JOSEPH DEVLIN, JR.,
Employee, Plaintiff
v.
APPLE GOLD, INC.,
Employer
and
ZENITH INSURANCE CO.,
Carrier, Defendants
The Law Office of Leslie O. Wickham, Jr., by Mark H. Woltz,
for plaintiff-appellant.
Morris York Williams Surles & Barringer, LLP, by Kim E.
Taylor, for defendant-appellees.
THOMAS, Judge.
Plaintiff, Joseph Devlin, Jr., appeals from an Opinion and
Award of the North Carolina Industrial Commission. The Commission
found he had regained wage-earning capacity and concluded he had
failed to meet his burden of showing continuing disability.
Plaintiff, however, contends his attempt at self-employment is
not sufficient to show either that his wage-earning capacity is at
pre-injury levels or that he has marketable skills. We reverse and
remand.
On 18 June 1995, Devlin slipped and injured his left knee
while in the course and scope of his employment with defendantApple Gold, Inc. A claims representative for defendant Zenith
Insurance Co., Apple Gold's carrier, executed a Form 63 on 13
September 1995, advising Devlin that payment of workers'
compensation benefits would be made without prejudice to
defendants' right to later contest the claim or their liability.
Defendants did not contest either the claim or their liability
within the statutory period set forth in N.C. Gen. Stat. § 97-
18(d). Therefore, plaintiff's entitlement to compensation became
an award of the Commission pursuant to N.C. Gen. Stat. § 97-82(b).
See Shah v. Howard Johnson, 140 N.C. App. 58, 63-64, 535 S.E.2d
577, 581 (2000), disc. review denied, 353 N.C. 381, 547 S.E.2d 17
(2001); Higgins v. Michael Powell Builders, 132 N.C. App. 720, 723-
24, 515 S.E.2d 17, 20 (1999). Pursuant to the executed Form 63,
plaintiff received temporary total disability benefits in the
amount of $370.35 per week from 12 September 1995 through 26 August
1997.
Defendants eventually filed a Form 24 application seeking to
terminate payment of compensation. It was approved by the Special
Deputy Commissioner and filed on 26 August 1997. Plaintiff's
temporary total disability benefits were retroactively terminated
beginning 16 January 1997, which the Special Deputy Commissioner
concluded to be the date plaintiff's self-employment business
receipts demonstrated some wage-earning capacity.
Plaintiff requested a hearing to contest the Commission's
approval of defendants' Form 24. He also filed a claim for
additional medical compensation pursuant to N.C. Gen. Stat. § 97-25.1.
On 17 May 1999, the matter was heard by Deputy Commissioner
Wanda Blanche Taylor. She found as fact that plaintiff started a
gutter and roofing business with a neighbor in November 1996 and
continued to help operate it. She also found that plaintiff's
trial return to work was successful and plaintiff had failed to
produce evidence of his continued diminished earning capacity. She
concluded:
3. Plaintiff has not shown that he is
disabled in that [he] has not shown that he
does not have the capacity to earn the wages
which he was earning at the time of his
compensable injury; nor, has the plaintiff
established a diminution in that ability.
She further determined plaintiff to be "entitled to compensation at
the rate of $370.34 per week for a period of 50 weeks for his [25%]
permanent partial disability of the left leg." She allowed
defendants an offset for the temporary total disability benefits
paid from 16 January 1997 through 25 August 1997. Finally, she
concluded that defendants are liable for all medical expenses
incurred by plaintiff as a result of his compensable injury,
including any future medical expenses. The parties appealed.
On 13 June 2001, the full Commission affirmed the opinion and
award of the deputy commissioner with Commissioner Bernadine S.
Ballance filing a dissenting opinion. The full Commission's
findings of fact included, inter alia, the following: At the time
of the hearing before the Deputy Commissioner, plaintiff was a
forty-year-old male with a GED. Prior to his injury, he had worked
primarily in restaurants, with brief periods of employment with IBMand driving a delivery truck. Plaintiff began working as a cook at
Applebee's, a restaurant owned by defendant Apple Gold, in August
1993. Prior to his injury in June 1995, he had progressed from
cook to shift supervisor to assistant general manager. On 14
November 1996, plaintiff reached maximum medical improvement and
was discharged from medical treatment. He retained a twenty-five
percent (25%) permanent partial disability rating to his left leg.
