Opinion
112,129.
08-14-2015
Jerry McFERRIN, Appellee, v. FEDERAL EXPRESS CORPORATION, Appellant.
Anton C. Anderson and Douglas M. Greenwald, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellant. Phillip B. Slape, of Slape & Howard, Chtd., of Wichita, for appellee.
Anton C. Anderson and Douglas M. Greenwald, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellant.
Phillip B. Slape, of Slape & Howard, Chtd., of Wichita, for appellee.
Before STANDRIDGE, P.J., BRUNS, J., and HEBERT, S.J.
MEMORANDUM OPINION
PER CURIAM.
Federal Express Corporation (FedEx) appeals from a final order of the Worker's Compensation Appeals Board (the Board) which granted Jerry McFerrin additional permanent partial disability benefits upon review and modification of his original award.
We find no reversible error in the Board's interpretation and application of K.S.A. 44–528, the review and modification statute, and further find that the modified award is based on substantial competent evidence. Accordingly, we affirm.
Factual and Background
The factual background of the case is not in material dispute. On August 19, 2010, McFerrin, an employee of FedEx filed an initial application for hearing alleging that on or about May 24, 2010, he sustained injuries to his low back with pain radiating down his right leg as a result of repetitive lifting. On October 12, 2011, McFerrin and FedEx entered into a settlement for this injury based on a 5% permanent partial disability to the body as a whole, for a total amount of $7,805.74 on a running award basis. The settlement went only to the present nature and extent of the disability and preserved all other rights, including future review and modification. (McFerrin had also injured his right knee and had also experienced numbness in two of his left fingers, but those injuries were addressed in other workers compensation cases which are closed and are not part of this case.)
McFerrin continued to work for FedEx at the same wage and without restrictions until December 14, 2012, when, after 29 years with the company, he voluntarily terminated his employment with FedEx. In his notice, McFerrin cited his eligibility to start receiving his pension (which the record suggests he has yet to draw on) and that he did not feel up to loading, unloading, and delivering packages through another peak Christmas season because such labor aggravated his injuries. After leaving FedEx, McFerrin began working more at his car dealership, M & M Hotwheels, a sole proprietorship he had owned and operated for more than 15 years.
On December 12, 2012, Dr. George Fluter evaluated McFerrin for the purpose of establishing permanent restrictions regarding McFerrin's low back injury. Dr. Fluter had evaluated this injury on March 8, 2011, and had determined that McFerrin suffered a 5% impairment to the body as a whole in relation to his lumbar spine injury. At this second evaluation, Dr. Fluter felt that McFerrin's impairment rating was unchanged, and he imposed permanent restrictions (1) limiting lifting, carrying, pushing, or pulling to 50 pounds occasionally and 20 pounds frequently; and (2) limiting bending, stooping, crouching, and twisting to occasionally. He also opined that McFerrin suffered a 61% task loss as a result of those restrictions. These restrictions were not reduced to writing prior to McFerrin's voluntary termination from FedEx.
On January 11, 2013, McFerrin applied for review and modification of his award, alleging that he was no longer working for FedEx and that his disability had increased since his award was issued.
Dr. Paul Stein evaluated McFerrin at the request of FedEx, and concluded that McFerrin (1) had a 5% impairment to the body as a whole, (2) did not require permanent work restrictions, and (3) had not suffered any task loss as a result of his impairment.
McFerrin also met with two vocational rehabilitation consultants. Steve Benjamin concluded that McFerrin could reenter the job market with no wage loss if he had no permanent restrictions placed on him but felt that McFerrin would suffer a 3.3% wage loss if he reentered the job market under Dr. Fluter's permanent restrictions. Paul Hardin concluded that McFerrin had suffered a 90% wage loss based on the calculation of his wages while at FedEx versus his average earnings from M & M Hotwheels over the last 5 years. He also opined that McFerrin had suffered a 56% task loss, or 61% loss without duplicate tasks, for a total work disability of 73%, or 75.5% without duplicate tasks.
The ALJ's Review and Modification Decision
The ALJ found that McFerrin was capable of earning the same or higher wages than he did at the time of his accident, as shown by his return to work at the same wage for over 2 years before his voluntary resignation, and that McFerrin had not sustained his burden of proving that he was entitled to an increase in his work disability. It therefore denied his request for additional benefits.
