Opinion
I.C. No. 489198
FILED 18 December 1997
This matter was reviewed by the Full Commission on 13 October 1997 upon the appeal of plaintiff from an Opinion and Award filed 8 May 1997 by Deputy Commissioner Theresa B. Stephenson who initially heard this matter on 10 September 1996 in Winston-Salem.
APPEARANCES
Plaintiff: David Stewart, Attorney, Madison, North Carolina; appearing.
Defendants: Teague, Campbell, Dennis Gorham, Attorneys, Raleigh, North Carolina; George H. Pender appearing.
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The undersigned have reviewed the prior Opinion and Award based upon the record of the proceedings before Deputy Commissioner Stephenson. The appealing party has not shown good ground to reconsider the evidence; receive further evidence; rehear the parties or their representatives; or amend the Opinion and Award.
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The Full Commission finds as fact and concludes as matters of law the following, which were entered into by the parties at the hearing as:
STIPULATIONS
1. All parties are properly before the North Carolina Industrial Commission and are subject to the provisions of the North Carolina Workers' Compensation Act.
2. Prior to the hearing before the Deputy Commissioner, the parties entered into a Pre-Trial Agreement which is incorporated herein by reference.
3. An employment relationship existed between plaintiff-employee and defendant-employer on 25 October 1994.
4. Defendant-employer is self-insured.
5. Defendants submitted a Form 22; however, the amount of the average weekly wage to be used for computation of the workers' compensation rate is at issue.
6. Plaintiff suffered a compensable injury to his back on 25 October 1994 and defendants paid compensation pursuant to a Form 60 which was submitted to the Commission 9 May 1995.
7. Defendants paid temporary total disability benefits at a rate of $160.01 per week from 25 October 1994 through 25 July 1995.
8. The following Industrial Commission Forms and Orders are received into evidence.
a) Form 19 dated 25 October 1994;
b) Form 24 filed 11 May 1995;
c) Form 33 filed 24 August 1995;
d) Form 33R filed 29 August 1995;
e) Administrative Decision and Order by then Special Deputy Commissioner W. Bain Jones, Jr., filed 25 July 1995;
f) Order by then Special Deputy Commissioner W. Bain Jones, Jr., filed 11 August 1995; and
g) Form 22 dated 20 February 1996.
9. A videotape of plaintiff is admitted as Stipulated Exhibit #2.
10. Plaintiff's medical records from:
a) Functional Capacity Evaluation;
b) Physical Therapy Reports;
c) Dr. O'Keefe and Dr. Harlan Daubert at Salem Orthopaedics Sports Medicine, PA;
d) Forsyth Memorial Hospital;
e) Dr. Nitka at Greensboro Orthopaedic; and
f) Kernersville Immediate Care received following the hearing before the Deputy Commissioner are admitted as Stipulated Exhibit #3.
11. Plaintiff's 1992, 1993, 1994 and 1995 State and Federal Tax Returns are admitted as Stipulated Exhibit #4.
12. The issues to be determined are what is the method for computing plaintiff's average weekly wage; and what benefits, if any, is plaintiff entitled to as a result of his compensable injury on 25 October 1994.
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The Full Commission adopts the findings of fact found by the Deputy Commissioner as follows:
FINDINGS OF FADO
1. On 25 October 1994 plaintiff was a 34-year-old male employed by defendant-employer as an assistant manager trainee. Plaintiff had started in this capacity on 26 September 1994 and his duties consisted of overseeing the Arby's fast-food service operation located in Kernersville.
2. On 25 October 1994 plaintiff suffered a compensable injury to his back when he lifted a 50 pound box full of meat. Plaintiff reported his injury and received treatment from Kernersville Immediate Care where he was diagnosed with lumbosacral strain.
3. Kernersville Immediate Care referred plaintiff to Dr. Richard O'Keefe of Salem Orthopaedics Sports Medicine who diagnosed plaintiff with a disc bulge but no herniated disc.
4. Plaintiff's last day of work with defendant-employer was the date of injury, 25 October 1994. Dr. O'Keefe and Dr. Daubert indicate in notes plaintiff was totally incapacitated and unable to earn any wages from 25 October 1994 through mid-June 1995. Dr. O'Keefe and Dr. Daubert were unaware at the time they excused plaintiff from work that he had been working in his self-employment businesses since his 25 October 1994 injury.
