#23731-rev&rem-GORS, Circuit Judge 

2006 SD 99 

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

DWAIN ORTH, Claimant and Appellant, 

 v. 

STOEBNER & PERMANN CONSTRUCTION, INC. Employer and Appellee, 

 and 

AMERICAN FAMILY MUTUAL INSURANCE CO., Insurer and Appellee. 

* * * * 

APPEAL FROM THE CIRCUIT COURT 

OF THE FIRST JUDICIAL CIRCUIT 

BON HOMME COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE GLEN W. ENG 

Judge 

* * * * 

RONALD A. PARSONS, Jr. and 

A. RUSSELL JANKLOW of 

Johnson, Heidepriem, Miner, Marlow & Janklow 

Sioux Falls, South Dakota 

GLENN L. ROTH 

Olivet, South Dakota Attorneys for appellant. 

 

JEFFREY L. BRATKIEWICZ and 

J. G. SHULTZ of 

Woods, Fuller, Shultz & Smith 

Sioux Falls, South Dakota Attorneys for appellees. 

* * * * 

 ARGUED 

 FEBRUARY 15, 2006 

 OPINION FILED 11/15/06 
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GORS, Circuit Judge 

[¶1.] Dwain Orth appeals from a circuit court decision affirming the South 

Dakota Department of Labor's determination that he was not entitled to workers' 

compensation benefits. Reversed and remanded. 

FACTS AND PROCEDURAL HISTORY 

[¶2.] Dwain Orth (Dwain) was born in Scotland, South Dakota, on February 

22, 1942. He graduated from Scotland High School in 1960. He lived and worked in 

South Dakota his entire life. In 1962 Dwain married Rita. They had two children. 

[¶3.] After graduating from high school Dwain held a variety of jobs. From 

1972 through 1976 Dwain worked for Cargill Grain Elevator in Scotland, South 

Dakota. On rare occasions the job required heavy lifting. Dwain did not sustain a 

work-related injury while at Cargill, but he did at times seek chiropractic treatment 

for both general maintenance adjustments and also for back pain. 

[¶4.] From 1976 through 1988 Dwain drove a concrete truck, performed 

carpentry work, and was responsible for general maintenance at Scotland Redi-Mix 

in Scotland, South Dakota. In 1978 Dwain injured his ankle while working for 

Scotland Redi-Mix. His injury was treated as compensable. Dwain made a full 

recovery and returned to work. During the twelve years Dwain was employed by 

Scotland Redi-Mix he would occasionally seek chiropractic treatment for general 

maintenance adjustments and back pain. 

[¶5.] From 1989 through 1994 Dwain performed general carpentry for Slaba 

Construction in Tripp, South Dakota. While employed by Slaba Construction 

Dwain continued occasional chiropractic treatment. In 1993 Dwain slipped on a 

roof while carrying a bundle of shingles and injured his back. He sought treatment 
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from Dr. Merkwan, a chiropractor in Tyndall, South Dakota. Dwain made a full 

recovery and did not file any workers' compensation claim while employed by Slaba 

Construction. 

[¶6.] Dwain began working for Stoebner & Permann Construction, Inc. (S & 

P Construction) in March of 1994. S & P Construction was founded in 1980 by 

Keith Stoebner (Stoebner) and Steven Permann (Permann). The company was 

involved in various types of construction and remodeling. Stoebner and Permann 

were hands-on owners who worked side-by-side with their employees. 

[¶7.] As an employee of S & P Construction Dwain was expected to perform 

a variety of tasks from pouring concrete to hanging sheetrock to shingling roofs. 

His work-related duties required bending, stooping, and heavy lifting. 

[¶8.] When Dwain started working for S & P Construction in 1994 he was in 

excellent physical condition and was able to perform all work-related tasks. Dwain 

worked ten-hour days, five days per week. His employers described him as an 

"exceptional worker" and a "very good employee" who "worked very hard." 

[¶9.] Dwain worked for S & P Construction for several years without 

incident. By the late 1990s, however, Dwain was approaching sixty years of age 

and his back was starting to give him trouble. He found it increasingly more 

difficult to perform heavy physical labor as an employee of S & P Construction. 

[¶10.] Dwain asked his employers to be assigned light-duty tasks. S & P 

Construction valued Dwain as an employee and assigned him to light-duty to keep 

him on the job. S & P Construction was aware of Dwain's increasing back trouble, 
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and the decision to relegate Dwain to light-duty tasks was based, in part, on this 

knowledge. Around this time Dwain started taking pain medication for his back. 

[¶11.] Later in the Spring of 2000 Dwain asked his employers to reduce his 

work schedule from five days a week to four. His back condition had continued to 

worsen, and Dwain believed that an extra day off would help him to recuperate and 

allow him to continue working for S & P Construction. S & P Construction granted 

his request. Dwain's employers understood that this request was made due to 

Dwain's worsening back problems. 

[¶12.] Neither the light-duty nor the shortened work-week alleviated Dwain's 

back pain. On the evening of May 15, 2001, Dwain came home from work in intense 

pain. Dwain's wife took him to the emergency room. He believed he had a kidney 

stone. The emergency room personnel questioned Dwain to determine the source of 

the pain. Dwain indicated that he had not strained his back. Tests revealed 

degenerative changes in Dwain's spine. The emergency room doctors concluded this 

was the most likely cause of his back pain. Dwain did not have a kidney stone. 

[¶13.] Dwain was unable to work for several weeks after the emergency room 

visit. On May 30, 2001, Dwain saw Dr. Stolz, a chiropractor in Scotland, South 

Dakota. Dr. Stolz conducted a physical examination and reviewed Dwain's x-rays. 

Dr. Stolz confirmed the existence of degenerative changes in Dwain's spine. 

[¶14.] Dwain also sought treatment from Dr. Gail Benson of the Orthopedic 

Institute in Sioux Falls. Dwain saw Dr. Benson on June 6, 2001. Dwain indicated 

to Dr. Benson that his back pain began about twenty years earlier, but that it had 

worsened over time. Dr. Benson recommended an MRI exam and a discography. 
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[¶15.] On June 8, 2001, Dr. Stolz told Dwain he could return to work on the 

condition that he limit himself to light-duty work and refrain from all heavy lifting. 

