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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Airlines, Inc. v. Darrow (8/25/2017) sp-7192

Alaska Airlines, Inc. v. Darrow (8/25/2017) sp-7192

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC   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, email  

                                                                                                              

          corrections@akcourts.us.  



                    THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



ALASKA  AIRLINES,  INC.;  EBERLE                              )  

VIVIAN,  INC.;  AIGA,  as  successor  in                      )  

interest  to  LUMBERMEN'S                                     )     Supreme  Court  Nos.  S-16127/16143  

INSURANCE  COMPANIES;  and  

NORTHERN  ADJUSTERS,  INC.,  

                                                                    Alaska   

                             Appellants  and  

                             Cross-Appellees,  



          v.  



                 

PAMELA DARROW,  

                         

f/k/a/ PAMELA CREEKMORE,  



                                            

                             Appellee and  

                             Cross-Appellant,  



and  



                                   

STATE OF ALASKA, DEPARTMENT  

                                               

OF LABOR & WORKFORCE  

                                                     

DEVELOPMENT, DIVISION OF  

                     

WORKERS' COMPENSATION,  



                                              

                             Intervenor and  

                             Cross-Appellee.  



                                                                                               



                                                                                                        

                                                                                                            


----------------------- Page 2-----------------------

                                                                                                          

                    J.  John Franich, Franich Law Office, LLC, Fairbanks, for  

                                                                                                 

                    Appellee/Cross-Appellant.  Kimberly D. Rodgers, Assistant  

                    Attorney General, Anchorage, and James E. Cantor, Acting  

                                                                      

                    Attorney  General,  Juneau,  for  Intervenor/Cross-Appellee  

                                 

                    State of Alaska.  



                                                                                                   

                    Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,  

                                        

                    and Carney, Justices.  



                                      

                    CARNEY, Justice.  



I.        INTRODUCTION  



                                                                                                                            

                    An employee continued to work for over ten years after a job-related knee  



                                                                                                                           

injury but had multiple surgeries on her injured knee.  Over time, her employer made  



                                                                                                                                

several permanent partial impairment payments, and she was eventually determined to  



                                                                                                                        

be permanently and totally disabled because of the work injury.  She began to receive  



                                                                                                                             

Social Security disability at about the same time she was classified as permanently and  



                                                                    

totally disabled for workers' compensation.  



                                                                                                                          

                    Her employer asked the Alaska Workers' Compensation Board to allow  



                                                                                                                         

two offsets to its payment of permanent total disability (PTD) compensation: one related  



                                                                                                                         

to Social Security disability benefits and one related to the earlier permanent partial  



                                                                                                                            

impairment  (PPI)  payments.                    The  Board  established  a  Social  Security  offset  and  



                                                                                                                              

permitted  the  employer  to  deduct  the  amount  of  previously  paid  PPI  (adjusted  for  



                  

inflation).  



                                                                                                                      

                    The employee appealed to the Alaska Workers' Compensation Appeals  



                                                                                                                                

Commission, arguing that the Board had improperly applied one of its regulations in  



                                                                                                                      

allowing the PPI offset and had incorrectly calculated the amount of the Social Security  



                                                                                                                              

offset.   She also brought a civil suit against the State challenging the validity of the  



                                                                                                                                    

regulation.  The State intervened in the Commission appeal; the lawsuit was dismissed.  



                                                               -2-                                                        7192
  


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The Commission reversed the Board's calculation of the Social Security offset and                                                                                                                                                                             



affirmed   the   Board's   order   permitting   the   PPI   offset.     The   employer   appealed   the  



Commission's Social Security offset decision to this court, and the employee cross-                                                                                                                                                                    



appealed the PPI offset.                                                   We affirm in part and reverse in part.                                                                                 



II.                  FACTS AND PROCEEDINGS                         



                                         PamelaDarrowworkedforAlaskaAirlines                                                                                               attheFairbanks airportin 1996.                                                                     



While working, she suffered a knee injury that required multiple surgeries and ultimately                                                                                                                                                   



led to her becoming permanently and totally disabled.                                                                                                                      Darrow held other jobs in the                                                         



years following the 1996 injury, and Alaska Airlines paid her temporary total disability                                                                                                                                                      



(TTD) during times she was unable to work because of her injury.                                                                                                                                           Alaska Airlines also                               



                                                                                                                                                        1  

                                                                                                                                                                                                                                                                              

made four payments for PPI for a total of $40,500.                                                                                                           The last payment was made in 2005.  