McFerrin appealed the ALJ's award to the Board.
The Board's Order
On appeal, the Board reviewed the record de novo and determined that once McFerrin left employment, he incurred a work disability and was entitled to a greater permanent partial disability benefit. The Board concluded that McFerrin had a wage loss—the reason for which was irrelevant—and thus was entitled to a work disability award.
The Board determined that McFerrin's recalculated weekly wage from his employment with FedEx was $815.43, representing $564.24 per week which had been stipulated as wages at the time of the original settlement, plus $251.19 in fringe benefits which ended upon termination of employment. The Board also determined McFerrin's average weekly wages from M & M Hotwheels as $228.19, based on a net profit of $7920.32 divided by 34.71 weeks, representing the period from January 1, 2013, through August 31, 2013.
The Board found that McFerrin failed to prove the need for permanent work restrictions or a task loss as a result of his low back injury. Based on a wage loss of 72% and a 0% task loss, the Board found that McFerrin had a 36% work disability.
The Board granted McFerrin's request for modification, resulting in a total award of $82,282.37. Two members of the Board signed the final order and a third member, writing separately, concurred in the majority's determination of the work disability award. Two other Board members individually dissented from the majority opinion and would have affirmed the ALJ's decision.
FedEx filed a timely petition for judicial review.
The Board Did Not Err in Granting McFerrin's Request for Review and Modification.
The thrust of FedEx's argument is that the Board abused its discretion by improperly determining that McFerrin had incurred a work disability which entitled him to an award of permanent partial disability benefits under the review and modification provisions set forth in K.S.A. 44–528.
FedEx argues that the ALJ properly determined that McFerrin was not entitled to modification. However, agreement or disagreement with the ALJ's decision does not define the parameters of our review. The Board conducted a de novo review pursuant to K.S.A.2009 Supp. 44–551(i)(1) and K.S A.2009 Supp. 44–555c(a), and our review is limited to consideration of the Board's determination that McFerrin was entitled to modification.
Standard of Review
Appellate courts have unlimited review of questions involving the interpretation or construction of a statute, owing “ ‘[n]o significant deference’ “ to an agency'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) ; see Douglas v. Ad Astra Information Systems, 296 Kan. 552, 559, 293 P.3d 723 (2013) (“the doctrine of operative construction ... has been abandoned, abrogated, disallowed, disapproved, ousted, overruled, and permanently relegated to the history books where it will never again affect the outcome of an appeal.”).
In workers compensation cases, the statute in effect at the time of the claimant's injury governs the rights and obligations of the parties. Bryant v. Midwest Staff Solutions, Inc., 292 Kan. 585, 588, 257 P.3d 255 (2011). When an appellant alleges the Board erroneously applied the law to undisputed facts, an appellate court has de novo review of the issue. Craig v. Val Energy, Inc., 47 Kan.App.2d 164, 166, 274 P.3d 650 (2012), rev. denied 297 Kan. 1244 (2013). The Workers Compensation Act is to be “liberally construed only for the purpose of bringing employers and employees within the provisions of the act. The provisions of the workers compensation act shall be applied impartially to both employers and employees in cases arising thereunder.” K.S.A.2014 Supp. 44–501b(a).
The Statute
The most fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. Bergstrom v. Spears Mfg. Co., 289 Kan. 605, 607, 214 P.3d 676 (2009). This court assumes that the legislature expressed its intent through the language it used in the statutory scheme, and when a statute is plain and unambiguous, this court must give effect to the legislative intent expressed in the statutory language. 289 Kan. at 607. This court does not speculate on legislative intent and does not read a statute to include something not readily found in it. 289 Kan. at 608. If the language is clear, there is no need to use the canons of construction. 289 Kan. at 608.
K.S.A. 44–528, as in effect at the time of McFerrin's claim, provided:
“(a) Any award or modification thereof agreed upon by the parties, except lump-sum settlements approved by the director or administrative law judge, whether the award provides for compensation into the future or whether it does not, may be reviewed by the administrative law judge for good cause shown upon the application of the employee, employer, dependent, insurance carrier or any other interested party. In connection with such review, the administrative law judge may appoint one or two health care providers to examine the employee and report to the administrative law judge. The administrative law judge shall hear all competent evidence offered and if the administrative law judge finds that the award has been obtained by fraud or undue influence, that the award was made without authority or as a result of serious misconduct, that the award is excessive or inadequate or that the functional impairment or work disability of the employee has increased or diminished, the administrative law judge may modify such award, or reinstate a prior award, upon such terms as may be just, by increasing or diminishing the compensation subject to the limitations provided in the workers compensation act.
