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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Flowline of Alaska v. Brennan (02/17/2006) sp-5986

Flowline of Alaska v. Brennan (02/17/2006) sp-5986, 129 P3d 881

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


FLOWLINE OF ALASKA and )
ALASKA NATIONAL ) Supreme Court No. S- 11900
INSURANCE COMPANY, )
) Superior Court No.
Appellants, ) 3AN-03-05882 CI
)
v. ) O P I N I O N
)
VINCENT BRENNAN, ) [No. 5986 - February 17, 2006]
)
Appellee. )
)



          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:    Richard  L.  Wagg,   Russell,
          Tesche,  Wagg,  Cooper & Gabbert,  Anchorage,
          for   Appellants.   Michael  J.  Jensen,  Law
          Office  of Michael J. Jensen, Anchorage,  for
          Appellee.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          FABE, Justice.

          In this case, Flowline Alaska, Inc. contests the Alaska
Workers  Compensation Boards classification of  Flowlines  former
employee,  Vincent  Brennan,  as  an  hourly  worker   under   AS
23.30.220.  The Board found that Brennans work did not fit neatly
or  precisely  into the classifications provided in AS  23.30.220
and  concluded that his work most closely fit that of an ongoing,
hourly  worker  under  AS 23.30.220(a)(4).  The  superior  court,
acting  as  an  intermediate appellate  court,  affirmed.   After
careful review of the parties briefs and arguments, we agree with
Superior  Court  Judge  Sen  K. Tans conclusions  and  adopt  the
superior courts decision.1
          Flowline  raises three main arguments in  this  appeal.
The  first  is that Brennan is an exclusively temporary  employee
for  the purposes of AS 23.30.220(a)(6).2  But the Boards finding
that  Brennan  was  not  an  exclusively  temporary  employee  is
supported by substantial evidence, including the number of  hours
Brennan  had worked, his continuing relationship with the  union,
and his work history with Flowline.  The Boards interpretation of
the  statutory  language is also consistent with the  legislative
intent  regarding the category of exclusively temporary  workers.
This  category is intended to apply to those persons who take  on
the   occasional  job  but  who  otherwise  do  not   participate
significantly  in the workforce in light of the fact  that   many
workers in the state choose a subsistence lifestyle and are  only
occasionally,  sporadically, or on a part-time basis  members  of
the workforce.3
          Flowlines  second argument concerns the Boards  finding
that AS 23.30.220(a)(4)(A), rather than subsection (a)(4)(B), was
applicable to Brennans compensation calculation.4  But the Boards
application  of  subsection (a)(4)(A) to  Brennans  situation  is
supported by substantial evidence given that he had been employed
by Flowline for more than thirteen calendar weeks, with stoppages
only for interruptions consistent with the nature of the work  he
performed.
          Finally, Flowline complains about the Boards use of the
fairness  language of Gilmore5 in its decision  of  February  24,
2003  and  argues that the Board used an improper test to  decide
Brennans case.  But it is clear from the Boards decision that  it
was well aware that the Gilmore test and related tests may not be
applied  to  the  post-1995  version of  the  statute  after  our
decision  in Dougan v. Aurora Electric, Inc.6  The Board properly
discussed which provision of the new statute applies to  Brennans
case.   And  although the Boards use of language  from  decisions
which  no longer apply to the amended statute may seem confusing,
it  is  clear  from the context of the Boards language  that  the
Board   used   it   as  a  shorthand  method  to   indicate   its
interpretation of the statutes legislative purpose.  That purpose
itself  retains the fairness language, as it is the  legislatures
intent that the statute be used to fix a fair approximation of an
employees  probable future earning capacity during  a  period  of
temporary partial or temporary total disability.7  As we  pointed
out  in  Gilmore,  a  fair approximation of  a  claimants  future
earning  capacity  lost  due  to  the  injury  is  the  essential
component   of  the  basic  compromise  underlying  the   Workers
Compensation  Act   the workers sacrifice of  common  law  claims
against  the employer in return for adequate compensation without
the  delay  and expenses inherent in civil litigation.8   Despite
subsequent  amendments  to the statute aimed  at  increasing  the
efficiency  and predictability of the compensation process,  this
          compromise, and the fairness requirements it engenders, provide
the context for interpreting the Workers Compensation Act.
          For  these  reasons and those discussed in  Judge  Tans
attached   decision,   we   AFFIRM   the   application   of    AS
23.30.220(a)(4)(A)  to  the calculation of Brennans  compensation
rate.
         IN THE SUPERIOR COURT FOR THE STATE OF ALASKA