                                                                                                                                                                                                                                                                 

                                         In  2012  the  Social  Security  Administration  decided  Darrow  met  its  



                                                                                                                                                                                                                                                                

standards for disability related to her knee, found her disabled as of December 2010, and  



                                                                                                                                                                                                                                                            

determined that her first month of eligibility for benefits was June 2011. In January 2013  



                                                                                                                                                                                                                                         

Darrow filed a written workers' compensation claim for PTD benefits and an adjustment  

                                                                                                             2     She was receiving TTD at the time and was in the  

                                                                                                                                                                                                                                                                 

of her disability compensation rate. 

reemployment process.3  

                                                                            



                     1                   PPI is calculated by multiplying the percentage of an injured worker's                                                                                                                               



permanent impairment by a fixed amount.  AS 23.30.190(a).  At the time of Darrow's   

injury, the fixed amount was $135,000.                                                                                        Former AS 23.30.190(a) (1996).                                                                             Using the   

medical reference named in the statute, Darrow's doctor ultimately rated Darrow as                                                                                                                                                                                 

having a 30% whole person impairment.                                                                                          



                     2                   When a worker is permanently and totally disabled, AS 23.30.220(a)(10)  

                                                                                                                                                                                                                      

permits the Board to base compensation on a wage rate the employee could earn during  

                                                                                                                                                                                                                                                      

the period of disability rather than what she earned before the injury.  

                                                                                                                                                                                                



                     3                   The reemployment process, which helps to prepare an employee to return  

                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                  (continued...)  



                                                                                                                                 -3-                                                                                                                       7192
  


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                         AlaskaAirlines               initially objectedtoher reclassification, but later                                   agreedshe   



was permanently and totally disabled.                                   It objected to the compensation rate adjustment                     



and noted it might be entitled to an offset for Darrow's Social Security disability (SSDI)                                                         

                                             4    Alaska Airlines later petitioned the Board to allow it two  

under AS 23.30.225(b).                                                                                                                                   



offsets: one for SSDI and another one, pursuant to AS 23.30.180, for the PPI it had paid  

                                                                                                                                                        

earlier.5  

                 



                         During Darrow's 2014 deposition Alaska Airlines learned that she had also  

                                                                                                                                                         



been working for the State of Alaska at the time of her injury, which affected  her  

                                                                                                                                                         

compensation rate.6                     The parties later entered into a partial settlement in which they  

                                                                                                                                                        



agreed  that:              (1)  Darrow's  "average  weekly  wage"  when  the  injury  occurred  was  

                                                                                                                                                        

$668.98,  rather  than  $270  as  the  adjuster  had  initially  calculated;7                                                     (2)  she  became  

                                                                                                                                                 



            3            (...continued)  



                                                                                                                                                            

to work in a different job when she can no longer return to her former one, is set out in  

        

AS 23.30.041.  



            4            AlaskaStatute23.30.225(b) authorizes anoffset to an employer's disability  

                                                                                                                                                

payments when an employee gets both workers' compensation and SSDI for the same  

                                                                          

injury.  



            5            Alaska Statute 23.30.180 provides in part, "If a permanent partial disability  

                                                                                                                                               

award has been made before a permanent total disability determination, permanent total  

                                                                                                                                                        

disability benefits must be reduced by the amount of the permanent partial disability  

                                                                                                                                               

award, adjusted for inflation, in a manner determined by the board."  

                                                                                                                 



            6            Pursuant to AS 23.30.220(a)(7), "when the employee is working under  

                                                                                                                                                     

concurrent contracts with two or more employers, the employee's earnings from all  

                                                                                                                                                           

employers is considered as if earned from the employer liable for compensation."  

                                                                                                                                                         



            7            The  partial  settlement  indicated  that  the  average  weekly  wage  was  

                                                                                                                                                       

"computed  under  the  1996  version  of  AS  23.30.220(a)(4)(A)"  and  that  the  initial  

                                                                                                                                                    

calculation "did not take into account" Darrow's concurrent employment with the State.  

                                                                                                                                                                  

No records were available to show how the adjuster at the onset of the case determined  

                                                                                                                                           

                                                                                                                                       (continued...)  



                                                                             -4-                                                                      7192
  


----------------------- Page 5-----------------------

disabled for purposes of the Alaska Workers' Compensation Act (Act) on October 8,                                                                                                                 



2012; (3) Alaska Airlines would pay Darrow an additional $15,000 related to penalties                                                                                             



and interest "in satisfaction of all claims prior to March 8, 2012"; and (4) Darrow's                                                                                           



attorney would receive "minimum statutory fees on all previously disputed benefits."                                                                                                                    



They listed four unresolved issues in the partial settlement:  one related to the Board's       



exerciseofdiscretion under AS23.30.220(a)(10) to determineawageratefor calculating                                                                                            

                                                     8  one regarding the percentage of PTD that could be withheld for  

Darrow's PTD amount,                                                                                                                                                                            



any overpayment, and the two raised in this appeal.  

                                                                                                                        



                              The Board held a hearing in August 2014; because the contested issues  

                                                                                                                                                                                        



were primarily legal, no witnesses testified.   Darrow argued that, contrary to Alaska  

                                                                                                                                                                                      



Airlines' assertion, AS 23.30.180 did not permit Alaska Airlines to offset the amount of  

                                                                                                                                                                                                  



PPI it had previously paid her because the statute authorized an offset for permanent  

                                                                                                                                                                              

                                                                                                                                   9  Although aBoardregulation  

partial disability rather thanpermanent partial impairment.  

