IN THE SUPREME COUR T OF TENNESSEE AT KNOXVILLE (HEARD IN NASHVILLE)

FOR PUBLICA

TION ROBERT HAROLD BOMELY, JR., ) Filed: June 1, 1998 ) Plaintiff/Appellee, ) Knox Chancery ) ) Hon. Frederick D. McDonald v. ) Chancellor ) MID-AMERICA CORPORATION, ) No. 03-S-01-9605-CH- 00059 d/b/a BURGER KING, ) ) Defendant/Appellee, ) ) and ) ) LARRY BRINTON, JR., ) DIRECTOR OF THE DIVISION OF ) WORKERS’ COMPENSATION, ) TENNESSEE DEPARTMENT OF ) LABOR, SECOND INJURY FUND, ) ) Defendant/Appellant. )
For Appellee Bomely : For Appellee Mid-America Corporation, d/b/a Burger King : David H. Dunaway Dunaway & Associates Steven Johnson LaFollette Butler, Vines and Babb Knoxville For Appellant: John Knox Walkup Attorney General & Repor ter Dianne Stamey Dycus Senior Counsel Nashville 

## O P I N I O N

TRIAL COURT REVERSED IN DROWOTA, J. PART AND AFF IRMED IN P ART.1 See Tenn. Code Ann. § 50-6-207(4)(A)(i)(providi ng that compensation for permanent total

disabili ty “sha ll be paid d uring the period of such permanen t total disability until the employee reaches the age of 65. . . . “ ). 2 In this workers’ compensation act ion t he Second Injury Fund, defendant-appellant, has appealed from ajudgment of the Chancery Co urt of Knox County which found the employee, Robert Bomely, plaintiff-appellee, to be totally and permanently disabled. The award was apportion ed 65 percentto the employer, MidAmerica Corporation, d/b/a Burger King, defendant-appellee, and 35 percent to the Second Injury Fund under Tenn. Code Ann. § 50-6-208(b). The trial court assessed t he employer’s liabili

ty based on 400 weeks of benefits and held the Second Injur y Fund liable for the remaining 938 weeks of benefits (until the employee reached the age of 65 1 ). Thus, the employer’s liability was limited to 65 percent of 400 weeks rather than 65 percent of the total number o f weeks to age 65. We transferred this
case from the Special Workers’ Comp ensation Appeals P anel to decide whether it
was proper to have limited the employer’s liability in this fashion. After carefully examining the record before us and considering the relevant authorities, we concl ude that the award should be apporti oned between the employer and the Second Injury Fund based on the total number of weeks to age 65 rather than l imitin g the employer’s liability to a perc entage of 400 weeks. Accord ingly, that portion o f the trial court’s judgm ent is reversed. We shall also addres s (1) whether an aw

ard of permanent total dis ability is s ubject to the mone tary c ap impose d by the 400 week maximum total benefit provision of Tenn. C ode Ann. § 50-6-102(a)(6) and (2) whether the apportionment of benefits between the employer and th e Second Injury Fund in this case is controlled

by subsection (a) or

(b) of Tenn. Code Ann. § 50-6-208.

BACKGROUND

In 1993 and again in 1994, the empl oyee, Rob ert Bome ly, was working
as an assistant manager for Burger King whe n he in jured his neck and back in the
course and scope of his employment. He had an extensive histor y ofprior back and neckinjuries, both wor k-rela ted and nonwork-related. These include a3

noncompensable back injury in 1982; a work-relatedback injury in 1983 that resulted in a court approved settl ement for 25 percent permanent disability to the body as a whole; a work-related back injuryin 1988 for which a settlement w as reached and approved by the court for 10 percent permanent disability to the body as a whole; and
a noncompensable neck injury resulting from a car accident in 1989. Accordin gly, the emp loyee has received workers’ compe nsation awards totaling 35 percent permanent disability to the w

hole body prior to the 1993 and 1994 work-related back and neck injurieswhich precipitated this suit. The employee was able to r eturn to work after each injury, but has not been able to return to work since his last injur

y in 1994.

