Stucco, Inc. v. Rose

Bruce T. Bullion, Special Judge. The claimant in this workers’ compensation case, Donald Rose, sustained a work-related injury on June 26, 1990, that resulted in an anatomical impairment of thirteen percent to the body as a whole. As a result of the combined effects of this compensable injury and a preexisting disability or impairment, the claimant was rendered permanently totally disabled. The appellant accepted the claim as compensable, as did the Second Injury Fund, but a dispute arose concerning the rate at which the claimant’s thirteen percent should be paid, i.e., whether the permanent disability for the first 58.5 weeks (corresponding to the thirteen percent anatomical rating) should be paid at the permanent partial disability rate of $169.59 or at the permanent total disability rate of $226.11. The appellant took the position that, as employer, it was responsible only for paying the first 58.5 weeks at the permanent partial disability rate, and that the Second Injury Fund was liable not only for all payments beyond the 58.5-week period, but also for the difference between the permanent partial disability rate and the permanent total rate during the 58.5-week period the employer was responsible for paying weekly benefits attributable to the thirteen percent anatomical impairment rating. The Commission held that the appellant employer must pay at the permanent total amount for the 58.5-week period attributable to the thirteen percent rating, and that the Second Injury Fund’s liability did not begin until the 58.5 weeks is paid out. In addition, the Commission found that the Second Injury Fund did not controvert its liability for permanent total disability benefits. From that decision, comes this appeal. For reversal, the appellant contends that the Commission erred in holding it responsible for the difference between the claimant’s permanent total and permanent partial disability rates, and that the Commission therefore also erred in awarding attorney’s fees based on the appellant’s controversion of that amount. On cross-appeal, the claimant contends that the Commission erred in finding that the Second Injury Fund did not controvert its liability for permanent total disability benefits. We affirm in all respects. We first address the appellant’s contention that the Commission erred in finding it liable for paying benefits for a period attributable to the thirteen percent anatomical impairment rating at the permanent total rate, rather than at the permanent partial rate. The appellant’s argument is based on its reading of Ark. Code Ann. § 11-9-525 (1987), which in pertinent part provides that: (a)(1) The Second Injury Trust Fund established in this chapter is a special fund designed to insure that an employer employing a handicapped worker will not, in the event the worker suffers an injury on the job, be held liable for a greater disability or impairment than actually occurred while the worker was in his employment. (2) The employee is to be fully protected in that the Second Injury Fund pays the worker the difference between the employer’s liability and the balance of his disability or impairment which results from all disabilities or impairments combined. (b)(3) If any employee who has a permanent partial disability or impairment, whether from compensable injury or otherwise, receives a subsequent compensable injury resulting in additional permanent partial disability or impairment so that the degree or percentage of disability or impairment caused by the combined disabilities or impairments is greater than that which would have resulted from the last injury, considered alone and of itself, and if the employee is entitled to receive compensation on the basis of combined disabilities or impairments, then the employer at the time of the last injury shall be liable only for the degree or percentage of disability or impairment which would have resulted from the last injury had there been no preexisting disability or impairment. (b)(5) If the previous disability or impairment whether from compensable injury or otherwise, and the last injury together result in permanent total disability, the employer at the time of the last injury shall be liable only for the actual anatomical impairment resulting from the last injury considered alone and of itself. However, if the compensation for which the employer at the time of the last injury is liable is less than the compensation provided in 11-9-501 - 11-9-506 for permanent total disability, then, in addition to the compensation for which the employer is liable and after the completion of payment of compensation by the employer, the employee shall be paid the remainder of the compensation that would be due for permanent total disability under 11-9-501 - 11-9-506 out of the Second Injury Trust Fund. The question presented in the case at bar is one of first impression. The appellant contends that the statutory language recited above is unambiguous and clearly provides that an employer should pay only at the permanent partial rate, arguing that a contrary construction would result in the employer being held liable for a percentage of the employee’s total disability. We do not agree that the statute is unambiguous in this regard. Although it does clearly provide that the employer will be liable for the actual anatomical impairment resulting from the last injury, the issue in the case at bar is not what percentage of the claimant’s disability is to be paid by the employer, but is instead the rate at which that percentage is to be paid. As the appellant concedes in his brief, the statute is silent on the question of the rate to be paid. Furthermore, we think that limitation of an employer’s liability to the permanent partial rate is inconsistent with the general statutory scheme concerning payment of benefits where Second Injury Fund liability is involved. The statute explicitly provides that the employee is to be “fully protected,” and we view this language as requiring that an employee who is rendered permanently totally disabled should receive benefits at the permanent total rate. Were the employer to pay at the permanent partial rate, “full protection” of the injured employee could be accomplished only through co-payments by the Second Injury Fund during the period of the employer’s liability, or additional payments by the Fund during the Fund’s period of liability. However, the statute makes no provision for co-payments by the Fund during the period of the employer’s liability, but instead expressly provides that payments by the Fund are to begin only “after the completion of payment of compensation by the employer.” Ark. Code Ann. § ll-9-525(b)(5). Moreover, additional payments by the Fund during the Fund’s period of liability would run afoul of the statutory maximum limits imposed on compensation payments. See generally, Ark. Code Ann. § 11-9-501 (Supp. 1993). Finally, we must, in construing statutes relating to the Second Injury Fund, interpret them strictly in light of the limited and restricted nature of the Fund and the need to ensure its solvency. Second Injury Fund v. Riceland Foods, Inc., 17 Ark. App. 104, 704 S.W.2d 635 (1986). Given these considerations, we hold that the Commission did not err in concluding that the employer was required under Ark. Code Ann. § 11 -9-525 to pay at the permanent total rate for the period attributable to the degree of anatomical impairment resulting from the last injury. The appellant next contends that the Commission erred in awarding attorney’s fees based on the appellant’s controversion of the difference between the claimant’s permanent partial disability rate and his permanent total disability rate. Insofar as this issue was contingent on the success of the appellant’s initial argument, we need not address it. On cross-appeal, the claimant contends that the Commission erred in finding that the Second Injury Fund did not controvert his entitlement to permanent total disability benefits. We do not agree. Whether or not a claim is controverted is a question of fact for the Commission to resolve, and its finding on this issue will not be reversed unless there is no substantial evidence to support it or it is clear that there has been a gross abuse of discretion. New Hampshire Insurance Co. v. Logan, 13 Ark. App. 116, 680 S.W.2d 720 (1984). In the case at bar, as the Commission noted, a relatively short time elapsed before the Fund admitted liability and its responsibility to pay permanent total disability benefits after the 58.5 weeks attributable to the employer’s thirteen percent were paid. The mere fact that the Fund engages in investigation prior to admitting liability on a claim does not require a finding of controversion and, on this record, we cannot say the Commission erred in finding that the Fund had not controverted the claim. See Buckner v. Sparks Regional Center, 32 Ark. App. 5, 794 S.W.2d 623 (1990). Affirmed on appeal, affirmed on cross-appeal. Jennings, C.J., agrees. Mayfield, J., concurs. Pittman, Robbins and Rogers, JJ., dissent.