                                                                                                                                                                               



               7               (...continued)  



                                                                                                                                                                                               

the  average  weekly  wage.                                            The  applicable  subsections  of  the  1996  version  of  

                                                                                                                                                                                               

AS 23.30.220(a) used the phrases gross weeklyearnings and spendableweeklywage, see  

                                                                                                                                                                                                  

former AS 23.30.220(a) (1996), but the parties referred to the average weekly wage in  

                                                   

the partial settlement.  



               8               Alaska Statute 23.30.220(a)(10) permits the Board to "determine gross  

                                                                                                                                                                                         

weekly earnings by considering the nature of the employee's work, work history, and  

                                                                                                                                                                                              

resulting disability" when an employee is PTD and the Board decides that the amount  

                                                                                            

of gross weekly earnings under other statutory subsections "does not fairly reflect the  

                                                                                                                                                                                               

employee's earnings during the period of disability."  The amount of compensation is  

                                                                                                                                                                                                  

tied to an employee's gross weekly earnings.  AS 23.30.175, .180, .185, .200, .220(a).  

                                                                                                                                                                                                        

Alaska Airlines later agreed with Darrow's calculation of $1,390 as her adjusted average  

                                                                                                                                                                                     

weekly wage under subsection .220(a)(10). Counsel told the Board the figure was based  

                                                                                                                                                                                         

on a vocational expert's report.  

                                                                         



               9               Compare  AS  23.30.190(a)  (providing  for  compensation  "[i]n  case  of  

                                                                                                                                                                                                

                                                                                                                                                                       (continued...)  



                                                                                                -5-                                                                                       7192
  


----------------------- Page 6-----------------------

provided that "[f]or purposes of (b) of this section and AS 23.30.180, permanent partial                                            



disability        benefits         include        permanent           partial       impairment            benefits   paid           under  

                          10  Darrow contended the regulation was against legislative intent.  She  

AS 23.30.190,"                                                                                                                          



asked the Board to adopt the reasoning of Miller v. Municipality of Anchorage, in which  

                                                                                                                                     

the Board based an offset on the worker's adjusted weekly wage,11 when calculating the  

                                                                                                                                          



SSDI offset. Under Darrow's analysis, Alaska Airlines would not be entitled to an SSDI  

                                                                                                                                      



offset because the offset calculation resulted in a negative number.  

                                                                                                               



                      Alaska Airlines argued first that it was entitled to an SSDI offset based on  

                                                                                                                                          



Darrow's actual wages in 1996 rather than the amount it had agreed to as an adjusted  

                                                                                                                                 



wage  under  AS  23.30.220(a)(10).                           It  contended  that  the  statement  in  Underwater  

                                                                                                                          



Construction, Inc. v. Shirley that the phrase average weekly wages in AS 23.30.225(b)  

                                                                                                                         

                                                                                                               12  meant that only  

was "the same as 'gross weekly earnings' in AS 23.30.220(a)(1)"                                                                        

                                                                                    



AS 23.30.220(a)(1) could be used to establish gross weekly earnings.  Alaska Airlines  

                                                                                                                                 



maintained that the purpose of AS 23.30.225 was to save the employer money and that  

                                                                                                                                        



the way to effectuate this purpose was to calculate the offset using Darrow's actual 1996  

                                                                                                                                      



           9          (...continued)  



                                                                                                                             

impairment partial in character but permanent in quality, and not resulting in permanent  

                                                                                                                                           

total disability"), with AS 23.30.180(a) (requiring reduction of PTD by "the amount of  

                                                                                      

the permanent partial disability award, adjusted for inflation").  



           10         8 Alaska Administrative Code (AAC) 45.134(c) (2011). 8 AAC 45.134(b)  

                                                                                                                               

provides, "In accordance with AS 23.30.155(j), the employer may reduce permanent  

                                                                                                                             

total disability benefits to recover permanent partial disability benefits previously paid  

                                                                                                                                       

by the employer for the same injury."  

                                                  



           11         AWCB Dec. No. 13-0099 at 27, 2013 WL 4508816, at *20 (Aug. 20,  

                                                                                                                                         

2103).  



           12         884 P.2d 150, 154 (Alaska 1994).  

