Gonzales Electrical Systems v. Director, Office of Workers' Compensation Programs

Case: 12-60116 Document: 00512041438 Page: 1 Date Filed: 11/02/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 2, 2012
No. 12-60116 Lyle W. Cayce
Summary Calendar Clerk
GONZALES ELECTRICAL SYSTEMS; AMERICAN INTERSTATE
INSURANCE COMPANY,
Petitioners
v.
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, U.S.
DEPARTMENT OF LABOR; VALERIE MIDDLETON,
Respondents
On Petition for Review of a Judgment
of the Benefits Review Board
BRB No. 11-0319
Before SMITH, PRADO, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Gonzales Electrical Systems (Gonzales) petitions this court for review of
a decision of the Benefits Review Board (BRB) affirming an administrative law
judge’s award of benefits to Valerie Middleton under the Longshore and Harbor
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published
and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
Case: 12-60116 Document: 00512041438 Page: 2 Date Filed: 11/02/2012
Workers’ Compensation Act (“LHWCA”), 33 U.S.C. §§ 901-950 (2010), following
the death of her husband. We have jurisdiction over the petition under 33
U.S.C. § 921(c).
This appeal presents two issues: first, whether the BRB and the ALJ
properly applied the LHWCA’s presumption of coverage, and second, whether
the BRB and the administrative law judge (ALJ) properly classified Gonzales’
per diem payments as “wages” for the purpose of calculating benefits. Because
we find no error, we DENY the petition for review.
FACTS AND PROCEEDINGS
Harold Middleton was an electrician employed with Gonzales. He and his
wife Valerie Middleton lived in Warren, Texas, but at the time of his death he
was working at a drilling rig at a shipyard in Vicksburg, Mississippi, a job
estimated to last for nine to ten months. The job involved working twelve-hour
days, at first for five days a week, then for seven days a week. Middleton stayed
at a motel and received a $50 per diem payment for each day worked in
Vicksburg.
On January 3, 2007, Middleton was climbing to the fourth floor of the rig
when he complained to a co-worker that he was suffering from chest pain. He
had made similar complaints the previous day. In order to reach the fourth
floor, Middleton had to climb stairways and a ladder while carrying up to 15
pounds of equipment. While on the fourth floor roof, Middleton suffered a fatal
heart attack.
Valerie Middleton filed a claim for death benefits under the LHWCA
against Gonzales and its insurance carrier, American Interstate Insurance
Company. The matter was referred to an administrative law judge. Both
parties filed cross-motions for summary decision on two issues: (1) whether to
apply the statutory presumption that LHWCA coverage applies pursuant to 33
2
Case: 12-60116 Document: 00512041438 Page: 3 Date Filed: 11/02/2012
U.S.C. § 920(a), and (2) the correct amount of per diem payments to be included
in the calculation of Middleton’s average weekly wage. Finding that genuine
issues of material fact existed as to both issues, the ALJ denied the motions.
The parties waived their right to an in-person hearing.
On December 21, 2010, the ALJ issued a decision based on a review of the
briefs and written record. The ALJ found that Middleton had made the required
prima facie showing for the presumption of LHWCA coverage to apply. The ALJ
reaffirmed that the per diem payments were properly included in the calculation
of Middleton’s average weekly wage.1 Based on pay records and testimony from
Gonzales’ owner, the ALJ found that the per diem payments included in
Middleton’s average weekly wage should reflect a seven-day work week. The
ALJ therefore calculated Middleton’s average weekly wage as $1,726.28.
Gonzales appealed the ALJ’s decision to the U.S. Department of Labor
Benefits Review Board. The BRB concluded that there was “substantial
evidence of record” to support the ALJ’s finding that Middleton had established
the prima facie case necessary to apply the presumption of coverage, and that
the ALJ “acted within his discretion” in crediting testimony from Middleton’s co-
workers and medical expert. Relying on our decision in B&D Contracting v.
Pearley, 548 F.3d 338 (5th Cir. 2008), the BRB affirmed the ALJ’s conclusion
that the per diem payment was properly construed as “wages.” The BRB
therefore affirmed the ALJ’s decision. On appeal to this court, Gonzales claims
that the decisions of the BRB and the ALJ contain errors of law related both to
1
Originally, the parties had agreed that the only issue for adjudication was whether Gonzales’
per diem payments to Harold Middleton should properly be considered part of Middleton’s wages. The
ALJ found that they were properly included and issued a decision and order calculating average weekly
wage accordingly. However, following the correction of a mathematical error in the ALJ’s wage
calculation, Gonzales indicated that it would appeal the decision as to the inclusion of per diem and that
it would also litigate the issue of causation of death. Thus, the ALJ vacated its previous decision and
order.