              THIRD JUDICIAL DISTRICT AT ANCHORAGE

FLOWLINE OF ALASKA and        )
ALASKA NATIONAL INSURANCE     )
COMPANY,                 )
                              )
               Appellants,         )
                              )
          v.                  )
                              )
VINCENT BRENNAN and ALASKA    )
WORKERS COMPENSATION     )
BOARD,                        )
                              )
               Appellees.          )
                              )

                              )
VINCENT BRENNAN,              )
                              )
               Cross-Appellant,    )
                              )
          v.                  )
                              )
FLOWLINE OF ALASKA and        )
ALASKA NATIONAL INSURANCE     )
COMPANY,                 )
                              )
               Cross-Appellees.    )
                              )

Case No. 3AN-03-5882 CI

                       DECISION ON APPEAL

                          INTRODUCTION

          This  matter  is before the court after remand  to  the
Alaska  Workers  Compensation Board (Board) for consideration  of
the  Alaska  Supreme Court decision in Dougan v. Aurora  Electric
Inc.1   In  2002, this court remanded the case after  the  Dougan
decision, to allow the Board to review a new authority on point.
          Appellants  Flowline  of  Alaska  and  Alaska  National
Insurance Company (Flowline) appeal from the Decisions and Orders
of  the Board entered March 18, 2003 and March 28, 2003 modifying
its  decision  entered February 24, 2003.  Flowline is  appealing
the Boards determination that, in accordance with Dougan, Vincent
Brennan    (Brennan)   was   an   hourly    worker    under    AS
23.30.220(a)(4)(A)  rather than an exclusively  temporary  worker
under AS 23.30.220(a)(6).
          Flowline  contends that the Board erred as a matter  of
law  and that the Boards decision is not supported by substantial
evidence.   Because  the  findings are supported  by  substantial
          evidence and there was no error in the Boards decision, the
Boards decision is AFFIRMED.
                       STANDARD OF REVIEW
          The  Supreme  Court of Alaska has recognized  at  least
four  principal standards of review of administrative  decisions.
Those  standards were discussed in the courts 2002  decision  and
will not be discussed here.  For the purposes of this appeal, two
standards are relevant.
          With  regard  to  issues  of  law,  such  as  statutory
interpretation,  this  court  must  apply  the  substitution   of
judgment  standard when the question of law on  appeal  does  not
involve  administrative agency expertise  or  where  the  agencys
expertise  is not particularly probative.  Under the substitution
of  judgment standard, this court may substitute its own judgment
for  that  of  the  Board  even if  the  Boards  decision  had  a
reasonable basis in law.2
          Next,  regarding issues of fact, this court must affirm
an  agency  fact  determination if the decision is  supported  by
substantial  evidence.   Substantial evidence  is  such  relevant
evidence  as  a  reasonable person might accept  as  adequate  to
support a conclusion.3
                              FACTS
                                
