Travis Watt v. Lumbermens Mutual Casualty Ins. Co. ( 2001 )

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
June 14, 2001 Session
TRAVIS MILTON WATT v. LUMBERMENS MUTUAL CASUALTY
INSURANCE CO., ET AL.
Appeal from the Chancery Court for Madison County
No. 53638 Joe C. Morris, Chancellor
No. W2000-00104-SC-R3-CV - Filed December 20, 2001
This case requires construction of the Second Injury Fund statute, Tenn. Code Ann. § 50-6-208
(1999 Repl.). Travis Milton Watt has suffered two successive scheduled-member injuries: (1) a 50
percent disability to the hand, which equates to an 18.75 percent disability to the body as a whole;
and (2) a 100 percent disability to the leg, which equates to a 50 percent disability to the body as a
whole. The trial court found that the two injuries rendered Watt permanently and totally disabled.
The court found that the two injuries contributed equally to Watt’s disability and apportioned
liability for permanent and total disability benefits equally between Lumbermens Mutual Casualty
Insurance Company and the Second Injury Fund. The Second Injury Fund appealed, asserting that
the trial court erred: (1) in finding Watt to be eligible for permanent and total disability benefits on
the basis of two scheduled member injuries whose individual disability ratings equate to less than
100 percent to the body as a whole; and (2) in holding the Second Injury Fund liable for 50 percent
of the benefit award. After thorough review and consideration, we hold that the trial court properly
found Watt to be permanently and totally disabled and correctly apportioned the liability. We reject
the Second Injury Fund’s contention that our holding effectively allows re-litigation of prior
workers’ compensation settlements; rather, we find it reasonable for trial courts to conclude that the
combined effects of multiple work-related injuries may result in a disability greater than that caused
by those injuries when considered in isolation. Accordingly, we affirm the judgment of the trial
court.
Direct Appeal Pursuant to Tenn. Code Ann. § 50-6-225(e);
Judgment of the Chancery Court Affirmed
ADOLPHO A. BIRCH, JR., J., delivered the opinion of the court, in which FRANK F. DROWOTA , III,
C.J., E. RILEY ANDERSON and WILLIAM M. BARKER, JJ., joined. J ANICE M. HOLDER, J., filed a
concurring and dissenting opinion.
Paul G. Summers, Attorney General and Reporter, Dianne Stamey Dycus, Deputy Attorney General,
Nashville, Tennessee, for the appellant, Second Injury Fund.
P. Allen Phillips and B. Duane Willis, Jackson, Tennessee, for the appellee, Lumbermens Mutual
Casualty Insurance Co.
T.J. Emison, Jr., Alamo, Tennessee, for the appellee, Travis Milton Watt.
OPINION
I. Facts and Procedural History
At the time of trial in this cause, the employee, Travis Milton Watt, was 51 years old. He left
high school in 1965 during the tenth grade, did not obtain a GED, and has no other formal or
vocational education. Since that time, he has spent most of his life working in occupations which
demand strenuous physical labor, including farming, factory work, truck driving, and construction.
In 1971, while working for Alton Box Company, Watt was injured when his right hand was
pulled between a set of cylinders on a press. His hand was torn and crushed, and his ring and little
finger were amputated. The injury left him with no feeling in his index finger and significantly
impaired his ability to move the rest of his hand. As a result of this injury, Watt received a court-
approved workers’ compensation settlement for 50 percent permanent partial disability to the right
hand. Despite this disability, he was able to continue the type of employment he had performed in
the past.
In 1996, Watt obtained a job performing repair and maintenance work for Hamilton Hills
Shopping Center (Shopping Center). At the time he was hired, the manager of the Shopping Center
was aware of his prior disability. On August 24, 1996, while working at the Shopping Center, Watt
fell approximately twenty feet from an extension ladder and sustained a comminuted fracture of the
right calcaneus and a fracture of the right fibula.1 The fibula healed without permanent
complications; the calcaneus did not. Watt developed post-traumatic arthritis in the subtalar joint,
located just below the ankle, and in the joints of his foot.