5. Defendants accepted the claim through an Industrial Commission Form 60. Based on plaintiff's compensable injury and plaintiff's physicians' opinions of total incapacity, defendant-employer paid plaintiff temporary total disability benefits from 25 October 1994 through 25 July 1995, a period of thirty-eight (38) weeks.
6. After his 25 October 1994 injury plaintiff continued self-employed business pursuits of a tax preparation business, a photography studio and Race Fans businesses. Plaintiff did not attempt to search for alternative employment until mid-July 1995. Plaintiff was hired by Kmart 29 July 1995.
7. During 1994 plaintiff earned $12,365.00 in gross profits from his tax preparation business and $14,360.00 in gross income from his photography and Race Fan businesses. After expenses his total net income in these businesses for 1994 was $9,674.00.
8. During 1995 plaintiff earned $12,585.00 in gross profits from his tax preparation business and $23,580.00 in gross profits from his photography and Race Fan businesses. Though his total net income after all expenses was only $10,527.00, the increased gross profits in 1995 is reflective of plaintiff's ability to earn wages.
9. There is insufficient evidence of record to ascertain precisely what amount plaintiff earned from his self-employed businesses during the period he collected temporary total disability from defendants.
10. Following a Form 24 hearing where both parties presented evidence, then Special Deputy Commissioner W. Bain Jones, Jr. approved defendants' Form 24 Application and authorized defendants to terminate plaintiff's temporary total disability payments retroactively to 20 March 1995. Then Special Deputy Commissioner Jones' decision was based in part on the fact that while plaintiff was collecting temporary total disability he was also earning wages in his self-employed businesses.
11. Plaintiff filed a motion for reconsideration of then Special Deputy Commissioner Jones' decision and after consideration of the evidence, then Special Deputy Commissioner Jones denied plaintiff's motion by Order filed 11 August 1995.
12. Plaintiff re-injured his back on 31 October 1995. Defendants do not contest the compensability of this re-injury as a change of condition under N.C. Gen. Stat. § 97-47.
13. Plaintiff was treated conservatively by Dr. O'Keefe, Dr. Daubert, Dr. Nitka and received a functional capacity exam which established plaintiff could perform light/medium physical work with lifting restrictions of 30 pounds occasionally and 15 pounds frequently. On 20 March 1995 Dr. Nitka performed an independent medical exam. Dr. Nitka released plaintiff to light duty on that date in keeping with the restrictions of the functional capacity exam.
14. Plaintiff reached maximum medical improvement on 15 June 1995 and received a ten percent (10%) permanent partial disability rating to his back.
15. Plaintiff was hospitalized in November 1995 for back pain but later evaluations by his treating physicians indicated his permanent partial disability rating remained at ten percent (10%).
16. When plaintiff started work with defendant-employer in mid-September 1994, he was paid the trainee wage of $6.00 per hour for a 40-hour week.
17. Defendant-employer had a three-month training period, during which employees were required to take 4-5 written tests which asked specific questions to test their knowledge of management policies and procedures. Employees did not pass this trainee period if they performed unsatisfactorily on the tests.
18. During plaintiff's employment period with defendant-employer he had only taken one management test. There were nineteen answers completed and the person who graded plaintiff's test had concerns about six of plaintiff's answers. Plaintiff did not receive a good score on this first test.
19. Plaintiff was unable to take further tests due to his compensable injury and there was no guarantee plaintiff would ever pass his trainee period. Defendant-employer's policy was to terminate a trainee-employee if they received poor test scores on four tests.
20. According to plaintiff, defendant-employer knew and consented to plaintiff's self-employment businesses while working for defendant-employer. This testimony is not accepted by the undersigned as credible based on the testimony and other credible evidence in the record. A manager-trainee for defendant-employer had to be available seven days a week during operating hours.
21. Plaintiff also claims he was unable to work in any of his self-employed pursuits from 25 October 1994 through December 1994 and that when he returned to his photography studio he had to use a wheelchair. These statements are also not accepted as credible based on the testimony and other credible evidence in the record. Plaintiff's medical records do not mention the need or the use of a wheelchair.
22. Plaintiff's average weekly wage during his employment with defendant-employer was $240.00 per week per an Industrial Commission Form 22, yielding a compensation rate of $160.01 per week.
