Title: Brakebush Brothers, Inc. v. Labor and Industry Review Commission

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
95-2586 
 
 
Complete Title 
of Case: 
 
Brakebush Brothers, Inc. and Employers  
Insurance of Wausau,   
        Plaintiffs-Respondents-Petitioners,  
         v.  
Labor and Industry Review Commission,   
        Defendant-Appellant,  
Richard Alan Engel,   
        Defendant.  
  
 
 
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  201 Wis. 2d 811, 549 N.W.2d 287 
 
 
(Ct. App. 1996) 
 
 
UNPUBLISHED 
 
 
Opinion Filed: 
June 12, 1997 
Submitted on Briefs: 
 
Oral Argument: 
March 5, 1997 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Marquette  
 
JUDGE: 
Donn H. Dahlke 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiffs-respondents-petitioners there 
was a brief by Raymond G. Clausen and Law Offices of Stilp and 
Cotton, Madison and oral argument by Raymond G. Clausen. 
 
For the defendant-appellant the cause was argued 
by Jennifer Sloan Lattis, assistant attorney general, with whom 
on the brief was James E. Doyle, attorney general. 
 
                                                          95-2586 
 
1 
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 95-2586 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Brakebush Brothers, Inc. and Employers 
Insurance of Wausau, 
 
 
Plaintiffs-Respondents-Petitioners, 
 
 
v. 
 
Labor and Industry Review Commission, 
 
 
Defendant-Appellant, 
 
Richard Alan Engel, 
 
          Defendant. 
FILED 
 
JUN 12, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.  
¶1 
WILLIAM A. BABLITCH, J.   Brakebush Brothers, Inc. and 
Employers Insurance of Wausau (Brakebush) seek review of an 
unpublished decision of the court of appeals granting worker’s 
compensation temporary disability benefits to Richard Engel 
(Engel), a former employee of Brakebush.  Brakebush Brothers 
suspended and then terminated Engel during his healing period 
for making false 
representations 
regarding 
a 
work-related 
injury.  Now Brakebush argues that Engel’s termination relieved 
it of its liability to pay Engel worker’s compensation temporary 
disability benefits for the concededly compensable injury.  The 
Labor and Industry Review Commission (LIRC) found that Engel was 
                                                          95-2586 
 
2 
entitled to disability benefits until the end of his healing 
period despite his termination.  We agree.  We hold that LIRC’s 
finding that Engel was entitled to temporary disability benefits 
until April 6, 1992, for his work-related injury is sustained by 
credible and substantial evidence, and Brakebush failed to 
submit adequate proof rebutting the extent of Engel’s injury.  
We further hold that the Worker’s Compensation Act does not 
provide an exception to an employer’s liability when an employee 
is terminated for misrepresentations relating to his or her 
medical condition.  Accordingly, we affirm. 
¶2 
The relevant facts for purposes of this review are as 
follows:  On April 10, 1990, while working for Brakebush, 
Richard Engel injured his back as he lifted an 80 pound box of 
chicken parts.  As a result of this injury, Engel was 
temporarily unable to work.  He underwent a diskectomy in May, 
1990.  He returned to work in August 1990, but continued to have 
problems with his back, resulting in occasional missed days at 
work, periodic light duty restrictions, and extensive physical 
therapy and medical care throughout 1990 and 1991.  Brakebush 
has a liberal return to work policy and accommodated Engel’s 
light duty work restrictions.  On September 16, 1991, Engel 
reinjured his back at work.  He immediately saw Dr. Moede, an 
emergency room physician, who prescribed bed rest.  Janet Van 
Epps, the benefits manager at Brakebush Brothers, spoke with 
Engel after Dr. Moede’s examination.  Engel told her that he 
understood the doctor’s restrictions.  Three days later, Engel 
purchased a bow hunting license. 
                                                          95-2586 
 
3 
¶3 
On October 10, 1991, Engel visited his treating 
physician, 
Dr. 
Leonard. 
 