Thereafter, Watt filed suit seeking workers’ compensation benefits from Lumbermens Mutual
Casualty Insurance Co. (Lumbermens) and the Second Injury Fund (Fund). At trial, Watt testified
that his foot and leg hurt constantly and were nearly always swollen. He stated that the pain
prevented him from standing for more than five minutes at a time and that even sitting for extended
periods would cause his leg to hurt and become numb. He also noted that his inability to balance
on the leg caused him to fall occasionally and that the pain in his foot made it difficult to drive, walk,
or climb stairs. Because of his injuries, he asserted, he could not return to any of the jobs he had
performed in the past, and he expressed the belief that he was permanently unable to work. Watt’s
wife, Linda Faye Watt, corroborated Watt’s testimony regarding the effects of his injury.
1
“Calcaneu s” refers to the bone which forms the heel. The term “comminuted” signifies that the bone did not
fracture cleanly, b ut was crushed into many small pieces. “Fibula” refers to the smaller of the two bones between the
knee and the ankle. See Dorland’s Illustrated Med ical Dictionary 252, 363 , 630 (27th ed. 1988 ).
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Watt also offered the deposition testimony of his treating physician, Keith D. Nord, M.D.,
who opined that Watt’s injury would require him to wear a brace on his leg and would cause him to
be unable to stand for long periods of time, walk more than a block, climb, crawl, or carry weights
of more than 20 pounds. Nord noted that Watt might be capable of sedentary work but concluded
that he would not be able to return to the type of work he had done in the past. Nord suggested,
however, that a surgical fusion of the joints in Watt’s foot might improve his ability to use his leg.
Orthopedic surgeon and foot specialist Greer Richardson, M.D., also testified by deposition.
Richardson noted that Watt’s injury had caused deformation of the heel and arthritis in the hind foot,
ankle joint, and mid-foot and that the mobility of Watt’s foot had been greatly reduced. Richardson
opined that the surgical procedure Nord suggested probably would relieve some of Watt’s pain but
would not restore his ability to walk on uneven ground, climb, or balance on his foot. Richardson
agreed that, from a purely physical standpoint, Watt would be capable of sedentary work, but he
recognized that his assessment did not take into consideration Watt’s intellectual function or
occupational history. Richardson stated that Watt would be unable, due to the combined effects of
his leg injury and hand injury, to perform any job that would require him to stand.
Based on this evidence, the trial court found Watt to be 100 percent permanently and totally
disabled and ordered that each defendant pay 50 percent of Watt’s benefits. The Fund appealed, and
the Supreme Court Special Workers’ Compensation Appeals Panel held that the trial judge did not
make sufficient findings to decide the case in accordance with Bomely v. Mid-America Corp., 970
S.W.2d 929 (Tenn. 1998). The Panel remanded the cause, directing the trial court to make specific
findings regarding the percentages of permanent disability caused by Watt’s injuries and whether
judgment was rendered pursuant to subsection (a) or subsection (b) of the Second Injury Fund
statute, Tenn. Code Ann. § 50-6-208 (1999 Repl.). On remand, the trial court reaffirmed that Watt
was permanently and totally disabled, concluding that he was “totally incapacitated from working
at an occupation which brings him an income,” and it held that Tenn. Code Ann. § 50-6-208(a)
governed the case. The trial court divided liability equally between Lumbermens and the Fund based
on a finding that Watt’s two injuries contributed equally to his disability.
The Fund again appealed, contending that the trial court erred: (1) in finding Watt eligible
for permanent and total disability benefits on the basis of two scheduled member injuries whose
individual disability ratings equate to less than 100 percent to the body as a whole; and (2) in
apportioning liability for benefits evenly between Lumbermens and the Fund. The case was argued
before the Special Workers’ Compensation Appeals Panel, but was transferred, prior to issuance of
a memorandum opinion, to the full Supreme Court. After thorough consideration, we hold that the
trial court did not err in finding Watt to be entitled to permanent and total disability benefits, and we
further hold that the evidence supports the trial court’s division of liability. Accordingly, we affirm
the judgment of the trial court.