23. It would not be just and fair to all parties to calculate plaintiff's average weekly wage based on what he might earn if he passed his trainee period.
24. Likewise it would not be just and fair to all parties to use the salary of a comparable employee's first year wages because defendant-employer's policy was to increase an employee's wages upon successful completion of the trainee period. Plaintiff had no guarantee he would pass this trainee period.
25. Plaintiff operated his self-employed businesses on a full-time basis from the time of his compensable injury 25 October 1994 through 28 July 1996, except during a brief period in November 1995. Plaintiff did not attempt to seek other employment during this period.
26. Plaintiff was unable to earn any wages in his self-employed capacity from 1 November 1995 through 4 November 1995 when he was hospitalized for back pain as a result of his compensable injury. Immediately following his hospitalization, plaintiff was unable to earn wages in any capacity for four weeks due to his compensable injury.
27. In mid-July 1996 plaintiff began looking for other work and on 29 July 1996 plaintiff became employed by Kmart earning greater wages than he had earned with defendant-employer.
28. Defendants are entitled to a credit for any temporary total disability benefits paid to plaintiff from 25 October 1994 through 25 July 1995, a total of 38 weeks. Plaintiff was earning wages during this period and failed to look for additional employment.
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Based upon the findings of fact, the Full Commission concludes as follows:
CONCLUSIONS OF LAW
1. Plaintiff is not entitled to a presumption of continuing temporary total disability as the parties never entered into a Form 21 Agreement. In cases where there has been no previous determination that the employee is disabled, the plaintiff bears the burden of proving his disability and the extent of his disability. Russell v. Lowe's, 108 N.C. App. 762, 425 S.E.2d 454 (1993); Stone v. G G Builders, 121 N.C. App. 671, 468 S.E.2d 627 (1996); Brown v. S N Communications, Inc., 124 N.C. App. 320, 477 S.E.2d 197 (1996).
2. Plaintiff earned wages during the period he collected temporary total disability from the defendants and failed to search for employment other than his self-employment pursuits. Defendants' Form 24 Application to Terminate Compensation was properly granted on 25 July 1995. Plaintiff has failed to meet his burden of proving temporary total disability. Defendants are entitled to a credit for those amounts paid to plaintiff for temporary total disability from 25 October 1994 through 25 July 1995, a period of 38 weeks as these were not due and payable. N.C. Gen. Stat. § 97-42.
3. Plaintiff's average weekly wage must be calculated by one of the methods set forth by N.C. Gen. Stat. § 97-2(5). Plaintiff was employed by defendant-employer less than fifty-two (52) weeks. During that period he was a trainee-employee earning an average weekly wage of $240.00 resulting in a compensation rate of $160.01 per week. Utilizing a method which would result in a windfall to the plaintiff would be unfair and not in accordance with the plain meaning of the statute. In this case, it is fair and just to both parties to compute the average weekly wage based on plaintiff's earnings during the time plaintiff actually worked for defendant-employer, as reflected on the Form 22. N.C. Gen. Stat. § 97-2(5); Liles v. Electric Company, 244 N.C. 653, 94 S.E.2d 790 (1956).
4. As a result of his compensable injury on 25 October 1994 plaintiff is entitled to temporary total disability for the period 1 November 1995 through 1 December 1995 at his compensation rate of $160.01 per week. N.C. Gen. Stat. § 97-29.
5. As a result of his compensable injury on 25 October 1994 plaintiff is entitled to permanent partial disability benefits for 30 weeks at a rate of $160.01 per week as a result of his ten percent (10%) disability to his back, minus defendants' credit of 38 weeks. N.C. Gen. Stat. § 97-31(23).
6. Plaintiff is entitled to have defendants provide all medical treatment arising from the 25 October 1994 compensable injury to the extent it tends to effect a cure, give relief or lessen plaintiff's disability. N.C. Gen. Stat. § 97-25.
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Based upon the foregoing findings of fact and conclusions of law, the Full Commission affirms the holding of the Deputy Commissioner and enters the following:
AWARD
1. Defendants shall pay to plaintiff in a lump sum temporary total disability at a compensation rate of $160.01 per week from 1 November 1995 through 1 December 1995, subject to the credit approved in Paragraph 3.
