Wheeler v. Cinna Bakers LLC , 2015 S.D. LEXIS 60 ( 2015 )

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2015 S.D. 25IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
PATRICIA WHEELER, Claimant and Appellant,
v.
CINNA BAKERS LLC, an Iowa
Limited Liability Company,
d/b/a CINNABON (EMPIRE MALL), Employer and Appellee,
and
HARTFORD CASUALTY
INSURANCE COMPANY, Insurer and Appellee.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
HUGHES COUNTY, SOUTH DAKOTA
****
THE HONORABLE MARK BARNETT
Judge
****
JOLENE R. NASSER
N. DEAN NASSER, JR. of
Nasser Law Office, PC
Sioux Falls, South Dakota Attorneys for claimant and
appellant.
RICHARD L. TRAVIS
ERIC D. DENURE
May & Johnson, PC
Sioux Falls, South Dakota Attorneys for employer, insurer,
and appellees.
****
CONSIDERED ON BRIEFS
ON FEBRUARY 17, 2015
OPINION FILED 05/06/15
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GILBERTSON, Chief Justice
[¶1.] Patricia Wheeler appealed the administrative law judge’s (ALJ’s)
determination that she not be allowed to aggregate her wages from three separate
employments in the calculation of her Average Weekly Wage (AWW). The circuit
court affirmed the ALJ’s determination. Wheeler appeals to this Court. We
reverse.
Facts and Procedural History
[¶2.] Wheeler worked at the Cinnabon Store in the Empire Mall in Sioux
Falls, South Dakota. Cinna Bakers, LLC, owns Cinnabon, which made Wheeler an
employee of Cinna Bakers. Wheeler was also employed by Westside Casino and Get
’N’ Go convenience store in Sioux Falls. Wheeler held all jobs concurrently in order
to reach the earning level of full-time employment and had done so on a long-term
basis with the intent of continuing indefinitely. While working at Cinnabon,
Wheeler sustained two separate work-related injuries, which arose out of and in the
course of her employment with Cinna Bakers. As a result of her injuries at
Cinnabon, Wheeler was unable to work at Cinnabon and her two other concurrently
held jobs. 1 After initially denying Wheeler’s claim, Cinna Bakers and its insurance
company, Hartford Casualty Insurance Co., accepted Wheeler’s injuries as
compensable. However, the parties disputed whether income from all three of
1. The ALJ found:
Both injuries additionally required treatment for dental injuries,
twenty-four sessions of occupational therapy, seven weeks off
from all three of [Wheeler’s] concurrently held jobs, and several
weeks of reduced hours and restrictions while transitioning to
full-time work (each injury).
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Wheeler’s concurrent employments should be used to calculate her AWW. Wheeler
filed a petition and asserted that all three of her concurrent employments should be
aggregated to calculate her AWW. The ALJ determined that only Wheeler’s wage
from Cinna Bakers could be utilized to calculate her AWW. Wheeler appealed to
the circuit court, and it affirmed. Wheeler now appeals to this Court.
[¶3.] Wheeler raises one issue:
Whether the ALJ and the circuit court erred in holding that
Wheeler could not aggregate her earnings from three separate
employments to calculate her AWW after she was injured on the
job at one employment.
Standard of Review
[¶4.] While our standard of review of an agency decision is set forth in SDCL
1-26-37, 2 the parties agree the question before the Court is one of statutory
interpretation. Statutory interpretation is a question of law reviewed de novo.
Whitesell v. Rapid Soft Water & Spas, Inc., 2014 S.D. 41, ¶ 6, 850 N.W.2d 840, 842
(citing Fair v. Nash Finch Co., 2007 S.D. 16, ¶ 7, 728 N.W.2d 623, 628).
Decision
[¶5.] Wheeler asserts on appeal that the ALJ and the circuit court erred
when they only used her wage from Cinna Bakers to determine her AWW. Wheeler
argues her wages from all three of her concurrent employments should have been
2. SDCL 1-26-37 provides:
An aggrieved party or the agency may obtain a review of any
final judgment of the circuit court under this chapter by appeal
to the Supreme Court. The appeal shall be taken as in other
civil cases. The Supreme Court shall give the same deference to
the findings of fact, conclusions of law, and final judgment of the
circuit court as it does to other appeals from the circuit court.