Dwain did in fact return to work, but even with light-duty tasks his back pain was 

unbearable. Ultimately, Dwain's back condition became so debilitating that on July 

17, 2001, he was forced to quit his job with S & P Construction. Dwain told his 

employers that his back pain had worsened to the point that he "couldn't do the 

work anymore." Dwain explained that his back pain was caused by "degenerated 

discs and wore [sic] out." 

[¶16.] Dwain continued treatment for his back condition. On August 1, 2001, 

Dr. Benson noted that Dwain's MRI and discography confirmed "extensive torn 

degenerated disc [sic] throughout the lumbar spine." Dr. Benson indicated that 

Dwain was not a surgical candidate due to the large number of injured discs. Dr. 

Benson determined that Dwain should be considered disabled for social security 

purposes because he could no longer do the physical labor required of a carpenter. 

[¶17.] Dr. Walter Carlson, another of Dwain's doctors at the Orthopedic 

Institute in Sioux Falls, agreed with Dr. Benson's evaluation, indicating in a clinical 

note that there was no "surgical treatment that will give [Dwain] predictable 

improvement in his condition." Dr. Carlson further noted that Dwain would not "be 

able to carry out any type of employment that he is trained to do – be it standing or 

sitting." Dr. Carlson agreed with Dr. Benson's conclusion that Dwain was totally 

disabled and should be awarded social security disability benefits. 

[¶18.] Dwain filed for and was awarded social security total and permanent 

disability benefits. 
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[¶19.] On March 5, 2002, Dr. Carlson wrote a letter to Russell Janklow, 

Dwain's attorney. At the time of the hearing Dr. Carlson was a board-certified 

orthopedic surgeon with over thirty years of experience in his field. He was one of 

Dwain's treating physicians for over a year. He practiced medicine in the same 

office as Dr. Benson, one of Dwain's treating physicians. In his letter Dr. Carlson 

indicated that he was unable to determine the major contributing cause of Dwain's 

back condition, but if he was asked to apportion it, he would conclude that fifty 

percent of Dwain's condition came as a result of "work related issues" and fifty 

percent came as a result of Dwain's "pre-existing degenerative changes." 

[¶20.] On or about May 20, 2002, S & P Construction received a South 

Dakota Employer's First Report of Injury form indicating that Dwain was claiming 

a work-related injury and was seeking workers' compensation benefits. The date of 

injury was indicated to be May 14, 2001. Stoebner completed the form. In the box 

for "Body Part Injured" Stoebner entered code 18, which indicated a back injury. 

Stoebner described the injury in the following manner: "employee said his back can 

not [sic] take this kind of work." 

[¶21.] On June 14, 2002, S & P Construction and their Insurer, American 

Family Mutual Insurance Company filed their joint answer denying responsibility 

for benefits. 

[¶22.] On April 29, 2003, Dr. Richard Farnham conducted an independent 

medical examination on Dwain. Dr. Farnham reviewed Dwain's medical records 

and physically examined him. Dr. Farnham diagnosed Dwain with "mechanical low 

back pain due to multi-level intervertebral disk degeneration and non-traumatic, 
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congenital grade I-II spondylolisthesis of L5 on S1 with low back pain." Dr. 

Farnham opined that Dwain's career in manual labor had no impact on his preexisting degenerative back condition. He indicated that none of Dwain's 

employment duties—while employed at S & P Construction or elsewhere—worked 

"to either temporarily exacerbate or permanently aggravate" his back condition. Dr. 

Farnham's report concluded that Dwain's condition was not work-related but 

instead was "a function of time and the aging process and past history of tobacco 

use for 30 years." 

[¶23.] A hearing on Dwain's application for workers' compensation benefits 

was held before a Department of Labor (Department) hearing examiner on January 

29, 2004, in Sioux Falls. Three issues were presented in the case: 1) whether 

Dwain's injury was causally connected to his work activities at S & P Construction, 

2) whether S & P Construction had actual knowledge or notice of Dwain's workrelated injury, and 3) whether Dwain was permanently and totally disabled under 

South Dakota's odd-lot doctrine. 

[¶24.] The hearing examiner ruled in favor of S & P Construction and its 

Insurer, American Family Mutual Insurance Company, concluding that Dwain 

failed to prove causation. The hearing examiner did not rule on issues two (notice) 

or three (odd-lot). 

[¶25.] Dwain appealed to the circuit court. The First Circuit Court affirmed 

the hearing examiner's finding on causation. The circuit court also ruled on the 

notice issue, which had not been addressed by the hearing examiner. The circuit 

court filed supplemental findings of fact and conclusions of law and an order ruling 
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that S & P Construction did not have actual knowledge or notice of the workrelatedness of Dwain's back condition. 

[¶26.] Dwain timely appealed to this Court. His back condition continues to 

be debilitating. Due to the severity of his pain Dwain is unable to perform most 

manual labor and physical tasks around the house. He wears a brace on his lower 

back when driving. He is unable to take his fishing boat out unless someone is 

there to help him load and unload the boat. 

STANDARD OF REVIEW 

 [¶27.] The standard of review in a workers' compensation case is established 

by SDCL 1-26-36 (Tischler v. United Parcel Service, 1996 SD 98, ¶23, 552 NW2d 

597, 602) and SDCL 1-26-37 (Capital Motors v. Schied, 2003 SD 33, ¶10, 660 NW2d 

242, 245). Under SDCL 1-26-36, the applicable standard of review "will vary 

depending on whether the issue is one of fact or one of law." Tischler, 1996 SD 98, 

¶23, 552 NW2d at 602. "When the issue is a question of fact, then the actions of the 

agency are judged by the clearly erroneous standard; and when the issue is a 

question of law, then the actions of the agency are fully reviewable [i.e., de novo]." 

Id. "Mixed questions of fact and law are fully reviewable." Brown v. Douglas Sch. 

Dist., 2002 SD 92, ¶9, 650 NW2d 264, 268. 

