Vinyard v. Palo Alto, Inc. , 3 N.M. 134 ( 2012 )

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New Mexico Compilation
Commission, Santa Fe, NM
'00'05- 17:25:52 2013.01.11
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2013-NMCA-001Filing Date: November 2, 2012
Docket No. 30,846
JODY VINYARD,
Worker-Appellant,
v.
PALO ALTO, INC., d/b/a PIZZA HUT,
and MANUFACTURERS ALLIANCE
INSURANCE COMPANY,
Employer/Insurer-Appellees,
and
Docket No. 31,044
JODY VINYARD,
Worker-Appellant,
v.
PALO ALTO, INC., d/b/a PIZZA HUT,
and MANUFACTURERS ALLIANCE
INSURANCE COMPANY,
Employer/Insurer-Appellees.
APPEAL FROM THE WORKERS’ COMPENSATION ADMINISTRATION
Gregory D. Griego, Workers’ Compensation Judge
Law Office of Alvin R. Garcia, LLC
Alvin R. Garcia
Albuquerque, NM
1
for Appellant
Maestas & Suggett, P.C.
Paul Maestas
Albuquerque, NM
for Appellees
OPINION
KENNEDY, Judge.
{1} This worker’s compensation case poses the question of how to properly calculate a
worker’s average weekly wage when the worker held two concurrent jobs, one for nine
weeks and one for fourteen weeks. Wages from both jobs must be assessed for the
calculation of the average weekly wage. The method of calculating the average weekly
wage when each job has a different duration is the sole issue in this case.
{2} The Workers’ Compensation Judge (WCJ) calculated the worker’s wage based on
the roughly nine-week time period1 that the two jobs overlapped, holding as a matter of law
that the method of calculation directed by NMSA 1978, Section 52-1-20(B) (1990) could not
be fairly applied. The WCJ rejected the application of Subsection (B) to the full period of
employment in each job because “it would result in counting of weeks where there was a
wage from only one [e]mployer.” The WCJ instead employed Section 52-1-20(C) to craft
the average weeklywage based only on the nine weeks when the two jobs overlapped. The
worker, who wanted the entire fourteen weeks of his second job included in the average,
appealed.
{3} We reverse, holding that when the facts support a separate computation for each
employer, Subsection (B) should be employed to compute an aggregate average weekly
wage for both employers. Subsection (B)(1) should be employed using the entire time of
employment if the period is fewer than twenty-six weeks for any concurrent employer.
Subsection (B) should be applied separately to each job, not limited to the shortest job, with
an aggregate average weekly wage for all concurrent employers then being computed. In
this case, the WCJ was required to average the wages the worker received from his other job
for the full fourteen weeks of the worker’s employment.
{4} In addition, the employer appealed the award of attorney’s fees. The employer
maintained that the worker’s attorney did not secure the entire award and lacked evidentiary
proof and, therefore, was not fully entitled to compensation. We affirm the WCJ’s award
of attorney fees and remand for proceedings consistent with our Opinion.
1
The actual number employed was 9.428 weeks.
2
I. FACTS
{5} The facts of this case are not disputed. Jody Vinyard (Worker) was injured in a
traffic accident while working as a delivery driver for his employer, Palo Alto, d/b/a Pizza
Hut (Employer) on December 6, 2009. This injury arose out of, and in the course of, that
employment. The responsibility of Employer and its insurer, Manufacturers Alliance
Insurance Company (collectively, Employer) to pay benefits is not at issue here. Worker
began working for Employer on October 1, 2009. He had also been employed as a horse
trainer for his family’s business since September 1, 2009. There is no dispute that Worker
is entitled to receive compensation benefits reflecting his wages from both jobs. The parties
vigorously disputed how to compute the aggregate weekly wage to be used to determine the
value of those benefits.