Such appeal may not be considered de novo.
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aggregated to calculate her AWW. In support of her argument, Wheeler points out
that a majority of jurisdictions allow for the aggregation of wages from concurrent
employments. Arthur Larson, Larson’s Workers’ Compensation Law, § 93.03[1][a]
(2014). Only a small number of states do not permit the aggregation of wages from
concurrent employments. Id. Of the jurisdictions that allow for the aggregation of
wages, most only permit aggregation when the employments are “similar” or
“related.” Id. Most of the remaining jurisdictions that permit aggregation allow
earnings to “be combined whether or not the employments were related or similar.”
Id. Professor Larson calls this last position the “growing minority rule.” Id.
Professor Larson endorses the “growing minority rule” when calculating the AWW. 3
[¶6.] Although a majority of jurisdictions aggregate the AWW in some
manner, we have not yet addressed whether South Dakota’s workers’ compensation
scheme permits the aggregation of wages from concurrent employments when, as
here, the injuries arose out of and in the course of only one of those employments.
While other jurisdictions and Professor Larson may provide persuasive authority on
the matter, the issue before the Court is one of statutory interpretation. The
3. After criticizing nonaggregation and aggregation of wages in similar or
related employments, Professor Larson endorses the “growing minority rule”:
From the point of view of achieving a result that makes sense in
relation to the claimant’s real earning capacity in the past and
future, . . . the only satisfactory calculation, particularly when
the hourly rate of pay in the concurrent jobs is sharply different,
is to combine the earnings in the [concurrent] jobs, rather than
to round out to a full-time basis the hourly rate in the
employment in which claimant was engaged at the time of
injury.
Larson, supra ¶ 5, at § 93.03[3].
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primary purpose of statutory interpretation is to discover legislative intent. Bostick
v. Weber, 2005 S.D. 12, ¶ 7, 692 N.W.2d 517, 519 (citing State v. Myrl & Roy’s
Paving, Inc., 2004 S.D. 98, ¶ 6, 686 N.W.2d 651, 653). Our first step in determining
legislative intent is to look at the plain language of the statute. See City of Rapid
City v. Anderson, 2000 S.D. 77, ¶ 7, 612 N.W.2d 289, 291 (quoting Dahn v.
Trownsell, 1998 S.D. 36, ¶ 14, 576 N.W.2d 535, 539). “Words and phrases in a
statute must be given their plain meaning and effect. When the language in a
statute is clear, certain and unambiguous, there is no reason for construction, and
the Court’s only function is to declare the meaning of the statute as clearly
expressed.” Id. “A statute or portion thereof is ambiguous when it is capable of
being understood by reasonably well-informed persons in either of two or more
senses.” Petition of Famous Brands, Inc., 347 N.W.2d 882, 886 (S.D. 1984) (quoting
Nat’l Amusement Co. v. Wis. Dep’t of Taxation, 163 N.W.2d 625, 628 (Wis. 1969)). If
statutes are ambiguous or lead to absurd and unreasonable results, we will utilize
the rules of statutory construction to discover the true legislative intent. See id. at
885; Anderson, 2000 S.D. 77, ¶ 7, 612 N.W.2d at 291 (quoting Dahn, 1998 S.D. 36, ¶
14, 576 N.W.2d at 539); State v. Davis, 1999 S.D. 98, ¶ 7, 598 N.W.2d 535, 537-38.
Additionally, if we conclude the language of the statutes is ambiguous or leads to an
absurd and unreasonable result, we “liberally construe[ the statutes] in favor of
[the] injured employee[]” because this is a workers’ compensation case. Hayes v.
Rosenbaum Signs & Outdoor Adver., Inc., 2014 S.D. 64, ¶ 28, 853 N.W.2d 878, 885
(quoting Caldwell v. John Morrell & Co., 489 N.W.2d 353, 364 (S.D. 1992)); Mills v.
Spink Elec. Co-op, 442 N.W.2d 243, 246 (S.D. 1989) (holding workers’ compensation
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is “remedial” in nature and should though be “liberally construed in favor of injured
employee[]”).
