Chappy v. Labor and Industry Review Com'n, Dept. of Industry, Labor and Human Relations
| Decision Date | 06 March 1987 |
| Docket Number | No. 84-2320,84-2320 |
| Parties | Peter CHAPPY d/b/a Chappy Electric Company and Bituminous Insurance Companies, Plaintiffs-Appellants-Petitioners, 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 Supreme Court |
Robert H. Zilske, (argued) William R. Sachse, Jr., M. Christine Cowles and Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, for plaintiffs-appellants-petitioners.
Bruce Olsen, Asst. Atty. Gen., for defendants-respondents.
This is a review of a published decision of the court of appeals, Chappy v. LIRC, 128 Wis.2d 318, 381 N.W.2d 552 (Ct.App.1985), affirming a judgment of Washington county circuit court, Judge James B. Schwalbach. The circuit court affirmed an order of the Labor and Industry Review Commission which affirmed the hearing examiner's award of increased temporary total disability benefits to Louise Chappy, pursuant to sec. 102.43(7)(b), Stats. (1979-80). [All references in this opinion are to the 1979-80 statutes unless otherwise indicated.]
There are two issues raised on appeal. First, does sec. 102.43(7)(b), Stats., operate to modify the benefits of those employees suffering a renewed period of temporary total disability stemming from an injury incurred prior to the enactment of sec. 102.43(7)(b)? Second, if sec. 102.43(7)(b) does operate to modify the injured employee's benefits, and hence the insurer's obligation, is it unconstitutional because (a) it violates the contract clause of either the Wisconsin Constitution or the United States Constitution; or (b) it violates the fifth amendment of the United States Constitution, as applied to the states via the fourteenth amendment, in that it deprives Bituminous Insurance Companies of property without due process of the law? We agree with the lower courts' determinations that sec. 102.43(7)(b) was intended to, and does, operate to modify the benefits of those employees suffering a renewed period of temporary total disability, regardless of whether the original injury occurred prior to, or after, the enactment of sec. 102.43(7)(b). Furthermore, we agree with the lower courts' conclusions that sec. 102.43(7)(b) is constitutional.
On February 27, 1967, Louise Chappy (Chappy) slipped and fractured her left hip while working for Peter Chappy d/b/a Chappy Electric Company. As a consequence of her broken hip, Chappy received temporary total disability (TTD) benefits of $39.20 per week. Such benefits were equal to 70 percent of her average weekly wage and were approximately 57 percent of the maximum TTD rate of $68 per week. Chappy returned to work on October 15, 1968.
Beginning on October 4, 1980, Chappy developed knee problems related to her 1967 hip fracture. The problem with her knee resulted in a renewed period of TTD which incapacitated Chappy from October 4, 1980, through March 12, 1981. During this time Chappy Electric's insurer, Bituminous Insurance Companies, paid Chappy TTD benefits of $83.34 per week, two-thirds of her average weekly wage of $125. 1.. The maximum TTD rate in effect at the time of Chappy's knee problems was $233 per week.
At the time that Chappy fractured her hip, sec. 102.03(4), Stats. (1967), provided that benefits were to be determined based upon the laws in effect at the time of the injury. However, after Chappy's original injury but prior to her knee problems, the legislature amended sec. 102.03(4) in 1977 to provide that benefits were to be determined based on laws in effect at the time of injury, except as provided in sec. 102.43(7). Under sec. 102.43(7)(b) an employee who has a renewed period of TTD more than two years after the date of injury and such new period of TTD entitles the employee to less than the maximum weekly benefit rate, payable at the instant of the renewed injury, then the employee would receive benefits in the following manner: "[T]he 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."
On April 13, 1982, the Department of Industry, Labor and Human Relations (DILHR), on its own initiative, wrote and directed Bituminous Insurance Companies to pay TTD benefits, as a result of Chappy's knee problems, in the amount of $134.32 per week. The $134.32 figure was arrived at by taking the percentage of the maximum weekly wage benefit received by Chappy at the time of her 1967 injury (57.65 percent) and multiplying that percentage by the $233 maximum weekly wage benefit applicable in October, 1980. See Sec. 102.43(7)(b), Stats.
