Waters v. TGI Friday's & Indem. Ins. Co. of North America
| Decision Date | 24 April 2012 |
| Docket Number | Record No. 1802-11-4 |
| Parties | KIMBERLY R. WATERS v. TGI FRIDAY'S AND INDEMNITY INSURANCE COMPANY OF NORTH AMERICA |
| Court | Virginia Court of Appeals |
Present: Judges Frank, Beales and Senior Judge Bumgardner Argued at Alexandria, Virginia
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
John B. Delaney (Delaney, McCarthy & Colton, P.C., on briefs), for appellant.
Steven T. Billy (Billy & Seli, P.C., on brief), for appellees.
Kimberly R. Waters, claimant, appeals a decision of the Virginia Workers' Compensation Commission (commission), modifying her average weekly wage from $1,295.11 to $798.31. Claimant also contends the commission erred in finding that employer is entitled to a credit for overpayment. For the reasons stated, we affirm the decision of the commission.
Claimant, a waitress at TGI Friday's, suffered a compensable work injury on June 11, 2006. The parties filed and signed an agreement to pay benefits form with the commission on March 29, 2007 which indicated a pre-injury average weekly wage of $1,295.11 and resulting in a compensation rate of $736. The average weekly wage was based solely on claimant's wages at a Tysons Corner location and did not include unreported tips. The commission entered the award on April 16, 2007.
Employer filed an application to vacate the award on March 9, 2009. The deputy commissioner entered an order finding no mutual mistake of fact and denying employer's request to amend the award. In an opinion dated October 14, 2010, a majority of the full commission reversed the deputy and held:
We find clear and convincing evidence of a mistake in the calculation of the claimant's average weekly wage. Defendant's Exhibit 2D reflects that the claimant's earnings including tips as reported to the employer from January 1, 2006 through June 12, 2006 totaled $10,360.89. A handwritten note on this document divided her total earnings by 8 weeks to find [$]1,295.11, even though the claimant had worked 19 weeks in 2006. The Agreement to Pay Benefits executed by the parties provided that the claimant would receive temporary total disability benefits in the amount of $736 based upon a pre-injury average weekly wage of $1,295.11. We do not ignore the testimony that the claimant provided the insurer with documentation of additional tips earned. However, a mistake was clearly made in calculating the claimant's average weekly wage as $1,295.11 which represents the claimant's total earnings divided by 8 weeks instead of the 19 weeks that the claimant worked in 2006. It cannot simply be a coincidence that this is the same figure used in the Agreement to Pay Benefits. We further note that the claimant herself alleged that she under- reported her tips to her employer. Since the $1,295.11 calculation was based upon the amounts reported to the employer, the claimant must concede that the $1,295.11 calculation was based upon inaccurate data. (footnote omitted)
The commission remanded the matter to the deputy commissioner to determine the correct average weekly wage.
On October 28, 2010, the deputy commissioner instructed the parties to submit written statements, but advised that there was no need to submit new evidence. On November 9, 2010 the employer requested an evidentiary hearing, which was denied. The deputy commissioner closed the record on November 23, 2010.
Employer argued to the deputy that more evidence was needed to show claimant's fraud and lack of credibility. The employer also claimed various problems with claimant's tax returns.Claimant argued that her weekly wages should be $1,295.11. She contended that the adjuster lost her "tip sheets" and that her taxes were filed without benefit of documentation.
The deputy commissioner determined that based upon the claimant's tax returns, the average weekly rate is $798.31, with a compensation rate of $532.23. The deputy also held that employer can recoup the overpayment. The full commission affirmed, and this appeal follows.
Claimant began working as a server at TGI Friday's in Manassas on August 28, 2005 and continued at that location until mid-March, 2006. She left Manassas and began working as a server at the TGI Friday's in Tysons Corner on April 3, 2006 until her injury on June 11, 2006.
Claimant testified that at the Tysons Corner location the clientele was better, the restaurant was newer and busier, and the tips were "ridiculously good." Her manager made her a trainer "not too long" after moving to Tysons Corner. She was paid a higher hourly rate and made more in tips for the hours she worked as a trainer because she kept the tips of the employees in training until they were validated as servers. She estimated she would receive $30 per hour in tips. Claimant stated that she believed her position as a trainer was going to continue because "one of the things that [the manager] wanted to do was . . . to train people at Tyson's and then send them out to [other] stores." Claimant's payment records from April 18, 2006 through June 12, 2006 show that she worked as a trainer for fifty hours and as a server for approximately 344 hours.
