1. Workers' Compensation_average weekly wage_sporadic
employment
The Industrial Commission erred in its calculation of a
workers' compensation plaintiff's average weekly wage where
plaintiff was an actor whose employment was sporadic. The
Commission was justified in resorting to an alternate method of
determining plaintiff's average weekly wage, but it is not clear
which method the Commission used. N.C.G.S. § 97-2(5).
2. Workers' Compensation_overpayment of benefits_credit to
employer
The Industrial Commission did not err by awarding a workers'
compensation defendant a credit for overpayment of benefits where
plaintiff was on notice that his benefits were subject to wage
verification.
Kathleen Shannon Glancy and Patterson, Harkavy & Lawrence,
L.L.P., by Martha A. Geer for plaintiff-appellant.
Hedrick & Blackwell, L.L.P., by Sherman Lee Criner and Jerry
L. Wilkins, Jr. for defendant-appellee.
TIMMONS-GOODSON, Judge.
Phillip E. Loch (“plaintiff”) appeals an opinion and award of
the North Carolina Industrial Commission (“the Full Commission”)
reducing his award of workers' compensation benefits. For the
reasons set forth herein, we remand to the Full Commission for re-
calculation of plaintiff's average weekly wage in compliance with
N.C. Gen. Stat. § 97-2(5) (1999). Pertinent facts and procedural information include the
following: Plaintiff began employment on an occasional basis with
Entertainment Partners (“defendant”) in 1990. On 21 September
1996, defendant employed plaintiff as an actor for a few days work.
The same day, plaintiff slipped on a step outside of his trailer,
causing him to aggravate a pre-existing knee injury. Plaintiff
was diagnosed with an acute contusion and sprain of his right knee.
Despite his injury, plaintiff continued to work for defendant on 4
October and 11 October 1996. On 11 November 1996, Dr. Sutton
performed partial knee surgery on plaintiff's right knee.
Plaintiff reached maximum medical improvement on 1 July 1997, and
was assigned a permanent disability rating of fifteen percent (15%)
to his right knee, with restrictions on climbing, stooping,
squatting, and crawling. Plaintiff was paid temporary total
disability benefits pursuant to a Form 60 Agreement at the maximum
compensation rate of $492.00, subject to wage verification.
On 1 October 1997, defendant filed a claim with the Industrial
Commission seeking to terminate or suspend payment of benefits
because plaintiff had resumed working at an equal or higher wage.
The parties agreed to submit the matter to the Deputy Commissioner,
based on stipulated exhibits, for a determination of plaintiff's
average weekly wage pursuant to N.C. Gen. Stat. § 97-2(5). After
a hearing on the matter, Deputy Commissioner Phillip A. Holmes
rendered an opinion and award on 28 August 1998, ruling, inter
alia, that calculating plaintiff's average weekly wage under the
first three calculations of N.C. Gen. Stat. § 97-2(5) results in an
unfair and unjust calculation. The Deputy Commissioner concludedthat plaintiff's average weekly wage must be calculated under the
fourth method to ensure a fair and just result. The Deputy
Commissioner calculated plaintiff's wages by dividing his highest
earning over any fifty-two week period during his seven-year
employment by fifty-two (52) weeks thus yielding an average weekly
wage of $80.05 and a compensation rate of $53.37.
Plaintiff appealed this opinion and award to the Full
Commission. The Full Commission rendered its opinion and award on
4 May 2000 with the following pertinent findings of fact and
conclusions of law:
Findings of Fact
7. Carrier-defendant subsequently obtained
plaintiff's wage records and a completed Form
22 Wage Chart. The Form 22 Wage Chart shows
no earnings by plaintiff in 1996 for the
months of January through August. The Form 22
Wage Chart reflected earnings of $594.00 in
September 1996 and $1,188.00 in October 1996.
For November 1995, the Form 22 Wage Chart
shows earnings of $1,234.53. Accordingly, in
the twelve months preceding the injury,
plaintiff earned a total of $3,016.53 working
for defendant-employer which equates to an
average weekly wage of $58.01, and a weekly
compensation rate of $38.67.
8. Plaintiff's payroll records show the
following yearly incomes earned between 1990
and 1996 while working for defendant-employer:
1990- $1,138.00; 1991-$492.80; 1992-$4,162.50;
1993-$1,895.57; 1994-$893.34; 1995-$2,734.59;
1996-$1,818.70.
