Stucco Plus, Inc. v. Rose

STUCCO PLUS, INC. v. Donald ROSE and Second
Injury Trust Fund

96-256                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered February 17, 1997


1.   Appeal & error -- review of court of appeals case. -- When the supreme
     court grants review following a decision by the court of
     appeals, it reviews the case as though the appeal was
     originally filed with the supreme court.

2.   Workers' compensation -- Second Injury Fund -- Ark. Code Ann.  11-9-
     525(b)(5) prohibits consideration of total disability when determining
     employer's liability for benefits. -- Where the Workers'
     Compensation Commission reasoned that but for his June 1990
     injury and the corresponding 13% disability, appellee employee
     would not be permanently disabled, and, therefore, appellant
     employer should be responsible for 13% of the total
     disability, the supreme court held that the Commission's
     reasoning was flawed because it completely disregarded Ark.
     Code Ann.  11-9-525(b)(5)'s requirement that the last injury
     be considered alone and of itself and instead included the
     last injury and its contribution to the total disability;
     section 11-9-525(b)(5) clearly and unambiguously prohibits
     such consideration of the total disability when determining
     the employer's liability for benefits.

3.   Workers' compensation -- Second Injury Fund -- Commission's public-policy
     rationale regarding Fund's solvency was misplaced. -- The supreme court
     held that the Workers' Compensation Commission's reliance on
     what it called the public policy of protecting the solvency of
     appellee Second Injury Fund was misplaced; there was simply no
     evidence in the record of appellee Fund's solvency or
     insolvency, and therefore any concern in that regard was
     premature.

4.   Statutes -- construction -- clear and unambiguous statute given plain and
     ordinary meaning. -- The supreme court gives the language of a
     clear and unambiguous statute its plain and ordinary meaning.

5.   Workers' compensation -- Second Injury Fund -- provisions of Ark. Code Ann.
      11-9-525 clear and unambiguous. -- When a statute is plain and
     unambiguous, there is no need to resort to rules of statutory
     construction; it is clearly expressed in Ark. Code Ann.  11-
     9-525 that the purpose of the Second Injury Fund is to fully
     compensate an employee for his total injuries while
     simultaneously protecting employers from having to pay for
     injuries that did not occur while the employee was working for
     that employer; the statute clearly and unambiguously provides
     for the Second Injury Trust Fund to make up the balance of the
     employee's total benefits and the employer's share.

6.   Workers' compensation -- Second Injury Fund -- payments from both employer
     and Fund within same period not prohibited. -- The supreme court
     determined that the language of Ark. Code Ann.  11-9-525(b)
     simply did not prohibit payments from both an employer and the
     Fund within the same period.

7.   Workers' compensation -- Second Injury Fund -- employer's liability for
     benefits limited to work-related injury considered alone and of itself --
     Fund held liable for balance of total disability benefits. -- The
     supreme court interpreted Ark. Code Ann.  11-9-525(b)(5) to
     mean that appellant employer's liability for appellee
     employee's benefits was limited to his work-related injury
     occurring in June 1990, considered alone and of itself; the
     court further interpreted section 11-9-525(b)(5) to mean that,
     after appellant's payment of its weekly liability, appellee
     Second Injury Fund must pay the balance of Rose's total
     disability benefits.

8.   Attorney's fees -- computation of fees due from employer in Second Injury
     Fund case. -- Where an employer demonstrates that it is liable
     for only a portion of a worker's present disability within the
     meaning of Second Injury Fund legislation, attorney's fees due
     from the employer should only be computed upon the basis of
     the amount of the employer's liability for benefits, not upon
     the amount of total disability benefits; an employer's
     liability for attorney's fees is limited to the amount of
     benefits awarded from injuries occurring while the worker was
     employed by that employer.


     Petition for Review from the Arkansas Court of Appeals;
reversed and remanded.
     Shaw, Ledbetter, Hornberger, Cogbill & Arnold, by: James A.
Arnold II and E. Diane Graham, for appellant.
     Lawrence W. Fitting, P.A., for appellee Donald Rose.
     Terry Pence, for appellee Second Injury Fund.

