David Young v. District of Columbia Department of Employment Services and Institute for Public-Private Partnership

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 12-AA-0917
DAVID YOUNG, PETITIONER
v.
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, RESPONDENT,
and
INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIP, et al., INTERVENORS.
Petition for Review of a Decision
of the Compensation Review Board
(CRB-074-12)
(Submitted October 31, 2013 Decided November 7, 2013)
Benjamin T. Boscolo was on the brief for petitioner.
Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim,
Solicitor General, Donna M. Murasky, Deputy Solicitor General, and Michael
Milwee, Senior Assistant Attorney General, were on the statement in lieu of brief
for respondent.
Roger S. Mackey was on the brief for intervenors.
Before GLICKMAN and EASTERLY, Associate Judges, and FARRELL, Senior
Judge.
2
EASTERLY, Associate Judge: David Young petitions for review of an order
by Respondent District of Columbia Department of Employment Services (DOES)
Compensation Review Board (CRB) affirming the final compensation order issued
by DOES Administrative Law Judge Jeffrey P. Russell (ALJ). Mr. Young asserts
the CRB erred, first in directing the ALJ to calculate his average weekly wage
(AWW) so as to disregard the amount his employer was contractually obligated to
pay him in the form of a housing allowance, and then, after remand, in upholding
the ALJ‟s AWW calculation based on the CRB‟s directive.1 We agree and hold
that Mr. Young‟s AWW must be calculated based on his annual salary and the
$1,200 a month housing allowance provided in his one-year employment contract.
I. Facts
In March 2006, Mr. Young was working for Intervenor Institute for Public-
Private Partnership (IP3) as the regional representative for the Middle East and
Northern Africa. He was soon to be permanently relocated to Jordan, but on
March 26, 2006, he was seriously injured in a car accident while traveling on
1
Mr. Young argues in the alternative that the CRB erred in upholding the
ALJ‟s calculation of his AWW because he should have been credited with a
weekly housing allowance based on five weeks of hotel stays paid for by IP3. We
reject this argument. See infra note 10.
3
business in Malawi. Mr. Young suffered a spinal cord injury, leaving him without
the use of both his legs and only limited use of his arms.
Mr. Young filed a worker‟s compensation claim and the DOES ALJ found
that he was permanently and totally disabled as of the date of the accident. That
ruling was not challenged by IP3.2 A dispute arose, however, regarding the
calculation of Mr. Young‟s AWW, which would serve as the basis for his
compensation.3
Mr. Young had been promoted to the position of regional representative at
the beginning of January 2006, a few months prior to his accident.4 At that time,
he was awarded a corresponding pay raise, giving him an annual salary of $48,000.
In addition, his 12-month employment contract gave him a housing allowance of
up to $1,200 per month. In anticipation of his move to Jordan, Mr. Young found
2
IP3 appeared before the ALJ and the CRB with its insurer, Travelers
Indemnity Co. of America (Travelers), and IP3 and Travelers filed a joint brief
before this court. For ease of reference, we refer to both Intervenors as IP3
throughout this opinion.
3
“In case of total disability adjudged to be permanent, 66 2/3% of the
employee‟s average weekly wages shall be paid to the employee during the
continuance thereof.” D.C. Code § 32-1508 (1) (2012 Repl.).
4
The orders issued by the ALJ and CRB inconsistently identify the date of
Mr. Young‟s promotion as January 1 or January 2, 2006 and the hearing transcript
confirms only that there was some confusion about which date was correct.
4
an apartment there to rent for the amount of his housing allowance. IP3 signed a
one-year lease on his behalf that was set to begin on April 15, 2006. In the five
weeks before the date of the accident, between February 18 and March 25, 2006,
IP3 put Mr. Young up at hotels in Malawi, Zambia, Egypt and Jordan.5
Before the ALJ, the following question arose: should a housing allowance
written into Mr. Young‟s employment contract constitute a figure to be included
within the AWW calculation where the lease IP3 signed on Mr. Young‟s behalf
pursuant to his contract had not yet begun, and IP3 had not yet made any rent
payments?6 The ALJ‟s first compensation order, dated September 9, 2010,
determined that because IP3 had agreed to pay $1,200 per month for housing, and
had in fact already paid for Mr. Young‟s lodging in hotels while in Africa and the
Middle East, his wage calculation properly included the value of the lease in
Jordan. This amount, combined with his $48,000 annual salary, resulted in an
AWW of $1,200. IP3 sought review of this order before the CRB, arguing that the
5
Mr. Young testified that before that time he had been in the District of
Columbia.
