Gross v. Sessinghause & Ostergaard, Inc.

Decision Date01 September 1991
Docket NumberNo. 29,29
Citation331 Md. 37,626 A.2d 55
PartiesIrving R. GROSS v. SESSINGHAUSE & OSTERGAARD, INC. et al. ,
CourtMaryland Court of Appeals

John K. Burkhardt (Saiontz & Kirk, P.A., both on brief), Baltimore, for petitioner.

Michael G. Comeau, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., Sophia L. Swope, Asst. Atty. Gen., all on brief), William S. Tostanoski (Sweeney & Zacharski, both on brief), Baltimore, for respondents.



The issue in this case involves the time period which the Workers' Compensation Commission may use in determining the "average weekly wage" of an injured worker.


The Workers' Compensation Act, Maryland Code (1991), §§ 9-101 et seq. of the Labor and Employment Article, "is designed to protect workers and their families from hardships inflicted by work-related injuries." Queen v. Agger, 287 Md. 342, 343, 412 A.2d 733, 733-734 (1980). This protection includes, inter alia, compensation for lost earning capacity, paid as a percentage of a worker's pre-injury "average weekly wage." See § 9-637(a) of the Labor and Employment Article (providing that an employee who has suffered a permanent total disability shall be paid compensation equal to two-thirds of the employee's average weekly wage). The statute, however, does not specify a particular time period to be used in calculating a worker's average weekly wage. Instead, § 9-602 lists the elements to be considered as within the average weekly wage. 1 The Workers' Compensation Commission is expressly authorized by § 9-309(a) of the Workers' Compensation title of the Maryland Code to "adopt regulations to carry out this title." In addition, § 9-701 broadly authorizes the Commission to promulgate procedural rules and regulations, specifically including regulations concerning "the nature and extent of evidence and proof" for establishing a right to compensation. At the time the present case arose, the Commission had promulgated a regulation governing the ascertainment of the average weekly wage. The regulation, referred to as Commission Rule 5, and set forth in COMAR, provided:

"A. Average weekly wage shall be determined from gross wages, including overtime, and will be determined by the Commission based on the information in the Commission file before the hearing.

"B. Notwithstanding § A, unless otherwise ordered after the hearing, compensation payments shall be based on: (1) the average wage earned by the employee during the 13 weeks before the accident; (2) those weeks the employee actually worked during the period; (3) those items set forth in Article 101, § 7(8), Annotated Code of Maryland.

"C. Periods of involuntary lay-off, or involuntary authorized absence are not included in the 13 weeks. However, any vacation wages paid shall be included in computing average weekly wage.

"D. If payments are made at a rate other than that determined by the Commission in its initial award, the carrier, self-insurer, or State Accident Fund, within 60 days of the date of the initial award shall file with the Commission the basis on which the payments were made and shall serve a copy on the claimant or his attorney of record if represented." 2

The dispute in this case centers upon the language of subsection B above, stating that, "unless otherwise ordered after the hearing, compensation payments shall be based on ... the average wage earned by the employee during the thirteen weeks before the accident."


Irving Gross worked for Sessinghause & Ostergaard, Inc., a construction firm, for over two years preceding the accident which precipitated this case. On June 6, 1984, a tunnel in which Mr. Gross was working collapsed, causing injuries to his neck, shoulders, and back. He filed a claim for benefits with the Workers' Compensation Commission, and on the claim form he listed his wages as $11.00 per hour.

On the basis of this hourly wage representation, the Commission made an initial determination of Mr. Gross' average weekly wage as $440.00. The employer's insurance carrier, The Home Insurance Company, paid Mr. Gross's benefits on the basis of the Commission's initial wage determination, while the parties attempted to negotiate a permanent resolution of Mr. Gross's claim. By November 1986, the parties had not come to an agreement, and the insurer stopped making payments to Mr. Gross. Mr. Gross requested a hearing before the Commission, claiming that he was permanently and totally disabled and that the cessation of payments was gravely detrimental to him in light of his inability to work. The employer submitted a wage statement covering the thirteen weeks prior to the accident, which showed an average weekly wage of $282.20. The insurer also impleaded the Subsequent Injury Fund into the case.

