Bomely v. Mid-America Corp.

• Decision Date: 01 June 1998
• Docket Number: MID-AMERICA
• Citation: 970 S.W.2d 929
• Parties: Robert Harold BOMELY, Jr., Plaintiff/Appellee, v.CORPORATION, d/b/a Burger King, Defendant/Appellee, and Larry Brinton, Jr., Director of the Division of Workers' Compensation, Tennessee Department of Labor, Second Injury Fund, Defendant/Appellant.
• Court: Tennessee Supreme Court

Page 929

970 S.W.2d 929

Robert Harold BOMELY, Jr., Plaintiff/Appellee, v. MID-AMERICA CORPORATION, d/b/a Burger King, Defendant/Appellee and Larry Brinton, Jr., Director of the Division of Workers' Compensation, Tennessee Department of Labor Second Injury Fund, Defendant/Appellant.

Supreme Court of Tennessee at Knoxville.

June 1, 1998.

David H. Dunaway, Dunaway & Associates, LaFollette, for Appellee Bomely.

Steven Johnson Butler, Vines, Babb, Knoxville, for Appellee Mid-America Corporation, d/b/a Burger King.

John Knox Walkup, Attorney General and Reporter, Dianne Stamey Dycus, Senior Counsel, Nashville, for Appellant.

OPINION

DROWOTA, Justice.

In this workers' compensation action the Second Injury Fund, defendant-appellant, has appealed from a judgment of the Chancery Court of Knox County which found the employee, Robert Bomely, plaintiff-appellee, to be totally and permanently disabled. The award was apportioned 65 percent to the employer, Mid-America Corporation, d/b/a Burger King, defendant-appellee, and 35 percent to the Second Injury Fund under Tenn.Code Ann. § 50-6-208(b). The trial court assessed the employer's liability based on 400 weeks of benefits and held the Second Injury Fund liable for the remaining 938 weeks of benefits (until the employee reached the age of 65 ¹). Thus, the employer's liability was limited to 65 percent of 400 weeks rather than 65 percent of the total number of weeks to age 65. We transferred this case from the Special Workers' Compensation Appeals Panel to decide whether it was proper to have limited the employer's liability in this fashion. After carefully examining the record before us and considering the relevant authorities, we conclude that the award should be apportioned between the employer and the Second Injury Fund based on the total number of weeks to age 65 rather than limiting the employer's liability to a percentage of 400 weeks. Accordingly, that portion of the trial court's judgment is reversed. We shall also address (1) whether an award of permanent total disability is subject to the monetary cap imposed by the 400 week maximum total benefit provision of Tenn.Code Ann. § 50-6-102(a)(6) and (2) whether the apportionment of benefits between the employer and the Second Injury Fund in this case is controlled by subsection (a) or (b) of Tenn.Code Ann. § 50-6-208.

BACKGROUND

In 1993 and again in 1994, the employee, Robert Bomely, was working as an assistant manager for Burger King when he injured his neck and back in the course and scope of his employment. He had an extensive history of prior back and neck injuries, both work-related and nonwork-related. These include a noncompensable back injury in 1982; a work-related back injury in 1983 that resulted in a court approved settlement for 25 percent permanent disability to the body as a whole; a work-related back injury in 1988 for which a settlement was reached and approved by the court for 10 percent permanent disability to the body as a whole; and a noncompensable neck injury resulting from a car accident in 1989. Accordingly, the employee has received workers' compensation awards totaling 35 percent permanent disability to the whole body prior to the 1993 and 1994 work-related back and neck injuries which precipitated this suit. The employee was able to return to work after each injury, but has not been able to return to work since his last injury in 1994.

Dr. William Kennedy, an orthopedic surgeon, testified that the employee sustained a 29 percent permanent anatomical impairment to his neck and a 26 percent permanent anatomical impairment to his back for a total of 47 percent impairment to the body as a whole. Dr. Kennedy attributed 33 percent of the total anatomical impairment of 47 percent to the 1993 and 1994 injuries, which equates to 15.6 percent. A psychiatrist testified the employee has permanent and severe depression related to his injuries which prevent him from being gainfully employed. A vocational disability expert concluded that the employee is totally and permanently vocationally disabled.

The trial court found the employee to be permanently and totally disabled, a finding that the parties do not contest on appeal. The court also found that only 20 percent of the employee's permanent and total disability was attributable to the last injury. The court further determined that the employee was entitled to workers' compensation benefits until he reached the age of 65 (he was 42 years old at the time of trial). See Tenn.Code Ann. § 50-6-207(4)(A)(i). The trial court then apportioned the award 65 percent to the employer and 35 percent to the Second Injury Fund pursuant to Tenn.Code Ann. § 50-6-208(b). The court assessed the employer's liability based on 65 percent of 400 weeks of benefits for a total of 280 weeks (or $81,640) and held the Second Injury Fund liable for the remaining 938 weeks of benefits (or $294,532). The employer's liability was thus limited to 65 percent of 400 weeks rather than 65 percent of the total number of weeks to age 65 (1,218 weeks).