[¶7.] Our first step is to analyze the plain meaning of the statutes in
question. Workers’ compensation statutes prescribe the calculation for the AWW.
There are three statutes that apply to such calculations. The first statute provides:
As to an employee in an employment in which it is the custom to
operate throughout the working days of the year, and who was
in the employment of the same employer in the same grade of
employment as at the time of the injury continuously for fifty-
two weeks next preceding the injury, except for any temporary
loss of time, the average weekly wage shall, where feasible, be
computed by dividing by fifty-two the total earnings of the
employee as defined in subdivision 62-1-1(6), during the period of
fifty-two weeks. However, if the employee lost more than seven
consecutive days during the period of fifty-two weeks, then the
division shall be by the number of weeks and fractions thereof
that the employee actually worked.
SDCL 62-4-24 (emphasis added).
[¶8.] The second method prescribed by statute is not utilized unless SDCL
62-4-24 does not apply. The second statute provides:
As to an employee in an employment in which it is the custom to
operate throughout the working days of the year, but who is not
covered by § 62-4-24, the average weekly wages shall, where
feasible, be ascertained by computing the total of the employee’s
earnings during the period the employee worked immediately
preceding the employee’s injury at the same grade of
employment for the employer by whom the employee was
employed at the time of the employee’s injury, and dividing such
total by the number of weeks and fractions thereof that the
employee actually worked. However, if such method of
computation produces a result that is manifestly unfair and
inequitable or if by reason of the shortness of time during which
the employee has been in such employment, or the casual nature
or terms of the employment, it is impracticable to use such
method, then regard shall be had to the average weekly amount
which during fifty-two weeks previous to the injury was being
earned by a person in the same grade, employed at the same
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work, by the same employer, or if there is no person so
employed, by a person in the same grade, employed in the same
class of employment in the same general locality.
SDCL 62-4-25 (emphasis added).
[¶9.] The third statute is used to calculate the AWW if neither SDCL 62-4-
24 nor SDCL 62-2-25 apply. The third statute provides:
As to an employee in an employment in which it is the custom to
operate throughout the working days of the year and where the
situation is such that it is not reasonably feasible to determine
the average weekly wages in the manner provided in § 62-4-24
or 62-4-25, the average weekly wages shall be determined by
multiplying the employee’s average day’s earnings by three
hundred, and dividing by fifty-two.
SDCL 62-4-26 (emphasis added).
[¶10.] All three AWW statutes utilize the definition of “earnings” as defined
by SDCL 62-1-1(6) to calculate the AWW. See SDCL 62-4-24; SDCL 62-4-25; SDCL
62-4-26. The statute defining “earnings” provides:
“Earnings,” the amount of compensation for the number of hours
commonly regarded as a day’s work for the employment in which
the employee was engaged at the time of his injury. It includes
payment for all hours worked, including overtime hours at
straight-time pay, and does not include any sum which the
employer has been accustomed to pay the employee to cover any
special expense entailed by him by the nature of his
employment; wherever allowances of any character made to an
employee in lieu of wages are specified as a part of the wage
contract, they shall be deemed a part of his earnings[.]
SDCL 62-1-1(6) (emphasis added).
[¶11.] The critical phrase in SDCL 62-1-1(6) is “for the employment in which
the employee was engaged at the time of his injury.” (Emphasis added.) The circuit
court held the italicized phrase unambiguously referred to the specific employment
in which an employee was engaged (i.e., engaged in the more narrow sense of
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“actively engaged”) at the time of the injury. Wheeler contends the italicized phrase
is subject to another reasonable interpretation. She argues “employment” and
“engaged” have a broader connotation related to the status of the individual, i.e.
being in the state of employment. Wheeler points out that she also “was engaged at
the time of [her] injury” in her other concurrent employments and intended to
remain concurrently employed indefinitely. Because, as Wheeler argues, her
proposed interpretation is equally reasonable and we construe a statutory
ambiguity in the employee’s favor, Wheeler asks us to reverse the ALJ and the
circuit court and hold the AWW statutes allow for aggregating an employee’s wages
from concurrent employments. We agree.
