Lowry v. INDUSTRIAL COM'N OF ARIZONA

• Decision Date: 03 December 1999
• Docket Number: No. CV-98-0480-PR.,CV-98-0480-PR.
• Parties: Carl LOWRY, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, City of Coolidge, Respondent Employer, State Compensation Fund, Respondent Carrier.
• Court: Arizona Supreme Court

989 P.2d 152

195 Ariz. 398

Carl LOWRY, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, City of Coolidge, Respondent Employer, State Compensation Fund, Respondent Carrier.

No. CV-98-0480-PR.

Supreme Court of Arizona, En Banc.

December 3, 1999.

As Corrected December 22, 1999.

Taylor & Associates By Roger A. Schwartz, Phoenix, Attorney for Petitioner. The Industrial Commission of Arizona, Anita R. Valainis, Phoenix, Chief Counsel Attorney for Respondent.

State Compensation Fund James F. Crane, Chief Counsel By W. Smith Michael, Jr., Assistant Chief Counsel and Robert A. Schuler, Tucson, Attorneys for Respondents Employer and Carrier.

OPINION

McGREGOR, Justice.

I.

¶ 1 We are asked to decide whether, for purposes of determining workers' compensation disability benefits, an employee's average monthly wage includes earnings from concurrent employment held within the thirty days prior to, but not on the date of, an on-the-job injury.

¶ 2 During 1992, petitioner Carl Lowry worked for the City of Coolidge as a building inspector and also as a volunteer firefighter. His pay as a firefighter consisted of approximately one-tenth his wages as a building inspector. The City terminated the building inspector position, and Lowry's employment in that job, on August 19, 1992. Four days later, Lowry suffered an injury while working as a firefighter. Although the parties agreed that Lowry was eligible to recover workers' compensation benefits, they disagreed as to how to calculate his wage base. The administrative law judge, rejecting Lowry's argument that wages from both jobs should be included in the calculation, established his average monthly wage using only the wages for the firefighter position that he held on the date of injury. The court of appeals affirmed, and we granted review. We exercise jurisdiction pursuant to Arizona Constitution, article VI, section 5(3), Arizona Revised Statutes Annotated (A.R.S.) § 12-120.24, and Arizona Rule of Civil Appellate Procedure 23.

II.

¶ 3 The Arizona Workers' Compensation Act, A.R.S. §§ 23-901 to 23-1091 (West 1995 & West Supp.1998) (the Act), defines an injured worker's monthly wage for the purpose of determining disability benefits. See id. § 23-1041. Subsection A of section 23-1041 provides in relevant part that employees "shall receive the compensation fixed in this chapter on the basis of such employee's average monthly wage at the time of injury." Id. (emphasis added). The court of appeals relied upon that emphasized language to conclude that only wages from employment held "on the date of injury" should be used to determine an average monthly salary. Lowry v. Industrial Comm'n, No. 1 CA-IC 96-0143 (App. Sept. 22, 1998) (emphasis added). Lowry, in contrast, relies upon subsection D of the statute, which defines "monthly wage" as "the average wage paid during and over the month in which the employee is killed or injured," to argue that all wages received during the month of injury should be included to determine his average wage. A.R.S. § 23-1041.D (emphasis added). He asserts that interpretation is consistent with the spirit and purpose behind the workers' compensation provisions and will supply an appropriate basis to fairly set his disability payments.

A.

¶ 4 The issue raised essentially requires that we determine whether the legislature intended that the worker's average monthly wage be calculated by considering only his or her wages for the job held on the date of injury, or wages from all jobs held within the month preceding the injury. We begin our analysis with the express language of the Act.

¶ 5 The statutory definition of monthly wage, with its reference to a worker's average wage during the month of injury, has remained unchanged from its first appearance, compare A.R.S. § 23-1041.D (1995) with A.R.S. § 1438 (1928), and supports Lowry's argument that the administrative law judge should have considered wages paid to him during the month preceding his injury. In Wiley v. Industrial Commission, 174 Ariz. 94, 98, 847 P.2d 595, 599 (1993), we considered this language and concluded that the legislature's reference to an "average wage paid during and over the month in which the employee is killed or injured," A.R.S. § 23-1041.D, contemplates including wages accrued from more than a single employer. Wiley, however, involved an employee who held two positions at the time of his injury and, therefore, did not implicate the final phrase of subsection A of section 23-1041. That subsection, by referring to an employee's average monthly wage at the time of injury, supports the State Compensation Fund's (the Fund) argument that only concurrent employment held on the date of injury may be considered in setting the pre-injury wage. Because the language of the statute is ambiguous as to whether "average wage" includes wages paid for concurrent employment that ends before the date of injury, but within the month of injury, our function is to interpret the statute. See Senor T's Restaurant v. Industrial Comm'n, 131 Ariz. 360, 362, 641 P.2d 848, 850 (1982)

. "Statutes which are ambiguous must be construed in view of the purposes they are intended to accomplish and the evils they are designed to remedy." Id. at 363, 641 P.2d at 851 (citing State v. Berry, 101 Ariz. 310, 312, 419 P.2d 337, 339 (1966)). Therefore, we look to the goals of the Act and the evils it was designed to remedy for the foundation of our decision. See Dietz v. General Elec. Co., 169 Ariz. 505, 510, 821 P.2d 166, 171 (1991).

