City of Danville v. Tate

• Decision Date: 08 January 2015
• Docket Number: Record No. 140011.
• Parties: CITY OF DANVILLE, Appellant, v. O. Ryland TATE, Appellee.
• Court: Virginia Supreme Court

289 Va. 1

766 S.E.2d 900

CITY OF DANVILLE, Appellant

v.O. Ryland TATE, Appellee.

Record No. 140011.

Supreme Court of Virginia.

Jan. 8, 2015.

Opinion

Upon consideration of the record, briefs, and argument of counsel, the Court is of the opinion that the circuit court reached the right result, although for the wrong reason, in dismissing the City of Danville's complaint in this case. Therefore, the judgment of the circuit court will be affirmed.

O. Ryland Tate (“Tate”) was employed by the City of Danville (the “City”) as a firefighter for thirty-nine years. In March 2009, Tate suffered a disabling heart attack, did not return to work, and retired six months later. Having accrued nearly 6,000 hours in sick leave, Tate received from the City the equivalent of his full wages in the form of sick leave pay totaling approximately $40,000. When he retired in August 2009, Tate elected under the City's retirement system to use the balance of his accrued sick leave to obtain an extra year of credit (the maximum allowed) towards his retirement. With this election, the City eliminated Tate's sick leave balance as provided for under its policies.

In addition, Tate, before retiring, filed a workers' compensation claim seeking indemnity benefits (66 2/3% of his lost wages) based on his heart attack related disability. The City initially denied the claim, but accepted it as compensable the following year. Thereafter, the City paid indemnity benefits to Tate for his six-month period of disability pursuant to a Virginia Workers' Compensation Commission (the “Commission”) award. In doing so, the City did not request from the Commission a credit under Code § 65.2–520 against this award for the sick leave payments that the City made to Tate during the same disability period.¹

The City then filed this action against Tate seeking recovery of his sick leave pay. The City contended that under its controlling ordinance and regulations Tate was not entitled to receive both sick leave pay and workers' compensation indemnity benefits for the same disability period.

After conducting an evidentiary hearing and considering the ordinance and regulations relied upon by the City as authority for recovering Tate's sick leave pay, the circuit court held that it did not have jurisdiction to decide the City's claim. The court reasoned that “[t]he City could have availed itself of the remedy under § 65.2–520 but for some reason failed to do so.” That is, the City did not ask the Commission for “a credit against the workers' compensation award for the amounts the City paid [to] Tate for sick leave.”² Moreover, according to the court, “[e]xclusive jurisdiction over the crediting of sick leave payments against a workers' compensation award lies with the Commission.” The court thus dismissed the City's complaint.

On appeal, the City argues the circuit court erred because the court, not the Commission, had jurisdiction to decide its claim. Furthermore, the City argues it is entitled to judgment against Tate for recovery of his sick leave pay pursuant to its controlling ordinance and regulations. We agree with the City on its jurisdictional argument but disagree on the merits.

Under the Virginia Workers' Compensation Act, Code §§ 65.2–100 through –1310 (the “Act”), the Commission does have jurisdiction over whether to credit an employer's sick leave pay, pursuant to Code § 65.2–520.³ However, the Commission's jurisdiction remains “limited to those issues which are directly or necessarily related to the right of an employee to [workers'] compensation for a work-related injury.” Hartford Fire Ins. Co. v. Tucker, 3 Va.App. 116, 120, 348 S.E.2d 416, 418 (1986). Code § 65.2–520 clearly provides that an employer is not required to request the credit authorized by the statute when paying workers' compensation, stating only that the employer “may” do so “subject to the approval of the Commission.”⁴ This means an employer can satisfy its obligation by paying fully the benefits awarded by the Commission without regard to any sick leave payments to the employee, which might otherwise be treated as payments of workers' compensation. Thus, where the employer does not request a credit under Code § 65.2–520, the statute is simply not implicated and, accordingly, no authority of the Commission relative to sick leave pay is triggered. That was the case here.

