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Case # Case # 60704882
Matter of Longley Jones Management Corp
2012 NY Wrk. Comp. 60704882

BOARD PANEL DECISION

By: Robert E. Beloten, Chair

Ruling:

The Full Board, at its meeting held on May 15, 2012, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on February 8, 2012.

ISSUE

The issue presented for Mandatory Full Board Review is how a claimant's loss of wage earning capacity should be calculated when the claimant is working at the time of classification with a non-schedule permanent partial disability (PPD).

The Workers' Compensation Law Judge (WCLJ), in a decision filed March 26, 2010, found that the record required further development on the issue of the claimant's loss of wage earning capacity and directed the parties to provide vocational assessments.

The Board Panel majority modified the WCLJ's decision, concluding that the claimant is permanently partially disabled to a moderate degree and since the claimant was working at the time of classification earning 76% of his wages at time of injury, his loss of wage earning capacity is 24%.

The dissenting Board Panel member would affirm the WCLJ and remit this matter back to the WCLJ for further development of the record regarding the determination of loss of wage earning capacity, including a consideration of vocational assessments, if produced, as well as other relevant factors.

The claimant filed an application for Mandatory Full Board Review on March 6, 2012. The carrier filed a rebuttal on April 3, 2012.

Upon review, the Full Board votes to adopt the following findings and conclusions.

FACTS

The case is established for a left arm injury that occurred on May 17, 2007. The average weekly wage was set at $471.65. On September 26, 2009, the claimant returned to work at a salary of $360.00. Both the treating physician and the carrier's consultant agree that the claimant has a condition amenable to classification and that the claimant has a medical impairment to a moderate degree.

At a hearing held on March 23, 2010, the carrier sought to establish permanency. The carrier argued that claimant's loss of wage earning capacity was 25% based on the fact that his post injury earnings were 75% of his pre-injury earnings. The claimant disagreed and argued that a loss of wage earning capacity calculation requires more than just a mathematical calculation based on pre- and post-injury earnings. The WCLJ declined to classify and establish a loss of wage earning capacity for the claimant and continued the matter for vocational reports on the issue of loss of wage earning capacity.

A Board Panel decision filed on February 8, 2012, modified the WCLJ's findings and classified the claimant as permanently partially disabled to a moderate degree with a classification date of March 23, 2010, and established a loss of wage earning capacity of 24% entitling claimant to a maximum of 250 weeks of benefits.

LEGAL ANALYSIS

Matter of Buffalo Auto Recovery, 2009 NY Wrk Comp 80703905, was the first Board Panel decision to interpret the 2007 amendment to Workers' Compensation Law (WCL) § 15(3)(w). That amendment imposed caps on the maximum number of weeks of benefits an injured worker could receive for a non-schedule PPD. The statutory caps are based on the percentage of loss of wage earning capacity suffered by the injured worker.

Buffalo Auto held that as the legislature did not amend the definition of wage earning capacity under WCL § 15(5-a), the loss of wage earning capacity for a claimant working at the time of classification must be extrapolated from his/her actual earnings, with the weekly rate and duration of benefits based solely upon the actual earnings. On the other hand, for a non-working claimant at the time of classification, Buffalo Auto provided "the loss of wage earning capacity must first be determined upon a preponderance of the evidence in the record concerning the nature and degree of the work-related permanent physical and/or mental impairment, work restrictions, claimant's age, and any other relevant factors with the wage earning capacity as its inverse" (Id.)

Buffalo Auto provided two separate and distinct methods for calculating a PPD claimant's loss of wage earning capacity depending on whether the claimant was working or not working at the time of classification. The majority opinion applied Buffalo Auto to the undisputed facts in this case and concluded that since the claimant at the time of classification was earning 76% of his former average weekly wage, his loss of wage earning capacity is 24%, and pursuant to WCL § 15(3)(w)(xi) he is entitled to 250 weeks of benefits. The dissenting member argued that Buffalo Auto's construction of WCL § 15(3)(w) was flawed for four reasons. The dissent maintained that Buffalo Auto fails to distinguish between permanent disability and temporary employment; unnecessarily creates an irreconcilable conflict between WCL § 15(3)(w) and WCL § 15(5-a); is at odds with the Board's position in support of the legislation; and creates the anomalous result of under-compensating or over-compensating similarly situated claimants.

