Steam & Process Repairs v. Michael V. Cayton

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REL: 10/02/2009 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS SPECIAL TERM, 2009 2080529 Steam & Process Repairs v. M i c h a e l V. Cayton Appeal from Mobile C i r c u i t (CV-05-3550.51) Court THOMPSON, P r e s i d i n g J u d g e . Steam & P r o c e s s Repairs ("S&P") a p p e a l s from t h e t r i a l c o u r t ' s judgment i n t h i s w o r k e r s ' compensation a c t i o n . appeal, S&P c o n t e n d s t h a t t h e t r i a l In i t s c o u r t e r r e d i n t h e way i t gave c r e d i t t o S&P f o r t e m p o r a r y - t o t a l - d i s a b i l i t y p a y m e n t s S&P 2080529 made t o employee M i c h a e l V. C a y t o n maximum m e d i c a l i m p r o v e m e n t The p e r t i n e n t facts a f t e r Cayton had reached ("MMI"). a r e as f o l l o w s . From May 22, 2004, t o A p r i l 1 8 , 2008, S&P v o l u n t a r i l y p a i d C a y t o n $ 5 1 3 . 5 4 a week in temporary-total-disability benefits for a back Cayton had s u s t a i n e d i n a w o r k - r e l a t e d a c c i d e n t . weekly payments litigated. were made I n i t s judgment, while this the t r i a l matter injury Most o f t h e was being court determined that Cayton had s u s t a i n e d a 7 5 % permanent p a r t i a l d i s a b i l i t y as a r e s u l t o f t h e i n j u r y a n d t h a t he h a d r e a c h e d MMI on A p r i l 2006. The t r i a l credit " t o the e x t e n t t h a t b e n e f i t s p a i d f o r temporary disability after c o u r t a l s o f o u n d t h a t S&P was e n t i t l e d t o a the date o f maximum medical total improvement e x c e e d e d b e n e f i t s due f o r p e r m a n e n t p a r t i a l d i s a b i l i t y . " trial 4, court directed the parties The t o confer t o determine the amount o f c o m p e n s a t i o n owed t o C a y t o n i n l i g h t o f t h e c r e d i t due t o S&P. S&P a r g u e d t h a t i t was e n t i t l e d t o a c r e d i t i n t h e form o f a r e d u c t i o n i n payment e q u a l t o t h e a c t u a l d o l l a r amount i t h a d o v e r p a i d C a y t o n a f t e r he h a d r e a c h e d MMI. Cayton argued t h a t S&P was e n t i t l e d t o c r e d i t i n t h e f o r m o f a d e d u c t i o n o f 2 2080529 the number of weeks i t had paid Cayton temporary-total- d i s a b i l i t y b e n e f i t s f r o m t h e t o t a l number o f weeks C a y t o n was entitled to receive permanent-partial-disability The p a r t i e s ' r e s p e c t i v e methods o f c a l c u l a t i o n a r e more fully below. resolve entered an the issue. amended benefits entitled They r e t u r n e d After order temporary-total-disability C a y t o n was finding that benefits to receive The t r i a l to the t r i a l court the t r i a l court a hearing, S&P had p a i d f o r 204 weeks Cayton and that permanent-partial-disability f o r 300 weeks p u r s u a n t Code 1 9 7 5 . discussed The p a r t i e s were u n a b l e t o a g r e e on t h e amount o f c o m p e n s a t i o n owed. to benefits. to § 25-5-57(a)(3)g., A l a . c o u r t gave S&P c r e d i t f o r t h e number o f weeks i t h a d a l r e a d y p a i d b e n e f i t s t o C a y t o n a n d o r d e r e d i t t o pay the $220 a week Cayton permanent-partial-disability was entitled benefits to receive in f o r the remaining 96 weeks. On a p p e a l , S&P argues t h a t the t r i a l court should have a w a r d e d i t a m o n e t a r y c r e d i t f o r t h e amount o f money i t h a d overpaid Cayton rather than credit f o r the time those o v e r p a y m e n t s were made, i . e . , c r e d i t f o r t h e number o f weeks 3 2080529 S&P h a d made t h e o v e r p a y m e n t s . 