          On  March  5,  1999, while working  as  a  laborer  for
Flowline, Brennan suffered a back injury and was entitled to time
loss   benefits.4    Flowline  initially  paid  Brennans   weekly
compensation  rate  at  the  statutory  minimum,   based   on   a
determination that Brennan was a seasonal, temporary worker.
          Brennan  had  worked  for Flowline  off  and  on  since
November  of  1998  until  his injury  in  March  1999.   Brennan
testified  that it was his understanding that he would work  with
Flowline full time with intermittent interruptions due to weather
conditions,  equipment  breakdowns, and other  factors.   Brennan
testified that he believed he was called back on March 3, 1999 to
finish what the crew had previously started.
          From  1993  through 1996, Brennan worked between  1,200
and  1,900 hours through the Laborers Union Local 942,  taking  a
year  off  in  1997 to build a house.  In July of  1998,  Brennan
began working for the union again.
          The  local  laborers  business  manager  and  secretary
treasurer, Joe Thomas, testified that the union does not classify
workers  as  seasonal, although employers and  contractors  might
consider the work seasonal.  But the union considered the members
eligible  for work year-round.  Thomas also testified to Brennans
union work history.
          On April 28, 1999, Brennan filed a Workers Compensation
claim,  asking  for  a  compensation  rate  adjustment  based  on
calculating the rate under AS 23.30.220.  Brennan asked to adjust
his  compensation to an average weekly wage of $783.85 based upon
the  best  13  weeks  in  the  prior  52-week  calculation.    AS
23.30.220(a)(4)(A).5
          After a hearing, on June 15, 2000, the Board issued its
first  decision.   The Board determined that Brennan  was  not  a
temporary employee as defined in AS 23.30.220(a)(6),6 but  rather
          determined  he  was an hourly worker with  intermittent
interruptions   whose   rate  should  be  calculated   under   AS
23.30.220(a)(4)(B).7  Further, the Board ordered a calculation of
benefits  under  AS  23.30.395(15) and 8 AAC  45.220(c)(3)(B)  to
include  pension  and  health benefit contributions.   The  Board
dismissed Brennans claim for a penalty award.
          Flowline  petitioned  for reconsideration.   The  Board
granted  reconsideration on July 7, 2000 and  ordered  additional
briefing.
          On  August  8, 2000, after reconsidering the  evidence,
the  Board  found  that  compensation  should  be  set  under  AS
23.30.220(a)(4)(A)   rather  than  under  AS   23.30.220(a)(4)(B)
because  Brennan actually worked for Flowline from November  1998
through  the beginning of March 1999, a period exceeding  the  13
week  period required by (a)(4)(B).  The Board also affirmed  its
original denial of a penalty award.
          Again,  Flowline  petitioned  for  reconsideration.  On
September  1,  2000, after reconsidering Flowlines petition,  the
Board affirmed its prior decision.
          Flowline then appealed the Boards decisions and Brennan
counter-appealed  the  Boards denial  of  penalties.   After  the
appeal  was  filed, Brennan made a claim for penalties,  interest
and attorneys fees and costs due to Flowlines late payment of the
Board-ordered compensation rate increase.
          On  January  24,  2001,  the Board  entered  its  final
decision.  It ordered Flowline to reinstate benefits at the  full
rate of $591.61, without an offset, and in addition, to pay a  25
percent penalty on the award as well as awarding interest on  all
benefits awarded, attorneys fees and costs.
          Flowline  appealed the Boards decision and  asked  that
the court reverse and remand the Boards decision and require them
to place Brennan in the temporary worker category for purposes of
calculating  his gross weekly earning and his compensation  rate.
Brennan appealed the Boards denial of penalties relating  to  the
increased   compensation   rate   awarded   to   him   under   AS
23.30.220(a)(4).
          This  court  initially  affirmed the  Boards  decision,
finding that the Board properly applied the Alaska Supreme  Court
decisions  in Gilmore v. Alaska Workers Compensation  Board8  and
Thompson v. United Parcel Service.9  However, the Alaska  Supreme
Court  then  issued  its decision in Dougan, which  declared  the
Gilmore  test inapplicable to the cases arising under the revised
version  of  AS 23.30.220(a).  Accordingly, upon reconsideration,
this  court reversed its decision and remanded back to the  Board
for  determination, in light of Dougan, whether  Brennan  was  an
hourly   worker   rather  than  a  temporary  worker   under   AS
23.30.220(a).
          On  remand,  the  Board issued its  February  24,  2003
decision  determining  that Brennans  work  was  not  exclusively
seasonal  or  temporary  and,  in  accordance  with  Dougan,   AS
23.30.220(a)(4)(A)  was  the section applicable  to  establishing
Brennans compensation rate.
          The  Board affirmed its decision on reconsideration  on
March  18,  2003 and again reaffirmed its decision on  March  23,
          2003.  The Board stated that they could not find Brennans work
was exclusively seasonal or temporary under AS 23.30.220(a)(6).
          This appeal follows.
                           DISCUSSION
                                