II. Standard of Review
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The standard of review in workers’ compensation cases is de novo upon the record,
accompanied by a presumption of the correctness of the trial court’s findings of fact. Tenn. Code
Ann. § 50-6-225(e)(2) (1999 Repl.); Spencer v. Towson Moving and Storage, Inc., 922 S.W.2d 508,
509 (Tenn. 1996). Where questions of law are presented, however, our review is de novo with no
presumption of correctness. Smith v. U.S. Pipe & Foundry Co., 14 S.W.3d 739, 742 (Tenn. 2000);
Ridings v. Ralph M. Parsons Co., 914 S.W.2d 79, 80 (Tenn. 1996).
Issues of statutory construction are questions of law to which we apply this de novo standard
without a presumption of correctness. See Perry v. Sentry Ins. Co., 938 S.W.2d 404, 406 (Tenn.
1996). When construing a statute, courts must “ascertain and give effect to the legislative intent
without unduly restricting or expanding a statute’s coverage beyond its intended scope.” Owens v.
State, 908 S.W.2d 923, 926 (Tenn. 1995). The legislature has declared that the Workers’
Compensation Act is intended “to be a remedial statute which shall be given an equitable
construction by the courts, to the end that the objects and purposes of this chapter may be realized
and attained.” Tenn. Code Ann. § 50-6-116 (1999 Repl.). Accordingly, “these laws should be
rationally but liberally construed to promote and adhere to the Act’s purposes of securing benefits
to those workers who fall within its coverage.” Lindsey v. Smith & Johnson, Inc., 601 S.W.2d 923,
926 (Tenn. 1980).
III. Analysis
A. Eligibility for Permanent and Total Disability Benefits
We first address whether Watt is entitled to receive permanent and total disability benefits.
Initially, we note that Watt’s disabilities in this case are both to scheduled members; he received 75
weeks of benefits for a 50 percent disability to the hand and 200 weeks of benefits for a 100 percent
disability to the leg. In Second Injury Fund cases, we convert scheduled member disabilities to an
equivalent body-as-a-whole disability using the “number of weeks” conversion method. See Scales
v. City of Oak Ridge, ___ S.W.3d ___ (Tenn. 2001). Under this method, the number of weeks
awarded for a scheduled member injury is expressed as a percentage of the 400 weeks available for
disability to the body as a whole. Thus, Watt’s hand injury equates to an 18.75 percent disability to
the body as a whole, and his leg injury equates to a 50 percent disability to the body as a whole.
When added together, the total body-as-a-whole disability attributable to Watt’s two injuries equals
68.75 percent. The Fund contends that Watt legally cannot be found permanently and totally
disabled on the basis of these two injuries because the individual disability ratings, when combined,
equate to less than 100 percent to the body as a whole.
In addressing this contention, we begin with this Court’s interpretation of the language of the
Second Injury Fund statute, Tenn. Code Ann. § 50-6-208 (1999 Repl.). In Allen v. City of
Gatlinburg, this Court described the operation of the statute in detail:2
2
In pertinent part, the statute provides:
(continued...)
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Subsections (a) and (b) [of the Second Injury Fund statute] apply in
different situations, and benefits are apportioned under the two
subsections in different ways. In order to claim benefits under
subsection (a), the employee (1) must have “sustained a permanent
physical disability from any cause or origin, whether compensable or
noncompensable,” and (2) must become “permanently and totally
disabled through a subsequent injury.” In addition, liability may be
apportioned to the Second Injury Fund under subsection (a) only if
the employer had actual knowledge of the preexisting injury before
the subsequent injury occurred. In contrast, subsection (b) applies if
the sum of two or more awards for permanent disability to the body
as a whole equal or exceed 100 percent permanent disability. Thus,
subsection (b) is more narrow in some respects, for it applies only
when the employee has sustained a prior compensable injury that
resulted in an award of permanent partial or total disability . . . ,
whereas subsection (a) applies when the employee has suffered a
2
(...continued)
(a)(1) If an employee has previously sustained a permanent physical disability from any cau se or o rigin
and beco mes p erma nently and totally disabled through a subsequent injury, such employee shall be
entitled to compe nsation from the employee’s emp loyer . . . only for the disability that would have
resulted from the subsequent injury, and such previous injury shall not be considered in estimating the
compensation to which such emp loyee m ay be e ntitled . . . ; provided , that in addition to such
compensation for a subsequent injury, and after completion of the payments therefor, then such
employee shall be paid the remainder of the compensation that would be due for the permanent total
disability out of a special fund to be known as the “second injury fund” therein created.