At the time Buffalo Auto was adopted it represented a reasoned interpretation of an issue of first impression. The Advisory Committee appointed in 2007 to develop impairment guidelines and help interpret the amendment to WCL § 15(3)(w) had failed to submit its recommendations and the Board Panel was forced to both interpret and apply the provisions of WCL § 15(3)(w) without the benefit of guidance. The fact that the 2007 amendment did not define the newly introduced concept of "loss of wage earning capacity" made the Board Panel's job that much more difficult. The Board Panel's conclusion to treat working and non-working PPD claimants differently represented an attempt to reconcile an eighty year old statute [WCL § 15(5-a)] with the newly adopted amendments to WCL § 15(3)(w). WCL § 15 (5-a) defines wage earning capacity in relationship to actual reduced earnings for working claimants with partial disabilities. Therefore, it was not unreasonable for the Board Panel to conclude that loss of wage earning capacity was the inverse of wage earning capacity and distill the determination of loss of wage earning capacity for a working claimant to a mathematical calculation involving pre- and post-injury wages.

This case represents the first time the Full Board has had an opportunity to review the distinction in calculating the loss of wage earning capacity for working and non-working PPD claimants. It is the Full Board's view that the dissenting Board Panel member was correct in asserting that PPD claimants should not be treated differently simply because of the fact that they may be back at work at the time of classification. The Full Board finds that WCL § 15(3)(w) and WCL § 15(5-a) are not at odds and that one standard should apply for calculating the loss of wage earning capacity for all PPD claimants.

WCL § 15(5-a)'s definition of wage earning capacity controls the meaning of the term in that portion of WCL § 15(3)(w) that provides the measure of weekly compensation benefits. For each week in which a classified claimant is working at less than full wages, the claimant will receive a payment for a benefit week based on the reduced earnings calculation outlined in WCL § 15(5-a). However, that definition does not control in the determination of loss of wage earning capacity. The determination of a claimant's loss of wage capacity is designed to establish duration of benefits, a finding which is unrelated to the traditional purpose of WCL § 15(5-a), which is to calculate the weekly benefit rate. It is simply more reasonable not to inject a rate-based definition of wage earning capacity into a statute designed to determine benefit weeks.

Buffalo Auto's interpretation of WCL § 15(3)(w) can lead to unequal treatment when applied to claimants with identical disabilities. The employment status of a PPD claimant on the day of classification will control his or her duration of benefits. Therefore, two identical claimants with a presumed 50% loss of wage earning capacity would be entitled to 300 weeks of benefits. If one of those claimants secures a light duty job within their restrictions and is working at no loss of salary on the date of classification, he or she would be entitled to only 225 weeks of benefits. If that claimant becomes subsequently unemployed he or she would still only be entitled to 225 weeks of benefits while the other identical claimant receives 300 weeks of benefits. Utilizing WCL § 15(5-a) for calculating weekly awards is warranted because of the actual loss of income caused by the compensable injury. Utilizing it to determine benefit weeks however is problematic because it results in unequal treatment. This modified interpretation has the added benefit of eliminating the conundrum created by Buffalo Auto that the non-rebuttable presumption of at least a 25% loss of wage earning capacity contained in WCL § 15(5-a) has been replaced by WCL § 15(3)(w)'s provision that a claimant's loss of wage earning capacity can be 15% or less.

Therefore, the Full Board finds that in calculating a PPD claimant's loss of wage earning capacity pursuant to WCL § 15(3)(w), it is not appropriate to draw a dispositive distinction between working and non-working claimants. For all claimants "the loss of wage earning capacity must first be determined upon a preponderance of the evidence in the record concerning the nature and degree of the work-related permanent physical and/or mental impairment, work restrictions, claimant's age, and any other relevant factors". [Buffalo Auto] This does not mean that a PPD claimant's wages at the time of classification are irrelevant. They are an important factor that must be considered and weighed by the WCLJ in determining a claimant's actual loss of wage earning capacity. As such, the framework of Buffalo Auto is herein modified only with respect to the method of calculation of a working claimant's loss of wage earning capacity. All other aspects of Buffalo Auto remain in full force and effect.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed on March 26, 2010, is AFFIRMED, and the further development of the record shall occur as follows: the case is returned to the hearing calendar for record development regarding loss of wage earning capacity. Claimant is to appear and testify. Both sides may produce evidence regarding loss of wage earning capacity at the hearing.

The case is continued.