6
The parties also litigated before the ALJ whether Mr. Young‟s AWW
should be based entirely on his post-promotion wages and whether he became
permanently disabled on the date of the accident. The ALJ determined that Mr.
Young had been permanently and totally disabled since March 26, 2006, and that
his weekly wage should be based on the promotion wage of $48,000 per year.
Neither of these rulings is challenged before this court.
5
ALJ should not have included the monthly rent obligation for the leased apartment
as part of the AWW.
The CRB determined that “the ALJ correctly included in the claimant‟s
average weekly wage an amount for lodging but that the ALJ erred in using the
annual equivalent of the cost of the apartment divided by 52.” Because the lease
did not begin until after the accident, the CRB determined that the ALJ erred in
using that lease value. The CRB remanded for recalculation of weekly lodging,
stating that “[t]he ALJ, consistent with D.C. Code § 32-1511 (a)(3), properly
divided the employer‟s annual salary divided by 52 but only should have added the
actual cost of the hotels paid for by the employer prior to the accident in
calculating the average weekly wage.”
On remand, the parties agreed that over 36 days (or 5.14 weeks) prior to the
accident, the employer paid $4,869.02 in hotel lodging. Mr. Young argued that the
hotel lodging figure should be divided by the number of weeks that the lodging
was provided (5.14) and then that figure ($947.28) should be added to his weekly
salary (derived from his annual salary of $48,000), resulting in an AWW of
$1,870.35. IP3 argued that the base salary figure should be halved and that the
entire hotel lodging figure should be added to that number, then divided by 26, to
6
reach an AWW of $1,110.34. The ALJ determined that neither approach was in
accordance with the CRB directive, and went on to calculate the AWW simply by
adding the lump sum paid for hotels ($4,869.02) to Mr. Young‟s annual salary
($48,000) and then dividing that sum by 52 weeks, to yield an AWW of
$1,016.71.
Mr. Young sought review of this order from the CRB. Arguing that the
ALJ‟s AWW calculation yielded an inequitable, distorted result, he proposed
instead that the CRB should either endorse the ALJ‟s initial AWW calculation of
$1,200 (based on his annual salary of $48,000 and monthly housing allowance of
$1,200), or it should endorse his calculation of $1,870.36 (based on his annual
salary and his calculation of his weekly hotel allowance). The CRB issued a
decision and order upholding the ALJ‟s calculation on remand.
II. Standard of Review
“[O]ur review in a workers‟ compensation case is of the decision of the
CRB, not that of the ALJ.” Reyes v. District of Columbia Dep’t of Emp’t Servs.,
48 A.3d 159, 164 (D.C. 2012) (citing Georgetown Univ. Hosp. v. District of
Columbia Dep’t of Emp’t Servs., 916 A.2d 149, 151 (D.C. 2007)). This review is
7
generally “limited to determining whether the decision is „arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.‟” Id. (quoting
Asylum Co. v. District of Columbia Dep’t of Emp’t Servs., 10 A.3d 619, 624 (D.C.
2010)). However, “recognizing that this court is the final authority on issues of
statutory construction,” “we review the CRB‟s legal rulings de novo.” Fluellyn v.
District of Columbia Dep’t of Emp’t Servs., 54 A.3d 1156, 1160 (D.C. 2012)
(internal citations and quotation marks omitted). We recognize agency expertise
and will “accord great weight to any reasonable construction of a statute by the
agency charged with its administration.” Id. (quoting Mills v. District of Columbia
Dep’t of Emp’t Servs., 838 A.2d 325, 329 (D.C. 2003) (internal quotation marks
omitted)). But “we will not affirm an administrative determination that reflects a
misconception of the relevant law or a faulty application of the law.” District of
Columbia Appleseed Ctr. for Law & Justice, Inc. v. District of Columbia Dep’t of
Ins., Sec. & Banking, 54 A.3d 1188, 1211 (D.C. 2012) (citation, internal quotation
marks and brackets omitted).
8
III. Analysis
The District of Columbia Workers‟ Compensation Act (WCA), D.C. Code
§§ 32-1501-1545 (2012 Repl.), provides for the compensation of employees
injured in the course of their employment. The foundation for calculating the
amount of compensation due is an employee‟s “wages,” which are statutorily
defined as “the money rate at which the service rendered is recompensed under the
contract of hiring in force at the time of the injury, including the reasonable value
of . . . housing, . . . received from the employer.” D.C. Code § 32-1501 (19) (2012
Repl.). From an injured employee‟s wages, an AWW is calculated. Sections
(a)(3) & (b) of D.C. Code § 32-1511 (2012 Repl.) provide that:
(a) . . . (3) If at the time of the injury the wages are fixed by the year, the
average weekly wage shall be the yearly wage so fixed divided by 52; [7]
...
