Kennedy v. Hubbard Milling Co.

• Decision Date: 19 September 1990
• Docket Number: No. 16923,16923
• Parties: Ronald L. KENNEDY, Claimant and Appellant, v. HUBBARD MILLING COMPANY Employer and Appellee and Northwestern National Insurance Company, Insurer and Appellee. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 792

465 N.W.2d 792

Ronald L. KENNEDY, Claimant and Appellant, v. HUBBARD MILLING COMPANY Employer and Appellee and Northwestern National Insurance Company, Insurer and Appellee.

No. 16923.

Supreme Court of South Dakota.

Considered on Briefs Sept. 19, 1990.

Decided Feb. 6, 1991.

Scott Sumner of Banks, Johnson, Johnson, Colbath & Huffman, Rapid City, for claimant and appellant.

Gene R. Bushnell of Costello, Porter, Hill, Heisterkamp & Bushnell, Rapid City, for appellees employer and insurer.

MORGAN, Retired Justice.

Ronald L. Kennedy (Kennedy), an employee of Hubbard Milling Company (Employer), brought a workers' compensation claim before the South Dakota Department of Labor, Division of Labor and Management (Department), seeking to elevate a fifteen percent (15%) permanent partial disability rating resulting from a back injury in the course of employment to a permanent total disability rating under the odd-lot doctrine. ¹ Kennedy's claim was denied by Department, and Department's decision was subsequently affirmed by the circuit court. On appeal, Kennedy argues that certain findings of Department are clearly erroneous, and that the position offered by Employer was "favored work" that should not have been considered in Department's decision. We affirm.

Kennedy is presently forty-six years old, and holds a general equivalency diploma which he earned in 1984. In 1968, when he was twenty-four years old, Kennedy began working at a feed and flour mill in Rapid City, South Dakota, that is now owned and operated by Employer. Prior to 1968, he had worked as a manual laborer on construction, and during his employment at the mill he held positions which entailed heavy manual labor.

The history of this claim begins on July 7, 1981, when Kennedy sustained a back injury while in the course and scope of his employment. He first sought medical treatment from a general practitioner who referred him to an orthopedic surgeon. Kennedy underwent conservative care and did not work until August 17, 1981, at which time his physician advised that he could return to work.

Kennedy returned to work, performing mostly light-duty work. On December 7, 1981, however, he was involved in heavy lifting and developed severe back pain. Kennedy then stopped working. He made two unsuccessful attempts to return to work in early 1982. After that, Kennedy remained off work for the balance of 1982, all of 1983 and all of 1984. During this time, Employer and its insurer, Northwestern National Insurance Company, paid temporary total disability benefits, permanent partial disability benefits, and medical expenses associated with Kennedy's work-related injury.

From 1981 through 1984, Kennedy consulted a number of physicians and specialists, and participated in various forms of treatment, with little improvement. In 1985, Kennedy was referred to a neurologist whose treatment resulted in substantial improvement of his condition. Kennedy returned to work on April 15, 1985. He began on a gradual "work hardening" program and within two weeks he progressed to an eight-hour work day. By late May, Kennedy was again working full-time in his regular position.

In June, Kennedy reinjured his back while working and treatment provided little relief. He discontinued work on June 13, 1985. On July 1, 1985, Kennedy's neurologist released him to return to light-duty work. On July 17, 1985, Employer offered Kennedy a light-duty sweeper position with severe restrictions on lifting. Kennedy declined this offer of employment, citing as his reason his previous bad experiences with attempts at light-duty work with Employer. Kennedy has never returned to work with Hubbard Milling Company or any other employer since June 13, 1985. In October, 1985, Kennedy and his family moved to Columbia Falls, Montana, where he was residing at the time of the hearing.

On October 11 and 12, 1988, the Department conducted a formal hearing on Kennedy's claim for permanent total disability benefits. On March 15, 1989, Department issued its decision denying Kennedy permanent total disability benefits. Findings of fact and conclusions of law, and an order were subsequently issued on March 31, 1989. Kennedy appealed to the circuit court for the Sixth Judicial Circuit. The circuit court affirmed the decision of Department and this appeal ensued.

