Lagge v. Corsica Co-op

• Decision Date: 10 March 2004
• Docket Number: No. 22829.,22829.
• Citation: 677 N.W.2d 569,2004 SD 32
• Parties: Benjamin P. LAGGE, Claimant and Appellee, v. CORSICA CO-OP, Employer and Appellant, and Travelers Insurance Co., Insurer and Appellant.
• Court: South Dakota Supreme Court

677 N.W.2d 569

2004 SD 32

Benjamin P. LAGGE, Claimant and Appellee, v. CORSICA CO-OP, Employer and Appellant, and Travelers Insurance Co., Insurer and Appellant.

No. 22829.

Supreme Court of South Dakota.

Considered on Briefs November 17, 2003.

Decided March 10, 2004.

Wally Eklund of Johnson, Eklund, Nicholson & Peterson Gregory, South Dakota and Jean M. Massa of Jensen and Massa Winner, South Dakota, Attorneys for appellee.

Sandra Hoglund, Timothy M. Gebhart of Davenport, Evans, Hurwitz & Smith, Sioux Falls, South Dakota, Attorneys for appellants.

GILBERTSON, Chief Justice.

[¶ 1.] Benjamin Lagge was injured while working at the Corsica Co-op. A prior summary affirmance from this Court affirmed his right to workers' compensation from Co-op. Consequently, the Department of Labor held a hearing to determine whether Lagge was permanently and totally disabled. At the hearing, Co-op and their insurance company (Travelers Insurance Company) attempted to enter video surveillance tapes of Lagge into evidence. These tapes had not been disclosed to Lagge, so the Department refused to admit them. The Department also ordered that Lagge is entitled to receive permanent total disability benefits, and ordered Co-op and Travelers to make payments through Lagge's attorney. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Lagge started working as a mechanic at Co-op in 1987. In early 1988, Lagge was injured while working at Co-op when an overhead garage door malfunctioned and came down on his left shoulder. Lagge saw several doctors because of this accident, including Dr. Dennis Johnson and Dr. Leonard Gutnik. Lagge was twice taken off work because of the injury. In May 1989, Lagge was fired from Co-op because he was no longer able to perform many of his job duties. He had trouble with these duties because his injury made it difficult for him to lift his left arm over his head.

[¶ 3.] Lagge next found work with a contractor. He ran a roller for the contractor, but only for approximately two weeks because the work bothered his neck and shoulders. In June 1989, Lagge began working at Petro Steel. Lagge worked at Petro Steel until December 1990, when he had surgery on his injured shoulder. Petro Steel would not allow Lagge back to work until the doctor gave him a "complete bill of health." Dr. Johnson would not give Lagge a complete bill of health, and consequently, Lagge was terminated from Petro Steel.

[¶ 4.] In June 1991, Lagge filed a petition with the Department of Labor, alleging that while employed by Co-op, he sustained a work-related injury to his left shoulder and was therefore entitled to workers' compensation benefits. Meanwhile, Lagge worked for John Deere until February 1992. He was having difficultly performing this job, so Dr. Gutnik recommended that Lagge try to re-train. As a result, Lagge left John Deere to enroll in an electronics program.

[¶ 5.] This program started in 1991 and ended in 1993. During that time, Lagge did some small engine work out of his home. He also worked thirty or more hours per week for the Douglas County Weed Board during the summer of 1992, and worked for a farmer during the harvest season.

[¶ 6.] After completing his electronics program, Lagge participated in the school's interviewing process. However, he was unable to get a job. Consequently, Lagge started doing some respite care. This was a part-time job, and his hours varied with the number of people he was providing care for. Lagge also continued his small engine repair business.

[¶ 7.] On December 22, 1994, the Department held a hearing on Lagge's 1991 petition. The Department ruled that Lagge's employment activities after he left Co-op contributed independently to his condition. The Department determined that this relieved Co-op of liability under the last injurious exposure rule. Lagge appealed, and the circuit court reversed the Department. This Court affirmed the circuit court without opinion.

[¶ 8.] By early 1997, Lagge's last respite care client went to the nursing home. In 1998, Lagge took a job as a maintenance worker at the nursing home. This job involved lawn mowing on a riding lawn mover, pulling weeds, replacing light bulbs, and repair of wheelchairs and walkers. The nursing home authorized Lagge to work twelve to thirteen hours a week doing this maintenance. Lagge also did light maintenance work and snow removal for four commercial and five residential locations in December 1998.