Dr. William Kennedy, an orthopedic surgeon, test ified that the employe e sustained a 29 percent permanent anatomical i mpairment to his neck an d a 26 percentpermanent anatom i cal impairment to his back for a total of 47 percent impairmentto the body as a whole. Dr. Kennedy att ributed 33 percent of the total anatomical impairment of 47 percent to the 1993 and 1994 injuries, which equates to 15.6 percent. A psychiat rist testified the employee has per manent an d severe depression related to his injuries wh ich prevent him from being gainfully employed. A vocational disability expert concluded that the employee is totally and permanently vocationally disabl ed.

The trial court found the employee to be perm anently and totally disabled, a findingthat the parties do not contest on appeal. The court also found that only 20 percent of the employee’s permanent and total disability was attributable to the last injury. The c ourt further determined that the employee was entitled t o workers’ compensation benefits until he reac hed the age of 65 (he was 42 years old at the time of trial). See Tenn. Code Ann. § 50-6-207(4)(A )(i). The trial cour

t then apportione d the award 65 percent to the employer and 35 percent to the Second InjuryFund pursuant to Tenn. Code Ann. § 50- 6-208(b). The cou rt assess ed the employer’s liability based on 65 percent of 400 weeks of benefits for a t otal of 280 weeks (or $81,640) and held the Second Injury Fund liabl e for the remaining 9382 A similar question was

presented in Sweeten v. Trade Env elopes, Inc. , 938 S.W.2d 383 (Tenn. 1996). In Sweeten , the employer settled w ith a permanently and totall y disabled employ

ee for 75 percent based upon 40 0 weeks, and then at trial the Second Injury Fund w as held liable for the remaining benefits to age 65. Thi s Court did not reach t he iss ue, however, because we set aside the settlement. Thus, whil e Sweeten and the case at bar pres e nt the same scenario involving the Fund

being held

responsibl e for all ben efits beyond 400 weeks, the present case is the first time this Court has square ly addressed the issu e. 4 weeks of benefits (or $294,532). The e mployer’s liabilit y was thus limited to 65 percentof 400 weeks rather than 65 per cent of the total number of weeks toage 65 (1,218 weeks).
The pr ima ry question on appea l is whethe r it was prop er to have assessed the empl oyer’s liab ility base d on a perc entage of 400 we eks

. 2 A secondary but related issue is w hether an award of permanent total disabi li ty is subject to the monetary cap imposed by the 400 week

maximum total benefit provision of Tenn . Code A nn. § 50-6-102(a)(6). A fina l question is whether the apportionment

of benefits between the employer and the Second Injury Fund in this case is controlled by

subsection (a) or (b)

of Tenn. Code Ann. § 50-6-208.

I. The Second Injury Fund argues that the trial c

ourt erred by limiti ng the
em ployer’s liability to 65 perce nt of 400 weeks. Citing Reagan v. Americ a n Policyholde rs’ I ns. , 842 S.W.2d 249 (Tenn. 1992), the Fund contends that the employer’s liability should be calculated based upon the total amount of ben efits awarded to age 65. According t o the Fund, the workers’ compensation law contains
no indication that the legislature intended to limit an employer’s liability under Tenn. Code Ann. § 50-6-208 to 400 weeks. Rather, the legislature expresse d its intent through the enactment of Tenn. Code Ann. § 50-6-207( 4)(A)(i) in 1992 that emplo yers can b e held liable for benefits to age 65 if the emplo yee is permanently and totally disabled.

In response, the employer ar gues that to hold it liable for more than 400
wee k s of benefits would undermine the pur pose of the Second Injury Fund to5

encourage employers to hire injured workers bec ause employers will

not risk having to pay benefits to age 65.

In Reagan v. American Pol icyholders’ Ins. , 842 S.W.2d 249 (Tenn. 1992), the employee fell through a flo or in the course and scope of his employment which left him totally and permanently disabled. He had previously settled a workers’ compensation claim for 15 percent permanent impai rment to the body as a wh ole. Due to his low averag e weekly wage,the employeewas entitled to an award of 550 weeks rather than the typical 400 weeks of benefits provi ded at that time for p ermanent total disability. The employer in Reagan argued th at its liab ility wa s limited to 85 percent of 400 weeks and tha t the Second Injury Fund should be liable forthe rest of the award. This Court rejected the employer’s argument and held that the apportionment should be bas ed on the total amount of money awar ded to the employee. Reagan , 842 S.W.2d at 251. We reasoned that apportioning the award in this manner was the onl y equitable thing to

do. Id

.