In response to Bituminous Insurance Companies' and Chappy Electric's (Bituminous) concern regarding the amount of TTD payments, DILHR scheduled a hearing on December 21, 1982. The hearing examiner rejected Bituminous's contention that sec. 102.43(7)(b), Stats., could not be applied retroactively. According to the examiner, sec. 102.43(7)(b) could be applied retroactively because (1) it is remedial legislation, and (2) sec. 102.03(4) explicitly provided that sec. 102.43(7)(b) is to be applied retroactively. The examiner, citing lack of jurisdiction, declined to rule on Bituminous's constitutional argument. Following the filing of a petition for review, the Labor and Industry Review Commission (LIRC) summarily affirmed the examiner's findings of fact and order.
Bituminous sought judicial review of LIRC's decision in the circuit court for Washington county, claiming that sec. 102.43(7)(b), Stats., was unconstitutional. 2.. The circuit court, using the same reasoning relied upon by the examiner, affirmed LIRC's order that the statute could be applied retroactively. The circuit court rejected Bituminous's constitutional argument. Although the court noted that the result reached in the case appeared absurd, it further noted that such a result was due to the failure of the legislature to place a cap on the benefits paid under sec. 102.43(7)(b).
The court of appeals affirmed the circuit court, rejecting Bituminous's arguments that (1) LIRC improperly applied the relevant statute retroactively, and (2) the retroactive application unconstitutionally impaired its contract rights and violated due process. The court of appeals held that, because the statute was remedial and because the statute reflected a legislative intent that it be applied retroactively, the statute was thus to be applied retroactively. The court of appeals then went on to state that, even if the retroactive application of sec. 102.43(7)(b), Stats., resulted in an impairment of Bituminous's contract obligations, the statute was nevertheless constitutional. The court based its decision on the fact that the constitutional proscription against impairment of contracts is not absolute and that the contract clause cannot be read literally to prohibit any impairment of contract. Chappy, 128 Wis.2d at 325-30, 381 N.W.2d 552.
Finally, the court of appeals rejected Bituminous's argument that, because the statute arbitrarily changed the remedy of an injured worker, the statute deprived Bituminous of property without due process of law. The court rejected this last argument because it found that sec. 102.43(7)(b), Stats., used a rational means to achieve a legitimate end (providing prompt relief to injured employees regardless of fault and allocating the financial burden to the most appropriate source--the employer and, ultimately, the consumer).
LIRC claims that Bituminous lacks standing to challenge the constitutionality of sec. 102.43(7)(b), Stats. LIRC argues that, under Speelmon Elevated Tank Service v. Industrial Commission, 2 Wis.2d 181, 185, 85 N.W.2d 834 (1957), Bituminous is precluded from questioning the constitutionality of sec. 102.43(7)(b). In Speelmon, the appellants were precluded from challenging the constitutionality of a statutory section because they had voluntarily proceeded under it and accepted the benefits thereof. According to LIRC, Bituminous's voluntary payment of compensation to Chappy constitutes accepting the benefits of the statute, and thus Bituminous should be prohibited from challenging the section's constitutionality. We find no merit to this claim.
It is true that one who voluntarily proceeds under a statutory section and thereby accepts the benefits of that statutory section may not question the constitutionality of that section. Speelmon, 2 Wis.2d at 185, 85 N.W.2d 834. However, Bituminous has not proceeded under the statutory section it now challenges [sec. 102.43(7)(b) ] and has not accepted the benefits thereof. 3.. Bituminous's payment of compensation similar to the rates provided in sec. 102.43(1), Stats., constitutes neither proceeding under, nor accepting the benefits of, sec. 102.43(7)(b), Stats. Although Bituminous operates under the Worker's Compensation Act as a whole, that fact alone does not prohibit Bituminous from challenging the constitutionality of a particular section of the Act. See Wendlandt v. Industrial Commission, 256 Wis. 62, 39 N.W.2d 854 (1949). We therefore conclude that Bituminous is not prohibited from challenging the constitutionality of sec. 102.43(7)(b).
We next turn to the question of whether sec. 102.43(7)(b), Stats., operates to retroactively alter the benefits of those employees suffering a renewed period of TTD stemming from an injury incurred prior to the enactment of sec. 102.43(7)(b). We recognize that, if sec. 102.43(7)(b) authorizes compensation to an employee for a renewed period of TTD at rates different from that authorized at the time of the original injury, sec. 102.43(7)(b) operates retroactively. 4.. Thus our analysis looks to whether the legislature, in enacting sec. 102.43(7)(b), intended such a retroactive operation.
Our determination...
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