[¶12.] The phrase—“for the employment in which the employee was engaged
at the time of his injury”—in SDCL 62-1-1(6) is ambiguous because it is “capable of
being understood by reasonably well-informed persons in either of two or more
senses.” See Petition of Famous Brands, Inc., 347 N.W.2d at 886. “Earnings” uses
the term “employment” in its definition. SDCL 62-1-1(6). “Employment” is not
defined in the workers’ compensation statutes relevant to the calculation of the
AWW. See SDCL 62-1-1. However, “employment” is defined in SDCL 61-1-10. 4
“Employment” is “any service performed, including service in interstate commerce,
by: . . . (2) Any individual who, under the usual common-law rules applicable in
determining the employer-employee relationship has the status of an employee.”
4. Pursuant to SDCL 2-14-4, “Whenever the meaning of a word or phrase is
defined in any statute such definition is applicable to the same word or
phrase wherever it occurs except where a contrary intention plainly appears.”
No contrary intention appears in either SDCL 61-1-10 or SDCL 61-1-1.
Therefore, the definition of employment transfers.
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SDCL 61-1-10 (emphasis added). The definition of “employment” as promulgated by
the Legislature is concerned with the status of the individual, i.e. the employee,
rather than the specific or immediate activity. Wheeler maintained the status of
employee at her other occupations at all times relevant to this case.
[¶13.] Moreover, “engaged” is not defined by our workers’ compensation
statutes. “Engaged” means “to put under pledge; to pledge; to place under
obligations to do or forbear doing something.” Webster’s New International
Dictionary 847 (2d ed. 1954). Wheeler was “engaged” in her other occupations at
the time of her injury in the sense that she was under a pledge and a continuing set
of obligations to those employments, i.e., she maintained the status of an employee
with her other employments even though she was not actively and immediately
doing work in those employments when she was injured at Cinnabon. It is
undisputed that Wheeler was “concurrently employed” at Cinnabon, Westside
Casino, and Get ’N’ Go convenience store at all times relevant to this case. She was
“engaged” in those employments to reach the earning level of full time employment
and had done so on a long term basis with the intention of doing so indefinitely.
Thus, in one sense, Wheeler “was engaged at the time of her injury” in her other
employments because she maintained the status of employee with her other
employments. 5 In another sense, she “was engaged at the time of her injury” only
5. In addition, this broader definition of “engage” is consistent with other
statutes in the workers’ compensation title. For example, SDCL 62-4-5.1
provides, “[O]nce such employee is engaged in a program of rehabilitation . . .
the employee shall receive compensation . . . during the entire period that the
employee is engaged in such program[.]” (Emphasis added.) The word
(continued . . .)
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with Cinnabon in that she was actively working for Cinnabon. Therefore, there are
two reasonable interpretations of the earnings statute, and it is ambiguous.
Because the language used in SDCL 62-1-1(6) is ambiguous, we interpret the
definition of “earnings” used to calculate Wheeler’s AWW in her favor, and Wheeler
is entitled to aggregate her wages from her concurrently held employments to
determine her “earnings” under any of the three AWW-computation statutes. See
Hayes, 2014 S.D. 64, ¶ 28, 853 N.W.2d at 885 (quoting Caldwell, 489 N.W.2d at
364).
[¶14.] Our interpretation is further buttressed by our rules of statutory
construction. First, the AWW statutes indicate a worker’s total earnings should be
used to calculate the AWW. See SDCL 62-4-24; SDCL 62-4-25; SDCL 62-4-26.
Wheeler’s total earnings include the wages she received from all of her concurrently
held jobs, not just her wages from Cinnabon. Second, the broader construction of
earnings is more consistent with the other workers’ compensation statutes. “[I]t is a
fundamental canon of statutory construction that the words of a statute must be
read in their context and with a view to their place in the overall statutory scheme.”
Expungement of Oliver, 2012 S.D. 9, ¶ 9, 810 N.W.2d 350, 352 (quoting Food &
Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133, 120 S. Ct.
1291, 1301, 146 L. Ed. 2d 121 (2000)) (internal quotation marks omitted). We said
in Caldwell that the primary purpose of workers’ compensation is to fairly
compensate the employee for his or her loss of income-earning ability:
________________________
(. . . continued)
“engaged” refers to a status of being enrolled or committed to participate, not
actually and immediately performing program requirements.