3
Case: 12-60116 Document: 00512041438 Page: 4 Date Filed: 11/02/2012
the LHWCA presumption of coverage and also to the treatment of per diem
payment as wages.
STANDARD OF REVIEW
Our review of a BRB decision is “limited to considering errors of law and
ensuring that the [BRB] adhered to its statutory standard of review, that is,
whether the ALJ’s findings of fact are supported by substantial evidence and are
consistent with the law.” B & D Contracting v. Pearley, 548 F.3d 338, 340 (5th
Cir. 2008) (quoting H.B. Zachry Co. v. Quinones, 206 F.3d 474, 477 (5th Cir.
2000) (internal quotation marks omitted). We review the BRB’s legal conclusions
de novo, id. (citing Tarver v. Bo-Mac Contractors, Inc., 384 F.3d 180, 181 (5th
Cir. 2004)), according deference to interpretations of the LHWCA by the Director
of the Office of Workers’ Compensation Programs. Id. (citing Pool Co. v. Cooper,
274 F.3d 173, 177 (5th Cir. 2001)).
DISCUSSION
Gonzales argues on appeal that the decisions of the BRB and the ALJ
contain two errors. First, Gonzales maintains that the BRB and the ALJ
incorrectly applied the presumption of coverage afforded claimants under 33
U.S.C. § 920(a). Second, Gonzales contends that the BRB and the ALJ erred as
a matter of law by considering per diem payments as “wages” under 33 U.S.C.
§ 902(13).
A
Gonzales argues that the decisions of the BRB and the ALJ misapplied
the LHWCA presumption of coverage under 33 U.S.C. § 920(a). Gonzales’
argument is unavailing.
The LHWCA provides for compensation for “disability or death of an
employee . . . if the disability or death results from an injury occurring upon the
navigable waters of the United States,” including adjoining areas. 33 U.S.C. §
4
Case: 12-60116 Document: 00512041438 Page: 5 Date Filed: 11/02/2012
903(a). The LHWCA defines an “injury” as an “accidental injury or death arising
out of and in the course of employment . . . .” 33 U.S.C. § 902(2). “The words
‘arising out of’ instruct that the employment must have caused the injury.”
Bludworth Shipyard, Inc. v. Lira, 700 F.2d 1046, 1049 (5th Cir. 1983).
Section 920(a) of the LHWCA establishes a presumption of coverage in
favor of claimants who establish a prima facie showing of work-related injury.
33 U.S.C. § 920(a); Port Cooper/T. Smith Stevedoring Co. Inc. v. Hunter, 227
F.3d 285, 287 (2000). To make such a showing, a claimant must prove that “(1)
he suffered a harm and (2) a condition of the workplace could have caused,
aggravated, or accelerated the harm.” Amerada Hess Corp. v. Director, Office of
Worker’s Compensation Programs, 543 F.3d 755, 761 (5th Cir. 2008). Once the
presumption is invoked, the employer can rebut it only through showing
“substantial evidence establishing the absence of a connection between the
injury and the employment.” Gooden v. Director, Office of Worker’s Compensation
Programs, U.S. Dep’t of Labor, 135 F.3d 1066, 1068 (5th Cir. 1998).
There is no dispute that Middleton suffered a heart attack while at work
and that the first element of the prima facie case is therefore satisfied. The ALJ
found that the second prong was also satisfied, based upon testimony from co-
workers regarding work conditions and testimony from a medical expert that
such conditions were risk factors for, and “more probabl[y] than not” caused,
Middleton’s heart attack.
Gonzales argues that the ALJ erred in relying on the testimony of
Middleton’s medical expert, Dr. Christopher Mallavarapu. Specifically, Gonzales
argues that Dr. Mallavarapu’s opinion was “pure speculation” because there was
no evidence in the record “that Middleton was under any emotional stress[ or]
was under any physical stress.”
But the prima facie showing does not require proof that a claimant’s
5
Case: 12-60116 Document: 00512041438 Page: 6 Date Filed: 11/02/2012
employment actually caused, aggravated, or accelerated his injury; merely that
it could have done so. 33 U.S.C. § 920(a); see also Wheatley v. Adler, 407 F.2d
307, 313 (D.C. Cir. 1968) (stating that evidence showing that there is “realistic
possibility” that an injury was work related “sufficed” to invoke the
presumption.). Dr. Mallavarapu, after reviewing the record evidence, testified
that Middleton experienced both physical stress, including climbing stairways
and ladders while carrying equipment, and emotional stress, including working
twelve-hour days seven days a week while living away from his family. Dr.
Mallavarapu testified further that stress has been found to be the third leading
risk factor for heart attack and that in this instance, it was “more probable than
not” that work-related stress contributed to Middleton’s heart attack. The ALJ
did not err in finding this evidence sufficient to establish that Middleton’s work
conditions could have caused or aggravated the heart attack.