{6} The WCJ considered four calculation options. Employer suggested taking the sum
of all wages that Worker was paid during the time employed by them, but calculating
average wages for a twenty-six-week period, relying on Section 52-1-20 (B). The WCJ
specifically rejected this suggestion, stating that it would result in counting weeks when
Worker only had one employer. The WCJ noted another option—counting the fourteen
weeks for both employers—but concluded that this would also count wages for only one
employer in some weeks. Worker suggested the calculation of an average weekly wage by
what the WCJ called an “asymmetric option” that would have divided the horse training
wages by fourteen weeks and the pizza delivery wages by nine weeks and then averaged the
two. This approach was taken by a mediator in the case. Employer disdained this
recommended resolution, claiming that this would count time with another employer prior
to Worker’s employment with Employer, and the WCJ rejected it as well.
{7} The method of computation has real implications. When the wages for each
employer received during this finite period of 9.428 weeks was divided, the result was an
aggregate average weekly wage of $886.74. In comparison, the mediator’s figure of $945.68
was based on the full fourteen weeks of Worker’s employment as a horse trainer from
September 1 through December 6, 2009.
{8} The WCJ concluded that because Worker had multiple employers for different
amounts of time, there is “no controlling authority in New Mexico determining how this
particular wage calculation should be arrived at” and that Worker’s wage could not “be fairly
calculated under Section 52-1-20(B).” The WCJ thus held that “the most rational and
reasonable option” was to count those weeks only “where Worker was employed by both
[e]mployers” and adopted that approach as “a matter of law” for the calculation in his partial
summary judgment. The WCJ computed an average weekly wage for Worker by dividing
his wages from each job by the period of October 1, 2009 through December 6, 2009, the
nine-week period of time that Worker was employed in both jobs. Worker maintains the full
time he was employed in each job should be counted and asks us to address the appropriate
application of Section 52-1-20 in this appeal.
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II. DISCUSSION
{9} We review questions of statutory interpretation and application de novo. State ex rel.
Children, Youth and Families Dep’t v. Steve C., 2012-NMCA-045, ¶ 8, 277 P.3d 484.
Although a misapplication of the law is considered an abuse of discretion, our courts review
de novo the initial decision of whether the correct legal standard has been applied. N.M.
Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986 P.2d 450.
If the correct law has been applied to the facts, the district court’s decision must be affirmed
when it is supported by substantial evidence. See id. ¶ 8.
A. Calculation of Two Average Weekly Wages Under Section 52-1-20
{10} The purpose of the Workers’ Compensation Act is to compensate an injured
employee for the reduction of his earning capacity. Lozano v. Archer, 71 N.M. 175, 180,
376 P.2d 963, 967 (1962). The test for entitling a worker to compensation is the worker’s
entire capacity to earn wages for performing work. Justiz v. Walgreen’s, 106 N.M. 346, 348,
742 P.2d 1051, 1053 (1987). The compensation due is for loss of earning capacity. Id.Fairness mandates compensating the worker according to what he would have earned in total
had he not been injured. Id. at 349, 742 P.2d at 1054. Section 52-1-20 was enacted to
promote fair calculation of average wages for injured workers, as well as to provide a
measure of fairness to employers by trying to eliminate influences that might inflate or
deflate the wage from a fair average. Considering “periods of unusually high or low wages”
dictates finding an average over time, so as not to unfairly benefit or prejudice the worker.
Shaw v. Wal-Mart Stores, Inc., 117 N.M. 118, 119-20, 869 P.2d 306, 307-08 (Ct. App. 1994)
(allowing employee’s concurrent employment to be used in calculating the average wage).
{11} Section 52-1-20 states, in pertinent part:
B. the average weekly wage shall be determined by computing
the total wages paid to the worker during the twenty-six weeks immediately
preceding the date of injury and dividing by twenty-six, provided that:
(1) if the worker worked less than twenty-six weeks in the
employment in which the worker was injured, the average weekly wage shall
be based upon the total wage earned by the worker in the employment in
which the worker was injured, divided by the total number of weeks actually
worked in that employment;
....
C. provided, further, however, that in any case where the
foregoing methods of computing the average weekly wage of the employee
by reason of the nature of the employment or the fact that the injured
employee has been ill or in business for himself or where for any other
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reason the methods will not fairly compute the average weekly wage, in each
particular case, computation of the average weekly wage of the employee in
such other manner and by such other method as will be based upon the facts
presented fairly determine such employee’s average weekly wage[.]
