Opinion
CLAIM NO. F106883
OPINION FILED AUGUST 31, 2006
Upon review before the FULL COMMISSION, Little Rock, Pulaski County, Arkansas.
Claimant represented by Honorable Phillip Wells, Attorney at Law, Jonesboro, Arkansas.
Respondent No. 1 represented by Honorable Mark Mayfield, Attorney at Law, Jonesboro, Arkansas.
Respondent No. 2 represented by Honorable David Pake, Attorney at Law, Little Rock, Arkansas.
Decision of Administrative Law Judge: Modified, in part, and reversed, in part.
OPINION AND ORDER
The claimant, respondent no. 1, General Electric, and respondent no. 2, the Second Injury Fund, all appeal a decision by the Administrative Law Judge filed July 27, 2005, making the following findings of fact and conclusions of law:
1. The Arkansas Workers' Compensation Commission has jurisdiction over this claim.
2. The stipulations agreed to by the parties are hereby accepted as fact.
3. The claimant has failed to prove, by a preponderance of the credible evidence, that he is permanently totally disabled.
4. The claimant has shown, by a preponderance of the credible evidence, that he has sustained a wage-loss disability of sixty percent (60%) to the body as a whole which was caused by the combined disabilities or impairments, together with the June 12, 2001, compensable injury.
5. Respondent #2 is responsible for all wage-loss disability, specifically, the sixty percent (60%) wage-loss disability awarded herein.
6. Respondent #1 is not entitled to any reimbursement for overpayment of permanent impairment benefits. Respondent #1 did not obtain a final impairment rating from the primary treating physician until April 28, 2004, and is estopped from asserting a credit for any alleged overpayment. Furthermore, respondents have failed to prove that any alleged overpayments were considered advanced payments of compensation within the meaning of Ark. Code Ann. § 11-9-807.
7. Respondent #2 is not entitled to a credit or offset pursuant to Ark. Code Ann. § 11-9-411.
8. Respondent #2 has accepted a thirty-five percent (35%) wage-loss disability in this claim. Respondent #2 has controverted all wage-loss in excess of the thirty-five percent (35%) acknowledged.
9. Respondent #1 has paid all appropriate benefits for which it is liable, including continued, reasonably necessary medical treatment and is not obligated for payment of any attorney's fees.
Specifically, respondent no. 2 appeals the decision of the Administrative Law Judge finding that the claimant was entitled to a 60% loss in wage earning capacity in addition to his permanent anatomical impairment and the finding that respondent no. 2 was not entitled, pursuant to Ark. Code Ann. § 11-9-411, to a credit for disability benefits received by the claimant for long-term disability and retirement disability.
The claimant appeals the decision of the Administrative Law Judge finding that the claimant was only entitled to a 60% loss in wage earning capacity in addition to his permanent anatomical impairment rating. The claimant contends that he was permanently and totally disabled.
Respondent no. 1 appeals the decision of the Administrative Law Judge denying their request for reimbursement of disability benefits paid to the claimant from respondent no. 2.
Based upon our de novo review of the record, we hereby modify, in part, and reverse, in part, the decision of the Administrative Law Judge. Specifically, we find that the claimant is only entitled to a 35% loss in wage earning capacity that has been accepted by respondent no. 2. We hereby reverse the decision of the Administrative Law Judge finding that respondent no. 2 was not entitled to a credit pursuant to Ark. Code Ann. § 11-9-411 for the claimant's long-term disability and disability retirement benefits. Finally, we hereby reverse the decision of the Administrative Law Judge finding that respondent no. 1 was not entitled to be reimbursed for the disability benefits it overpaid the claimant in the amount of $37,136.00.
The relevant facts in this case are basically undisputed. The claimant is fifty-four (54) years old and has a high school education. In addition, the claimant obtained on-the-job vocational training in hydraulics through the respondent employer. The claimant began working for the respondent employer in 1970. He was initially hired as a utility person. He then moved into the maintenance department prior to becoming a machine operator. At the time of the claimant's admittedly compensable injury on June 12, 2001, he was earning $19.00 per hour, and he worked considerable overtime. His total wages exceeded $50,000.00 per year. The record reflects that the claimant sustained prior injuries and surgeries. The claimant underwent his first back surgery on December 12, 1995. He underwent a second back surgery on April 15, 1996. The record also reflects that the claimant sustained a subsequent knee injury and had surgery on or about June 13, 2002. The claimant sustained an admitted, compensable back injury on June 12, 2001. He underwent a third back surgery on August 15, 2001, followed by an extensive fusion surgery at the L4-L5 level on January 10, 2002. The claimant has not been gainfully employed since the surgery and fusion on January 10, 2002. He takes a number of prescription medications, including Neurontin, Metradose and Lexapro. The record further reflects that respondent no. 1 provided the claimant with job placement assistance through Rehabilitation Management, Inc. Ms. Heather Naylor, a vocational rehabilitation consultant, found job opportunities for the claimant. The claimant either did not obtain a suitable job offer or was not interested in accepting a low-wage offer.
The claimant contended that he was permanently totally disabled or, alternatively, that he had sustained wage-loss disability in excess of the thirty-five percent (35%) to the body as a whole which had been accepted by respondent no. 2; that respondent no. 1 had waived any right to reimbursement of alleged overpayment from the claimant, and that reimbursement, if any, would come from the Fund; that although the Fund admitted a thirty-five percent (35%) wage loss disability, it was not free from liability of attorney's fees, specifically, attorney's fees for permanent total disability.