Dr. 
Leonard 
diagnosed 
acute 
exacerbation of lumbar pain, possibly involving a herniated or 
enlarged disc.  He prescribed physical therapy for Engel and 
concluded that Engel would be unable to work for the next three 
weeks. 
¶4 
Between September 16 and November 6, 1991, while Engel 
was not working and was receiving temporary total disability 
benefits, 
Brakebush 
conducted 
a private investigation and 
discovered that Engel had been bow hunting and playing pool.  
Engel did not mention these activities to either his employer or 
his doctors.  In fact, at the DILHR hearing, Van Epps testified 
that on October 11, 1991, Engel told her he had been “staying at 
home and taking it easy.”   
¶5 
On November 5, 1991, Dr. Leonard determined that Engel 
could resume light duty work.  However, on November 7, 1991, 
Brakebush suspended Engel and on November 12, 1991, Brakebush 
terminated him for gross misconduct.  Brakebush company policy 
prohibits “misrepresentation of facts or giving false or 
misleading information regarding a work injury.”  Brakebush 
concluded that despite being diagnosed as totally incapacitated 
and ordered by Dr. Leonard to bed rest following his September 
16, 1991 work injury, Engel had been playing in a pool league at 
a local establishment and bow hunting. 
¶6 
Upon learning that Brakebush had terminated Engel for 
failing to follow his prescription of bed rest, Dr. Leonard sent 
a letter to Brakebush’s insurance company stating that he never 
meant to restrict Engel to bed rest.  He explained that, rather 
                                                          95-2586 
 
4 
than prohibit specific activities, he routinely encourages his 
patients to use their common sense in selecting activities that 
do not aggravate their pain.  Dr. Leonard also stated that he 
had recommended walking to Engel as a form of therapy for his 
back.  Dr. Leonard noted in the letter that he had received a 
copy of the surveillance report on Engel.  Dr. Leonard reported 
that he was continuing to treat Engel for his back injury and 
would continue treatment until the end of Engel’s healing 
plateau, which he later determined to be April 6, 1992. 
¶7 
The Worker’s Compensation Division of the Department 
of Industry, Labor and Human Relations (DILHR) held two hearings 
in 1992.  During these hearings, Brakebush conceded that Engel 
had suffered a compensable injury.  Brakebush also conceded all 
temporary total disability and permanent partial disability 
benefits that had been paid to Engel before November 6, 1991, as 
well as permanent partial disability benefits.  Accordingly, 
DILHR concluded that the only benefits at issue were those that 
accrued between November 6, 1991 and April 6, 1992, the date 
Engel reached the end of his healing period. 
¶8 
DILHR reviewed reports from several doctors who had 
examined Engel.  All diagnosed a back injury.  DILHR reviewed 
Dr. Leonard’s reports and his December 16, 1991 letters to 
Brakebush’s insurance company.  In his reports, Dr. Leonard 
opined that Engel could return to light duty work as of November 
5, 1991, and would reach his healing plateau on April 6, 1992.  
DILHR found Dr. Leonard’s opinion to be credible.  On October 2, 
1992, DILHR ordered Brakebush to pay Engel the temporary total 
disability benefits that accrued between November 6, 1991 and 
                                                          95-2586 
 
5 
April 6, 1992.  On January 20, 1994, LIRC affirmed DILHR’s 
factual findings and order.  
¶9 
The circuit court overruled LIRC.  The court of 
appeals reversed the circuit court and affirmed LIRC’s decision 
to award benefits to Engel.  The court of appeals found that 
because the record contains medical evidence that Engel was 
disabled, and does not contain evidence that the physical 
activities Engel engaged in were inconsistent with disability, 
LIRC necessarily found Engel disabled under Leist v. LIRC, 183 
Wis. 2d 450, 462, 515 N.W.2d 268, 272 (1994).  Further, the 
court of appeals found that Wis. Stat. § 102.43 plainly does not 
allow an exception to an employer’s liability to pay disability 
benefits where the employee is subsequently fired for misconduct 
during the period of disability. 
¶10 Brakebush argues that an employee terminated for 
misrepresenting his or her physical abilities is not entitled to 
collect temporary disability benefits after being terminated.  
LIRC contends that its factual findings that Engel suffered a 
compensable injury and that his healing plateau was reached on 
April 6, 1992 must be upheld because they are supported by 
credible and substantial evidence and were not adequately 
rebutted by Brakebush.  It further contends that the Worker’s 
Compensation Act does not provide an exception to an employer’s 
liability when an employee is terminated for misrepresentations 
relating to his or her medical condition.  We agree with LIRC.  
Accordingly, we affirm. 
¶11 This case presents two issues.  First, whether the 
record contains credible and substantial evidence to support 
                                                          95-2586 
 