2. Defendants shall pay to plaintiff in a lump sum for the permanent partial disability to his back for 30 weeks at his compensation rate of $160.01 per week, subject to the credit herein approved in Paragraph 3.
3. The amounts awarded plaintiff in Paragraphs 1 and 2 of this AWARD are subject to a credit to the defendants in the amount of 38 weeks paid to plaintiff after 25 October 1994 through 25 July 1995.
4. Since the amount for which defendants are entitled to a credit exceeds the amount of compensation plaintiff is entitled to under Paragraphs 1 and 2 of this AWARD, plaintiff is entitled to no further compensation.
5. Defendants shall pay the costs.
This is ___ October 1997.
______________________________ DIANNE C. SELLERS COMMISSIONER
CONCURRING:
S/ _______________________ KIM L. CRAMER DEPUTY COMMISSIONER
DISSENTING:
S/ _______________________ THOMAS J. BOLCH COMMISSIONER
Following, the plaintiff's injury by accident on October 25, 1994, the defendants began paying temporary total disability benefits to the plaintiff at the rate of $160.01 per week. On May 9, 1995, the defendants prepared and submitted to the Commission a Form 24 application to stop payment of compensation to the plaintiff. Simultaneously, the defendants also prepared and submitted a Form 60 admission of employee's right to compensation.
By order dated August 11, 1995, Special Deputy Commissioner W. Bain Jones, Jr. approved the defendants' Form 24 application and authorized the defendants to terminate the plaintiff's temporary total disability payments retroactively to March 20, 1995. Special Deputy Commissioner Jones also denied the plaintiff's motion for reconsideration by order filed August 11, 1995.
Thereafter, the plaintiff requested a hearing in this matter, which was held before Deputy Commissioner Theresa B. Stephenson on September 10, 1996 in Winston-Salem.
In an Opinion and Award entered on May 8, 1997, Deputy Commissioner Stephenson denied the plaintiff claim for temporary total disability benefits, except for the period of time from November 1 to December 1, 1995. Deputy Commissioner Stephenson also rejected the plaintiff's contention that the plaintiff's average weekly wage should be calculated based upon the earnings of a comparable employee.
On October 25, 1994, Benny Sims, the plaintiff, sustained a compensable injury to his back while working for the defendant employer, Charmes/Arby's. At the time of his injury, Mr. Sims had been working for the employer for only a brief period of time as an assistant manager trainee.
Mr. Sims was initially treated at Kernersville Immediate Care and referred to Salem Orthopedics and Sports Medicine, where he was treated by Dr. Richard M. O'Keeffe, Jr., who diagnosed plaintiff's condition as multiple bulging discs. In June, 1995, the plaintiff was given a ten percent rating to his back and permanently restricted from significant bending and lifting more than 15 pounds. It was Dr. O'Keeffe's opinion that Mr. Sims could not return to the job he was performing at the time of his injury.
On March 20, 1995, Mr. Sims was seen for an independent medical evaluation by Dr. James Nitka, who diagnosed degenerative disc disease and recommended return to work within restrictions to be determined by an FCE. Following the FCE, the defendant employer declined to offer Mr. Sims employment.
On October 31, 1995, Mr. Sims reinjured his back and was hospitalized for a number of days thereafter. After recovering from his reinjury, Mr. Sims was offered employment in the management training program at K Mart, where he began working on July 29, 1996. At the time of the hearing, Mr. Sims was working at K Mart as a department manager.
The principal issue in this case concerns the plaintiff's concurrent self employment. At the hearing in this matter, Mr. Sims testified that since 1988 he has owned and — with the assistance of members of his family — operated a number of business enterprises, including a photography studio and a tax preparation service. Mr. Sims testified that he continued to own and operate these businesses during his brief employment with Charmes/Arby's, and that subsequent to his injury he continued to own and operate his businesses. Mr. Sims also testified that although he is now employed by K Mart, he continues to own and operate his businesses and that he intends to do so for the foreseeable future.
This case raises significant issues concerning the effect of dual or concurrent employment (or self-employment) upon an injured employee's right to receive temporary total disability benefits to replace lost earnings from a second job. Undoubtedly, the Commission will be called upon to resolve these issues as more people are compelled to supplement their income by taking second jobs. Fortunately for the plaintiff, in this case the Commission need not address these issues because the defendants, themselves, have resolved the issues in the plaintiff's favor.