The presumptive period where it can be used is twenty-six weeks under Section 52-1-20(B).
Subsection (B)(1) encompasses situations where periods of employment are shorter. We
regard the statute as having a preference for maximizing the opportunity to calculate an
average wage over a substantial period of time.
{12} All parties recognize the significance of our Supreme Court’s opinion in Justiz to this
case. The court in Justiz held that where a worker had concurrent employment and where
the injury arose in the course of only one job, the worker was entitled to compensation for
his entire loss of earning capacity in both jobs. The Justiz court went on to hold that the
employer on whose job site the injury occurred would be solely responsible for the worker’s
compensation based on the aggregate of the worker’s average wages with both employers.
{13} In Justiz, our Supreme Court dismissed the employer’s argument that only the
employment in which the injury was sustained could be used to compute the average wage.
The Supreme Court stated that, even though a prior case, Eberline Instrument Corp. v. Felix,
103 N.M. 422, 426, 708 P.2d 334, 338 (1985), did not speak to the calculating of an
aggregate average weekly wage where a worker had two concurrent jobs, the worker’s
compensation benefits were to be computed on the average weekly wage earned by the
employee at the time of the injury. Justiz, 106 N.M. at 347-48, 742 P.2d 1052-53. Justiz
stated that Section 50-1-20(B) would ordinarily be used to compute an average weekly wage
where the computation could fairly be done and that Section 52-1-20(C) provided the ability
to perform the calculation of an aggregate average wage for concurrent jobs. Id. It rejected
the argument that Subsection (B) restricted the average weekly wage to the employment
being performed at the time of the accident and precluded the averaging-in of wages from
other employment. Justiz, 106 N.M. at 348, 742 P.2d 1053.
{14} Section 52-1-20 was amended by the Legislature in 1990 after the Justiz case was
decided, but Subsection (B) still provides a formula by which to calculate average weekly
wage from an employer. We held that Justiz continues to apply to concurrent employment
situations after the 1990 amendment to Section 52-1-20. Shaw, 117 N.M. at 119-20, 869
P.2d at 307-08. Subsection (C) allows for the use of other factors to compute the average
weekly wage, but only if the preceding formulas cannot be fairly applied.
{15} As did the Supreme Court in Justiz, we recognize the preference expressed in
Subsection (C) that restricts its application to those circumstances “where the foregoing
methods of computing the average weekly wage of the employee . . . will not fairly compute
the average weekly wage[.]” Justiz, 106 N.M. at 347, 742 P.2d at 1052. The Supreme Court
made it clear that the essence of Section 52-1-20 is to reach a fair computation and that
where a worker’s weekly wages are for any reason not fairly determinable by Subsections
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(A) or (B), then Subsection (C) permits “such other manner . . . [or] method as will . . .
fairly” make that determination. Section 52-1-20(C). This reaffirmed the application of
Kendrick v. Gackle Drilling Co., 71 N.M. 113, 376 P.2d 176 (1962) (holding that erratic
income arising from the fact that employee was only working a few days at each job justified
employing Subsection (C) for the unusual circumstance); accord Eberline Instrument, 103
N.M. at 424-25, 708 P.2d at 336-37; Griego v. Bag’N Save Food Emporium, 109 N.M. 287,
292-93, 784 P.2d 1030, 1035-36 (Ct. App. 1989) (finding that abnormal overtime hours
during the grand opening constituted unusual circumstances in the calculation of average
weekly wages). Thus, we hold that in concurrent employment circumstances, as in single
employment, absent some specific unusual circumstance, Subsection (A) or (B) should be
used to calculate the average weekly wage. Unusual circumstances may arise in the nature
of the worker’s wage-earning situation that would prevent a fair computation by using
Subsections (A) and (B). See Villanueva v. Sunday Sch. Bd. of S. Baptist Convention, 121
N.M. 98, 101, 908 P.2d 791, 794 (Ct. App. 1995) (applying a different method for
calculating wages under Subsection (B) where a seasonal worker was only employed for six
months each year over the past ten-year period). Despite Subsection (B) seeming to consider
wages from a single employer, if its methods can fairly produce an aggregate average for
concurrent employment situations, Subsection (C) does not authorize a departure, and
Subsection (B) will be used to calculate an average weekly wage from each employment that
will then be used to calculate an aggregate average.
