Subsequent Injury Fund v. Kraus, 131

• Decision Date: 01 September 1983
• Docket Number: No. 131,131
• Citation: 301 Md. 111,482 A.2d 468
• Parties: SUBSEQUENT INJURY FUND v. James Paul KRAUS et al. ,
• Court: Maryland Court of Appeals

Page 111

301 Md. 111

482 A.2d 468

SUBSEQUENT INJURY FUND v. James Paul KRAUS et al.

No. 131, Sept. Term, 1983.

Court of Appeals of Maryland.

Oct. 15, 1984.

Sophia L. Swope, Asst. Atty. Gen., Towson (Stephen H. Sachs, Atty. Gen., Baltimore, on the brief), for appellant.

Alfred M. Porth, Theodore B. Cornblatt, S. Woods Bennett and Smith, Somerville & Case, Baltimore, amicus curiae on the brief, for Moriconi Const. Co., Maryland Cas. Co., Packaging Services of Maryland, Inc. and Nationwide Mut. Ins. Co.

L. William Gawlik, Asst. City Sol. (Benjamin L. Brown, City Sol. and Sheldon H. Press, Chief Sol., Baltimore, on the brief), for appellee.

Argued before MURPHY, C.J., ELDRIDGE, COLE, DAVIDSON, ^* RODOWSKY and COUCH, JJ., and JAMES C. MORTON, Jr., Associate Judge of the Court of Special Appeals (Retired), Specially Assigned.

RODOWSKY, Judge.

The dispute in this workers' compensation case is between the Subsequent Injury Fund (the Fund) and the employer, the Mayor and City Council of Baltimore (the City), over how much of an award for permanent total disability each is to pay. We shall hold that the employer is responsible for so much of the award as equals compensation payable for that disability which the subsequent injury would have caused, absent the prior impairment, and that the Fund is responsible for the balance of the award.

The claimant, James Paul Kraus (Kraus), had been employed by the City as a firefighter beginning in 1964. He was diagnosed as having high blood pressure in 1972. On March 11, 1978, Kraus suffered the first of two myocardial infarctions and has been unable to return to work. His average weekly wage was $287.17. The Workmen's Compensation Commission (the Commission) found that Kraus was permanently totally disabled and that "70% of such disability is reasonably attributable to the occupational disease and 30% is due to the pre-existing condition." The Commission ordered the City, a self-insurer, to pay Kraus "compensation for permanent total disability at the rate of $192.00 per week beginning March 14, 1978 not to exceed the sum of $63,045.00 allowable under 'Other Cases' ...." The Fund was ordered to pay Kraus "compensation for permanent total disability at the rate of $192.00 per week and continuing during the period of permanent total disability; beginning at the end of compensation to be paid by the [City]."

Prior to 1973 total compensation payable for permanent total disability was limited to $45,000. Chapter 671 of the Acts of 1973 eliminated any ceiling by adding a proviso which reads:

[P]rovided, however, that if the employee's total disability shall continue after a total of $45,000.00 has been paid, then further weekly payments at the rate previously paid shall be paid to him during such disability. [Md.Code (1957, 1979 Repl.Vol., 1984 Cum.Supp.), Art. 101, § 36(1)(a). ¹ ]

Under the Commission's award to Kraus the City's portion is limited to $63,045 while the Fund's portion is open ended.

The Fund appealed, contending that employer and Fund should pay compensation concurrently, so that in this case the City and the Fund should pay Kraus 70% and 30%, respectively, of the required weekly payments. The circuit court affirmed the Commission and the Fund appealed to the Court of Special Appeals. In an unreported opinion that court affirmed the circuit court. We granted the Fund's petition for certiorari, which advanced the argument, inter alia, that the Commission's method of allocating permanent total disability awards in subsequent injury cases was at odds with the allocation in death cases approved in C & P Telephone Co. v. Subsequent Injury Fund, 297 Md. 339, 466 A.2d 39 (1983). There we affirmed for the reasons set forth in the opinion for the Court of Special Appeals by Judge Adkins, 53 Md.App. 508, 453 A.2d 1243 (1983).