In this case the defendants' began paying temporary total disability benefits to the plaintiff following his injury without entering into a compensation agreement or otherwise admitting liability for the compensation they were paying. Months later, when the defendants sought to terminate the plaintiff's benefits based upon his concurrent self-employment, the defendants prepared and submitted a Form 60 admission of employee's right to compensation. In other words, the defendants paid the compensation, and thereafter — with complete knowledge of all relevant facts — admitted that they owed it.
In holding that the plaintiff in this case failed to meet his initial burden of proving disability, Deputy Commissioner Stephenson and a majority of this panel distinguished a Form 60 admission from a Form 21 agreement. According to them, a Form 21 agreement both establishes the fact of disability and gives rise to the presumption that it continues, while a Form 60 admission does neither. This is clearly a mis-statement of the law.
In Kisiah v. W.R. Kisiah Plumbing, Inc., 124 N.C. App. 180, 476 S.E.2d 434 (1996), the Court of Appeals reiterated the often held principal that a Form 21 agreement "is the equivalent of proof that [a] plaintiff is disabled," not because it is an agreement, but because it "represents an admission of liability by the employer for disability compensation pursuant to the Workers' Compensation Act." 476 S.E.2d at 436.
The Form 60 amounts to a judicial admission of the employee's entitlement to compensation. The Supreme Court has held that "judicial admissions are conclusive and binding in every respect." Estrada v. Burnham, 316 N.C. 318, 341 S.E.2d 538, 543 (1986). Having admitted that the plaintiff is entitled to compensation, the defendants cannot thereafter deny it based upon facts and circumstances known to them at the time of the admission.
Because the Form 60 admission establishes the fact of disability, the employee is thereafter entitled to a presumption that his disability continues until he returns to work (if not longer). See Kisiah, supra. In this case, the defendants have offered no evidence to rebut the presumption of that the plaintiff's disability continued until he returned to work at K Mart on July 29, 1996.
It must be noted that the defendants could have rebutted the presumption at any time after the plaintiff was released to return to work with restrictions, by offering the plaintiff work within those restrictions. The defendants, however, elected not to extend such an offer to the plaintiff, and they cannot now complain that he failed to look for suitable employment.
The proper method of calculating the average weekly wage in this case is by referring to a comparable employee.
Deputy Commissioner Stephenson and a majority of this panel held that the proper method of computing the plaintiff's average weekly wage in this case is based on plaintiff's actual earnings during the very brief time that the plaintiff worked as a trainee for the employer. They rejected the plaintiff's contention that in light of the very brief period of the plaintiff's employment and the fact that the plaintiff was being paid a training wage, it would be fairer and more just to use a comparable employee's first year wages. Their finding was apparently based upon the conclusion that the plaintiff had failed to establish the likelihood that he would have successfully completed his training period had he not been injured.
The clear implication of this conclusion is that had the plaintiff been able to establish that he would have in all likelihood successfully completed his training, the proper method of computing his average weekly wage would be by reference to the earnings of a comparable employee. The plaintiff respectfully submits that the evidence clearly establishes such a likelihood.
In making their determination that the plaintiff had failed to establish that he would in all likelihood pass his training, the Deputy and the majority of this panel apparently relied upon the testimony of Charles Freeman concerning the plaintiff's performance on a written test. A copy of the test had not been provided to plaintiff's counsel prior to the testimony of Mr. Freeman, despite counsel's request for such material in his letter of representation of May 15, 1995, which is included in the claim file. At the hearing, plaintiff's counsel's objection to the testimony was overruled, despite the clear prejudice to the plaintiff that resulted from counsel's inability to properly cross-examine Mr. Freeman. Thus, the plaintiff's objection to this testimony should have been sustained.
Even if Mr. Freeman's testimony concerning the test is allowed, his speculative and self serving testimony ought to be given little weight in light of the fact that the plaintiff successfully completed his management training at K Mart.
For the foregoing reasons, the plaintiff should be awarded temporary total disability benefits from the date of his injury, October 25, 1994, to the date he started work for K Mart, July 29, 1996. This cause should be remanded for the taking of additional testimony and receipt of evidence concerning the earnings of comparable employees, in order to determine the plaintiff's average weekly wage.
This 5th day of December, 1997.
S/ _______________________ THOMAS J. BOLCH COMMISSIONER