BOARD NO. 1145-94Commonwealth of Massachusetts Department of Industrial Accidents
Filed: June 27, 1996
REVIEWING BOARD DECISION
(Judges Wilson, Fischel and McCarthy)
APPEARANCES
Alan J. Pierce, Esq., for the self-insurer
David J. McMorris, Esq., for the employee
Paul Ingraham, Esq., for the Trust fund
WILSON, J.
The Workers’ Compensation Trust Fund appeals from a decision in which the administrative judge awarded the claimant § 31 survivor’s benefits, augmented by application of G.L.c. 152, § 35C. The Trust Fund argues that the decision is contrary to law because the employee’s average weekly wage, calculated pursuant to § 35C and 452 CMR 2.03, was based on his earnings from self-employment. We agree, and conclude that the average weekly wage claimed as of the first date of eligibility for benefits, under the provisions of § 35C and 452 CMR 2.03, must be based upon wages earned as an employee within the meaning of the Act. We therefore reverse the decision, and remand the case for further proceedings consistent with this opinion.
The case was tried on a statement of agreed facts, which was incorporated with the decision and stipulates as follows:
The employee’s surviving spouse, Gloria Letteney, filed a claim against the self-insurer/employer, Hercules Powder Company, for widow’s benefits pursuant to M.G.L. Chapter 152 Section 31, burial expenses pursuant to Section 33, and medical expenses pursuant to Sections 13 and 30 of the Act.
The employee was last exposed to asbestos on May 15, 1955 while in the employ of Hercules Powder Company.
The employee died from the disease mesothelioma on June 8, 1992.
Asbestos exposure was given as the cause of the employee’s mesothelioma and his resulting death.
The last exposure bearing a causal relationship to the employee’s mesothelioma occurred at the Hercules Powder Company on May 15, 1955.
Prior to the employee’s onset of disability, he was employed in his own business, the Instrument Service Company, until June 30, 1991 when his health required him to retire. His average weekly wage, calculated at a date ending June 30, 1991, is $740.71.
The Instrument Service Company was a business located in Florida and not insured under the Workers’ Compensation Laws of the Commonwealth of Massachusetts.
The employee was last employed by Hercules Powder Company in March of 1959.
Pursuant to a conference order, the self-insurer was required to pay the claimant § 31 benefits at the rate of $493.81, based on the average weekly wage of $740.71, from June 8, 1992 and continuing. The judge also ordered the Trust Fund to reimburse the self-insurer pursuant to § 65 (2)(b)[1] to the extent that the employee’s weekly compensation exceeded the § 31 rate in effect on May 15, 1955, the date of injury. (Dec. 1.) The self-insurer and Trust Fund appealed to a hearin de novo. (Dec. 2.)
At hearing, the parties addressed the issue framed as whether “average weekly wage” as used in 452 CMR 2.03 includes self-employment income for the purpose of determining benefits pursuant to § 35C of the Act.
General Laws c. 152, § 35C states in pertinent part:
When there is a difference of five years or more between the date of injury and the initial date on which the injured worker or his survivor first became eligible for benefits under section thirty-one, thirty-four, thirty-four A, or section thirty-five, the applicable benefits shall be those in effect on the first date of eligibility for benefits.
452 CMR 2.03 (1) states in its entirety:
For the purposes of M.G.L.c. 152, § 35C, applicable benefits on the first date of eligibility for benefits shall be based on the employee’s average weekly wage as of such first date of eligibility for benefits, or, if such employee is not employed on such date, it shall be based on the employee’s average weekly wage as of the employee’s last date of employment.
The judge determined that “average weekly wage” on the “first date of eligibility for benefits” could be based on the earnings of a worker who was self-employed at that time. The judge reasoned that the definition of “average weekly wages” in § 1(1) was contained in the first phrase of that section: “[T]he earnings of the injured employee during the period of twelve months immediately preceding the date of injury, divided by fifty-two[.]” The judge determined that, since there was no requirement that such earnings be derived from an employment relationship with an employer insured for workers’ compensation within the Commonwealth, self-employment earnings were a valid basis for setting the compensation rate under §§ 31 and 35C. (Dec. 3-4.) We cannot agree with this line of reasoning.
