Opinion
No. 107,526.
2013-03-8
Maria Y. Gallegos MORALES, Appellee, v. WAL–MART and Ins. Co. of The State of Pennsylvania, Appellants.
Appeal from Workers Compensation Board. Michael R. Kauphusman and Ryan D. Weltz, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Overland Park, for appellants. Conn Felix Sanchez, of Kansas City, for appellee.
Appeal from Workers Compensation Board.
Michael R. Kauphusman and Ryan D. Weltz, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Overland Park, for appellants. Conn Felix Sanchez, of Kansas City, for appellee.
Before STANDRIDGE, P.J., ATCHESON, J., and DANIEL L. HEBERT, District Judge Retired, assigned.
MEMORANDUM OPINION
PER CURIAM.
Wal–Mart appeals from the order of the Workers Compensation Board (Board) awarding benefits to Maria Y. Gallegos Morales. Wal–Mart contends that it is entitled to an offset of Morales' social security retirement benefits pursuant to K.S.A.2009 Supp. 44–501(h) and claims that Morales is not entitled to work disability benefits because her termination from Wal–Mart was unrelated to her injury. For the reasons stated below, we affirm in part, reverse in part, and remand with directions.
Facts
In 2008, Morales started working as a stocker at Wal–Mart. In November 2008, shortly after Morales' 62nd birthday, she began receiving social security retirement benefits of $299 per month. On June 2, 2009, Morales injured her back after she fell off a stool while stocking shelves. There is no dispute that Morales' injury arose out of and in the course of her employment with Wal–Mart. After the accident, Morales continued to work as a cashier at Wal–Mart until she was terminated on June 25, 2010, for reasons unrelated to her injury.
An administrative law judge (ALJ) calculated Morales' workers compensation award. In calculating the award, the ALJ found that Morales had suffered a 100% wage loss and a 76% task loss, resulting in an 88% work disability. The ALJ also determined that Wal–Mart was entitled to an offset of Morales' social security retirement benefits under K.S.A.2009 Supp. 44–501(h).
The Board affirmed the ALJ's finding that Morales had suffered a 100% wage loss but found that Morales had an 87% task loss, which resulted in a work disability of 93.5%). Additionally, the Board reversed the ALJ's holding that Wal–Mart was entitled to an offset of Morales' social security retirement benefits, relying on Dickens v. Pizza Co., 266 Kan. 1066, 974 P.2d 601 (1999). The Board held that because Morales was receiving social security retirement benefits prior to her injury, K.S.A.2009 Supp. 44–501(h) did not apply to Morales' circumstances and, therefore, her workers compensation award should not be reduced by her social security retirement benefits.
Standard of Review
K.S.A.2009 Supp. 44–556(a) directs that final orders of the Board are subject to review under the Kansas Judicial Review Act (KJRA), K.S.A. 77–601 et seq. , as amended. The claimant has the burden of proof to establish his or her right to an award of compensation under the Workers Compensation Act and to prove the various conditions on which the claimant's right depends. K.S.A.2009 Supp. 44–501(a). ‘ “Burden of proof means the burden of a party to persuade the trier of facts by a preponderance of the credible evidence that such party's position on an issue is more probably true than not true on the basis of the whole record.” K.S .A.2009 Supp. 44–508(g).
Whether the Board erroneously interpreted or applied the law is a question within our scope of review. K.S.A.2009 Supp. 77–621(c)(4). The party challenging the Board's interpretation of the law bears the burden of proving its invalidity. K.S.A.2009 Supp. 77–621(a)(1); Foos v. Terminix, 277 Kan. 687, 693, 89 P.3d 546 (2004).
