State News : South Dakota

South Dakota Department of Labor

Halstead v. J & R Well Drilling Services LLC and Zurich North America

James Sword/William Fuller

Judge Donald W. Hageman

This case involves a rather significant injury involving a 30 year old individual. The claim was that claimant was entitled to vocational rehabilitation benefits for a petroleum engineering degree. Claimant suffered an injury in July 2006 as he worked as a derrick hand for a drilling company. This was extremely strenuous and hard work. He had previously worked as a firefighter, roofer, and a cook. Claimant attended high school but did not have any formal education after that. After Claimant’s injury, all doctors agreed he was limited to sedentary physical activity, could not return to his usual and customary employment as an oil field worker/derrick hand, and that his prior jobs as a firefighter, roofer, and cook were no longer suitable for him due. Claimant chose to attend the University of Wyoming to obtain a four year degree in petroleum engineering. Petroleum engineers start making between $60,000 and $70,000, and will earn much more with some experience.

In order to be entitled to vocational rehabilitation benefits, a claimant must establish a five part test. This test is as follows: (1) the employee must be unable to return to his usual and customary line of employment; (2) rehabilitation must be necessary to restore the employee to suitable, substantial and gainful employment; (3) the program of rehabilitation must be a reasonable means of restoring the employee to employment; (4) the employee must file a claim with the employer requesting the benefits; and (5) the employee must actually pursue a reasonable program of rehabilitation.

The employer and insurer were challenging element (3) of the analysis as they claimed the program claimant sought elevated his status in life, and thus was not reasonable. The South Dakota Supreme Court has indicated that an insurer cannot be forced to pay for an educational program that would allow an employee to elevate his status in life. Claimant was making approximately $41,000 before his injury, and would make at least $60,000 to $70,000 starting off as a petroleum engineer. The Department agreed that the petroleum engineering degree was not reasonable and claimant was not entitled to have that benefit covered. The employer and insurer did not have to pay for any of claimant’s schooling.

Reiman v. Zylstra Body & Frame and Dakota Truck Underwriters/Auto Owners

Rex Hagg/Michael McKnight and Charles A. Larson/Rick Orr

Judge Donald W. Hageman

The Reiman decision has a number of issues. The first was whether Reiman’s work activities are a major contributing cause of his knee condition and need for bilateral knee replacements. The second issue was which insurer was responsible for the surgeries and claimant’s condition. The third issue is whether claimant was permanently and totally disabled.

Claimant worked for employer from 1986 to March of 2010 as an auto body repairman and painter. He was required to stoop, squat, and kneel between 33-66% of the time. He was 51 years old at the time of the hearing, and completed nine years of schooling. He later obtained his GED with the assistance of his wife (my wife hits me) but had difficulty reading and writing.

Claimant sought treatment for his knees between 2003 and June of 2006. At that time, Dakota Truck Underwriters was the insurer for employer. Dakota Truck Underwriters paid for treatment to claimant’s knees through 2006. After June of 2006, employer was insured by Auto Owners.

Claimant sustained an injury to his other knee in 2007, and ultimately ended up treating for both of his knees. He continued to complaint of knee pain in 2008 and also of low back pain. Claimant was told his knees would continue to worsen over time and there was nothing he could do to stop the degenerative processes in his knees. There was mention as early as 2007 of the potential for knee replacements. Claimant elected to go through with conservative treatments and physical therapy and wanted to postpone the knee replacement as long as possible.

Claimant was ultimately laid off from his job in March of 2010. He testified his knees continued to worsen after he was laid off. When he had another set of MRIs in June of 2010, it showed additional degeneration. Claimant had his left knee replaced in March of 2011. Claimant’s treating doctors opined claimant’s work activities at employer were a major contributing cause of his need for knee replacements, and his current condition. While claimant had been diagnosed with degenerative disease within his knees, the finding was that the work activities accelerated the degeneration and caused the need for a total knee replacement. Claimant was given a five pound lifting restriction and was precluded from bending, stooping, and kneeling.

Auto Owners retained Dr. Segal, an orthopedic surgeon, to conduct an IME. Dr. Segal opined claimant was not a candidate for knee replacement and claimant’s work activities were not a major contributing cause for his current conditions. Dr. Emerson was hired by Dakota Truck Underwriters and likewise opined the work activities were not a major contributing cause and claimant was not a candidate for total knee replacement.

The Department accepted the opinions of the treating doctors over the IME doctors. The Department found the operating surgeon was in a much better position to opine on causation as he actually saw the inside of claimant’s knee instead of simply looking at films, and used that surgical knowledge when forming his opinion. The Department found the treating doctors’ opinions were of greater weight, and rejected the opinions of Drs. Emerson and Segal. The Department thus found that claimant’s condition was related to his work activities at employer.

The second issue was whether Dakota Truck Underwriters or Auto Owners was responsible for benefits. This was governed by the last injurious exposure rule. The Department found that claimant’s condition was due to cumulative injuries. The injuries occurred over time as claimant continued working on his knees. Since Auto Owners was the last employer on the risk, it was found responsible for the condition, which includes both medical and indemnity.

Finally, the question was whether claimant was permanently and totally disabled. Rick Ostrander testified on claimant’s behalf that claimant was obviously unemployable as his physical condition, in combination with his age, training and experience excluded him from the type of work that was available in his community. The Department also found that claimant was in continuous, severe, and debilitating pain that would make employment nearly impossible. The burden then shifted to the employer to find some work that was open and available and pay at least claimant’s workers’ compensation rate. Jim Carroll testified on behalf of both insurers and opined that if Dr. Lawlor’s restrictions were used, claimant was unable to work in the community and make his workers’ compensation rate. However, if Dr. Segal’s work restrictions were used, there was work available to claimant and claimant would benefit from vocational rehabilitation. The Department rejected Dr. Segal’s work restrictions, adopted Dr. Lawlor’s work restrictions, and thus accepted Jim Carroll’s opinion that claimant could not work under Dr. Lawlor’s work restrictions in the Rapid City labor market and make his workers’ compensation rate.

I know that the Reiman decision is currently on appeal. Please remember that all Department decisions are subject to appeal. The first appeal will go the Circuit Court level, and the losing party at the Circuit Court can always appeal it to the South Dakota Supreme Court.

If you have questions or would like additional information, please contact Charlie Larson at 605-731-0228 orcalarson@bgpw.com.  If you would like SD cheat sheets, let me know.