6 
LIRC’s determination that Engel was entitled to temporary 
disability benefits for his work-related injury.  The answer to 
this issue involves the question of whether Brakebush submitted 
adequate proof rebutting the extent and duration of Engel’s 
injury.  Second, whether an employee who is terminated for 
making misrepresentations relating to his or her physical 
activities is entitled to worker’s compensation disability 
benefits for a concededly work-related injury. 
¶12 This court reviews the decision of LIRC, not that of 
the circuit court.  Stafford Trucking, Inc. v ILHR Dept., 102 
Wis. 2d 256, 260, 306 N.W.2d 79, 82 (Ct. App. 1981). 
¶13 The 
first 
question 
involves 
LIRC’s 
finding 
that 
Engel’s back injury reached its healing plateau on April 6, 
1992.  The determination of the extent or duration of a 
disability is a question of fact.  Vande Zande v. IHLR Dept., 70 
Wis. 2d 1086, 1095, 236 N.W.2d 255 (1975).  LIRC’s factual 
findings are conclusive so long as they are supported by 
credible and substantial evidence.  Wis. Stat. § 102.23(6)(1993-
94); Applied Plastics, Inc. v. LIRC, 121 Wis. 2d 271, 276, 359 
N.W.2d 168, 171 (Ct. App. 1984).  This court does not weigh the 
evidence or pass upon the credibility of the witnesses; the 
weight and credibility of medical evidence are to be determined 
by LIRC.  E. F. Brewer Co. v. ILHR Dept., 82 Wis. 2d 634, 637, 
264 N.W.2d 222 (1978). 
¶14 The second question requires us to interpret the 
Worker’s Compensation Act (the Act).  In certain situations, we 
defer to LIRC’s interpretation of the Act.  However, the issue 
we confront today is one of first impression.  Accordingly, we 
                                                          95-2586 
 
7 
are not bound by LIRC’s legal conclusions and review them de 
novo.  Kelley Co., Inc. v. Marquardt, 172 Wis. 2d 234, 245-246, 
493 N.W.2d 68, 73-74 (1992).  
¶15 First, 
we 
consider 
whether 
the 
record 
contains 
credible and substantial evidence that Engel’s healing plateau 
was reached on April 6, 1992, keeping in mind that the role of 
this court upon review is to search the record to locate 
credible evidence to support LIRC’s factual findings.  Vande 
Zande, 70 Wis. 2d at 1097.  Brakebush concedes that Engel 
suffered a compensable injury on September 16, 1991.  The record 
contains several reports by Dr. Leonard, Engel’s treating 
physician.  On October 10, 1991, Dr. Leonard wrote that Engel 
should not return to work for three weeks.  In a later report, 
he concluded that Engel would be able to return to light duty 
work on November 5, 1991.  Dr. Leonard later concluded that 
Engel reached his healing plateau on April 6, 1992.  LIRC found 
Dr. Leonard’s opinion credible.   
¶16 Brakebush challenges the credibility of Dr. Leonard’s 
diagnosis and determination of the healing period.  Essentially, 
Brakebush argues that if Engel was playing pool and bow hunting, 
he could not have been disabled.
1  If Engel was not disabled, 
then he was not entitled to worker’s compensation benefits. 
¶17 Brakebush argues that since Engel did not inform Dr. 
Leonard of his recreational activities, Dr. Leonard’s opinions 
                     
1 Brakebush also argues that by convincing his employer that 
he was at bed rest from the date of his injury until the date of 
his suspension, when he was in fact bow hunting and playing 
pool, Engel effectively refused light duty work during this 
time.  We do not address this argument because it is not at 
issue.  Brakebush has paid and conceded benefits for this time 
period. 
                                                          95-2586 
 
8 
are not credible.  However, a reasonable inference can be drawn 
from 
the 
record that 
Dr. 
Leonard 
was aware 
of Engel’s 
activities, as evidenced by Dr. Leonard’s December 16, 1991 
letter to Brakebush’s insurance company in which he stated that 
he had received a surveillance report from them.  Dr. Leonard 
declined to comment upon the surveillance report.  However, he 
did comment on Brakebush's contention that Engel’s activities 
were inconsistent with bed rest.  Dr. Leonard stressed that he 
does not prescribe bed rest to his patients; rather, he 
encourages 
them 
to 
use 
their 
common 
sense 
in 
selecting 
activities which do not exacerbate their condition.  After this 
letter, Dr. Leonard continued to treat Engel until the end of 
his healing period.  We conclude that the record contains 
credible and substantial evidence supporting LIRC’s findings 
that Dr. Leonard’s opinion is credible. 
¶18 Next, 
we 
consider 
whether 
Brakebush 
adequately 
rebutted the extent and duration of Engel’s injury.  If an 
employee produces medical evidence of a work-related injury, an 
employer must produce evidence contradicting the employee’s 
claim in order for LIRC to deny worker’s compensation benefits 
to the employee.  Liest, 183 Wis. 2d 450.  Engel claims a work-
related injury, and he presented medical evidence of his injury 
which LIRC found credible.  Brakebush presented evidence that 
Engel participated in recreational activities which perhaps 
appear, to the lay person, to be incompatible with his 
disability.  Brakebush submitted evidence showing that Engel had 
played pool and bow hunted during his disability leave.  At the 
DILHR hearings in 1992, Brakebush proved that Engel lied to his 
                                                          95-2586 
 