Additionally, an appellate court reviews a challenge to the Board's factual findings in light of the record as a whole to determine whether the findings are supported to the appropriate standard of proof by substantial evidence. See K.S.A.2009 Supp. 77–621(c)(7). ‘ “[I]n light of the record as a whole’ “ is statutorily defined as meaning
“that the adequacy of the evidence in the record before the court to support a particular finding of fact shall be judged in light of all the relevant evidence in the record cited by any party that detracts from such finding as well as all of the relevant evidence in the record, compiled pursuant to K.S.A. 77–620, and amendments thereto, cited by any party that supports such finding, including any determinations of veracity by the presiding officer who personally observed the demeanor of the witness and the agency's explanation of why the relevant evidence in the record supports its material findings of fact. In reviewing the evidence in light of the record as a whole, the court shall not reweigh the evidence or engage in de novo review.” K.S.A.2009 Supp. 77–621(d).
Although not statutorily defined, “substantial evidence” refers to “evidence possessing something of substance and relevant consequence to induce the conclusion that the award was proper, furnishing a basis of fact from which the issue raised could be reasonably resolved.” Redd v. Kansas Truck Center, 291 Kan. 176, 183–84, 239 P.3d 66 (2010).
Finally, appellate courts have unlimited review of questions involving the interpretation or construction of a statute, owing ‘ “[n]o significant deference” ‘ to the ALJ's or the Board's interpretation or construction. Ft. Hays St. Univ. v. University Ch., Am. Ass'n of Univ. Profs, 290 Kan. 446, 457, 228 P.3d 403 (2010). The most fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. Bergstrom v. Spears Manufacturing Co., 289 Kan. 605, 607, 214 P.3d 676 (2009). An appellate court must first attempt to ascertain legislative intent through the statutory language enacted, giving common words their ordinary meanings. Padron v. Lopez, 289 Kan. 1089, 1097, 220 P.3d 345 (2009). When a statute is plain and unambiguous, an appellate court does not speculate as to the legislative intent behind it and will not read into the statute something not readily found in it. Where there is no ambiguity, the court need not resort to statutory construction. Only if the statute's language or text is unclear or ambiguous does the court use canons of construction or legislative history to construe the legislature's intent. Double M Constr. v. Kansas Corporation Comm'n, 288 Kan. 268, 271–72, 202 P.3d 7 (2009).
Analysis
Wal–Mart raises two arguments on appeal. First, it claims it is entitled to an offset for Morales' social security retirement benefits under K.S.A.2009 Supp. 44–501(h). Second, Wal–Mart alleges that Morales is not entitled to work disability benefits because her termination at Wal–Mart was unrelated to her injury. We address each of Wal–Mart's arguments in turn. Offset for Social Security Retirement Benefits
Wal–Mart challenges the Board's determination that it was not entitled to an offset of Morales' social security retirement benefits, claiming that it is contrary to the plain language of K.S.A.2009 Supp. 44–501(h) and that the judicially made exception to the statute promulgated in Dickens is bad law. In the alternative, Wal–Mart attempts to distinguish Dickens on the basis that there is no evidence indicating Morales was retired before she began working at Wal–Mart.
K.S.A.2009 Supp. 44–501(h), the workers compensation law in place at the time of Morales' injury, provides:
“If the employee is receiving retirement benefits under the federal social security act or retirement benefits from any other retirement system, program or plan which is provided by the employer against which the claim is being made, any compensation benefit payments which the employee is eligible to receive under the workers compensation act for such claim shall be reduced by the weekly equivalent amount of the total amount of all such retirement benefits, less any portion of any such retirement benefit, other than retirement benefits under the federal social security act, that is attributable to payments or contributions made by the employee, but in no event shall the workers compensation benefit be less than the workers compensation benefit payable for the employee's percentage of functional impairment.”
The purpose of this statutory offset, or reduction, is to prevent wage-loss duplication. Mcintosh v. Sedgwick County, 32 Kan.App.2d 889, 897, 91 P.3d 545,rev. denied 278 Kan. 846 (2004). But the Kansas Supreme Court has created an exception to the statute that applies to retired workers who receive social security retirement benefits before reentering the workforce to supplement their social security income. See Dickens, 266 Kan. at 1071.
