Opinion
NO. 2015-CA-001854-WC
04-15-2016
COMMONWEALTH OF KENTUCKY, UNINSURED EMPLOYERS' FUND APPELLANT v. KARA SIDEBOTTOM aka KARA HARVILLE; WHITNEY BRANDS INC.; HON. GRANT ROARK, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEF FOR APPELLANT: C.D. Batson Assistant Attorney General Uninsured Employers' Fund Frankfort, Kentucky BRIEF FOR APPELLEE: Stephanie N. Wolfinbarger Louisville, Kentucky
NOT TO BE PUBLISHED PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-11-00211 OPINION
AFFIRMING BEFORE: COMBS, DIXON AND STUMBO, JUDGES. STUMBO, JUDGE: The Commonwealth of Kentucky, Uninsured Employers' Fund ("UEF") appeals from an Opinion of the Workers' Compensation Board Affirming in Part, Vacating in Part and Remanding an Opinion, Order and Award of Hon. Grant S. Roark, Administrative Law Judge ("ALJ"). The UEF contends that the Board erred in affirming the ALJ's determination that Appellee Kara Sidebottom was receiving a salary plus tips at the time of her slip and fall injury. Rather, the UEF maintains that Sidebottom was a salaried employee without tips; therefore, her average weekly wage ("AWW") should be calculated in accordance with KRS 342.140(1)(a). We find no error, and AFFIRM the Board's Opinion.
Kentucky Revised Statute. --------
The facts are not in dispute. Sidebottom was employed as a waitress at Whitney's Diner, where her duties included seating customers, taking orders, serving customers, stocking the salad bar, bussing tables and receiving payment from customers. She began her employment in December, 2009, and was paid $2.10 per hour plus tips.
After about six months of employment, the owner approached Sidebottom in May, 2010, and gave her increased employment duties. In addition to her other responsibilities, Sidebottom was given a key to the diner and was provided with a code to the safe where the diner's revenue was stored. Concurrently with the increased responsibilities, the owner changed Sidebottom's pay structure to $100 per week plus tips.
After the change, Sidebottom continued to report her tips to her employer. However, unbeknownst to her, the employer stopped reporting Sidebottom's tips to the Internal Revenue Service. Sidebottom did not learn that the employer stopped reporting her tips until Sidebottom received a W-2 from her employer. However, even after learning that the employer did not report her tips, Sidebottom did not report those tips on her personal income tax return.
On December 3, 2010, Sidebottom was injured during the course of her employment when she slipped and fell on a recently-mopped floor. As a result of the fall, Sidebottom later underwent spinal fusion surgery. The event resulted in loss of income and medical costs.
On February 14, 2011, Sidebottom initiated the instant proceeding with the filing of a Form 101 Application for Resolution of Injury Claim. The matter proceeded before ALJ Roark, who awarded Sidebottom Temporary Total Disability ("TTD") benefits at the rate of $172.81 per week from December 4, 2010 through December 31, 2012, and Permanent Partial Disability ("PPD") benefits in the amount of $103.69 per week for 425 weeks beginning January 1, 2013. In calculating these benefits, the ALJ relied on Sidebottom's wage records prior to her May 1, 2010 transition from hourly pay plus tips to weekly pay plus tips.
The UEF appealed from the Opinion, Order and Award to the Workers' Compensation Board, arguing that 1) the ALJ erred in considering attachments filed with Sidebottom's application, 2) erred in calculating the AWW, and 3) erred in enhancing the PPD benefits with the three multiplier. On November 16, 2015, the Board rendered an Opinion Affirming in Part, Vacating in Part and Remanding. It determined in relevant part that the ALJ properly calculated Sidebottom's AWW; however, it remanded the matter to the ALJ for additional findings regarding the application of the three multiplier. This appeal followed.