The employer in the case a t ba r argues that Reagan is “wholly unrelated to the issues in the present case” because it w as decided before the 1992 change to the workers’ compens ati on law pro viding that a permanently and totally disabled worker is entitle d to receive benefits

un til age 65. It is true that when Reagan was decided an award f or permanent total disability was based on 400 weeks of benefits rather than the current payment of benefits until age 65. See Tenn. Code Ann. § 50-6-207(4)(A)(i ). As such, Reagan d oes not address the apportionment of benefits until age 65.

Nonetheless, we are pe rs uaded that the principle of equitable ap portionmentadopted in Reagan applies with equal force to the case at bar. It i s not equitable to

cap the employer’s liabil ity at 400 weeks and r equire the Fund to pay the bulk of the award in light of the fact that Tenn. Code Ann. § 50-6-102(a)(6)(C) specifically exempts permanent totaldisability awar ds from the 400 week maximum6

total benefit limitation and Tenn. Code Ann. § 50-6-207(4)(A)(i ) authorizes benefits to age 65 in cases of permanent and tota l disability. There i s no indication in the workers’ compensation law that the legislature intended to limit an employer’s liability under Tenn. Code Ann. § 50-6-208 to 400 w eeks. In fact, the legislature has expressed its intent through Tenn. Code Ann. § 50-6-207(4)(A)(i) that employers can be held liable for benefits to age 65 if an emp loyee is totally and permanently disabled. If the legislature had wanted to cap an employer’s liability at 400 weeks where benefits are awar ded to age 65 in cases involving the Second Injury Fund it could have easily done so.

Furtherm ore, we not e here as we did in Reagan that the “objective of the legislation creating

the Second Injury Fund is to limit the liabil ity

exposure of the employer

by holding it respon sible only for the employ ee’s first 100percen t of workers’ compensation disabilit y, thereby

encouragi ng the emp loymen t of injured workers.” Reagan , 842 S.W.2d at 250. “In other words, the employer is responsible forthe employee’s first 100 percent of benefits an d the Second Injury Fund is responsible for the r est.” Id

. at 250-251. Under our holding today the employer’s exposure to liability is s till limited to the first

100 percent of Bomely’s permanent total disability. If Bomely is able to rehabilitate himself and return to work and then gets injured again, the employ er would pay nothing

in benefits.

In sum, we are persuaded that the equitable division ra tionale that we adopted in Reagan should apply in this c ase. We find no statutory or equitable basis forusing 400 weeks as the basis of apportionment under Tenn. Code A nn. §§ 50-6- 208 and 50-6-207(4)(A)(i). In reaching this conclusi on, we a re cognizant of the employer ’s arg ument that if an employer’s li ability is not limited to a percentage of 400 weeks, some employers might resist hiring young w orkers with disabi lities in light of the legislation ext

ending benefits to a ge 65 for pe rmanent total dis ability. Whatever the merits of this argument, it should be addressed to the legislature since that bod y, not the courts, b rought ab out the c hange in t he law.3 An em plo yee is considered totally disabled w hen an injury “totally

incapacitates the employeefrom working at an occupation whi ch brings such employee an income. . . .” Tenn. Code Ann. § 50-6-

207(4)(B). 7 II.

A n issue necessarily related to the apportionment question i s what eff ect, if any , the maximum total benefit prov ision of Tenn. Code Ann. § 50-6- 102(a)(6) has on awards of permanent total disability made under Tenn. Code Ann. § 50-6-207(4)(A)(i), which makes benefits payable to age 65. The questio n has
con siderable practical significanc e because limiting benefits t o the maximum tota l benefit could substanti a lly reduce the amount of compensation paid to the worker.

Tenn. Code Ann. § 50-6-207(4)(A) (i) provides that c ompensation for permanent total disability “shall be paid during the period of such permanent total disability

3 until the employee reaches the age of si xty-five. . . .”

Tenn. Code Ann. § 50-6-207(4)(B) provides that in cases of permanent total disability an employee is to be compensated as provided for in Tenn. Code Ann. § 50-6-207 (4)(A) - to age 65 - “provided, that the total amount of compensation payable hereunder shall not exceed the maximum total benefit, exclusive of medical and hospital ben efit s.” At fi rst glance, Tenn. Cod e Ann. § 50-6-207(4)(B) appear s to place a monetary cap on awardsof permanent total disability . However, this i s not the cas e. The statutory definition of “maximum total benefit” in Tenn. Code Ann. § 50-6-102(a)(6) provides that “maximum total benefit means the sum of all weekly benefits to which a worker maybe entitled.” The maximum to tal benefit for “injuries arisi ng on or after July 1, 1992, shall be four hundred (400) weeks times the maximum weekly benefit except in instances of permanent total disability .” Tenn. Code Ann. § 50-6- 102(a)(6)(C)(emphasis added).