“Average weekly wage(s)” is an expression which has a very particular meaning within the Act. It is constituted of “earnings” of an “employee.” § 1(1). “Employee” is defined in § 1(4) as “every person in the service of another under any contract of hire, express or implied, oral or written.” (emphasis added). Self-employment is, by its very nature, not employment “in the service of another.” There is no “average weekly wage” to be assigned to a person who is not in the service of another. Such person is simply not within the scope of the Act. See Altshulerv. Colonial Hilton Hotel, 7 Mass. Workers’ Comp. Rep. 62, 64 (1993). Therefore, the reference to “average weekly wage” in Regulation 2.03 is without force and meaning for an employee or dependent claiming the benefit of § 35C, when there is no employment relationship recognizable under the Act “on the first date of eligibility for benefits.” Moreover, we are not persuaded by the argument raised by our dissenting colleague, that our concern with the definition of “average weekly wage” is unwarranted because the expression does not appear in § 35C. The “applicable benefits,” in § 35C are those available to eligible employees and dependents “under section thirty-one, thirty-four, thirty-four A or section thirty-five . . . .” § 35C. All of these sections invoke the “average weekly wage” as the basis for the calculation of benefits to be paid thereunder. Although we recognize the important policy considerations that underlie the judge’s decision and our collegue’s dissent, we are not empowered to expand the scope of the Act to include a special definition of “average weekly wage,” for which we find no authority in the clear words of the interrelated sections of the statute or the case law. That is for the Legislature. See Louisv. Anthony’s Pier Four, 8 Mass. Workers’ Comp. Rep. 311, 313 (1994), appeal transferred, No. 95-P-1202 (Supreme Judicial Court February 28, 1996).
The claimant’s citation to cases which have as their subject post-injury earning capacity is inapposite. “Average weekly wage(s)” and earning capacity are entirely independent concepts. Certainly, self-employment or out-of-state employment has relevance to the employee’s capacity to return to work and the calculation of § 35 benefits. See Federico’s Case, 283 Mass. 430, 432 (1933); Senck’s Case, 247 Mass. 232, 234 (1924), Rodgersv. Dept. of Public Works, 9 Mass. Workers’ Comp. Rep. 539, 541 (1995); DaBelle v. News Distributors, Inc.,
9 Mass. Workers’ Comp. Rep. 114 (1995). The argument is misplaced, however, with regard to the meaning of average weekly wages for purposes of § 35C.
Because we are unable to see a basis for interpreting the fundamental meaning of “average weekly wage” in § 35C, by way of Regulation 2.03 and §§ 34, 34A and 35, in a manner that is inconsistent with every other pertinent section in the Act, we must reverse the judge’s assignment of compensation benefits based on the June 30, 1991 self-employment earnings.[2] We remand the case for calculation of benefits in accordance with Regulation 2.03, “as of the last date of the employee’s [insured] employment.”[3]
So ordered.
______________________ Sara Holmes Wilson Administrative Law Judge
______________________ William A. McCarthy Administrative Law Judge
Filed: June 27, 1996
FISCHEL, J. (dissenting).
I offer no expansive interpretation of average weekly wage for purposes of § 35C, but one that harmonizes the meaning of average weekly wage with the intent and meaning of § 35C. I cannot agree with the majority that this case is governed by the “clear words” of any part of the Act. Its construction renders § 35C meaningless for an entire category of eligible employees and will spawn inconsistent results. There is nothing in c. 152 that compels the reversal of the well-reasoned decision of the administrative judge. I would affirm it and allow the claimant to receive § 31 benefits at the compensation rate based on the employee’s last average weekly wage under § 35C and Regulation 2.03, which the judge found to be his self-employment earnings.
The majority’s reasoning leads inexorably to the following hypothetical: Two employees work side by side at the same plant in Fall River in the early 1950’s, and are both exposed to asbestos. The last exposure is in 1955, when both employees leave that employment. Both have average weekly wages of $60.00 per week at that time. Thereafter, employee #1 commences work in a sole proprietorship for the next thirty-five years, ending up with weekly earnings in 1990 of $600.00. Employee #2 goes to work for various other employers for the next thirty-five years, and has a comparable advancement in his earning capacity, earning $600.00 per week in 1990. Both employees develop mesothelioma in 1990, related to the 1955 exposure, and are incapacitated from any gainful employment at the same time. Both employees file for workers’ compensation benefits. Both cases are accepted by the 1955 insurer for the employer of both employees, which commences payment of benefits at the weekly rate of $40.00, 2/3 of the 1955 average weekly wage for each of them.