                                                                    



                                                                     -6-                                                              7192
  


----------------------- Page 7-----------------------

wage, even though Darrow would get less money in combined SSDI and PTD than she                                                                              



                                                                                    13  

would get in PTD alone under this proposal.                                              



                         Alaska Airlines acknowledged that AS 23.30.180provided for an offset for  

                                                                                                                                                              



permanent  partial  disability  (PPD)  rather  than  PPI.                                               But  it  argued  that  in  enacting  

                                                                                                                                                  



AS 23.30.180, the legislature intended "to avoid double payment for injuries" that cause  

                                                                                                                                                         



first a permanent impairment and later a permanent total disability.   Alaska Airlines  

                                                                                                                                                   



pointed out that AS 23.30.190(a), the statute authorizing PPI, directs payment of PPI  

                                                                                                                                                            



only when the partial impairment does not "result[] in permanent and total disability."  

                                                                                                                                                                     



It argued that if an employee was paid PPI and later became permanently and totally  

                                                                                                                                                       



disabled, the employer should get a credit for the previously paid PPI as an advance  

                                                                                                                                                   



payment of PTD.  Alaska Airlines cited several Board decisions that allowed an offset  

                                                                                                                                                   



for PPI when a claimant received PTD, and maintained that the Board's regulation  

                                                                                                                                               



"equat[ing] permanent and partial disability with permanent and partial impairment"  

                                                                                                                                           



required the Board to consider the terms synonymous.  

                                                                                                        



                         In its decision the Board adopted the approach  used in  Miller, but its  

                                                                                                                                                              

application of  Miller  did  not give  Darrow  the  outcome she wanted.14                                                                   Instead,  the  

                                                                                                                                                             



Board's result when it calculated the SSDI offset was the same as Alaska Airlines'  

                                                                                                                                                 



proposal.  When it turned to the PPI offset, the Board referred to the legislative history  

                                                                                                                                                      



of the 1988  amendments to  the Act that  replaced  permanent partial disability  with  

                                                                                                                                                          



permanent partial impairment.  It also quoted from Larson's Workers' Compensation  

                                                                                                                                        



             13          Under   Alaska   Airlines'   calculation of the SSDI                                           offset, Darrow would          



receive $535.18 a week in combined SSDI and PTD instead of $668.98 in PTD alone.                                                                                     



             14          In  applying  Miller,  the  Board  limited  Darrow's  adjusted  wages  under  

                                                                                                                                                       

AS 23.30.220(a)(10) to $668.90.  As the Commission pointed out, this was erroneous.  

                                                                                                                                                                     



                                                                               -7-                                                                       7192
  


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                                                                                                                                                                               18  

SSDI offset, even though its analysis was somewhat different from hers.                                                                                                              Under the   



Commission's    analysis,    the    average    weekly    wage    the    parties    agreed    to    under  



AS 23.30.220(a)(10) was the average weekly wage to be used in calculating the offset.                                                                                                                            



It noted Alaska Airlines' argument that the statutory language of AS 23.30.225(b) said                                                                                                               



"average weekly wages at the time of injury."                                                                   But it interpreted the legislature's 1995                                          

                                                                            19  to include wages calculated under any subsection of  

amendment of AS 23.30.220(a)                                                                                                                                                                              



AS 23.30.220(a), including subsection .220(a)(10), within the definition of average  

                                                                                                                                                                                           



weekly wages under AS 23.30.225(a).  The Commission thought that to interpret the  

                                                                                                                                                                                                       



statute otherwise would lead to an unfair result: Darrow would receive less in combined  

                                                                                                                                                                                        



SSDI and PTD than she would  in PTD alone.   The Commission observed that the  

                                                                                                                                                                                                       



statutory language permitted an offset, but that Alaska Airlines' argument would result  

                                                                                                                                                                                                  



in a reduction of total benefits.  

                                                                           



                                Next the Commission decided that Darrow's PPI did not now meet the  

                                                                                                                                                                                                       



terms of AS 23.30.190(a) - "impairment partial in character but permanent in quality,  

                                                                                                                                                                                             



and not resulting in permanent total disability" - and thus the earlier PPI payments were  

                                                                                                                                                                                                    



effectively an advance payment of PTD.  It allowed Alaska Airlines to offset the PPI  

                                                                                                                                                                                                      

amountunder AS23.30.155(j),20 andordered that "AlaskaAirlinesis entitled to withhold  

                                                                                                                                                                                          



20% of [Darrow's] permanent total disability payments, without regard to AS 23.30.180  

                                                                                                                                                                                       



                18              The parties also disputed howtheBoardshould apply the maximumbenefit                                                                                           



cap, but neither party has raised that issue before us.                                                                        We therefore do not address it.                                               



                19              This  amendment  added  subsection  .220(a)(10)  and  allowed  the  Board  

                                                                                                                                                                                               

discretion to vary  gross weekly earnings when an employee was eligible for PTD.  

                                                                                                                                                                                                                 

Ch. 75,  9, SLA 1995.  

                                           



                20              Alaska Statute 23.30.155(j) permits an employer to offset overpayments or  

                                                                                                                                                                                                          

advance payments "by withholding up to 20 percent .  .  .  of unpaid installments of  

                                                                                                                                                                                                         

compensation."  



