Olson v. Workforce Safety and Ins.
| Decision Date | 25 March 2008 |
| Docket Number | No. 20070094.,20070094. |
| Citation | 747 N.W.2d 71,2008 ND 59 |
| Parties | Geremy OLSON, Claimant and Appellant v. WORKFORCE SAFETY AND INSURANCE, Appellee and Wilton Fire Protection Dist. 1, Respondent. |
| Court | North Dakota Supreme Court |
Wilking (on brief), Special Assistant Attorney General, Fargo, N.D., for appellee.
[¶ 1] Geremy Olson has appealed from a district court judgment affirming an order of Workforce Safety and Insurance ("WSI") which determined the amount of Olson's average weekly wage under N.D.C.C. § 65-01-02(5)(b) for purposes of calculating disability benefits, We affirm, concluding that WSI correctly interpreted the plain language of N.D.C.C. § 65-01-02(5)(b) and did not err in calculating Olson's average weekly wage.
[¶ 2] Olson was injured on April 8, 2005, while fighting a fire as a volunteer with the Wilton Fire Department. As a volunteer firefighter, Olson was afforded the coverage and protection of the workers compensation laws as if he were a full-time paid employee of the city. See N.D.C.C. § 65-06-02. Olson applied for benefits, and WSI accepted his claim and paid medical and temporary total disability benefits.
[¶ 3] At the time of his injury, Olson was self-employed as the owner of a video production company. In its initial decision awarding disability benefits, WSI calculated Olson's average weekly wage to be $101, based upon his 2004 tax return, which showed a net profit of $5,265 from his business.
[¶ 4] Olson requested reconsideration of WSI's decision, arguing that WSI had failed to include $5,871 he had earned in ordinary wages at a second job and that certain deductions for business expenses and depreciation should be added back to his business's net profit to calculate his average weekly wage. Olson contended his actual net income for 2004 was $43,777, calculated, as follows:
Frontier personal services W-2 5871
Regular depreciation 1557
Sec 179 depreciation 21499
Special depreciation allowance 947
Business use of personal vehicle 4952
Business use of home 3696
Business net income 5255
Total 43777
Based upon the information provided, WSI amended its earlier decision to include the wages Olson earned at his second job and recalculated Olson's average weekly wage to be $214. WSI refused, however, to include Olson's business deductions and depreciation in calculating his net earnings from self-employment. Olson filed a second request for reconsideration and, in an order dated July 26, 2005, WSI again determined that business deductions and depreciation should not be added back to Olson's net earnings and that his average weekly wage was $214.
[¶ 5] Olson requested a hearing. After a prehearing conference, the parties agreed to submit the matter to the administrative law judge ("ALJ") based upon exhibits, affidavits, and briefs and oral argument by counsel. Olson submitted a profit and loss statement for his business for 2004 showing net income of $21,460. Olson also submitted four separate 2004 tax returns, prepared by his accountant, which he claimed he could have legally filed. The four versions included varying deductions and expenses, and showed net income from his business ranging from $10,217 to $37,866. Olson argued that his actual net earnings from his business was the amount shown on his 2004 profit and loss statement, $21,460.
[¶ 6] The ALJ determined that WSI had failed to correctly calculate Olson's average weekly wage and recommended vacating WSI's prior order. The ALJ further concluded, however, that Olson had failed to demonstrate that the amount shown on his profit and loss statement was an accurate depiction of his net earnings from self-employment. The ALJ therefore recommended that WSI redetermine Olson's average weekly wage "pursuant to [N.D.C.C. § 65-01-02(5)(b)] according to its purpose and principles of constitutional equal protection."
[¶ 7] WSI rejected most of the ALJ's recommended findings of fact and conclusions of law, determining that the ALJ had misconstrued the relevant statute. WSI concluded its prior calculation of Olson's average weekly wage at $214 was correct, and entered a final order affirming its July 26, 2005, order. Olson appealed to the district court, which "affirmed WSI's final order.