[¶28.] When findings of fact are made based on live testimony, the clearly 

erroneous standard applies. See Brown, 2002 SD 92, ¶9, 650 NW2d at 267-68. 

Deference and great weight are given to the hearing examiner on fact questions. Id.

at 267. "When factual determinations are made on the basis of documentary 
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evidence, however, we review the matter de novo, unhampered by the clearly 

erroneous rule." Id. at 268. 

[¶29.] "'The standard of review in an appeal to the Supreme Court from a 

trial court's appellate review of an administrative decision is de novo: unaided by 

any presumption that the trial court is correct.'" Capital Motors, 2003 SD 33, ¶10, 

660 NW2d at 245 (quoting Brown, 2002 SD 92, ¶17, 650 NW2d at 269). While the 

hearing examiner's resolution of fact questions is given great weight, the circuit 

court will receive no such deference. 

[¶30.] In the present case only one issue, causation, is technically subject to 

review. The hearing examiner did not rule on notice and neither the hearing 

examiner nor the circuit court ruled on the odd-lot issue. 

ANALYSIS AND DECISION 

ISSUE ONE 

[¶31.] Was Dwain's back disability causally connected to his work at 

S & P Construction? 

[¶32.] SDCL 62-1-1(7) sets forth the standard an employee must meet to 

prevail in a workers' compensation case. To be awarded benefits, an employee must 

first establish that he has suffered an "injury arising out of and in the course of the 

employment[.]" Id. See also Horn v. Dakota Pork, 2006 SD 5, ¶14, 709 NW2d 38, 

41 ("Our law requires a claimant to establish that his injury arose out of his 

employment by showing a causal connection between his employment and the 

injury sustained."). "'This causation requirement does not mean that the employee 

must prove that [his] employment was the proximate, direct, or sole cause of [his] 

injury; rather the employee must show that [his] employment was a 'contributing 
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factor' to [his] injury.'" Brown, 2002 SD 92, ¶19, 650 NW2d at 270 (quoting Arends 

v. Dacotah Cement, 2002 SD 57, ¶13, 645 NW2d 583, 587-88) (emphasis in original). 

[¶33.] If the injured claimant suffers from "a preexisting disease or condition" 

unrelated to the injury, and the injury combines with the preexisting condition "to 

cause or prolong disability, impairment, or need for treatment," the injury is 

compensable only if the claimant can prove that his "employment or employment 

related injury is and remains a major contributing cause of the disability, 

impairment, or need for treatment[.]" SDCL 62-1-1(7)(b). In short, in a case 

involving a preexisting disease or condition, a workers' compensation claimant must 

satisfy two tests of causation in order to prevail on his claim: 1) causation of the 

injury (contributing factor test), and 2) causation of the disability (major 

contributing cause test). See Brown, 2002 SD 92, ¶19, 650 NW2d at 270. 

[¶34.] With respect to proving causation of a disability, this Court has stated 

that: 

[T]he testimony of professionals is crucial in establishing 

this causal relationship because the field is one in which 

laymen ordinarily are unqualified to express an opinion. 

Unless its nature and effect are plainly apparent, an 

injury is a subjective condition requiring an expert 

opinion to establish a causal relationship between the 

incident and the injury or disability. 

Westergren v. Baptist Hospital of Winner, 1996 SD 69, ¶31, 549 NW2d 390, 398 

(quoting Day v. John Morrell & Co., 490 NW2d 720, 724 (SD 1992)). A medical 

expert's finding of causation cannot be based upon mere possibility or speculation. 

Deuschle v. Bak Const. Co., 443 NW2d 5, 6 (SD 1989). See also Rawls v. ColemanFrizzell, Inc., 2002 SD 130, ¶21, 653 NW2d 247, 252-53 (quoting Day, 490 NW2d at 
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724) ("'Medical testimony to the effect that it is possible that a given injury caused a 

subsequent disability is insufficient, standing alone, to establish the causal relation 

under [workers'] compensation statutes.'"). Instead, "[c]ausation must be 

established to a reasonable medical probability[.]" Truck Ins. Exchange v. CNA, 

2001 SD 46, ¶19, 624 NW2d 705, 709. 

[¶35.] The claimant has the burden of proving the facts necessary to sustain 

an award of compensation. King v. Johnson Bros. Construction Company, 83 SD 

69, 73, 155 NW2d 183, 185 (1967). The claimant must prove the essential facts by a 

preponderance of the evidence. Caldwell v. John Morrell & Co., 489 NW2d 353, 358 

(SD 1992). 

[¶36.] The issue in this case does not concern whether or not Dwain's injury 

arose out of and in the course of his employment with S & P Construction (i.e., 

causation of the injury). Instead, the issue deals solely with the causation of 

Dwain's disability, and resolution of this issue turns on the medical evidence. 

Dwain's expert, Dr. Walter Carlson, offered the following opinion: 

We recently reviewed all the records of Mr. Orth. After 

reviewing this history and all other data's [sic] available 

to us, it is not possible for me to determine which of the 

patient's work related activities or the patient's preexisting degenerative changes are the major contributing 

cause of his disability impairment and the need for 

medical treatment. If we are asked in the future to 

apportion this, we would give it a 50% to the pre-existing 

degenerative problems and 50% to the work related 

issues. 

S & P Construction's expert, Dr. Richard Farnham, opined that Dwain's condition 

was not work-related but instead was "a function of time and the aging process and 

past history of tobacco use for 30 years." The hearing examiner concluded that Dr. 
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Carlson's letter failed "to establish that [Dwain's] employment or employment 

related injury is and remains a major contributing cause of the disability, 

impairment, or need for treatment in combination with his preexisting condition." 

The hearing examiner accepted Dr. Farnham's opinion. Dwain's claim was 

consequently denied for failure to prove causation of the disability. 

[¶37.] The circuit court affirmed the hearing examiner on this issue. The 

circuit court found that, although Dr. Carlson was an expert qualified to render an 

opinion in the matter, his letter dated March 5, 2002, was insufficient to prove 

causation of Dwain's disability. The circuit court found Dr. Carlson's letter 

contained "only a vague reference to [Dwain's] records and data that were reviewed 

and provided no foundation as to the reasonable degree of certainty that Dr. 