When released from medical care, plaintiff was restricted from
activities requiring climbing, working on unlevel surfaces, and
scaffolding. He was advised to avoid prolonged squatting and
kneeling and was told he would not be able to perform those
functions on a repetitive basis.
The full Commission made the following further findings of
fact:
11. In November 1996, plaintiff started a
gutter business, D & D Gutter and Roofing,
with a neighbor. This business manufactured
and installed gutters and performed some
roofing. Plaintiff's wife is listed as the
owner and president of the business; however,
she is also employed full-time as a manager of
an apartment complex. Plaintiff is the vice
president of the business and responsible for
talking with contractors, writing invoices,
ordering materials, generating business,
performing technical consultations, inspecting
jobs, and making job quotes. Plaintiff's wife
keeps the financial records and calculates the
taxes. The company has had as many as eight
employees, but generally has three or four.
Plaintiff has never physically worked on the
roofs or carried bundles of shingles around
the job site.
12. Plaintiff submitted business records from
D & D Gutter and Roofing. However, these
records did not include a complete list of
checks drawn on the checking account from thatbusiness. Checks were sometimes written for
personal rather than business expenses, and
the personal items were not included in the
submitted records. There was also evidence
that plaintiff and his wife had occasionally
loaned money to the business. Gross sales for
1996 (November and December) were $13,000.00
During that time, plaintiff continued to draw
temporary total disability benefits at the
rate of $370.35 per week. In 1997, the gross
receipts were $54,841.00 and in 1998, the
gross receipts of the company were $61,725.00.
Income tax returns noted that 1998 was the
first year of profit. However, deductions
including depreciation, bad debt and the like,
affect the profitability of the company.
13. D & D Gutter and Roofing deducts expenses
for advertising, vehicles, gas, mileage, tools
and equipment, materials, supplies, salaries,
and consulting fees. Plaintiff's family also
allocates twenty-five percent of the family's
electric bill to the business as an expense.
Tax records, which showed profits and losses
of the company, do not accurately reflect the
worth of the company and do not indicate
plaintiff's actual wage earning capacity.
. . .
19. From November 1996 and continuing,
plaintiff has developed and operates a gutter
and roofing business. Plaintiff has dealt
with advertisers, workers, suppliers, and
potential customers. Although plaintiff's
business has not generated a "profit," it has
generated substantial revenues due in large
part to his efforts and skills. It is likely
that plaintiff is compensated for his
substantial contribution to the business.
20. Plaintiff is capable of earning wages as
a business manager as he has the skills to
develop and operate his own business, and he
held a responsible managerial position in his
employment with defendant-employer.
21. Plaintiff's return to work in his own
business in November 1996 was a trial return
to work, because he was under work
restrictions. Plaintiff's return to work was
successful, and he has not produced persuasiveevidence of the extent of any continuing
diminished earning capacity.
. . . .
The Commission concluded that plaintiff had failed to meet his
burden of showing continuing disability under N.C. Gen. Stat. § 97-
2(9). The Commission further concluded plaintiff retained a
twenty-five percent (25%) permanent partial disability to the left
leg and ordered defendants to pay plaintiff $370.34 per week for
fifty weeks. Defendants were allowed an offset from that amount
due to its payment of temporary total disability benefits from 16
January 1997 through 25 August 1997.
Commissioner Ballance dissented from the majority opinion,
stating there was insufficient evidence of (1) plaintiff having
adequate skills as a manager to obtain work in the general
marketplace, or (2) plaintiff being capable of earning wages equal
to or greater than his pre-injury wages.
In reviewing an opinion and award of the Industrial
Commission, this Court is bound by the Commission's findings of
fact when supported by any competent evidence, but the Commission's
legal conclusions are fully reviewable. See Lanning v. Fieldcrest-
Cannon, Inc., 352 N.C. 98, 106, 530 S.E.2d 54, 60 (2000). This
Court does not weigh the evidence and decide the issue on the basis
of its weight; rather, this Court's duty goes no further than to
determine whether the record contains any evidence tending to
support the finding. See Anderson v. Construction Co., 265 N.C.
431, 434, 144 S.E.2d 272, 274 (1965). If the findings of the
Commission are insufficient to determine the rights of the parties,this Court may remand to the Industrial Commission for additional
findings. See Hilliard v. Apex Cabinet Co., 305 N.C. 593, 595, 290
S.E.2d 682, 684 (1982).
