Edmonds v. Wilson County , 1999 Tenn. LEXIS 681 ( 1999 )

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
FILED
December 20, 1999
Cecil Crowson, Jr.
WILLIAM EDMONDS, ) FOR PUBLICATION Appellate Court Clerk
)
Plaintiff/App ellant, ) Filed: December 20, 1999
)
)
v. ) Wilson Criminal
) Hon. J. O. Bond
)
WILSON COUNTY and WILSON )
COUNTY ROAD COMMISSION, Supre me C ourt No .
)
) M1998-00451-SC-WCM-CV
Defendants/Appellees. )
) Trial Court No. 96-235
For Defendants-Appellees: For Plaintiff-Appellant:
Kent E. Krause Frank Buck
Sharon E. England 124 West Main Street
Suite 2600, The Tower Smithville, TN 37166
611 Commerce Street
Nashville, TN 37203
OPINION
JUDGMENT OF TRIAL COURT DROW OTA, J.
AFFIRMED
In this workers’ compensation action, the defendants, Wilson County and Wilson
County Road Commission, have appealed from the trial court’s judgment finding that the
employee, William Edmonds, was entitled to a commutation of his award of workers’
compensation benefits to a lump sum. The Special Workers’ Compensation Appeals Panel,
upon reference for findings of facts and conclusions of law pursuant to Tenn. Code Ann. § 50-
6-225(e)(3), affirmed the trial court’s award of benefits, but modified the judgment to disallow
payment of the award in a lump sum. Thereafter, the employee filed a motion for full Court
review of the Panel’s decision pursuant to Tenn. Code Ann. § 50-6-225(e)(5)(B). We granted
the employee’s motion to determine whether the trial court abused its discretion in ordering
the award paid in a lump sum. After carefully examining the record before us and considering
the relevant authorities, we affirm the trial court’s judgment commuting the award to a lump
sum.
BACKGROUND
The employee, William Edmonds, was 49 years old at the time of trial. He had no
formal education or vocational training beyond receiving a GED. His prior work experience
consisted of factory work, driving a truck, and repairing engines and machinery. The
employee’s work responsibilities for the defendant employer included driving a pick-up truck
and trailer, hauling pipe to job sites, and assisting in installing pipe. He also performed some
carpen try and g eneral m aintena nce wo rk for the em ployer.
On December 13, 1995, the employee fell from a ladder in the course and scope of
his employment. He broke his right arm and injured his left leg in the fall. The employee had
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two surgeries on the injured leg, and developed a chronic circulatory problem that cannot be
corrected by surgery. He has significant problems with swelling and discomfort in the leg, and
must elevate it above heart level several times a day to alleviate the swelling and discomfort.
The employee must take a blood thinner to protect against blood clots. Taking the blood
thinner re quires the emplo yee to be careful no t to injure him self throug h bruising or cuts
At trial, the employee presented the testimony of a banker, Roy Pugh, who has worked
in the banking industry for twenty-three years. The banker, who knew the employee for over
twenty years, testified that he was familiar with the employee’s financial history, which he
described as “very frugally done.” Regarding the employee’s ability to manage his money and
assets the banker stated: “I think he’s an excellent manager. . . . I solicited his business even
though it was eighteen miles from where I work. I fortunately did get part of his business at
that time. He always did his business appropriately. He’s very efficient in his management
of money.” The banker further testified that it would be financially advantageous for the
employee to have his workers’ compensation award paid in a lump sum so that the award
could be invested and earn interest. The banker and the employee had lengthy discussions
concerning how to best invest a lump sum award. The banker testified that he would assist
the em ployee if his award was co mm uted to a lu mp su m.
The employee testified that he wanted a lump sum award so that the funds could be
invested and produce income. He also wanted a lump sum in order to provide an estate for
his wife and children in the event of his death.1 Evidence regarding the employee’s financial
condition showed that his house and ten acres, vehicles, and farm equipment, were all paid
for. His debts consisted of some medical bills and transportation costs for his son, who was
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The employee testified: “Well, my concern is my family. Cause I’ve got an obligation to take
care of my family and if I take a lump sum, then we can work with a lump sum and if something happens
to me, my wife will still have the lump sum. But if I take it over a period of years . . . and these blood
clots cause me to have a heart attack, then I’m going to be buried and my wife is going to have nothing.”