Carlson's opinions were based on." 

[¶38.] All of the medical evidence in this case was presented by way of 

reports, medical records and letters stipulated into evidence. There was no live 

testimony on the causation issue. Consequently, although "'[i]ssues of causation in 

worker's compensation cases are factual issues'" ordinarily subject to clearly 

erroneous review (Therkildsen v. Fisher Beverage, 1996 SD 39, ¶8, 545 NW2d 834, 

836 (quoting Lawler v. Windmill Restaurant, 435 NW2d 708, 709 (SD 1989)), in this 

case the hearing examiner's and circuit court's findings are reviewed de novo. 

Brown, 2002 SD 92, ¶9, 650 NW2d at 267-68. 

[¶39.] Dwain's case is similar to Horn, 2006 SD 5, 709 NW2d 38. In Horn, a 

workers' compensation claimant suffered two work-related back injuries: one in 

1997 while employed by Dakota Pork, and another in 2000 while employed by 
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Riverside Manufacturing. The issue in Horn was whether either injury was a major 

contributing cause of his back condition. The employers' expert medical testimony 

was provided by Dr. Richard Farnham (the same doctor who testified on behalf of 

the employer in this case), who diagnosed the claimant with "mechanical low back 

pain due to degenerative changes of the lumbosacral spine compatible with age 

rather than trauma." Id. ¶8. To prove causation, the claimant relied on the opinion 

of Dr. Gail Benson (the same doctor who treated Dwain in this case), who diagnosed 

Horn with "ankylosing spondylitis and chronic low back pain." Id. ¶9. "Dr. Benson 

attributed the former to a pre-existing genetic condition unrelated to Horn's work 

and the latter to long term spinal changes from repetitive lifting and bending over 

his lifetime." Id. ¶17. Horn pointed to the following testimony from Dr. Benson to 

support the compensability of his condition: 

Q: The second disorder, the degenerative disc problem, is 

that problem, how did that come about from a pathologic 

standpoint, is that something that was contributed to over 

the years by his bending, lifting and stooping work 

activities? 

A: That's very likely and probable but how to pin that 

down to a certain event is very difficult. You can look at 

x-rays as you go along and see if it's been preexisting. 

That's the only other way I know. 

* * * 

Q: And just so that I keep that straight, this man worked 

at one place from 1990 to 1997, seven years, and I can 

represent to you that he worked, this was at Dakota Pork 

where he did a significant amount of twisting, bending 

and stooping, although the lifting that he did wasn't all 

that heavy but it was continuous. Then after that he 

worked for a three-year period from about 1997 or 1998, 

about a two year period, from 1997 to '98 where he was 

doing a welding job that I don't believe there was a lot of 
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heavy lifting there either but there was a lot of lifting, 

bending and stooping. Are you going to be able to tell us 

which one of those two positions, the first seven years at 

Dakota Pork or the last two years at Riverside 

Manufacturing, which one of those two working positions 

or the work activities, would you be able to tell us which 

one of those places the work activities were a major 

contributing cause of the progression of the degenerative 

disc disease, Doctor? 

* * * 

A: I cannot be specific on that issue. 

Q: Would it be your opinion that both of those previous 

employments then contributed on an equal basis to the 

progression of the disease, Doctor? 

* * * 

A: I believe all of these repetitive jobs are contributory, 

but I would place that over a lifetime rather than just 

over a ten-year period. 

Q: . . . the part that I'm struggling with, Doctor, is this 

gentleman was able to work and then at some point got 

into a situation where he was no longer able to continue 

to work, and I guess the question we have for you is 

whether the cumulative work activities over the last ten 

years, were those activities, it doesn't have to be 'the' 

major contributing factor but simply "a" major 

contributing factor in his resultant disability and the 

reason he's not working today? 

A: Oh, I believe it is a contributing factor. 

Q: And I know this gets a little difficult and I know it's 

not an exact science, but is it fair for me to state that 

you're not able to quantify from a percentage standpoint if 

we were trying to apportion it how much of this problem 

is related to his first seven years at Dakota Pork and the 

following two, two and a half years at Riverside 

Manufacturing? Are you able to apportion that for us, 

Doctor? 

A: I don't believe so. 
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Id. at 42-43. This Court found Dr. Benson's opinion insufficient to establish 

causation because he was "unable to state that Horn's degenerative disc or his 

employment was a major contributing cause of his current disability." Id. ¶18. 

[¶40.] Dwain's condition is similar to the condition of the claimant in Horn. 

Both worked in physically demanding professions for long periods of their lives. 

Both suffered from degenerative changes in their spines. Both were evaluated by 

Dr. Farnham, who concluded that both Dwain's and Horn's back problems were not 

related to their employment but rather were a result of their age. Both were 

treated by Dr. Benson at the Orthopedic Institute in Sioux Falls. 

[¶41.] Contrast Dr. Benson's opinion in Horn with Dr. Carlson's opinion in 

this case. Dr. Benson's opinion was equivocal; his testimony clearly did not indicate 

that Horn's employment was a major contributing cause of his disability. Dr. 

Carlson, however—who practices medicine with Dr. Benson at the Orthopedic 

Institute in Sioux Falls—stated that he was unable to determine whether Dwain's 

work-related activities or his pre-existing degenerative changes were the major 

contributing cause of Dwain's impairment. However, he went on to state that if he 

were asked to apportion it, he would determine the pre-existing condition to be fifty 

percent responsible and Dwain's work-related activities to be fifty percent 

responsible for his condition. 

[¶42.] A claimant does not need "to prove that the work injury was 'the' major 

contributing cause, only that it was 'a' major contributing cause, pursuant to SDCL 

62-1-1(7)." Brown, 2002 SD 92, ¶23, 650 NW2d at 271 (describing the legislative 

history of SDCL 62-1-1(7)). Dr. Carlson's opinion clearly indicated that Dwain's 
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work-related activities were fifty percent responsible for his impairment. No other 

cause could exceed this; no other cause could be greater than fifty percent 

responsible for Dwain's condition. A cause which cannot be exceeded is a major 

contributing cause. Dr. Carlson's opinion therefore established to a reasonable 

degree of medical probability that Dwain's work-related activities were a major 

contributing cause of his current back impairment. 