The Commission had no jurisdiction to decide this dispute between the City and Tate over the City's claim for recovery of its sick leave payments to Tate—no more than the Commission would have jurisdiction to decide a dispute over any other employment benefit such as annual leave or maternity leave. The circuit court thus erred in holding that the Commission rather than the court had jurisdiction over this case.⁵

The circuit court nevertheless reached the right result, as a matter of law, in dismissing the City's complaint. See Deerfield v. City of Hampton, 283 Va. 759, 767, 724 S.E.2d 724, 728 (2012) (applying the right result for the wrong reason doctrine). The City did not have the authority under the ordinance or regulations upon which it relied to recover sick leave pay from Tate on the basis that he had also received workers' compensation for the same disability period. The recovery authorized by those provisions pertains to a distinct type of claim by the City against an employee's workers' compensation payment.⁶ But, here, of course, the City is seeking to recover Tate's sick leave payments, not his workers' compensation payments.

For these reasons, we affirm the judgment of the circuit court dismissing the City's complaint in this case. This order shall be certified to the said circuit court and shall be published in the Virginia Reports.

Justice MILLETTE, with whom JUSTICE POWELL joins, concurring.

The majority today affirms the ruling of the circuit court dismissing the City of Danville's suit against Ryland Tate on alternative grounds. While I would likewise affirm the ruling of the circuit court, I would hold, as did the circuit court, that it lacked jurisdiction because exclusive jurisdiction lies with the Virginia Workers' Compensation Commission.

I am in agreement as to the relevant facts, and that the relevant Code section is § 65.2–520 of the Virginia Workers' Compensation Act, Code § 65.2–100 et seq. (the “Act”). The Code section, entitled “Voluntary payment by employer,” states, in pertinent part:

Any payments made by the employer to the injured employee during the period of his disability, or to his dependents, which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation....

Id. Based on the plain meaning of this statutory language, recovery of voluntary payments must be made “subject to the approval of the Commission.” Thus, the central issue is whether the sick leave payments constitute voluntary payments under Code § 65.2–520 such that recovery of these payments falls under this section. If the disputed monies are indeed voluntary payments under Code § 65.2–520, both Virginia jurisprudence and the statutory mandates of Code § 65.2–520 and Code § 65.2–700 squarely place exclusive jurisdiction for such disputes under the purview of the Commission.

The City argues that its payments were not voluntary because the payments for sick leave were made according to City ordinances. The City further argues that the payments were not voluntary because, had Tate not received sick benefits in violation of City policy, Tate had a right to sue the City in circuit court. In effect, the City contends that we must interpret “voluntary” to mean only benevolent payments not required by a statute, regulation, ordinance, or other legal mandate.

Code § 65.2–520 defines by its terms the types of payment considered to be “voluntary” under the Act, however. It states, in pertinent part, that “[a]ny payments made by an employer to the injured employee ... which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation.” (Emphasis added.) Sick leave benefits utilized after an accident are, clearly, “payments made by an employer to the injured employee.” Code § 65.2–520. Regardless of whether a municipal ordinance, personnel policy, or other regulation requires payment of sick leave, sick leave is not mandated “by the terms of this title,” i.e., the Virginia Workers' Compensation Act. Code § 65.2–520. It is, therefore, a voluntary payment for the purposes of the Act.

This question came before the Court of Appeals in Dodson v. Newport News Shipbuilding & Dry Dock Co., Record No. 0278–99–1, 1999 WL 1133301, at *2, 1999 Va.App. LEXIS 493, at *6 (Aug. 10, 1999) (unpublished). In Dodson , the Court of Appeals found:

Code § 65.2–520 does not distinguish between types of “voluntary payments.” The statute states that any payment is voluntary which “by the terms of this title were not due and payable when made.” ... We, therefore, hold that the definition of “voluntary payments” includes any type of payment not required under the Act, whether the payment is an overpayment as a result of a mistake by the employer or a payment of benefits pursuant to another statute.

Id.

As a “voluntary payment,” employers are entitled to seek a credit for sick leave under Code § 65.2–520 when an employee receives a Workers' Compensation award, once leave is reinstated. Augusta County School Board v. Humphreys, 53 Va.App. 355, 362–63, 672 S.E.2d 117, 120–21 (2009). By its explicit language, the statute requires that credit for such voluntary payments be repaid to employers “subject to the approval of the Commission,” that is, under the exclusive jurisdiction of the Commission. Code § 65.2520.

The majority concludes that “where the employer does not request a credit under Code § 65.2–520, the statute is simply not implicated and, accordingly, no authority...