Respondent no. 1 contended that any wage-loss disability over and above the twelve percent (12%) permanent anatomical impairment rating was the responsibility of respondent no. 2. Respondent no. 1 requested reimbursement from respondent no. 2 for any payments made beyond its obligation to pay the 12% permanent anatomical impairment rating. It further maintained that any and all wage-loss was the responsibility of respondent no. 2, including, but not limited to the thirty-five percent (35%) accepted by respondent no. 2.
Respondent no. 2 maintained that it was not responsible for reimbursement of any overpayment of temporary total disability as its liability was limited to wage-loss disability benefits only; that it had no understanding concerning the date respondent no. 1 intended to stop paying temporary total disability and initiate payment of its permanent impairment, that respondent no. 2 stood ready, willing, and able to pay the thirty-five percent (35%) wage-loss disability which it maintained was appropriate based upon the facts of this claim. Respondent no. 2 conceded that if any wage-loss disability in excess of thirty-five percent (35%) were awarded, it had controverted same for purposes of attorney's fees.
WAGE LOSS
The wage-loss factor is the extent to which a compensable injury has affected the claimant's ability to earn a livelihood.Emerson Electric v. Gaston, 75 Ark. App. 232, 58 S.W.3d 848 (2001). To be entitled to any wage-loss disability benefit in excess of permanent physical impairment, a claimant must first prove, by a preponderance of the evidence, that he or she sustained permanent physical impairment as a result of a compensable injury. Wal-Mart Stores, Inc. v. Connell, 340 Ark. 475, 10 S.W.3d 727 (2000). The Commission is charged with the duty of determining disability based upon a consideration of medical evidence and other matters affecting wage loss, such as the claimant's age, education, and work experience. Emerson Electric v. Gaston, supra.
In determining wage loss disability, the Commission may take into consideration the workers' age, education, work experience, medical evidence and any other matters which may reasonably be expected to affect the workers' future earning power. Such other matters are motivation, post-injury income, credibility, demeanor, and a multitude of other factors. Glass v. Edens, 233 Ark. 786, 346 S.W.2d 685 (1961); City of Fayetteville v. Guess, 10 Ark. App. 313, 663 S.W.2d 946 (1984). Curry v. Franklin Electric, 32 Ark. App. 168, 798 S.W.2d 130 (1990). A claimant's lack of interest in pursuing employment with her employer and negative attitude in looking for work are impediments to our full assessment of wage loss. The Commission may use its own superior knowledge of industrial demands, limitations, and requirements in conjunction with the evidence to determine wage-loss disability.Oller v. Champion Parts Rebuilders, 5 Ark. App. 307, 635 S.W.2d 276 (1982).
Respondent no. 2 accepted liability for the claimant's wage loss disability benefits in excess of his permanent anatomical impairment and accepted a 35% loss in wage earning capacity. The claimant contended that he was permanently and totally disabled or in the alternative his wage loss substantially exceeded the 35% accepted by respondent no. 2. The Administrative Law Judge awarded the claimant a 60% loss in wage earning capacity. After conducting a de novo review of the record, we find that this amount is excessive. The claimant can only prove that he is entitled to a 35% loss in wage earning capacity.
The evidence demonstrates that the claimant is 54 years old and has a high school education. He has also obtained additional vocational training through his employment with respondent no. 1. The November 4, 2004, report of Ms. Heather Naylor of Rehab. Management Inc., reflected that the claimant was capable of performing light duty work. She found a number of jobs in the light duty category for which the claimant was capable of performing. In fact, one of the jobs paid $12.35 per hour. The claimant was making $19 an hour at the time of his injury. Wage loss disability should be determined on the basis of the type of work and its wage rate that the claimant is capable of performing. The evidence in this case demonstrates that the claimant is capable of working a job that pays $12.35 an hour. Accordingly, we find that the claimant's loss of earning capacity is 35%.
Further, the claimant does not have a financial incentive to work. He draws $1,400.00 per month in Social Security Disability benefits as well as $308.00 a week in Workers' Compensation benefits, plus $876.00 in disability retirement from the respondent employer. Moreover, the claimant receives $150.00 a month in long-term disability benefits. This comes to approximately $3,676.00 per month, tax-free, that the claimant receives. The claimant was grossing approximately $4,000.00 per month while he was having to work forty to fifty hours per week. Simply put, we cannot find that the claimant proved by a preponderance of the evidence that he was permanently and totally disabled, much less entitled to a 60% loss in wage earning capacity. Accordingly, we modify the decision of the Administrative Law Judge and award the claimant a 35% loss in wage earning capacity in addition to his permanent anatomical impairment that has previously been accepted by respondent no. 1.
REIMBURSEMENT
The next issue that must be addressed is the right of respondent no. 1 to be reimbursed by respondent no. 2 for overpayment of temporary total disability benefits that respondent no. 1 made to the claimant. Respondent no. 2 resisted reimbursement of any amount to respondent no. 1 taking the position that respondent no. 1, by waiving any reimbursement from the claimant for any overpayment, could not now seek recovery from respondent no. 2. Additionally, respondent no. 2 contended that there was no statutory authority within the Act including, specifically, Ark. Code Ann. § 11-9-525, authorizing it to pay any monies to any party except the claimant, and that the only benefit authorized to be paid is for permanent partial or permanent total disability. Respondent no. 1 cites Ark. Code Ann. § 11-9-807 as statutory authority for reimbursement.