[¶43.] Dr. Carlson's letter stated that there were two major contributing 

causes of Dwain's back impairment—his pre-existing degenerative condition and his 

work-related activities—and these two major contributing causes were equally 

responsible for Dwain's condition. Consequently, according to Dr. Carlson, Dwain's 

work-related activity at S & P Construction was a major contributing cause of his 

disability. This is the plain meaning of his opinion expressed in the letter dated 

March 5, 2002. Any other interpretation of his opinion would place hyper-technical 

restrictions on workers' compensation claimants seeking to recover for injuries 

sustained in the course of their employment, and would ignore the principle that 

workers' compensation statutes are to be "'liberally construed in favor of injured 

employees.'" Vaughn v. John Morrell & Co., 2000 SD 31, ¶33, 606 NW2d 919, 925 

(quoting Welch v. Automotive Co., 528 NW2d 406, 409 (SD 1995)). 

[¶44.] This Court has indicated that "[t]here are no 'magic words' needed to 

express an expert's degree of medical certainty, and the test is only whether the 

expert's words demonstrate that he or she was expressing an expert medical 

opinion." Stormo v. Strong, 469 NW2d 816, 824 (SD 1991). Dr. Carlson's letter was 

clear and unequivocal. His opinion was stated in no uncertain terms: fifty percent 
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of Dwain's impairment could be blamed on his preexisting degenerative condition, 

and fifty percent could be blamed on his work-related activities. The opinion was 

expressed to a satisfactory degree of medical probability. 

[¶45.] Dr. Carlson was a board-certified orthopedic surgeon with thirty years 

of experience in the field. He graduated from the University of Minnesota Medical 

School and the Mayo Graduate School of Medicine. He completed advanced training 

in adult spine surgery at the Institute for Low Back Care in Minneapolis. He, along 

with his associate, Dr. Benson, was one of Dwain's treating physicians at the 

Orthopedic Institute for more than one year. He had personally examined Dwain 

on several occasions. Before rendering his opinion, he reviewed Dwain's history 

"and all other data" available to him. 

[¶46.] "This Court has approved an award of 'compensation to claimants, 

even though they cannot prove any specific trauma, if they prove a history of injury 

to the body that occurs in the normal course of employment.'" Horn, 2006 SD 5, 

¶16, 709 NW2d at 42. See also St. Luke's Midland Regional v. Kennedy, 2002 SD 

137, ¶13, 653 NW2d 880, 884-85 ("A pre-existing medical condition or infirmity does 

not disqualify a claim under the 'arising out of employment' requirement if the 

employment aggravated, accelerated, or combined with the condition or infirmity to 

produce the disability for which compensation is sought."). Furthermore, this Court 

stated in Schuck v. John Morrell & Co., 529 NW2d 894, 899 (SD 1995)(quoting 

Caldwell, 489 NW2d at 358): 

[A]n employee does not have to have an accident or 

experience any trauma to his person before a medical 

condition will qualify as a compensable injury. It is 

sufficient that the disability was brought on by strain or 
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overexertion incident to the employment, though the 

exertion or strain need not be unusual or other than that 

occurring in the normal course of employment. 

 [¶47.] Dwain's current impairment, although it cannot be traced to a single 

instance of trauma, is nonetheless compensable under South Dakota law. When 

Dwain started working for S & P Construction, he was an "exceptional worker" who 

could perform any work-related task. After five years of laboring as an employee of 

S & P Construction, his back had become so painful that he was forced to quit 

working. His employment-related activities at S & P Construction clearly 

"aggravated, accelerated, or combined with" his preexisting condition to produce his 

ultimate disability. 

[¶48.] Under South Dakota law, insofar as a workers' compensation 

claimant's "pre-existing condition is concerned[,] we must take the employee as we 

find him." Kennedy, 2002 SD 137, ¶13, 653 NW2d at 884. "If a compensable event 

contributed to the final disability, recovery may not be denied because of the preexisting condition, even though such condition was the immediate cause of the 

disability." Id. (quoting Elmstrand v. G & G Rug & Furniture Company, 77 SD 152, 

155, 87 NW2d 606, 608 (1958)). Dwain's age and degenerative spinal condition may 

have made him more susceptible to a work-related injury while working for S & P 

Construction, but this does not alter the compensability of his claim. 

[¶49.] Dwain met his burden of proving by a preponderance of the evidence 

that his work-related activities at S & P Construction were a major contributing 

cause of his disability. 
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ISSUE TWO 

[¶50.] Did S & P Construction have actual knowledge of Dwain's 

work-related injury? 

[¶51.] Pursuant to SDCL 62-7-10, an employee who seeks workers' 

compensation benefits for an injury must provide the employer with written notice 

of the injury within three days of its occurrence. Mudlin v. Hills Materials Co., 

2005 SD 64, ¶21, 698 NW2d 67, 74. "However, when an employer [has] 'actual 

knowledge' of the injury, the failure to provide notice does not bar the claim." Id. 

Under South Dakota law, a workers' compensation claimant bears the burden of 

establishing that the claimant either provided written notice of the injury or that 

the employer had actual knowledge of the injury. Id. Notification of an injury, 

either written or by way of actual knowledge, is "a condition precedent to 

compensation." Westergren, 1996 SD 69, ¶17, 549 NW2d at 395. 

[¶52.] "The purpose of the written notice requirement is to give the employer 

the opportunity to investigate the injury while the facts are accessible." Id. ¶18. 

"The notice requirement protects the employer by assuring he is alerted to the 

possibility of a claim so that a prompt investigation can be performed." Id. 

