The Full Board, at its meeting on May 21, 2013, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision, duly filed and served on August 22, 2012.
The issue presented for Mandatory Full Board Review is whether the claimant is entitled to reduced earnings benefits.
The Workers' Compensation Law Judge (WCLJ) found that the claimant's reduced earnings in 2010 were due to economic factors, and not the claimant's work-related disability, and thus denied an award for reduced earnings.
The Board Panel majority modified the WCLJ's decision to reflect that the claimant is entitled to an award for reduced earnings for the period he worked in 2010 and continued the case.
The dissenting Board Panel member found that the reduction in claimant's earnings was economic in nature and was not a consequence of the claimant's compensable condition.
The Special Funds Conservation Committee (Special Funds) filed an application for Mandatory Full Board Review, arguing that the WCLJ's decision should be reinstated.
The claimant filed a rebuttal, asserting that Special Funds failed to show that the claimant's reduced earnings was due solely to economic factors, and that he is entitled to actual reduced earnings benefits.
Upon review, the Full Board votes to adopt the following findings and conclusions.
On February 22, 1996, the claimant, then a 22 year-old construction worker, filed a C-3 (Employee Claim) stating that he suffered a gunshot wound while working for a construction company on February 22, 1996.
The case was established for a gunshot wound to the claimant's back and chest, with an average weekly wage of $450.00, per agreement. Awards were made at various rates for the period from February 23, 1996, to November 28, 2000. By decision filed on September 9, 2009, the WCLJ found that as of April 22, 2007, the claim was the liability of the Special Funds pursuant to Workers' Compensation Law (WCL) § 25-a. At a hearing held on August 17, 2010, the WCLJ found no compensable lost time from November 28, 2000, to January 1, 2009, but made an award of compensation for the period from January 1, 2009, to January 1, 2010, at a reduced earnings rate of $134.67. No application for review of the WCLJ's award was filed by either party.
Medical reports from claimant's treating physician, Dr. Bernstein, dated January 13, 2010, February 24, 2010, April 14, 2010, and May 12, 2010, indicate that the claimant was totally disabled and not working. In a report dated June 18, 2010, Dr. Bernstein released the claimant to part time clerical work, with 90% sitting and no lifting.
At a hearing held on May 31, 2011, the claimant testified that he owned a business with his brother, Jamaica Electrical Supply (hereafter "JES"), an electrical parts/supply retail store that opened at the beginning of 2010. The claimant worked part time, 20 hours per week (4 to 6 hours per day), as a cashier, and earned $6,000.00, as indicated in his W-2 statement. The claimant's brother does not work at the store. However, the claimant's cousin works at the store, full time, approximately 60 hours per week, and is paid a salary. As the business just started in 2010, there was no profit. He stated that the store did not have much business in 2010 because it was a new business. The claimant also testified that in 2010, he worked part time at CSB Contracting Company, a company owned by his brother, for a half a year, and then began working for JES. Now he only works for CSB when his brother needs him as a driver (the record contains 1099 income statement from CSB which indicates that claimant earned $8,250.00 in 2010). The claimant further testified that he is still currently treating for his gunshot wound.
At the conclusion of the claimant's testimony at the May 31, 2011, hearing, the claimant's attorney requested awards based upon actual reduced earnings. However, Special Funds argued that the claimant was voluntarily restricting his earnings and that his testimony "defies credibility." Thereafter, the WCLJ stated that the claimant was not restricting his income to collect workers' compensation benefits. However, the WCLJ found that the claimant's reduced earnings were "a result of the business environment that he finds himself in" and that his reduced earnings bore "no relationship to the work-related injury." In a decision filed on June 3, 2011, the WCLJ found that the claimant had no actual reduced earnings in 2010.
The claimant's 2010 income tax return (doc. #179080873) shows that he is actually a part owner in CSB Contracting, and does not contain a Schedule C indicating that he is part owner of JES. Yet, he received a W-2 from JES and a 1099 from CSB.
In the claimant's request for administrative review of the WCLJ's decision, he argued that his testimony at the May 31, 2011, hearing demonstrated that he attempted to engage in self-employment and start a new business. He argued that the evidence presented at the hearing did not elicit that the sole cause of the claimant's reduced earnings was unrelated to his disability. He argued further that his W-2 statement showed that he had earnings of $14,250.00 in 2010, that the claimant started his own business to supplement his income, but did not succeed. Special Funds did not file a rebuttal to the claimant's request for administrative review.
The claimant subsequently filed his 2011 tax returns with the Board on January 27, 2012 (doc. #192001845). The claimant earned $12,000.00 from JES in 2011.
A claimant is eligible for a reduced earnings award when he returns to work at a lower wage rate following a compensable injury and such lower wage rate is determined to be caused, at least in part, by the claimant's causally related disability (see WCL § § 15(3)(v) and (w); Matter of Miller v Pan American World Airways, 46 AD2d 718 ; Matter of Stickley v ALCO Products, Inc., 36 AD2d 871 ). However, "[i]t is well settled that "a reduced earnings award may be denied where the reduction in earning capacity results from age, economic conditions or other factors unrelated to the disability"' (Matter of Turetzky-Santaniello v Vassar Bros. Hosp., 302 AD2d 706 , quoting Matter of La Pietra v County of Suffolk, 294 AD2d 794 ; see Matter of Ennist v Texaco, 280 AD2d 773 )" (Matter of Millner v Cablevision, 2 AD3d 1146 ).
Here, the record contains medical evidence from January 2010 to June 2010 that indicates the claimant was totally disabled and not working during such time period. In his report dated June 18, 2010, Dr. Bernstein released the claimant to return to part time clerical work with 90% sitting and no lifting. The claimant testified that he worked for CSB approximately half of 2010, and thereafter worked part time as a cashier for JES approximately 20 hours per week, which would appear to be consistent with the June 18, 2010, report of Dr. Bernstein, which released the claimant to part time clerical work, with 90% sitting and no lifting.
There is no evidence in the record to support the WCLJ's finding that the general business economy had anything to do with limiting the claimant's earnings. The claimant did, in fact, testify that the store did not have much business in 2010 given it was new. However, this would speak to the claimant's "profits" and not necessarily his pay as an "employee." Notably, claimant testified that his cousin was employed at the store full time, approximately 60 hours per week, and is paid a salary. Thus, if there was enough work at the store for his cousin to be paid on a full time basis, then the claimant's reduced earnings were not necessarily caused solely by economic conditions, rather than the restrictions imposed by Dr. Bernstein.
The Full Board finds, based upon a preponderance of the evidence, that the claimant is entitled to an award for reduced earnings for the year 2010 in which he worked part time. It is noted that the claimant's part-ownership and earnings from CSB Contracting may need to be considered in determining the proper amount of reduced earnings. It is noted that claimant was found to be totally disabled in reports from January 18, 2010, to May 12, 2010, and may be entitled to indemnity benefits for that period as well.
ACCORDINGLY, the WCLJ decision filed on June 3, 2011, is MODIFIED to reflect that the claimant is entitled to an award for reduced earnings for the period he worked in 2010. The case is continued for consideration of any outstanding RFA-1 issues.