(2) To receive benefits from the second injury fund, the injured employee must be the employee of an
employer who has properly insured such employer’s workers’ compensation liability or has qualified
to operate under the W orkers’ Co mpensation Law as a self-insurer, and the employer must establish
that the employer had actual knowledge of the permanent and preexisting disability at the time that the
employee was hired or at the time that the employee was retained in employment after the employer
acquired such kn owledge, but in all cases prio r to the subseq uent injury.
....
(b)(1)(A) In cases where the injured employee has received or will receive a workers’ compensation
award or awards for perm anent disability to the body as a whole, and the combination of such awards
equals or exceeds one hundred percent (100% ) permanent disability to the body as a whole, the
employee shall not be entitled to receive from the employer or its insurance carrier any compensation
for permanent disability to the bo dy as a whole that would be in excess of one hundred percent (100%)
perm anent disability to the bo dy as a whole, after combining awa rds.
(B) Benefits which may be due the employee for permanent disability to the body as a whole in excess
of one hundred percent (100%) permanent disability to the body as a whole, after comb ining awards,
shall be paid by the second injury fund.
Tenn. Cod e Ann. § 50-6-208(a), (b).
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prior disabling injury from any source, including noncompensable
sources . . . . On the other hand, subsection (b) is broader in that an
employee does not have to be rendered permanently and totally
disabled by the second injury for subsection (b) to apply, nor does
subsection (b) contain any requirement that the employer have notice
of the employee’s prior injury.
36 S.W.3d 73, 76 (Tenn. 2001) (citations and footnote omitted).3
In asserting that Watt is barred from recovering permanent and total disability benefits, the
Fund relies on Minton v. State Indus., Inc., 825 S.W.2d 73 (Tenn. 1992). In Minton, the employee
first suffered a back injury, resulting in a 10 percent disability to the body as a whole, and then
suffered a 100 percent disability to the leg, which the Court converted to a 50 percent disability to
the body as a whole. Id. at 74-75. The trial court found Minton had been rendered permanently and
totally disabled by the combination of the two injuries. Id. at 75. This Court, however, added
together the percentages of disability caused by the injuries and found that Minton’s “aggregate
permanent disability” was only 60 percent. Id. at 80. Viewing the medical evidence in the record,
we held that Minton could be permanently and totally disabled only if the medical evidence indicated
that the second injury aggravated the first injury, so that the amount of disability attributed to the first
injury could be redefined. Id. at 79. We concluded, “There is no medical evidence in this record that
the knee injury in 1990 aggravated the back injury of 1980. The trial court was therefore in error in
finding that a combination of the two injuries rendered the Plaintiff totally and permanently disabled
. . .” Thus, we held that the facts did not support a finding that Minton was permanently and totally
disabled, and we limited her recovery to the 200 weeks of benefits available for loss of a leg. Id. at
79-80.
The holding of Minton reflects the premise that employees in Second Injury Fund cases must
suffer an aggregate disability equivalent to 100 percent disability to the body as a whole before being
eligible for permanent and total disability benefits. The trial court’s award of permanent and total
disability in Minton was reversed because the first injury had not been aggravated and therefore the
disability attributed to it could not be increased, and the second injury was to a scheduled member
and could not be increased beyond 100 percent to that member. If Minton were to control the
outcome here, Watt could not recover permanent and total disability benefits because his aggregate
disability to the body as a whole equals only 68.75 percent, there has been no aggravation to justify
re-defining the first injury, and the disability caused by his second injury cannot exceed 100 percent
to the leg or 50 percent to the body as a whole. Despite being rendered permanently unable to work
as the sole result of work-related injuries, Watt would only be eligible for the 200 weeks of benefits
available for loss of a leg.
3
The trial court found that both subsections of the Second Injury Fund statute were applicable in this case,
though it applied subsection (a) because it found that subsection more favorable to the employer. Though this finding
does not affect the result in this ca se, we note that it was in erro r. As discussed above, the d isability caused b y W att’s
two injuries, when ad ded together, equates to only 68 .75 pe rcent to the body as a whole. Therefore, subsection (b)
cannot apply, and if Watt is to receive benefits, it must be under subsection (a).
