Altamirano v. Industrial Commission, 1

• Decision Date: 07 November 1974
• Docket Number: No. 1,CA-IC,1
• Citation: 22 Ariz.App. 379,527 P.2d 1096
• Parties: David F. ALTAMIRANO, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Magma Copper Company, Superior Division, Respondent Employer, State Compensation Fund, Respondent Carrier. 1097.
• Court: Arizona Court of Appeals

Page 1096

527 P.2d 1096

22 Ariz.App. 379

David F. ALTAMIRANO, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent Magma Copper Company, Superior Division, Respondent Employer State Compensation Fund, Respondent Carrier.

No. 1 CA-IC 1097.

Court of Appeals of Arizona, Division 1, Department C.

Nov. 7, 1974.

Rehearing Denied Dec. 4, 1974.

Review Denied Jan. 14, 1975.

Spencer K. Johnston, Phoenix, for petitioner.

Edward F. Cummerford, Chief Counsel, The Industrial Commission of Arizona, Phoenix, for respondent.

Twitty, Sievwright & Mills by John F. Mills, Phoenix, for respondent employer.

Robert K. Park, Chief Counsel, State Compensation Fund, Phoenix, for respondent carrier.

OPINION

NELSON, Judge.

The petitioner, David Altamirano, instituted this action by Writ of Certiorari challenging an award of the Industrial Commission of Arizona which granted his 1972 Petition to Reopen for New, Additional, or Previously Undiscovered Disability (A.R.S. § 23--1061(H)), after which a hearing was held to determine the amount of benefits payable to Altamirano for temporary partial disability suffered between May 18, 1972, and January 31, 1973. (The original accident upon which the Petition to Reopen was based occurred in 1966.) In computing the amount of benefits to which Altamirano was entitled for the period of temporary partial disability, the Industrial Commission did not allow for the effects of inflation and changes in industry-wide wage levels between 1966 and 1972. The result of this method of computation was to deny petitioner any recovery because the dollar amount of his wages in 1972, even though he was partially disabled, was a higher amount because of inflation than he had been earning at the time of his injury in 1966, and thus the Industrial Commission concluded Altamirano had suffered no diminished earning capacity. Altamirano presented testimony establishing that the wages in the job he was able to hold while temporarily partially disabled were now much higher than they had been for a job of that classification at the time he was first injured in 1966:

                      Prior-to-Injury      Post-Injury
                            Job                Job
                1966     $3.29 hr.     $2.50-$2.87 hr
                ----
                                       (would have paid)
                1972     $4.69 hr.     $4.00-$4.25 hr
                ----
                

(he in fact earned)

The sole issue before this court is whether petitioner's recovery was properly computed, or whether recovery should have been based on real wages, with the effects of inflation and changes in industry-wide wage levels removed from the computation.

Section 23--1044(A), A.R.S., sets forth the formula by which the amount of recovery for a temporary partial disability is computed. Section 23--1044(C), A.R.S., sets forth a somewhat comparable formula for the computation of recovery for a permanent partial disability. Subsection C has received a judicial construction which petitioner herein urges this court now to give Subsection A. We agree that a similar construction for the two sections should obtain, and therefore set aside the award.

The purpose of industrial compensation is to compensate an employee for lost earning capacity. Maness v. Industrial Commission, 102 Ariz. 557, 434 P.2d 643 (1967), Whyte v. Industrial Commission, 71 Ariz. 338, 227 P.2d 230 (1951). For example, if an employee's earning capacity is reduced by 50 per cent, and the amount of his post-injury wage is fixed as of the time immediately following injury, before wage levels generally have risen, his recovery will be based on the full 50 per cent loss of capacity. But if the post-injury wage is given several years to rise, and that higher wage is used as his post-injury wage, then his amount of recovery will be reduced, despite the fact that his percentage earning capacity was nonetheless reduced by 50 per cent. ¹

All the reasons stated in Whyte v. Industrial Commission, supra, and Arizona Public Service Co. v. Industrial Commission, 16 Ariz.App. 274, 492 P.2d 1212 (1972) to support removal of inflationary factors from computation of recoveries for permanent partial disabilities apply equally to temporary partial cases.

The Arizona Supreme Court stated in Whyte v. Industrial Commission, supra:

'The intent of the legislature in using the language under consideration was to furnish the commission with a yardstick by which it could with reasonable accuracy determine the diminished earning capacity of an injured employee and by the use of which no inequalities, inequities or injustices could arise. To do this it, of course, intended that the length of the yardstick to be used should at all times remain constant. It follows then that the legislature did not intend that wages received two, five or ten years after an employee has sustained an injury (depending upon when the injury becomes stationary), regardless of changes in business conditions during those periods where all wages have doubled, due to a business boom, or cut in two due to business depression, should be used by the commission as a part of its formula in ascertaining the loss of his earning capacity.' 71 Ariz. at 344, 227 P.2d at 233.

This language was quoted with approval in Arizona Public Service v. Industrial Commission, supra.

The court, in Whyte, supra, went on to say:

'. . . The diminished earning capacity of petitioner occurred the moment he sustained his injury. It is only the extent of the loss of his earning capacity which remained underterminable and this continues until the healing processes of nature renders the condition of his injuries stationary so that the character of work he is able to do, if any, may be ascertained. As above stated the law clearly fixes his earning capacity immediately prior to his injury as one of the predicates for determining the loss in his earning capacity. We think it reasonable and logical to conclude therefore that in defining the other predicate as 'the monthly wages he is able to earn thereafter' the word 'thereafter' was intended to mean and must of necessity be construed to mean, 'immediately thereafter' and that the second predicate based upon his new employment must be determined by ascertaining what wages others in the same or most similar class in the same or most similar employment in the same or similar locality were receiving at the time the injury occurred. This is the only construction that will yield an unvariable result regardless of surrounding circumstances, and harmonizes with all of the authorities that changes in economical conditions may not be permitted to affect the amount of compensation due an injured employee based upon loss of earning capacity. Capone's Case, 239 Mass. 331, 132 N.E. 32; Durney's Case, 222 Mass. 461, 111 N.E. 166; Peak v. Nashua Gummed & Coated Paper Co., 87 N.H. 350, 179 A.355. The authorities seem to agree that the employee in common with all others must bear the loss resulting from a business depression. It follows as a necessary corollary thereto that the employee in common with all others is entitled to the enjoyment of benefits resulting from general wage increases due to eras of great prosperity in the nation. Therefore a reduction or increase in earning capacity occasioned by general business conditions and not due to the injury cannot be considered by the commission as a basis for fixing or adjusting the compensation of an injured employee.' 71 Ariz. at 345, 227 P.2d at 234.

The language in Whyte, supra, upon which the hearing officer relied, and upon which respondents base their argument that inflationary factors cannot be removed from temporary partial recoveries, is the following:

'. . . This formula, however, applies only in cases where the increase or decrease in wages is due solely to a change in economic conditions that occurs between the date the injury takes place And the date the injury becomes stationary, as in this case. It has no application where the difference in wages during that period is due to a change in the physical condition of the injured employee directly and...