Mueller v. Lincoln Public Schools
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Joni Mueller, an employee of the Lincoln Public Schools (LPS), sought workers' compensation benefits after she suffered a whole body injury arising out of and in the course of her employment. At issue was how to calculate Mueller's average weekly wage for workers' compensation purposes. As a school employee, Mueller worked only during the school year and did not work during summer vacation, but her salary was spread out so that she was paid every month of the year, including the summer months. The trial court determined the the basis of calculation should be what Mueller earned during the six months before her injury, not necessarily what she was paid, and awarded Mueller temporary and permanent disability benefits based upon its determinations. The review panel of the Workers' Compensation Court affirmed the award. On appeal, the reversed, holding that the trial court erred in not calculating Mueller's average weekly wage based upon her actual weekly income. Remanded.
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Nebraska Advance Sheets
mueller v. lincoln public schools
Cite as 282 Neb. 25
25
bad faith by not releasing its lien. Finally, we conclude that
neither side is entitled to attorney fees under § 25-824.
R eversed and remanded for
further proceedings.
Wright and McCormack, JJ., not participating.
Joni Mueller, appellee, v. Lincoln P ublic
Schools, appellant.
___ N.W.2d ___
Filed August 5, 2011.
No. S-10-748.
1. Workers’ Compensation. The determination of how the average weekly wage of
a workers’ compensation claimant should be calculated is a question of law.
2. Workers’ Compensation: Appeal and Error. Regarding questions of law, an
appellate court in workers’ compensation cases is obligated to make its own
d
ecisions.
3. Employer and Employee: Wages. In calculating an employee’s average weekly
wage, abnormally low workweeks resulting from circumstances such as vacation
time, sick leave, or holidays should be excluded from the calculation.
4. Workers’ Compensation. The goal of any average income test is to produce
an honest approximation of a workers’ compensation claimant’s probable future
earning capacity. The emphasis is on not distorting the employee’s average
weekly wage.
5. Stipulations. The construction of a stipulation is a question of law.
Appeal from the Workers’ Compensation Court. Reversed
and remanded with directions.
Riko E. Bishop, of Perry, Guthery, Haase & Gessford, P.C.,
L.L.O., for appellant.
Jon Rehm, of Rehm, Bennett & Moore, P.C., L.L.O., for
appellee.
Heavican, C.J., Connolly, Gerrard, Stephan, McCormack,
and Miller-Lerman, JJ.
Gerrard, J.
Joni Mueller, an employee of the Lincoln Public Schools
(LPS), was awarded workers’ compensation benefits after she
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was injured on the job. As a school employee, Mueller worked
only during the school year and did not work during summer
vacation. But her salary was spread out so that she was paid
every month of the year, even during the summer. The issue
presented in this appeal is how to calculate Mueller’s average
weekly wage for workers’ compensation purposes.
Background
Mueller sought workers’ compensation benefits after she suffered a whole body injury on February 2, 2007, arising out of
and in the course of her employment as a food service manager
at Arnold Elementary School. The compensability of her injury
is not at issue—only the determination of her wage.
At trial, Mueller explained that when she was hired, it was
understood that she would be paid monthly for 12 months
a year, even though she would work only during the school
year—essentially, 9 out of 12 months. Mueller’s health insurance benefits were also provided over a 12-month period. And
each year, Mueller was essentially assured of returning to her
job the following year, after filling out a form notifying LPS
of her desire to do so. In other words, Mueller’s employment
contract with LPS was on a 1-year renewable basis, wherein
Mueller would work during the school year, but her income
would be spread out so she would be paid every month.
The director of LPS’ school nutrition services explained that
the hourly wage paid to LPS food service workers was higher
than the surrounding market rate, because the intent was to
offer workers an annual salary that was competitive with the
annual salary offered in the field. LPS food service employees
were considered full-time employees at 371⁄2 hours per week.
In essence, the workers’ hourly wage was used as a means to
calculate an annualized 12-month salary.
LPS offered to stipulate that Mueller’s hourly wage was
$15.27 and that her average weekly wage was $411.49. Mueller
accepted that her hourly wage was $15.27, but disagreed with
respect to the average weekly wage. The dispute, as presented
to the court, was whether the average weekly wage should be
calculated over a 9-month period or a full calendar year. Based
on what Mueller had actually been paid over the 6 months
Nebraska Advance Sheets
mueller v. lincoln public schools
Cite as 282 Neb. 25
27
before her injury, LPS calculated her average weekly wage
for purposes of temporary indemnity as being $411.49. LPS
also proposed that because Mueller’s wages were earned over
39 weeks, but paid over 52 weeks, her average weekly wage
for purposes of permanent indemnity should be calculated
by annualizing her hourly income, then dividing that total
by 52 weeks—resulting in a proposed average weekly wage
of $458.10.