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Our [workers’ compensation laws are] designed to compensate
an employee or his family for the loss of his income-earning
ability which loss is occasioned by an injury, disablement, or
death because of an employment related accident, casualty, or
disease. [Workers’ compensation] guarantees employees
compensation irrespective of tort law considerations and in
return employees forego the right to a one hundred percent
recovery. Employers, on the other hand, accept responsibility
for injuries they might not otherwise be responsible for at
common law and in return their liability is fixed and limited.
489 N.W.2d at 362 (emphasis added). “[S]tatutes [are] governed by one spirit and
policy, and [are] intended to be consistent and harmonious in their several parts
and provision.” Lewis & Clark Rural Water Sys., Inc. v. Seeba, 2006 S.D. 7, ¶ 12,
709 N.W.2d 824, 831 (quoting M.B. v. Konenkamp, 523 N.W.2d 94, 98 (S.D. 1994))
(alterations in Lewis & Clark Rural Water Sys., Inc.).
[¶15.] Third, when the circuit court affirmed the ALJ and reasoned that the
workers’ compensation statutory scheme did not permit aggregation of wages, the
circuit court noted, “[C]arriers would be forced to set higher premiums to cover
unknown risks,” (i.e., wages earned at unknown other jobs). The circuit court also
noted that requiring the employer to pay higher rates to cover an employee’s other
jobs or lost income-earning ability would be “manifestly unfair.” While it is true
higher rates are undesirable, Professor Larson responds:
[F]airness to the employee and fairness to the employer/carrier
are not symmetrical, and cannot be judged by the same
standards. To this one employee, this one loss is everything–he
or she has nothing against which to offset. To the employer, and
even more to the carrier, this is just one case among many. . . .
Today this employer-carrier may be saddled with a slight extra
cost; tomorrow positions may be reversed. . . .
Concurrent employment is by no means the only compensation
situation in which employers and carriers must console
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themselves with the reminder that these things will all “wash
out” in the end. . . .
For the injured worker, however, there is no such consolation.
That worker, alone, bears the burden of being reduced to $20 a
week when his or her actual earnings may have been five times
that much. That is real unfairness. By comparison, the
“unfairness” to the employer, in the form perhaps of a slight
premium increase, eventually offset by the times he or she will
benefit by the same rule, is an artificial construct with no
genuine content.
Larson, supra ¶ 5, at § 93.03[1][c]; see also Foreman v. Jackson Minit Markets, Inc.,
217 S.E.2d 214, 216-17 (S.C. 1975) (interpreting substantially similar statutes to
those of South Dakota and holding the definition of “earnings” did not preclude
aggregation of wages because aggregation of wages was the only fair way to
compensate employees for lost earning capacity).
[¶16.] Lastly, we are persuaded to adopt the “growing minority rule,” as
Professor Larson calls it, and allow for aggregation of wages from all concurrently
held employments, not just similar or related employments. We see no reason why
the employments must be similar or related if workers’ compensation “is designed to
compensate an employee or his family for the loss of his income-earning ability.”
Caldwell, 489 N.W.2d at 362 (emphasis added). Professor Larson states:
The rule refusing to combine earnings from concurrent
employments unless they are “similar” or “related” is
unnecessary from the point of view of statutory construction,
unsound as a matter of accomplishing the purposes of the
legislation, inhumane from the point of view of the claimant,
and logically absurd as to the distinctions on which it is based.
Larson, supra ¶ 5, at § 93.03[1][c].
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Conclusion
[¶17.] The definition of “earnings” in SDCL 62-1-1(6) is ambiguous. We,
therefore, interpret “earnings” in Wheeler’s favor. Because “earnings” is utilized to
calculate a worker’s AWW, we hold that SDCL 62-4-24, SDCL 62-4-25, and SDCL
62-4-26 allow for the aggregation of wages when an injury at one employment
renders the worker incapable of performing that employee’s other concurrently held
employments. We also adopt the “growing minority rule” concerning aggregation.
Consequently, we reverse the ALJ and the circuit court.
[¶18.] ZINTER, SEVERSON, WILBUR, and KERN, Justices, concur.
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