Baity v. Workforce Safety & Insurance

2004 ND 184, 687 N.W.2d 714, 2004 N.D. LEXIS 319, 2004 WL 2284036

• Court: North Dakota Supreme Court
• Decided: October 12, 2004
• Docket: 20040096
• Status: Published

Opinions

NEUMANN, Justice.

[¶ 1] Esther Baity appealed from a district court judgment affirming an order of Workforce Safety and Insurance (“WSI”) declaring her to be permanently and totally disabled and deciding the date when her supplementary benefits begin under N.D.C.C. § 65-05.2-01. We affirm, concluding WSI correctly determined Baity was eligible for supplementary benefits beginning September 11, 2002, the date its cyclic review committee declared Baity permanently and totally disabled, rather than beginning July 1, 2001, the date Baity claimed evidence established she was permanently and totally disabled.

I

[¶ 2] On December 12, 1990, Baity filed a claim for workers compensation benefits relating to an injury to her lower back suffered on November 6, 1990, while she was employed by Case IH in Fargo. At that time, Baity was 44 years old. WSI accepted liability and paid associated medical and disability benefits. Baity began receiving temporary total disability benefits on December 4, 1990. In June 1995, a claims analyst completed a cyclic benefit review form, noting Baity had been released to work three to four hours per day at a sedentary level with restrictions, but that Baity had no motivation to return to work. The analyst recommended cyclic benefits. In September 1998, a claims analyst completed another cyclic benefit review form and recommended continuation of cyclic temporary total disability benefits, noting the continuing restrictions on Baity’s work release and that she was not a retraining candidate. Cyclic temporary total disability benefits were approved.

[¶ 8] During September 1998, WSI implemented a procedure for reviewing eligibility for supplementary benefits. A claims review committee was formed to review all claims where the injured worker may be eligible to receive supplementary benefits. The claims review committee was structured to review all claims where the claimant had received temporary total disability benefits for 10 or more consecutive years, to determine which injured workers were eligible to receive long-term disability benefits and which workers qualified for supplementary benefits, and to determine eligibility for supplementary benefits on the anniversary date of the claimant’s injury. The committee intended to give highest priority to those claims where the injured worker’s weekly compensation rate was less than 60 percent of the state’s average weekly wage. See N.D.C.C. §§ 65-05-09 and 65-05.2-02. No cyclic, supplementary and catastrophic benefit claim review form was completed for Baity between 1998 and 2002, although the 10-year anniversary of her injury was November 2000.

[¶ 4] Claims analysts continued to monitor Baity’s claim throughout the years as she periodically visited physicians and underwent functional capacity assessments (“FCA”), but her condition did not significantly change. On December 18, 2001, WSI asked Baity’s physician whether she could undergo a strengthening program followed by a FCA and whether there was any medical evidence preventing her from participating in vocational planning. The physician approved the requests and Baity underwent a FCA in March 2002. The physician agreed with the results, which indicated that Baity could work 16 to 20 hours per week on a trial basis, doing light level work, and the hours could be increased as tolerated.

[¶ 5] On July 16, 2002, Baity requested supplementary disability benefits from WSI because she had received more than 10 years of continuous benefits. On July 18, 2002, Baity’s claim was referred for review by WSI’s internal cyclic review committee. On July 30, 2002, the cyclic review committee considered the claim and requested additional information regarding clarification of the March 2002 FCA and Baity’s allowable work hours, which differed from previous assessments. After receiving the clarification, the committee met again and returned the claim to the claims analyst for review of rehabilitation options. The claims analyst recommended permanent total disability status rather than rehabilitation. The committee met on September 11, 2002, and approved a declaration that Baity was, permanently and totally disabled and was entitled to supplementary benefits beginning on that date.