[¶53.] "In determining actual knowledge, the employee must prove that the 

employer had 'sufficient knowledge to indicate the possibility of a compensable 

injury.'" Shykes v. Rapid City Hilton Inn, 2000 SD 123, ¶36, 616 NW2d 493, 501 

(quoting Streyle v. Steiner Corp., 345 NW2d 865, 866 (SD 1984)). "The employee 

must also prove that the employer had sufficient knowledge that the injury was 

sustained as a result of [his] employment versus a pre-existing injury from a prior 

employment." Id. (emphasis original). In other words, to satisfy the actual 
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knowledge notice requirement, the employer: 1) must have sufficient knowledge of 

the possibility of a compensable injury, and 2) must have sufficient knowledge that 

the possible injury was related to employment with the employer. 

[¶54.] Dwain did not give written notice. As a result, Dwain's workers' 

compensation claim could proceed only if he proved that his employers had actual 

knowledge of both his injury and its potential work-relatedness. Dwain's employers 

were fully aware of his back condition. The only question was whether Dwain's 

employers had actual knowledge that Dwain's back condition may have been related 

to his employment at S & P Construction. 

[¶55.] The hearing examiner did not address notice. Notice is the threshold 

issue in a workers' compensation matter. The hearing examiner denied Dwain's 

claim solely on the causation issue. The circuit court, however, concluded that 

Dwain's employers did not have actual knowledge of the work-relatedness of 

Dwain's injury sufficient to satisfy SDCL 62-7-10(1). 

[¶56.] The circuit court's ruling on this issue was based entirely on 

documentary evidence. Therefore, we review the ruling de novo. Moreover, this 

Court has held that the question of whether or not an injured employee has 

satisfied SDCL 62-7-10 is a mixed question of law and fact. Schuck, 529 NW2d at 

897. Mixed questions of law and fact are also reviewed de novo. Id. 

[¶57.] The circuit court's decision on notice was erroneous for two reasons. 

First, the question of what knowledge Dwain's employers possessed about his injury 

should have been addressed by the hearing examiner. In the absence of a finding by 

the hearing examiner, there was nothing for the circuit court to review. The 
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hearing examiner had the benefit of observing both Stoebner and Permann testify 

live at the hearing. The hearing examiner was able to evaluate the credibility of the 

witnesses in a way the circuit court could not. 

[¶58.] Second, the circuit court's ruling on notice was not consistent with the 

facts of the case and the testimony of Stoebner and Permann themselves. When 

Dwain began work for S & P Construction, he was an "exceptional worker" who 

could perform any work-related task. After several years of the bending, stooping 

and heavy lifting required as an employee of S & P Construction, Dwain was forced 

to ask for lighter duty work.1 Ultimately, he could no longer do the work at all. 

[¶59.] This Court has stated that, to satisfy the actual knowledge notice 

requirement, "'[t]here must . . . be some knowledge of accompanying facts 

1. The following testimony from Permann was elicited during the proceeding 

before the hearing examiner: 

Q: I guess the point I'm trying to make is in 1994 when 

he went to work for you folks, from your personal 

observation of him, he was having no problems doing any 

of the work that you folks had him doing. 

A: No. 

Q: And then, three, four years into the job of doing this 

medium to heavy labor, manual labor, he started having 

more and more complaints about back problems; isn't that 

a fair statement? 

A: Yes. 

Q: And he would make those complaints to you 

personally, and you would actually accommodate him in 

the type of work he was performing; isn't that fair? 

A: Toward the end, yes.
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connecting the injury or illness with the employment, and indicating to a 

reasonably conscientious manager that the case might involve a potential

compensation claim.'" Vaughn, 2000 SD 31, ¶33, 606 NW2d at 925 (emphasis 

added) (quoting Larson's Workers' Compensation Laws §78.31(a)(2)). Dwain's 

dramatic change in condition should have indicated to a "reasonably conscientious 

manager" that the case "might involve a potential compensation claim." 

[¶60.] The testimony from Stoebner and Permann did not support the circuit 

court's decision on notice. Stoebner testified before the hearing examiner: 

Q: But he was complaining more and more about his back 

condition getting worse towards the end; isn't that true? 

A: He was just saying that he wanted to do – you know, 

slow down. And I don't know, he never really did 

complain. He just said he was doctoring more for it. 

Q: But you knew that one of the reasons that he wanted 

to slow down is even though he wasn't complaining, it was 

because it was hard work; you knew that? 

A: Yeah. I suppose it was getting to the point that it was 

getting harder for him if his back was bothering him. 

Q: And in fact, you knew at that time that it wasn't a 

leap of logic that the type of hard work that he was 

performing day in and day out was playing a role in the 

progression of his back problems; you knew that, isn't 

that true? 

A: Well, since he told us, yeah. I mean that it would be a 

logical part of it since he was doctoring for it so that 

would be a logical part that he had back trouble, yeah. 

Q: Well it was also – 

A: That's how I gathered my information from. 

Q: And it was also logical because you were seeing him 

day in and day out. You were actually working alongside 
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of him and watching the kind of work he was performing 

every day? 

A: Uh-huh. 

Q: Right? 

A: Yeah, right. 

Q: And it was hard work, wasn't it? 

A: Well, from medium to hard work, yes. 

Q: I'm going to talk to you about this notice issue, and I 

guess I can just simply ask you. At the time that he left 

your employment, which I understand it to be May of 

2001, you knew the reason he was leaving the 

employment was because of his back problems; you knew 

that, Mr. Stoebner, isn't that true? 

A: Because he was doctoring for them, yes. 

Q: And you knew the doctor had told him that he should 

not continue to do this type of work; you knew that as 

well? 

A: I never had any information telling me from the doctor 

that he could not do this work. It was just from him 

telling me. 

Permann testified at the same hearing: 

Q: And as the years went by, he started complaining 

more and more about aches and pains in his back; isn't 

that true? 

A: Yes. As we all did. 

Q: Yeah. And at your deposition, I think we talked about 

that. You know, it's pretty obvious to you that the work 

was taking a toll on Dwain. That wasn't something that 

was a surprise to you at all, was it, Mr. Permann? 

A: No. 
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Q: And in fact, you've personally been in this industry for 

years, and the heavy labor has taken a toll on you as well? 

A: Yes. 

Q: In the last couple of years that Dwain worked for you 

folks, you would hear Dwain say: I've got to think about 

doing something different or slowing down because my 

back is giving me problems. Do you remember him 

making statements like that? 

