disability, rather than unwillingness to work again. 'Claimant must demonstrate that his or her reduced earning capacity is due to the disability, not… factors unrelated to the disability' (Burns, 9 NY3d at 216)." (Matter of Zamora v New York Neurologic Assoc., __ NY3d __, 2012 NY Slip Op 03357).
A partially disabled person need only seek employment within his or her medical restrictions (Matter of Sanchez v Consolidated Edison Co. of N.Y., Inc., 40 AD3d 1153 ) and for which he or she is qualified (see Matter of St. Francis Constr. Co., 2009 NY Wrk Comp 30705539). Whether a claimant actually maintains an attachment to the labor market sufficient to justify continued compensation benefits is a factual determination for the Board to resolve (Matter of Rothe v United Med. Assoc., 18 AD3d 1093 ).
Attachment to the labor market can be demonstrated by credible documentary evidence showing that claimant is actively seeking work within the restrictions through an independent job search that is timely, diligent, and persistent; or is actively participating in a job-location service such as (1) New York State's Department of Labor's re-employment services, (2) One-Stop Career Centers, or (3) a job service commonly utilized to secure work within a specific industry; or is actively participating in vocational rehabilitation through VESID or other Board-approved rehabilitation program; or is actively participating in a job-retraining program; or is attending an accredited educational institution full time to pursue employment within the work restrictions (Matter of American Axle, 2010 NY Wrk Comp 80303659).
At a minimum, if the independent job search is in person, documentary evidence should provide the day, month, and year of the contact; the name and address of the employer; the name and telephone number of the person with whom employment was discussed; the type of job sought; and the response of the potential employer. If the contact was written, copies of the resume submitted if any; the inquiry letter or e-mail communication; or the application completed is necessary along with the day, month, and year submitted, the nature of employment sought, name and address of the employer and the response of the potential employer (id).
Here, the claimant submitted a written record of his job search efforts, which supports a finding that he was attached to the labor market for the period from December 20, 2008, to December 17, 2009 (ECF Doc ID #160493378, pp. 2, 5-6). Specifically, the job search list includes the dates that the searches were done; the names and phone numbers of the employer and the person with whom employment was discussed; the type of job sought; and the response of the potential employer. The listing also includes the claimant's efforts to look for work in the paper and on the internet, with dates provided. Finally, the listing includes the dates that the claimant did work as a part-time driver for one of the employers that he contacted in an effort to find work.
Therefore, the Full Board finds that the record contains sufficient evidence "that claimant is actively seeking work within the restrictions through an independent job search that is timely, diligent, and persistent" (see American Axle, 2010 NY Wrk Comp 80303659).
Turning to the argument set forth in the claimant's rebuttal to the carrier's application for Mandatory Full Board Review, WCL § 15(5-a) provides, in pertinent part that "the wage earning capacity of an injured employee in cases of partial disability shall be determined by his actual earnings…" Additionally, a finding of permanent partial disability permits application of the rebuttable inference that there has been a loss of wage earning capacity (see Mazziotto v Brookfield Const. Co., Inc., 40 AD2d 245 )
In making a reduced earnings award, it is improper to impose a degree of disability or factor in a reduction in participation in the labor market. Absent a complete and voluntary withdrawal from the labor market, under WCL § 15(5-a) the Board must measure reduced earnings as two-thirds of the difference between the post-injury earnings and the pre-injury average weekly wage. No evidence of the ability to earn more or less may be considered (see Matter of Meisner v United Parcel Serv., 243 AD2d 128 , lv dismissed 93 NY2d 848 , lv denied 94 NY2d 757 ).
Here, since the claimant's participation with VESID led to his employment, he is entitled to an award for reduced earnings for days that he worked. At the time of the WCLJ's reserved decision, the Board file did not contain the VESID documentation. However, the information was sent with the claimant's rebuttal. Specifically, in a letter dated January 19, 2010, from VESID, the claimant was informed that he was accepted into a Work-Try-Out program beginning on January 18, 2010 (ECF Doc ID #165448635, p. 14). The letter further states that the claimant would receive an hourly wage of $15.00, 15 hours per week, for four weeks.
Therefore, the Full Board finds that since the claimant's employment as of January 18, 2010, would result in an award for reduced earnings and not an award at the moderate disability rate, the awards for the period subsequent to January 18, 2010, should be held in abeyance, pending further development of the record on the issue of reduced earnings.
Accordingly, the WCLJ reserved decision filed on February 18, 2010, is MODIFIED to hold awards in abeyance for the period subsequent to January 18, 2010, pending further development of the record on the issue of reduced earnings. The rest of the WCLJ decision remains in effect. The case is referred to the hearing calendar for the completion of the record. The case is continued.