Conclusions of Law<
br>
2. Given the part-time and intermittent
nature of plaintiff's work as an actor for the
defendant-employer, calculation of plaintiff's
average weekly wage under the first three
calculations of N.C. Gen. Stat. § 97-2(5)
results in an unfair and unjust calculation
which would not take into account the periods
during which plaintiff did not work. Therefore, plaintiff's average weekly wage
must be calculated under the fourth method
under N.C. Gen. Stat. § 97-2(5) in order to
ensure results which are fair and just to both
employer and employee. Joyner v. A.J. Carey
Oil Co., 266 N.C. 519, 146 S.E.2d 447 (1996);
Barber v. Going West Transportation, Inc [134
N.C. App. 428, 517 S.E.2d 914 (1999)].
3. The undersigned conclude as a matter of
law that plaintiff's average weekly wage must
be calculated by taking the total earnings for
the 52 weeks preceding his disability and
dividing that amount by 52. Barber v. Going
West Transportation, Inc. [134 N.C. App. 428,
517 S.E.2d 914 (1999)]. Plaintiff's earnings
from defendant-employer during the 52 weeks
prior to his disability total $3,016.53, which
equates to an average weekly wage of $58.01,
yielding a compensation rate of $38.67. N.C.
Gen. Stat. § 97-2(5).
The Commission further concluded that defendant was entitled to a
credit towards future indemnity benefits. Plaintiff appeals.
_________________________________
[1]On appeal, plaintiff assigns error to the Commission's
computation of his average weekly wage. Specifically, plaintiff
contends that the Commission erred by resorting to the “fourth
method” of N.C. Gen. Stat. § 97-2(5) in calculating his average
weekly wage. For the reasons discussed below, we agree.
First, we note that the role of this Court in reviewing an
appeal from the Industrial Commission is limited to a determination
of (1) whether the findings of fact are supported by competent
evidence and (2) whether the conclusions of law are supported by
the findings. Barham v. Food World, 300 N.C. 329, 331, 266 S.E.2d
676, 678 (1980). Conclusions of law by the Industrial Commission
are reviewable de novo by this Court. Grantham v. R.G. BarryCorp., 127 N.C. App. 529, 534, 491 S.E.2d 678, 681 (1997), di
sc.
review denied, 347 N.C. 671, 500 S.E.2d 86 (1998).
Under N.C. Gen. Stat. § 97-2(5) average weekly wage is defined
in pertinent part as
earnings of the injured employee in the
employment in which he was working at the time
of the injury during the period of 52 weeks
immediately preceding the date of the injury
... divided by 52; but if the injured,
employee lost more than seven consecutive
calendar days at one or more times during such
period, although not in the same week, then
the earnings for the remainder of such 52
weeks shall be divided by the number of weeks
remaining after the time so lost has been
deducted. Where the employment prior to the
injury extended over a period of less than 52
weeks, the method of dividing the earnings
during that period by the number of weeks and
parts thereof during which the employee earned
wages shall be followed; provided, results
fair and just to both parties will be thereby
obtained. Where, by reason of a shortness of
time during which the employee has been in the
employment of his employer or the casual
nature or terms of his employment, it is
impractical to compute the average weekly
wages as above defined, regard shall be had to
the average weekly wage amount which during
the 52 weeks previous to the injury was being
earned by a person of the same grade and
character employed in the same class of
employment in the same locality or community.
But where for exceptional reasons the
foregoing would be unfair, either to the
employer or employee, such other method of
computing average weekly wages may be resorted
to as will most nearly approximate the amount
which the injured employee would be earning
were it not for the injury.
N.C. Gen. Stat. § 97-2(5) (1999).
It is clear from the language of the statute and prior
holdings of this Court that N.C. Gen. Stat. § 97-2(5) establishes
an order of preference and that the primary method is to calculatethe total wages of the employee for the fifty-two weeks of the year
prior to the date of the injury, divided by fifty-two. Bond v.