[¶ 6] Baity requested reconsideration of WSI’s order and sought supplementary benefits from July 1, 2001, the date she claimed she should have been placed on highest priority because her weekly benefit rate had fallen below 60 percent of the state’s average weekly wage. Because WSI did not follow its own written procedures and did not approve her as permanently and totally disabled until more than a year later, Baity claimed she was entitled to supplementary benefits commencing July 1, 2001. After WSI rejected this argument, Baity requested a formal hearing. An administrative law judge (“ALJ”) recommended that Baity be awarded supplementary benefits effective July 1, 2001, because on that date she had been receiving continuous benefits for more than 10 years and her weekly benefits fell below 60 percent of the state’s average weekly wage. The ALJ also found July 1, 2001, was “the date that medical and vocational evidence concluded Baity was permanently and totally disabled,” and the “finding that Baity is permanently,[and] totally disabled as of September 11, 2002, is arbitrary and capricious since the September 11, 2002 date is unrelated to Baity’s medical or vocational status and simply reflects the date the committee met and determined Baity’s status.” WSI rejected the ALJ’s recommendation and ordered Baity was not entitled to supplementary benefits before September 11, 2002, the date the cyclical review committee declared her to be permanently and totally disabled. The district court affirmed WSI’s order, and this appeal followed.

II

[¶ 7] Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The, findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

[¶ 8] In Zander v. Workforce Safety and Ins., 2003 ND 194, ¶ 6, 672 N.W.2d 668, we explained:

On appeal from the district court’s judgment, this Court reviews the agency order in the same manner as the district court under N.D.C.C. § 28-32-46. N.D.C.C. § 28-32-49; Grand Forks Prof'l Baseball, Inc. v. North Dakota Workers Comp. Bureau, 2002 ND 204, ¶ 8, 654 N.W.2d 426. We review the decision of the administrative agency, rather than that of the district court, although the district court’s analysis is entitled to respect. Paul v. North Dakota Workers Comp. Bureau, 2002 ND 96, ¶ 6, 644 N.W.2d 884. Although the administrative construction of a statute by the agency administering the law is ordinarily entitled to some deference if that interpretation does not contradict clear and unambiguous statutory language, Hamich, Inc. v. State, 1997 ND 110, ¶ 13, 564 N.W.2d 640, questions of law, including the interpretation of a statute, are fully reviewable on appeal from an administrative decision. Grand Forks Prof l Baseball, at ¶ 8.

A

[¶ 9] The major issue in this case is whether Baity is entitled to supplementary disability benefits beginning on September 11, 2002, the date WSI’s cyclic review committee declared she was permanently and totally disabled, or beginning July 1, 2001, the date Baity claims evidence established she was permanently and totally disabled.

[¶10] Section 65-05.2-01, N.D.C.C., addresses eligibility for supplementary benefits:

A workforce safety and insurance claimant who is receiving permanent total disability benefits, or death benefits, and who has been receiving disability or death benefits for a period of [ten] consecutive years is eligible for supplementary benefits. Eligibility for supplementary benefits lasts as long as the claimant is entitled to permanent total disability benefits or death benefits.¹

[¶ 11] Section 65-05.2-02(1), N.D.C.C., which governs the amount of supplementary benefits allowable, also provides in part:

A claimant whose weekly benefit rate is less than sixty percent of the state’s average weekly wage, who is eligible for supplementary benefits and who is receiving permanent total disability benefits, or death benefits regardless of the date of death, is entitled to receive a weekly supplementary benefit that, when added to the weekly permanent total disability benefit or death benefit, equals the ratio of that claimant’s weekly benefit to the state’s average weekly wage on the date of the claimant’s first disability, times the state’s average weekly wage in effect at the date eligibility for supplementary benefits is achieved.

[¶ 12] When interpreting a statute to determine its intent, we must look at the language itself and give it its plain, ordinary, and commonly understood meaning. State v. Lynch, 2001 ND 173, ¶ 7, 635 N.W.2d 164. We also construe related statutes as a whole to harmonize and give meaning to each word and phrase. Lawrence v. North Dakota Workers Comp. Bureau, 2000 ND 60, ¶ 19, 608 N.W.2d 254.

When the meaning of the statute is clear on its face, there is no room for construction. Erdmann v. Rants, 442 N.W.2d 441, 443 (N.D.1989).