{16} Regular wages are ascertainable, and an average weekly wage can fairly be computed
by dividing wages by weeks worked. Average weekly wages from more than one job can
themselves be averaged. Subsection (B)(1) is clear that employment for less than twenty-six
weeks compels dividing the total wages earned by the worker in that job by the number of
weeks “actually worked in that employment[.]” It was arbitrary for the WCJ to exclude six
weeks of employment without a specific basis in fact, when Subsection (B)(1) states that the
“total number of weeks actually worked in that employment” is the number to be used to
calculate the average wage in a job, and no facts demanded an unusual circumstances
exception. For the WCJ to depart from this method of computation by using a number of
weeks different than was specified in Subsection (B) was error. We consequently view
Subsection (C) as designed to permit the fair computation of average weekly wages in
multiple employment cases, primarily by any means provided in the statute or, secondarily,
by any other means that might be needed and fairly employed to effectuate the purpose of
Section 52-1-20. Here, it was possible to determine the average weekly wage for both jobs
by applying Subsection (B)(1) to each. Averaging the results yields a single aggregate
average weekly wage. No further exploration for alternatives under Subsection (C) was
required. In fact, other than an ad hoc selection of the number of weeks utilized in the
computation, the WCJ correctly used the method provided in Subsection (B).
{17} The WCJ’s mistake was in going outside of Subsection (B) in choosing a shorter
number of weeks Worker was employed by Employer (Pizza Hut) when computing the total
wages earned in both jobs. No legal or factual reason for that choice was provided, or an
explanation as to why the statutory fourteen-week period would create circumstances that
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unfairly computed the horse training average wage. The WCJ’s incorrect legal conclusion
turned on the determination that any calculation under Subsection (B) was “not appropriate”
and that the average weekly wage could not be “fairly calculated” simply “because of
multiple employers.”
{18} The WCJ’s conclusion did not address why his own method would result in a more
fair result either legally or factually than any of the other three suggested in the case.
Subsection (C) allows the expansion of the computational method contained in Subsection
(B) to be used for calculating an aggregate average wage for more than one job. With that
proviso, it is Subsection (B)(1) that applies when wages and time of employment are finite
and an average weekly wage for individual employers can be calculated for an aggregate
average, even among more than one job. This case does not require departure from applying
available statutory formulas. It involves ascertaining whether all of Worker’s wages during
fourteen weeks as a horse trainer should, in fairness, be averaged into the computation of his
average weekly wage. No facts indicate that using the full fourteen weeks of the horse
training work would result in any unfairness.
{19} We therefore reverse the WCJ’s legal conclusion that Subsection (B) cannot be
applied as a matter of law. We further hold that, under a typical concurrent employment
situation such as this case, each employer’s average weekly wage is to be individually
determined according to Subsection (B)(1), and an average weekly wage based on the
aggregate of all averages should then be calculated. See, e.g., Sturchio v. Wausau
Underwriters Ins. Co., 172 P.3d 1260, 1262-63 (Mont. 2007) (holding that the methods of
calculating average weekly wage to a single employer should be employed as to each
concurrent employer, using the result to calculate the aggregate average weekly wage). We
conclude that no factual reason justified any departure by the WCJ from Subsection (B) in
this case. The WCJ should have calculated the average weekly wage by dividing wages
from Employer by 9.428 weeks and Worker’s wages from his concurrent horse training
employment by fourteen weeks in accordance with Subsection (B). We remand for further
proceedings consistent with this Opinion.
