Xcel Energy Servs., Inc. v. Labor

Decision Date11 July 2013
Docket NumberNo. 2011AP203.,2011AP203.
Citation2013 WI 64,833 N.W.2d 665,349 Wis.2d 234
PartiesXCEL ENERGY SERVICES, INC., Petitioner–Appellant–Petitioner, v. LABOR AND INDUSTRY REVIEW COMMISSION and John Smoczyk, Respondents–Respondents.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

For the petitioner-appellant-petitioner, there were briefs by Timothy S. Crom, Matthew P. Bandt and Jardine, Logan & O'Brien, P.L.L.P., Lake Elmo, MN, and oral argument by Matthew P. Bandt.

For the respondents-respondents, the cause was argued by Richard Briles Moriarty, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general.

PATIENCE DRAKE ROGGENSACK, J.

[349 Wis.2d 241]¶ 1 This is a review of a published opinion of the court of appeals 1 that reversed a decision of the Chippewa County Circuit Court,2 which in turn had affirmed an order of the Labor and Industry Review Commission (LIRC) awarding worker's compensation benefits to John Smoczyk for his permanent total disability that resulted from a work-related injury during his employment by Xcel Energy Services, Inc. Three issues are presented. First, Xcel claims that the court of appeals erred when it concluded that the circuit court was required to dismiss Xcel's complaint for lack of competency based on Xcel's failure to name its insurer, ACE American Insurance Co., as an “adverse party,” pursuant to Wis. Stat. § 102.23(1)(a) (2011–12).3 Second, Xcel raises two challenges to the merits of LIRC's decision, claiming that: (1) there was not credible and substantial evidence in the record to support LIRC's finding that Smoczyk was entitled to permanent total disability benefits under the odd-lot doctrine; and (2) LIRC acted without authority or in excess of its powers 4 when it awarded Smoczyk disability benefits after an administrative law judge (ALJ) had ordered that further medical procedures were required to determine whether Smoczyk was permanently and totally disabled.

¶ 2 We conclude that the circuit court had competency to adjudicate Xcel's complaint, notwithstanding Xcel's omission of ACE, because ACE was not an “adverse party for purposes of Wis. Stat. § 102.23(1)(a). In reaching this conclusion, we reaffirm our decision in Miller Brewing Co. v. LIRC (Miller II), 173 Wis.2d 700, 713–18, 495 N.W.2d 660 (1993), and conclude that an “adverse party under § 102.23(1)(a) is a party “in whose favor” LIRC's award or order was made, or a party “whose interest is in conflict with the modification or reversal” of LIRC's order or award. We also now withdraw language that creates a definition of “adverse party proffered by the court of appeals in Miller Brewing Co. v. LIRC (Miller I), 166 Wis.2d 830, 842, 480 N.W.2d 532 (Ct.App.1992), that is not in accord with our definition.5

[349 Wis.2d 243]¶ 3 Additionally, rather than remanding to the court of appeals to review the merits of Xcel's complaint, which the court of appeals did not review, we affirm LIRC's award in favor of Smoczyk. First, based on the evidence of record, LIRC's finding that Smoczyk is entitled to permanent total disability benefits on an odd-lot basis is supported by credible and substantial evidence. Second, Xcel has not demonstrated that LIRC exceeded its authority in reaching a conclusion that departed from an ALJ's order in Smoczyk's worker's compensation proceeding before the Department of Workforce Development (DWD). Therefore, we reverse the decision of the court of appeals and we remand with instructions to affirm LIRC's decision awarding permanent total disability benefits to Smoczyk.

I. BACKGROUND

¶ 4 On January 25, 2007, Smoczyk, while employed by Xcel as an ironworker, injured his back. After taking a short break to rest his back, Smoczyk returned to work and finished his shift.6

¶ 5 After experiencing significant pain over the weekend, Smoczyk returned to work the following Monday and notified his supervisor about the back injury. On February 1, 2007, Smoczyk met with Dr. Jane Stark, accompanied by a representative of Xcel, Scott Crotty. Dr. Stark diagnosed Smoczyk with a back sprain/strain, which she concluded could reasonably be related to his work activities.

¶ 6 Soon thereafter, Smoczyk began undergoing physical therapy, but in late February 2007, believing that Dr. Stark's recommendations were not in his best interest, Smoczyk began treatment with Dr. Joseph Hebl. Dr. Hebl continued the recommendation for physical therapy and imposed light-duty restrictions. Soon after Dr. Hebl imposed light-duty restrictions, Smoczyk was laid off as part of Xcel's seasonal layoffs; however, Smoczyk was never rehired and has not worked since being laid off in February 2007.