The Boards Application of AS 23.30.220 Was Legally Correct.
          Alaska  Statute  23.30.220 is the  statutory  provision
that   sets   the  spendable  weekly  wage  upon  which   workers
compensation  is  determined.  There  are  different  methods  of
making  this  calculation.  Two of them  are  at  issue  in  this
appeal, AS 23.20.220(a)(4) and (a)(6).
          Interpretation of AS 23.30.220 is a question of law and
statutory  interpretation that does not involve agency expertise.
Therefore,  this court will substitute its judgment for  that  of
the Board.
          Alaska Statute 23.30.220(a)(6) provides in part  if  at
the time of the injury the employment is exclusively seasonal  or
temporary,  then notwithstanding (1)-(5) of this subsection,  the
method  provided  in  subsection (a)(6) applies.   The  statutory
interpretation  issue is straightforward.  If an employee  is  an
exclusively seasonal or temporary worker, then (a)(4)  would  not
apply.
          Here,  Brennan  was  found to  not  be  an  exclusively
temporary or seasonal employee, therefore (a)(6) does not  apply.
Additionally,  the  Board found that Brennans  employment  lasted
longer  than  13  calendar weeks, excluding  the  application  of
(a)(4)(B).  Brennans earnings while with Flowline were calculated
by   the  hour,  excluding  the  application  of  (a)(1-3).   The
remaining  sections  are clearly not applicable.   Based  on  the
Boards  factual  findings,  the  most  appropriate  formula   for
calculating Brennans compensation is (a)(4)(A).
          The Board, properly, did not apply the Gilmore accurate
predictor test.  The accurate predictor test turns on whether the
workers wage history was an accurate predictor of losses  due  to
injury.   Under  Gilmore, the Board could not  deviate  from  the
statutory scheme unless there was substantial evidence to support
the  conclusion that past wage levels would lead to an irrational
workers compensation award.10  Dougan held that the Gilmore  test
is  no longer necessary when the Boards initial determination  is
based on the amended version of AS 23.20.220.11
          As  a  matter  of  law, the Board was  correct  in  its
application  of  AS  23.30.220(a)(4)(A) to Brennans  compensation
calculation.
The  Boards Finding that Brennan Was Not an Exclusively Temporary
Employee is Supported by Substantial Evidence.

          Flowline    argues   that   the   evidence    presented
conclusively establishes that Brennan was hired in March 1999 for
a  5-day  job  and  therefore AS 23.30.220(a)(6) applies  because
Brennan was a temporary employee.
          The  Board based its decision on the documentary record
and  the testimony of both Brennan and Thomas.  Brennan testified
that  he  worked intermittently for Flowline from  November  1998
until  his injury in March 1999.  Brennan also testified that  he
          believed the March 1999 job was a continuation of a project he
had  previously started.  Based on Brennans testimony, the  Board
found  that  even  though there were interruptions  in  the  work
period, the interruptions were consistent with the nature of  the
work  Brennan performed and Brennan had a reasonable  expectation
of  working  on  an ongoing basis year-round.   Due  to  Brennans
testimony  that  he  understood his  work  with  Flowline  to  be
permanent and that he would have returned to work for Flowline in
August of 1999, the Board found Brennan did not perform temporary
work.12
          The substantial evidence standard applies to the Boards
factual  findings.   Accordingly, the testimony  of  Brennan  and
Thomas  and  other relevant evidence is adequate to  support  the
conclusion that Brennans work was not exclusively temporary.  The
Boards  finding that Brennan was not an exclusively  seasonal  or
temporary employee is supported by substantial evidence.
                           CONCLUSION
          For  the reasons stated above, the Boards decision that
Brennan  was not an exclusively temporary worker and  the  Boards
subsequent application of AS 23.30.220(a)(4)(A) is AFFIRMED.
          DATED  at  Anchorage, Alaska, this 16th day  of  March,
2005.

                         
                                   
                                   /s/
                                   SEN K. TAN
                                   Superior Court Judge
_______________________________
     1     See  Appendix  A.  We have edited the superior  courts
decision to conform to our technical rules.

     2     AS 23.30.220(a)(6) in the form applicable to this case
provides:

               (a)   Computation of compensation  under
          this  chapter  shall be on the  basis  of  an
          employees spendable weekly wage at  the  time
          of  injury.   An  employees spendable  weekly
          wage  is  the employees gross weekly earnings
          minus  payroll tax deductions.  An  employees
          gross weekly earnings shall be calculated  as
          follows:
          
               . . . .

               (6)   if  at  the  time  of  injury  the
          employment   is   exclusively   seasonal   or
          temporary, then, notwithstanding (1) - (5) of
          this  subsection, the gross  weekly  earnings
          are 1/50 of the total wages that the employee
          has  earned  from all occupations during  the
          calendar   year  immediately  preceding   the
          injury[.]
          
     3    Ch. 75,  1(a)(4), SLA 1995.

     4     AS  23.30.220(a)(4)(A)  and  (a)(4)(B),  in  the  form
applicable to this case, provide:

               (a)   Computation of compensation  under
          this  chapter  shall be on the  basis  of  an
          employees spendable weekly wage at  the  time
          of  injury.   An  employees spendable  weekly
          wage  is  the employees gross weekly earnings
          minus  payroll tax deductions.  An  employees
          gross weekly earnings shall be calculated  as
          follows:
          
               . . . .