In Dickens, the claimant retired at age 64 and supplemented his social security retirement benefit with part-time work for Pizza Hut. After working there for 8 years, the claimant suffered a work-related injury for which he sought workers compensation benefits. Pursuant to K.S.A.1998 Supp. 44–501(h), the Board reduced the amount of his workers compensation benefits by the amount of his social security retirement benefits. On appeal, the Dickens court noted that duplication of wage-loss replacement, the rationale behind K.S.A.1998 Supp. 44–501(h), is not a concern when the worker is employed to supplement the social security retirement benefits he or she is already receiving. Rather, the concern is ensuring that the statute allows the worker to recover the benefits he or she was entitled to as a result of the wage loss caused by the injury. 266 Kan. at 1070. Thus, the Dickens court held that a workers compensation award should not be offset because of social security retirement benefits if the injured worker was receiving the benefits before reentering the workforce. 266 Kan. at 1071; see Robinson v. City of Wichita Retirement Bd. of Trustees, 291 Kan. 266, 286, 241 P.3d 15 (2010) ( “[I]f an employee retires and then returns to work to supplement his or her income, the reduction does not apply, as the employee's receipt of both workers compensation benefits and social security retirement benefits are not duplicative.”).
As support for its argument that the Dickens exception does not apply here, Wal–Mart relies on McIntosh, 32 Kan.App.2d at 889. In McIntosh, the claimant worked as a security officer for Sedgwick County. In the spring of 1999, he began receiving social security retirement benefits around the time of his 65th birthday but continued to work full-time for the County. Prior to the claimant's planned retirement in August 1999, he was injured in June 1999 following a work-related injury for which he made a workers compensation claim. The ALJ and the Board concluded that, pursuant to Dickens, the County was not entitled to a K.S.A. 44–501(h) offset.
On appeal, this court reversed, concluding that the offset provisions of K.S.A. 44–501(h) did apply. In reaching this decision, the court reviewed previous caselaw that interpreted the statute and concluded that the cases showed two consistent patterns: (1) when an injury occurs prior to retirement, multiple benefits are not allowed, see Wishon v. Cossman, 268 Kan. 99, 106–08, 991 P.2d 415 (1999); Treaster v. Dillon Companies, Inc., 267 Kan. 610, 625, 987 P.2d 325 (1999); Gadberry v. R.L. Polk & Co., 25 Kan.App.2d 800, 807, 975 P.2d 807 (1998); Brown v. Goodyear Tire & Rubber Co., 3 Kan.App.2d 648, 654, 599 P.2d 1031 (1979), aff'd221 Kan. 645, 608 P.2d 1356 (1980); and conversely, (2) when an injury occurs after retirement, multiple benefits are allowed, see Dickens, 266 Kan. at 1071;Boyd v. Barton Transfer & Storage, 2 Kan.App.2d 425, 428, 580 P.2d 1366,rev. denied 225 Kan. 843 (1978). McIntosh, 32 Kan.App.2d at 897. The McIntosh court held that the claimant fell into the former category because he suffered his work-related injury before retirement and therefore suffered only one wage loss, i.e., “the loss of wages for his full-time employment that predated the injury and his retirement.” 32 Kan.App.2d at 897. Specifically, the court stated:
“[I]t is clear that in enacting K.S.A. 44–501(h), the legislature intended to prevent wage-loss duplication. In instances in which the work-related injury predates the actual date of retirement, the appellate courts have consistently held that social security retirement benefits are designed to restore a portion of an employee's wages lost due to age and, therefore, duplicate workers compensation benefits which are designed to restore a portion of an employee's wages lost due to injury.” 32 Kan.App.2d at 897–98.
Thus, based on the holdings set forth in McIntosh and Dickens, if a claimant is injured before he or she retires, the employer is entitled to the statutory offset, as an injured employee is not entitled to recover both retirement benefits and workers compensation benefits beyond the value of the functional impairment. McIntosh, 32 Kan.App.2d at 897–98. But if an employee retires and then returns to work to supplement his or her income, the offset does not apply, as the employee's receipt of both workers compensation benefits and social security retirement benefits are not duplicative. Dickens, 266 Kan. at 1071; see Robinson, 291 Kan. at 286.