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attending college. Prior to the injury, the employee had approximately $18,000 in a savings
accou nt.
The trial court found that the employee sustained a 95 percent permanent vocational
disability to the body as a whole, which entitled him to a judgment of $100,658.20, to be paid
in a lump sum. The trial court explained its decision to commute the award as follows:
Is he able to handle [his finances]? A man who’s already paid for his
house, has his car and truck paid for, had money in the bank when this
happened, got a banker who says he’s good at what he does, that he’s a good
manager. I believe it would be to the best interest of this man if he gets his
money in a lump sum. I think he can manage it, I think he can make more
money off of the money than he would get if he was paid on a weekly basis.
Cause there’s not anything in this man’s background that would indicate that
he’s extravagant, that he didn’t pay his bills or he’s taken bankruptcy, there’s
not anything that would state he couldn’t handle the money. It’s all positive,
a man who does have the ability and in whose best interest it would be to
have the money instead of receiving it [periodically]. The Court is going to find
that he can handle his money and it should be paid in a lump sum.
Accordingly, the trial court found that the employee was capable of wisely managing a
commuted award, and that such an award was in his best interest. The trialcourt further found
that the employee had “special needs” justifying a commutation of benefits, although the court
did not specify what those needs were.
The Special Workers’ Compensation Appeals Panel affirmed the trial court’s finding
regarding the employee’s extent of disability. However, the Panel held that the trial court
abused its discretion in ordering the award paid in a lump sum. The Panel opined that a
commutation was improper because no evidence was presented that the commuted award
would be used for rehabilitation purposes. The Panel modified the trial court’s judgment
accordingly. Thereafter, the employee filed a motion for full Court review of the Panel’s
decision pursuant to Tenn. Code Ann. § 50-6-225(e)(5)(B). We granted the employee’s
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motion, and now reject the Panel’s finding concerning the impropriety of the lump sum and
affirm the ju dgme nt of the trial co urt.
DISCUSSION
An award of workers’ compensation benefits may be commuted to one or more lump
sum payments upon motion of a party subject to the approval of the trial court. Tenn. Code
Ann. § 50-6-229(a). The controlling statute, Tenn. Code Ann. § 50-6-229(a), states that “[i]n
determining whether to commute an award, the trial court shall consider whether the
commutation will be in the best interest of the employee, and such court shall also consider
the ability of the employee to wisely manage and control the commuted award irrespective of
whether the re exist special nee ds.”
In 1990, Tenn. Code Ann. § 50-6-229(a) was amended to eliminate a requirement that
the employee demonstrate a special need as a prerequisite to receiving a lump sum award.2
Clayton v. Cookeville Energy Inc., 824 S.W.2d 167, 169 (Tenn. 1992). Thus, under the statute
as it is currently written, the employee has the burden of demonstrating first that a lump sum
is in the employee’s “best interest,” and second that the employee is capable of “wisely
managing and controlling the commuted award.” Perdue v. Green Branch Min. Co., Inc., 837
S.W.2d 56, 58 (Tenn. 1992). Whether to commute the award is discretionary with the trial
court, and this Court will not alter the trial court’s decision absent a showing that the trial
court’s decision amounted to an abuse of discretion. Perdue, 837 S.W.2d at 58; Bailey v.
Colonial Freight Systems, Inc., 836 S.W.2d 554, 557 (Tenn. 1992). Thus, we must determine
2
One of the legislative sponsors of the 1990 amendment deleting the requirement of
demonstrating a special need stated: “[F]or those set of [workers] that have no special needs out
there, but are able and capable of managing their own money, I don’t think we ought to be telling
them that they can’t have their money and this is what this bill does. . . .”
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in the present case whether the trialcourt abused its discretion by commuting the employee’s
award to a lump sum.
This Court has pointed out several times in the past that the purpose of workers’
compensation is to provide injured workers with periodic income as a substitute for lost wages.