Ark. Code Ann. § 11-9-207(a)(7) provides that the Commission has the power to ". . . determine the time for the payment of compensation and order the reimbursement of employers for amounts advanced; . . ." Further, Ark. Code Ann. § 11-9-807 provides: "(a) if the employer has made advanced payments for compensation, the employer shall be entitled to be reimbursed out of any unpaid installment or installments of compensation due." Respondent no. 2 contends that there is no statutory authority for the reimbursement by respondent no. 2 to respondent no. 1 for overpayment of benefits and cites some statutory authority for not requiring the Fund to reimburse respondent no. 1.
Respondent no. 2 argues that Ark. Code Ann. § 11-9-410(a) precludes reimbursements. Ark. Code Ann. § 11-9-410(a) provides that any action by the claimant against the "employer or carrier" does not affect the claimant's right to go against ". . . any third party for the injury . . .". Respondent no. 2 argues that it is a "third party" to whom the claimant has a right to look for his functional disability benefits. Therefore, the insurance carrier cannot "siphon off" such benefits from respondent no. 2, to the financial detriment of the claimant. Subsection 410(c)(4) requires each party with an interest in the claim to cooperate with others in the litigation of the claim. Subsection 410(b)(5) says that the purpose of such cooperation is to prevent a double payment to the claimant. Respondent no. 2 alleges that respondent no. 1 made no attempt to cooperate with it. Despite respondent no. 2 being a party in the case since October of 2002, respondent no. 1 made no attempt to coordinate with respondent no. 2 to try to determine the end of healing period in a timely fashion, to elicit a rating of anatomical impairment as quickly as was appropriate, or to let respondent no. 2 know what benefits it was paying, and why. Therefore, any overpayments respondent no. 1 made were entirely gratuitous.
Respondent no. 2 also argues that A.C.A. § 11-9-505(b)(2), which says that the employer has the responsibility for "additional payments" not to exceed seventy-two (72) weeks during the exploration of vocational rehabilitation or job placement, is also applicable to this case.
In her deposition, Ms. Richard, the adjuster in this case, said that she paid that temporary total disability benefits to the claimant while he was looking for a job. The claimant testified at the hearing that he was still searching for a job as late as May 19, 2005, the week before the hearing. Ms. Richard also testified that, after Dr. Tuck finished her treatment, she referred the claimant to Dr. Savu for additional treatment. She said that was the reason why she continued to pay at the temporary total disability compensation rate of $410.00 per week. She noted that Dr. Savu had said the claimant was unable to do any kind of work during the course of his treatment. Therefore, respondent no. 1 should not be reimbursed since the payments were designated as temporary total disability benefits on the pay sheets.
Respondent no. 2 additionally argued that there is nothing in the language of Ark. Code Ann. § 11-9-525(c)(2) which authorizes reimbursement to an insurance carrier, especially where that carrier has waived its right to reimbursement from the claimant. A.C.A. § 11-9-525(c)(2) allows the Fund to enter into settlements, if it wishes to do so, but is totally silent as to any type of involuntary payment of its funds to any other party except the claimant.
Further, respondent no. 2 argues A.C.A. § 11-9-801(b) states that payment of benefits shall be made to the person entitled to the compensation, and must be paid to the person entitled to it. Ark. Code Ann. § 11-9-803(a)(1) requires the employer to file a notice of controversion when it denies responsibility for a specific type of benefit. Respondent no. 1 in the instant case says it continued to pay benefits beyond its obligation for the anatomical impairment rating, but it never gave any notice to respondent no. 2, or the claimant, that it was either controverting those alleged payments, or requesting a reimbursement from some party. Respondent no. 1's continued payment, coupled with the fact that it made no declaration required in subsection 803, and again coupled with the fact that Respondent No. 1 is not asking for that money back from the claimant now precluded respondent no. 1 from receiving any type of reimbursement.
Furthermore, respondent no. 2 advances the argument that the provisions of A.C.A. § 11-9-807(a), which allows an employer who has made an "advance payment" of compensation to the claimant to obtain reimbursement from the claimant, only allows reimbursement out of unpaid installments of compensation benefits due to the claimant.
We cannot agree with respondent no. 2's argument. We find that respondent no. 1 is entitled to be reimbursed $37,136.00 that it overpaid the claimant in compensation. There are two cases that have specifically dealt with the issue of respondent carriers being reimbursed by the Second Injury Fund. In the case of Monk v. Brown Taylor Lumber Co., Comm. Opn. filed April 14, 1997 (Claim No. E113004), the Commission required the Second Injury Fund to reimburse the respondent carrier permanent partial disability benefits that the respondent carrier had overpaid to the claimant. This case also cites Richard Maxell v. Hawkins Construction Co., Full Workers' Compensation Commission Opinion filed Sept. 11, 1996 (Claim No. E311524). The Commission stated in the Monk case:
In Weaver, the Arkansas Court of Appeals established the criteria for payment of benefits by the Second Injury Fund. First a determination must be made as to the anatomical impairment that resulted from the last injury. Next, the fact finder must determine the disability attributable to those pre-existing conditions. Next, the extent of combined disability must be determined. Finally, the fact finder must determine the balance which should be paid by the Second Injury Fund. When applying the Weaver formula to the findings we have made, the claimant is entitled to a 52% permanent disability rating to be apportioned 2% to respondent No. 1 and 50% to respondent No. 2. I find that respondent No. 1 is liable to the claimant for permanent disability compensation equal to 2% and that respondent No. 2 is liable to the claimant for permanent disability compensation equal to 50%. However, we also find that respondent No. 1 is entitled to a pro rata credit payable from respondent No. 2's 50% liability to the extent that respondent No. 1 has already paid the claimant permanent disability in excess of 2%. See Richard Maxell v. Hawkins Construction Co., WCC No. E311524 (Opinion delivered 9/11/96). In the Maxell case, the Commission found that the insurance carrier/respondent was entitled to a pro rata credit payable from the Second Injury Fund's wage loss liability. The carrier was allowed to recover from the Second Injury fund the excess permanent disability it paid to the claimant. Therefore based upon our finding in Maxell, we find that respondent No. 1 (sic) entitled to be reimbursed for the amount of its overpayment of six thousand two hundred and forty-seven dollars and eight cents ($6,247.08).