                                                                                                    -9-                                                                                            7192
  


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                                                  33  

computing compensation."                               We noted that even though the legislature had changed the                                              



language of AS 23.30.220 in 1983, the method used to calculate a weekly wage rate in                                                                           

                                                                                                                                  34     From this we  

the 1977 and 1983 versions of the statute remained "very similar."                                                                                           



concluded that  average weekly wages  in AS 23.30.225(b) was "the same as 'gross  

                                                                                                                                                       



weekly  earnings'  in  AS  23.30.220(a)(1),"  the  subsection  used  to  calculate  the  

                                                                                                                                                            

employee's compensation in that case.35  

                                                                             



                         Alaska Airlines asserts that AS 23.30.225(b)'s use of the phrase at the time  

                                                                                                                                                           



of injury only permits the use of Darrow's income from 1996, the year of her injury.  

                                                                                                                                                                     



This argument ignores the use of the same phrase in AS 23.30.220, which currently  

                                                                                                                                    



provides that compensation is calculated "on the basis of an employee's spendable  

                                                                                                                                                

weekly wage  at the time of injury."36                                     (Emphasis added.)   In spite of this language,  

                                                                                                                                       



AS 23.30.220(a)(10) allows the Board to set a different wage rate for certain workers  

                                                                                                                                                    



who are permanently and totally disabled.  

                                                                                 



                         Historically AS 23.30.220 has permitted the Board some discretion in  

                                                                                                                                                               



setting the wage used as a base for compensation calculation.  When AS 23.30.225(b)  

                                                                                                                      



was added to the Act in 1977, for example, former AS 23.30.220 permitted the Board to  

                                                                                                                                                                



set a worker's average weekly wages at the time of injury by considering wages for  

                                                                                                                                                             



             33          Id.  at 153 (quoting former AS 23.30.220 (1977)).                             



             34          Id.  at  153-54  (quoting  former  AS  23.30.220(2)  (1977)  and  former  

                                                                                                                                                     

AS 23.30.220(a)(1) (1983)).  

                                       



             35          Id. at 154.  We also observed that the version of AS 23.30.220 in effect  

                                                                                                                                                        

when Shirley was injured was unconstitutional.  See id. at 151 n.2 (citing Gilmore v.  

                                                                                                                                                               

Alaska Workers' Comp. Bd., 882 P.2d 922 (Alaska 1994)).  

                                                                                                  



             36          Spendable weekly wages are based on gross weekly earnings and serve as  

                                                                                                                                                               

the  basis  for  calculating  compensation  under  the  Act.                                                          See  AS  23.30.220(a).  

                                                                                                                                                                     

AS 23.30.220(a)(10) allows the Board to vary an employee's gross weekly earnings  

                                                                                                                                                   

when an employee is PTD, which changes the amount of compensation.  

                                                                                                             



                                                                             -13-                                                                        7192
  


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 AS 23.30.190(a) and AS 23.30.155(j) and decided that Alaska Airlines could recover the                                                                                                                                                      



 PPI as an overpayment of PTD "without regard to AS 23.30.180 and without regard to                                                                                                                                                             



 8 AAC [45].134."                                     It did not mention the additional $11,338.                                                                               



                                       Darrow argues that the Commission misinterpreted the Act by allowing                                                                                                                 



 Alaska Airlines to offset the PPI it had previously paid her against her PTD award.                                                                                                                                                     Her  



 argument is based on statutory language:                                                                              AS 23.30.180(a) requires an offset when "a                                                                              



 permanent partial                                   disability   award has been made before a permanent total disability                                                                                  



 determination" (emphasis added) - not a permanent partial                                                                                                                  impairment  award - yet                                         

 permanent partial disability as a benefit was removed from the Act in 1988.                                                                                                                                           69  Darrow  



 contends that disability and impairment are distinct concepts.   She points out that a  

                                                                                                                                                                                                                                                 

 person may be disabled from working without having a permanent impairment,70  and  

                                                                                                                                                                                                                                          



 conversely,  a  person  who  has  a  permanent  impairment  may  not  be  disabled  from  

                                                                                                                                                                                                                                      



 working, as illustrated by Darrow herself.  Darrow maintains that the Board correctly  

                                                                                                                                                                                                                            



 recognized that PPI was intended to compensate for a separate loss related to a physical  

                                                                                                                                                                                                                            



 harm, rather than wage loss from an injury, which would be a disability benefit.  