Because the statu tory defi nition of maxi mum to tal benefit exempts permanent total disability aw ards from the 400 week limitation,we conclude that such4 In Love v. American Olean Tile Company , S.W.2d (Tenn. 1998), a companion

case to the one at bar, the Spec ial Worke rs’ Compensation Appeal s Panel held that aw ards of permanent tot

al disabi lity are s ubject to the maximum total benefit prov ision of Tenn. Code Ann. § 50-6- 102(a

)(6). Judge Joe C.Loser, Jr., speaki ng fo r the Special Workers’ Compensation Appeals panel in Love , is of the view that p ermanent total benefits are pay able to age 65, but

may not exceed the maximum total benefit. This view is based on the belief that th e legislature did not intend to financially burden the Second Injury Fund and perhaps result in the employee’s social security disabili ty benefits being reduce d. See 42 U.S.C. §

424(a). As our opinions in the present case and in Love demonstrate, we do not agree with the Panel’s holding in Love , but we do recog nize that our

resolution of these ca ses wi ll resu lt in th e Secon d Injury Fund pa

ying l arge r monetary

awards. Once again, how ever, these are arguments that sho uld be add ressed t o the legislat ure since that body, not the co urts, br ought ab out the ch ange in th e law. 8 benefits are to be paid until age 65 under Tenn. Code Ann. § 50-6-207(4)(A)(i) without regard tothe monetary cap imposed by the maximum total benefit provision of Tenn. Code Ann. § 50-6-102(a)(6 ). Although the 400 week limitation on benefits expressly

applies in cases

of temporary partial disability, see Tenn. Code Ann. § 50- 6-207(2), and permanent partial disabil ity, see Tenn. Code Ann. § 50-6-207(3)(F), the limitation does not apply to permanent total disability under Tenn. Code Ann. § 50-6- 207(4). Had the legislature i ntended to limit permanent t otal dis ability awards to a maximum of 400 weeks, it could hav e drafted a provision explicitly doing so as it did fortemporary partial and per manent partial disab ility. Our conclusion is further buttressed by Tenn. Code Ann. § 50-6-207( 4)(A)(iii), w

hich says that “[a]ttorne ys’ fees in contested cases of permanent total disability shall be calculated upon the first four h undred ( 400) weeks of disability only.” If the legislature had intended to limit permanent total disability benefits to 400 weeks of compensation under Tenn. Code Ann. § 50-6-102(a)(6), it w ould not have been neces s ary to provide that attorney’s fees be calculated only upon the first 400 weeks of compensation.

In sum, we hold that

awards of permanent total disability are payable to age 65 under Tenn. Code Ann. § 50-6 -207(4)(A)(i) and ar e not subject to the monetary cap impo sed by the 400 wee k maximum total benefit provi sion of Tenn. Code Ann. § 50-6-102(a)(6). O ur holding on this point is a reasonable construction of statutory language w hich avoids statutory

conflict and provides for the harmonious operation of the laws in questio n. 4 See Cronin v. Howe , 906 S.W.2d 910, 912 (Tenn. 1996). We further f ind that when liability is apportioned to the Second Injury Fund, payments by the Fund do not begin until “after completion of the paym ents” by the5 Subsection (a) (1) of Te nn. Code Ann. § 50-6-208 p rovides in pertinent part: “If an

employee has previo usly sustained a permanent physical disability from any cause or origin an d becomes permanently and totall y disabled through a su bsequent injury, such employ ee shall be entitled to compensation from such employee’s emp loyer or the employe r’s insurance company onlyfor the disability tha t would ha

ve resulte

d from the subs

equent injury, and such p revious i njury shall not be considered in e stimating the compensation to whi ch such employee may be entitled . . . .”
6 Subsection(b)(1)(A) of Tenn. Code Ann. § 50-6-208 p rovides: “In cases w here the injured employeehas receiv

ed or wil l receive

a workers’ comp ens ation award or awa rds for permanent disabili ty to the body

as a whol e, and the co mbination o f such awards equals or exceeds one hundred percen t (100%) permanent disabili ty to the body as a w

hole, the employee shall not be entitled to receive f rom the emp loyer or its insurance carrier any compensation for permanent disabili ty to the body as a w

hole that would be in ex

cess of one hundred percent (100 %) permanent disabili ty to the bo

dy as a w

hole, after co mbining aw ards.”