(b) If the administrative law judge finds that the employee has returned to work for the same employer in whose employ the employee was injured or for another employer and is earning or is capable of earning the same or higher wages than the employee did at the time of the accident or is capable of gaining an income from any trade or employment which is equal to or greater than the wages the employee was earning at the time of the accident, or finds that the employee has absented and continues to be absent so that a reasonable examination cannot be made of the employee by a health care provider selected by the employer, or has departed beyond the boundaries of the United States, the administrative law judge may modify the award and reduce compensation or may cancel the award and end the compensation.”
There is nothing particularly ambiguous about these provisions. Pursuant to subsection (b), the ALJ found that McFerrin was capable of earning the same or higher wages that he did at the time of his accident and exercised the statutory discretion to deny modification. But the Board, upon de novo review, found that McFerrin had incurred a work disability because of his lowered average weekly wage and exercised its statutory discretion to modify McFerrin's award. In so doing, the Board applied the work disability calculation formula set forth in K.S.A. 44–510e(a). Under the facts of this case and the application of prior caselaw, the Board's action falls within the anticipation of the language used in K.S.A. 44–528.
The Board here relied at least in part upon the unpublished but persuasive opinion of a panel of this court in Serratos v. Cessna Aircraft Co., No. 104,106, 2011 WL 2637449 (Kan.App.2011) (unpublished opinion). In Serratos, the claimant had returned to work after a workers compensation award, but was thereafter terminated for violating the employer's attendance policy. Serratos then filed for review and modification of his prior award, seeking a work disability based on his wage loss due to termination. The Board found that the specific formula set forth in K.S.A. 44–510e controlled over the general language of K.S.A. 44–528 when calculating a change in work disability. This court generally agreed with the Board and held that the only way to calculate a change in work disability if a modification of an award is found warranted under K.S.A. 44–528(a) is to turn to the formula in K.S.A. 44–510e(a). Serratos, 2011 WL 2637449, at *6. This holding is consistent with the plain language of K.S.A. 44–528 that any increase or decrease under subsection (a) is “subject to the limitations provided in the workers compensation act.”
Significantly, the court in Serratos reiterated that the reason for the wage loss at this point is irrelevant. 2011 WL 2637449, at *6 ; see Bergstrom v. Spears Manufacturing Co., 289 Kan at 609–10 (holding that nothing in the unambiguous language of K .S.A. 44–510e [a] required an injured worker to make a good faith effort to seek out and accept alternative employment.). This court has also held that if a claimant can meet the burden of proving a work disability, he is not limited from doing so because he was first able to return to work at a comparable wage. The presumption of no work disability in K.S.A. 44–510e(a) may apply at one period of time but be overcome at a later period. See Messner v. Continental Plastic Containers, 48 Kan.App.2d 731, 747, 298 P.3d 371, rev. denied 297 Kan 1246 (2013).
The Evidence
McFerrin was limited to functional impairment benefits when he returned to work at full pay for some 2 years following his injury. He testified that the work bothered his prior injuries and that he decided to leave employment with FedEx before he had to endure another peak season of increased labor. At that point, he suffered a wage loss since his car dealership was not yet showing much profit. He also still had a 5% impairment to the body as a whole due tc the original accident and settlement. Under K.S.A. 44–510e(a), this constituted a work disability due to the wage loss.
FedEx would argue that the Board's de novo review and decision is somehow flawed because the Board's factual findings mirror those made by the ALJ, yet it reached an opposite conclusion. FedEx cites no authority to support its assertion. As noted above, the discretionary language found in K.S.A. 44–528 would countenance the possibility of different conclusions; the ALJ exercised discretion to deny the modification and, on de novo review, the Board exercised the same discretion to grant the modification. The statute does not mandate a particular outcome, and the Board did not err in interpreting the statute to allow the finding of a work disability entitling McFerrin to modification of his prior award.
The Board's Work Disability Calculation is Supported by the Evidence.
FedEx would next suggest that the Board's determination that McFerrin had incurred a 36% work disability is not supported by substantial competent evidence.