An administrative hearing was held on November 19, 1987. The major issues were the nature and extent of Mr. Gross's disability, and the proper calculation of his average weekly wage. On the wage issue, the employer and insurer argued that Mr. Gross's compensation ought to be based on the thirteen-week wage statement. Mr. Gross submitted his W-2 form for the year preceding the accident, showing total wages of $20,823.45, which, when divided by 52 weeks, comes to an average weekly wage of approximately $400.00. Mr. Gross argued that, given the nature of the heavy construction industry in which Mr. Gross worked, the yearly earnings better represented his earning capacity. 3 The remainder of the hearing addressed the other issues.

In an order issued on December 10, 1987, the Commission found that Mr. Gross's average weekly wage was $400.00 and that compensation should be awarded to Mr. Gross on this basis. The Commission also found that Mr. Gross was permanently and totally disabled, seventy-five percent of which was attributable to the accident and twenty-five percent of which was attributable to pre-existing conditions. The Commission further stated that

"the employer and insurer shall pay the sum of $104,000.00 representing the compensation payable for 75% due to the accidental injury and further finds that the Subsequent Injury Fund, pursuant to the provisions of Section 66, Subsection 1 of Article 101 shall pay the claimant compensation benefits at the rate of $267.00, per week and continuing during the period of permanent total disability, and said compensation to begin at the end of compensation to be paid by the employer and insurer."

The employer and insurer requested a rehearing with regard to the "finding that the claimant's average weekly wage was $400.00 per week." They argued that, under the statute and regulation, "the average weekly wage is computed based upon the thirteen weeks prior to the accident and not upon the claimant's entire work year." Mr. Gross in response argued that neither the statute nor any Commission regulation required the wage calculation to be based on the thirteen-week statement, and he reiterated his position that, under the circumstances of this case, the yearly wage statement was a fairer and more accurate reflection of his earnings. The Commission denied the request for rehearing.

The employer and insurer then filed in the Circuit Court for Calvert County an action for judicial review of the Commission's order. They contended that "the Commission misconstrued the law and facts as applicable to the Claimant's average weekly wage," and that the average weekly wage should be $282.20. At the circuit court nonjury hearing, Mr. Gross testified that he was a full-time employee of Sessinghause & Ostergaard, that he had worked approximately 48 out of 52 weeks the preceding year, that Sessinghause & Ostergaard was his only employer, and that he was retained even when other employees were laid off. The court, at the conclusion of the hearing, delivered an opinion in which it found that Mr. Gross was a full-time employee. The court then held that the Commission does not have the authority to base its average weekly wage calculation on anything but the thirteen-week statement, as provided for in Rule 5, unless after a hearing the Commission specifically finds that some inequity would result from doing so. The court stated that the Commission did not give any reason for choosing to use the prior year's wages rather than the thirteen weeks' wages. The court held that the Commission's decision was "arbitrary," and it reversed. The case was remanded to the Commission with instructions to amend its order to reflect the lower average weekly wage.

Mr. Gross took an appeal to the Court of Special Appeals, which affirmed the judgment of the circuit court. Gross v. Sessinghause, Inc., 85 Md.App. 727, 584 A.2d 1313 (1991). The intermediate appellate court recognized that the thirteen- week rule is not absolute. It stated (85 Md.App. at 734, 584 A.2d at 1316):

"Commission Rule .05 B. provides that compensation payments following a hearing shall be based upon the average weekly wage for the thirteen weeks before the accident, unless otherwise ordered after the hearing. The Commission, therefore, is not locked into the thirteen week period if the circumstances or facts in a particular case warrant a reasonable alternative computation of average weekly wage."

Nevertheless, the appellate court went on to state (ibid.):

"The right to deviate from the Rule, however, may not be arbitrarily invoked on a case-by-case basis. Departure from the Rule must be articulated by the Commission setting forth the factual basis for the decision rendered. That articulation was not set forth in this case and the trial court was not required to accept the Commission's preference."

Mr. Gross then filed in this Court a petition for a writ of certiorari which presented a single question as follows:

"Does the Maryland Workers' Compensation Act, and rules promulgated pursuant thereto, limit...

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