¶ 7 Although Smoczyk experienced some relief during the course of physical therapy, he returned to Dr. Hebl in May 2007, and reported that his back pain had worsened. Over the course of the next two months, Smoczyk reported varying pain levels for his back, while also reporting new pain radiating down both legs to the bottom of his feet. Dr. Hebl suggested that Smoczyk consider a consultation at the Pain Clinic of Northwestern Wisconsin, where he might obtain more aggressive treatment, including steroid injections or possibly spinal surgery. Smoczyk expressed some concern that such invasive treatments might exacerbate his condition or create new pain.

¶ 8 Notwithstanding his concerns, Smoczyk visited the Pain Clinic on July 13, 2007, and met with Dr. Mark Schlimgen. Dr. Schlimgen recommended further physical therapy, as well as an epidural steroid injection intended to address Smoczyk's lower back pain. Smoczyk received epidural steroid injections on July 13 and 27, both of which provided some relief. Additionally, Smoczyk continued to attend physical therapy treatments and to practice exercises at home. Smoczyk also continued to meet with Dr. Hebl, who maintained the light-duty work restrictions.

¶ 9 In early September 2007, Dr. Hebl suggested that Smoczyk apply for Social Security Disability benefits, based on Dr. Hebl's opinion that Smoczyk would be unable to return to work, and that he would be unable to pursue any other gainful employment.Later that month, Smoczyk met with an independent medical examiner, Dr. John Dowdle, at the request of Xcel. Dr. Dowdle opined that the work injury in January 2007 exacerbated a preexisting spinal condition, and that the treatments he had been receiving were “reasonable and necessary.... [having] been done in [an] attempt to manage his back pain.”

¶ 10 Dr. Dowdle suggested that there existed a number of treatment options for Smoczyk. One was a procedure called a medial branch block, which would be intended to temporarily decrease Smoczyk's back pain and determine whether he might be a candidate for a subsequent procedure, a radiofrequency facet denervation, which might help eliminate some of his lower back pain. Dr. Dowdle also recommended work restrictions: a 20–25 pound maximum lifting limit, minimal bending and lifting, and avoiding prolonged single positioning. Additionally, Dr. Dowdle assessed a five percent permanent partial disability rating, and recommended that Smoczyk discontinue physical therapy.

¶ 11 Smoczyk returned to Dr. Hebl on October 3, 2007, and reported worsening neck pain, as well as continuing, persistent back and leg pain. At that visit, Dr. Hebl removed Smoczyk from work-availability and reiterated that Smoczyk should continue to pursue Social Security Disability benefits. Thereafter, Smoczyk was deemed eligible for Social Security disability benefits, as well as permanent partial disability benefits for five percent of the body as a whole and temporary total disability for the period between February and December 2007.

¶ 12 During late fall and winter of 2007, Smoczyk continued treatment with Dr. Schlimgen, who discussed Dr. Dowdle's recommendation for a radiofrequency rhizotomy procedure with Smoczyk.7 Specifically, Dr. Schlimgen noted that the recommended procedure would address back and hip pain, but that it would not treat Smoczyk's leg pain, which still comprised a significant portion of his overall pain. Dr. Schlimgen noted that because he could not rule out the facet joints as “being at least a contributor” to Smoczyk's back and hip pain, “it would be reasonable to consider a medial branch blockade to determine if the facet joints are contributing to this portion of his pain.” Dr. Hebl later concurred with these recommendations.

¶ 13 Smoczyk again met with Dr. Hebl in February 2008, and reiterated his reluctance to undergo additional procedures, based on his concern of exacerbating his pain. Based on Smoczyk's hesitance to undergo further treatment, Dr. Hebl noted that Smoczyk was at the end of healing, and that he had a permanent disability rating of 20 percent attributable to his lower back and leg conditions, as well as three percent attributable to his neck.

¶ 14 During summer and fall of 2008, Smoczyk underwent two separate vocational assessments, one on his behalf conducted by Sidney Bauer, and the other on Xcel's behalf, conducted by John Meltzer. Relying upon Dr. Dowdle's suggested limitations, Bauer concluded that Smoczyk's only potential occupational opportunities would be in the service industry, but that Smoczyk's physical restrictions, his education, and the limited labor market resulted in Smoczyk's being permanently and totally disabled under the odd-lot doctrine. Similarly, Bauer concluded that Smoczyk was permanently and totally disabled under Dr. Hebl's opinion as well, based on Dr. Hebl's recommendation regarding permanent partial disability rating and his suggestion that Smoczyk would be unable to return to gainful employment.

¶ 15 Xcel's vocational expert, John Meltzer, also proffered opinions based on the medical conclusions of Drs. Dowdle and Hebl. Based on Dr. Dowdle's opinion, Meltzer concluded that Smoczyk would have a 60 to 70 percent decrease in earning capacity, but that with a diligent search, Smoczyk...

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