Foster Masonry, Inc., 139 N.C. App. 123, 128, 532 S.E.2d 583, 586
(2000). The statute includes a “catch-all” provision, to be used
when warranted by “exceptional reasons.” Postell v. B&D
Construction Co., 105 N.C. App. 1, 7, 411 S.E.2d 413, 416, disc.
review denied, 331 N.C. 286, 417 S.E.2d 253 (1992). However, the
final method set forth in N.C. Gen. Stat. § 97-2(5) may not be used
unless there has been a finding that unjust results would occur by
using the previous methods. Wallace v. Music Shop, 11 N.C. App.
328, 331, 181 S.E.2d 237, 239 (1971).
The primary intent of the N.C. Gen. Stat. § 97-2(5) is to make
certain that the results reached are fair and just to both parties.
Liles v. Electric Co., 244 N.C. 653, 660, 94 S.E.2d 790, 795-96
(1956). In calculating an employee's average weekly wage, the
North Carolina Supreme Court has held that the average weekly wage
should be based upon the injured employee's earning capacity.
Dereberry v. Pitt County Fire Marshall, 318 N.C. 192, 197, 347
S.E.2d 814, 817 (1986). Therefore, the average weekly wage is
determined by calculating “'the amount which the injured employee
would be earning were it not for the injury.'” Id. (quoting N.C.
Gen. Stat. § 97-2(5)).
At the outset, we note that due to the sporadic nature of
plaintiff's employment and the difficulty in making a precise
calculation, the Commission was justified in resorting to analternative method of determining his average weekly wage.
Plaintiff worked for defendant for seven years but was assigned
work only as it became available. In fact, the record reveals that
work was not available in the acting field to plaintiff every week.
In the fifty-two weeks prior to plaintiff's injury in 1996,
plaintiff only worked a total of five days. In relying on Joyner
v. Oil Co., 266 N.C. 519, 146 S.E.2d 447 (1966), the Commission
concluded that given the “part-time and intermittent” nature of
plaintiff's employment, calculation under the first three methods
of N.C. Gen. Stat. § 97-2(5) “results in an unfair and unjust
calculation which would not take into account the periods which
plaintiff did not work.” Therefore, the Commission calculated
plaintiff's average weekly wage under the “fourth method” of the
statute.
Although N.C. Gen. Stat. § 97-2(5) does not numerically
designate the methods for calculating average weekly wage, recent
case law assigns numbers to the statutory methods for calculating
average weekly wage with the fifth method being the “catch-all”
provision. See McAnich v. Buncombe County Schools, 122 N.C. App.
679, 681, 471 S.E.2d 441, 443 (1996) (noting that the statute
provides a “hierarchy” of five methods of computing the average
weekly wage) overruled on other grounds, 347 N.C. 126, 489 S.E.2d
375 (1997); Bond v. Foster Masonry Inc., 139 N.C. App. 123, 127,
532 S.E.2d 583, 585-86 (2000) (setting forth five methods of
calculating average weekly wage). In light of recent case law, it
is not clear which method the Commission employed in calculatingplaintiff's average weekly wage.
On the one hand, the Commission concluded as follows:
2. Given the part-time and intermittent
nature of plaintiff's work as an actor for the
defendant-employer, calculation of plaintiff's
average weekly wage under the first three
methods of N.C. Gen. Stat. § 97-2(5) results
in an unfair and unjust calculation which
would not take into account the periods during
which plaintiff did not work. Therefore,
plaintiff's average weekly wage must be
calculated under the fourth method under N.C.
Gen. Stat. § 97-2(5) in order to ensure
results which are fair and just to both
employer and employee.
However, calculation under this method would require comparing
plaintiff's work with an employee of the “same grade and character
. . . in the same locality or community” as required by § 97-2(5).
The record contained no findings regarding the wages or annual
earnings of comparable part-time actors. There was also no finding
of whether the work provided by defendant was seasonal or how often
employment was offered to the actors during any portion of the
year. Without the related findings, the Commission could not
properly conclude that calculation under the fourth method would
ensure fair results.
On the other hand, the opinion and award of the Commission
suggests that it employed the final “catch-all” method of the
statute by quoting the language “fair and just” in their
conclusions. However, without any explanation, it calculated
plaintiff's wages under the first method of the statute and
justified this calculation under the “catch-all” provision of the
statute. We note that this method of calculation is not permitted
under N.C. Gen. Stat. § 97-2(5) in computing plaintiff's averageweekly wage, because plaintiff worked less than fifty-two weeks
prior to his injury. While there existed an “exceptional reason”
to resort to the final “catch-all” method of the statute because of
the part-time nature of plaintiff's employment, the Commission was
not permitted to circumvent the statute when calculation under the
first method was otherwise inappropriate. Accordingly, those
portions of the Full Commission's opinion and award based on a
calculation of plaintiff's average weekly wage at $58.01 are
reversed and this matter is remanded for recalculation of
plaintiff's average weekly wage.
