RENDERED:  MARCH 27, 2015; 10:00 A.M.

NOT TO BE PUBLISHED

 

Commonwealth of Kentucky

Court of Appeals

 

NO. 2014-CA-000617-WC

 

 

MATTINGLY CONSTRUCTION                                                 APPELLANT

 

 

                            PETITION FOR REVIEW OF A DECISION

v.                    OF THE WORKERS’ COMPENSATION BOARD

                                         ACTION NO. WC-12-01695

 

 

JAMES C. SMITH;

HONORABLE JANE R. WILLIAMS,

ADMINISTRATIVE LAW JUDGE; AND

WORKERS’ COMPENSATION BOARD                                     APPELLEES

 

 

AND                                 NO. 2014-CA-000750-WC

 

 

 

JAMES C. SMITH                                                         CROSS-APPELLANT

 

 

                    CROSS-PETITION FOR REVIEW OF A DECISION

v.                   OF THE WORKERS’ COMPENSATION BOARD

                                        ACTION NO. WC-12-01695

 

 

MATTINGLY CONSTRUCTION;

HONORABLE JANE R. WILLIAMS;

ADMINISTRATIVE LAW JUDGE; AND

WORKERS’ COMPENSATION BOARD                      CROSS-APPELLEES

 

OPINION

AFFIRMING

 

** ** ** ** **

 

BEFORE:  CLAYTON, MAZE, AND TAYLOR, JUDGES.

CLAYTON, JUDGE:  Mattingly Construction appeals, and James C. Smith cross appeals, from the March 13, 2014 opinion of the Workers’ Compensation Board (hereinafter the “Board”) that vacated a portion of the August 27, 2013 opinion, award, and order of the Administrative Law Judge (hereinafter “ALJ”) relating to the calculation of Smith’s average weekly wage, and accordingly, the calculation of his benefits.  The Board remanded the matter to the ALJ for entry of an amended opinion and award of Smith’s benefits pursuant to the Board’s opinion.  The sole issue on appeal is the appropriate methodology under the Workers’ Compensation statutes for calculating Smith’s average weekly wage.  After careful consideration, we affirm.

                   On October 1, 2010, after only working one hour on his first day of employment with Mattingly Construction, Smith fell through a skylight on the roof of the Marion County Highway Garage and was severely injured.  He was working for Mattingly Construction, which had been hired to remove the metal roof on the garage and install a new roof.  The work-related injury occurred on a Friday, and Smith was to begin full-time employment with Buzick Construction on the following Monday.  Because the injury occurred on Smith’s first day of employment, the method for calculating the average weekly wage (hereinafter “AWW”) is provided by Kentucky Revised Statutes (KRS) 342.140(1)(e) and necessitates that the AWW be determined by using the wages of a similarly-situated employee.

                   Mattingly Construction provided the ALJ with wage records for two comparable employees covering two different thirteen-week periods.  One record contained the weekly wages spanning the thirteen week period beginning with the week ending July 9, 2010, extending through the week ending October 1, 2010.  The other record contained the weekly wages of those same employees spanning the thirteen week period beginning with the week ending July 23, 2010, extending through the week ending October 15, 2010.  In each filing the comparable employees had no wages for the weeks ending September 10, 2010, September 17, 2010, September 24, 2010, and October 1, 2010.  The gaps in wages reflect that similarly-situated employees to Smith worked intermittently for Mattingly Construction. 

                   Smith also filed a number of wage documents, all of which cover the period beginning with the week ending June 25, 2010, extending through the week ending October 15, 2010.  Further, Smith introduced a copy of a letter sent to Mattingly Construction’s counsel providing a calculation of his AWW based on the weekly wages for the thirteen week period beginning with the week ending July 2, 2010, and extending through the week ending on September 24, 2010. 

                   The ALJ in the opinion, award, and order, determined the AWW by going back thirteen weeks from October 8, 2010, including July 16, 2010, and dividing the total wages by eight since for five weeks no wages were paid to the similar employee.  Accordingly, the ALJ determined that the AWW was $361.56.     

                   Both parties filed petitions for reconsideration.  Applicable to this appeal, is Mattingly Construction’s claim that the ALJ erred in the determination of the AWW and that such determination is governed by C & D. Bulldozing Co. v. Brock, 820 S.W.2d 482 (Ky. 1991).  In essence, Mattingly Construction maintained that pursuant to statute, the calculation of Smith’s AWW requires that the total amount earned by the comparable employees over the designated thirteen weeks must be divided by thirteen rather than the eight used by the ALJ.

