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Twiggs v. Anchorage (6/13/97), 938 P 2d 1046
<![CDATA[
NOTICE: This opinion is subject to formal correction before
publication in the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska
99501, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
JOHN D. TWIGGS, )
) Supreme Court No. S-6213
Appellant, )
) Superior Court No.
v. ) 3AN-93-1550 CI
)
MUNICIPALITY OF ANCHORAGE, ) O P I N I O N
(self-insured) and the ALASKA )
WORKERS' COMPENSATION BOARD, )
)
Appellees. ) [No. 4835 - June 13, 1997]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Milton M. Souter, Judge.
Appearances: William J. Soule, Law Office of
William J. Soule, Anchorage, for Appellant. Patricia L. Zobel and
Deirdre D. Ford, DeLisio, Moran, Geraghty & Zobel, Anchorage, for
Appellees.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, and Eastaugh, Justices. [Fabe, Justice, not
participating.]
RABINOWITZ, Justice.
I. INTRODUCTION
John Twiggs fell and injured his back while serving as a
volunteer policeman in 1987. Twiggs filed a workers' compensation
claim seeking, among other things, permanent partial disability
benefits (PPD). At the time of the accident, Twiggs' income was
almost $49,000 from his employment with the Federal Aviation
Administration (FAA); at the time of the hearing in 1992, Twiggs'
income was in excess of $78,000. In the interim, Twiggs had
received a promotion, merit raises, and numerous cost of living
adjustments. Nonetheless, Twiggs claims that, but for his back
injury, he would have received a second promotion and raise in
1991. The Workers' Compensation Board (Board) denied Twiggs' PPD
claim, stating that "this is a case based on the employee's
speculation that he would have obtained the [promotion]." The
superior court affirmed, holding that the Board's decision "is
amply supported by substantial evidence."
This appeal raises two issues: (1) whether an injured
employee whose post-injury income is greater than his income at the
time of injury is entitled to PPD benefits as a result of a lost
promotion; and (2) whether Twiggs' compensation benefits
calculation is capped at the minimum gross weekly wage of a full-
time Anchorage policeman.
II. FACTS AND PROCEEDINGS
On January 5, 1987, one day before his official
retirement from the Anchorage Volunteer Police Reserves, John
Twiggs tripped on an unknown object buried beneath the snow as he
entered the police station to turn in his police equipment. In
attempting to break his fall, Twiggs wrenched his back. Twiggs
formally retired as planned from the Reserves the next day. At the
time of his injury, Twiggs was employed at the GM-13 pay level by
the FAA at Anchorage International Airport. Twiggs timely filed a
workers' compensation claim. [Fn. 1]
In March 1987, two months after his injury, Twiggs was
laterally transferred to a field security position by the FAA. In
that capacity, Twiggs' duties grew and his supervisory
responsibilities increased, resulting in his promotion to the GM-14
pay level in September 1988. In August of 1990, Twiggs was again
laterally transferred, this time from his field position to his
current position in the FAA's regional Anchorage office. Twiggs
claims that he was transferred because his field position required
sitting in long meetings, extensive travelling, and physical
exertion in the form of stooping, squatting, lifting, and bending
-- all of which proved too difficult given Twiggs' back injury.
His current duties are "much more reasonable, and much less
strained, with much less travel[.]" As the supervisor responsible
for transferring Twiggs stated, "[t]he final decision [to transfer]
was based on my concern for Jack's health and . . . making his
environment a little easier."
In 1991 Twiggs applied for the newly created job of
Deputy Security Division Manager of the FAA in Alaska. James
Derry, Twiggs' supervisor, was responsible for selecting the person
to be promoted to this position. Twiggs did not receive the
promotion and has remained in his current position at the GM-14 pay
level.
Since his injury, Twiggs has received periodic medical
treatment for his back problems. Twiggs has occasionally missed
work due to his back pain but has not lost salary because he works
flexible hours weekdays and weekends, and takes personal leave when
necessary. After several consultations, Davis Peterson, M.D., an
orthopedic surgeon, diagnosed a lumbar strain and in April 1991
assessed Twiggs as having a 20.5% whole-body permanent partial
impairment rating pursuant to applicable AMA guidelines.