Standard of Review
Final orders of the Board are subject to review under the Kansas Judicial Review Act, K.S.A.2014 Supp. 77–601 et seq. , as amended. K.S.A.2014 Supp. 44–556(a). This court reviews a challenge to the Board's factual findings in light of the record as a whole to determine whether those findings are supported by substantial competent evidence. See K.S.A.2014 Supp. 77–621(c)(7). This means that the factual findings of the Board will be upheld if supported by substantial evidence even though other evidence in the record would support contrary findings. Hall v. Dillon Companies, Inc., 286 Kan. 777, 780, 189 P.3d 508 (2008).
“[I]n light of the record as a whole” is statutorily defined to mean:
“[T]hat 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.2014 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 to act from which the issue raised could be easily resolved.” ‘ Saylor v. Westar Energy, Inc., 292 Kan. 610, 614, 256 P.3d 828 (2011) (quoting Mitchell v. Petsmart, Inc., 291 Kan. 153, 172, 239 P.3d 51 [2010] ).
This court may also grant relief when the agency's action is “otherwise unreasonable, arbitrary or capricious.” K.S.A.2014 Supp. 77–621(c)(8). The claimant has the burden of proving his or her right to an award of compensation and to prove the various conditions on which the claimant's right depends. K.S.A.2014 Supp. 44–501b(c). “Burden of proof” is defined as “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 that not true on the basis of the whole record.” K.S .A.2014 Supp. 44–508(h).
The Evidence
The Board determined that although McFerrin's evidence did not support finding any additional task loss, he had incurred a 72% wage loss as a result of his termination of employment. Applying the definitions and formula of K.S.A. 44–510e(a), the Board arrived at a 36% work disability. The Board recalculated McFerrin's average weekly wage from FedEx to include the value of fringe benefits which would terminate following his termination of employment. FedEx does not contest this recalculation on appeal.
The Board based its calculation of the income produced from M & M Hotwheels on the testimony of McFerrin and his wife, Susan, who was the company's bookkeeper. This included Susan's testimony regarding mistakes made in preparing the financial statements. FedEx would insist that the business records submitted by the McFerrins are “clearly insufficient” and that McFerrin should have been required to present “credible expert testimony” regarding his business income. FedEx cites no authority in support of this argument. Although Susan McFerrin testified that she did work with an accountant in preparing the financial statement, there is no such burdensome requirement in the workers compensation statutes that a claimant support his financial records by the review and testimony of an expert.
McFerrin owned and operated the car dealership as a sole proprietorship. Thus, McFerrin is entitled to the net profit of the business, even though he takes no salary and had not, as of the time of the hearing, withdrawn any money from the business. The relevant period for calculation was from January 1, 2013, through August 31, 2013, which was the period commencing with McFerrin's termination of employment at FedEx. There is no suggestion in the record that McFerrin had any other source of income. FedEx would suggest that this is “simply an inadequate basis” for calculating an average weekly wage, but again offers no authority in support of its position. Similarly, FedEx argues that the net profit from a sole proprietorship is an improper measure from which to calculate an average weekly wage, but once again, cites no authority in support of such a proposition. We would find that FedEx's broad, general, unsupported arguments are not persuasive in the absence of authority.
K.S.A. 44–510e(a) defines the wage loss percentage in plain language as “the difference between the [pre-injury] average weekly wage ... and the average weekly wage the worker is earning after the injury.” The Kansas Supreme Court has recognized that the wage loss percentage “is simply calculated by the factfinder based on the difference between the pre-injury weekly wage and the post-injury weekly wage.” Graham v. Doktor Trucking Group, 284 Kan. 547, 556, 161 P.3d 695 (2007). Clearly such calculation is not dependent upon intricate and arcane corporate accounting established by experts.
Here, the Board made reasonable calculations and recalculations based on the best available evidence. The financial records and explanatory testimony presented by the McFerrins was relevant and possessed sufficient substance to support the Board's determination.
We would note that FedEx is not left wholly without remedy, since we find nothing in the statutes which would prevent future application for review and modification if McFerrin's financial situation changes. It is possible that McFerrin's income will increase now that he is devoting his efforts exclusively to his business, in which event the work disability calculation could change. But that is a consideration for another day and does not impact our decision herein.
Affirmed.