[¶ 8] Courts exercise only a limited review in appeals from administrative agency decisions under the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Fettig v. Workforce Safety & Ins., 2007 ND 23, ¶ 9, 728 N.W.2d 301; Tverberg v. Workforce Safety & Ins., 2006 ND 229, ¶ 7, 723 N.W.2d 676. Under N.D.C.C. § 28-32-46, the district court must affirm an administrative agency order unless:
1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.
[¶ 9] On appeal from the district court's decision in an administrative appeal, we review the agency order in the same manner. N.D.C.C. § 28-32-49; Rodenbiker v. Workforce Safety & Ins., 2007 ND 169, ¶ 14, 740 N.W.2d 831; Tverberg, 2006 ND 229, ¶ 8, 723 N.W.2d 676. Application and interpretation of a statute is a question of law. Rodenbiker, at ¶ 15; Rojas v. Workforce Safety & Ins., 2006 ND 221, ¶ 13, 723 N.W.2d 403. Questions of law are fully reviewable on appeal, and when there are no disputed issues of fact and only questions of law are presented on appeal, this Court must affirm the agency order unless it is not in accordance with the law. Rodenbiker, at ¶ 15; Tedford v. Workforce Safety & Ins., 2007 ND 142, ¶ 7, 738 N.W.2d 29.
[¶ 10] There are no disputed issues of material fact presented in this case. Resolution of the appeal turns upon interpretation of N.D.C.C. § 65-01-02(5)(b), particularly the 2003 amendment of the statute.
[¶ 11] The parties agree that Olson is entitled to disability benefits, and that those benefits must be calculated based upon Olson's average weekly wage at the time of his injury. Under our workers compensation law, "wages" is defined as "an employee's remuneration from all employment reportable to the internal revenue service as earned income for federal income tax purposes." N.D.C.C. § 65-01-02(31).
[¶ 12] For purposes of determining disability benefits, a self-employed injured worker's "average weekly wage" is calculated in accordance with the formula set out in N.D.C.C. § 65-01-02(5)(b). Prior to 2003, that section provided:
The "average weekly wage" of a self-employed employee is determined by the following formula: one-fiftieth of the net profits based on the preceding tax year or preceding fifty-two weeks whichever is higher if accurate, reliable, and complete records for those fifty-two weeks are readily available, plus depreciation, meal and travel expenses, and any expenses chargeable to use of personal residence as allowed under the federal tax laws.
The 2003 Legislature amended that section to provide:
The "average weekly wage" of a self-employed employer is determined by the following formula: one fifty-second of the net earnings reported the preceding tax year or preceding fifty-two weeks whichever is higher if. accurate, reliable, and complete records for those fifty-two weeks are readily available.
2003 N.D. Sess. Laws ch. 562, § 1. The parties agree that the 2003 version of the statute governs calculation of Olson's disability benefits for his April 8, 2005, injury.1
[¶ 13] The 2003 amendment, in addition to changing the multiplier for average weekly wage from one-fiftieth to one fifty-second, also changed the phrase "net profits based on the preceding tax year" to "net earnings reported the preceding tax year" and deleted the provision requiring that "depreciation, meal and travel expenses, and any expenses chargeable to use of personal residence as allowed under the federal tax laws" be added back in when calculating the injured worker's average weekly wage from self-employment. The parties dispute the effect of these changes. WSI contends "net earnings" is the equivalent of "net profit" as reported on Schedule C2 of a self-employed worker's federal tax return, and that depreciation and other deductions may no longer be added back in when calculating average weekly wage. Olson counters that (1) there is no indication the legislature intended to drastically reduce disability benefits to self-employed workers; (2) "net earnings" and "net profits" are not equivalent; and (3) the legislature intended to decouple the calculation of average weekly wage from federal tax law and focus upon wages as shown by other accurate, reliable, and complete records, such as a profit and loss statement.
[¶ 14] Our primary goal when interpreting a statute is to ascertain the intent of the legislature. Stephenson v. Hoeven, 2007 ND 136, ¶ 14, 737 N.W.2d 260; CybrCollect, Inc. v. North Dakota Dep't of Fin. Insts., 2005 ND 146, ¶ 23, 703 N.W.2d 285. We initially seek to ascertain legislative intent from the language of the statute itself, giving the words in the statute their plain,...
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