25-5-56, A l a . Code 1 9 7 5 , S&P b a s e s i t s c o n t e n t i o n on § which s t a t e s , i n pertinent part: " A l l moneys v o l u n t a r i l y p a i d by t h e e m p l o y e r o r i n s u r a n c e c a r r i e r t o an i n j u r e d e m p l o y e e i n a d v a n c e o f a g r e e m e n t o r award s h a l l be t r e a t e d as advance p a y m e n t s on a c c o u n t o f t h e c o m p e n s a t i o n . I n o r d e r t o encourage advance payments, i t i s e x p r e s s l y p r o v i d e d t h a t t h e p a y m e n t s s h a l l n o t be c o n s t r u e d as an admission of liability but shall be without prejudice." Cayton deals contends only parties. governs case. with that § cases 25-5-56 i s i n a p p l i c a b l e involving a because i t s e t t l e m e n t between the I n s t e a d , he s a y s , § 2 5 - 5 - 5 7 ( a ) ( 3 ) g . , A l a . Code 1975 t h e method o f the c a l c u l a t i o n of the c r e d i t Section 25-5-57(a)(3)g. provides, i n pertinent in this part: " I f a permanent p a r t i a l d i s a b i l i t y , compensation f o r w h i c h i s n o t c a l c u l a t e d by u s e o f t h e s c h e d u l e i n s u b d i v i s i o n (a)(3) of t h i s s e c t i o n , f o l l o w s a p e r i o d of temporary t o t a l d i s a b i l i t y r e s u l t i n g from the same i n j u r y , t h e number o f weeks o f t h e t e m p o r a r y t o t a l d i s a b i l i t y s h a l l be d e d u c t e d f r o m t h e number of weeks payable for the permanent partial disability." S e c t i o n 2 5 - 5 - 5 7 ( a ) ( 3 ) g . does n o t encompass s i t u a t i o n s i n which there has been disability benefits. an overpayment of temporary-total- I t s i m p l y a l l o w s an e m p l o y e r the t i m e t h e employee i s e n t i t l e d t o r e c e i v e to deduct temporary-total- d i s a b i l i t y b e n e f i t s f r o m t h e t o t a l number o f weeks an 4 injured 2080529 employee partial i s entitled to receive benefits for a permanent disability. "Our r e v i e w o f t h e Workmen's C o m p e n s a t i o n A c t reveals nothing barring a credit f o r advance payments o f p e r m a n e n t p a r t i a l d i s a b i l i t y b e n e f i t s . A l t h o u g h no s e c t i o n o f t h e A c t s p e c i f i c a l l y p r o v i d e s f o r an e m p l o y e r t o be g i v e n c r e d i t f o r p e r m a n e n t p a r t i a l d i s a b i l i t y benefits paid p r i o r to a t r i a l court's judgment, the A c t appears to favor the payment o f b e n e f i t s p r i o r t o l i t i g a t i o n . . . . II I I " T h i s c o u r t has i n t e r p r e t e d § 25-5-56 as i n t e n d e d ' t o e n c o u r a g e t h e e m p l o y e r . . . t o make a d v a n c e payments t o t h e d i s a b l e d e m p l o y e e w i t h o u t w a i t i n g for a determination of the question of l i a b i l i t y , the l e n g t h of d i s a b i l i t y , o r the e x t e n t of the injuries.... [ I ] f t h e e m p l o y e r were [ s i c ] not i n s u r e d t h e e m p l o y e r may t a k e c r e d i t f o r v o l u n t a r y a d v a n c e p a y m e n t s a g a i n s t t h e amount o f u l t i m a t e liability.' M a r c h v. C i t y o f H u n t s v i l l e , 45 A l a . App. 480, 483, 232 So. 2d 662, 664 ( C i v . App. 1970)." Gold K i s t , App. I n c . v. M u l l i n a x , 1994)(footnote In M u l l i n a x , 650 So. 2d 937, 939 (Ala. Civ. omitted). this court explained the r a t i o n a l e behind a l l o w i n g an e m p l o y e r t o r e c e i v e a m o n e t a r y c r e d i t f o r a d v a n c e payments of p e r m a n e n t - p a r t i a l - d i s a b i l i t y b e n e f i t s . "The w o r k [ e r s ' ] c o m p e n s a t i o n l a w s a r e t o be liberally construed i n favor of the injured e m p l o y e e . To d i s a l l o w c r e d i t f o r a d v a n c e payment o f p e r m a n e n t p a r t i a l d i s a b i l i t y , as i n t h i s c a s e , i s c o n t r a r y t o t h e l e g i s l a t i v e i n t e n t o f § 25-5-56, 5 2080529 w h i c h e n c o u r a g e s e m p l o y e r s t o make a d v a n c e payments d u r i n g t h e p e r i o d between t h e a c c i d e n t and t h e d e t e r m i n a t i o n o f l i a b i l i t y and t h e e x t e n t o f t h e i n j u r y . T h i s i n t e r p r e t a t i o n o f § 25-5-56 f a v o r s t h e e m p l o y e e b y e n c o u r a g i n g e m p l o y e r s t o make payments to t h e i n j u r e d employee w h i l e w a i t i n g , i f n e c e s s a r y , f o r a c o u r t d e t e r m i n a t i o n r e g a r d i n g l i a b i l i t y and b e n e f i t s due. The d i s a l l o w a n c e of c r e d i t f o r a d v a n c e payments f o r p e r m a n e n t p a r t i a l d i s a b i l i t y would, i n a l l likelihood, discourage advance payments." Id. In Hedgemon v . U n i t e d P a r c e