Purdue, 837 S.W.2d at 59. Periodic payments are thus “part of a statutory scheme designed
to cushion an injured worker during the period of his or her disability.” North American
Royalties v. Thrasher, 817 S.W.2d 308, 310-11 (Tenn. 1991). However, when there is no
need for periodic payments to substitute for lost wages, this Court has permitted a
commutation when the employee has shown that the commutation is in the employee’s best
interest an d that the e mploy ee can wisely co ntrol and mana ge it.
For example, in Ponder v. Manchester Housing Authority, 870 S.W.2d 282 (Tenn.
1994), the surviving spouse of the deceased employee appealed the trial court’s decision not
to lump sum an award of benefits. This Court reversed the trial court because the plaintiff had
structured the family finances in such a way that periodic payments were not needed as a
substitute for lost wages. Id. at 284-85. We also noted in Ponder that the plaintiff would
receive a greater benefit from the interest on the award than she was receiving through
periodic payments. Id. at 284. Thus, we were persuaded that the plaintiff could wisely
manage and control the commuted award and that a commuted award was in the plaintiff’s
best interest. Therefore, we concluded that the trial court should have commuted the award.
In another case, Clayton v. Cookeville Energy, Inc., 824 S.W.2d 167 (Tenn. 1992), the
issue before us was whether benefits paid to a surviving spouse should have been commuted
to a lump sum. In addition to paying off some debts, the plaintiff in Clayton planned to invest
the award so that it could earn interest. The plaintiff did not need the award to cover her
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monthly expenses. Clayton, 824 S.W.2d at 170. We held that a commutation was appropriate
because the plaintiff did not need periodic payments to substitute for lost wages and the
requirements of Tenn. Code Ann. § 50-6-229(a) were satisfied. See also Perdue, 837 S.W.2d
at 59-60 (lump sum award upheld where there was no need for periodic payments to
substitute for wag es).
In the present case, the proof establishes that the employee’s house, land, vehicles,
and farm equipment were all paid for. Prior to his injury, the employee had saved
approximately $18,000. His banker, who was thoroughly familiar with the employee’s financial
history, testified that the employee was “very efficient” in the management of his money and
assets. The employee sought professional advice on how to best invest a commuted award
in the event one was ordered. This evidence was uncontradicted, and no evidence was
presented that the employee failed to pay his bills, was a spendthrift, or had much debt.
Accordingly, we have no difficulty concluding that the record supports the trial court’s finding
that the em ployee was ca pable o f wisely m anagin g and c ontrolling a comm uted aw ard.
Having decided that the employee satisfied the wise management and control prong
of Tenn. Code Ann. § 50-6-229(a), we turn to whether a lump sum award is in the employee’s
best interest. The employee testified that he wanted a lump sum award so that the funds
could be invested and earn interest. He also wanted the award lump summed in order to
provide for his family in the event of his death. The employee’s banker testified that it would
be financially advantageous for the employee to have his award commuted to a lump sum so
that it could be invested and earn interest. The banker also testified that he would assist the
employee in investing the funds. This evidence, coupled with the fact that the employee has
relatively few monthly financial obligations for which periodic payments are needed, compels
us to the same conclusion reached in Clayton, Perdue, and Ponder, i.e., the record supports
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the trial court’s finding that a commuted award is in the employee’s best interest. Hence, the
emplo yee ha s satisfied b oth pron gs of Te nn. Co de Ann . § 50-6-22 9(a).
Accordingly, we hold that the trial court did not abuse its discretion in awarding a lump
sum. We further note that the trial court’s finding that the employee had “special needs”
justifying a commutation of benefits is of no consequence because the employee met the
requirements of Tenn. Code Ann. § 50-6-229(a). Therefore, he is entitled to a commuted
award “irrespectiv e of whe ther there exist spe cial need s.” Tenn . Code Ann. § 50-6-229
CONCLUSION
For the foregoing reasons, we reject the findings and conclusions of the Special
Workers’ Compensation Appeals Panel regarding commutation of the award and affirm the
judgment of the trial court. Costs of this appeal are taxed to the defendants, for which
execu tion ma y issue if ne cessar y.
Frank F . Drowo ta, III
Justice
CONCUR:
Anderson, C. J., Birch, Holder, JJ.
Barker, J. not participating
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