Carter v. Treasurer of Mo. - Custodian of the Second Injury Fund

• Decision Date: 25 October 2016
• Docket Number: WD77747,C/w WD78840
• Citation: 506 S.W.3d 368
• Parties: Phillip CARTER, Dec., Appellant, v. TREASURER OF THE STATE OF MISSOURI - CUSTODIAN OF THE SECOND INJURY FUND, Respondent.
• Court: Missouri Court of Appeals

506 S.W.3d 368

Phillip CARTER, Dec., Appellant,

v.TREASURER OF THE STATE OF MISSOURI - CUSTODIAN OF THE SECOND INJURY FUND, Respondent.

WD77747

C/w WD78840

Missouri Court of Appeals, Western District.

Filed October 25, 2016

Motion for Rehearing and/or Transfer to Supreme Court Denied November 22, 2016

Application for Transfer Denied January 31, 2017

Truman E. Allen and Benjamin B. Nelson, Columbia, MO for appellant.

Kimberley C. Fournier, Jason M. Lloyd, Kansas City, and Cara L. Harris, Springfield, MO for respondent.

Before Division Two: Lisa White Hardwick, Presiding Judge, Karen King Mitchell and Anthony Rex Gabbert, Judges

LISA WHITE HARDWICK, JUDGE

Edith Joanne Carter appeals the decision of the Labor and Industrial Relations Commission ("Commission") dismissing her motion to substitute her as a party for her deceased husband, Phillip Carter,¹ in his workers' compensation case and to order the Second Injury Fund ("Fund") to pay his permanent total disability benefits to her. Carter contends the Commission erred in concluding that it had no statutory authority to order the continuation of Phillip's benefits to her after his death. Additionally, she argues that the Commission's decision to deny her Phillip's benefits violated her right to due process of law. For reasons explained herein, we affirm.

FACTUAL AND PROCEDURAL HISTORY

Phillip sustained a work-related injury on January 25, 2005. He filed a workers' compensation claim against both his employer and the Fund on November 8, 2006. A hearing was held before an Administrative Law Judge ("ALJ"). On August 18, 2009, the ALJ awarded Phillip permanent total disability benefits from the Fund. The award provided that Phillip was to receive benefits "for as long as [he] remains so disabled." The award contained no factual findings or conclusions regarding any dependents of Phillip. No party filed an application for review of the ALJ's award.

On April 13, 2014, Phillip died of causes unrelated to his work injury. The Fund terminated payment of Phillip's benefits effective upon his death. Carter filed a motion to substitute herself as a party in the workers' compensation case and to reinstate Phillip's permanent total disability benefits to pay them to her.

The Commission dismissed Carter's motion on July 3, 2014. The Commission determined that it lacked the authority to substitute Carter as a party or to order that she be paid Phillip's permanent total disability benefits because Phillip's August 18, 2009 award was final and contained no basis upon which the Commission could grant such relief. Carter appeals.

While this appeal was pending, Carter filed a petition in the circuit court requesting to have Phillip's August 18, 2009 workers' compensation award entered as a judgment pursuant to Section 287.500.² The court entered the award as a judgment. Carter then filed a motion asking the court to enforce the judgment by ordering the Fund to pay Phillip's permanent total disability benefits to her for her lifetime. The court granted Carter's motion. The Fund appealed in Joanne Carter v. Missouri State Treasurer, as Custodian of the Second Injury Fund , WD79437 (Mo. App. Oct. 25, 2016), which was argued on the same day as this case and is handed down simultaneously.

STANDARD OF REVIEW

We will not disturb the Commission's decision in a workers' compensation case unless the Commission acted in excess of its powers, the decision was procured by fraud, the facts found by the Commission do not support the decision, or there was not sufficient competent evidence in the record to support the decision. § 287.495.1. We review questions of law de novo . Gervich v. Condaire, Inc. , 370 S.W.3d 617, 620 (Mo. banc 2012). Therefore, we are not bound by and do not defer to the Commission's interpretation or application of the law. Id .

ANALYSIS

In Point I, Carter contends the Commission erred in determining it had no authority to substitute her as a party and to reinstate Phillip's permanent total disability benefits, naming her the recipient of those benefits. She argues that Sections 287.530 and 287.203 provide a basis for the Commission to determine her right to have her deceased husband's benefits continued to be paid to her as his surviving dependent.

