Wallace v. Music Shop, II, Inc.

181 S.E.2d 237 (1971)

11 N.C. App. 328

Fred WALLACE v. The MUSIC SHOP, II, INC., and Royal Indemnity Company.

No. 7181C306.

Court of Appeals of North Carolina.

May 26, 1971.

*238 White, Allen, Hooten & Hines by F. Fred Cheek, Jr., Kinston, for plaintiff appellee.

Taylor, Allen, Warren & Kerr by John H. Kerr, III, Goldsboro, for defendant appellants.

HEDRICK, Judge.

The question presented by the defendants' exceptions is whether the Industrial *239 Commission correctly calculated the employee's average weekly wage. G.S. § 97-2(5) sets forth five methods of computation which are as follows:

"(1) `Average weekly wages' shall mean the earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury * * * divided by fifty-two; but if the injured employee lost more than seven consecutive calendar days at one or more times during such period, although not in the same week, then the earnings for the remainder of such fifty-two weeks shall be divided by the number of weeks remaining after the time so lost has been deducted. (2) Where the employment prior to the injury extended over a period of less than fifty-two weeks, the method of dividing the earnings during that period by the number of weeks and parts thereof during which the employee earned wages shall be followed, provided, results fair and just to both parties will be thereby obtained. (3) Where, by reason of a shortness of time during which the employee has been in the employment of his employer or the casual nature or terms of his employment, it is impractical to compute the average weekly wages as above defined, regard shall be had to the average weekly amount which during the fifty-two weeks previous to the injury was being earned by a person of the same grade and character employed in the same class of employment in the same locality or community. (4) But where for exceptional reasons the foregoing would be unfair, either to the employer or employee, such other method of computing average weekly wages may be resorted to as will most nearly approximate the amount which the injured employee would be earning were it not for the injury. * * * * * * "(5) In case of disabling injury to a volunteer fireman under compensable circumstances, compensation payable shall be calculated upon the average weekly wage the volunteer fireman was earning in the employment wherein he principally earned his livelihood as of the date of injury." (numbering ours)

Obviously, the first and fifth methods prescribed in the statute for computing the average weekly wage of an injured employee are not applicable in this case. The defendant concedes that there is no factual basis for the application of the third method.

Defendant contends that the fact that the plaintiff at the time of his injury was drawing Social Security retirement benefits and his earnings could not exceed $1680 annually, and that he was only employed intermittently, are "exceptional reasons" which make utilization of the second prescribed method unfair and unjust to the employer. We do not agree.

The fourth prescribed method may not be used unless there has been a finding that use of the second method would produce results unfair and unjust to either the employee or employer. Liles v. Electric Co., 244 N.C. 653, 94 S.E.2d 790 (1956). Thus, since the Commission in the instant case made a finding that its use of the second method produced results that were "fair and just to both sides", our review is narrowed to a determination of whether the Commission's finding and conclusion in this regard is supported by the evidence.

In Liles v. Electric Co., supra, Bobbitt, J., now C. J., speaking for the Court, stated:

"The words `fair and just' may not be considered generalities, variable according to the predilections of the individuals who from time to time compose the Commission. These words must be related to the standard set up by the statute. Results fair and just, within the meaning of G.S. 97-2(e), consist of such `average weekly wages' as will most *240 nearly approximate the amount which the injured employee would be earning were it not for the injury, in the employment in which he was working at the time of his injury."

In Barnhardt v. Cab Co., 266 N.C. 419, 146 S.E.2d 479 (1966), the North Carolina Supreme Court held that it would be unfair to the employer and his insurance carrier to compute the average weekly wage of an injured employee by combining his earnings from the employment where he was injured with his earnings from other employment. The Court reasoned that it would be unfair to the employer and his insurance carrier to burden them with a liability out of proportion to employer's payroll and the insurance premium computed thereon. Sharp, J., speaking for the Court, said: "It seems reasonable to us that the Legislature, having placed the economic loss caused by a workman's injury upon the employer for whom he was working at the time of the injury, would also relate the amount of that loss to the average weekly wages which that employer was paying the employee."

It is our opinion that the reasoning of the Court in Barnhardt in determining what was unfair to the employer can be used in the instant case to determine what is fair to the employer. By computing the plaintiff's average weekly wage from his earnings from the employment in which he was injured, the employer's liability is in direct proportion to his payroll and the insurance premiums based thereon. This, we believe, is fair and just.

To compute the plaintiff's average weekly wage in the instant case from a consideration of the fact that he had an artificial maximum of $1680 placed on his earnings because he was retired and drawing Social Security benefits, would not only produce results unfair to the employee but would ignore the well established principle that an injured employee's average weekly wage must be computed from his actual earnings in the employment in which he is injured rather than his earning capacity. Liles v. Electric Co., supra; Barnhardt v. Cab Co., supra; Joyner v. Oil Co., 266 N.C. 519, 146 S.E.2d 447 (1966); Lovette v. Manufacturing Co., 262 N.C. 288, 136 S.E.2d 685 (1964). We hold that the evidence supports the Commission's finding and conclusion that its use of the second prescribed method set out in the statute in computing the plaintiff's average weekly wage produced results "fair and just to both sides." The Commission's findings and conclusions adequately support the award. The opinion and award of the North Carolina Industrial Commission dated 17 December 1970 is affirmed.

Affirmed.

BROCK and MORRIS, JJ., concur.