               (4)  if at the time of injury the
          
               (A)   employees earnings are  calculated
          by  the  day, hour, or by the output  of  the
          employee, the employees gross weekly earnings
          are the employees earnings most favorable  to
          the  employee computed by dividing by 13  the
          employees earnings, not including overtime or
          premium pay, earned during any period  of  13
          consecutive  calendar  weeks  within  the  52
          weeks immediately preceding the injury;
          
               (B)  employee has been employed for less
          than  13 calendar weeks immediately preceding
          the  injury, then, notwithstanding (1) -  (3)
          of this subsection and (A) of this paragraph,
          the   employees  gross  weekly  earnings  are
          computed  by determining the amount that  the
          employee   would   have   earned,   including
          overtime  or  premium pay, had  the  employee
          been employed by the employer for 13 calendar
          weeks  immediately preceding the  injury  and
          dividing this sum by 13[.]
          
     5     Gilmore v. Alaska Workers Comp. Bd., 882 P.2d 922, 924
(Alaska  1994).  Gilmore was explicitly concerned with  balancing
the purposes of the Workers Compensation Act as a whole, purposes
which  included  the  quick,  efficient,  fair,  and  predictable
delivery  of benefits to injured workers.  Id. at 927.   Fairness
was  considered an essential component of the application of  the
statute  and could not be sacrificed in the pursuit of the  other
purposes.  Id. at 928.

     6     50  P.3d  789,  797 (Alaska 2002)  (holding  that  the
Gilmore   test   is   no  longer  necessary  when   the   initial
determination of compensation is based on the amended version  of
AS 23.20.220).

     7    Ch. 75,   1(b)(2), SLA 1995.

     8    882 P.2d at 927.

1    50 P.3d 789 (Alaska 2002).

2     Hammer  v.  City  of Fairbanks, 953 P.2d 500,  504  (Alaska
1998).

     3     Nunley v. State of Alaska, 99 P.3d 7, 10 (Alaska 2004)
(citing  Handley v. State, Dept of Revenue, 838 P.2d  1231,  1233
(Alaska 1992)).

     4     The  facts  detailed here supplement the statement  of
facts set out in this courts June 24, 2003 decision.

     5    AS 23.20.220(a)(4)(A) states:

               (a)   Computation of compensation  under
          this  chapter  shall be on the  basis  of  an
          employees spendable weekly wage at  the  time
          of  injury.   An  employees spendable  weekly
          wage  is  the employees gross weekly earnings
          minus  payroll tax deductions.  An  employees
          gross weekly earnings shall be calculated  as
          follows:
          
               . . . .

               (4)  if at the time of injury the
          
               (A)   employees earnings are  calculated
          by  the  day, hour, or by the output  of  the
          employee, the employees gross weekly earnings
          are the employees earnings most favorable  to
          the  employee computed by dividing by 13  the
          employees earnings, not including overtime or
          premium pay, earned during any period  of  13
          consecutive  calendar  weeks  within  the  52
          weeks immediately preceding the injury[.]
          
     6    AS 23.30.220(a)(6) states:

          [I]f at the time of injury the employment  is
          exclusively  seasonal  or  temporary,   then,
          notwithstanding (1)  (5) of this section, the
          gross  weekly earnings are 1/50 of the  total
          wages  that the employee has earned from  all
          occupations   during   the   calendar    year
          immediately preceding the injury[.]
          
7    AS 23.30.220(a)(4)(B) states:

               (4)  if at the time of injury the
               
               . . . .

               (B)  employee has been employed for less
          than  13 calendar weeks immediately preceding
          the injury, then, notwithstanding (1)-(3)  of
          this  subsection  and (A) of this  paragraph,
          the   employees  gross  weekly  earnings  are
          computed  by determining the amount that  the
          employee  would  have earned,  not  including
          overtime  or  premium pay, had  the  employee
          been employed by the employer for 13 calendar
          weeks  immediately preceding the  injury  and
          dividing this sum by 13[.]
          
     8    882 P.2d 922 (Alaska 1994).

     9    975 P.2d 684 (Alaska 1999).

10   Thompson, 975 P.2d at 689.

     11   Dougan, 50 P.3d at 797.

     12    Temporary work is defined as employment  that  is  not
permanent,  ends upon completion of the task, job,  or  contract,
and  ends  within  six  months  from  the  date  of  injury.   AS
23.30.220(c)(2).

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