Witzky v. West Coast Duplicating & Claims Center

• Decision Date: 10 March 1987
• Docket Number: No. BM-290,BM-290
• Citation: 12 Fla. L. Weekly 723,503 So.2d 1327
• Parties: 12 Fla. L. Weekly 723 James WITZKY, Appellant, v. WEST COAST DUPLICATING & CLAIMS CENTER, Appellee.
• Court: Florida District Court of Appeals

Page 1327

503 So.2d 1327

12 Fla. L. Weekly 723

James WITZKY, Appellant, v. WEST COAST DUPLICATING & CLAIMS CENTER, Appellee.

No. BM-290.

District Court of Appeal of Florida,

First District.

March 10, 1987.

Rehearing Denied April 1, 1987.

A. Dawn Hayes, of Earle & Thompson, St. Petersburg, for appellant.

Kathleen R. Hudson, St. Petersburg, for appellee.

ZEHMER, Judge.

Claimant, James Witzky, appeals an order of the deputy commissioner excluding certain commissions from the calculation of his average weekly wage. He argues it was error to exclude commissions earned but not paid to him during the thirteen-week period immediately preceding the industrial accident. We reverse.

Claimant injured his lower back in a work related accident on February 26, 1985. At the time of the accident, claimant was employed by West Coast Duplicating as a salesman, earning a base salary plus commissions. Compensation benefits were paid from March 26, 1985, until December 24, 1985, at the rate of $211.81 per week. Claimant made several sales during the thirteen weeks immediately prior to the accident for which he was not actually paid commissions until after the accident. Arguing that he had "earned" the commissions before the accident and that they should be included in the calculation of his average weekly wage, claimant requested an increase in his average weekly wage and compensation rate.

Prior to working at West Coast, claimant was employed as a duplicating equipment salesman by Bay Area Duplicating and was paid $500 per week, or approximately $26,000 per year. Claimant went to work for West Coast when it purchased all the inventory of Bay Area. He testified that although he agreed to accept a lower base salary ($200 per week), plus 40% commission on all sales made by him, he and his employer contemplated that his overall weekly compensation would remain about $26,000 per year, an average of about $500 per week. Claimant testified that his commissions were "earned" when the sale was made, although he did not get "paid" until the customer paid West Coast for the equipment.

Sam Thurman, president of West Coast, testified:

When the equipment is paid for is when we actually pay the commission. If you say earned, it's when a sale is made, we assume that a commission is earned when we have a signed contract for the equipment, but we do not pay commissions; therefore, possibly by the straight letter of the law, it wouldn't be until it's paid for. We don't pay the commissions to the salespeople until the equipment is paid.

(R. 38-9). Thurman did not dispute claimant's testimony that he was expected to earn $26,000 per year.

The deputy commissioner ruled that only commissions actually paid to claimant during the thirteen-week period immediately prior to his injury would be included in calculating claimant's average weekly wage, and figured total commissions and salary paid to claimant during this period to be $4,330.50. The deputy, applying section 440.14(1)(a), reduced that amount by the cost of health insurance benefits still provided by the employer and servicing agent, and determined the average weekly wage to be $296.87. Claimant's contention that this amount was well below his expected income of $26,000 per year, or $500 per week, was unpersuasive. Claimant appeals this final order.

Section 440.14(1)(a), Florida Statutes (1985), speaks in terms of wages "earned" by a claimant during the thirteen week period immediately preceding an accident, and is not necessarily limited to the amount of money actually paid to the claimant. See Tampa Electric Co. v. Bradshaw, 477 So.2d 624 (Fla. 1st DCA 1985) (appropriate amount to be included in average weekly wage was the amount claimant earned, not just the monies actually paid to him during the thirteen-week period preceding the accident). Commissions fall within the term "wages" and should be included in a determination of average weekly wage. Miller v. Ben's Service Station, Inc., 417 So.2d 266 (Fla. 1st DCA 1982). Here, the parties testified that the commissions were "earned" when a sale was made, although they were not paid to claimant until the employer was paid. Accordingly, amounts so earned should have been included in calculating the claimant's average weekly wage.

Prior to the accident claimant closed sales of equipment on January 29, 1985, February 1, 1985, and February 20, 1985, earning commissions on these sales totalling $1,002.91. In addition, claimant received a check for $250 on February 27, 1985, for training work he had done from February 1, 1985, through February 28, 1985. Of that amount, $187.50 was earned prior to the accident. These "earned," but not "paid," amounts should also have been included in the calculation of average weekly wage.

Under the rule discussed above, the $1,951.46 commission earned by claimant from the sale of equipment to Let Us Print was properly excluded by the deputy in calculating claimant's average weekly wage. The owner of Let Us Print testified that, while he decided to purchase the equipment in January 1985, he did not place the order until March 22, 1985. Therefore, the equipment was not "sold," and the commission was not "earned," until the order was actually placed, several weeks after the accident.

Our holding in this case, that for the purpose of calculating average weekly wage under section 440.14(1)(a), commissions were "earned" when the sale was closed rather than when payment of the purchase price was ultimately received by the employer and the commission paid to claimant, comports with the underlying theory and purpose of calculating average weekly wage, which is simply a method of establishing the value of an employee's lost ability to earn future wages during the period of disability attributable to the covered industrial accident. ¹ The statute uses the term "earned," instead of the term "paid," to focus attention on the ability of the employee to physically engage in remunerative employment, a fact which may or may not be temporally related to the date the employee receives payment for such services. The time and labor required of claimant to earn each commission was substantially completed by the time the order was placed. It was not shown that claimant was required to perfect delivery and collect payment or that he had any control over these activities. The date payment was ordinarily received by the employer was not shown to be sufficiently close, temporally, to claimant's sales activity to support an inference that the act of paying the employer was competent proof of claimant's physical ability to work.

If claimant's compensation agreement with his employer was intended by both to produce approximately $26,000 in income each year, it should be obvious that limiting average weekly wage calculations to commissions received during the arbitrary thirteen-week period specified in section 440.14(1)(a), is not a fair and satisfactory method of measuring claimant's lost earning capacity. Certainly, since the basis of compensation was annual earnings likely to fluctuate from quarter to quarter, a more rational basis for determining claimant's average weekly wage would be to calculate his annual earnings and divide by fifty-two weeks, as in the case of a seasonal worker...