                   Furthermore, Mattingly Construction contended that C & D Bulldozing Co. supports this interpretation for employees who are to work sporadically.  Here, Mattingly Construction’s employees, similarly-situated to Smith, expected to work on an intermittent basis, and thus, weeks without a pay were a necessary part of the calculus.  Additionally, it cited Huff v. Smith Trucking, 6 S.W.3d 819 (Ky. 1999), as support for this interpretation since in that case the Kentucky Supreme Court applied the standard in C & D Bulldozing.  Finally, Mattingly Construction proffered a different thirteen-week period than the one used by the ALJ to determine the AWW.  Despite using a different thirteen-week period, it opined that the ALJ had the discretion to ascertain the proper thirteen-week period. 

                   Smith countered that the ALJ’s calculation was correct and provided yet another different time period for the calculation of the total wages.  He proposed that the calculation of the AWW should begin with the week ending July 2, 2010, and extend through the week ending September 24, 2010.  The ALJ denied Mattingly Construction’s petition and granted Smith’s petition to award a 30% enhancement to the TDD benefits.  Mattingly Construction appealed the ALJ’s orders to the Board.

                   The Board vacated and remanded the ALJ’s opinion as pertains to the determination of Smith’s AWW, TDD benefits, and PTD benefits.  Mattingly Construction appeals the decision of the Board, and Smith cross appeals.  The only issue on appeal is the proper calculation of Smith’s average weekly wage and the concomitant benefits he is entitled to under Workers’ Compensation. 

                   Because Smith was injured on the first day of his employment, the applicable statute for calculating AWW is KRS 342.140(1)(e), which provides, in pertinent part:

The average weekly wage of the injured employee at the time of the injury or last injurious exposure shall be determined as follows:

 

(1) If at the time of the injury which resulted in death or disability or the last date of injurious exposure preceding death or disability from an occupational disease:

....

 

(e) The employee had been in the employ of the employer less than thirteen (13) calendar weeks immediately preceding the injury, his average weekly wage shall be computed under paragraph (d), taking the wages (not including overtime or premium pay) for that purpose to be the amount he would have earned had he been so employed by the employer the full thirteen (13) calendar weeks immediately preceding the injury and had worked, when work was available to other employees in a similar occupation…

 

                   As noted by the Board, indisputably, Smith was employed for less than thirteen calendar weeks immediately preceding his injury.  And following the strictures of the statute, Mattingly Construction and Smith introduced evidence as to what similar employees to Smith earned prior to his injury.  Pursuant to the statute, the ALJ must determine what Smith “would have earned had he… been so employed by the employer the full thirteen (13) calendar weeks immediately preceding the injury.”  KRS 342.140(1)(e). 

                   On appeal to the Board, neither party took issue with the thirteen weeks period used by the ALJ; yet, Mattingly Construction now appeals the decision of the Board regarding the time period.         Although observing that the payroll

records are ambiguous with regard to the exact weeks represented by the paychecks, Mattingly Construction maintains that the October 15, 2010 paycheck represents payment for the work Smith’s co-workers performed during the week ending October 1, 2010.  Therefore, it argues that, using these pay periods, the similarly-situated employees worked nine of the thirteen weeks, which results in an AWW of $233.00.  Alternatively, Mattingly Construction suggests that the thirteen weeks used to ascertain the AWW go back thirteen weeks from the date of the injury, which results in an AWW of $277.50. 

                   In contrast, Smith agrees with the Board that the thirteen-week period from July 2, 2010 through September 24, 2010, is the appropriate period to use in calculating the AWW.  Further, Smith argues that the higher earner of the two similarly-situated employees should also be used to calculate the AWW.  Mattingly Construction objects to this fact, too.  Notably, the ALJ determined that the thirteen-week wage calculation should be based on the payroll earnings from July 16, 2010 through October 8, 2010. 

                   The determination of the weeks to use to establish the AWW is complicated and in this case, the subject to multiple interpretations.  Nonetheless, we agree with the Board that the ALJ’s selection of the applicable thirteen-week period was not in conformity with the statute, and concur with the Board’s statutory interpretation.  First, it is obvious that Smith had been employed for less than thirteen calendar weeks immediately preceding the injury.  As such, consistent with KRS 342.140(1)(e), the parties introduced evidence as to what other comparable employees working for Mattingly Construction earned prior to Smith’s injury. 

                   The statute requires the ALJ to determine what Smith “would have earned had he been so employed by the employer the full thirteen calendar weeks immediately preceding the injury.”  However, as the Board explained, the thirteen- week period could not encompass earnings of similarly-situated employees during the week in which Smith was injured as that week immediately preceding the injury was not a full calendar week.  Smith testified he had not worked an hour on Friday, October 1, before he fell.  Thus, that week was not a full calendar week prior to the injury. 