     Donald L. Corbin, Justice. 
     Appellant Stucco, Incorporated, appeals the decision of the
Arkansas Workers' Compensation Commission holding that Stucco is
liable for benefits to its employee, Appellee Donald Rose, at the
total disability benefits rate, that the liability of Appellee
Second Injury Trust Fund does not begin until Stucco's liability is
paid out, and that Stucco is responsible for an attorney's fee on
the difference between Rose's total disability benefits and
permanent partial disability benefits.  The Arkansas Court of
Appeals affirmed the Commission's decision.  Stucco, Inc. v. Rose,
52 Ark. App. 42, 914 S.W.2d 767 (1996).  We granted Stucco's
petition for review of that decision, which was decided by a tie
vote.  When we grant review following a decision by the court of
appeals, we review the case as though the appeal was originally
filed with this court.  Maloy v. Suttgart Memorial Hosp., 316 Ark.
447, 872 S.W.2d 401 (1994).  We find error in the Commission's
decision and reverse and remand.
                  Facts and Procedural History
     The facts of this case are not disputed.  Rose sustained a
work-related injury to his lower back on June 26, 1990.  His
healing period ended June 23, 1991.  As a result of this injury, he
sustained an anatomical impairment of 13% to the body as a whole. 
Rose had a preexisting disability or impairment which, when
combined with the June 1990 injury, resulted in his total
disability.  The 13% impairment equates to a benefit period of 58.5
weeks.  The maximum weekly rate for permanent partial disability
benefits for Rose's June 1990 injury is $169.59.  The maximum
weekly rate for total disability benefits is $226.11.
     Both Stucco and the Second Injury Trust Fund accepted Rose's
claim as compensable and as governed by Ark. Code Ann.  11-9-
525(b)(5) (Repl. 1996).  A dispute arose, however, concerning the
rate at which Rose's benefits should be paid and by whom they
should be paid.  Stucco contended that it should only be liable for
benefits for the 58.5 weeks at the permanent partial disability
rate of $169.59 and that the Second Injury Trust Fund is liable for
the difference between that rate and the total disability rate of
$226.11.  The Second Injury Trust Fund contended that its liability
for Rose's total disability benefits did not begin until after
Stucco paid the first 58.5 weeks at the total disability rate of
$226.11.
     The Administrative Law Judge found that Rose was entitled to
receive benefits for his 13% impairment at the total disability
rate of $226.11 beginning June 24, 1991.  The Administrative Law
Judge ordered Stucco to pay the 58.5 weeks of benefits at the
permanent partial disability rate of $169.59 per week, and, at the
conclusion of the 58.5 weeks, ordered the Second Injury Trust Fund
to pay the difference between the total disability rate of $226.11
per week and the permanent partial disability rate of $169.59 per
week that accrued during the first 58.5 weeks.  The Administrative
Law Judge further ordered that, after the 58.5-week period, the
Second Injury Trust Fund was to pay Rose benefits at the total
disability rate of $226.11 until he is no longer disabled or dies.
     The Administrative Law Judge determined that neither Stucco
nor the Fund controverted Rose's claim for total disability
benefits subsequent to the 58.5-week period, but that both Stucco
and the Fund controverted Rose's claim to weekly benefits in excess
of the permanent partial disability rate for the first 58.5 weeks. 
Accordingly, the Administrative Law Judge ordered the Fund to pay
the maximum statutory attorney's fee based on the additional
benefits found to be its liability.  In addition, the
Administrative Law Judge awarded Rose's attorney a fee of $500.00
to be paid by Rose.
     The Second Injury Trust Fund appealed to the Commission, and
Rose cross-appealed on the issue of controversion of total
disability benefits after the 58.5 weeks.  The Commission affirmed
the Administrative Law Judge's finding that Rose was entitled to
benefits at the total disability rate of $226.11, but reversed the
finding that Stucco was responsible for the first 58.5 weeks at the
permanent partial disability rate and ordered Stucco to pay at the
total disability rate.
     The Commission affirmed the Administrative Law Judge's finding
that neither Stucco nor the Fund controverted the total disability
benefits after the first 58.5 weeks, but reversed the
Administrative Law Judge's determination that the Fund was liable
for the fees to Rose's attorney based upon the difference between
the two rates of benefits.
     Stucco appealed the Commission's decision.  Rose cross-
appealed on the issue of controversion after the 58.5 week period. 
Rose has not pursued his cross-appeal in this court.  Stucco
presents two arguments for reversal of the Commission's decision. 
First,  Stucco contends the Commission erred in holding that Stucco
must pay Rose's benefits at the total disability rate.  Second,
Stucco contends the Commission erred in holding Stucco responsible
for attorney's fees on the difference between Rose's permanent
partial disability rate and total disability rates.  We find merit
to both arguments and reverse and remand.
                        Rate of Benefits
     The very narrow issue presented is strictly a question of law. 
All parties agree that Rose is entitled to total disability
benefits of $226.11 as a result of the combination of a preexisting
injury and a later injury that Rose incurred in June 1990 while
working for Stucco and that resulted in the 13% impairment rating. 
All parties agree that Second Injury Trust Fund liability is
established.  All parties agree that Stucco is responsible for
paying Rose's benefits for the first 58.5 weeks due to the later
injury.  The question is how much of the $226.11 does the Workers'
Compensation Act require Stucco to pay, all $226.11 or only $169.59
with the Second Injury Trust Fund then making up the difference. 
In other words, at what rate does the Workers' Compensation Act
require Stucco to pay benefits during the 58.5 weeks, the permanent
partial disability rate or the total disability rate?
     Section 11-9-525 addresses total disability resulting from the
combination of a preexisting injury and a later injury, and
provides as follows:
     11-9-525. Compensation for disability -- Second injuries.