But the trial court rejected those arguments, reasoning that
the basis of calculation should be what Mueller earned during
the 6 months before her injury, not necessarily what she was
paid. The trial court acknowledged LPS’ observation that its
reasoning would result in wage calculations for workers’ compensation purposes that would significantly exceed the wages
Mueller had actually been receiving from LPS. But the trial
court believed that LPS’ proposal would, in effect, lower the
hourly wage to which the parties had stipulated.
So, the trial court determined that Mueller’s average weekly
wage for temporary total disability purposes was $572.62
($15.27 per hour × 371⁄2 hours per week). And for permanent
partial disability purposes, the trial court found that Mueller’s
average weekly wage was $610.80 ($15.27 per hour × 40 hours
per week). The trial court rejected the opinion of the courtappointed vocational rehabilitation counselor with respect to
Mueller’s loss of earning capacity, because her opinion had
been based on LPS’ calculation of Mueller’s average weekly
wage. The trial court made its own calculation of Mueller’s loss
of earning capacity and awarded Mueller temporary and permanent disability benefits based upon its determinations.
LPS appealed to the review panel of the Workers’
Compensation Court, which panel found that the trial court’s
decision was “based on findings of fact which are not clearly
wrong.” The review panel affirmed the award. LPS appeals.
Assignments of Error
LPS assigns that the Workers’ Compensation Court erred
in (1) determining how to calculate the average weekly wage
of a school employee who is paid over 12 months for work
performed during the 9-month school year and (2) declining to
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adopt the court-appointed vocational rehabilitation counselor’s
opinion that Mueller’s loss of earning capacity was 20 percent, based upon her 26-week wage history, or alternatively,
25 percent, based upon an annualized average weekly wage
of $458.10.
Standard of Review
[1,2] The determination of how the average weekly wage
of a workers’ compensation claimant should be calculated is
a question of law. Regarding questions of law, an appellate
court in workers’ compensation cases is obligated to make its
own decisions.
Analysis
In workers’ compensation cases, the amount of benefits
awarded to a claimant is dependent upon the court’s calculation
of the claimant’s average weekly wage. For employees who are
paid by the hour, the average weekly wage is determined pursuant to Neb. Rev. Stat. §§ 48-121 (Reissue 2004) and 48-126
(Reissue 2010). Section 48-126 provides in relevant part that
“wages” mean “the money rate at which the service rendered
is recompensed under the contract of hiring in force at the time
of the accident.” In continuous employment, if immediately
before the accident the claimant’s rate of wages was fixed by
the hour, the claimant’s weekly wage is “his or her average
weekly income for the period of time ordinarily constituting
his or her week’s work, and using as the basis of calculation
his or her earnings during as much of the preceding six months
as he or she worked for the same employer,” except as provided (as relevant in this case) in § 48-121. And § 48-121(4)
provides that for purposes of calculating permanent disability
benefits of an hourly employee, “the weekly wages shall be
taken to be computed . . . upon the basis of a workweek of a
minimum of forty hours.”
Ramsey v. State, 259 Neb. 176, 609 N.W.2d 18 (2000).
Id.
§ 48-126.
Nebraska Advance Sheets
mueller v. lincoln public schools
Cite as 282 Neb. 25
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We have said that as a general rule, “[t]he weekly wage of
a worker compensated on an hourly basis is a simple function
of the hourly rate multiplied by the number of hours worked in
a given week.” And in Ramsey v. State, we further explained
that for claimants with permanent disabilities, § 48-121(4)
requires that a minimum of 40 hours per week be utilized
in that computation, so part-time employees with permanent
disabilities are treated as though they had worked a 40-hour
workweek.
[3] But we have also recognized that this formula is not
inflexible. For instance, in Ramsey, we held that § 48-126 does
not permit the backward extrapolation of a wage increase so
as to distort the average weekly wage actually earned by the
worker before a compensable injury. And in Harmon v. Irby
Constr. Co., we held that a $30 per diem which a worker
earned during the 6 days immediately before his injury would
be considered income only for each of the 6 days on which he
actually earned it, because application of the $30 per diem to
the entire 26-week period preceding his injury would distort
the calculation of his average weekly wage. Similarly, we have
held that in calculating an employee’s average weekly wage,
abnormally low workweeks resulting from circumstances such
as vacation time, sick leave, or holidays should be excluded
from the calculation.
[4] In other words, as we explained in Powell v. Estate
Gardeners, “the addition of the language ‘“ordinarily constituting his or her week’s work”’ precludes an automatic mathematical calculation based on the past 6 months’ work.” So,
for instance, “abnormally low output or weekly hours due to
illness or vacation will not be averaged in.” The goal of any
Ramsey, supra note 1, 259 Neb. at 181, 609 N.W.2d at 21.