Claimant's former manager testified that it was against company policy to take trainee's tips once the trainee was serving tables on their own even though they were still being observed by the trainer.
In 2005, claimant's taxable income from TGI Friday's, as reported on her 2005 federal income tax return, was $11,783.81. In 2006, her income from TGI Friday's, as reported on her income tax return, was $17,753.73 for combined total earnings of $29,537.54 for both years.
The commission made a factual finding that she worked for TGI Friday's for 37 weeks. In determining her average weekly wage, the commission totaled her taxable income from 37 weeks at TGI Friday's, $29,537.54, and divided that sum by 37, reaching an average weekly wage of $798.31.
This appeal follows.
Claimant argues the commission erred in modifying her average weekly wage from the original amount agreed upon in the agreement to pay benefits form. Her sole argument on appeal is that the parties intended to use only her earnings at Tysons Corner to calculate her average weekly wage and that the commission cannot alter the agreement from what the parties originally intended. We reject this argument because it ignores the principles of Mercy Tidewater Ambulance Serv. v. Carpenter, 29 Va. App. 218, 511 S.E.2d 418 (1999), and Collins v. Dept. of Alcoholic Beverage Control, 21 Va. App. 671, 467 S.E.2d 279, affd on reh'g en banc, 22 Va. App. 625, 472 S.E.2d 287 (1996), as discussed below.
"[A]n employee's average weekly wage, even after being agreed to by the parties and set forth in an award of the commission, is subject to modification upon the grounds of fraud, misrepresentation, mistake or imposition." Carpenter, 29 Va. App. at 226, 511 S.E.2d at 421-22. It is immaterial whether the mistake of fact is mutual or unilateral. Collins, 21 Va. App. at 680, 467 S.E.2d at 283. In order for the commission to vacate an award, allegations of fraud,misrepresentation, or mutual mistake must be proven by clear and convincing evidence. Miller v. Potomac Hosp. Foundation, 50 Va. App. 674, 686, 653 S.E.2d 592, 598 (2007).
In Collins, the adjuster used eight of claimant's pay stubs as a basis for calculating claimant's average weekly wage. The adjuster prepared a memorandum of agreement that was executed by the parties and ultimately approved by the commission. 21 Va. App. at 674, 467 S.E.2d at 280. It was later discovered that claimant's actual average weekly wage was less than what had originally been agreed to by the parties. Finding that a mutual mistake of fact had been made, the commission amended the average weekly wage to reflect the lesser figure. This Court affirmed, stating that "[t]he parties simply made a substantial mistake in computing claimant's average weekly wage necessary to determine claimant's award." Id. at 680, 467 S.E.2d at 283 (emphasis in original). The Court further explained:
In determining whether a mutual mistake of fact existed at the time of the agreement, the inquiry is not . . . who initially made the mistake, but rather, whether each party held the same mistaken belief with respect to a material fact at the time the agreement was executed. In this case, each party went forward under the mistaken belief that the average weekly wage set forth in the agreement was correct, when, in fact, it was not. The mistake was mutual.
Id. (citation omitted).
In this case, the commission found that the mistake occurred in the calculation of claimant's average weekly wage. The agreement based claimant's 2006 earnings on her wages as reported in her pay stubs. The commission explained that his sum, $10,360.89, did not accurately reflect her 2006 earnings because this figure did not include claimant's unreported tips. In addition, the agreement also based the calculation on an eight-week pre-injury work period instead of the nineteen weeks that claimant worked in 2006.
For the reasons that follow, we find that the commission did not err in finding that a mistake was made in the initial calculation of claimant's average weekly wage.
"'The reason for calculating average weekly wage is to approximate the economic loss suffered by an employee or his beneficiaries when there is a loss of earning capacity because of work-related injury or death.'" Chesapeake & Potomac Tel. Co. v. Williams, 10 Va. App. 516, 519-20, 392 S.E.2d 846, 848 (1990) ).
Generally, the average weekly wage is calculated based on the employee's actual earnings for the 52 weeks before the accident. Code § 65.2-101.1 When the employment prior to the injury lasts less than 52 weeks, the earnings shall be divided by the number of weeks worked as to be "fair and just" to...
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