Opinion ID: 1928422
Heading Depth: 1
Heading Rank: 5

Heading: Commissioner's Penalty Analysis

Text: As noted above, the commissioner refused to award penalty benefits for the delay in commencing PPD compensation. The commissioner found there was no medical evidence indicating Christensen had a permanent injury until Dr. DeBartolo's report in November 1991. We think there is substantial evidence to support the commissioner's finding there was a legitimate dispute as to the permanency of Christensen's injury prior to Dr. DeBartolo's report. On the other hand, we disagree with the commissioner's manner of evaluating the subsequent delay in commencing PPD payments. The commissioner concluded the length of time involved does not warrant imposition of a penalty; he did not decide whether an excuse existed for the delay and if so, whether any such excuse was reasonable. In the absence of a reasonable excuse for a delay, penalty benefits are mandatory. Only the amount is within the discretion of the commissioner. Here there was a two-month delay between Dr. DeBartolo's report and Snap On's receipt of a report from its independent medical expert. We think this delay falls within a reasonable time for the investigation of Christensen's medical evidence that she suffered a ten percent permanent impairment, particularly in light of the prior medical records indicating she would recover from her injury. See Kiesecker, 528 N.W.2d at 111 (holding a delay in making payments while the insurer investigated the claim was reasonable). The more troublesome delay is that which occurred after Snap-On's receipt of its expert's report. Snap-On argued at the hearing there was a thirteen-day delay between its receipt of Dr. Donovan's report and its decision to pay benefits because there was some confusion over what the proper wage rate should be. This witness offered no details on what this confusion was, why the correct rate had not been computed when healing period benefits had been paid, or why it took thirteen days to resolve the confusion. The first check was not issued and mailed for an additional eleven days and no explanation was offered for this delay other than that the check had to be mailed from Michigan. We fail to find substantial evidence to support the commissioner's decision not to award penalty benefits for the delay between receipt of Dr. Donovan's report and the commencement of PPD payments. The existence of confusion over the proper rate is not a reasonable excuse in that (1) the injury occurred more than a year earlier; (2) some healing period benefits had already been paid, requiring computation of the rate; and (3) Christensen's attorney had attempted for more than seven months to obtain wage records to verify the rate used by Snap-On. These facts negate any argument by Snap-On that it needed almost two weeks in 1992 to compute the correct rate. With respect to the subsequent eleven-day delay in mailing the check, Snap On again fails to offer a reasonable excuse. Although the fact the check was mailed from Michigan may explain the four-day delay between mailing and receipt of the check by Christensen, it does not address why it took eleven days to issue the check. Although such a delay may seem minimal to Snap-On, it may not be minor to an employee relying on disability benefits to pay bills. More importantly and contrary to the commissioner's decision, the applicability of section 86.13 does not turn on the length of the delay. Any delay without a reasonable excuse entitles the employee to penalty benefits in some amount. Thus, we reverse the commissioner's decision refusing penalty benefits for the delay in commencing PPD compensation after January 17, 1992. We remand to the commissioner to decide the amount of the penalty to be awarded. We now turn to the final issue, whether substantial evidence supports the commissioner's failure to award penalty benefits for Snap-On's delay in making PPD payments at the proper rate. Again we look for evidence of the employer's reasonable excuse for its failure to pay PPD benefits at the correct rate. Snap-On gave no reason for its failure to pay at the proper rate prior to the time it stipulated to the correct rate. Similarly, Snap-On offered no excuse for its failure to pay the full amount of back benefits due once it did commence PPD payments. In the absence of any excuse, the commissioner was required under section 86.13 to award penalty benefits. We remand for a determination of the amount of these benefits.