Therefore, whether the offset in K.S.A.2009 Supp. 44–501(h) applies here turns on whether Morales retired before her employment at Wal–Mart and her subsequent injury. The Board did not make a specific factual finding that Morales had retired before she started working at Wal–Mart but seemed to assume that was the case based on the fact that Morales was receiving social security retirement benefits before her injury.
Morales testified that she worked as an interpreter in Garden City from 1999 to 2008. Morales moved to Johnson County in 2008 to be closer to her family, at which time she started working at Wal–Mart. Morales began receiving social security retirement benefits in November 2008. There is no evidence in the record to establish that Morales retired and then took a job at Wal–Mart in order to supplement her social security income. In fact, Morales began receiving the social security retirement benefits sometime after she started working at Wal–Mart. While Morales' attorney argued in a submission letter to the ALJ that Morales had retired but continued to work in order to supplement her income and was limiting her income to stay within the limits to retain social security benefits, Morales did not provide testimony on these points and there is no evidence in the record to support them.
The statutory exception set forth by Dickens is based on the rationale that workers who already are retired and receiving social security retirement benefits before starting work on a part-time job to supplement those benefits suffer a second wage loss when they are injured in the course of their employment. See Dickens, 266 Kan. at 1071. Although Morales began receiving social security retirement benefits before her injury, the fact that she received those benefits does not necessarily mean that she was retired. See McIntosh, 32 Kan.App.2d at 897 (“to retire is ‘ “to terminate employment or service upon reaching retirement age’ “ ”). In the absence of evidence in the record showing that Morales was retired and working at Wal–Mart to supplement her income at the time of her injury, Wal–Mart is entitled to an offset for retirement benefits she received. See K.S.A.2009 Supp. 44–501(h). Work Disability Benefits
Wal–Mart argues the Board incorrectly awarded Morales permanent partial disability benefits based on a 100% wage loss because Morales' termination at Wal–Mart was unrelated to her injury. To the extent that Wal–Mart challenges Morales' entitlement to permanent total disability benefits, we need not address this argument, as the Board specifically found that Morales is not permanently and totally disabled.
A permanent partial disability award, also known as a work disability award, compensates an injured employee for wages lost after an injury. See Gutierrez v. Dold Foods, Inc., 40 Kan.App.2d 1135, 1138, 199 P.3d 798 (2009). Morales' injury is not on the list of scheduled injuries set forth in K.S.A. 44–510d, so it was proper for the ALJ to consider whether Morales was entitled to a work disability award for a nonscheduled injury under K.S.A. 44–510e. See Casco v. Armour Swift–Eckrich, 283 Kan. 508, Syl. ¶ 10, 154 P.3d 494 (2007).
K.S.A. 44–510e does not contain an explicit requirement that the injury cause the wage loss before an employee is entitled to work disability. A panel of this court has stated: “Absent a specific statutory provision requiring a nexus between the wage loss and the injury, this court is not to read into the statute such a requirement.” Tyler v. Goodyear Tire & Rubber Co., 43 Kan.App.2d 386, 391, 224 P.3d 1197 (2010).
Notwithstanding the holding in Tyler, Wal–Mart claims that there is a nexus between wage loss and injury in K.S.A.2009 Supp. 44–501(c), which addresses preexisiting conditions. However, whether Morales' injury was caused by a preexisting condition was not at issue below. Wal–Mart stipulated that Morales' injury arose out of and in the course of her employment with Wal–Mart. Moreover, Wal–Mart's reliance on testimony from Dr. Adrian Jackson to support its preexisting condition argument is misplaced, as Dr. Jackson testified that he was “not able to say whether [Morales'] disk herniation was present prior to the traumatic incident that she described.”
The reasoning in Tyler is sound. The wage loss portion of the calculation of a permanent partial general disability award is based on “the difference between the wages the worker was earning at the time of the injury and the wages the worker was earning after the injury.” Bergstrom, 289 Kan. at 610. There is simply nothing in the statute that requires Morales to prove a causal connection between her wage loss and her injury.
The Board's work disability award is affirmed. The Board's determination that the offset provisions of K.S.A.2009 Supp. 44–501(h) do not apply to Morales is reversed and the cause remanded for application of such an offset.