The primary question on appeal is whether it was proper to have assessed the employer's liability based on a percentage of 400 weeks. ² A secondary but related issue is whether an award of permanent total disability is subject to the monetary cap imposed by the 400 week maximum total benefit provision of Tenn.Code Ann. § 50-6-102(a)(6). A final question is whether the apportionment of benefits between the employer and the Second Injury Fund in this case is controlled by subsection (a) or (b) of Tenn.Code Ann. § 50-6-208.

I.

The Second Injury Fund argues that the trial court erred by limiting the employer's liability to 65 percent of 400 weeks. Citing Reagan v. American Policyholders' Ins., 842 S.W.2d 249 (Tenn.1992), the Fund contends that the employer's liability should be calculated based upon the total amount of benefits awarded to age 65. According to the Fund, the workers' compensation law contains no indication that the legislature intended to limit an employer's liability under Tenn.Code Ann. § 50-6-208 to 400 weeks. Rather, the legislature expressed its intent through the enactment of Tenn.Code Ann. § 50-6-207(4)(A)(i) in 1992 that employers can be held liable for benefits to age 65 if the employee is permanently and totally disabled.

In response, the employer argues that to hold it liable for more than 400 weeks of benefits would undermine the purpose of the Second Injury Fund to encourage employers to hire injured workers because employers will not risk having to pay benefits to age 65.

In Reagan v. American Policyholders' Ins., 842 S.W.2d 249 (Tenn.1992), the employee fell through a floor in the course and scope of his employment which left him totally and permanently disabled. He had previously settled a workers' compensation claim for 15 percent permanent impairment to the body as a whole. Due to his low average weekly wage, the employee was entitled to an award of 550 weeks rather than the typical 400 weeks of benefits provided at that time for permanent total disability. The employer in Reagan argued that its liability was limited to 85 percent of 400 weeks and that the Second Injury Fund should be liable for the rest of the award. This Court rejected the employer's argument and held that the apportionment should be based on the total amount of money awarded to the employee. Reagan, 842 S.W.2d at 251. We reasoned that apportioning the award in this manner was the only equitable thing to do. Id.

The employer in the case at bar argues that Reagan is "wholly unrelated to the issues in the present case" because it was decided before the 1992 change to the workers' compensation law providing that a permanently and totally disabled worker is entitled to receive benefits until age 65. It is true that when Reagan was decided an award for permanent total disability was based on 400 weeks of benefits rather than the current payment of benefits until age 65. See Tenn.Code Ann. § 50-6-207(4)(A)(i). As such, Reagan does not address the apportionment of benefits until age 65.

Nonetheless, we are persuaded that the principle of equitable apportionment adopted in Reagan applies with equal force to the case at bar. It is not equitable to cap the employer's liability at 400 weeks and require the Fund to pay the bulk of the award in light of the fact that Tenn.Code Ann. § 50-6-102(a)(6)(C) specifically exempts permanent total disability awards from the 400 week maximum total benefit limitation and Tenn.Code Ann. § 50-6-207(4)(A)(i) authorizes benefits to age 65 in cases of permanent and total disability. There is no indication in the workers' compensation law that the legislature intended to limit an employer's liability under Tenn.Code Ann. § 50-6-208 to 400 weeks. In fact, the legislature has expressed its intent through Tenn.Code Ann. § 50-6-207(4)(A)(i) that employers can be held liable for benefits to age 65 if an employee is totally and permanently disabled. If the legislature had wanted to cap an employer's liability at 400 weeks where benefits are awarded to age 65 in cases involving the Second Injury Fund it could have easily done so.

Furthermore, we note here as we did in Reagan that the "objective of the legislation creating the Second Injury Fund is to limit the liability exposure of the employer by holding it responsible only for the employee's first 100 percent of workers' compensation disability, thereby encouraging the employment of injured workers." Reagan, 842 S.W.2d at 250. "In other words, the employer is responsible for the employee's first 100 percent of benefits and the Second Injury Fund is responsible for the rest." Id. at 250-251. Under our holding today the employer's exposure to liability is still limited to the first 100 percent of Bomely's permanent total disability. If Bomely is able to rehabilitate himself and return to work and then gets injured again, the employer would pay nothing in...