B. The WCJ’s Determination of Attorney’s Fees is Affirmed
{20} Employer separately appealed the award of attorney’s fees to Worker’s counsel. The
parties appeared at a hearing on December 20, 2010. Both sides submitted requested
findings of fact and conclusions of law. Worker’s counsel was awarded $15,000 in attorney
fees to be borne fifty-fifty by each side. The order makes a number of findings of fact: (1)
the absence of any settlement offers; (2) the present value of Worker’s award and finding
that it was substantially the result of Worker’s attorney’s efforts; (3) the amount of work
expended; (4) the complexity and novelty of the case; and (5) Worker’s attorney’s skill and
success in the case. Worker’s counsel secured benefits for Worker in the amount of
$86,037.15 and was awarded 17.43% of that amount in fees, divided equally between the
parties. Employer’s requested findings establish that it paid partial permanent disability
benefits based on its assessment of a 23% rating, which was increased in the compensation
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order by almost doubling it to 40% and that it had under-calculated the average weekly wage
to be used. Such an increase is substantial and substantial evidence of work performed.
{21} Employer states that at the hearing, Worker’s counsel did not itemize his hours and
did not otherwise substantiate that his work resulted in significant benefit to Worker. Thus,
Employer claims that the WCJ abused his discretion in making the award. NMSA 1978,
Section 52-1-54(E) (2003); Cordova v. Taos Ski Valley, Inc., 121 N.M. 258, 264, 910 P.2d
334, 340 (Ct. App. 1995) (reviewing the WCJ’s award of attorney fees for abuse of
discretion and directing the appellate court to defer to the WCJ’s decision if it appears that
the request for fees received individualized scrutiny). Employer directs us to no legal
requirement for a specific application for fees. In fact, the authority cited by Employer
supports a conclusion that evidentiary support for a fee award requires the presentation of
sufficient facts for the WCJ to rule whether at a hearing or not. Lopez v. K.B. Kennedy
Eng’g Co., 95 N.M. 507, 508, 623 P.2d 1021, 1022 (Ct. App. 1981); Tafoya v. S & S
Plumbing Co., 97 N.M. 249, 252, 638 P.2d 1094, 1097 (Ct. App. 1981) (holding that
“evidentiary support . . . can mean facts presented during or after trial” (internal quotation
marks and citation omitted)). Worker’s counsel, contrary to Employer’s argument, did not
fail to submit any documents supporting its request for attorney fees. Worker submitted
proposed findings and conclusions from which the WCJ made findings of its own and
concluded that an award was appropriate. It appears that the compensation order makes
requisite findings of fact in compliance with Fryar v. Johnsen. 93 N.M. 485, 601 P.2d 718(1979).
{22} As a small illustration, Worker’s counsel points out that Employer paid its share of
attorney’s fees on January 26, 2011. Employer states that Worker “cites to nothing in the
record which establishes that Employer/Insurer have paid their portion of the attorney fees
awarded to Worker’s counsel in this case,” but waited until their reply brief to “be clear
about it” and acknowledge that their portion of the fees were paid. This sort of behavior on
appeal, coupled with a record demonstrating some sharp-elbowed tactics by Employer,
supports the WCJ’s finding in the compensation order awarding attorney fees that “[t]he
issues in this cause were contested to a more than average degree.” See Pesch v. Boddington
Lumber Co., 1998-NMCA-026, ¶ 11, 124 N.M. 666, 954 P.2d 98 (holding that aggressive
representation that adversely affects the progress of the case is a proper factor to consider
when awarding attorney fees). While pleased that Employer’s counsel did not allow us to
labor under a misconception forever, we note that, by looking at the whole record, Worker
prevailed and received more benefits than Employer had calculated to be due. And the
WCJ’s findings and conclusions are supported by an adequate basis in the pleadings. The
attorney fee award does not appear unreasonable and is entitled to our deference. We affirm.
III. CONCLUSION
{23} We reverse the decision of the WCJ and remand to the Worker’s Compensation
Administration to recalculate compensation based on the foregoing Opinion. We affirm the
award of attorney fees.
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{24} IT IS SO ORDERED.
____________________________________
RODERICK T. KENNEDY, Judge
WE CONCUR:
____________________________________
TIMOTHY L. GARCIA, Judge
____________________________________
J. MILES HANISEE, Judge
Topic Index for Vinyard v. Palo Alto, Inc., No. 30,846
APPEAL AND ERROR
Standard of Review
Substantial or Sufficient Evidence
WORKERS COMPENSATION
Apportionment
Attorney Fees
Basis for Compensation
STATUTES
Interpretation
Legislative Intent
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