[¶ 13] To be eligible for supplementary benefits under N.D.C.C. §§ 65-05.2-01 and 65-05.2-02(1), the claimant 1) must be “receiving” permanent total disability benefits or death benefits, 2) must have been “receiving” disability or death benefits for ten consecutive years, and 3) the claimant’s weekly benefit rate must be less than 60 percent of the state’s average weekly wage. The plain, ordinary, and commonly understood meaning of the word “receive” is “[t]o take or acquire.” The American Heritage Dictionary 1032 (2d Coll. ed.1985). Although Baity had been “receiving” disability benefits for more than the required ten-year period and her benefit rate may have dropped below the 60 percent threshold, it is .undisputed that Baity was not “receiving” permanent total disability benefits,. The definition of “permanent total disability” under N.D.C.C. § 65-01-02(26) specifically states that an employee must be “determinéd incapable of rehabilitation of earnings capacity” to qualify as permanently and totally disabled. The cyclic review committee did not determine Baity was incapable of rehabilitation of earnings capacity, and therefore permanently and totally disabled, until September 11, 2002.

[¶ 14] This Court’s decision in Saari v. North Dakota Workers Comp. Bureau, 1999 ND 144, 598 N.W.2d 174, lends analogous support for this conclusion. Saari involved a claim for a permanent partial impairment (“PPI”) award. See N.D.C.C. § 65-01-02(25) (defining “permanent impairment” as “the loss of or loss of use of a member of the body existing after the date of maximum medical improvement ... ”). In calculating the claimant’s benefits, the Bureau applied a statute passed by the Legislature after the date of injury which reduced his benefits from what they would have been under the previous law. The claimant argued that, under Gregory v. North Dakota Workmen’s Comp. Bureau, 369 N.W.2d 119 (N.D.1985) (“Gregory I”), his right to PPI benefits vested on the date of injury and could not be subsequently reduced by the new legislation. A majority of this Court held “any right to PPI benefits does not vest on the date of injury, but vests on the date the impairment is determined to be permanent,” reasoning “until there has been an actual determination an impairment is permanent, no right has vested because at the time of injury the existence of the right depends on a future evaluation, an event the result of which is uncertain.” Saari, at ¶ 13.

[¶ 15] A majority of this Court also rejected the claimant’s argument that his right to PPI benefits vested on the date of maximum medical improvement rather than on the actual date he was determined eligible for a PPI award:.

Gregory I, 369 N.W.2d at 122, makes clear a claimant’s right to PPI benefits does not become fixed or vested until the claimant has been evaluated and determined eligible for a PPI award. The date of a claimant’s maximum medical improvement is a preliminary step in the process of establishing entitlement to a PPI award. See Tooley v. Aim, 515 N.W.2d 137, 142 (N.D.1994). See also Effertz [v. North Dakota Workers’ Comp. Bureau], 481 N.W.2d [218,] 222 [(N.D.1992)] (holding, in line with Gregory I, claimant was entitled to PPI award under 1989 rate in effect when claimant was evaluated rather than 1963 rate in effect when claimant reached maximum medical recovery). . A claimant’s right to a PPI award does not vest on the date of injury or on the date of maximum medical improvement because more is necessary before entitlement to a PPI award is established.

Saari, at ¶ 14.

[¶ 16] Like the situation in Saari, an evaluation must precede a determination of whether a person is permanently and totally disabled before an award of supplementary benefits can be made. Section 65-01-02(26), N.D.C.C., in defining “permanent total disability,” requires that an employee be:

determined incapable of rehabilitation of earnings capacity as determined by the:

a. Nature of injury.

b. Degree of physical impairment,

e. Education.

d. Work history.

e. Vocational rehabilitation potential.

The record shows that in early 2001, a claims analyst was attempting to gather current information on whether additional vocational options could be pursued. Baity’s physician agreed with the results of a March 2002 FCA indicating Baity was capable of working longer hours with more physical demands than indicated in previous FCAs. The analyst further considered possible home-based vocational options. When this information was given to the cyclical review committee, the committee asked for further information to clarify the differences in the work release conditions set forth in the most recent FCA and by the physician. After receiving a response from a physical therapist and considering Baity’s reluctance to return to work, the committee determined further vocational efforts would not be productive and declared her permanently and totally disabled.