Respondent no. 2 argues that because the respondent carrier paid temporary total disability benefits, these were gratuitous payments to the claimant, therefore they are not entitled to be reimbursed. The attorney for respondent no. 2 specifically asked the adjuster, Ms. Richard what she designated those payments as. She stated that she paid temporary total disability benefits, which were at the higher rate of $410.00 per week. We note that in the case of Ratchford v. Belden Wire Cable Co., Full Workers' Compensation Opinion filed Sept. 20, 1999 (Claim No. E513736), the Commission specifically allowed the respondents to reclassify benefits from TTD to PPD. Since wage loss is considered to be permanent partial disability benefits, the respondents are allowed to reclassify the temporary total disability benefits that they paid to the claimant as permanent partial disability benefits. Respondent no. 1 is not responsible for benefits in excess of the permanent anatomical impairment and respondent no. 2 should reimburse respondent no. 1. Further, in the case of Swem V. University of Arkansas, Full Commission Opinion filed Nov. 2, 2004 (Claim No. F203675), the Commission noted that it has the power to order reimbursement of employers for amounts advanced. Ark. Code Ann. § 11-9-807, as cited previously, gives the Commission the mechanism to require the reimbursement.
Our de novo review of the evidence demonstrates that it is undisputed that the claimant received advance payments of compensation. The claimant acknowledged such and felt that he was entitled to the benefits. Ms. Richard testified that she was responsible for only paying workers' compensation benefits, and that she had paid the money as workers' compensation.
Indeed, Ms. Richard, provided an exact amount of benefits paid since the date the healing period ended. From October 8, 2002, (the stipulated end of the healing period) until April 15, 2005, the date respondent no. 2 took over the payments, respondent no. 1 paid $53,768.00. The anatomical impairment rating given by Dr. Tuck in 2004 was $16,632.00, with the difference being $37,136.00 respondent no. 2 should reimburse respondent no. 1.
Whether overpaid benefits are called temporary total disability or permanent partial disability does not matter. See Ratchford, E513736. Moreover, respondent no. 2 tries to alternatively suggest that the claimant was actually temporarily totally disabled or in need of maintenance benefits, even though neither it, nor the claimant raised that as an issue at the hearing.
It is important to note that the end of the healing period was the result of a stipulation agreed to by all parties. Respondent no. 2 takes the fact that there was some confusion in 2002 and 2003 over whether the claimant had reached maximum medical improvement and twists it. Confusion concerning the end of the healing period does not irrevocably prevent a credit against permanent partial disability. The record demonstrates that there was ongoing treatment for the claimant and some unclear statements about when the claimant reached maximum medical improvement. Dr. Tuck ultimately established that the healing period ended in October of 2002, but she did not make this statement until 2004.
Respondent no. 2 makes the argument that respondent no. 1 should essentially be penalized for paying benefits. The Workers' Compensation Act should not be read to reach such an illogical result. See Piles v. Triple F Feed of Texas, Inc. 270 Ark. 729, 606 S.W.2d 146 (1980). The purpose of the statute setting up the Second Injury Fund is to encourage the employment of disabled workers and to provide payments for wage loss disability. See Ark. Code Ann. § 11-9-525. There is absolutely nothing in this statute which can be construed as a prohibition to pay installments for wage loss disability benefits back to the respondent employer.
It is of note that respondent no. 2 was made a party to the case in July of 2002, but did not accept any liability until April of 2005. This is more than adequate time to investigate and address any questions that it may have had during that period of time. Respondent no. 2 faults respondent no. 1 for continuing to make payments to the claimant, but it could have obtained the same information that it now claims was so desperately needed and respondent no. 1 did not obtain. This is clearly a case where respondent no. 1 merely stepped in and advanced these benefits while respondent no. 2 was conducting its investigation.
Further, we must agree with respondent no. 1's argument that the claimant would receive a windfall if respondent no. 2 is not required to reimburse respondent no. 1. The law allows respondent no. 1 to be reimbursed by respondent no. 2 as stated previously. If we did not allow this reimbursement to take place, the claimant would essentially be paid twice for his wage loss, which is not the intent of the Act. Respondent no. 2 faults respondent no. 1 for continuing to make payments to the claimant and for it not getting the information when the claimant reached the end of his healing period. However, as noted previously, respondent no. 2 was made a party to this case in July of 2002, and they did not accept liability until April of 2005. We submit that the Fund had adequate time to investigate and address any questions that it may have had during that period of time.