Gonzales cites two cases involving claimants who also suffered heart
attacks. Ortco Contractors, Inc. v. Charpentier, 332 F.3d 283 (5th Cir. 2003);
Winfield v. Dep’t of Navy, No. 94-LHC-1859, 1996 WL 776446 (DOL O.A.L.J.
Dec. 12, 1996). But neither of those cases turned on a claimant’s prima facie
case for coverage under 33 U.S.C. § 920(a). Although the ALJ in Winfield found
that the weight of the evidence was insufficient to establish that the claimant’s
heart attack was caused by work-related stress, 1996 WL 776446 at *17, that
finding came only after the claimant successfully made a prima facie case for the
presumption of coverage, id. at *12. The ALJ found that the claimant
“established that work could have caused the harm by proffering medical
testimony suggesting that stress can cause heart attacks,” as Middleton has
done here. Id. The ALJ proceeded to analyze actual causation only because the
employer then rebutted the presumption with substantial evidence. Id.
Similarly, in Ortco Contractors, we held that while the claimant successfully
6
Case: 12-60116 Document: 00512041438 Page: 7 Date Filed: 11/02/2012
made a prima facie case to invoke the presumption of coverage, the employer
nonetheless submitted substantial evidence to rebut that presumption. 332 F.3d
at 292 (“[A]lthough the ALJ initially erred in ruling that [the claimant] failed to
make a prima facie case – indeed, she did . . . . [the employer] submitted
substantial evidence sufficient to rebut [the claimant’s] § 20(a) presumption.”
Here, Gonzales did not submit evidence to rebut the presumption that
Middleton’s injury was work-related. The ALJ therefore did not err in holding
that the presumption of coverage applies in this case.
B
Second, Gonzales argues that the BRB and the ALJ erred as a matter of
law by including Gonzales’ per diem payments to Middleton in the calculation
of average weekly wage.
The LHWCA provides that the calculation of death benefits shall be based
on the average weekly wage of the deceased. 33 U.S.C. § 909. The LHWCA
defines “wages” as
the money rate at which the service rendered by an
employee is compensated by an employer under the
contract of hiring in force at the time of the injury,
including the reasonable value of any advantage which
is received from the employer and included for purposes
of any withholding of tax under subtitle C of title 26
(relating to employment taxes). The term wages does
not include fringe benefits, including (but not limited
to) employer payments for or contributions to a
retirement, pension, health and welfare, life insurance,
training, social security or other employee or dependent
benefit plan for the employee’s or dependent’s benefit,
or any other employee’s dependent entitlement.
33 U.S.C. § 902(13).
We have held that non-taxable compensation can constitute wages under
7
Case: 12-60116 Document: 00512041438 Page: 8 Date Filed: 11/02/2012
the LHWCA. B&D Contracting v. Pearley, 548 F.3d 338, 342 (5th Cir. 2008).
In B&D Contracting v. Pearley, we held that per diem payments can be properly
classified as “wages” under the LHWCA where they “played the role of money
wages.” Id. at 343. We concluded that the payments in that case did play the
role of wages, taking into account that the payments
were calculated based on the number of hours worked;
they were paid in the same paycheck as the employee’s
normal wages; the per diem was an unrestricted
payment, unrelated to actual costs of meals, lodging, or
travel; the same per diem was paid to all employees
regardless of where they live; and the per diem
constituted almost half of [the employee’s] gross pay.
Id.
The payments in this case consisted of a daily allowance of $50 for
employees who worked on sites outside of the company headquarters in
Beaumont, Texas. The payments were disbursed for days actually worked, not
all days spent away from Beaumont. The per diem was paid in cash at the same
time paychecks were distributed. Employees were not obligated to substantiate
travel costs or report their actual expenses. The payments were not included in
employees’ W-2 tax statements.
Gonzales argues that this case is distinguishable from Pearley because the
per diem was paid in cash and not as part of a paycheck; it was paid only when
workers were employed outside the Beaumont area; and the amount paid was
closer to one-quarter than one-half of Middleton’s wages. But as in Pearley, the
payments here were calculated based on time worked, not time away from home,
and employees could spend the payments in any manner without reporting
expenses. In addition, Gonzales’ owner testified that the per diem payments
were intended, at least in part, to make the job more attractive to potential
8
Case: 12-60116 Document: 00512041438 Page: 9 Date Filed: 11/02/2012
employees. Therefore, we do not find error in the ALJ’s conclusion that the per
diem payments to Middleton were “more akin to wages” than compensation of
expenses and were properly classified as wages under 33 U.S.C. § 902(13).
CONCLUSION
For the above reasons, we find that the BRB correctly concluded that the
ALJ’s order was in accordance with the law and supported by substantial
evidence based on the record as a whole. We therefore DENY Gonzales’ petition
for review.
9