                                                                                                                                                                                                                                     



                                       Darrow points to a different statutory subsection, AS 23.30.041(k), which  

                                                                                                                                                                                                                                    



 concernsanemployee's eligibility for reemployment benefits,toshowthatthelegislature  

                                                                                                                                                                                                                        



 understood that PPD and PPI are in fact different.   In that subsection the legislature  

                                                                                                                                                                                                                       

 explicitly differentiated between PPD and PPI.71  She concludes that AS 23.30.180 does  

                                                                                                                                                                                                                                        



                    69                 Ch. 79,  34, SLA 1988.                              



                    70                 For example, in                             Rydwell v. Anchorage School District                                                                      , 864 P.2d 526, 529-                       



                                                                                                                                                                

 30 (Alaska 1993), the parties agreed the injured worker could not return to her former  

job even though she had a 0% impairment rating.                                                                           



                    71                Alaska  Statute  23.30.041(k)  provides  in  part,  "If  permanent  partial  

                                                                                                                                                                                                                                 

 disability or permanent partial impairment benefits have been paid in a lump sum before  

                                                                                                                                                                                                                                   

                                                                                                                                                                                                               (continued...)  



                                                                                                                     -22-                                                                                                              7192
  


----------------------- Page 23-----------------------

not authorize an offset against her PTD for PPI.                                                                                                                                                                                                           Darrow argues that the Commission's                                                                                           



construction of AS 23.30.190 could permit an employer a double recovery of PPI when                                                                                                                                                                                                                                                                                                                                                      



AS 23.30.041(k) had been used to suspend benefits.                                                                                                                                                                                                                                Both Darrow and Alaska Airlines                                                                                                          



currently take the position that                                                                                                                               permanent partial disability                                                                                                                         in AS 23.30.180(a) refers to                                                                                                           



the permanent partial benefit that existed before the 1988 statutory amendments.                                                                                                                                                                                                                                                                                                                                                         



                                                                      AlaskaAirlines                                                                    asks us toaffirmtheCommission's                                                                                                                                                    interpretation oftheAct                                                                                 



allowing it to recoup PPI under AS 23.30.190(a) and .155(j). Alaska Airlines argues that                                                                                                                                                                                                                                                                                                                                                          



the 1988 addition of the offset provision to subsection .180(a) "only . . . related to                                                                                                                                                                                                                                                                                                                                                                   



injuries occurring prior to the statutory changes . . . which changed permanent partial                                                                                                                                                                                                                                                                                                                                            



disability benefits to permanent partial impairment benefits."                                                                                                                                                                                                                                                                       Therefore, it continues,                                                  



after the 1988 amendments to the Act, "neither the credit provision of  .180 nor the                                                                                                                                                                                                                                                                                                                                                               



board's regulation in 8 AAC 45.134(c) is required to address recovery of PPI paid when                                                                                                                                                                                                                                                                                                                                                   



an employee is rendered permanently and totally disabled."                                                                                                                                                                                                                                                                         It does not mention the                                                                                          



Board's adjustment of the PPI amount for inflation or the Commission's failure to                                                                                                                                                                                                                                                                                                                                                                        



address it.   



                                                                      The State supports the Commission's interpretation of the statute, arguing                                                                                                                                                                                                                                                                             



that Darrow "is not entitled to PPI benefits for her knee injury because her impairment                                                                                                                                                                                                                                                                                                                 



resulted   in   permanent   total  disability."     The   State   relies   on   the   plain   meaning   of  



AS 23.30.190(a) - which refers to PPI as not resulting in permanent total disability -                                                                                                                                                                                                                                                                                                                                                                  



and the common meaning of                                                                                                                         overpayment, but also maintains that the Board's regulation                                                                                                                                                                                                   



is consistent with both AS 23.30.180 and .190 and "harmonizes the two statutes."                                                                                                                                                                                                                                                                                                                                                                        It  



contends that the concepts of                                                                                                                        disability  and  impairment  are distinct but related, as shown                                                                                                                                                                                                               



                                   71                                 (...continued)  



                                                                                                                                                                                                                                                                                                                                                                                                                                                         

the employee requested or was found eligible for reemployment benefits, payment of  

                                                                                                                                                                                                                                                                                                                                                                                                                                                      

benefits  under  this  subsection  is  suspended  until  permanent  partial  disability  or  

                                                                                                                                                                                                                                                                                                                         

permanent partial impairment benefits would have ceased . . . . "  



                                                                                                                                                                                                                         -23-                                                                                                                                                                                                               7192
  


----------------------- Page 24-----------------------

by language in AS 23.30.180(a) that classifies a worker who suffers certain impairments                                                                                                                                                                                                                                                      



as presumptively permanently and totally disabled. It argues that not requiring an offset                                                                                                                                                                                                                                                                                  



would overcompensate Darrow.                                                                                                                       At oral argument before us the State postulated that,                                                                                                                                                                         



because   both   statutes   took   effect   on   the   same   date,   the   statutory  language   in  



AS 23.30.180(a) was a drafting error and that the legislature meant to use                                                                                                                                                                                                                                                                     impairment  



rather than                                      disability  in the statutory language.                                                                                                                             



                                                            As noted, the Commission's decision relied solely on AS 23.30.190(a) and                                                                                                                                                                                                                                                 



AS 23.30.155(j) to permit Alaska Airlines' recovery of previously paid PPI and failed                                                                                                                                                                                                                         



to explore the meaning of AS 23.30.180(a) and its interaction with AS 23.30.190(a). The                                                                                                                                                                                                                                                                                            