The Fund's contentions concerning a waiver are also misplaced. Respondent no. 1 did state that it was not asking the claimant to reimburse benefits directly to them. This is consistent with the decisions in Osborne v. Logan County Commission Opn. filed Aug. 20, 1998, (Claim No. E513263), and Swem V. University of Arkansas, Full Commission Opinion filed Nov. 2, 2004 (Claim No. F203675). Respondent no. 1 sought out and affirmed its entitlement to a credit by joining the Fund and by seeking reimbursement from the Fund. The Fund was the one who owes for advance payments of installments.
The Administrative Law Judge erred in applying estoppel without considering all of the factors to this claim. The Administrative Law Judge's decision was premised, in part, on the idea that respondent no. 1 was estopped to claim a credit. Nowhere in the opinion is there any mention of the factors needed for estoppel. The Commission has explicitly stated that estoppel requires the following:
1. The party to be estopped must know the facts;
2. He or she must intend that his or her conduct shall be acted upon, or must act so that the party asserting the estoppel has the right to believe the other party so intended;
3. The party asserting the estoppel must be ignorant of the true facts;
4. The party asserting the estoppel must rely on the other parties' conduct to his or her injury.
Scott v. Georgia Pacific Corp., FC Opn. filed August 14, 1998, (Claim No. E006693). Estoppel involves a situation where one party changes his position to his detriment as a result of the conduct of another. Norden v. Big Mack Trucks, FC Opn. filed July 7, 1998, (Claim Nos. E500623 and E111402).
An overpayment of benefits cannot be the basis for estoppel in this case. In Long v. Youth Home, FC Opn. filed Dec. 4, 1998, (Claim No. E615714 and E615715), Zenith Insurance Company claimed that Liberty Mutual was estopped from seeking reimbursement for medical bills erroneously paid. The Commission, in that case, held that the case met none of the four requirements for estoppel. Of particular note, the Commission found that it could not see where Liberty Mutual intended to provoke a response from Zenith. Specifically, the Commission found that there was no particular benefit to Liberty Mutual by paying the money. In this case, there is no particular benefit to be found for respondent no. 1 to pay these benefits.
The Commission found in Long that Zenith was aware of the true facts of the case, and that they at least had potential liability. The same applies here. Respondent no. 2 was put on notice of the claim in July of 2002. It knew, or should have known, that no reports of cessation of payments had occurred. Respondent no. 2 criticizes respondent no. 1 for the payment of benefits without filing a notice of controversion. Respondent no. 1 did not controvert this claim, nor did they want to controvert the claim. Respondent no. 1 knew that the claimant was owed wage loss disability benefits. Respondent no. 2, for whatever reason, was unwilling or unable to accept responsibility and did not accept responsibility for approximately 18 months.
Respondent no. 1 disputed who should be responsible for those benefits, but chose to pay the claimant. The claimant promptly received benefits and avoided financial hardship because respondent no. 1 advanced payments of disability benefits. It was entirely proper for respondent no. 1 to make those payments.
As to the fourth factor, there is no prejudice to respondent no. 2. Repaying respondent no. 1 will not cost respondent no. 2 any additional dollars, but will merely place the responsibility for the wage loss where it belongs, with respondent no. 2. Respondent no. 2 has failed to demonstrate anything that can establish prejudice. The mere designation of a payment as temporary total disability does not estop the employer from crediting those amounts as permanent partial disability. See Ratchford v. Belden Wire Cable Co., FC Opn. filed Sept. 20, 1999 (Claim No. E513736).
We find that the Second Injury Fund, respondent no. 2, should reimburse respondent no. 1 for the $37,136.00 in benefits that they advanced to the claimant for compensation. Respondent no. 2's argument that because the insurance company waived reimbursement from the claimant that they also waived it with respect to respondent no. 2 is disconcerting at best. Reimbursement and a credit are not the same thing. Pursuant to Ark. Code Ann. § 11-9-807, the employer that has made advance payments of compensation is entitled to be reimbursed out of any unpaid installments due. The employer is not allowed to go back to the claimant and ask for reimbursement of those funds that it advanced. Respondent no. 2 has termed these payments as being "gratuitous" based upon the testimony of Ms. Richard. In the case of Looney v. Sears Roebuck Co., 236 Ark. 868, 371 S.W.2d 6 (1963), the Court held: "where excess of wages over compensation, as received by employee, was intended by the employer as a gratuity, the employer is not allowed to deduct the voluntary payments from the amount of benefits due to the employee." I cannot find that these were gratuitous payments as respondent no. 2 argues. Respondent no. 1 stated they would not ask for reimbursement from the claimant. However, they were seeking basically what is a credit for future benefits from respondent no. 2. Respondent no. 2 is to pay a 35% loss in wage earning capacity to the claimant. Because respondent no. 1 paid those payments in advance, respondent no. 2 should not be allowed to take advantage of those payments by merely disregarding any reimbursement.
Therefore, for all the reasons set forth herein, we find that the claimant is not required to reimburse respondent no. 1 for the advance payments of compensation, but that the Second Injury Fund, respondent no. 2, is required to reimburse respondent no. 1 for the advance payments of compensation respondent no. 1 made to the claimant. Accordingly, we reverse the decision of the Administrative Law Judge.
The last issue that needs to be addressed is whether or not respondent no. 2 is entitled to a credit for the long term disability benefits, as well as the disability retirement benefits that the claimant receives. We find that respondent no. 2 should be given a dollar-for-dollar credit for these benefits.