In her motion filed with the Commission, Carter sought to have Phillip's benefits reinstated and paid to her as his dependent pursuant to Schoemehl v. Treasurer of Missouri , 217 S.W.3d 900 (Mo. banc 2007). In Schoemehl , the Supreme Court held that, when an employee with a permanent total disability dies of a cause unrelated to the compensable work-related injury, the disability benefits shall be paid to the employee's dependents for their lifetime because the surviving dependents are deemed to have the same rights as the employee. Id . at 902.

In 2008, the legislature specifically rejected and abrogated Schoemehl by amending several sections of the Workers' Compensation Law to make clear that permanent total disability benefits are payable only during the injured employee's lifetime and not to his dependents after the employee's death when the employee dies from a cause unrelated to the work injury. Gervich , 370 S.W.3d at 620–21.

Despite the legislature's abrogation of Schoemehl with its 2008 amendments to Chapter 287, courts have ruled that the holding in Schoemehl continues to apply to claims for permanent total disability benefits that were pending between January 9, 2007, the date the Supreme Court issued the Schoemehl decision, and June 26, 2008, the effective date of the 2008 amendments. Id . at 621 ; Strait v. Treasurer of Missouri , 257 S.W.3d 600, 602 (Mo. banc 2008). For Schoemehl to apply to claims that were pending during this window, the claims must not have reached final disposition. Gervich , 370 S.W.3d at 622 ; Strait , 257 S.W.3d at 602.

Thus, in Gervich , 370 S.W.3d at 622, and Strait , 257 S.W.3d at 602, the Court found that dependents were entitled to the employees' permanent total disability benefits because the employees' claims were pending during the Schoemehl window and no final award had been entered by the Commission. In both of those cases, the employees died before the Commission entered a final award. Gervich , 370 S.W.3d at 619 ; Strait , 257 S.W.3d at 601. Because no final award had been entered on the workers' compensation claims, the employees' dependents were able to establish themselves as dependents, be substituted as parties in place of the employees, and assert their rights to the employees' permanent total disability benefits under Schoemehl before the awards became final. Gervich , 370 S.W.3d at 619 ; Strait , 257 S.W.3d at 601.

Following Gervich and Strait , this court discussed the extent of the Commission's authority to address claims that fall within the Schoemehl window when the employee is still living at the time the final award is entered. In White v. University of Missouri, Kansas City , 375 S.W.3d 908, 909–10 (Mo. App. 2012), the employee's claim against the Fund for permanent total disability benefits included a claim for successor benefits for his wife. The Commission found that the employee's spouse was his dependent and that she qualified for benefits under Schoemehl . Id . at 910. On appeal, we vacated the Commission's decision to the extent that it purported to adjudicate the spouse's future entitlement to successor benefits upon the employee's death. Id . at 913.

In so holding, we explained that, pursuant to Gervich , 370 S.W.3d at 622, an employee's dependents are determined at the time of the employee's injury and not at the time of the employee's death. White , 375 S.W.3d at 911. For the spouse of an injured employee to remain a dependent entitled to Schoemehl benefits after the employee dies, however, the spouse must not predecease or divorce the employee. Id. at 913.³ Because these contingencies remain unfulfilled until the employee dies, the Commission cannot determine that a dependent is entitled to Schoemehl benefits in the final award if the employee is still living. Id .

Even though the Commission cannot determine a dependent's entitlement to Schoemehl benefits in the final award if the employee is still living, we found that the Commission correctly determined the spouse's dependency status in the final award. Id . Specifically, the Commission's final award in White included a finding that the spouse had been married to the employee for 35 years. Id . at 912. Consequently, we found that the spouse's "dependency status at the time of the injury is established, and has been appropriately determined as a matter of law." Id . at 913. Thus, pursuant to White , where a claim falls within the Schoemehl window and the employee is still living at the time the final award is entered, it is appropriate for the Commission to establish and determine dependency status at the time of the injury as a matter of law in the final award, thereby preserving the issue of the dependent's contingent right to Schoemehl benefits for future determination. See id .

In this case, Phillip's claim was pending during the Schoemehl window, as he filed his claim in November 2006 and no final award was issued on the claim until August 18, 2009. The final award on Phillip's claim, however, did not mention that Carter and Phillip were married or that Carter was Phillip's dependent at the time of his injury. Indeed, Carter concedes that "[t]he award contained no factual findings or conclusions regarding anyone's dependency on Phillip Carter."

Once the final award was issued on Phillip's claim, and the 20-day time period to file an application for review under Section 287.480.1 expired without an application having been filed, the Commission lost its authority to make any findings and conclusions regarding Phillip's dependents at the time of his injury. As an administrative tribunal, the Commission is a statutory creation and has only that authority given by legislative enactment. Buescher v. Mo. Highway &...