Twiggs contends that but for his 1987 back injury, he
would have received the promotion to Deputy Security Division
Manager. He seeks PPD benefits of $60,000 -- the statutory limit
-- for this lost opportunity. [Fn. 2] The Municipality counters
that Twiggs would have been denied the promotion regardless of
whether he had injured his back.
In a 2-1 decision, the Board agreed with the Municipality
and found that "this is a case based on the employee's speculation
that he would have obtained the deputy position . . . ." The
superior court affirmed the Board's decision, concluding that it
was supported by substantial evidence. Twiggs now appeals.
III. STANDARD OF REVIEW
We accord no deference to the decision of a superior
court acting as an intermediate appellate court. Kirby v. Alaska
Treatment Center, 821 P.2d 127, 128 n.4 (Alaska 1991). The Board's
legal conclusions are reviewed de novo. Harp v. ARCO Alaska, Inc.,
831 P.2d 352, 356 n.5 (Alaska 1992).
IV. DISCUSSION
As an initial matter, the Board correctly assumed that an
injured employee may be compensated for a lost promotion. Since
his injury occurred in 1987, Twiggs' claim for unscheduled PPD
benefits is governed by the now repealed AS 23.30.190(a)(20) and AS
23.30.210 of Alaska's Workers' Compensation Act. [Fn. 3] In
applying these statutory provisions, we have repeatedly emphasized
that disability compensation is a function of lost earning
capacity:
The concept of disability compensation rests
on the premise that the primary consideration is not medical
impairment as such, but rather loss of earning capacity related to
that impairment. An award for compensation must be supported by a
finding that the claimant suffered a compensable disability or,
more precisely, a decrease in earning capacity due to a work-
connected injury or illness.
Vetter v. Alaska Workmen's Compensation Board, 524 P.2d 264, 266
(Alaska 1974) (citations omitted); see also Wien Air Alaska v.
Kramer, 807 P.2d 471, 474 (Alaska 1991) ("Loss of earning capacity
is the defining characteristic of a compensable disability.").
The relevant initial inquiry is whether the employee's
lost promotion -- purportedly caused by his injury -- decreased
his earning capacity. The fact that Twiggs' post-injury income had
increased from approximately $48,000 at the time of his injury to
more than $78,000 at the time he was considered for promotion is
not dispositive. Such a circumstance is not necessarily
inconsistent with a loss of earning capacity. In short, "earning
capacity and post-injury earnings are not synonymous." Pioneer
Const. v. Conlon, 780 P.2d 995, 997 (Alaska 1989) (citing 2 Arthur
Larson, The Law of Workmen's Compensation sec. 57.21, at 10-91 to
10-92 (1986)).
In Hewing v. Peter Kiewit & Sons, 586 P.2d 182, 186
(Alaska 1978), we held that a post-injury increase in earnings does
not necessarily preclude a finding of a decrease in earning
capacity. [Fn. 4] We stated that if lost earning capacity was
calculated by merely comparing pre-injury wages to post-injury
wages, the calculation might prove unreliable. Id. at 186.
Quoting Professor Larson, we noted that the unreliability of post-
injury earnings may be due to such factors as an increase in
general wage levels since the time of the accident, the claimant's
maturation and additional training, longer hours worked after the
accident, or payment of wages disproportionate to the claimant's
capacity out of sympathy to claimant. Id.
In Fairbanks North Star Borough School District v.
Crider, 736 P.2d 770 (Alaska 1987), we elaborated on this subject:
However, the Board's figures did not recognize
changes in wage levels that occurred after 1981. The record
contains uncontradicted evidence that Crider's salary as a school
custodian would have risen rapidly between 1981 and 1983, while
salaries in Crider's post-injury positions as a housekeeper rose
only slightly during this same period. Crider believes that these
lost increases should be taken into account when calculating the
full extent of her lost earning capacity. The School District, on
the other hand, contends that Crider is not entitled to benefits
based on wage increases occurring after 1981 because 1981 was the
year in which Crider's injury stabilized.