Ramsey, supra note 1.
Harmon v. Irby Constr. Co., 258 Neb. 420, 604 N.W.2d 813 (1999).
See, Canas v. Maryland Cas. Co., 236 Neb. 164, 459 N.W.2d 533 (1990);
Clifford v. Harchelroad Chevrolet, 229 Neb. 78, 425 N.W.2d 331 (1988).
Powell v. Estate Gardeners, 275 Neb. 287, 294, 745 N.W.2d 917, 923
(2008) (emphasis omitted).
Id. at 294-95, 745 N.W.2d at 923.
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average income test is to produce an honest approximation of
the claimant’s probable future earning capacity.10 The key to
these cases is our emphasis on not distorting the employee’s
average weekly wage.11
The Workers’ Compensation Court’s decision in this case,
however, had the effect of distorting Mueller’s average weekly
wage well beyond what she was actually earning at the time
of her injury. To some extent, such distortion is required by
§ 48-121(4), which requires the use of a 40-hour workweek
in calculating benefits, rather than the 371⁄2-hour week that
Mueller was actually expected to work during the school year.
This is because, while LPS may consider Mueller to be a
full-time employee at 371⁄2 hours per week, § 48-121(4) establishes a 40-hour-per-week minimum for workers’ compensation purposes.
But the Nebraska Workers’ Compensation Act does not
dictate that Mueller’s weekly wages be calculated without
accounting for the unique circumstances of her employment.
Part of the problem faced by the Workers’ Compensation Court
in this case, and this court on appellate review, is that the
record is far from clear about how, precisely, Mueller was compensated. The parties seem to assume that because Mueller had
an hourly wage, her rate of wage was fixed by the hour within
the meaning of §§ 48-121(4) and 48-126. However, if Mueller
was purely an hourly employee, her paycheck each month
would depend on the number of hours she had worked that
month. Obviously, that is not the case, because in the summer,
Mueller is paid during months she did not work at all. And
neither party does a particularly good job of explaining how
Mueller’s monthly paycheck is derived from her hourly wage—
facts which might have helped the Workers’ Compensation
Court’s calculation.
The record suggests that Mueller’s monthly wage is determined by taking her hourly wage, projecting the hours she
would be expected to work over the course of the school
year, and dividing that total by 12. And as explained above,
10
11
See id.
Id.
Nebraska Advance Sheets
mueller v. lincoln public schools
Cite as 282 Neb. 25
31
the hourly wage is apparently determined by taking a desired
annual salary and dividing it by the number of hours an
employee is expected to work during the year. This is confusing, but it does not make for an hourly employee as the term
is usually understood. For an employee’s “rate of wages” to
be “fixed by the day or hour,” an hourly wage and the number
of hours worked during each pay period should be the starting
points for determining remuneration—not the result of some
other calculations.12
Nevertheless, each of the parties has started from the premise that Mueller had an hourly wage, and then set about trying
to pound a square peg into a round hole. And each party argues
that the other should bear the consequences of an imperfect
fit. But while a perfect fit may not be possible given the applicable statutes, we agree with LPS that a better fit is possible
and that the Workers’ Compensation Court erred in calculating
Mueller’s average weekly wage without accounting for the fact
that her hourly wages do not, if simply multiplied by 40 hours
a week, approximate her actual weekly wages.
Section 48-126 requires that an hourly employee’s weekly
wages
be taken to be his or her average weekly income for the
period of time ordinarily constituting his or her week’s
work, and using as the basis of calculation his or her earnings during as much of the preceding six months as he or
she worked for the same employer.
Under these circumstances, the trial court erred in not calculating Mueller’s average weekly wage, for temporary disability purposes, based upon her actual weekly income. And for
permanent disability purposes, although § 48-121(4) requires
that Mueller’s workweek be extended to 40 hours, it does not
require the court to ignore that she was paid over the entire
year for 39 weeks of work. So, the trial court erred in not
accounting for that fact, as LPS suggested.
The trial court’s reasoning, in fact, could cut both ways. The
basis of the trial court’s calculation was, in effect, not what
Mueller had been paid during the 6 months before her injury,
12
See §§ 48-121(4) and 48-126.
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but the hours she had actually worked during those 6 months.
Which, because Mueller was injured in February, worked to
her benefit. Had Mueller been injured in August, however,
the court’s reasoning would have deprived her of “earnings”
because she would not have worked during summer vacation.
This appeal would most likely be the same, except the parties’
positions would be reversed. As we said in Powell, such a result
would “not be an accurate reflection” of the employee’s loss
of earning capacity and “thus would not carry out the beneficent purposes” of the Nebraska Workers’ Compensation Act.13
That, in itself, demonstrates how the court’s reasoning runs up
against our emphasis, explained in Powell, on “‘not distorting’
the employee’s average weekly wage.”14 Neither employers
nor injured workers in this situation should experience feast or
famine based upon when they were injured.
