Model Laundry & Dry Cleaning v. Simmons

• Decision Date: 05 March 1980
• Docket Number: No. CA,CA
• Citation: 596 S.W.2d 337,268 Ark. 770
• Court: Arkansas Court of Appeals
• Parties: MODEL LAUNDRY & DRY CLEANING and Sentry Ins. Co., Appellants, v. Gary D. SIMMONS, Appellee. 79-202.

Page 337

596 S.W.2d 337

268 Ark. 770

MODEL LAUNDRY & DRY CLEANING and Sentry Ins. Co., Appellants, v. Gary D. SIMMONS, Appellee.

No. CA 79-202.

Court of Appeals of Arkansas.

March 5, 1980 Released for Publication by the Court of Appeals.

Jones & Segers, Fayetteville, for appellants.

Kendall & Schrantz, Rogers, for appellee.

NEWBERN, Judge.

In this workers' compensation appeal we are asked to decide the following questions: (1) whether the "maintenance expenses" part of the rehabilitation benefits provided by Ark.Stat.Ann., § 81-1310(f) (Supp.1979), may be based on income reduction which occurs during a retraining period; (2) whether the statutory penalty for late payments provided by Ark.Stat.Ann., § 81-1319(f) (Repl.1976), extends to late payment of medical bills and attorney's fees or is limited to compensation instalments which should have been paid to the claimant; and (3) whether there was substantial evidence to support the commission's finding (a) that The appellee suffered an undisputedly compensable injury while working for the appellant Model Laundry in May, 1975. For undisclosed reasons, his initial workers' compensation claim which was filed April 15, 1976, stated the date of injury, erroneously, as January 19, 1976. Appellant Sentry Insurance Co. controverted permanent partial disability in excess of 10%. Temporary total disability payments were made in June, 1976, covering a period beginning January 19, 1976. Presumably the payments continued until September 23, 1976, the date of the end of the temporary total disability determined by the administrative law judge. Other findings in the September 19, 1977, opinion of the administrative law judge included one to the effect that the appellants controverted certain medical bills in the amount of $1714.36. The administrative law judge concluded the appellants should pay those bills and the maximum attorney's fee with respect to those bills. He also concluded the appellee was permanently disabled to the extent of 331/3% to the body as a whole, and awarded maximum attorney's fees on the award to the extent it exceeded 10%.

certain medical bills were controverted by the appellants and (b) that the appellee was permanently disabled to the extent of 15% to the body as a whole. We will discuss these points separately after setting out the facts.

A major issue addressed in the September 19, 1977, opinion was whether the medical bills were controverted. Although he recognized there had been some confusion at the outset caused by notice to the wrong carrier and the inaccurate statement of the date of injury by the appellee, the judge found most of the medical expenses in question had been incurred in March, 1976, and no effort to pay them had been made as late as May, 1977, although the evidence indicated the bill had been sent to Sentry on September 13, 1976.

The administrative law judge concluded the appellee was a suitable candidate for a rehabilitation program, but that no plan for rehabilitation had been submitted, and thus no award could be made in that respect.

On appeal to the full commission, the finding of controversion of the medical bills was affirmed. The commission concluded that it could make no final determination as to permanent disability, however, as the administrative law judge had reserved the question of rehabilitation. The commission found, however, no dispute as to anatomical disability of at least 10%, and thus ordered the appellants to make payments based on that percentage. The case was remanded to the administrative law judge for a determination with respect to rehabilitation.

The appellee submitted to the administrative law judge a rehabilitation plan which consisted of working in a wood crafts shop, where he had already begun work, making "novelty items" with the prospect of becoming the owner of the shop after a training program to last from January 1, 1978, until June 1, 1978. Based on a finding that the appellee's income would be reduced from that which he was earning while working for Model Laundry, the administrative law judge awarded rehabilitation benefits of $2100. In the same opinion, dated July 20, 1978, the administrative law judge ordered the appellants to pay a 20% penalty plus interest on the still unpaid medical bills and the attorney's fee which had been added with respect to those bills because they were controverted. This was done over the objection of the appellants that the award had not yet become final. The administrative law judge concluded there was no reason not to have paid the medical bills and related attorney's fee, as the case had been remanded to him solely to deal with the rehabilitation matter.