We reject the School District's argument. The
determination of lost earning capacity under AS 23.30.190(a)(20) is
not limited to an examination of those losses that appear
immediately after claimant's injury stabilizes. Instead, it
requires the Board to use all "available clues"to forecast the
losses that the disabled claimant will incur over the course of her
work life.
Id. at 772-73 (citations omitted).
Incorporating a lost promotion into the lost earning
capacity equation is a natural extension of our previous cases. A
lost promotion merely reflects yet another manifestation of how an
injury can decrease one's earning capacity.
In the instant case, however, another provision of
Alaska's Workers' Compensation Act limits Twiggs' recovery. [Fn. 5]
The version of AS 23.30.220 in force at the time of his injury
provided at subsection (a)(4) that
[i]f the employee is injured while performing
duties as a volunteer ambulance attendant, policeman, or fireman,
the gross weekly earnings for calculating compensation shall be the
minimum gross weekly earnings paid a full-time ambulance attendant,
policeman, or fireman employed in the political subdivision where
the injury occurred . . . .
Twiggs was injured while serving as a volunteer police
officer in Anchorage, but seeks compensation for injury-related
loss at his job at the FAA. Professor Larson notes there are three
ways to calculate workmen's compensation benefits for an employee
who loses income from several jobs as a result of an injury at one
job. One approach is to "use only the actual wage of the
employment in which the employee was injured." A second approach
rounds out "the wage in the injury-related employment to a normal
average basis for that employment." The third approach "is to
combine the earnings in the two jobs." 2 Larson, supra n.4, sec.
60.33 at 10-767, 772.
We conclude that the legislature selected the second
approach when it enacted AS 23.30.220(a)(4). By declaring that
calculated benefits of injured volunteers "shall be"based on the
minimum gross weekly earnings of a full-time policeman, the statute
effectively rounds out the wage in the job where the injury
occurred, but ignores income lost from other sources.
This interpretation is supported by legislative history.
When AS 23.30.220(a)(4) was amended to bring volunteer patrolmen
within its sweep, see ch. 77, sec. 2, SLA 1979, [Fn. 6] John Cook
of
the Department of Labor testified as to the origins of the
volunteer provision:
A volunteer fireman had been injured here in
Juneau. He had a private business, a commercial art business, he
drew and . . . he hurt his hand fighting a fire. But under the
provisions of the law at the time, he just got paid for the
industry he was injured in, which was $5 per fire and which [meant
he was getting] $5 per week compensation while he was injured.
. . . [W]e couldn't pay him compensation based on his total
earnings he lost, which was his artist work, so they . . .
change[d] [AS 23.30.220] to provide some kind of a wage for
furthering a volunteer's compensation . . . .
Hearings on HCSSB 4 Before the Senate Community and Regional
Affairs Comm., 11th Legis., 1st Sess., January 25, 1979, reel-to-
reel tape 1, side 1, at 335 (statement of John Cook of the
Department of Labor).
Cook's testimony suggests that before subsection (4) was
added to AS 23.30.220(a), see ch. 41, sec. 1, SLA 1968, a
volunteer's
benefits were calculated under the first method described by
Professor Larson. Like the injured fireman in Juneau, a volunteer
paid on a nominal basis received only nominal compensation for his
injuries. By adding the new subsection, the legislature expanded
the definition of volunteers' gross weekly earnings for purpose of
calculation compensation to the full wages of the profession for
which they volunteered, but did not take into account lost income
from other employment. We conclude AS 23.30.220(a)(4) sets Twiggs'
gross weekly earnings for calculation of benefits at the minimum
gross weekly wage paid a full-time Anchorage patrolman. [Fn. 7]
V. CONCLUSION
The superior court's decision affirming the Board's
decision is REVERSED. The case is REMANDED to the superior court
with instructions to remand to the Board for calculation of
benefits pursuant to former AS 23.30.220(a)(4).
FOOTNOTES
Footnote 1:
Initially, the Municipality of Anchorage (Municipality)
controverted Twiggs' claim on two bases: (1) as a volunteer, Twiggs
was not covered by the workers' compensation statute; and (2)
Twiggs was not on duty at the time of his injury. The Municipality
subsequently withdrew its notice of controversion on March 28,
1990, leaving only the issues of whether Twiggs is entitled to PPD
benefits for a lost promotion and whether he in fact lost a
promotion as a consequence of his injury.
