H.G. Boddiford Painting Contractors, Inc. v. Boddiford

• Decision Date: 10 February 1983
• Docket Number: No. AE-429,AE-429
• Citation: 426 So.2d 1243
• Parties: H.G. BODDIFORD PAINTING CONTRACTORS, INC., and Safeco Insurance Companies, Appellants, v. H. Grady BODDIFORD, Appellee.
• Court: Florida District Court of Appeals

Page 1243

426 So.2d 1243

H.G. BODDIFORD PAINTING CONTRACTORS, INC., and Safeco Insurance Companies, Appellants, v. H. Grady BODDIFORD, Appellee.

No. AE-429.

District Court of Appeal of Florida First District.

Feb. 10, 1983.

Ivan Matusek, St. Petersburg, for appellants.

T. Terrell Sessums, P.A., of Albritton, Sessums & McCall, Tampa, for appellee.

ERVIN, Judge.

In this worker's compensation case, the employer/carrier (e/c) contends that the deputy commissioner (deputy) erred, first, in not allowing a credit for temporary total disability (TTD) benefits over-paid, and second, in not allowing a set-off, corresponding to claimant's "actual earnings," against permanent total disability (PTD) benefits. Central to both contentions is whether claimant received a "salary" or "actual earnings" from the employer after the industrial accident. We disagree with the e/c's position and therefore affirm the deputy's order in its entirety.

Claimant established H.G. Boddiford Painting Contractors in 1968 and had developed it into a profitable operation by 1978. In October of that year the business was incorporated as a closely held corporation with claimant as its sole shareholder. On November 9, 1978, claimant suffered an industrial accident causing injury to his back. Prior to the accident he was in full charge of the business, working 12 to 14 hours daily, seven days a week, despite back problems resulting from two prior industrial accidents in 1956 and 1968. Although surgery in December of 1978 provided some relief, claimant continued to experience extreme pain in his right leg and back and to suffer severe physical limitations. Claimant's physicians and the e/c are in agreement that claimant is 100% physically disabled at this time. Because of the limitations placed on claimant's physical activities since the accident, the day-to-day operation of the business was assumed by claimant's wife, two sons and a trusted employee. Claimant's contribution to the business has been limited to serving in a consulting capacity and to the signing of checks.

At the time of the accident, claimant's stipulated average weekly wage was $692.31. The deputy found that claimant did not receive any salary for the last few months of 1978, but began receiving payments designated as "salary" in the amount of $3,000.00 per month in 1979. On March 1, 1980, claimant resigned as president of the corporation and has received no monies for salary from that date. The primary issue before the deputy was whether the monies received by claimant after the accident constituted a return on his investment in the corporation in the form of profits or whether they were wages actually earned. The deputy agreed with claimant that such monies were profits and not wages.

The e/c voluntarily accepted claimant as temporarily totally disabled (TTD) from November 9, 1978 until November 6, 1979, when he reached maximum medical improvement, and also paid the appropriate TTD benefits during that period. Claimant was then accepted as permanently totally disabled (PTD) as of November 6, 1979 and PTD benefits were paid by the e/c until June 22, 1980, when such benefits were stopped. It was the e/c's position before the deputy and before this court that although claimant was voluntarily accepted as TTD and later as PTD, he is not entitled to full compensation because he continued to receive wages from the corporation, as contemplated by Section 440.15(1)(d), which were equal to his wages before the injury, therefore he is not losing wages. Credit was sought first for the TTD benefits allegedly over-paid.

Temporary total disability has been defined as the "healing period during which a claimant is by reason of the injury totally disabled and unable to work." Fort Pierce Utilities v. Blotney, 396 So.2d 852, 853 (Fla. 1st DCA 1981). We have consistently held that it is error to award TTD benefits to a claimant who is capable of obtaining and performing some type of work. See Blotney (claimant working full-time in non-sheltered employment); McDonnell Douglas v. Holliday, 397 So.2d 366 (Fla. 1st DCA 1981) (claimant working as a baby sitter); Dixie County School Board v. Stinson, 393 So.2d 661 (Fla. 1st DCA 1981) (claimant returned to work as a teacher); Burger King Corporation v. Stark, 401 So.2d 1173 (Fla. 1st DCA 1981) (claimant working for a real estate company). Because the claimant in the present case continued to receive monthly payments from the corporation which were designated by the company bookkeeper as "salary" during the period of TTD, the e/c contends that the payments were improper, thus entitling the e/c to a credit against PTD benefits.