9 
employer about his recreational activities.  Brakebush contends 
that this evidence adequately rebuts evidence of the extent and 
duration of Engel’s injury.  We disagree. 
¶19 In order to deny disability benefits, if an employee 
submits credible and substantial evidence of a compensable 
injury, Leist directs that LIRC must point to some evidence that 
raises a legitimate doubt as to whether someone suffering with 
the alleged injury could engage in the alleged physical 
activities.  Leist, 183 Wis. 2d at 461.  Brakebush presented 
evidence that Engel was able to bow hunt and play pool.  
However, it failed to present any evidence that a person able to 
engage in these activities was also able to perform light duty 
work.  Instead, Brakebush asks this court to rely on its 
cultivated intuition to make that assumption.  Leist prohibits 
us from doing so.  Leist, 183 Wis. 2d at 462. 
¶20 Brakebush was not required to present an expert 
medical opinion to support a legitimate doubt although such an 
opinion would have been relevant.  Id. at 461.  Brakebush could 
also have provided a concession from Engel relating to the 
severity of his injury or his ability to work, or evidence from 
a medical text indicating that Engel’s recreational activities 
were inconsistent with his claimed injury.  Id.  Brakebush, 
however, provided no such evidence.  In its memorandum opinion, 
LIRC concluded: 
 
The employer submitted no medical evidence indicating 
that 
the 
applicant’s 
bow-hunting 
or 
pool-playing 
activities altered the course of his healing, and Dr. 
Leonard’s letter dated December 16, 1991, leads to the 
inference that such activities did not change the 
course of healing.   
                                                          95-2586 
 
10
We agree.  Accordingly, we conclude that Brakebush failed to 
adequately rebut Dr. Leonard’s opinion. 
¶21 Finally, Brakebush argues that employers should be 
relieved from liability for worker’s compensation disability 
benefits to an employee who is terminated for misrepresenting 
his or her physical abilities.  Brakebush’s argument focuses on 
Engel’s deceitful conduct and his termination.  Engel was 
terminated because he lied about his recreational activities.  
He misled his employers into believing that he was staying at 
home on bed rest when he was, in fact, playing pool and bow 
hunting.  This court in no way condones Engel’s behavior.  
However, the issue of whether Engel should have been terminated 
is not before us.  Nor is it relevant to our determination.  Our 
analysis is governed by the Worker’s Compensation Act. 
¶22 The Act provides that liability shall exist against an 
employer where: (1) the employee sustains an injury; (2) at the 
time of the injury, the employee is performing service growing 
out of and incidental to his or her employment; and, (3) the 
injury arises out of his or her employment.  Wis. Stat. 
§ 102.03(1)(a)(c) and (e)(1993-94).  The Act is essentially a 
no-fault law which seeks to make employees, good or bad, whole 
again after a work-related injury. 
¶23 Brakebush concedes that Engel sustained an injury and 
that the injury occurred while Engel was performing service 
growing out of and incidental to his employment.  However, 
Brakebush asks this court to find an exception to the Act that 
will excuse employers from liability under the statute where an 
                                                          95-2586 
 
11
employee is discharged for making misrepresentations relating to 
his or her medical condition.  
¶24 In its memorandum opinion, LIRC concluded that the Act 
contains 
no 
provision 
for 
terminating 
compensation 
when 
employment is terminated so long as the employee is still 
disabled: 
 
[W]hile the employer appears to have had sound reasons 
for terminating the applicant, this does not relieve 
the employer/insurance carrier from the obligation to 
pay temporary total disability benefits for the period 
in question. . . . To the employer and its insurance 
carrier, it may seem inequitable that the applicant is 
able to receive temporary disability benefits after 
having been discharged for good cause.  However, 
worker’s compensation is a statutory program and there 
is no provision in Chapter 102 which would allow the 
cutoff of temporary disability benefits as long as the 
work injury continues to cause disability . . . The 
only 
medical 
evidence 
of 
record 
leads 
to 
the 
conclusion that up until April 6, 1992, the applicant 
continued to be temporarily totally disabled due to 
the effects of the work injury. 
 