[5] In arguing to the contrary, Mueller contends that LPS
stipulated away its argument about her average weekly wage
by stipulating to her hourly wage. Mueller contends that LPS
is barred from arguing that her average weekly wage is lower
than what the trial court calculated based on that stipulation.
We agree that generally, parties are bound by stipulations voluntarily made.15 But we have also said that the construction of
a stipulation is a question of law.16 In this case, we do not agree
with Mueller’s construction of the stipulation. An examination
of the colloquy at issue will illustrate why:
[LPS’ counsel]: Your Honor, I think that [LPS] would
be willing to stipulate that there was an injury on February
2, 2007; that [Mueller’s] average weekly wage at that time
was 411.49; her hourly rate at that time was $15.27. Are
you okay with that so far?
[Mueller’s counsel]: Well, I would disagree over the
average weekly wage.
13
14
15
16
Powell, supra note 8, 275 Neb. at 296, 745 N.W.2d at 924.
Id. at 295, 745 N.W.2d at 923.
Lincoln Lumber Co. v. Lancaster, 260 Neb. 585, 618 N.W.2d 676 (2000).
Jackson v. Brotherhood’s Relief & Comp. Fund, 279 Neb. 593, 779
N.W.2d 589 (2010); Foote v. O’Neill Packing, 262 Neb. 467, 632 N.W.2d
313 (2001).
Nebraska Advance Sheets
mueller v. lincoln public schools
Cite as 282 Neb. 25
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[LPS’ counsel]: They’re challenging the average weekly
wage. That’s the average weekly wage that was used.
THE COURT: All right. So we don’t have an agreement on average weekly wage.
....
THE COURT: The hourly rate . . . of 15.27, do you
concede that, or is that at issue too?
[Mueller’s counsel]: I think we would — actually, the
hourly rate is correct. It’s a matter of how you — how it’s
calculated, the amount of time it’s calculated over.
THE COURT: I understand from my reading of the
dispute, it’s whether or not the average weekly wage is
calculated over a nine-month period or a full calendar
year; is that correct?
[LPS’ counsel]: That’s correct.
THE COURT: Is that your understanding?
[Mueller’s counsel]: Correct.
THE COURT: I assume you will agree with the other
stipulations proposed . . . ?
[Mueller’s counsel]: Correct.
THE COURT: I will accept those.
Read in context, it is apparent that LPS’ stipulation of
Mueller’s hourly wage was not a concession of its arguments
about her average weekly wage. Mueller seems to be arguing
that once the hourly wage is established, the rest is just math.
But Mueller’s math is based on her construction of the relevant
statutes—a construction which, as explained above, is inconsist
ent with our jurisprudence. As Powell notes, we already make
exception where the determination of an employee’s average
weekly wage is distorted by abnormally low output or weekly
hours due to illness and vacation.17 Basic fairness requires that
principle to be applied in both directions—as Powell explains,
the goal is to honestly approximate the claimant’s probable
future earning capacity.18 That did not happen here.
Therefore, we find merit to LPS’ assignments of error. But
rather than recalculate Mueller’s award, we find that the cause
17
18
See Powell, supra note 8.
See id.
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should be remanded to the Workers’ Compensation Court for
further proceedings consistent with this opinion—and, perhaps, greater clarity from the parties about how Mueller’s
actual take-home pay is calculated. Any issues with respect to
possible overpayment should be addressed by the trial court.
And because it is not clear whether the trial court would have
adopted the opinion of the court-appointed vocational rehabilitation counselor had it not disagreed with her assumptions
regarding Mueller’s average weekly wage, the court should
reconsider that issue in the first instance.
Conclusion
For the foregoing reasons, the judgment of the review panel
of the Workers’ Compensation Court is reversed, and the cause
is remanded with directions to remand the case to the trial
court for further proceedings consistent with this opinion.
R eversed and remanded with directions.
Wright, J., not participating.
McK innis Roofing and Sheet Metal, Inc.,
a Nebraska corporation, appellant and
cross-appellee, v. Jeffrey D. H icks,
appellee and cross-appellant.
___ N.W.2d ___
Filed August 5, 2011.
No. S-10-1048.
1. Contracts: Judgments: Appeal and Error. The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach
its conclusions independently of the determinations made by the court below.
2. Contracts. When there is a question about the meaning of a contract’s language,
the contract will be construed against the party preparing it.
Appeal from the District Court for Douglas County: Gregory
M. Schatz, Judge. Reversed and remanded with directions.
David V. Drew, of Drew Law Firm, for appellant.
Patrick D. Pepper, of McGrath, North, Mullin & Kratz, P.C.,
L.L.O., for appellee.
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