7 Subse ction (a), unlike subsection (b), also requires the employer to have had actual know ledge

of the employ

ee’s prior permanent ph ysical disability

prior to the

subsequent i nju ry . Burris v. Cross Moun

tain Coal Co. , 798 S.W.2d 746, 7 48 (Tenn. 199

0). 9 employer. Tenn. Code Ann. § 50-6-208(a)(1). See also Perry v. Sentry Ins. Co. , 938 S.W.2d 404, 408 (Tenn. 1996).

III.

Finally, we must add re ss the employer’s argument that the trial court should have apportioned the awar d between it and the Second Inj ury Fund under Tenn. Code Ann. § 50-6-208(a) 5 rather than under Tenn. Code Ann. § 50-6-208(b). 6 The basis for the employer’s argument is that subsection (a) and subsection ( b) of Tenn. Code Ann. § 50-6-208 are mutuall y exclusive.

After this case was tried and the employer filed its brief in this Court in which it contended that subsection ( a) and subsection (b) of Tenn. Code Ann. § 50-6- 208 are mutually exclus ive, this Court deci ded Perry v. Sentry Ins. Co. , 938 S.W.2d 404 (Tenn. 1996). In Perr y , we noted (and reiterate here) that the Second Injury Fund is liable under subsecti on (a) if ( 1) the employee has previ ously sustained a permanent physical di sabil ity from any cause or or igin, either compensable or noncompensable, and (2) the employee becomes permanently and totally disabled
as the resul t of a sub sequent c ompensa ble injur y. 7 Id . at 407. See also Sweeten , 938 S.W. 2d at 385 . In such a case, the employer pays on ly for the disability that results from the s ubsequent injury that r endered the employee permanently and totallydisabled, without consideration of any prior injuries. Tenn. Code Ann. § 50- 6-1 0

208(a)(1). In other words, an employ er under subsection (a) is responsible only for that disability that would have resulted fr om the subsequ e nt injury had the earli er injuryor injuries not exi sted. Perry v. Sentry Ins. Co. , 938 S.W.2d 404 (Tenn. 1996); Cameron v. Kite Pa int ing Co. , 860 S.W.2d 41 (Tenn. 1993); Allkins v. Thomas Furniture Co. , 762 S.W.2 d 557 (Tenn. 1988); see also Minton v. State Industries, Inc. , 825 S.W.2d 73, 76-77 (Tenn. 1992). Accordingly, it is important for trial co urts to make an explicit finding of fact reg arding the extent of voc ational disability attributable to the subsequent or last injury, without consideration of any prior injuries. This the trial judge did in this case, making a finding of 20 percent vocational disabili ty attribu table to the last in jury.

We further indicated in Perry ( and again reiterate here) that an employee will also have met the requirements

for recovery under

subsection (b) if the employee has received or will receive workers’ compensation awards, including the last one, for permanent disability to the whole body whic h exceed 100percent when combined. Perry , 938 S.W.2d at 407. See also Sweeten , 938 S.W.2d at 3 85 ; Henson v. Cit y of Lawrenc eburg , 851 S.W.2d 809, 81 2 (Tenn. 1993). When this occurs, the Sec ond Inju ry Fund pays benefits due the wo rker in excess of 100 percent after all compensable aw ards, including the las

t one, are combined. Hill v. Eagle Bend Mfg., Inc. , 942 S.W.2d 483 (Tenn. 1997); Huddleston v. Hartford Ac c. & Indem. Co. , 858 S.W.2d 315 (Tenn. 1993); Fink v. Caudle , 856 S.W.2d 952 (Tenn. 1993); Henson v. City of Lawrenceburg , 851 S.W.2d 809 (Tenn. 1993); Reagan v. American Policyholders’ Ins. , 842 S.W.2d 249 (Tenn. 1992); Cox v. Martin M arietta Energy Systems , 832 S.W.2d 534 (Tenn. 1992); Hale v. CNA Ins. Companies , 799 S.W.2d 659 (Tenn. 1990); Sims v. Bituminous Cas. Corp. , 798 S.W.2d 751 (Tenn. 1990); Burris v. Cross Mountain Coal Co. , 798 S.W.2d 746 (Tenn. 1990); Sit z v. Goodyear