A: Yes. 

Q: And when he would make those statements to you, 

you took that that it was work-related, that it was the 

work that was causing him problems, correct? 

A: Yes. 

Q: And you understood that because you were watching 

him doing this heavy lifting, bending, and stooping day in 

and day out, correct? 

A: Yes. 

* * * 

Q: When Dwain left the employment of you and Mr. 

Stoebner, you knew at that time and you personally 

understood the reason he was leaving your employment 

was because of back problems related to work; isn't that 

true? 

A: Yes. 

[¶61.] When Dwain terminated his employment with S & P Construction, he 

did so because his back condition had become so painful that he "couldn't do the 

work anymore." Dwain told his employers that his back pain was caused by 

"degenerated discs and wore [sic] out." A "reasonably conscientious manager" would 

ask: worn out from what? If an employer is put on notice that an injury may be 
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work related, the employer has actual knowledge sufficient to satisfy SDCL 62-7-

10(1). See id. See also Westergren, 1996 SD 69, ¶20-21, 549 NW2d at 396. 

[¶62.] In the absence of a finding from the hearing examiner, this Court 

would ordinarily be reluctant to rule on notice. However, in this case, the testimony 

of Stoebner and Permann themselves is inconsistent with the circuit court's ruling 

and resolves the notice question. Stoebner and Permann may not, in this appeal, 

"'assert a better version of the facts than [their] prior testimony and 'cannot now 

claim a material issue of fact which assumes a conclusion contrary to [their] own 

testimony.''" Clausen v. Northern Plains Recycling, 2003 SD 63, ¶18, 663 NW2d 

685, 690 (quoting Loewen v. Hyman Freightways, Inc., 1997 SD 2, ¶16, 557 NW2d 

764, 768) (other citations omitted). Stoebner and Permann admitted that they both 

had actual knowledge of Dwain's injury and its potential relatedness to his work at 

S & P Construction. 

[¶63.] Consequently, Dwain satisfied the notice threshold. Dwain proved 

that his employers had actual knowledge of a potential injury and that the injury 

may have been related to his work at S & P Construction. The circuit court's 

determination to the contrary is reversed. 

CONCLUSION 

 [¶64.] When Dwain started working for S & P Construction in 1994 he was in 

excellent health and could perform any work-related task. His employers described 

him as an "exceptional worker" and a "very good employee" who "worked very hard." 

By the late 1990s, however, the bending, stooping and heavy lifting required of him 

as an employee of S & P Construction had injured his back to the extent that he was 
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forced to request lighter duty work and a shortened work-week. Eventually, his 

back condition became so painful that he had no choice but to resign from S & P 

Construction. 

[¶65.] Dr. Carlson, one of Dwain's treating physicians, stated that there were 

two major contributing causes for his back impairment. According to Dr. Carlson, 

Dwain's pre-existing degenerative spinal condition and his work-related activities 

were each fifty percent to blame for his ultimate disability. When a cause is 

determined to be fifty percent responsible for a disability, no other cause can exceed 

it. A cause that cannot be exceeded is a major contributing cause of a disability. 

Therefore, Dwain's work-related activities were a major contributing cause of his 

disability. 

[¶66.] Dr. Carlson's opinion was stated to a sufficient degree of medical 

probability. The hearing examiner and the circuit court are reversed on causation. 

Dwain satisfied his burden of proving that injuries sustained in the course of his 

employment with S & P Construction were a major contributing cause of his 

ultimate disability. 

[¶67.] Dwain also satisfied his burden of proving that his employers had 

actual knowledge of his injury and its potential work-relatedness. 

[¶68.] The matter is reversed and remanded to Department for a 

determination on permanent and total disability under the odd-lot doctrine. 

[¶69.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, concur. 

[¶70.] ZINTER, Justice, concurs in part and dissents in part. 

[¶71.] BASTIAN, Circuit Judge, dissents. 
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[¶72.] GORS, Circuit Judge, sitting for SABERS, Justice, disqualified. 

[¶73.] BASTIAN, Circuit Judge, sitting for KONENKAMP, Justice, 

disqualified. 

ZINTER, Justice (concurring in part and dissenting in part). 

[¶74.] I join the opinion of the Court on the issue of causation. However, I 

respectfully dissent on the issue of notice. In my view, the notice issue should be 

remanded because there is conflicting evidence concerning Employer's actual 

knowledge of the work-related nature of the disability. Moreover, although the 

administrative agency tried this factual dispute concerning notice, it has not 

resolved the conflicting evidence. Therefore, even though this Court identifies 

evidence that employer may have admitted actual notice, the dispute was not 

resolved below and we should not resolve this conflict involving live testimony. We 

should remand for the entry of findings of fact and conclusions of law on the issue of 

actual notice. 

[¶75.] It bears repeating that in this type of appeal, we are reviewing the 

findings of fact and conclusions of law of the administrative agency rather than the 

findings and conclusions of the circuit court. Therefore, "'[t]he Supreme Court 

[reviews] the administrative agency's decision. . . unaided by any presumption that 

the circuit court's decision was correct.'" Kurtz v. SCI, 1998 SD 37, ¶10, 576 NW2d 

878, 882 (quoting Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, ¶6, 566 NW2d 840, 

843). 

[¶76.] In this case the issue of notice was fully litigated at the administrative 

hearing, but the hearing examiner expressly declined to decide the issue because 
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she disposed of the case on the issue of causation. This Court, however, decides the 

notice issue on appellate review by focusing solely on alleged concessions of the 

employer. However, live testimony was taken on the notice issue and the only 

findings adopted by the hearing examiner suggest that Employers did not have 

actual notice. For example, in Findings 48-53 the hearing examiner found: 

(1) that Employer received a report of first injury on May 

20, 2002; 

(2) that May 20, 2002, was the first time Employer 

became aware that Claimant was claiming to have 

sustained a work-related injury; 

(3) that Mr. Stoebner was surprised when he received 

Claimant's first report of injury; 

(4) that Employer had posted a notice in the workplace 

notifying employees that they were to promptly report 

any injuries they received while working; and 

(5) that neither Claimant nor any doctor ever informed 

either Permann or Stoebner that Claimant had been 

injured while working. 

