State of North Dakota by and through Workforce Safety and Insurance, Appellant
Leonard Taylor, Appellee and Industrial Contracting, Inc., Respondent
from the District Court of Mercer County, South Central
Judicial District, the Honorable Cynthia M. Feland, Judge.
Jacqueline S. Anderson, Special Assistant Attorney General,
Fargo, ND, for appellant.
J. Haas, Bismarck, ND, for appellee.
VANDEWALLE, CHIEF JUSTICE.
Workforce Safety and Insurance ("WSI") appealed
from a judgment affirming an Administrative Law Judge's
("ALJ") order finding Leonard Taylor had a retained
earnings capacity of zero and he had good cause for
noncompliance with vocational rehabilitation for failing to
perform a good faith work search. Because the ALJ misapplied
the law in determining Taylor had zero retained earnings
capacity, we reverse the judgment and remand to the ALJ for
On March 11, 2014, Taylor, then 55 years old, sustained
severe work-related injuries when he fell 15 feet while
employed as an electrician by Industrial Contractors, Inc.
Taylor suffered multiple compression fractures of the
thoracic vertebrae from T8-10, with a fragment impinging the
spinal cord resulting in partial paraplegia. Taylor underwent
surgery and was diagnosed with a spinal cord injury,
incomplete paraplegia at T5-6, neurogenic bowel and bladder,
a closed head injury, and neuropathic pain. While at the
hospital, Taylor exhibited numerous signs of cognitive
dysfunction. Taylor was eventually transferred to a hospital
rehabilitation unit where he received physical, occupational,
and cognitive therapy. WSI accepted liability for
Taylor's claim and paid him benefits.
After he had improved, Taylor was discharged from the
rehabilitation unit on April 22, 2014, and he moved out of
state. He began receiving outpatient rehabilitation at
various facilities. He continued to have only partial control
of his bladder and bowel and was unable to ambulate without a
cane or walker. He received home health care services which
began at 25 hours per week and was subsequently reduced to 12
to 15 hours per week. He continued to suffer severe pain in
his lower back. His pain was exacerbated by prolonged
standing, sitting and walking, which was relieved by laying
down. He required a rolling walker and was not able to return
to work. His brain injury also resulted in Taylor having
In August 2015, Taylor participated in a functional capacity
evaluation ("FCE") which resulted in a
recommendation of a light, physical demand level of work. He
was given various lifting restrictions and positional
restrictions, including no crouching, kneeling or balancing
and only occasional standing, walking, bending and climbing.
Taylor also began receiving vocational rehabilitation
consultations. Retraining options were considered but were
thought to be unworkable because of his deficits in memory,
processing speed, and attention. The vocational
consultant's report ("VCR") was submitted on
May 18, 2016. The VCR ruled out the "first appropriate
option[s]" for rehabilitation services under N.D.C.C.
§ 65-05.1-01(4) because Taylor could not return to
modified work with his previous employer and no job goals
were identified as feasible options. He was continuing to
receive personal care assistance up to 15 hours per week.
Under N.D.C.C. § 65-05.1-01(6)(c), the VCR set
Taylor's retained earnings capacity to be $290 per week
based on the state's hourly minimum wage. The VCR listed
potential job search goals for Taylor which included working
as a telephone sales representative, a customer service
representative, or an account or bill collector. WSI then
informed Taylor that he was required to perform a good faith
work search and document at least five job contacts per day.
After Taylor failed to comply with the work search
requirements, WSI terminated his benefits under N.D.C.C.
Taylor requested rehearing of WSI's decisions that he had
a retained earnings capacity of $290 per week and that he
failed without good cause to make a good faith work search.
Following a hearing, the ALJ reversed both of WSI's
decisions. The ALJ accepted the opinion of Taylor's
treating physician, Dr. Steven Musick, who considered Taylor
to be unemployable, over the opinion of WSI's doctor, Dr.
Gregory Peterson. The ALJ found by the "greater weight
of the evidence" that "there was no valid
release" to work issued to Taylor and the "greater
weight of the evidence" established that Taylor has a
retained earnings capacity of zero. The ALJ also found that
Taylor established good cause for his failure to conduct a
good faith work search. WSI appealed to the district court
which affirmed the ALJ's decision.
WSI argues the ALJ erred in reversing its decisions that
Taylor had a retained earnings capacity of $290 per week and
that Taylor failed to comply with the good faith work search
We exercise limited appellate review of administrative agency
decisions under the Administrative Agencies Practice Act,
N.D.C.C. ch. 28-32. See Welch v. Workforce Safety &
Ins., 2017 ND 210, ¶ 11, 900 N.W.2d 822. Under
N.D.C.C. § 28-32-46(1) and (5), we must affirm an
administrative decision unless "[t]he order is not in
accordance with the law" or "[t]he findings of fact
made by the agency are not supported by a preponderance of
the evidence." In Higginbotham v. Workforce Safety
& Ins., 2014 ND 147, ¶ 7, 849 N.W.2d 233, we
When an ALJ issues findings of fact, conclusions of law, and
order, this Court recognizes the ALJ was in a better position
to observe and assess the credibility of witnesses and
resolve conflicts in evidence, and will therefore apply the
same deferential standard of review to the ALJ's factual
findings as used for agency decisions. Bishop [v.
Workforce Safety & Ins.], 2012 ND 217, ¶ 6, 823
N.W.2d 257. With respect to an ALJ's findings of fact,
this Court "do[es] not make independent findings or
substitute [its] judgment for that of the ALJ, but
determine[s] only whether a reasoning mind reasonably could
ha ve determined the findings were proven by ...