Coutts v. Wisconsin Retirement Bd.

Decision Date22 May 1997
Docket NumberNos. 95-1905,95-2228,s. 95-1905
Citation209 Wis.2d 655,562 N.W.2d 917
PartiesRonald W. COUTTS, Sr., Petitioner-Appellant, v. WISCONSIN RETIREMENT BOARD, Respondent-Respondent-Petitioner, City of Racine, Respondent. Byron DES JARLAIS, Petitioner-Respondent, v. WISCONSIN RETIREMENT BOARD, Respondent-Appellant-Petitioner.
CourtWisconsin Supreme Court

For the respondent-respondent/appellant-petitioner the cause was argued by L. Jane Hamblen, Assistant Attorney General, with whom on the briefs was James E. Doyle, Attorney General.

For the petitioner-appellant there was a brief by Bruce F. Ehlke and Shneidman, Myers, Dowling, Blumenfield, Ehlke, Hawks & Domer, Madison and oral argument by Bruce F. Ehlke.

For the petitioner-respondent there was a brief by Lester A. Pines, Cheryl Rosen Weston and Cullen, Weston, Pines & Bach, Madison and oral argument by Lester Pines.

¶1 ANN WALSH BRADLEY, Justice

The Wisconsin Retirement Board ("the Board") seeks review of a published decision of the court of appeals, 1 which held that the Board is not statutorily authorized to reduce the duty disability benefits of Ronald W. Coutts, Sr. and Byron Des Jarlais with worker's compensation benefits previously paid to them. The Board argues that the court of appeals erred because the statute in question requires an offset of duty disability benefits with all worker's compensation payments, regardless of when the worker's compensation payments are made. We conclude that the statute unambiguously mandates an offset of duty disability benefits only with worker's compensation payments paid after the duty disability benefit payments commence. Accordingly, we affirm the decision of the court of appeals.

I.

¶2 The parties have stipulated to the relevant facts:

Ronald W. Coutts, Sr.

¶3 Ronald W. Coutts, Sr. was employed as a City of Racine firefighter, and was therefore a "protective occupation participant" for purposes of the Wisconsin Retirement System (WRS). See Wis. Stat. § 40.02(48)(1995-96). 2 In August 1988, Coutts suffered an injury to his right shoulder while fighting a fire. Following surgery on the shoulder and a period of physical therapy, Coutts returned to light duty employment at the Racine Fire Department in January 1989. However, the permanent physical limitations resulting from the shoulder injury eventually forced Coutts to retire. His last day on the Fire Department payroll was September 30, 1989.

¶4 Following his injury, Coutts filed a claim for permanent partial disability benefits pursuant to the Worker's Compensation Act, Chapter 102, Wis. Stat. 3 In April 1989, the Worker's Compensation Division of the Department of Industry, Labor and Human Relations (DILHR) determined that Coutts was entitled to permanent partial disability benefits. The permanent partial disability benefits were paid at a rate of $524.33 per month, effective January 7, 1989. In January 1990, Coutts received the last $524.33 full monthly payment of permanent partial disability benefits, and in February 1990, he received a final payment of $101.88.

¶5 Coutts also applied for duty disability benefits under Wis. Stat. § 40.65. 4 In May 1989, the Department of Employe Trust Funds (DETF) advised Coutts that he was eligible to receive duty disability benefits. When Coutts left the payroll of the Fire Department, he began receiving § 40.65 duty disability benefits.

¶6 The DETF reduced Coutts' § 40.65 duty disability benefits each month by $524.33, which was the monthly amount of worker's compensation permanent partial disability benefits that he was receiving at the time. 5 The net result was that Coutts' monthly combination of duty disability and worker's compensation benefits were the same as if he received duty disability benefits alone. However, the monthly $524.33 reduction in duty disability benefits continued even after Coutts stopped receiving worker's compensation benefits in February 1990. The DETF based this continued duty disability reduction on the worker's compensation payments that Coutts had received in the months prior to the commencement of duty disability benefits. As such, after his worker's compensation benefits ceased in February 1990, Coutts received $524.33 less per month in aggregate benefits than he received in the immediately preceding months.

¶7 In a letter sent to the DETF in August 1990, Coutts objected to the offsets against duty disability benefits occurring after his worker's compensation benefits ended. The DETF responded that duty disability benefits are to be reduced by all worker's compensation benefits received for the same disability injury, regardless of whether the worker's compensation payments are made before or after the commencement of duty disability benefits. Coutts appealed the DETF's determination to the Board. See § 40.03(8)(f).