We have recognized that when an overpayment is made in any category of compensation benefits, it is presumed that such overpayment is a gratuity and it becomes incumbent upon the e/c to demonstrate a reasonable basis for the overpayment. "If the Deputy finds such a basis the presumption is dissipated and he may allow the overpayment to be applied as a credit against compensation ultimately found to be due even though the compensation may be of another class." Belam Florida Corporation v. Dardy, 397 So.2d 756, 758 (Fla. 1st DCA 1981). The entitlement to a credit, however, presupposes that an overpayment has been made. In this case an overpayment could only have occurred if claimant was not TTD from November 9, 1978 until November 6, 1979. We do not consider that the mere fact that claimant was receiving monies, however designated, from his closely held corporation demonstrates that he was capable of doing some type of work. A review of the record shows by competent and substantial evidence that claimant was indeed TTD during that period and was therefore entitled to receive TTD benefits. The deputy was therefore correct in not allowing a credit for the alleged overpayment. ¹

When claimant reached maximum medical improvement on November 6, 1979, the e/c voluntarily accepted him as PTD and began paying the appropriate benefits. It was stipulated that the e/c suspended those benefits as of June 22, 1980. The e/c contends that an overpayment was made in PTD benefits because claimant was still receiving monies designated as salary from the corporation until the time he resigned as president on March 1, 1980. The argument, then, is that PTD benefits should have been reduced accordingly. In considering this issue the deputy found that, although claimant was incapable of lending any active physical service to the corporation, he was able to, and was in fact, rendering consulting services which were, according to the deputy, worth approximately $200.00 per week. ² This brings us to the central issue of whether claimant was receiving "actual earnings" which would require a reduction in the amount of benefits to which he was entitled. The deputy correctly concluded that the issue must be determined with reference to Section 440.15(1)(d), Florida Statutes (1977), which provides:

If an employee who is being paid compensation for permanent total disability shall become rehabilitated to the extent that he shall establish an earning capacity by employment he shall be paid during the period of such employment, instead of the compensation provided in paragraph (a), 60 percent of the difference between his average weekly wages at the time the total disability was incurred and his wage-earning capacity as determined by his actual earnings in such employment.

(emphasis supplied). The clear terms of that section indicate that a claimant receiving PTD benefits must be shown to have established a wage-earning capacity through (1) employment and (2) receipt of actual earnings before a reduction in benefits is required. Here, the deputy found that claimant was not receiving "actual earnings," therefore no reduction was justified.

The e/c urges that the deputy's finding was in error and relies on Delta Terrazzo, Inc. v. Jones, IRC Order 2-3467 (June 30, 1978) to support its position. Delta Terrazzo found that the claimant was in fact employed, although sporadically, and was receiving actual earnings. Section 440.15(1)(d) was held to apply to situations of sheltered employment as well as to full-time non-sheltered employment. In determining what degree of wage-earning capacity was required to trigger that section, the Commission concluded that the general wage-earning capacity found in other sections of the Worker's Compensation law was not contemplated; rather, it is a limited type of wage-earning capacity which must be demonstrated by receipt of wages, i.e., "actual earnings," from a specific job. It is axiomatic then that if no "actual earnings" are received from employment, no adjustment of benefits is justified.

Although we have found no Florida cases addressing the issues presented in this unique factual situation, ³ we find that the general rule is that "income from a business owned by the claimant, even though he contributes some work to it, should not be used to reduce disability." 2 Larson, The Law of Workmen's Compensation § 57.51 (1981) (hereinafter: Larson). That rule is premised, in part, on the recognition that a claimant need not be "entirely out of commission to be awarded compensation for total permanent disability." Richardson v. City of Tampa, 175 So.2d 43, 45 (Fla.1965). See also, Larson § 57.51. The proper scope of inquiry is thus not whether a claimant is receiving some monies which enable him to sustain himself, but whether, despite his status as PTD, he has a wage-earning capacity. "The ability to perform limited service in one's own or a family enterprise may not of itself be sufficient to negate industrial unemployability. The question in that kind of situation is the worker's ability to sell his services in a competitive job market." Germain v. Cool-Rite Corporation, 70 N.J. 1, 355 A.2d 642, 646 (1976).

Courts in a number of other jurisdictions have held that where claimants receive income from unrelated...