The Administrative Law Judge denied the credit to respondent no. 2, and basically insinuated that the Fund had asked for the credit pursuant to Ark. Code Ann. § 11-9-411 for the first time in its post-hearing trial brief. We note that a respondent is not required to affirmatively plead the off-set provisions of Ark. Code Ann. § 11-9-411. See, Wilkins v. Van Buren School Dist. #42, WCC No. E510091 (February 7, 1997); Turner v. Trane, WCC No. E616700 (June 17, 1998); Tadlock v. St. Joseph's, WCC No. E802168 (December 9, 1999); and the Brister case, WCC No. E607106 (October 2005). As this Commission stated in Brister, supra:
A.C.A. § 11-9-411 is a statute which applies summarily and does not require an affirmative pleading by the respondent . . .
We note that in his January 11, 2005 Prehearing Questionnaire Response, the law judge instructs the claimant under No. 10 that he is required to disclose the identity, address, and/or number of any entity which has paid benefits pursuant to A.C.A. § 11-9-411. Such credit is to be given for any of a claimant's retirement benefits, Rich v. Phycor of Ft. Smith, 1997 AWCC 430 (Claim No. E511541), and for any benefits payable under the claimant's group disability policy.
The claimant testified in this case that he has been and is drawing long-term disability from the respondent employer in the amount of $150.00 per month, and disability retirement from the respondent employer in the amount of $876.00 per month. we find that respondent no. 2 should be given a credit in the amount of $1,026.00 per month as long as the claimant draws those disability benefits.
The Administrative Law Judge denied respondent no. 2 a credit on two grounds. First, he contended that this subsection doesnot provide for a credit for "concurrent benefits". Second, he takes the position that subsection 411 does not apply to "retirement" benefits. We find that his interpretation of subsection 411 is misplaced.
A.C.A. § 11-9-411(a) states in part:
. . . (a) Any benefits payable to an injured worker under this chapter shall be reduced in an amount equal to, dollar-for-dollar, the amount of benefits the injured worker has previously received for the same . . . period of disability, whether those benefits were paid under a group health care service plan of whatever form or nature, a group disability policy, a group loss of income policy, a group accident, health, or accident and health policy, a self-insured employee health or welfare benefit plan . . .
Long-term disability benefits and the disability retirement benefits which the claimant receives are the types of benefits which subsection 411 is intended to address. The only type of benefit which respondent no. 2 pays is the weekly benefit for wage loss disability. The claimant is receiving two types ofdisability payments from other sources. A disability "retirement" is not the same thing as a regular one. An employee becomes eligible for a disability retirement by virtue of injury, not by meeting the minimum number of years for a normal retirement. As such, it would meet the definition of a "welfare benefit plan . . . of whatever form or nature . . ."
The law judge's assessment that the workers' compensation payments and the other disability payments are "concurrent" payments, and therefore, do not come within the purview of subsection 411 is misplaced. First, the claimant began drawing long-term disability benefits and disability retirement benefitsbefore respondent no. 2's payments for wage loss disability benefits commenced. Therefore, such benefits were received "previously." Second, the term ". . . for the same period of disability . . ." appears to be completely ignored by the law judge. The claimant cannot receive both workers' compensation benefits and "disability" benefits from any of the enumerated sources which includes long-term disability and disability retirement for the same period of time, regardless of when that period of time appears on the "time line" of receipt of such benefits. The word "previous" only means that the respondent cannot take a future credit. If we would agree with the Administrative Law Judge's interpretation, there is no conceivable scenario by which a credit could ever be taken. Accordingly, we reverse the decision of the Administrative Law Judge and find that respondent no 2 is entitled to a credit.
Therefore, after considering all of the evidence and conducting a de novo review of the record, we find that the opinion of the Administrative Law Judge should be and hereby is modified, in part, and reversed, in part.
IT IS SO ORDERED.
___________________________________ OLAN W. REEVES, Chairman
___________________________________ KAREN H. McKINNEY, Commissioner
Commissioner Turner concurs, in part, and dissents, in part.
CONCURRING AND DISSENTING OPINION
The Claimant, Respondent No. 1, General Electric, and Respondent No. 2, the Second Injury Fund, all appeal a decision by the Administrative Law Judge filed on July 27, 2005. Specifically, Claimant appeals the decision of the Administrative Law Judge finding that Claimant was only entitled to a 60% loss in wage earning capacity in addition to his permanent anatomical impairment rating. The Claimant contends that he was permanently and totally disabled.
Respondent No. 1 appeals the decision of the Administrative Law Judge denying their request for reimbursement of disability benefits paid to Claimant from Respondent No. 2.
Respondent No. 2 appeals the decision of the Administrative Law Judge finding that Claimant was entitled to a 60% loss in wage earning capacity in addition to his permanent anatomical impairment and the finding that Respondent No. 2 was not entitled, pursuant to Ark. Code Ann. § 11-9-411, to a credit for disability benefits received by Claimant for long-term disability and retirement disability.
The majority modified, in part, and reversed, in part, the decision of the Administrative Law Judge. Specifically, they modified Claimant's wage loss benefits to the 35% loss in wage earning capacity that had been accepted by Respondent No. 2. They reversed the decision of the Administrative Law Judge finding that Respondent No. 2 was not entitled to a credit pursuant to Ark. Code Ann. § 11-9-411 for Claimant's long-term disability and disability retirement benefits. Finally, they reversed the decision of the Administrative Law Judge finding that Respondent No. 1 was not entitled to be reimbursed for the disability benefits it overpaid Claimant in the amount of $37,136.00.
