Olson v. Midwest Printing Co., C3-83-525

• Decision Date: 13 April 1984
• Docket Number: No. C3-83-525,C3-83-525
• Citation: 347 N.W.2d 43
• Parties: Irene OLSON, Respondent, v. MIDWEST PRINTING COMPANY, and American Mutual Insurance Company, Relator.
• Court: Minnesota Supreme Court

Page 43

347 N.W.2d 43

Irene OLSON, Respondent, v. MIDWEST PRINTING COMPANY, and American Mutual Insurance

Company, Relator.

No. C3-83-525.

Supreme Court of Minnesota.

April 13, 1984.

Syllabus by the Court

1. A retrained commission salesperson's earning capacity is to be determined based upon actual earnings, but only for a reasonable period of time during which the person is making a diligent effort to succeed in the occupation of retraining.

2. The Workers' Compensation Court of Appeals properly exercised its power by remanding the penalty issue to the compensation judge.

Donald W. Anderson, Minneapolis, for Relators.

Brian M. Olsen, Cokato, for respondent.

Considered and decided by the court en banc without oral argument.

PETERSON, Justice.

This is a worker's compensation action brought by respondent, Irene Olson, seeking continuing temporary total disability benefits and an additional penalty award for wrongful discontinuance of benefits against relators Midwest Printing Company and American Mutual Insurance Company. Olson's claim is based upon a January 29, 1979, injury she sustained to her back while working as a binding machine operator for Midwest Printing. Olson received temporary total disability benefits from January 30, 1979, to March 12, 1982. In addition, she received retraining benefits from August 2, 1979, to October 31, 1980. She has also received lump-sum payments for 10% permanent partial disability of the back.

On March 12, 1982, American Mutual discontinued Olson's temporary total disability payments, stating the following reasons: "Retraining as ins. agent in 1980. We feel our obligation is completed. Clm't now a licensed agent." Olson filed an objection to discontinuance. After a hearing, the compensation judge denied Olson's claim, finding that Olson's earning capacity was equal to or greater than her earnings at the time of the injury and that Midwest Printing's obligation was therefore at an end. The Workers' Compensation Court of Appeals (WCCA) reversed ¹ and ordered the payment of ongoing temporary total benefits based upon a finding that Olson had "no net earnings in the occupation for which she was retrained" and that there was no evidence that "she had a capacity to earn more than she has earned in her occupation for which she was retrained." The WCCA remanded the case to the compensation judge for consideration of imposition of a penalty for wrongful discontinuance of compensation benefits.

The central issue raised on appeal is whether the earning capacity of a retrained commission salesperson should be determined in the context of the entire competitive labor market or be limited to the labor market for the occupation for which the person was retrained.

Irene Olson began working for Midwest Printing as a machine operator in August 1966. Her duties involved lifting unbound stacks of paper and placing them in a binding machine, then removing and stacking the bound product. In January 1979, Olson injured her back when she lifted a stack of paper and simultaneously twisted toward the binding machine. She was treated by an orthopedic surgeon, who restricted her bending and lifting, recommended back exercise, and advised her to use "common sense" in her activities. In the surgeon's opinion, Olson sustained a 10% permanent partial disability of the back as a result of her injury.

Midwest Printing and American Mutual admitted liability for the back injury and paid temporary total benefits from January 29, 1979, to March 12, 1982, when they filed their notice of discontinuance. A short time after the accident, Olson received a lump-sum payment for 5% permanent partial disability of her back.

It is undisputed that Olson is unable to return to her job with Midwest Printing because of her disability. In May 1979, she underwent tests at the Department of Vocational Rehabilitation in St. Cloud to determine a possible occupation for retraining. The vocational rehabilitation counselor recommended that she consider a future in sales. Midwest Printing and American Mutual consented to Olson's request to be retrained as an insurance salesperson and paid retraining benefits from August 1979 to October 1980.

Olson was retrained through a program conducted by Farmers Insurance. In October 1979, she was licensed to sell auto, fire, and life insurance and began attempting to sell Farmers Insurance in the Waverly, Minnesota, area where she lives. Her 1979 commission income was negligible. In January 1980, she was licensed to sell commercial and farm casualty insurance. In March, she became an independent agent associated with the TK Agency of Golden Valley and the Hennepin Agency of Crystal, so that she would be able to offer insurance from a number of companies. She received her final license to sell accident and health insurance in October 1980.

After Olson completed her training, American Mutual provided a rehabilitation counselor to assist her in finding a job. Olson interviewed for other employment in the insurance industry, finding only office clerical or commission sales work similar to her current employment. There were no salaried positions available in insurance sales. Even though a commission income generally takes several years to develop, the rehabilitation counselor was convinced that Olson belonged in the occupation for which she was retrained. Olson testified that she encountered difficulties because she was a relative newcomer to rural Waverly, having moved there less than 2 years before her injury.

Olson has continued to sell insurance as an independent agent in Wright County. She works at least 40 hours per week calling on prospective clients and preparing the necessary paperwork in an attempt to build her insurance business. There is no dispute that she has been diligent, enthusiastic, and energetic in her efforts to earn an income from insurance work. In fact, the employment expert who testified on behalf of Midwest Printing and American Mutual praised Olson's efforts and testified that she has the personal qualities that would make her a successful insurance agent. In spite of her efforts, Olson has not realized a significant income. In 1980, she had a net loss of $1,066. Her net loss in 1981 was $2,148. From January to August 1982, she had a net income of $33.

Early in 1982, Olson began working with Irene Woitalla, who operates the Shore Agency in Waverly. Woitalla is a longtime resident of Wright County, and Olson's association with Woitalla allowed Olson "to get her foot into a number of doors * * * that [she] was turned away at before." The Shore Agency was awarded several contracts that will enable Olson to write a more competitive insurance package. She is optimistic about the future and expects a definite upturn in her insurance income. Olson plans to become Woitalla's partner as soon as legal problems with the Shore Agency have been resolved.

In January 1982, Olson hired an attorney to seek an additional 5% permanent partial disability lump-sum payment. Her surgeon had given her a rating of 10% permanent partial disability of the back. She had received payment for a 5% rating, and her attorney advised her that, in his opinion, she had a right to an additional 5%. Her attorney was successful in obtaining the additional 5% payment. In an affidavit attached to her objection to the notice of discontinuance, Olson...