                   Therefore, the Board pinpointed the last week of the applicable thirteen week period as the week ending September 24, 2010.  Consequently, since the applicable thirteen-week period ends with the wages of September 24, 2010, one must go forward the previous twelve weeks to ascertain the first week of the thirteen-week period.  Here, under this interpretation, the wages of July 2, 2010, are the initial week for the start of the thirteen-week period.  Based on the plain meaning of the statutory language, the Board determined that the earnings for the thirteen-week period commenced with the week ending July 2, 2010, and ended with the week of September 24, 2010.  We agree. 

                   In addition, Mattingly Construction’s assertion that the Board interfered with the fact-finding of the ALJ in making its determination of the appropriate thirteen-week period is not persuasive.  The Board’s decision was based on an interpretation of the statutory language, which is a legal issue.  The Board has authority to address legal issues in its review of an ALJ’s opinion.   

                   Regarding Smith’s assertion that the similarly-situated employee with the higher wages should be used to determine the AWW, the Board disagreed because calculating the total wages in this manner would not reflect the earnings of any Mattingly employee during the applicable thirteen week period.  Moreover, the statute references the “average weekly wage.”  Instead, the ALJ may use the weekly wages of either employee during that period in calculating Smith’s AWW.  We agree that the ALJ has discretion to discern the credibility of the proffered evidence when making the decision of which employee’s wages are to be used in calculating the AWW.  

                   Next, we address the Board’s holding that the ALJ erred when it divided the total amount of wages by the eight weeks of earning rather than thirteen weeks mentioned in the statute.  Smith argues that the ALJ had the discretion to make this determination given the unique factors of each case.  Again, however, we concur with the Board.  The statute directs Smith’s AWW to be determined by the amount a similarly-situated employee would have earned during a full thirteen calendar week period.  Merely because the employees similarly-situated to Smith did not work some of the weeks during the designated thirteen-week period does not permit the ALJ to divide the total wages earned during this period by only the number of weeks worked, that is, a number less than thirteen. 

                   As explained in C & D Bulldozing Co., calculations under KRS 342.140(1)(e) must take into consideration the unique facts and circumstances of each individual case including the sporadic and temporary nature of some employment.  Subsection (1)(e) is designed to arrive at an average weekly wage based upon an employee's earning capacity.  Under that subsection, the average weekly wage is determined not upon actual wages earned, but upon the amount earned by a similarly-situated employee during the full thirteen calendar weeks immediately preceding the injury.  The employee seeking compensation here, Smith, would have worked when similarly-situated employee also had worked.  C & D Bulldozing Co., at 486 (citation omitted).

                   The Court further instructed that the rationale for this statutory construct is that in cases under the purview of this subsection are employees who have not been employed for a full thirteen weeks.  Hence, the AWW must be determined, indeed may only be determined, not by actual weeks that wages were paid but by the full thirteen calendar weeks immediately preceding the injury and available to other similarly-situated employees.  The total amount earned over the thirteen-week period is divided by thirteen.  Id.

                   Here, the similarly-situated employees did not work all thirteen weeks because the availability of work was intermittent.  Notably, neither party argues that the two similarly-situated employees are not appropriate for this calculation.  The purpose of KRS 342.140(1)(e) is to obtain a realistic expectation of the salary of the injured worker as compared to similarly-situated workers.  Therefore, if the similarly-situated workers did not work during some of the thirteen preceding weeks, Smith, too, would not have worked.  Hence, based on the statute, the ALJ must use the total wages of any similarly-situated employee during the applicable thirteen-week period and divide this amount by the thirteen weeks to establish the AWW for Smith.

                   Finally, although KRS 342.285 designates the ALJ as the finder of fact in workers’ compensation claims, it charges the Board with determining whether the legal conclusions the ALJ draws from the facts conform to Chapter 342.  Moreover, KRS 342.290 directs that the Court of Appeals review all matters subject to the Board’s review as well as any legal errors that arise before the Board.  In the case at hand, we hold that the Board acted within the scope of its authority when it determined that Smith’s AWW must be calculated under KRS 342.140(1)(e) as construed in C & D Bulldozing v. Brock.               

                   We affirm the decision of the Board, which vacated and remanded the ALJ’s opinion as it pertains to the determination of Smith’s AWW, TDD benefits, and PTD benefits.

                   ALL CONCUR.

 

BRIEF FOR APPELLANT/CROSS- APPELLEE:   Douglas A. U’Sellis Louisville, Kentucky

BRIEF FOR APPELLEES/CROSS- APPELLANTS:   Mark J. Hinkel Lexington, Kentucky