Based upon my de novo review of the record, I concur, in part, and respectfully dissent, in part, from the Majority's Opinion. I concur with the Majority's decision that Respondent No. 1 is entitled to be reimbursed by Respondent No. 2 in the amount of $37, 136.00. I respectfully dissent from the Majority's decisions that Respondent No. 2 is entitled to a credit for the retirement and long-term disability benefits Claimant has received from his employer and that Claimant is not permanently and totally disabled.
As indicated above, I concur with the Majority's finding that Respondent No. 1 is entitled to a reimbursement from Respondent No. 2 for monies they paid to Claimant after his healing period ended. As the Majority has extensively and persuasively outlined the relevant statutory case law pertaining to this matter, I will not further discuss that issue.
I respectfully dissent from the Majority's finding that Respondent No. 2 is entitled to a credit for the retirement and long-term disability benefits Claimant has received from his employer.
The benefits upon which Respondent No. 2 is basing their reduction request are referred to in the parties briefs as "disability retirement benefits." While the benefits in question total approximately $1,300.00 per month and were paid by Claimant's employer, according to the Claimant's testimony, they were in fact separate benefits paid by separate, monthly checks. The primary payment Claimant received was what he described as a retirement benefit which was paid to him by his employer as a consequence of his long service with them. The other benefit payment, in the amount of $150.00 per month, was paid to him out of an employer funded long-term disability plan. In order to accurately analyze these payments under Ark. Code Ann. § 11-9-411, in my opinion, it is necessary to consider them separately.
Ark. Code Ann. § 11-9-411 provides that a respondent may reduce the amount of benefits that they are paying to a claimant based upon the claimant's receipt of certain group insurance benefits when receipt of those benefits would constitute a double recovery. The statute specifically lists several types of benefits which are covered. The benefits provided for in the statute are those: paid under a group health care savings plan, group disability policy, a group loss of income policy, a group accident or health policy, a self-insured employer health benefit fund, or group hospital or medical service contract. The statute also provides that this reduction shall take place for benefits which the injured worker has received for the same medical services or period of disability. (Emphasis added).
In my opinion, the benefits received by Claimant are not covered by the statute. The statute clearly intends to avoid a double recovery by Claimant. That intent is evidenced by the statute's plain language that benefits may be reduced for thesame medical services and periods of disability. In the present case, Claimant's retirement benefits are of a totally separate nature than those provided for in the statute. Specifically, they are a benefit received by Claimant as a form of compensation for the many years he was employed by the respondent. While his disabling injury entitled him to begin receiving those benefits sooner than he otherwise would have had he not been injured, they are not listed among the benefits set out in the statute. Since we have been specifically directed by the Arkansas General Assembly to avoid expanding or narrowing the Workers' Compensation Act, I do not believe that it is appropriate for us to include Claimant's retirement benefits under the application of Ark. Code Ann. § 11-9-411, when the legislature has not seen fit to specifically include that type of payment. In my opinion, if the legislature had intended receipt of retirement benefits to be included in the benefit reductions provided in the statute, they would have said so. Consequently, I respectfully dissent from the Majority's decision to allow Respondent No. 2 to reduce benefits based upon Claimant's receipt of retirement benefits.
The other benefit Claimant was receiving from his employer was a monthly check in the amount of $150.00. This payment was made from a long-term disability fund managed by the claimant's employer, Respondent No. 1. Unlike the retirement benefits discussed above, this payment is pursuant to an employer group disability plan which is covered by Ark. Code Ann. § 11-9-411. However, I still do not believe that Respondent No. 2 is entitled to reduce the benefits they owe Claimant based upon his receipt of this payment.
As stated above the obvious intent of the statute is that claimants should not receive a double recovery. That conclusion is obvious based upon the statutory statement that it applies to benefits that a claimant receives for the "same period of disability."
In my opinion, the primary reason that Respondent No. 2 is not entitled to the benefit reduction requested is that monthly stipend that Claimant is receiving from Respondent No. 1's long-term disability fund is not the same type of benefit he is receiving from Respondent No. 2 and, consequently, there is no double recovery and should be no benefit reduction.
The permanent disability benefits provided by the Workers' Compensation Act are intended to compensate a claimant for two aspects of his injury. The first such aspect is for a claimant's anatomical impairment. That is, the Legislature has stated that where an injured worker sustains a loss of a body part or a loss in the use of function of a body part he or she is entitled to receive a certain amount of partial disability benefits to be paid to him for a specific period of time. Since Respondent No. 2 is not liable for paying these benefits, this point has no application in the present case but I would note that the disability benefits a claimant might receive from a group disability plan are not conditioned upon such as a loss of a body part but is intended to compensate him for loss of earnings while he is unable to work. Obviously, there is no double payment being received when a claimant is being paid a payment based upon his anatomical impairment and those being paid for as a temporary inability to work.
