Chappy v. Labor and Industry Review Com'n

• Decision Date: 10 October 1985
• Docket Number: No. 84-2320,84-2320
• Citation: 381 N.W.2d 552,128 Wis.2d 318
• Parties: Peter CHAPPY d/b/a Chappy Electric Company and Bituminous Insurance Companies, Plaintiffs-Appellants, v. LABOR AND INDUSTRY REVIEW COMMISSION, Department of Industry, Labor and Human Relations of the State of Wisconsin and Louise Chappy, Defendants- Respondents
• Court: Wisconsin Court of Appeals

Page 552

381 N.W.2d 552

128 Wis.2d 318

Peter CHAPPY d/b/a Chappy Electric Company and Bituminous Insurance Companies, Plaintiffs-Appellants, v. LABOR AND INDUSTRY REVIEW COMMISSION, Department of Industry, Labor and Human Relations of the State of Wisconsin and Louise Chappy Defendants- Respondents.

No. 84-2320.

Court of Appeals of Wisconsin

Oral Argument Oct. 10, 1985.

Opinion Released Dec. 26, 1985.

Opinion Filed Dec. 26, 1985.

Review Granted.

M. Christine Cowles of Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, Robert Zilske, (argued), for plaintiffs-appellants.

Bronson C. La Follette, Atty. Gen., and Gordon Samuelsen, Asst. Atty. Gen., Gordon Samuelsen, Madison, (argued), for defendants-respondents.

Before SCOTT, C.J., BROWN, P.J., and NETTESHEIM, J.

NETTESHEIM, Judge.

Peter Chappy and Bituminous Insurance Companies (Bituminous) appeal from a judgment of the circuit court affirming a decision by the Labor and Industry Review Commission (LIRC) determining the rate at which Louise Chappy was to receive temporary total disability (TTD) benefits under the Worker's Compensation Act.

Bituminous argues that LIRC improperly applied the relevant statute retroactively and that the retroactive application unconstitutionally impaired its contract rights and violated due process. We reject these arguments and affirm the circuit court's judgment.

Louise Chappy was injured at her place of employment on February 27, 1967. As a result, Chappy received TTD benefits from her employer's worker's compensation insurer, Bituminous, at a rate of 70% of her average weekly salary. This rate of compensation represented 57.6% of the maximum TTD benefits available in 1967. In October 1980 Chappy suffered another period of disability which was related to the original injury. Chappy again received TTD benefits. She was paid 57.6% of the maximum rate available in 1980. At dispute is the proper rate at which TTD benefits ought to be paid to Chappy for the renewed period of disability beginning in October 1980.

At the time of the original injury in 1967, sec. 102.03(4), Stats. (1965), of the Worker's Compensation Act, provided that the right to and amount of compensation "shall in all cases be determined in accordance with the provisions of law in effect as of the date of the injury." After Chappy's original injury, but before her renewed period of disability, sec. 102.03(4) was amended several times ¹ and in October 1980 provided:

The right to compensation and the amount of the compensation shall in all cases be determined in accordance with the provisions of law in effect as of the date of the injury except as to employes whose rate of compensation is changed as provided in ss. 102.43(7) and 102.44(1) and (5). [Emphasis added.]

Sec. 102.03(4), Stats. (1979-80). LIRC determined the rate of Chappy's TTD benefits in 1980, pursuant to sec. 102.43(7), Stats., which was created by sec. 29, ch. 195, Laws of 1977, and in October 1980 provided:

If an employe has a renewed period of temporary total disability commencing more than 2 years after the date of injury, payment of compensation for the new period of disability shall be made as follows:

(a) If the employe was entitled to maximum weekly benefits at the time of injury, payment for the renewed temporary total disability shall be at the maximum rate in effect at the commencement of the new period.

(b) If the employe was entitled to less than the maximum rate, the employe shall receive the same proportion of the maximum which is in effect at the time of the commencement of the renewed period as the employe's actual rate at time of injury bore to the maximum rate in effect at that time.

Sec. 102.43(7), Stats. (1979-80). ²

LIRC ordered that Chappy be paid at the rate prescribed in sec. 102.43(7)(b), Stats. (1979-80). Bituminous appealed to the circuit court which affirmed LIRC's order. Bituminous appeals.

The application of a statute to a set of facts presents a question of law. Maxey v. Redevelopment Authority, 120 Wis.2d 13, 18, 353 N.W.2d 812, 815 (Ct.App.1984). As such, we are not bound by LIRC's interpretation and we may review the issue ab initio. L & H Wrecking Co. v. LIRC, 114 Wis.2d 504, 510, 339 N.W.2d 344, 347 (Ct.App.1983). However, if the legal conclusions of an administrative agency are reasonable, they will be sustained even if an alternative view is equally reasonable. Eaton Corp. v. LIRC, 122 Wis.2d 704, 708, 364 N.W.2d 172, 174 (Ct.App.1985). We should not substitute our judgment for that of the commission if there is a rational basis in law for the commission's interpretation, so long as it does not conflict with the legislative history of the statute, prior appellate decisions, or specific constitutional prohibitions. Klusendorf Chevrolet-Buick, Inc. v. LIRC, 110 Wis.2d 328, 331-32, 328 N.W.2d 890, 892 (Ct.App.1982).