Footnote 2:
Though the Alaska Workers' Compensation Act was amended
significantly in 1988, the 1988 amendments apply only to injuries
sustained on or after July 1, 1988. Since Twiggs was injured in
January 1987, the former law applies. Olson v. AIC/Martin J.V.,
818 P.2d 669, 675 n.6 (Alaska 1991). Twiggs calculates his total
wage loss as a result of not receiving the GM-15 promotion at
$65,207, and also claims an additional $94,266 in lost retirement
benefits. However, his recovery is limited to $60,000, the maximum
award under the former law. AS 23.30.190(b).
Footnote 3:
Repealed in 1988 (sec. 34 ch.79 SLA 1988), AS 23.30.190(a)
stated:
(20) in all other cases in this class of
disability the compensation is 80 per cent of the difference
between the spendable weekly wages of the employee and the wage-
earning capacity of the employee after the injury in the same
employment or otherwise, payable during the continuance of the
partial disability, but subject to modification by the board on its
own motion or upon application of a party in interest . . . .
AS 23.30.210 provided:
In a case of partial disability under AS
23.30.190(a)(20) . . . the wage-earning capacity of an injured
employee is determined by the actual spendable weekly wage of the
employee if the actual spendable weekly wage fairly and reasonably
represents the wage-earning capacity of the employee. If the
employee has no actual spendable weekly wage or the actual
spendable weekly wage does not fairly and reasonably represent the
wage-earning capacity of the employee, the board may, in the
interest of justice, fix the wage-earning capacity which is
reasonable, having due regard to the nature of the injury, the
degree of physical impairment, the usual employment, and any other
factors or circumstances in the case which may affect the capacity
of the employee to earn wages in a disabled condition, including
the effect of disability as it may naturally extend into the
future.
Footnote 4:
As Professor Larson states:
It is uniformly held, therefore, without
regard to statutory variations in the phrasing of the test, that a
finding of disability may stand even when there is evidence of some
actual post-injury earnings equalling or exceeding those received
before the accident.
1C Arthur Larson & Lex K. Larson, The Law of Workmen's Compensation
sec. 57.21(c), at 10-136 (1995) (footnotes omitted).
Footnote 5:
We ordered the parties to file supplemental memoranda as to
"whether Twiggs's gross weekly earnings should be calculated under
Alaska Statute 23.30.220(a)(4)."
Footnote 6:
In 1979 AS 23.30.220(a)(5) was amended to add coverage for
volunteer policemen. The statute was later renumbered, and
subsection (a)(5) became subsection (a)(4).
Footnote 7:
We note in passing that current AS 23.30.220 provides at
subsection (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." This new section may adopt the third approach
outlined by Larson. Since the current volunteer clause (at
subsection (9)) is only exempted from the operation of subsections
(1)-(6), a volunteer's recovery may be gauged by his earnings from
all employers. In other words, while AS 23.30.220(a)(9) still sets
benefits for a volunteer with no other source of income, recovery
for on-duty volunteer injuries may otherwise be defined by wages
lost at all other employment, including lost promotions.
We further note that a volunteer such as Twiggs, who
experienced no decline in overall income, would first have to
overcome the Hewing presumption against compensability by
presenting evidence which, viewed in isolation, could lead a
reasonable person to conclude his post-injury income did not
reflect his earning capacity. See Municipality of Anchorage v.
Carter, 818 P.2d 661, 665 (Alaska 1991); Veco, Inc. v. Wolfer, 693
P.2d 865, 869-70 (Alaska 1985); Hewing v. Peter Kiewit & Sons, 586
P.2d 182, 186 (Alaska 1978). If the presumption were displaced,
the employee would then have to prove all elements of his claim by
a preponderance of the evidence. See Brunke v. Rogers & Babler,
714 P.2d 795, 801 (Alaska 1986); Burgess Const. Co. v. Smallwood,
698 P.2d 1206, 1211 (Alaska 1985).
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