          (a)(1) The Second Injury Trust Fund established in
     this chapter is a special fund designed to ensure that an
     employer employing a handicapped worker will not, in the
     event the worker suffers an injury on the job, be held
     liable for a greater disability or impairment than
     actually occurred while the worker was in his employment.

          (2) The employee is to be fully protected in that
     the fund pays the worker the difference between the
     employer's liability and the balance of his disability or
     impairment which results from all disabilities or
     impairments combined.

          . . . . 

          (b)(5) If the previous disability or impairment,
     whether from compensable injury or otherwise, and the
     last injury together result in permanent total
     disability, the employer at the time of the last injury
     shall be liable only for the actual anatomical impairment
     resulting from the last injury considered alone and of
     itself. However, if the compensation for which the
     employer at the time of the last injury is liable is less
     than the compensation provided in  11-9-501 -- 11-9-506
     for permanent total disability, then, in addition to the
     compensation for which the employer is liable and after
     the completion of payment of compensation by the
     employer, the employee shall be paid the remainder of the
     compensation that would be due for permanent total
     disability under  11-9-501 -- 11-9-506 out of the fund.

     Section 11-9-525(b)(5) is at the heart of this dispute and is
silent on the rate at which an employer's liability for benefits is
to be determined.  This silence is perhaps due to the fact that
when the language at issue in this case was adopted by 1981 Ark.
Acts 290, 4, the rates for permanent partial disability and
permanent total disability benefits were the same.  Those rates
became different pursuant to 1986 Ark. Acts 10,  2.  
     The Commission applied section 11-9-525(b)(5) and held that
Stucco must pay at the total disability rate for the 58.5-week
period.  In addition to section 11-9-525(b)(5), the Commission also
relied on what it described as the public policy of protecting the
Second Injury Trust Fund's solvency.  The Commission's reasoning
for its interpretation of section 11-9-525 was flawed, and its
consideration of the Fund's solvency was misplaced.
     The Commission reasoned that but for the June 1990 injury and
the corresponding 13% disability, Rose would not be permanently
disabled, and, therefore, Stucco should be responsible for 13% of
the total disability.  The Commission thus held that Stucco's share
of Rose's benefits was $226.11, the total disability rate, for 58.5
weeks, the time period for Rose's permanent partial disability
benefits.  The Commission's "but for" reasoning is flawed because
it completely disregards section 11-9-525(b)(5)'s requirement that
when permanent total disability results from a previous injury
combined with a last injury, "the employer at the time of the last
injury shall be liable only for the actual anatomical impairment
resulting from the last injury considered alone and of itself." 
(Emphasis added.)  The aforementioned "but for" reasoning by the
Commission does not consider the last injury alone and of itself,
but includes the last injury and its contribution to the total
disability.  Section 11-9-525(b)(5) clearly and unambiguously
prohibits such consideration of the total disability when
determining the employer's liability for benefits.
     The Commission also reasoned that Stucco would be receiving a
windfall if the Fund were held liable for the difference.  The
Commission's "windfall" reasoning is also flawed.  Stucco is not
avoiding any liability for any injury that occurred when Rose was
employed at Stucco.  Likewise, the Fund is not liable for any
injury that occurred when Rose was employed at Stucco.  Therefore,
Stucco does not gain anything, much less a windfall.
     The Commission's reliance on what it called the public policy
of protecting the solvency of the Fund is misplaced for several
reasons.  Initially, there is simply no evidence in this record of
the Fund's solvency or insolvency, and therefore any concern in
that regard is premature.  Mid-State Constr. Co. v. Second Injury
Fund, 295 Ark. 1, 746 S.W.2d 539 (1988).  Moreover, in Mid-State
Constr. Co. this court cited with approval Justice Newbern's
dissent in McCarver v. Second Injury Fund, 289 Ark. 509, 715 S.W.2d 429 (1986), which pointed out that the court of appeals' reference
to language from Arkansas Workmen's Compensation Comm'n v. Sandy,
217 Ark. 821, 233 S.W.2d 382 (1950) on consideration of the Fund's
solvency came from the Commission and not from this court. 
Secondly, we note that the funding mechanisms provided for the Fund
in 1950 by Ark. Stat. Ann.  81-1313(f)(2)(iii) (Supp. 1949) were
remarkably different from the current funding mechanisms provided
in Ark. Code Ann.  11-9-301 to -307 (Repl. 1996).  This
difference in funding sources underscores that any consideration of