Bituminous first claims that sec. 102.43(7)(b), Stats. (1979-80), may not be applied retroactively to cases where the original injury occurred before creation of the statute. We disagree.

Generally, legislation is presumed to apply prospectively unless statutory language indicates, by express language or necessary implication, an intent that the legislation apply retroactively. State v. DILHR, 101 Wis.2d 396, 403, 304 N.W.2d 758, 761 (1981). This general rule, however, does not apply to remedial statutes. Id. at 404, 304 N.W.2d at 762. Where a statute is remedial or procedural in nature, it will be given retroactive application unless the legislature expresses a contrary intent or unless retroactive application disturbs contracts or vested rights. City of Madison v. Town of Madison, 127 Wis.2d 96, 102, 377 N.W.2d 221, 224 (Ct.App.1985). Remedial statutes are "those which afford a remedy, or improve or facilitate remedies already existing for the enforcement of rights and redress of injuries." Bruner v. Kops, 105 Wis.2d 614, 619, 314 N.W.2d 892, 894-95 (Ct.App.1981), quoting 3 C. Sands, Statutes & Statutory Construction § 60.02 (4th ed. 1974).

The Worker's Compensation Act is a remedial statute. DILHR at 405, 304 N.W.2d at 762; Jaeger Baking Co. v. Kretschmann, 96 Wis.2d 590, 602, 292 N.W.2d 622, 628 (1980). Section 102.43(7)(b), Stats. (1979-80), increased previously existing compensation rates for injuries covered by the Worker's Compensation Act. Therefore, we do not begin our analysis with a presumption that sec. 102.43(7)(b) may be applied only on a prospective basis. Rather, we conclude that sec. 102.43(7)(b) may be applied retroactively provided that such application does not disturb contract or vested rights. See City of Madison 127 Wis.2d at 102, 377 N.W.2d at 224.

Furthermore, we conclude that the statute itself reflects a legislative intent that it be applied retroactively. Section 102.03(4), Stats., provides for the retroactive application of sec. 102.43(7), Stats. (1979-80):

The right to compensation and the amount of the compensation shall in all cases be determined in accordance with the provisions of law in effect as of the date of the injury except as to employes whose rate of compensation is changed as provided in ss. 102.43(7) and 102.44(1) and (5). [Emphasis added.]

The parties do not dispute that the legislature was attempting to deal with the effects of inflation upon compensation rates when it enacted this statute. Since the legislative intent was to afford benefits in keeping with economic conditions at the time of renewed periods of disability, we conclude that the legislature intended retroactive application of sec. 102.43(7). ³

Next, Bituminous argues that the retroactive application of sec. 102.43(7)(b), Stats. (1979-80), impaired its contract rights because retroactive application "imposes an obligation upon Bituminous for which it cannot receive recompense from its policyholder ... through increased premiums." We are not persuaded that Bituminous's contract rights were unconstitutionally impaired.

The federal and state constitutions prohibit the state from enacting statutes which impair contract obligations. See U.S. Const., art. I, § 10; Wis. Const., art. I, § 12. The constitutional proscription against impairment of contracts, however, is not absolute and the contract clause cannot be read literally to prohibit any impairment of contract. State ex rel. Cannon v. Moran, 111 Wis.2d 544, 553-54, 331 N.W.2d 369, 374 (1983). The obligations of contract may have to yield, in certain circumstances, to a compelling interest of the public. Id. at 554, 331 N.W.2d at 374. See also State ex rel. Building Owners & Managers Association of Milwaukee, Inc. v. Adamany, 64 Wis.2d 280, 292, 219 N.W.2d 274, 280 (1974).

The first step of the analysis is to determine whether an obligation of contract has been impaired. Cannon at 554, 331 N.W.2d at 374. See also Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244, 98 S.Ct. 2716, 2722, 57 L.Ed.2d 727 (1978). "[L]egislation which alters the contractual expectations of the parties impairs the obligation of contract." Cannon at 555, 331 N.W.2d at 375. If contract obligations are impaired, we must then determine whether such impairment is unconstitutional. Id. at 557, 331 N.W.2d at 376. The statute challenged must have a significant and legitimate public purpose, such as remedying a broad and general social or economic problem. Id. at 560, 331 N.W.2d at 377. The final inquiry is whether the statute is reasonable and appropriate for the public purpose justifying its enactment. Id. at 561, 331 N.W.2d at 378.

Even assuming that the retroactive application of sec. 102.43(7), Stats. (1979-80), resulted in an impairment of Bituminous's contract obligations, we nonetheless conclude that the impairment was not unconstitutional. We are persuaded that sec. 102.43(7) has a significant and legitimate public purpose and that the statute is reasonable and appropriate, given its purpose.

Worker's compensation statutes are economic regulations by which the legislature has...