(b) The terms “average weekly wage” and “total wages” as used in this
section shall include reasonable value for board and lodging received from
the employer plus gratuities declared for tax purposes by the employee.
7
D.C. Code § 32-1511 (a) provides different formulas depending on the
compensation system between the employer and employee at the time of the
accident. The CRB and ALJ applied § 32-1511 (a)(3) at all stages of the litigation,
which sets out the calculation method for an employee whose salary is fixed by the
year. Earlier in this litigation, IP3 argued for application of a different subsection
but, on appeal, the parties are in agreement that (a)(3) is the appropriate subsection
to apply.
9
D.C. Code § 32-1511 (2012 Repl.).
The question presented by this case is what does “reasonable value for board
and lodging received from the employer,” under § 32-1511 (b) (emphasis added),
mean. The CRB determined “received” meant prior payment to an employee. For
the reasons discussed below, we conclude that the CRB‟s reading of D.C. Code §
32-1511 was unduly constrained and was not a reasonable interpretation of this
provision.
We begin by considering the plain meaning of the language in § 32-1511.
See Peoples Drug Stores, Inc. v. District of Columbia, 470 A.2d 751, 753 (D.C.
1983) (“The primary and general rule of statutory construction is that the intent of
the lawmaker is to be found in the language that he has used.” (quoting Varela v.
Hi-Lo Powered Stirrups, Inc., 424 A.2d 61, 64 (D.C. 1980) (en banc) (internal
quotation marks omitted))).
The primary, ordinary meanings of “receive” are “to take possession or
delivery of” and “to knowingly accept.” Webster’s Third New International
Dictionary, Unabridged 1894 (2002); see also American Heritage Dictionary,
Third Edition 1508 (“To take or acquire (something given, offered, or transmitted);
10
get.”) (1992). At the time of the accident, Mr. Young had been offered and had
accepted a 12 month contract, under the terms of which he was granted both the
salary he was being paid and the housing allowance pursuant to which he had
acquired an apartment. But while he was getting paid at the promotion rate on the
date of the accident, he had not yet taken up residence in the apartment IP3 had
rented for him and IP3 had not yet paid the first installment of rent. Thus, the
ordinary meaning of receive makes colorable both the CRB‟s and Mr. Young‟s
interpretations and does not guide us toward either.
We must read § 32-1511 (b) in light of the broader statute, however. Indeed,
“[s]tatutory interpretation . . . is „a holistic endeavor in which we must consider not
only the bare meaning of words but also their placement and purpose in the
statutory scheme.‟” In re D.F., 70 A.3d 240, 243 (D.C. 2013) (quoting Appleseed,
54 A.3d at 1213 (brackets and ellipses omitted)). Thus, we read the term
“received” “in light of the statute taken as a whole, with the goal of interpreting the
statute as a harmonious whole.” Id. (quoting Appleseed, 54 A.3d at 1213 (internal
quotation marks omitted)). When read in this manner, the CRB‟s interpretation of
§ 32-1511 (b) is unreasonable.
11
We are guided in particular by D.C. Code § 32-1501 (19) (defining wages)
and § 32-1511 (a)(3) (establishing the proper computation of wages fixed by the
year). Both provisions are focused on the rate of recompense — not on the
monetary amount actually paid out to the employee. Reading § 32-1511 (b)
together with these provisions leads us to conclude that the value of housing
“received” as wages within the meaning of § 32-1511 (b) is likewise calculated by
examining the rate of recompense to which the employee was entitled at the time
of the injury — i.e., the dollar value of housing committed to an employee under
his employment contract — not by the dollar amount of the housing actually
enjoyed or paid for.8
This interpretation is further supported by our obligation to “liberally
construe[] [the WCA] to achieve [its] humanitarian purpose,” and to eschew
8
To argue that the statute is backward-looking and concerned only with the
cost of housing actually paid for, IP3 relies on Asylum Co. v. District of Columbia
Dep’t of Emp’t Servs., 10 A.3d 619 (D.C. 2010). However, Asylum was
interpreting D.C. Code § 32-1511 (a)(4) (addressing the calculation of the AWW
when “wages are fixed by the day, hour, or by the output of the employee”), not
D.C. Code § 32-1511 (a)(3). D.C. Code § 32-1511 (a)(4) provides that “the
average weekly wage shall be computed by dividing by 26 the total wages the
employee earned in the employ of the employer in the 26 consecutive calendar
weeks immediately preceding the injury.” By contrast, subsection (a)(3) does not
include this language and thus does not require a retrospective assessment of
income actually earned in the weeks immediately preceding an injury.