Both employees then file a claim against the Workers’ Compensation Trust Fund under § 65 (2)(b) for the adjustment of that average week pursuant to § 35C. Employee #2’s claim is accepted by the Trust Fund, which pays the adjustment, namely $360.00 per week for the additional weekly $540.00 earned by that employee on the date of his eligibility for benefits. Under the rule espoused by the majority today, the Trust Fund denies employee #1’s claim and prevails at hearing, because employee #1 is prohibited from a § 35C adjustment. He has been self-employed for the last thirty-five years and no § 35C adjustment is due him based on such employment. Employee #1, and his widow at the time of his inevitable death due to the occupational exposure, will be stuck with benefits paid at the rate of $40.00 per week, enhanced to $276.00 weekly by § 34B COLA adjustments. This compensation will be significantly less than the total $400.00 per week that comparably situated employee #2 and his widow will receive. Note that this result obtains, even though causal relationship between the employments of either employee in 1990 and their incapacities does not matter. Liability and causation has already been established against the 1955 insurer. The self-employment of Employee # 1 and employment of Employee # 2 are indistinguishable in that regard. Is this really what § 35C was intended to accomplish? Doesn’t the statute allow for, indeed require, better than that? I urge that it does.
The majority errs because its approach in essence makes the employee/claimant prove again an employment relationship under the Act on the date of incapacity. The employee/claimant in this case, and in all § 35C cases, has already proved that he/she is covered by the Act. The § 26 “personal injury” occurred, arising out of and in the course of an employment relationship between the § 1(4) “employee” and the 1955 § 1(5) “employer,” giving rise to the self-insurer’s obligation to pay compensation benefits under §§ 34, 33, 32, 31, and 30 in accordance with the employee’s § 1 (1) “average weekly wage.” There is one date of injury in this case; there is no event or incident during the self-employment that any party contends is cognizable under the Act.
The reasoning of the majority hinges on the concept of “earnings while in the employ of another”. This concept only has relevance when the central issue is, which employer and insurer must bear the risk for liability. When liability is not established, examination of the employment relationship is crucial. But under § 35C, the nature of the employee’s employment on the date of his eligibility is absolutely irrelevant to the subject industrial injury because no one contests which employer/insurer is at risk. Here application of § 35C only requires a determination of what the employee was actually able to earn at the time he became incapacitated thirty-fiveyears after the industrial exposure. Section 35C directs benefits to be paid consistent with the employee’s actual loss of earnings.
The Act provides for an “average weekly wage” to be assigned to “arrive at as fair an estimate as possible of an employee’sfuture earning capacity.” Szwaja v. Deloid Associates,
2 Mass. Workers’ Comp. Rep. 40, 43 (1988) (emphasis in original). An “average weekly wage” has no meaning if it does not “produce an honest approximation of [the employee’s] probable future earning capacity.” Id. In other words, where the date of injury and incapacity resulting therefrom are far removed, “average weekly wages” as defined in § 1 (1), does not fulfill its intended function of replacing lost present earnings. Section 35C was meant to close that divide, by adjusting the “applicable benefits” up to a relevant reflection of actual lost earning power.
In the first case construing “average weekly wage,” Gillen’sCase, 215 Mass. 96 (1913), Rugg, C.J. addressed the very definition in the first phrase of s. 1 (1) that we discuss today:
It is apparent both from its phrase and its context that this sentence applies to a continuous employment throughout the year. While the language is not amplified, it refers to substantially uninterrupted work in a particular employment from which the wages of the employee are derived. The basis is the earning capacity of the workman as shown by the employment.
Id. at 97 (emphasis added). The court concluded, “The loss of his capacity to earn, as demonstrated by his conduct in such regular employment, is the basis upon which his compensation should be based.” Id. at 99.