On appeal to the full commission, the penalty awarded was affirmed. The commission also ordered payment of "$1695.75 representing maintenance benefits pursuant to Section 10(f) of the act for 251/2 weeks at the rate of $66.50 per week." This part of the award apparently replaced the $2100 the administrative law judge had awarded as rehabilitation benefits. The commission ordered payment of benefits for permanent disability to the extent of 15% to the body I. Rehabilitation Benefits

as a whole less payments already made on the previous 10% determination plus attorney's fees on the increment. This amounted to a modification of the initial 331/3% permanent disability finding.

Ark.Stat.Ann., § 81-1310(f) (Supp.1979), says, in part:

In addition to benefits otherwise provided for by this Act, an employee who is entitled to receive compensation benefits for permanent disability shall be paid reasonable expenses of travel and maintenance and other necessary costs of a program of vocational rehabilitation, if the Commission finds that such program is reasonable in relation to the disabilities sustained by such employee. . . .

The commission found fault with the administrative law judge's determination of rehabilitation benefits because he calculated them on the basis of the difference between the income the appellee received before his injury and his income during the proposed training program. But the commission's own calculation was based on the same differential, adding to it the notion that rehabilitation maintenance is equivalent to a special or additional period of "temporary partial disability." The commission concluded the appellee was entitled to six months (251/2 weeks) of payments at 662/3 of his average weekly wage as provided in Ark.Stat.Ann., § 81-1313(b) (Repl.1976).

We find no authority for this kind of calculation. The commission seems to have done the same thing for which it criticized the administrative law judge, i. e., fixing maintenance benefits by referring to lost wages. The only thing added by the commission was its reference to § 81-1313(b) which provides for compensation for temporary partial disability. We find no connection whatever between that section and the one providing for rehabilitation benefits. While the former contemplates reduced income, the latter deals with costs of rehabilitation. They are not the same.

While we have no cases to which we can refer, the tenor of § 81-1310(f) contemplates rehabilitation at an institution or place away from the claimant's home, thus necessitating "maintenance." See, 2 Larson, Workmen's Compensation Law, § 61.20 (1976). In this case the appellee had moved to the training site where he planned to remain. We hold loss of income and temporary partial disability are irrelevant to rehabilitation maintenance benefits, thus there was not substantial evidence to support the commission's award of $1695.75 for such benefits.

II. Penalties

The appellants contend the penalty provision of the Workers' Compensation Act does not provide for imposition of penalties on delinquent payment of medical bills and attorney's fees. The two basic reasons stated are, first, the Act refers to penalties only with respect to failure to pay "instalments" on time. Ark.Stat.Ann., § 81-1319(f) (Repl.1976). Our Act does not provide for the payment of medical bills and attorney's fees in instalments. See, Ark.Stat.Ann., §§ 81-1311 and 1332 (Supp.1979). Secondly, our Act does not deal with reimbursement of the claimant for medical and legal expenses, thus imposition of the penalty would raise a question to whom it should be paid.

Neither this court nor the Arkansas Supreme Court has dealt with this problem as far as we know. It has been considered only rarely in other jurisdictions. In California there were a number of appeals courts decisions dealing with the question, some of them conflicting. See, e. g., Ramsey v. Workmen's Comp. App. Bd., 18 Cal.App.3d 155, 95 Cal.Rptr. 558 (1971); Vogh v. Workmen's Comp. App. Bd., 264 Cal.App.2d 724, 70 Cal.Rptr. 722 (1968). The matter was settled by the California Supreme Court in Adams v. Workers' Comp. App. Bd., 18 Cal.3d 226, 133 Cal.Rptr. 517, 555 P.2d 303 (1976), which held the penalties provided by the California Code apply to medical and legal obligations. The case makes it clear, however, that the California law contemplates reimbursement of the claimant rather than direct payment of Louisiana courts of appeals have held their penalty statute, La.Rev.Stat.Ann., § 23.1201.2 (1964), "obviously" applies to the medical payments parts of an award as it says it applies to "any claim due" under the law. Dupre v. Sterling Plate Glass & Paint Co., Inc., 344 So.2d 1060 (La.App.1977); Scott v. Hartford Accident & Indemnity Co., 302 So.2d 641 (La.App.1974). Again, no mention of "instalments" appears in the statute, and it is clear from the statute and the cases that the money is to be paid as reimbursement to the employee rather than directly.

these expenses. In addition, the California statute which is comparable to our § 81-1319(f) makes no mention of instalments but clearly says it applies to any payments to be made pursuant to the award. Cal.Lab.Code, § 5814 (1976).

There are indications that Minnesota, ...