The employee appealed a compensation judge’s order dismissing his claim for penalties. The employee sustained work injuries to his shoulders in 1984 and 1985. In 1994, the parties stipulated the employee was permanently totally disabled and would be paid ongoing benefits.
In 2011, the employer and insurer filed a petition to discontinue benefits alleging the employee returned to employment with substantial income and was no longer permanently totally disabled. The parties negotiated settlement in September 2011 and proceedings were held in abeyance.
On October 5, 2011, the employer and insurer filed a Notice of Intention to Discontinue Benefits (NOID), stating the parties had reached an agreement allowing discontinuation of permanent total disability benefits; the employer and insurer gave notice that they were discontinuing benefits pending settlement and noted that Employee had agreed to not object. No objection was filed.
As laid out in further detail in the substantive summary of this case, a compensation judge subsequently found that the employee was not permanently totally disabled and granted the petition to discontinue. This was appealed to the Minnesota Supreme Court and ultimately remanded with instructions to dismiss the petition as using it to discontinue permanent total disability benefits was not authorized by statute.
The employee sought penalties for non-payment of benefits, late payment of certain benefits, and interest on the penalty award surrounding the NOID and resulting discontinuance. A compensation dismissed the claim petition for penalties in August 2015 and the employee appealed.
The employee argued that penalties were appropriate as the employer and insurer had no statutory right to discontinue permanent total disability benefits. The court of appeals found that the controversy in this case (spanning numerous proceedings and appeals) has been the employee’s entitlement to permanent total disability benefits despite a window of returning to employment for a period where he lived in Alaska. The unsettled law on this point led the parties to discuss settlement and no objection to the subsequent NOID was filed. While the court did consider the use of the NOID in this case to be “unique”, it found that it did not warrant penalties. The court of appeals affirmed the compensation judge.