[¶ 17] Because of the necessity of an evaluation of permanent total disability status before supplementary benefits may be awarded, Baity’s argument that she met all of the criteria for supplementary benefits on July 1, 2001, is pure conjecture. We have recognized the beneficial purposes of vocational rehabilitation and that “[h]aving the worker back on the job contributing in a productive and meaningful way, even at a lower wage, provides real economic, social, and psychological benefit for society and for the individual worker.” Baldock v. North Dakota Workers Comp. Bureau, 554 N.W.2d 441, 446 (N.D.1996) (footnote omitted). The record shows WSI and its cyclic review committee were investigating rehabilitation options for Baity during the summer of 2002. In response to a question whether Baity was “any more or less disabled now than she was back in 1995,” a member of the cyclic review committee testified:

A. You know, again, I’d have to speculate, but if I take a look at that and look at the criteria she was at after we did the Functional Capacities Assessment, I don’t see a great deal of improvement. But I do know part of our discussion in the Cyclic Review Committee, and I hear this almost every day, that there [are] so many opportunities out there now for home operations, and I think that we hope — we had a lot of hope that this was going to work, so physically, it doesn’t look like much has changed, and so maybe the conditions haven’t changed a whole lot, but, again, from the designation point of view, no doubt there was that hope. And I think Mr. Tealey and Mr. Jolliffe pointed that out in the August 29th, 2002, review, that, you know, let’s give it still another shot. One can look at that in hindsight and say, look, we ended up going nowhere, maybe we should have done something earlier. It’s possible, but at the same time, we didn’t do it, and simply because of what we felt may work for her in going back to work or not going back to work.

Until rehabilitation options were considered and rejected, Baity could not be found permanently and totally disabled and therefore eligible for supplementary benefits.

[¶ 18] We conclude WSI’s determination that Baity was entitled to supplementary benefits ' beginning September 11, 2002, is in accordance with the law.

B

[¶ 19] A member of the cyclic review committee admitted that the committee did not follow its “highest priority” procedures in Baity’s case and that her eligibility for supplementary benefits should have been evaluated approximately 15 months earlier.

[¶ 20] An agency’s systemic disregard of the law may warrant reversing the agency decision without a showing of prejudice by the party relying on the improper conduct to ensure the government acts consistently and predictably in accordance with the law. Greenwood v. Moore, 545 N.W.2d 790, 798 (N.D.1996). However, “[t]o establish systemic disregard, a party must show at least some persistent pattern of improper agency conduct, that is, evidence of a single improper act is not sufficient.” Kraft v. State Bd. of Nursing, 2001 ND 131, ¶ 48, 631 N.W.2d 572; see also Scott v. North Dakota Workers Comp. Bureau, 1998 ND 221, ¶21, 587 N.W.2d 153. Although the delay in the committee’s evaluation of Baity violated its internal procedures, Baity does not argue that there is a persistent pattern of WSI delaying evaluation of claimants’ eligibility for supplementary benefits. We therefore conclude that reversal of WSI’s decision is not justified in this case.

Ill

[¶ 21] In view of our resolution of this case, it is unnecessary to address the other

issues raised. The judgment upholding WSI’s order is affirmed.

[¶ 22] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ., concur.

1 . The parties quote prior versions of N.D.C.C. § 65-05.2-01 rather than its current version. Unless otherwise provided, the statutes in effect on the date of injury govern a claimant’s right to collect workers compensation benefits. See Tangen v. North Dakota Workers Comp. Bureau, 2000 ND 135, ¶ 12, 613 N.W.2d 490. Section 65-05.2-01 was amended in 1999 in part to reduce from ten to seven the number of years a claimant has been receiving disability or death benefits to be eligible for supplementary benefits. See 1999 N.D. Sess. Laws ch. 556, § 4. Although the reduction in the waiting period from ten to seven years "is effective August 1, 2006, for all claims, regardless of the date of injury,” 2001 N.D. Sess. Laws ch. 582, § 2, the remainder of the statute “is effective August 1, 1999, for all claims regardless of the date of injury.” 1999 N.D. Sess. Laws ch. 556, § 6. Therefore, the current version of N.D.C.C. § 65-05.2-01 governs, except that the waiting period is ten rather than seven years.