12
“rigorous literalism” when it “would surely lead to incongruous or absurd
results.” United Parcel Service v. District of Columbia Dep’t of Emp’t Servs., 834
A.2d 868, 872-73 (D.C. 2003) (internal citations and quotation marks omitted).
Ultimately, our goal is to ensure that “[w]orkers‟ compensation is . . . so calculated
as to produce an honest approximation of claimant‟s probable future earning
capacity.” Id. at 872 (quoting 5 Arthur Larson, Larson’s Workers’ Compensation
Law § 93.01 [1][e], at 93-11 (2003) (internal quotation marks omitted)).
Here, “an honest approximation of [Mr. Young‟s] probable future earning
capacity,” id., included both his $48,000 in salary and his $1,200 housing
allowance under his 12-month employment contract. There was nothing in the
contract that indicated that the payment of a housing allowance was only an
anticipated future benefit. As the contract reads, the housing allowance, like the
salary increase, became an active commitment on the date the contract was signed.
Thus, the CRB‟s focus on the date on which the lease began was misplaced. IP3‟s
obligation to pay Mr. Young a housing allowance both was independent of the
lease agreement and predated that separate agreement.9
9
IP3 well understood that this housing allowance was an inducement for
Mr. Young to take the job. Thomas White, one of the founders of IP3,
acknowledged at the hearing that the company “recognized that as part of
employing individuals in the Middle East that one of the benefits the employees
(continued…)
13
Furthermore, the CRB‟s determination that only the actual cost of Mr.
Young‟s hotel stays over approximately 5 weeks should be used in calculating
lodging was in error because this focus distorted and undervalued Mr. Young‟s
earning capacity. These hotel expenses were not provided for in the detailed
contract. And they are in total far less than the $14,400 ($1,200 x 12) due to Mr.
Young under his contract.10
More generally, looking only to the amount of lodging actually paid to
calculate a claimant‟s AWW would “lead to incongruous or absurd results,” United
Parcel Service, 834 A.2d at 872, because it would make the calculation of AWW
(…continued)
got was that the company provided them with lodging . . . [and] [t]hat they didn‟t
have to pay for it out of their take-home pay.” Moreover, it is not lost on us that
IP3 benefitted from the fact that Mr. Young would be living overseas while
working for the company and thus could pay Mr. Young as little as $48,000
because Mr. Young would not be taxed on that income and would have more take
home pay. Under these circumstances, it seems all the more appropriate to require
IP3 to honor its contractual commitment to pay Mr. Young a housing allowance
and to factor that amount into Mr. Young‟s AWW.
10
For this reason, Mr. Young‟s alternative argument that he was entitled to
a $947.28 weekly housing allowance based on his hotel stays and that that figure
should have been used in the calculation of his AWW likewise fails. IP3 did not
contract to pay Mr. Young for hotel stays, and the figure he reached in calculating
an annual allowance for such expenses, $49,258.56, is well in excess of the total
housing allowance to which IP3 contractually committed for the year.
14
entirely dependent on the timing of the employer‟s payment rather the force of the
employer‟s commitment. Here, for example, IP3 had signed the lease on Mr.
Young‟s behalf and had committed to pay the landlord in two, six month
installments — one at the beginning of the lease and one in the middle. Thus,
under the interpretation of D.C. Code § 32-1511 (b) endorsed by the ALJ and the
CRB, had Mr. Young been injured the day after his lease began, he could have
factored half of his annual rent payments ($7,200) into his AWW calculations, and
had he been injured six months and a day after his lease began, he could have
factored in his total housing allowance for the year ($14,400) because, by that
point, his rent would have been paid in full. Or, had the employer defaulted on its
commitment and never paid Mr. Young‟s rent, he would have had only his salary
as the basis from which to calculate his AWW. But this manner of calculation is
entirely arbitrary and unfair where, in all these scenarios (as in the facts at bar),
Mr. Young had a binding commitment from IP3 to pay for his housing for the full
year.
For all these reasons, we hold that, where an employee is being compensated
via a contract fixed by the year, that provides both for an annual salary and a
monthly housing allowance, his AWW must be calculated based on the terms of
wages — both salary and housing — committed to in the contract. The result is
15
that, in this case, Mr. Young‟s AWW must be properly calculated as $48,000 in
salary added to $14,400 in lodging divided by 52 weeks, for a total of $1,200. We
reverse and remand to the CRB to direct the ALJ to calculate Mr. Young‟s AWW
consistent with this opinion.
So ordered.