The UEF now argues that the Board erred in affirming the ALJ's calculation of Sidebottom's AWW. It maintains that the ALJ improperly relied on Sidebottom's wage records prior to her May 1, 2010 transition from hourly pay plus tips to weekly pay plus tips. The UEF contends that the record demonstrates that Sidebottom earned $100 per week with no tips on the date of her injury because Sidebottom's employer did not report her tips to the IRS after May 1, 2010, and Sidebottom did not report those tips on her personal income tax return. The UEF argues that because no evidence exists to support the contention that Sidebottom received tips after May 1, 2010, the ALJ was required to calculate Sidebottom's AWW using KRS 342.140(1)(a) rather than KRS 342.140(1)(d). The UEF contends that Sidebottom's AWW was $100, thus resulting in a PPD calculated at $100 x .6667 x .20 x .1 = $13.33 per week. Accordingly, the UEF argues TTD would be the minimum rate of $142.36 from December 3, 2010, to the MMI date of August 9, 2012, minus TTD overpayments already paid after the latter date.
The sole issue now before us is whether the Board properly affirmed the ALJ's calculation of Sidebottom's AWW.
KRS 342.285 designates the ALJ as the finder of fact. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418 (Ky. 1985), explains that the fact-finder has the sole authority to judge the weight, credibility, substance, and inferences to be drawn from the evidence. Special Fund v. Francis, 708 S.W.2d 641, 643 (Ky. 1986), explains that a finding that favors the party with the burden of proof may not be disturbed if it is supported by substantial evidence and, therefore, is reasonable.AK Steel Corp. v. Adkins, 253 S.W.3d 59, 64 (Ky. 2008).
As the Board properly noted, KRS 342.140(6) sets out the definition of wages for purposes of KRS Chapter 342. KRS 342.140(6) states:
The term "wages" as used in this section and KRS 342.143 means, in addition to money payments for services rendered, the reasonable value of board, rent, housing, lodging, and fuel or similar advantage received from the employer, and gratuities received in the course of employment from others than the employer to the extent the gratuities are reported for income tax purposes.
Additionally, KRS 342.140(1)(a) provide that,
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: . . . The wages were fixed by the week, the amount so fixed shall be the average weekly wage[.]
Finally, KRS 342.140(1)(d) states that if the wages were fixed by the day, hour, or by the output of the employee,
the average weekly wage shall be the wage most favorable to the employee computed by dividing by
thirteen (13) the wages (not including overtime or premium pay) of said employee earned in the employ of the employer in the first, second, third, or fourth period of thirteen (13) consecutive calendar weeks in the fifty-two (52) weeks immediately preceding the injury[.]
The dispositive question for our consideration is whether at the time of Sidebottom's injury she was receiving fixed wages or variable wages including tips. If the former, then the UEF is correct that KRS 342.140(1)(a) must be applied to find Sidebottom's AWW at $100; if the latter, then KRS 342.140(1)(d) is properly applied to include tips in the AWW as the ALJ so found.
The AWW is properly decided on a case by cases basis, and must take into account the unique facts and circumstances of each case. Huff v. Smith Trucking, 6 S.W.3d 819, 822 (Ky. 1999). Ultimately, the goal in calculating the AWW is to ensure that the claimant's benefit rate is based upon what the worker would have expected to earn had the injury not occurred. Desa International, Inc. v. Barlow, 59 S.W.3d 872, 875 (Ky. 2001).
While the record demonstrates that neither Sidebottom nor her employer reported her tips to the IRS after May 1, 2010, it cannot be said that no evidence was adduced that she received tips after that date. Rather, Sidebottom testified that she received tips throughout 2010, and at all relevant times. She does not dispute that her unreported tips after May 1, 2010, are not eligible to be included in the calculation of her AWW. Because the record contains substantial evidence that Sidebottom's wages included tips, KRS 342.140(1)(d) was properly applied to calculate Sidebottom's AWW. By the express statutory language, when the wages are variable, the AWW shall be calculated based on the quarter most favorable to the employee in the preceding 52 weeks. KRS 342.140(1)(d). Using this formula, the ALJ correctly utilized Sidebottom's wage data from the quarter preceding her wage adjustment on May 1, 2010, and calculated her AWW to be $259.22. The Board properly sustained the ALJ's ruling on this issue. We find no error.
For the foregoing reasons, we AFFIRM the November 13, 2015 Opinion of the Workers' Compensation Board.
ALL CONCUR. BRIEF FOR APPELLANT: C.D. Batson
Assistant Attorney General
Uninsured Employers' Fund
Frankfort, Kentucky BRIEF FOR APPELLEE: Stephanie N. Wolfinbarger
Louisville, Kentucky