Dubbelde v. John Morrell & Co.

• Decision Date: 09 January 1991
• Docket Number: 17170,Nos. 17150,s. 17150
• Citation: 473 N.W.2d 500
• Parties: Pete DUBBELDE, Plaintiff and Appellee, v. JOHN MORRELL & CO., Defendant and Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 500

473 N.W.2d 500

Pete DUBBELDE, Plaintiff and Appellee, v. JOHN MORRELL & CO., Defendant and Appellant.

Nos. 17150, 17170.

Supreme Court of South Dakota.

Considered on Briefs Jan. 9, 1991.

Decided Aug. 7, 1991.

Bradley G. Bonynge, Sioux Falls, for plaintiff and appellee.

David J. Vickers and Michael S. McKnight of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, for defendant and appellant.

MEIERHENRY, Circuit Judge.

Facts and Procedural History

This appeal stems from a worker's compensation proceeding and appeal to circuit court. On January 8, 1985, Claimant Pete Dubbelde (Dubbelde) sustained an injury to his right shoulder arising out of and during the course of his employment with John Morrell & Company (Morrell). As a result of the injury, Morrell paid Dubbelde worker's compensation at a rate of $227.98 per week. Following an appeal hearing before the State of South Dakota, Department of Labor, Division of Labor and Management (Department), the Department entered a decision determining that Dubbelde was entitled to compensation at a rate of $247.00 per week. The $19.02 increase resulted from the Department including overtime hours in the calculation. Morrell's calculation was based upon a straight 40 hour work week. The Department determined that Dubbelde regularly worked 44.6 hours per week based upon his wage history over the previous year. Morrell appealed the Department's decision to circuit court contending that the Department erred in including overtime hours in its calculation. Morrell argued that no part of Dubbelde's overtime earnings, hours or premium pay, should be considered in calculating the weekly compensation rate.

The Department considered "earnings" defined in SDCL 62-1-1(3) to include all of the hours worked by an employee on a regular and continuous basis, including overtime hours calculated at a regular or straight-time rate. The circuit court concluded that overtime hours may be considered at the straight-time rate when overtime hours are commonly regarded as a day's work. Although the Department and the circuit court used different rationale in their application and interpretation of the statutes, they both found ambiguity in the statute and basically arrived at the same conclusion, i.e. that overtime hours at a regular pay rate may be included in calculating compensation rates. ¹

We reverse.

DECISION

The agency and circuit court erred in determining that overtime hours should be included at the straight-time pay rate under the definition of what constitutes earnings under SDCL 62-1-1(3). Dubbelde's case hinges on an interpretation of South Dakota worker's compensation statutes which set forth a procedure for calculating disability benefits.

An interpretation of a statute or question of law in an administrative appeal is fully reviewable. Beville v. Univ. of S.D./Bd. of Regents, 420 N.W.2d 9 (S.D.1988). "Questions of law, such as statutory interpretation, are reviewable by the court de novo. No deference is given to the conclusions of law by the trial court or the agency." Beville at 9. See Permann v. Dept. of Labor, Unemp. Ins. D., 411 N.W.2d 113 (S.D.1987); West v. John Morrell & Co., 460 N.W.2d 745 (S.D.1990).

In South Dakota the weekly compensation rate for disability compensation is equal to sixty-six and two-thirds percent of an employee's weekly wages, not to exceed the state average weekly wage which was $247.00 at the time of Dubbelde's injury. An injured employee's average weekly wage is the employee's earnings computed "as provided in Secs. 62-4-24 to 62-4-28, inclusive." SDCL 62-1-1(1). Since Dubbelde had been employed at Morrell's continuously for the previous fifty-two weeks, SDCL 62-4-24 analysis applies and his average weekly wage is determined by dividing the total earnings during the previous fifty-two weeks by fifty-two.

"Earnings" are defined in SDCL 62-1-1(3) as "the amount of compensation for the number of hours commonly regarded as a day's work for the employment in which the employee was engaged at the time of this injury and shall exclude overtime earnings," ... (emphasis added). Generally, in the absence of specific statutory exclusion, overtime earnings are usually included in "wages" if they are "regular" or "customary," although not necessarily guaranteed. Larson's Workman's Compensation Law, Vol. 2, Sec. 60.12(d) at 10-646. The South Dakota Legislature specifically excludes overtime in the definition of earnings. Although some states have softened the effect of an express exclusion by holding that regularly worked overtime hours could be included at straight-time pay, we find those cases distinguishable because the statutes of those states are worded differently than the one here at issue. See R.C. Durr Co., Inc. v. Chapman, 563 S.W.2d 743 (Ky.App.1978); ...