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In Bomely v. Mid-America Corp.4 and Perry v. Sentry Ins. Co.,5 however, this Court departed
from the analysis used in Minton. In both of those cases, we emphasized that the trial court must
make a specific finding of fact regarding the disability caused by the second injury without
consideration of any prior injury. Bomely, 970 S.W.2d at 934; Perry, 938 S.W.2d at 407-08. In
other words, upon finding the employee to be permanently and totally disabled, the trial court must
then make a finding regarding how much disability the second injury would have caused if it
occurred to a person with no prior disability. See Bomely, 970 S.W.2d at 934. Thus, the Court
directed that a determination of the degree of vocational disability should be made prior to assessing
the effects of the injuries in isolation, instead of adding together the individual amounts of disability
as had been done in Minton.
This new approach was more fully outlined in Allen v. City of Gatlinburg, 36 S.W.3d 73(Tenn. 2001). In Allen, the employee suffered a first injury which caused a 20 percent disability to
the body as a whole and then was permanently and totally disabled by a second injury. Id. at 74-75.
The trial court found that the second injury caused 80 percent disability, apparently subtracting the
prior percentage of 20 percent from the total 100 percent disability. Id. at 75, 77. The Allen Court,
however, reversed this finding, noting that trial courts in Second Injury Fund cases must make an
independent determination of the disability attributable to the second injury alone. The Court
emphasized that “the percentage of disability awarded for the prior injury has no bearing on” the trial
court’s determination of the effects of the second injury. Id. at 77, n.4.
Implicit in this approach is a rejection of the premise that the individual disability percentages
attributed to an employee’s injuries must total 100 percent before he or she may be permanently and
totally disabled. The Fund asserts that Bomely and Perry are not inconsistent with Minton because
the employees in Bomely and Perry each had injuries from noncompensable sources. See Bomely,
970 S.W.2d at 931; Perry, 938 S.W.2d at 405-06. The employee in Allen, however, suffered only
work-related injuries. See Allen, 36 S.W.3d at 74-75. Had we continued to accept, after Bomely
and Perry, that an employee cannot be permanently and totally disabled unless the sum of individual
disability percentages equals at least 100 percent, it would not have been necessary in Allen to insist
that the trial court make an independent finding regarding the effects of the second injury, rather than
simply subtracting the 20 percent attributed to the prior injury from a total of 100 percent.
We take this opportunity to reaffirm the approach followed in Bomely, Perry, and Allen. We
hold that this line of cases has expanded the analysis beyond that of Minton, and we recognize that
an employee may be permanently and totally disabled by the combined effects of multiple injuries
whose individual disability percentages do not total 100 percent, even if prior injuries have not been
aggravated by later injuries.
4
970 S.W .2d 929 (T enn. 1998).
5
938 S.W .2d 404 (T enn. 1996).
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We are not persuaded by the Fund’s contention that our holding today will result in trial
courts “re-litigating” prior disability awards. We continue to hold that trial courts may not re-litigate
prior workers’ compensation awards and may not base an award of permanent and total disability
on a finding that a prior workers’ compensation settlement was too low. See Hale v. CNA Ins. Cos.,
799 S.W.2d 659, 661 (Tenn. 1990) (“Concerns for judicial economy and finality of settlements in
the context of workers’ compensation litigation [lead] us to reject the . . . contention that a trial court
in a subsequent proceeding is not bound by a prior judicial determination regarding the extent of
disability stemming from a prior injury . . .”). Our proscription against the re-litigation of prior
awards, however, does not preclude the trial court from considering the synergistic effects of
multiple of disabling injuries. In many cases, the disability caused by multiple injuries, when
combined, may significantly exceed that which would have been caused by either injury occurring
independently. As this Court recognized in Lock v. Nat’l Union Fire Ins. Co. of Pittsburgh,
Pennsylvania, “a combination of injuries to members of the body (in this case the arm and foot) has
a greater disabling effect than the arithmetical sum of individual scheduled awards.” 809 S.W.2d
483, 487 (Tenn. 1991). We find it reasonable to conclude that a finding of permanent and total
disability where the sum of individual disability awards equals less than 100 percent represents not
a re-litigation of a prior workers’ compensation settlement, but a finding that the combined effects
of the injuries have created a disability greater than that caused by the effects of the injuries when
considered independently.