In latency cases, where there has been interim self-employment, to require “average weekly wages” to be calculated at the date of last injurious exposure ignores the true loss of earning capacity, many years later when incapacity occurs. Section 35C was enacted to remedy this glaring unfairness with regard to industrial illnesses brought on by harmful exposure. As such, the legislature provided that the injured employee’s “applicable benefits shall be those in effect on the first date of eligibility for benefits.” Section 35C benefits were thereby intended to address the employee’s loss of earning capacity at the time of his eligibility. Under circumstances such as those presented here, to limit earning capacity to employment “in the service of another” frustrates and obliterates § 35C’s purpose.
Section 35C benefits are an “adjustment” to the average weekly wage. Section 65 (2)(b) specifically states the Trust Fund is responsible for payment of “reimbursement of adjustments to weekly compensation pursuant to § 35C . . . .” G.L.c. 152, § 65 (2)(b) (emphasis added). The use of the word, “adjustment, ” is telling. To adjust means to change so as to match or fit; cause to correspond; To bring into proper relationship; To adapt or conform as to new conditions. American Heritage Dictionary, Second Ed., 1985, at 79. It does not imply a requirement for a new employment relationship within the Act. Section 35C adjusts the average weekly wage derived from the remote covered employment into an alignment with the employee’s current ability to earn. Regulation 2.03’s description of “applicable benefits” under § 35C as the employee’s average weekly wage as of that date must be read to mean the prior one year’s calculation of earnings in order to estimate the “employee’s future earning capacity” at that time. SeeSzwaja, supra.
We should uphold the administrative judge’s interpretation of the reasonable scope of § 35C. The statute is weakened not strengthened by constructions that allow for the disparate treatment that the majority advances. The absurd consequence of the hypothetical above is no hyperbole: it is the real outcome that will be the by product of the majority’s cramped reading of the statute.
Where irrational results obtain, the legislative scheme must be examined with an eye toward the mischief or imperfection sought to be remedied through the enactment of the legislation.St. Germaine v. Pendergast, 411 Mass. 615, 626 (1992).
Section 35C was enacted as part of the massive renovation of the Act in 1985.
In so large a legislative enterprise, there are likely to be casual overstatements and understatements, half-answers, and gaps in the statutory provisions. As practice develops and the difficulties are revealed, the courts are called on to interweave the statute with decisions answering the difficulties and composing, as far as feasible and reasonable, an harmonious structure faithful to the basic designs and purposes of the legislature.
Mailhot v. Travelers Insurance Co., 375 Mass. 342, 345 (1978).
The majority sets up an unnecessary and unreasonable hurdle to an evenhanded application of § 35C’s basic design for all employees with latent industrial illnesses. To no rational end, it calls upon the employee, at the time of becoming incapacitated, to re-prove other elements of employment within the Act. Said employee has already done that; otherwise § 35C would not even arise. The use of the expression, “average weekly wage,” in Regulation 2.03 should not be interpreted to exclude earnings from self-employment at the time of eligibility for benefits, because it “lead[s] to an awkward and even intolerable result.” Mailhot,
supra at 348. The benefit to the Trust Fund of removing these claimants from its scope of coverage under § 65 (2)(b) is minuscule when compared with the consequences such as those for Employee #1 and his dependents. No overall policy underlying the structure of the insurance function in the Act (e.g. the successive insurer rule, or the definition of concurrent employment) compels the adoption of the majority’s narrow view. To the contrary, any effort to interpret the statute in a manner consistent with its design is altogether lacking in the majority’s decision.
The wage obsolescence-defeating object of § 35C harmonizes with the concept of “average weekly wage” in the following way. First and foremost, the “earnings of an injured employee”, are those the employee was actually capable of earning at the moment of incapacity. Because the employee has already shown the harmful employment relationship where he made earnings while in the employ of another — the work that brought him under the Act — he need not be called on to show this again before § 35C can be applied.
Section 35C was enacted to compensate all employees whose incapacity occurs a long time after the injury sustained at the insured employment for their real loss of earnings. The statute can be and should be construed to promote evenhandedness. I would affirm the decision.
_____________________ Carolynn N. Fischel Administrative Law Judge