Before discussing the issues, we reiterate our scope of review of workers' compensation appeals as articulated in Permann v. Department of Labor, Unemployment Insurance Division, 411 N.W.2d 113 (S.D.1987). When presented with a question of fact, this court must determine whether the agency's findings are clearly erroneous. Id. at 116-17. Further, "the question is not whether there is substantial evidence contrary to the agency finding, but whether there is substantial evidence to support the agency finding.... [T]he court shall give great weight to the findings made and inferences drawn by an agency on questions of fact." Lawler v. Windmill Restaurant, 435 N.W.2d 708, 711 (S.D.1989) (Morgan, J., concurring specially). Questions of law, however, are reviewed de novo. Permann, 411 N.W.2d at 117.

Kennedy's claim that he is entitled to odd-lot benefits under the Barkdull I doctrine requires that we apply this test:

The claimant has the burden to make a prima facie showing that his physical impairment, mental capacity, education, training, and age place him in an odd-lot category. The burden then shifts to the employer to show that some form of suitable work is regularly and continuously available to the claimant.

Schlenker v. Boyd's Drug Mart, 458 N.W.2d 368, 371 (S.D.1990) (citations omitted); Wendel v. Domestic Seed & Supply, 446 N.W.2d 265, 270 (S.D.1989); see 2 A. Larson, Workmen's Compensation Law Sec. 57.66 (1987).

Department's decision, as stated in its conclusions of law, was that "[Kennedy] has failed to carry his burden of proof in establishing a prima facie case for entitlement to permanent total disability benefits under the odd-lot doctrine." With that decision, Kennedy takes issue in the following respects:

1. Findings of Fact XIII and XIV are not supported by the evidence found in the deposition testimony of Dr. Stephens;

2. Finding of Fact XVIII is not supported by the evidence in the record as a whole;

3. Finding of Fact XIX is clearly contrary to the medical evidence in the record;

4. Finding of Fact XX is clearly erroneous under the "favored work" doctrine;

5. The proffered employment was "favored work"; and

6. The Department erred in considering the proffered work in evaluating the second phase in the test, the employer's burden to establish availability of work.

First, we note that it is undisputed that Kennedy sustained a back injury while in the course and scope of his employment with Employer on July 7, 1981. Further, when Kennedy returned to work on three occasions within the next year, he was disabled due to aggravation of the injury. Finally, after nearly three years "off work," ² he again returned to work in April of 1985, but within two months his condition was again greatly aggravated while working. It is from that point on that the controversy developed.

Turning then to Kennedy's dispute with the findings of fact, we first examine Findings XIII and XIV, which state:

XIII.

That in the opinion of Dr. Stephens, Claimant never will return to work. This [is] based upon the fact that Claimant is presently receiving Social Security and that he is not able to do a job or will not do a job for whatever reason because he wants to stay within the system and be disabled.

XIV.

That Claimant had no plans to obtain employment in Montana when he moved, and did not even register with Job Services in Montana until Daniel Schara, a Montana vocational consultant, suggested that he do so two years after Claimant moved.

Kennedy argues that these findings must be based upon a piecemeal reading of excerpts, out of context, from Dr. Stephens' deposition. Because deposition testimony is relied upon, he also claims that there should be no presumption that the findings are correct. Finding XIII is directly supported by the deposition testimony of Dr. John V. Stephens, Kennedy's own physician who specializes in physical medicine and rehabilitation. In fact, as a whole, the testimony of Dr. Stephens indicates that while Kennedy does suffer some pain from his injury, he is fully capable of returning to full-time light-duty work. Kennedy points to the fact that Dr. Stephens testified that he, Kennedy, was not malingering, and that his pain was real, as evidence that Department's finding lacks support. However, it is the function of the trier of fact to resolve conflicting testimony and evaluate credibility of witnesses to determine the comparative weight to be given to such testimony. Lee v. Minneapolis St. Ry. Co., 230 Minn. 315, 321, 41 N.W.2d 433, 437-38 (1950). Furthermore, Department should not arbitrarily disregard uncontradicted or undiscredited expert testimony. Campbell v. City of Chamberlain, 78 S.D. 245, 100 N.W.2d 707 (1960). Our reading of Dr. Stephens' testimony, together with other substantial evidence in the record supports these findings and they are not clearly erroneous.

The next finding with which Kennedy takes issue is:

XVIII.

That Claimant's off-duty activities since his injury reflect a willingness to tolerate the pain and discomfort associated with activities he enjoys, but Claimant has no such willingness in regard to employment or motivation to search for employment.

Kennedy argues that there is no support for this finding that he is not motivated to seek suitable employment. He argues that the pain he suffers is real and debilitating, directly causing him to be unemployable. This contention was raised at the Department hearing on Kennedy's claim, and the record supports the rejection of this claim. Department is not required to accept the testimony of the claimant and is free to choose between...