Commission   effectively   wrote   out   of   the   statute   AS   23.30.180(a)'s   provision   for  



recovery of previously paid PPD by saying that "Alaska Airlines is entitled to withhold                                                                                                                                                                                                                                                                      



 20% of [Darrow's] permanent total disability payments, without regard to AS 23.30.180                                                                                                                                                                                                                                                                  



and without regard to 8 AAC [45].134."                                                                                                                                                 



                                                            Alaska Airlines asks us to ignore AS 23.30.180(a), the Board's regulation,                                                                                                                                                                                                               



and the Board's decision applying that statute and regulation, narrowing its focus to the                                                                                                                                                                                                                                                                                              



statutory  subsections   relied   on   by   the   Commission.     Although   we   review   the  

                                                                                                                                                                                                    72          when  construing  a  statute,  "we  must,  

Commission's   decision,   not   the   Board's,                                                                                                                                                                                                                                                                                                                         



whenever possible, interpret each part or section of a statute with every other part or  

                                                                                                                                                                                                                                                                                                                                                                                          

section, so as to create a harmonious whole."73                                                                                                                                                                       "When a statute or regulation is part of  

                                                                                                                                                                                                                                                                                                                                                                                           



a larger framework or regulatory scheme, even a seemingly unambiguous statute must  

                                                                                                                                                                                                                                                                                                                                                                               



                              72                            Humphrey v. Lowe's Home Improvement Warehouse, Inc.                                                                                                                                                                                                               , 337 P.3d 1174,                              



  1178 (Alaska 2014) (citing                                                                                                 Shehata v. Salvation Army                                                                                                    , 225 P.3d 1106, 1113 (Alaska                                                                          

 2010)).  



                              73                            State, Dep't of Commerce, Cmty. &Econ. Dev., Div. of Ins. v. Progressive  

                                                                                                                                                                                                                                                                                                                                               

Cas. Ins. Co., 165 P.3d 624, 629 (Alaska 2007) (quoting Kodiak Island Borough v.  

                                                                                                                                                                                                                                                                                                                                                                                            

Exxon Corp., 991 P.2d 757, 761 (Alaska 1999)).  

                                                                                                                                                                                         



                                                                                                                                                                                          -24-                                                                                                                                                                                 7192
  


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                                                                    103  

inconsistent with those definitions.                                      The separation of powers doctrine "prohibits this                                        



                                                                                                                           104  

court from enacting legislation or redrafting defective statutes."                                                                                    

                                                                                                                                 When the legislature  

                                                                                                             105     The statutory language in  

                                                                                                                                                                     

                                                                                               

makes a drafting error, we do not rewrite the statute. 



AS 23.30.180(a) does not authorize an employer to reduce a PTD award when an  

                                                                                                                                                                    



employee has previously received PPI. Alaska Statute 23.30.180(a) authorizes recovery  

                                                                                                                                                         



of  previously  paid  permanent  partial  disability,  not  impairment,  benefits.                                                                                The  

                                                                                                                                                                



Commission's construction of AS 23.30.190(a) fails to interpret that subsection in the  

                                                                                                                                                                    



context of the entire Act, including AS 23.30.180(a), and essentially eliminates the  

                                                                                                                                                                   



Board's regulation.  We therefore reverse the Commission's decision.  

                                                                                                                        



             C.           8 AAC 45.134(c) Is Invalid Because It Is Inconsistent With The Act.  

                                                                                                                                                               



                          Darrow's cross-appeal asks us to consider the validity of 8 AAC45.134(c),  

                                                                                                                                                      



which the Board applied to authorize Alaska Airlines' recovery of previously paid PPI  

                                                                                                                                                                   



and to increase the amount Alaska Airlines was entitled  to recover  for  the PPI  by  

                                                                                                                                                                    



adjusting for inflation.   Alaska Airlines does not directly address the validity of the  

                                                                                                                                                                   



regulation, arguing instead that its recovery of the overpayment does not rely on the  

                                                                                                                                                                   



regulation.               The  State  agreed  with  Alaska  Airlines  that  under  the  Commission's  

                                                                                                                                            



construction of the statute, the regulation is not needed to recover previously paid PPI.  

                                                                                                                                                                           



But neither Alaska Airlines nor the State addressed whether PPI should be adjusted for  

                                                                                                                                                                    



inflation, as permitted by AS 23.30.180(a) and 8 AAC 45.134(c) and ordered by the  

                                                                                                                                                                    



Board. And the State did not discuss why the Board would have adopted this regulation  

                                                                                                                                                      



             103          262 P.3d 593, 597-98 (Alaska 2011).                          



