Arizona Public Service Co. v. Industrial Commission

• Decision Date: 01 February 1972
• Docket Number: No. 1,CA-IC,1
• Citation: 16 Ariz.App. 274,492 P.2d 1212
• Parties: ARIZONA PUBLIC SERVICE COMPANY, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Bernard Maldonado, Respondent Employee. 605.
• Court: Arizona Court of Appeals

Page 1212

492 P.2d 1212

16 Ariz.App. 274

ARIZONA PUBLIC SERVICE COMPANY, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Bernard Maldonado, Respondent Employee.

No. 1 CA-IC 605.

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

Feb. 1, 1972.

Rehearing Denied Feb. 28, 1972.

John S. Schaper, Phoenix, for petitioner.

William C. Wahl, Jr., Chief Counsel, Phoenix, for respondent The Industrial Commission of Arizona.

Chris T. Johnson, Phoenix, for respondent Employee.

HAIRE, Judge.

In this review of an award by the Industrial Commission we are asked to find that because of statutory amendments following the holding of the Arizona Supreme Court in Whyte v. Industrial Commission, 71 Ariz. 338, 227 P.2d 230 (1951), this decision is no longer applicable in determining the post-injury earning capacity of a workman who has incurred a permanent partial disability. In Whyte the court set forth the principle that in the determination of the amount which represents the injured workman's post-injury earning capacity, the Commission should adjust or roll-back the actual post-injury earnings of the injured workman when the evidence shows that the post-injury earnings have been affected by a general increase in wage levels.

Initially, we reject petitioner's claim that subsequent statutory amendments have rendered inapplicable the opinion of the Arizona Supreme Court in Whyte. The pertinent statutory provisions in effect at the time of the Whyte decision were found in subsections (c) and (d) of § 56--957, Ariz.Code Ann. (1939). These subsections, together with the corresponding statutory provisions now in effect, subsections C and D of A.R.S. § 23--1044, are set forth in Footnote 1 below. ¹ In our opinion the revised statutory language mandates the result reached in Whyte even more clearly than did the statutes in effect at the time of the Whyte decision. The statutes now expressly require that the post-injury evaluation be based upon 'earning capacity' rather than upon the post-injury 'monthly wages' as required before the amendment. While it is usually true that the concepts of 'earning capacity' and 'monthly wages' vary considerably, See 2 A. Larson, Workmen's Compensation Law, § 57.21 (1971), even before the amendment the Arizona Supreme Court had construed the term 'monthly wages' as used in the prior statute as being synonymous with 'earning capacity'. See Whyte, Supra. The subsequent amendment merely recognizes the construction previously adopted by judicial decision. However, we do not mean to imply that the pre-amendment application of the 'earning capacity' test was in any way in derogation of the pre-amendment legislative intent. To the contrary, in our opinion, when the language 'monthly wages he is able to earn thereafter' found in subsection (c) of § 56--957, Ariz.Code Ann. (1939) is considered together with the provisions of subsection (d) thereof, which require the Commission to consider factors other than actual wages received, the conclusion is inescapable that an earning capacity test was intended.

While it is logical, and well established in Arizona law that evidence as to post-injury earnings creates a presumption that the injured workman has an earning capacity equal to the amount of these post-injury earnings, See Allen v. Industrial Commission, 87 Ariz. 56, 347 P.2d 710 (1959), under certain circumstances post-injury wages considered by themselves may be a quite unreliable indicator of post-injury earning capacity. As stated in Larson:

'Unreliability of post-injury earnings may be due to a number of things: increase in general wage levels since the time of accident; claimant's own greater maturity or training; longer hours worked by claimant after the accident; payment of wages disproportionate to capacity out of sympathy to claimant; and the temporary and unpredictable character of post-injury earnings.'

2 A. Larson, Workmen's Compensation Law $ 57.21 at 27 (1971).

We have no hesitancy in holding that an increase in general wage levels is one of the 'other things' which the Commission may consider under A.R.S. § 23--1044 D along with 'wages received for work performed subsequent to the injury' for the purpose of 'determining the amount which represents the reduced monthly earning capacity' of the injured workman. For Arizona decisions subsequent to Whyte recognizing the applicability of the Whyte rule, see Kurtz v. Matich, 96 Ariz. 41, 391 P.2d 594 (1964); Allen v. Industrial Commission, 92 Ariz. 357, 377 P.2d 201 (1962); Allen v. Industrial Commission, 87 Ariz. 56, 347 P.2d 710 (1959); White v. Industrial Commission, 87 Ariz. 154, 348 P.2d 922 (1960). The Whyte rule is an application of the principle that it is only by the elimination of all variables except the injury itself that a reasonably accurate estimate can be made of the impairment of earning capacity attributable to the injury. Another application of this same principle is found in Sanchez v. Industrial Commission, 96 Ariz. 19, 391 P.2d 579 (1964), wherein the court held that when part-time employment as a musician was not considered in establishing the injured workman's average monthly wage, ² then such part-time employment subsequent to the injury could not be considered in addition to his post-injury full-time employment in establishing post-injury earning capacity. See also, 2 A. Larson, Workmen's Compensation Law § 57.33 (1971).

Having decided that the statutory amendments relief upon by the petitioner do not require that we disregard the principle set forth in Whyte, we now look at the facts to determine whether the evidence supports the Commission's action in this case.

In 1964 Bernard Maldonado was injured by an accident arising out of and in the course of his employment with petitioner Arizona Public Service Company. A timely filed workmen's compensation claim resulted in an award for medical benefits only, since initially Maldonado had not been disabled from work for more than seven days.

In 1967, some three years later, the claim was reopened upon Maldonado's petition, and later that year he underwent disc surgery. Subsequent proceedings before the Commission eventually resulted in the Commission's award of November 18, 1970, which found that Maldonado had incurred a 21.17% Loss of earning capacity entitling him to unscheduled permanent partial disability benefits in the sum of $63.21 per month, to continue until further order of the Commission.

Maldonado's average monthly wage had been established at $543.93 by a 1968 Commission award which became final and is not subject to attack in this review. The file shows that part of this average monthly wage was attributable to a base rate of pay of $463 per month. The balance of the average monthly wage in the amount of $79.93 per month was attributable to over-time and flag pay. ³ His post-injury average monthly earnings were $627.36, an amount obviously substantially in excess of the previously established average monthly wage. However, the Commission determined that because of a general increase in wage levels, these post-injury monthly earnings were not an accurate measure of his post-injury earning capacity, and entered an award entitling Maldonado to compensation as above indicated. Petitioner contends that assuming the applicability of the Whyte rule, the Commission erred in its application under the facts of this case.

A claimant relying upon the Whyte rule must show that his actual present earnings do not represent a reasonable basis for measuring his loss of earning capacity because, in comparison with his pre-injury earnings, his post-injury earnings have been inflated by a general increase in wage levels. The theory of Whyte, Supra, is that when the evidence shows a general increase in wage levels, then the post-injury wage scale should be adjusted back ⁴ to the time of the injury so as to afford a fair and equitable basis of comparison with the injured workman's wage scale in the occupation he was engaged in at the time of injury. As emphasized in Whyte, Supra, the intent of the legislature 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.' (Emphasis added). 71 Ariz. at 344, 227 P.2d at 233.

If both the post-injury earnings and the average monthly wage are measured on the same yardstick, for example, a standard full-time job unaffected by overtime or other extraneous factors which are...