In sum, under the approach established in Bomely, Perry, and Allen, trial courts in Second
Injury Fund cases must first determine whether the employee has been permanently and totally
disabled by the combination of two or more injuries. As defined by statute, this inquiry involves a
determination whether the employee has been “totally [incapacitated] . . . from working at an
occupation which brings the employee an income.” Tenn. Code Ann. § 50-6-207(4)(B) (1999 Repl.).
The trial court may not reconsider the extent of disability caused by any prior compensable injury;
prior courts’ findings of disability must be given conclusive effect. The trial court is not barred,
however, from concluding that the combined effects of two injuries are greater than the individual
disability which would have been caused by those injuries in isolation, so that an employee may be
found permanently and totally disabled and may receive benefits under subsection (a) of the Second
Injury Fund statute even though the individual percentages of disability attributable to the two
injuries do not equal 100 percent when added together.
Applying this approach to the case under submission, we hold that the trial court properly
found Watt to be permanently and totally disabled. We conclude that the trial court’s finding did
not involve a re-litigation of the prior hand injury; the trial court did not re-assess the disability
attributed to the first injury, nor did it suggest in any fashion that Watt’s hand injury in isolation
caused more than 50 percent disability to that scheduled member. Instead, the trial court plainly
concluded that Watt’s disability had been caused by the combined effects of both injuries.
Accordingly, regardless of whether the individual percentages of disability attributed to the two
injuries equates to less than 100 percent to the body as a whole, we affirm the trial court’s award of
permanent and total disability.
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B. Allocation of Liability for Benefits
Having held that the trial court properly awarded Watt benefits for permanent and total
disability, we next must address the allocation of those benefits between Lumbermens and the Fund.
Lumbermens asks that its liability be limited to 200 weeks, the amount it would have paid to Watt
for loss of a leg had he not suffered a prior injury. Certainly, some prior statements of this Court
would seem to suggest that this would be the proper allocation. See, e.g., Minton v. State Indus.,
Inc., 825 S.W.2d 73, 76-77 (Tenn. 1992) (noting that “the employer [in Second Injury Fund cases]
is liable only for the disability that would have resulted from the subsequent injury without
consideration of the first,” and concluding that the employer’s liability in that case could not exceed
“100 percent of the lower extremity or 200 weeks”). In Bomely v. Mid-America Corp., however,
this Court established that the employer’s liability in Second Injury Fund cases is not limited to the
400 weeks available for permanent partial disability to the body as a whole. 970 S.W.2d 929, 931-32
(Tenn. 1998). Instead, awards of permanent and total disability are apportioned between the
employer and the Fund based on a percentage of the total number of weeks to age 65. Id. In this
case, the trial court found Watt’s second injury caused a 100 percent disability to the leg, which
equates to a 50 percent disability to the body as a whole. We conclude that the evidence supports
that finding. Accordingly, it properly apportioned 50 percent of the liability for permanent and total
disability benefits to Lumbermens, with the remaining benefits to be paid by the Fund. See Tenn.
Code Ann. § 50-6-208(a)(1999 Repl.) (noting that when subsection (a) applies, the employer is liable
for the percentage of disability caused by the second injury, and the Second Injury Fund is liable for
the remainder of permanent and total disability benefits). The trial court’s finding on this issue is
affirmed.
IV. Conclusion
For the foregoing reasons, we hold that the trial court properly concluded that Watt may
receive an award of permanent and total disability benefits, and we further hold, based on the trial
court’s finding that Watt’s last injury was responsible for 50 percent of Watt’s disability, that the
trial court’s allocation of liability for benefits between the Fund and Lumbermens was proper.
Accordingly, the judgment of the trial court is affirmed. Costs on appeal are taxed to the Second
Injury Fund, for which execution may issue if necessary.
___________________________________
ADOLPHO A. BIRCH, JR., JUSTICE
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