             104          State v. Campbell                  , 536 P.2d 105, 111 (Alaska 1975) (citing Alaska Const.                                         



art. II,  1, art. IV,  1),                  overruled on other grounds by Kimoktoak v. State                                                  , 584 P.2d 25        

(Alaska 1978).  

                 



             105          Alyeska Pipeline Serv. Co., 262 P.3d at 597-98.  

                                                                                                         



                                                                                 -33-                                                                           7192
  


----------------------- Page 34-----------------------

if the Commission's construction of the statute were correct.                                                                                                                                                        The State argues that the                                                     



regulation's  validity is not properly before us because the superior                                                                                                                                                                                  court case was                          



dismissed and the Commission determined it did not have jurisdiction to decide this                                                                                                                                                                                                             



issue.    It concludes that "no ruling on the regulation's validity exists to support this                                                                                                                                                                                                      



Court's appellate jurisdiction."                                                                              



                                               Alaska Statute 23.30.129(a) gives a party the right to appeal a decision by                                                                                                                                                                           



the Commission to this court rather than the superior court. This is precisely the posture                                                                                                                                                                                          



of the case before us; we therefore have jurisdiction.                                                                                                                                    The question of the regulation's                             



validity   may   not   technically   be   ripe   for   review   because   the   Commission   correctly  



decided it lacked jurisdiction to determine a regulation's validity and, according to the                                                                                                                                                                                                          

                                                                                                                                                          106   But the parties briefed the merits of this  

State, the superior court case was dismissed.                                                                                                                                                                                                                                                    



issue before the Commission and this court, and our construction of the relevant statutes  

                                                                                                                                                                                                                                                                                    



leaves no question as to the validity of 8 AAC 45.134 (c).  

                                                                                                                                                                                              



                                               Because Darrow does not challenge whether the regulation was properly  

                                                                              



promulgated, we consider only "whether the regulation is consistent with and reasonably  

                                                                                                                                                                                                                                                                        



necessary  to  carry  out  the  purposes  of  the  statutory  provisions"  and  "whether  the  

                                                                                                                                                                                                                                                                                                 

regulation is reasonable and not arbitrary."107                                                                                                                  "We exercise our independent judgment  

                                                                                                                                                                                                                                                                            

in determining the validity of an administrative regulation . . . ."108                                                                                                                                                                           A regulation that  

                                                                                                                                                                                                                                                                                                



                        106                    Cf. Nelson v. Municipality of Anchorage                                                                                                   , 267 P.3d 636, 644 (Alaska 2011)                                                                



(deciding that as-applied constitutional challenge was not ripe because claim had not                                                                                                                                                                                                             

been litigated before Board or superior court).                                                                                           



                        107                    Kelly v. Zamarello, 486 P.2d 906, 911 (Alaska 1971); see also Lauth v.  

                                                                                                                                                                                                                                                                                                       

State, 12 P.3d 181, 184 (Alaska 2000).  

                                                                                                                 



                        108                    Lauth, 12 P.3d at 184.  

                                                                                                            



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                                                                                                                                                                                                              109  

"differs   substantively   from   the   clear   language   of   the   statute"   is   invalid.                                                                                                                          Here  



AS23.30.180(a) specifies                                             thatan            employer can reducepermanent totaldisability                                                                               benefits  



by the amount of previously paid permanent partial disability benefits, adjusted for                                                                                                                                           



inflation.   While the State advances some policy arguments in support of the regulation,                                                                                                                  



                                                                                                                                                                                                                                 110  

such a policy decision is for the legislature rather than for the Board or this court.                                                                                                                                                    



Becausetheregulation effectively rewrites AS23.30.180(a), substituting impairment for  

                                                                                                                                                                                                                                



disability, 8 AAC 45.134 (c) is not valid.  

                                                                                               



V.                CONCLUSION  



                                    We AFFIRM that part of the Commission's decision reversing the Board's  

                                                                                                                                                                                                                   



calculation  of  the  Social  Security  disability  offset  and  REVERSE  that  part  of  the  

                                                                                                                                                                                                                              



Commission's decision permitting an offset for permanent partial impairment benefits.  

                                                                                                                                                                                                                 



WethereforeREMANDthis matter to theCommission for furtherproceedingsconsistent  

                                                                                                                                                                                                             



with this opinion.  

                         



                  109               Muller v. BP Expl. (Alaska) Inc.                                                    , 923 P.2d 783, 792 n.9 (Alaska 1996);                                                                see  



also Madison v.                                Alaska   Dep't of Fish                                       & Game                   , 696           P.2d   168,   178   (Alaska 1985)   

(holding that agency regulation was invalid because it unduly restricted subsistence                                                                                                                    

hunting, contrary to legislative intent).                                           



                  110               Fairbanks N. Star Borough Sch. Dist. v. NEA-Alaska, Inc., 817 P.2d 923,  

                                                                                                                                                                                                                           

926 (Alaska 1991).  

                                   



                                                                                                              -35-                                                                                                        7192
  

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