B.

¶ 6 The primary purpose of the Act is to compensate an employee for wages he would have earned without his injury and, thereby, prevent him from becoming a public charge during his disability. See Stephens v. Textron, Inc., 127 Ariz. 227, 230, 619 P.2d 736, 739 (1980)

. In Wiley, we recognized:

The Arizona Constitution commands that the Act be a "just and humane compensation law" and relieve workers and their dependents from "burdensome, expensive and litigious remedies." Ariz. Const. art. 18, § 8. As a matter of statutory interpretation, we have long held that

[t]he goal of the Act is to determine a realistic pre-injury wage base which can serve as a standard of comparison with the post-injury earning capacity of the injured worker; the emphasis in setting a worker's average monthly wage is on what the employee has actually earned for his labors.

174 Ariz. at 99-100, 847 P.2d at 600-601 (quoting Senor T's, 131 Ariz. at 363, 641 P.2d at 851) (emphasis in original). Therefore, to be consistent with the constitutional command and statutory goal, the wage base should realistically reflect a claimant's actual monthly earning capacity, see Hershkowitz v. Arizona Highway Dep't, 56 Ariz. 494, 498, 109 P.2d 46, 48 (1941), overruled in part by Ross v. Industrial Comm'n, 82 Ariz. 9, 307 P.2d 612 (1957),

and the Act should be construed broadly to effectuate this goal. See Wiley, 174 Ariz. at 100,

847 P.2d at 601.

¶ 7 To further that goal, we reversed Arizona's "concurrent dissimilar employment rule" in Wiley and held the Act does not prohibit a wage calculation that includes wages from both similar and dissimilar concurrent employment. Id. at 104, 847 P.2d at 605. Importantly, we returned to the purpose of the Act and the spirit of the law as the basis for our decision. We stated that the inclusion of wages from dissimilar employment "focuses on reality—what the employee actually earned—not on some artificial distinction that the language of the Act does not compel." Id. at 100, 847 P.2d at 601 (citation omitted) (emphasis added); see also Southwest Restaurant Sys. v. Industrial Comm'n, 170 Ariz. 433, 436, 825 P.2d 958, 961 (App.1991)

(holding that even though the employee intended to take an unpaid leave of absence later that month to meet the social security minimum wage, her wages from the thirty days prior to the injury were the proper wage base because they represented her actual earnings).

¶ 8 Our analysis in Wiley extends naturally to the situation here. To be consistent with the goals of the Act, the focus in setting Lowry's wage base must be on reality—in this case, the wages Lowry actually earned prior to his injury.

¶ 9 Lowry held concurrent employment as a building inspector and as a firefighter for at least five months prior to his termination. He was terminated from the building inspector position only four days before the injury. Because Lowry realistically earned more than his wages as a volunteer firefighter indicate, his lower wages from the firefighter position alone cannot provide an accurate measure of his actual pre-injury earning capacity. Fully compensating him for his real loss of earning capacity, therefore, requires considering also the income he actually earned as a building inspector during the month of his injury.

¶ 10 Our conclusion that "average monthly wage" can include wages earned from employment held within the thirty days prior to injury also is consistent with prior decisions, which have held that the statutory language establishes a presumptive thirty-day wage period, see Swift Transp. v. Industrial Comm'n, 189 Ariz. 10, 11, 938 P.2d 59, 60 (App.1996),

and that administrative law judges have discretion to apply an expanded wage base when the presumptive period does not realistically reflect a claimant's earning capacity. See Davis v. Industrial Comm'n, 134 Ariz. 293, 296, 655 P.2d 1345, 1348 (1982); Elco Vet. Supply v. Industrial Comm'n, 137 Ariz. 46, 47-48, 668 P.2d 889, 890-91 (App. 1983),

approved by 137 Ariz. 45, 668 P.2d 888 (1983). As we recognized in Davis, seasonal employment, intermittent employment, and temporarily inflated wages can all provide justification for using an expanded wage base when necessary to measure an individual's pre-injury earning capacity. 134 Ariz. at 296,

655 P.2d at 1348. Because the factors that determine an individual's realistic pre-injury earning capacity can vary, our holding today is not...