Truck Tire Ctr. , 762 S.W .2d 886 (Ten n. 1988). We thus conclude d in Perrythat an injured w orker may m eet the criteria under both s ubsection (a) and subsection (b) of Tenn. Code Ann. § 50-6-208. Perry , 938 S.W.2d at 407 (“[S]ection (a) and (b) are not mutu ally exclusi ve, and an employee may m eet the criteria for8 In Hale v. CNA Ins. Companies , 79 9 S.W.2d 659 (Tenn. 1990), subsection (a) was not

pursued because the record failed to reflect “knowledge” on the part o f the employer of the 1972 injury. The refore, we ap plied subs ection (b). 1 1 recovery under both sections.”). 8 Thus, Perry resolves the argument

of the employer in the insta nt case th at subse ctions (a ) and (b) ar e mutual ly exclusive. We wo ul d add, however, that when the facts satisfy the requirements of both subsections, courts should apply the one which produces a result more favor able to the employer since the goal of the Second Injury Fund statute is to encourage the hiring of injured workers by limi

ting employer liabil ity. See Reagan , 842 S.W.2d at 250; Burris , 798 S.W.2d at 749.

As indicated above, the trial court in this case ap portioned the award 65 percent to the employer and 35 percent to the Second Injury Fund pursuant to Tenn. Code Ann. § 50-6-208(b). The trial court as an alter

native finding determined that under subsection (a) Bomely had sustained a 20percent permanent disabilit y as a result of the 1994 injury.Accordingly, under subsec ti on (a), the trial court found that the employer would have been responsible for 20 percent of the award and the Second Injury Fund responsible for the remaining 80 percent of the award. The trial court conclude d, however , that it wa s bound t o apply s ubsect ion (b) because the employee had prior awar ds of benefits. Atthe time the trial court decided the case it did not have the benefit of this Court’s decision in Perry

.
The facts in this case, as w e found in Perry , satisfy only the req uirements of section (a). The emplo yee has not met the requirements of secti on (b) of having received awar d s for permanent disability which equal or ex

ceed 100 percent. The employee had received p rio r workers’ compensati on awards totaling 35 percent perma nent disability to the w hole body prior to the l ast work-related in jury in 199 4

. He was found to have sustained a 20 percent permanen t disability as a result of the 1994 injury. As

in Perry , the combined awards (55 per cent) do not equal or ex ceed 100 percent.1 2 The trial court did, how ever, correc

tly rec ognize that the facts of this case satisfy the requirements of subsection ( a). The employee had sustained prior injurie s which caused permanent dis ability and he subsequently became permanently and totally disabled as a result of the 1994 compensable injury. As expl ained above, the employer

would pay only for the disability that r esulted from the last injury which rendered the employee totally and permanently disabled without consi deration of any prior injuries, which th e trial court correctly found to b e 20 percent . The evidence does not preponderateagainst this finding. Tenn. Code Ann. § 50-6-225(e)(2) (1997 Supp.). The Second Injury Fund would be responsibl e forthe remaining 80 percent of the award. The

Fund will begin to

discharge its liabi lity

after the employer has paid its portion of the award.

For the foregoing reasons, the judgment of the trial court is affirmed in part and reversed in part and the case remanded so that the trial court can ru le on a motion filed by the employee to hold the employer in contempt

for failing to pay his medical expenses. Costs on appeal are taxed to the defendant-appellee.

___ __________________

____________

_ Frank F. Drowota, II I, Justice
Concur: Anderson, C.J. Reid, Birch, JJ. Holder, J - Separate Concurring and Dissenting Opinion1 3

# FILED
June 1, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE SUPREME COUR T OF TENNESSEE AT KNOXVILLE

ROBERT HAROLD BOMELY, JR., ) ) Plaintiff/Appellee, ) ) v. ) ) MID-AMERICA CORPORATION, ) D/B/A BURGER KING, ) Knox Chancery ) Defendant/Appellee, ) Hon. