O'Hearne v. Maryland Casualty Co.

• Citation: 177 F.2d 979
• Decision Date: 07 November 1949
• Docket Number: No. 5960.,5960.
• Parties: O'HEARNE v. MARYLAND CASUALTY CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

177 F.2d 979 (1949)

O'HEARNE v. MARYLAND CASUALTY CO. et al.

No. 5960.

United States Court of Appeals Fourth Circuit.

Argued October 11, 1949.

Decided November 7, 1949.

Herbert P. Miller, Assistant Chief Counsel, Bureau of Employees' Compensation, Washington, D. C. (Ward E. Boote, Chief Counsel, Bureau of Employees' Compensation, Washington, D. C., George R. Humrickhouse, United States Attorney, Richmond, Va., and John P. Harper, Assistant United States Attorney, Norfolk, Va., on the brief) for appellant.

Hugh S. Meredith, Norfolk, Va. (Vandeventer & Black, Norfolk, Va., on the brief), for appellees.

Before PARKER, Chief Judge, DOBIE, Circuit Judge, and BARKSDALE, District Judge.

PARKER, Chief Judge.

This is an appeal from a final decree enjoining the enforcement of a compensation order entered pursuant to the provisions of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C.A. § 901 et seq., on account of injuries sustained by one Murden, employed as a shipfitter by the Southern Trading Company at Norfolk, Va. There is no question as to the nature of Murden's injury or the extent of the disability resulting therefrom. Compensation was determined by the Deputy Commissioner under 33 U.S.C.A. § 910(b), upon a finding that the employee had been working at the employment in which he was injured for less than a year and that the average weekly wage for employees similarly employed during the preceding year as reported by the employer was $55.20. The judge below granted the injunction because he was of opinion that the compensation should have been determined under 33 U.S. C.A. § 910(c), in view of the fact that the employee had been working at the employment for only two days and his employment during the year preceding his injury had been irregular. He said: "Shipfitter's employment alone was not the fair measure to be applied to the earning activities of the claimant, because it had not in fact been the source of his earnings. Actually they had flowed from a variety of pursuits, even during the year of his injury. To find his earning capacity, study of his previous occupations, his earnings therefrom, and his opportunity, fitness and readiness for work was necessary. This is doctrine in the Fourth Circuit. Baltimore & O. R. Co. v. Clark, Infra. The deputy commissioner has not made this inquiry, but has taken the last two days of the claimant's work as exclusively and conclusively indicative of his earning capacity. An award on that basis is `not in accordance with law'.

The issue before the Deputy Commissioner and in the court below was whether compensation was to be determined upon the basis of the earnings of the employment in which Murden was engaged at the time of his injury or upon the basis of his personal earnings during the preceding year; and the whole contention of appellees was based upon evidence to the effect that he had been working as a shipfitter for only two days and prior to that had worked for a while as a cook on a vessel, for a while as a painter and for several months had been serving a term in prison. Although faint contention is made in the brief of appellees that the employment of a shipfitter in the Norfolk area was "intermittent and discontinuous", no evidence to that effect was introduced before the Commissioner and no such allegation is contained in the bill of complaint. Before entering the compensation order, the Deputy Commissioner wrote counsel for appellees as follows: "On what basis, or evidence, do you state that the employment in the instant case was intermittent and irregular? Shipbuilding and repair is a prize industry in the Port of Norfolk. It is my understanding that this employment is substantially continuous. The cases you cite are cases where the employment, itself, is casual and intermittent."

In reply to this letter, counsel made no contention that the employment of a shipfitter in the Norfolk area was intermittent or discontinuous in its nature, but took the position that section 10(c) of the Act, 33 U.S.C.A. § 910(c), should be applied "whenever the employment of claimant himself is intermittent and discontinuous". It was this view which was adopted by the Judge below as the basis of his decision; and the question presented by the appeal is whether this constituted error. We think that it did and that the learned judge misinterpreted our decision in Baltimore & O. R. Co. v. Clark, 4 Cir., 59 F.2d 595, 599, in which we were dealing with a case where the employment itself, not merely the prior work of the employee, was intermittent and discontinuous. We said in that case:^*

"Subdivisions (a) and (b) are applicable only where the employment is of a continuous nature; for it is only in such cases that the multiplication of the average daily wage by three hundred would approximate the average annual earnings. Where the employment is intermittent or discontinuous in its nature, multiplying the average daily wage paid during employment by three hundred would give as annual earnings a sum far in excess of the actual earning power of the employee, and consequently that method of determining average annual earnings cannot reasonably be applied and the method prescribed by section (c) must be followed. * * * It is not clear whether the deputy commissioner in the case at bar made his calculation under sections (a) or (b). In either case, he was in error. The record shows that the employment of Ellis was intermittent and discontinuous. During the twelve months' period prior to August 1, 1931, he earned in his employment with the company $527.30. From August 1st to August 25th, the day of his injury, he earned $51.45. His common-law wife testified that when not working for the company `he used to pick up day's work now and again'; * * *."

The reasoning underlying the act is that compensation is to be based upon the employee's earning capacity in the employment in which he is engaged at the time of injury. If he has worked in that employment for a year preceding the injury, his own earnings furnish the basis of compensation under subsection (a). If he has worked in the employment less than a year, compensation is computed under subsection (b) and is based on the average earnings over the preceding year of an employee of the same class working in such employment. Whether neither (a) nor (b) can reasonably or fairly be applied because of the nature of the employment, as where it is intermittent or discontinuous in nature, then the compensation is to be determined under (c) on the basis of the annual earning capacity of the employee. As said by the Supreme Court of California, construing a similar statute in Mahaffey v. Industrial Accident Comm., 176 Cal. 711, 171 P. 298, 299:

"Both subdivisions 1 and 2 contemplate a kind of employment which is permanent and steady, and which, for that reason, affords to an employe the possibility, at least, of earning annually an amount measured by the number of working days in a year, estimated and fixed by the act at 300. Where this kind of employment is not shown to exist, the case falls within subdivision 3, under which the annual earnings are to be taken as...