The other component of permanent disability benefits are those intended for compensation for a loss of future earning ability. Those benefits may be expressed either as a percentage impairment which we would normally call wage loss disability or if the loss is severe enough, permanent total disability benefits. In the present case, Respondent No. 2 is contending that the long-term disability benefits Claimant received entitled them to make a reduction in any wage loss or permanent and total disability benefits they may owe Claimant. However, the basis of any such wage loss or permanent and total disability benefits are compensated for a claimant's economic loss caused by the effects of his job related injury. Clearly, this is not a "period of disability" as that term is used in Ark. Code Ann. § 11-9-411. The Claimant's receipt of wage loss disability benefits or permanent and total disability benefits are inextricably linked to his loss of body function and how it limits his ability to earn a living. Consequently, I see no double recovery in this case and in my opinion, the long-term disability benefits Claimant was receiving are not a basis for reducing any benefits he received from Respondent No. 2.
Another reason Respondent No. 2 is not entitled to benefits from the provisions of Ark. Code Ann. § 11-9-411 is that this statute obviously applies to respondents who are providing disability benefits under a company sponsored disability plan and, at the same time, are required to pay the claimant benefits under the Arkansas Workers' Compensation Act. In the present case, the long-term disability benefits Claimant is receiving are being paid to him out of a fund maintained by Respondent No. 1. On the other hand, Respondent No. 2's payments are not in any way associated with Respondent No. 1 and I see no reason for them to be able to reduce their obligation based upon benefit payments made by Respondent No. 1. Also, it does not appear to me that Respondent No. 2 has considered the fact that, if they were to become entitled to a reduction in their obligation to Claimant, they would be required to reserve any payments they avoided paying to Claimant so that the long-term disability fund maintained by Claimant's employer could be reimbursed. In that case, Respondent No. 2 would have no net savings and would merely be transferring a portion of Claimant's benefits back to the employer's long-term disability system. In my opinion, this is not the intent of the statute nor would there be any net gain for Respondent No. 2 in so doing.
In short, I believe that if Ark. Code Ann. § 11-9-411 is applied, it is obvious that Respondent No. 2 is not entitled to a reduction in their benefit obligation to Claimant. The statute is obviously entitled to provide the employer relief where a claimant would be receiving a double recovery from his employer or a group insurance plan organized or funded by an employer. Had the Legislature intended Respondent No. 2 to be able to obtain a reduction in benefits under this statute, they could have included them. In my opinion, it would be an improper expansion of the Workers' Compensation law for us to apply the statute in the manner argued by Respondent No. 2.
The final issue is the extent of Claimant's permanent disability. The Majority has modified the Administrative Law Judge's award of wage loss disability benefits in the amount of 60% down to the 35% accepted by Respondent No. 2. I respectfully dissent from this decision. In my opinion, Claimant should be found permanently and totally disabled.
The Claimant began working for Respondent No. 1 in approximately 1970. During that time, he sustained two injuries to his lower back, the first in 1995 and the second in 2001. The combined effects of these two injuries, as well as a knee injury Claimant sustained were the basis of Respondent No. 2's liability. As a result of these two accidents, Claimant underwent four spinal surgeries over a period of six years including a spinal fusion at the L4-L5 level and three discectomies at L5-S1 and L4-L5. I also note from reviewing the various MRI scans and CT scans of Claimant's lower back in addition to the surgical treatment, he has been diagnosed as having a bulging disc at L2-L3 and L3-L4. In addition, he has been diagnosed as suffering from failed back syndrome and has consistently and credibly testified as to severe and debilitating lower back pain.
There is no question that Claimant's physical impairment has substantially limited his job opportunities. The Claimant's past job experience is that of a heavy equipment repair man with some specialized training in hydraulics. As this job requires frequent, heavy lifting and strenuous exertion, he clearly cannot return to this employment. Further, the undisputed testimony, supported by payroll and other documents, indicate that at the time of injury, Claimant was earning in excess of $1,100.00 per week.
In order to evaluate Claimant's remaining vocational ability, Respondent No. 1 retained Heather Naylor, a vocational rehabilitation consultant to assist Claimant in returning to work. After interviewing Claimant, Ms. Naylor provided him a number of jobs which she believed would be within his physical capacity. The Claimant, testified that he had applied for a number of those jobs, both personally and by telephone. However, Claimant testified that he had not been offered employment by any of those employers. This is not surprising considering Claimant's age and severe limitations.
The Claimant extensively testified about the disabling effects of his back pain. He stated that he was unable sit or stand for any significant periods of time without changing his position or otherwise moving around. He also states that he had difficulty driving or engaging in any strenuous activities including walking or standing. Also, he was taking strong narcotic medication so as to maintain some functionality. Obviously, few employers would be interested in hiring 55 year old men who have no specialized training other than as a heavy equipment mechanic who are unable to sit, walk, stand, or otherwise engage in vigorous activities, and who are taking regular doses of strong narcotic pain medication.
In my opinion, the facts of this case clearly establish that Claimant is unemployable. Despite the best efforts of Ms. Naylor, she was simply not able to find any jobs that Claimant was able to obtain, given his restrictions and need for medication. During the hearing, Respondent No. 2's attorney repeatedly asked Claimant why he had not contacted Ms. Naylor for additional help. As Claimant explained, he had already gone to all the jobs that she had provided for him and she had closed her file. If Ms. Naylor was not able to locate an employer willing to hire Claimant, and his longtime employer was not able to accommodate his extensive restrictions, I do not see how Claimant could be considered anything other than permanently and totally disabled. In my opinion, to find Claimant anything else is contrary to the evidence presented in this case.
For the foregoing reasons, I respectfully concur, in part, and dissent, in part, from the Majority's Opinion.
______________________________ SHELBY W. TURNER, Commissioner