[2]Plaintiff next contends that the Commission erred in
concluding that defendant is entitled to a credit for overpayment
of benefits. Plaintiff therefore contends that he is entitled to
keep temporary total disability benefits that were paid to him in
the amount of $492.00 from 24 October 1996 through 24 September
1997. We disagree.
The decision of whether to grant a credit is within the sound
discretion of the Commission. Such decision to grant or deny a
credit will not be disturbed on appeal in the absence of an abuse
of discretion. Moretz v. Richards & Associates., 74 N.C. App. 72,
75, 327 S.E.2d 290, 293 (1985), aff'd as modified, 316 N.C. 539,
342 S.E.2d 844 (1986). This Court has held that N.C. Gen. Stat. §
97-42 is the only statutory authority for allowing an employer in
North Carolina any credit against workers' compensation payments
due an injured employee. Johnson v. IBM, 97 N.C. App. 493, 389
S.E.2d 121, 122 (1990), disc. review denied, 327 N.C. 429, 395S.E.2d 679 (1990). N.C. Gen. Stat. § 97-42 provides:
Payments made by the employer to the injured
employee during the period of his disability .
. . which by the terms of this Article were
both due and payable when made, may, subject
to the approval of the Commission be deducted
from the amount to be paid as compensation.
N.C. Gen. Stat. § 97-42 (1999). The rationale behind the statute
is to encourage voluntary payments by the employer during the time
of the worker's disability. See Gray v. Carolina Freight Carriers,
105 N.C. App. 480, 484, 414 S.E.2d 102, 104 (1992). In Foster v.
Western-Electric Co., 320 N.C. 113, 115, 357 S.E.2d 670, 672
(1987), the North Carolina Supreme Court held that if defendant has
not accepted plaintiff's injury as compensable under workers'
compensation at the time the payments were made, or if there has
not been a determination of compensability by the Industrial
Commission, then defendant-employer should be awarded a credit. See
also, Lowe v. BE&K Construction Co., 121 N.C. App. 570, 576, 468
S.E.2d 396, 399 (1996).
In its opinion and award, the Commission made the following
finding of fact:
Equitable estoppel arises when one party, by
his acts, representations, or silence when he
should speak, intentionally, or through
culpable negligence, induces a person to
believe certain facts exist, and that person
reasonably relies on and acts on those beliefs
to his detriment. Long v. Trantham, 226 N.C.
510, 513, 39 S.E.2d 384, 387 (1946). It is
based on the theory that “it would be against
principles of equity and good conscience to
permit a party against whom estoppel is
asserted to avail himself of what . . .
otherwise [might] be his undisputed legal
rights.” Redevelopment Comm'n v. Hannaford,29 N.C. App. 1, 3, 222 S.E.2d 752, 754 (1976).
Since plaintiff did not rely to his detriment
on any action or representation made by
defendants, equitable estoppel does not
apply[.]
We hold that the record supports a finding that plaintiff was on
notice that his benefits were subject to wage verification.
Plaintiff sustained his injury on 21 September 1996 and defendant
voluntarily began payments on 24 October 1996. From 24 October
1996 through 24 September 1997, weekly compensation benefits were
paid to plaintiff by defendant subject to verification as
documented on the Form 60 Agreement. Thus, we are unable to
conclude that the Commission abused its discretion in awarding
defendant a credit for any overpayment of benefits. This
assignment of error is therefore overruled.
Accordingly, we hold that the average weekly wage computed by
the Commission is not supported by the evidence and the matter must
therefore be remanded for recalculation of plaintiff's average
weekly wage and resulting credit toward overpayment of benefits.
On remand the Commission shall take such additional evidence as
necessary, specify the method employed, and make sufficient
findings in order to support its opinion and award.
Affirmed in part, reversed in part, and remanded.
Chief JUDGE EAGLES and JUDGE THOMAS concur.
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