¶8 The Board, in a final decision and order dated September 15, 1994, concluded that the plain language of § 40.65(5)(b)3 requires an offset of all worker's compensation payments against § 40.65 duty disability benefits, regardless of the timing of the worker's compensation benefits payments. 6 Coutts filed a petition for certiorari review in the Circuit Court for Dane County, Angela Bartell, Judge.

¶9 The circuit court determined that § 40.65(5)(b)3 is ambiguous. However, according to the circuit court, other provisions in § 40.65, as well as the legislative history, evince a broad legislative intent to offset duty disability payments with other sources of income, without regard to the time that the duty disability payments commence. Determining that the Board's interpretation of § 40.65 was consistent with the legislative intent, the circuit court affirmed the Board's decision. Coutts appealed. The court of appeals reversed, concluding that the statute is unambiguous and does not authorize the DETF to reduce § 40.65 duty disability benefits with previously paid worker's compensation benefits. The Board petitioned this court for review.

Byron L. Des Jarlais

¶10 Byron L. Des Jarlais was employed as a deputy sheriff for Vilas County. In 1988, Des Jarlais suffered a work-related back injury for which he received both temporary total disability and permanent partial disability benefits under the Worker's Compensation Act. Des Jarlais received a total of $8,190 in permanent partial disability payments, with the final payment being made in December 1988. 7

¶11 After aggravating his back injury while on the job, Des Jarlais applied for § 40.65 duty disability benefits in April 1991. The DETF approved his application, and duty disability payments commenced in August 1991. The DETF reduced Des Jarlais' monthly duty disability payment by $503.10 until the amount deducted equaled the $8,190 in permanent partial disability payments that Des Jarlais had received through December 1988. 8

¶12 The Board rejected Des Jarlais' claim that his disability benefits should not be reduced by the worker's compensation paid nearly three years prior to the commencement of duty disability benefits. Des Jarlais appealed to the Circuit Court for Dane County, Michael Nowakowski, Judge, which ruled in his favor. The circuit court concluded that § 40.65 unambiguously precluded the DETF from reducing duty disability benefits with previously received worker's compensation benefits. The court of appeals affirmed the decision of the circuit court, and the Board petitioned this court for review.

II.

¶13 The sole question before this court is whether the phrase "any worker's compensation benefit payable" in § 40.65(5)(b)3 authorizes the Board to reduce a WRS participant's duty disability benefits with worker's compensation benefits paid prior to the commencement of duty disability benefits. Generally, the interpretation of a statute is a question of law reviewed by this court under a de novo standard, without deference to the decisions of the court of appeals, circuit court, or administering agency. State ex rel. Parker v. Sullivan, 184 Wis.2d 668, 699, 517 N.W.2d 449 (1994). In certain instances, however, we will refrain from substituting our interpretation of a statute for that of the agency charged with administering the statute. An agency's interpretation of a statute is reviewed under one of three standards: de novo, "due weight" deference, or "great weight" deference. Sauk County v. WERC, 165 Wis.2d 406, 413-14, 477 N.W.2d 267 (1991).

¶14 An agency's interpretation of a statute will be reviewed de novo if any of the following are true: 1) the issue before the agency is clearly one of first impression; 9 2) a legal question is presented and there is no evidence of any special agency expertise or experience; 10 or 3) the agency's position on an issue has been so inconsistent that it provides no real guidance. 11 Under de novo review, the agency's interpretation is given no weight. William Wrigley, Jr. Co. v. Wisconsin Dep't of Revenue, 160 Wis.2d 53, 71, 465 N.W.2d 800 (1991), rev'd on other grounds by Wisconsin Dep't. of Revenue v. William Wrigley, Jr. Co., 505 U.S. 214, 112 S.Ct. 2447, 120 L.Ed.2d 174 (1992). We conclude that de novo review is appropriate in these cases.

¶15 These cases are analogous to Kelley Co., Inc. v. Marquardt, 172 Wis.2d 234, 493 N.W.2d 68 (1992). At issue in Kelley was the Department of Industry, Labor and Human Relations' (DILHR) interpretation of the phrase "equivalent employment position" in the Family and Medical Leave Act (FMLA), Wis. Stat. § 103.10(8)(a)2. This court concluded that de novo review was appropriate, because the meaning of the statutory language was a question of first impression with respect to which DILHR had no experience or expertise. Kelley, 172 Wis.2d at 245, 493 N.W.2d 68. TheKelley court based its conclusion on the fact that DILHR had adopted no administrative rules interpreting the meaning of the phrase at issue in that case, and that "the hearing examiner relied on no precedent and had no rules to...

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