Ultimately, the hearing examiner did not adopt findings or conclusions resolving 

the conflict between these findings and the testimony of the two employers relied 

upon by this Court. That conflict remains unresolved by any fact finder. 

[¶77.] Because the notice issue should be decided after a resolution of this 

conflicting live testimony, I would remand the matter for dispositive findings and 

conclusions. I would also remand because the findings that were adopted by the 

hearing examiner suggest no actual notice, this Court decides the issue on other 

testimony not even acknowledged by the hearing examiner, and the hearing 

examiner has yet to actually decide the issue. Under these circumstances a remand 

is required because, as we have often noted, "the fact finder. . . had the advantage of 

hearing testimony of witnesses and could directly judge their credibility. As a 
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reviewing court, neither the circuit court nor this [C]ourt should attempt to assume 

such a role." Hendricksen v. Harris, 1999 SD 130, ¶7, 600 NW2d 180, 181. 

BASTIAN, Circuit Judge (dissenting) 

[¶78.] I respectfully dissent. The appellant's causation evidence is based 

solely on a one-paragraph letter of Dr. Carlson set forth at ¶36. Dr. Carlson admits 

"it is not possible for me to determine which of the patient's work-related activities 

or the patient's pre-existing degenerative changes are the major contributing cause 

of his disability impairment and the need for medical treatment." He nonetheless 

concludes, "If we are asked in the future to apportion this, we would give it a 50% to 

the pre-existing degenerative problems and 50% to the work related issues." 

[¶79.] I find that Dr. Carlson's allusion to a future determination is too 

indefinite and his reference to "the work related issues" is too nebulous to have 

established causation to a reasonable medical probability. Enger v. FMC, 1997 SD 

70, ¶18, 565 NW2d 79, 85 (when the medical evidence is not conclusive, the 

claimant has not met the burden of showing causation by a preponderance of the 

evidence. Causation must be established to a reasonable medical probability, not 

just a possibility.)2

[¶80.] More importantly, there is no affidavit, deposition or live testimony by 

the doctor. The one-paragraph letter was signature-stamped. 

[¶81.] This Court has "consistently required expert medical testimony in 

establishing causation for workers' compensation purposes." Enger, supra, 

2. Furthermore, Dr. Carlson's letter is addressed to the appellant's attorney but 

the attorney's letter of inquiry is not part of the record. Thus, we have Dr. 

Carlson's answer but are left to speculate as to the question posed. 
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(emphasis supplied). In Hanten v. Palace Builders, Inc., 1997 SD 3, ¶10, 558 NW2d 

76, 78, this Court held that "[e]xpert witness testimony must be used to establish 

the causal connection between one's employment and subsequent injury where 'the 

field is one in which laymen are not qualified to express an opinion.'" Day v. John 

Morrell & Co., 490 NW2d 720, 724 (SD 1992); Howe v. Farmers Coop. Creamery, 81 

SD 207, 212, 132 NW2d 844, 846 (1965)). 

A [worker's] compensation award cannot be based on 

possibilities or probabilities, but must be based on 

sufficient evidence that the claimant incurred a disability 

arising out of and in the course of his employment. As 

noted above, where the relationship between the work 

and the injury is not clear, medical expert testimony is 

required to establish the causal connection. 

Hanten, 1997 SD 3, ¶18, 558 NW2d at 78(internal citations and quotations 

omitted). 

[¶82.] This Court has frequently held that the "testimony of professionals is 

crucial" in establishing the causal relationship. Rawls v. Coleman-Frizzell, Inc., 

2002 SD 130, ¶21, 653 NW2d 247, 252; Day, 490 NW2d at 724; Lawler v. Windmill 

Restaurant, 435 NW2d 708, 710 (SD 1989); Wold v. Meilman Food Indus., Inc., 269 

NW2d 112, 115 (SD 1978). 

[¶83.] In Westergren v. Baptist Hospital, 1996 SD 69, ¶31, 549 NW2d 390, 

368, this Court held: 

By stating that "the testimony of professionals is crucial 

in establishing this causal relationship" we acknowledged 

the lack of medical training by lawyers, hearing 

examiners, and courts to interpret these records. . . . By 

not deposing these professionals or having them testify at 

hearing, the parties are likewise limited in the 

information that might otherwise be available to them. 
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See also Deuschle v. Bak Constr. Co., 443 NW2d 5, 6 (SD 1989) (to establish the 

causal relationship . . . a finding "must rest on the testimony of professionals" . .) 

[¶84.] I find the majority's reliance on Stormo v. Strong, 469 NW2d 816 (SD 

1991) to be unpersuasive. I agree there "are no 'magic words' needed to express an 

expert's degree of medical certainty, and the test is only whether the expert's words 

demonstrate that he or she was expressing an expert medical opinion." Stormo, 469 

NW2d at 824 (citing Drexler v. All Amer. Life & Cas. Co., 72 Wis2d 420, 432, 241 

NW2d 401, 408 (1976)). In Stormo and in Drexler, however, unlike this case, the 

Court was able to evaluate the sworn testimony of the medical expert. Stormo, 469 

NW2d at 824; Drexler, 72 Wis2d at 425, 241 NW2d at 403. 

[¶85.] While the worker's compensation act is to be liberally construed in 

favor of the claimant, this rule applies to the law and not to the evidence offered to 

support the claim. Hanten, 1997 SD 3, ¶10, 558 NW2d at 78; Wold, 269 NW2d at 

116; and Podio v. American Colloid, 83 SD 528, 534, 162 NW2d 385, 388 (1968)). 

[¶86.] The appellant's evidence on causation, resting on an imprecise oneparagraph letter that the doctor did not sign and may not have reviewed after 

dictating, falls well short of any standard that this Court has previously established 

in worker's compensation cases. There is no expert medical opinion in any reliable 

form that establishes causation to a reasonable medical probability. 

[¶87.] In addition, I join the dissent of Justice Zinter.