We affirm the Court of Special Appeals in this case. The Fund's position contradicts the express language of the first unnumbered paragraph of the controlling statute, § 66(1). In relevant part § 66(1) para. 1 provides:

Whenever an employee who has a permanent impairment due to previous accident or disease or any congenital condition, which is or is likely to be a hindrance or obstacle to his employment, incurs subsequent disability by reason of a personal injury, for which compensation is required by this article resulting in permanent partial or permanent total disability that is substantially greater by reason of the combined effects of the impairment and subsequent injury than that which would have resulted from the subsequent injury alone, the employer or his insurance carrier shall be liable only for the compensation payable under this article for such injury. However, in addition to such compensation to which the employer or his insurance carrier is liable, and after the completion of payments therefor provided by this article, the employee ... shall be paid additional compensation from [the Fund], it being the intent of this section to make the total payments to which such employee shall become entitled equal to the compensation that would be due for the combined effects of the impairment and subsequent injury resulting in permanent total disability or a substantially greater permanent partial disability. ²

The essence of the Fund's argument, quoted from its brief, is as follows:

Where such injury in conjunction with prior impairment results in the combined effects of permanent total disability, then each factor contributes to the total disability. The previous impairment does not, standing alone, render the claimant permanently totally disabled and the compensable injury alone does not render the claimant permanently totally disabled. The combined effects, however, do. Therefore, the Employer should be charged with the percentage of permanent total disability which is caused by the injury, and the Subsequent Injury Fund should be charged with the percentage contributed by the pre-existing condition, or prior permanent impairment. Payments by both parties should be simultaneous and begin from the first payment for permanent total disability.

Paragraph 1 of § 66(1) clearly states that the Fund pays after the employer has paid. The payments are not concurrent. The system which the Fund urges has the employer and the Fund paying their shares of each weekly payment to the claimant throughout the period of permanent total disability.

Further, the employer's obligation is "only for the compensation payable under this article for such injury." The "injury" referred to is the disability that "would have resulted from the subsequent injury alone ...." The step- by-step calculation of the Commission's award reflects how compliance with this aspect of § 66(1) para. 1 was achieved. ³

The Commission attributed 70% of the permanent total disability to the subsequent injury. In the words of § 66(1) para. 1, 70% is the extent of disability "which would have resulted from the subsequent injury alone ...." The Commission then looked to § 36(4)(a), the "Other Cases" section. It generally provides that in certain permanent partial disability cases the Commission is to determine the percentage of loss of industrial use of the employee's body "and shall award compensation in such proportion as the determined loss bears to 500 weeks, the said compensation to be paid weekly at the rate of [66 2/3%] of the average weekly wages, in no case to exceed [33 1/3%] of the State average weekly wage ...." As of March 11, 1978, one-third of the State average weekly wage was $68. Because the Commission found a 70% disability attributable to the subsequent injury and because 70% permanent partial disability converts to 350 weeks under § 36(4)(a), the Commission treated Kraus' subsequent injury as a "serious disability" under § 36(4a). In serious disability cases "[t]he weeks for such award shall be increased by one third ... and the compensation shall be for [66 2/3%] of the average weekly wage ...." The latter limitation as of March 11, 1978, was $135. Increasing the 350 weeks by one-third, or 117 weeks, to a total of 467 weeks and multiplying 467 weeks by the maximum serious disability rate of $135 per week, the Commission arrived at $63,045 as the total amount payable by the City to Kraus.

By this method the Commission correctly honored the limitation of § 66(1) para. 1 that "the employer ... shall be liable only for the compensation payable under this article for such injury." Having determined that a 70% permanent partial disability "would have resulted from the subsequent injury alone," the Commission computed the City's liability by using § 36(4)(a) and (4a) as if the injury were one for an "Other Cases" permanent partial disability. The Commission's calculation comports with the rationale of Reliance Ins. Co. v. Watts, 16 Md.App. 71, 293 A.2d 836 (1972), the Maryland appellate decision most nearly in point.

Watts had lost his left leg in an earlier accident and lost his right leg in the subject accident. Absent "conclusive proof to the contrary" loss of both legs is a permanent total disability under § 36(1)(a) for which compensation was limited to $45,000 when Watts lost his second leg. The Commission attributed 50% of the disability to the loss of each leg and ordered compensation accordingly. In support of the award the Fund argued "that it is 'the percentage of industrial loss of use of the body as a whole due to the [second] injury' which is chargeable to the claimant's current employer ...." Id. at 74, 293 A.2d at 838 (emphasis added). The court rejected that argument as conflicting with the policy behind § 66(1) which is to encourage employers to hire handicapped individuals by limiting the employer's liability. See Subsequent Injury Fund v. Pack, 250 Md. 306, 308, 242 A.2d 506, 508 (1968). Section 66(1) para. 1, properly applied, required the Commission first to compute the employer's liability for loss of one leg as if there were a permanent...