¶25 We agree with LIRC’s interpretation of the Act.  
Wisconsin has a long history of providing benefits to employees 
despite their misconduct.  In Karlslyst v. Industrial Comm., 243 
Wis. 612, 614, 11 N.W.2d 179 (1943), an employee who was injured 
while urinating off of a moving truck was still entitled to 
benefits because he was injured while in the course of his 
employment.  In Theisen v. Industrial Com’n., 8 Wis. 2d 144, 
154, 98 N.W.2d 446, 451 (1959), assuming that an employee had 
attempted to bribe witnesses to testify on his behalf at a 
worker’s compensation hearing regarding an alleged work-related 
injury, the court concluded that as long as there was no 
legitimate doubt as to the existence of a compensable injury, 
                                                          95-2586 
 
12
the employee was still eligible to receive worker’s compensation 
disability benefits.  This court quoted the circuit court 
opinion which stated, “the law prescribes the penalty (for 
bribery), but denial of compensation, otherwise proper, is not 
the penalty prescribed.”  Theisen, 8 Wis. 2d at 154.  
¶26 As these cases illustrate, an injured employee who has 
been terminated is nonetheless entitled to disability benefits 
because the employee continues to be limited by the work-related 
injury.  It is the injury, not the termination, that is the 
cause of the employee’s economic loss.  Accordingly, Engel’s 
misrepresentations are of no moment to us unless they are 
relevant to the extent of his injury.  We have concluded that 
they are not.
2   
¶27 Other jurisdictions maintain the same position.  In 
Cousins v. Georgia-Pacific Corp., 599 A.2d 73 (Me. 1991), an 
employee was terminated when his employer discovered that 
although he had called in sick claiming difficulties due to a 
concededly work-related injury, he had actually participated in 
a golf tournament.  In this case the Maine court held that, 
“[A]ssuming that Cousins was terminated for willful misconduct, 
we conclude that circumstance does not of itself preclude the 
restoration of worker’s compensation.”  Cousins at 74. 
¶28 In Minnesota, Boryca v. Marvin Lumber & Cedar, 487 
N.W.2d 876 (Minn. 1992), an employee called coworkers and 
                     
2 An unemployment compensation proceeding is the proper 
forum for a discussion of employee behavior.  On February 6, 
1992, the Unemployment Compensation Division concluded that 
Engel was ineligible for unemployment benefits because he was 
terminated for cause, i.e., for his misrepresentations to his 
employer about his activities while on disability leave. 
                                                          95-2586 
 
13
individuals involved in his worker’s compensation dispute and 
threatened to kill himself and others.  Although the employee 
was subsequently fired for this behavior, he was still found 
eligible for worker’s compensation benefits.  The court held 
that, “the (Worker’s Compensation) Act does not deprive a worker 
discharged for misconduct of permanent total compensation for 
which he would otherwise be eligible.”  Boryca, 487 N.W.2d at 
879. 
¶29 A Florida court held that “(t)he award of wage-loss 
benefits is not precluded simply because the wage loss, 
occurring after a period of successful post-injury employment, 
is attributable in some part to a non-injury-related factor such 
as economic conditions, seasonal layoff or discharge for a just 
cause such as excessive absenteeism.” Johnston v. Super Food 
Services, 461 So.2d 169, 170 (Fla. Dist. Ct. App. 1984). 
¶30 The 
purpose 
of 
worker’s 
compensation 
disability 
benefits is to compensate employees who have lost the ability to 
work, temporarily or permanently, due to a work-related injury, 
regardless of whether they are good or bad employees.  It 
contravenes public policy to allow an employer to avoid paying 
disability benefits to a disabled employee without evidence that 
the employee’s activities are inconsistent with his or her 
injury.  Without such a requirement, the law would leave 
employees suffering from legitimate work-related injuries in 
grave danger of being left both unemployed and unable to work 
due to their work-related disability, without compensation and 
potentially with a lower earning capacity.  
                                                          95-2586 
 
14
¶31 In sum, we hold that LIRC’s finding that Engel was 
entitled to temporary disability benefits until April 6, 1992, 
for his work-related injury is sustained by credible and 
substantial evidence, and Brakebush failed to submit adequate 
proof rebutting the extent of Engel’s injury.  We further hold 
that the Worker’s Compensation Act does not provide an exception 
to an employer’s liability when an employee is terminated for 
misrepresentations relating to his or her medical condition.  
Accordingly, we affirm. 
 
By the Court.—The decision of the court of appeals is 
affirmed.