Schmaltz v. Troy Metal Concepts, Inc.
| Decision Date | 23 December 2003 |
| Docket Number | Docket No. 123865. |
| Citation | 469 Mich. 467,673 N.W.2d 95 |
| Parties | Thomas SCHMALTZ, Plaintiff-Appellant, v. TROY METAL CONCEPTS, INC., and Westfield Insurance Company, Defendants-Appellees. |
| Court | Michigan Supreme Court |
J. Timothy Esper & Associates, P.C. (by J. Timothy Esper), Detroit, MI, (Daryl Royal, of counsel) Dearborn, MI, for the plaintiff.
Lacy & Jones (by Michael T. Reinholm), Birmingham, MI, for the defendants.
In this worker's compensation case, this Court is asked to determine whether a disabled employee's average weekly wage at the time of injury can be recalculated or redetermined to include discontinued fringe benefits when that employee's subsequent employment produces a partial benefit rate. We conclude that the average weekly wage that is used to establish benefit entitlement is determined at the time of injury and may not be subsequently recalculated. Postinjury employment does not affect the time of injury average weekly wage calculation. This was the decision reached by the Worker's Compensation Appellate Commission (WCAC), a decision which we affirm.
This case comes to us on stipulated facts, which we will review after setting forth the applicable provisions of law. From this case's inception, the sole question posed by the parties is whether, and to what extent, plaintiff's discontinued fringe benefits can be included in his "average weekly wage" when determining his entitlement to wage-loss benefits.
To answer this question, we must examine several provisions in the Worker's Disability Compensation Act, M.C.L. § 418.101 et seq. The act compensates workers for wage loss due to work-related injuries, but it also establishes limits for such compensation. Since 1982, disabled workers have been entitled to receive eighty percent of their after-tax average weekly wage. M.C.L. § 418.351(1). However, this compensation is subject to a statutory maximum, which is ninety percent of the state average weekly wage applicable at the time of injury. M.C.L. § 418.355(2).
The after-tax wages used to determine wage-loss benefit entitlement are calculated pursuant to M.C.L. § 418.313(1), which establishes how the "after-tax" determination is made, and M.C.L. § 418.371, which establishes how the "average weekly wage" is calculated. The critical provision for purposes of this case is § 371(2), which provides:
As used in this act, "average weekly wage" means the weekly wage earned by the employee at the time of the employee's injury in all employment, inclusive of overtime, premium pay, and cost of living adjustment, and exclusive of any fringe or other benefits which continue during the disability. Any fringe or other benefit which does not continue during the disability shall be included for purposes of determining an employee's average weekly wage to the extent that the inclusion of the fringe or other benefit will not result in a weekly benefit amount which is greater than 2/3 of the state average weekly wage at the time of injury. The average weekly wage shall be determined by computing the total wages paid in the highest paid 39 weeks of the 52 weeks immediately preceding the date of injury, and dividing by 39.
The plaintiff in this case was injured in 1997. At the time of his injury, his weekly wage (or "cash" wage) was $983.59. His fringe benefits, which were discontinued, were valued at $273.96. The applicable state average weekly wage in 1997 was $591.18, two-thirds of which is $394.12. Plaintiff's "cash" weekly pay therefore far exceeded the amount under which fringe benefits may be included in the calculation of plaintiff's "average weekly wage" under § 371(2). In short, plaintiff's average weekly wage at the time of his injury was $983.59.
Plaintiff subsequently found new employment, at wages less than he earned from defendant. In accordance with M.C.L. § 418.361(1), he is entitled to weekly compensation equal to "80% of the difference between the injured employee's after-tax average weekly wage before the personal injury and the after-tax average weekly wage which the injured employee is able to earn after the personal injury, but not more than the maximum weekly rate of compensation, as determined under [M.C.L. § 418.355]." There is a companion statement of entitlement in the reasonable employment provisions of the act, specifically M.C.L. § 418.301(5)(b), which states that if a disabled employee "is employed and the average weekly wage of the employee is less than that which the employee received before the date of injury, the employee shall receive weekly benefits under this act equal to 80% of the difference between the injured employee's after-tax weekly wage before the date of injury and the after-tax weekly wage which the injured employee is able to earn after the date of injury, but not more than the maximum weekly rate of compensation, as determined under [M.C.L. § 418.355]."
Plaintiff proposes that, if the differential benefit entitlement discussed in §§ 361(1) and 301(5)(b) is below two-thirds of the applicable state average weekly wage ($394.12), his discontinued fringe benefits should now be included in his average weekly wage, to the extent that such inclusion does not result in a weekly benefit amount greater than $394.12. The worker's compensation magistrate, relying on prior decisions by the WCAC, rejected plaintiff's proposal, and the WCAC affirmed the magistrate's decision. 2002 Mich. ACO 326.1 We agree with these authorities.
Findings of fact made or adopted by the WCAC are conclusive on appeal, absent fraud, if there is any competent supporting evidence in the record, but a decision of the WCAC is subject to reversal if the WCAC operated within the wrong legal framework or if its decision was based on erroneous legal reasoning. DiBenedetto v. West Shore Hosp., 461 Mich. 394, 605 N.W.2d 300 (2000). Questions of law arising in any final order of the WCAC are reviewed by this Court under a de novo standard of review. Mudel v. Great Atlantic & Pacific Tea Co., 462 Mich. 691, 614 N.W.2d 607 (2000). Unless clearly erroneous, the Courts are to give great weight to the interpretation of a statute placed upon it by the administrative body whose job it is to apply the statute. Hoste v. Shanty Creek Mgmt., Inc., 459 Mich. 561, 592 N.W.2d 360 (1999).
The statutory restriction on the inclusion of discontinued fringe benefits in the calculation of an employee's average weekly wage, M.C.L. § 418.371(2), reflects the Legislature's intent that fringe benefits should only be included to increase the weekly benefit amount available to employees whose other earnings, exclusive of fringe benefits, are too low to yield a weekly benefit amount that is equal to or above two-thirds of the applicable state average weekly wage. In the leading WCAC decision, Karczewski v. Gen Motors Corp, 1994 Mich. ACO 613 (1995), the WCAC adopted the following analysis provided by the magistrate in that case:
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