The Workers' Compensation Act defines "disability" as the
"incapacity because of injury to earn the wages which the employee
was receiving at the time of the injury in the same or any other
employment." N.C. Gen. Stat. § 97-2(9) (2001). "Compensation must
be based upon loss of wage-earning power rather than the amount
actually received." Hill v. DuBose, 234 N.C. 446, 447-48, 67
S.E.2d 371, 372 (1951). If wage-earning power is only diminished,
the employee is entitled to benefits under N.C. Gen. Stat. § 97-30.
Gupton v. Builders Transport, 320 N.C. 38, 42, 357 S.E.2d 674, 678
(1987). If wage-earning power is totally obliterated, the employee
may recover under N.C. Gen. Stat. § 97-29. Id. "The focus of this
determination is not on 'whether all or some persons with
plaintiff's degree of injury are capable of working and earning
wages, but whether plaintiff [him]self has such capacity.'"
Lanning, 352 N.C. at 105, 530 S.E.2d at 59-60 (quoting Little v.
Anson County Sch. Food Serv., 295 N.C. 527, 531, 246 S.E.2d 743,
746 (1978)). The earning capacity of an injured employee must be
evaluated "by the employee's own ability to compete in the labor
market. If post-injury earnings do not reflect this ability to
compete with others for wages, they are not a proper measure of
earning capacity." Peoples v. Cone Mills Corp., 316 N.C. 426, 437,
342 S.E.2d 798, 805-06 (1986). The employee's age, education, and
work experience are factors to be considered in determining theperson's capacity to earn wages. Little v. Anson County Sch. Food
Serv., 295 N.C. 527, 532, 246 S.E.2d 743, 746 (1978).
In Lanning, the Supreme Court addressed when an injured
employee's earnings from self-employment can support a finding of
wage-earning capacity. The Court stated:
While an employee's management skills may
be significant in the operation of certain
businesses . . . different skills may be
relevant to and necessary for the operation of
other types of personal businesses. The
determinative issue is whether the skills--be
they management, computer, accounting, sales,
consulting, or something else--utilized by the
employee in the active operation of his own
business, when considered in conjunction with
the employee's impairment, age, education, and
experience, would enable the employee to
compete in the labor market. See Peoples, 316
N.C. at 438, 342 S.E.2d at 806. We hold,
therefore, that the test for determining
whether the self-employed injured employee has
wage-earning capacity is that the employee (i)
be actively involved in the day to day
operation of the business and (ii) utilize
skills which would enable the employee to be
employable in the competitive market place not
withstanding the employee's physical
limitations, age, education and experience.
Lanning, 352 N.C. at 107, 530 S.E.2d at 60-61; see also McGee v.
Estes Express Lines, 125 N.C. App. 298, 480 S.E.2d 416 (1997).
The determination of whether a disability exists is a
conclusion of law that must be based upon findings of fact
supported by competent evidence. Hilliard, 305 N.C. at 594-95, 290
S.E.2d at 683. However, "[w]hether plaintiff's management skills
are marketable and whether plaintiff is actively involved in the
business' personal management are questions of fact" to be
determined by the Commission. Lanning, 352 N.C. at 108, 530 S.E.2dat 61.
Here, the Commission found as fact that plaintiff was vice
president of the gutter and roofing business and "responsible for
talking with contractors, writing invoices, ordering materials,
generating business, performing technical consultations, inspecting
jobs, and making job quotes." This is akin to a finding that
plaintiff was actively involved in the day to day operation of the
business. However, the Commission made no finding that plaintiff's
management skills are competitively marketable in light of his
physical limitations, age, education and experience. Further, the
Commission made no determination of whether plaintiff's wage-
earning capacity was equal to or greater than his pre-injury wage-
earning capacity. The Commission simply found that plaintiff's
business had generated substantial revenues due in large part to
his efforts and skills, that plaintiff was likely being
compensated, and that he "had some wage-earning capacity." The
Commission's findings are insufficient to determine plaintiff's
actual wage-earning capacity.
Since the Commission failed to make findings necessary to
determine plaintiff's actual wage-earning capacity and the rights
of the parties, we reverse the Commission's opinion and award. We
remand to the Commission for findings consistent with the legal
principles stated in this opinion. See Lanning, 352 N.C. at 109,
530 S.E.2d at 61.
Reversed and remanded.
Chief Judge EAGLES and Judge MARTIN concur.
*** Converted from WordPerfect ***