l S e r v i c e , I n c . , 832 So. 2d 656, 661 ( A l a . C i v . App. 2 0 0 2 ) , t h i s the issue whether overpayment an employer had of b e n e f i t s , recognized receive a credit court, while the right addressing to recoup the employer's r i g h t t o f o r overpayment o f b e n e f i t s , s t a t i n g : "[T]he M u l l i n a x court r i g h t l y recognized t h a t , i n o r d e r t o make an award o f f u t u r e b e n e f i t payments t o an e m p l o y e e t h a t w o u l d r e s u l t i n t h e e m p l o y e e ' s r e c e i v i n g t h e c o r r e c t t o t a l amount o f b e n e f i t s t o w h i c h he o r she was e n t i t l e d u n d e r t h e t e r m s o f t h e [Workers' Compensation] A c t , i t o b v i o u s l y had t o a l l o w a c r e d i t f o r a l l s i m i l a r payments made i n advance o f t h e t r i a l c o u r t ' s judgment. Mullinax, 650 So. 2d a t 939." See a l s o E a s l e y v. H u n t s v i l l e - M a d i s o n C o u n t y Pub. L i b r a r y , 977 So. 2d 516, 520 awarding disability an ( A l a . C i v . App. 2007) employer payments a monetary (affirming credit judgment f o r prejudgment i t h a d made t o i t s i n j u r e d e m p l o y e e a n d 6 2080529 applying credit against d i s a b i l i t y benefits owed t h e I n t h i s c a s e , S&P receive $220 benefits. should The O p e r a t i n g Co. an and trial each begun court 225 MMI, when to in overpaid Cayton reached So. MMI. 2d 833, 840 to benefits Fort (Ala. James 2008)(for permanent-partial- benefits, the or e m p l o y e e must have parte Phenix Rental Therefore, from the him C a y t o n was permanent-partial-disability receive ( c i t i n g Ex (Ala. 2003))). S&P determined that permanent-partial-disability permanent-total-disability r e a c h e d MMI employee). v. S t e p h e n s , 996 employee permanent-partial- f o r an a d d i t i o n a l 106 weeks a f t e r he week Payment o f have accrued p a i d C a y t o n $513.34 a week f o r 98 weeks b e f o r e he r e a c h e d MMI r e a c h e d MMI. the Ctr., 873 time Cayton $293.54 e a c h week f o r 106 So. 2d reached weeks f o r a t o t a l overpayment of $31,115.24. B a s e d upon t h e received authorities cited above, S&P a c r e d i t f o r those overpayments. The s h o u l d have c r e d i t should have b e e n a p p l i e d t o t h e p e r m a n e n t - p a r t i a l - d i s a b i l i t y b e n e f i t s o f $220 e a c h week f o r t h e 300 weeks C a y t o n was 96 weeks r e m a i n i n g o f t h e entitled to 7 total compensation pursuant to of § 2080529 25-5-57(a)(3)g. S&P owed 1 Cayton A t a r a t e o f $220 e a c h week a total disability benefits. it had a l r e a d y in permanent-partial- Once S&P i s c r e d i t e d w i t h t h e $31,115.24 overpaid C a y t o n r e a c h e d MMI, o f $21,120 f o r 96 weeks, Cayton during h o w e v e r , S&P w i l l t h e 106 weeks after owe C a y t o n no f u r t h e r c o m p e n s a t i o n , b e c a u s e S&P h a s p a i d $9,995.24 more t h a n C a y t o n is entitled to recover f r o m S&P. The i s s u e w h e t h e r e n t i t l e d t o r e c o u p t h a t amount i s n o t b e f o r e For trial the reasons court had set forth above, court. t h e judgment o f t h e a l l o w i n g S&P a c r e d i t f o r t h e number o f weeks i t overpaid Cayton, but not o v e r p a y m e n t , i s due t o be r e v e r s e d , for this S&P i s for the amount of the a n d t h e c a u s e i s remanded t h e e n t r y o f a judgment c o n s i s t e n t w i t h t h i s opinion. REVERSED AND REMANDED. Pittman, B r y a n , Thomas, and Moore, J J . , c o n c u r . T h e 98 weeks C a y t o n r e c e i v e d t e m p o r a r y - t o t a l - d i s a b i l i t y b e n e f i t s , p l u s t h e 106 weeks C a y t o n r e c e i v e d t h e o v e r p a y m e n t s , e q u a l s 204 weeks o f c o m p e n s a t i o n . A f t e r d e d u c t i n g t h e 204 weeks f o r w h i c h C a y t o n h a d a l r e a d y r e c e i v e d c o m p e n s a t i o n f r o m t h e 300 weeks he was e n t i t l e d t o r e c e i v e c o m p e n s a t i o n , C a y t o n was e n t i t l e d t o r e c e i v e c o m p e n s a t i o n f o r 96 more weeks a t a r a t e o f $220 e a c h week. 1 8

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