[¶ 9.] In preparation for the upcoming hearing to determine whether Lagge was permanently and totally disabled, the parties held a prehearing conference. Lagge listed the witnesses he planned to call at the hearing and Co-op and Travelers listed one witness that they intended to call. The Department entered a Prehearing Order including these witnesses and specifically stating that "the parties shall be bound by [the] Order unless objection is made in writing to the Department of Labor and received by September 15th, 1999. No changes will be allowed after that date except in the case of unforeseen exigencies."

[¶ 10.] The hearing took place on June 6, 2000. At the time of the hearing, Lagge was working an average of sixteen to thirty hours per week at the nursing home. He worked nearly forty hours in the week before the hearing. This increase in hours was due to another employee's time off and some remodeling at the nursing home. Lagge was also working up to forty-five hours per week at his own small engine and electronics repair business.

[¶ 11.] At the hearing, Lagge described his job at the nursing home as follows: "Mow lawn. Pull weeds out of flowers. Replace light bulbs. Repair, like wheelchairs. Walkers." On cross-examination, Lagge denied doing any heavy or construction-type work at the nursing home.

[¶ 12.] However, Co-op and Travelers had videotaped surveillance of Lagge. The tapes showed Lagge using both arms in a variety of ways, including constructing a chain link fence, carrying fence posts and a railroad tie, and driving a fence post into the ground. Co-op and Travelers attempted to offer the tapes into evidence, but the Department refused because the tapes and the witnesses related to the tapes had not been disclosed in the Prehearing Order. In August 2001, the Department awarded Lagge permanent total disability benefits. The circuit court affirmed the Department.

[¶ 13.] Co-op and Travelers appeal, raising the following issues for our review:

1. Whether the Department erred in refusing to receive surveillance videotapes of Lagge.

2. Whether the Department erred in finding Lagge permanently and totally disabled under the odd-lot doctrine.

3. Whether the Department erred in ordering the payment of medical bills through Lagge's counsel.

STANDARD OF REVIEW

[¶ 14.] In workers' compensation cases:

Our standard of review ... is controlled by SDCL 1-26-37. "Under SDCL 1-26-37, when the issue is a question of fact then the clearly erroneous standard is applied to the agency's findings; however, when the issue is a question of law, the actions of the agency are fully reviewable." We will reverse only when, after careful review, we are firmly convinced a mistake has been made.... "The standard of review in an appeal to the Supreme Court from a trial court's appellate review of an administrative decision is de novo: unaided by any presumption that the trial court is correct."

Capital Motors, LLC, v. Schierl, 2003 SD 33, ¶ 10, 660 N.W.2d 242, 245 (internal citations omitted). "Whether a claimant makes a prima facie case to establish oddlot total disability inclusion is a question of fact." Id. ¶ 11 (citation omitted).

ANALYSIS AND DECISION

[¶ 15.] 1. Whether the Department erred in refusing to receive surveillance videotapes of Lagge.

[¶ 16.] At the hearing on June 6, 2000, Lagge testified that the maintenance work he did at the nursing home consisted of: "Mow lawn. Pull weeds out of flowers. Replace light bulbs. Repair, like wheelchairs. Walkers." On cross-examination, Lagge stated that he did not do any "heavy" work or any "construction-type work" at the nursing home. Lagge indicated that the only heavy grounds keeping he did was to "pull weeds in the flowers." He further stated that he intends to continue working for the nursing home.

[¶ 17.] After Lagge rested, Co-op and Travelers called their first witness. To begin their case-in-chief, Co-op and Travelers called two private investigators who had taken surveillance tapes of Lagge. This was offered to refute Lagge's substantive evidence on the extent of his injury.

[¶ 18.] Neither the tapes nor the private investigators had been included in the Prehearing Order. The Prehearing Order required the parties to disclose all of their evidence, including witnesses. In the Order, Co-op and Travelers listed only one live witness that they intended to call.

[¶ 19.] The parties were to be bound by the Prehearing Order unless they objected, in writing, by September 15, 1999. Neither party objected to the Order. Finally, the Order specifically stated that: "No changes will be allowed after that date except in the case of unforeseen exigencies."

[¶ 20.] Co-op and Travelers argued that these were "rebuttal" witnesses. They argued that:

[T]he evidence was offered to impeach [Lagge's] testimony regarding his abilities to use his upper extremities and the type of work he was capable of doing. Had [Lagge] testified forthrightly about his abilities, the impeaching evidence would never have been used. Yet disclosure of the evidence prior to ascertaining whether it will ever be used defeats its very purpose.

Ultimately, Co-op and Travelers argue that impeachment or rebuttal evidence need not have been disclosed before the hearing.

[¶ 21.] Lagge objected to the admission of the private investigators and the tapes. The Hearing Officer ruled that:

I guess I don't agree [that they are rebuttal witnesses]. I'm inclined to think that — I mean, I don't think I would place an insidious...