the Fund's solvency in this case is inappropriate.  Finally, we
note that, in the event the Fund becomes insolvent, the General
Assembly has expressed an intent to provide claimants with
arrearages once the Fund regains its solvency, without any
possibility of reverter of responsibility for benefits to
employers.  Section 11-9-301(f).
     The Second Injury Trust Fund relies on the second sentence of
section 11-9-525(b)(5) and argues that the language "in addition to
the compensation for which the employer is liable and after the
completion of payment of compensation by the employer," means that
the Fund's liability does not begin until "after" the end of the
58.5 weeks, therefore Stucco must pay the total disability rate for
the 58.5 weeks.  The Second Injury Trust Fund maintains that the
statute does not contemplate concurrent payments by an employer and
the Fund.  Such a constrained interpretation of a statute is not
necessary when the language of the statute is clear and
unambiguous, because we give the language of a clear and
unambiguous statute its plain and ordinary meaning.  McGee v.
Amorel Pub. Sch., 309 Ark. 59, 827 S.W.2d 137 (1992).
     When a statute is plain and unambiguous, there is no need to
resort to rules of statutory construction.  State v. Johnson, 317
Ark. 226, 876 S.W.2d 577 (1994); Southern Sur. Co. v. Dardanelle
Rd. Improvement Dist. No. 1, 169 Ark. 755, 276 S.W. 1014 (1925). 
It is clearly expressed in section 11-9-525 that the purpose of the
Fund is to fully compensate an employee for his total injuries
while simultaneously protecting employers from having to pay for
injuries that did not occur while the employee was working for that
employer.  That the employer is not to be held liable for a greater
disability than actually occurred while the worker was in that
employer's employment is mentioned in the statute no less than four
times.  Moreover, the statute clearly and unambiguously provides
for the Second Injury Trust Fund to make up the balance of the
employees total benefits and the employer's share when it states
that the "fund pays the worker the difference between the
employer's liability and the balance of his disability or
impairment which results from all disabilities or impairments
combined."  (Emphasis added.) 
     In short, the Fund's argument in support of the Commission's
interpretation of the statute is without merit.  Section 11-9-
525(b)(5)'s language simply does not prohibit payments from both an
employer and the Fund within the same period.  The words "in
addition to" and "after" payment of the employer's liability do
nothing more than signal the possibility that an employee who is
totally disabled from more than one injury could receive benefits
concurrently from both the employer and the Fund without violating
the statutory maximum benefits for total disability.  That the
employer is not liable for the total disability rate is patently
clear from the use of the word "remainder" in the last clause of
the subsection "the employee shall be paid the remainder of the
compensation that would be due for permanent total disability ...
out of the fund."
     We interpret section 11-9-525(b)(5) to mean that Stucco's
liability for Rose's benefits is limited to the injury occurring in
June 1990 considered alone and of itself, and therefore, Stucco's
liability is at the permanent partial disability rate of $169.59
for 58.5 weeks.  We further interpret section 11-9-525(b)(5) to
mean that, after Stucco pays its weekly liability, the Fund must
pay the balance of Rose's total disability benefits, or $56.52 per
week for the 58.5 weeks.  There is no dispute that the Fund is
responsible for the full $226.11 per week thereafter.  
                         Attorney's Fees
     Stucco argues that the Commission's award of fees based upon
Stucco's liability for benefits at the total disability rate should
be reversed because Ark. Code Ann.  11-9-715(a)(2)(B)(ii) (Repl.
1966) provides that attorney's fees "shall be allowed only on the
amount of compensation controverted and awarded."   This argument
has merit.
     Where an employer demonstrates that it is liable for only a
portion of a worker's present disability within the meaning of
Second Injury Fund legislation, attorney's fees due from the
employer should only be computed upon the basis of the amount of
the employer's liability for benefits, not upon the amount of total
disability benefits.  Buckner v. Sparks Regional Medical Ctr., 32
Ark. App. 5, 794 S.W.2d 623 (1990); Prier Brass v. Weller, 23 Ark.
App. 193, 745 S.W.2d 647 (1988).  In short, an employer's liability
for attorney's fees is limited to the amount of benefits awarded
from injuries occurring while the worker was employed by that
employer.  Given our reversal of the Commission's decision of the
amount of Stucco's liability for benefits, we also reverse the
amount of attorney's fees assessed against Stucco.
     The Commission's decision is reversed, and the case is
remanded for entry of an order consistent with this opinion.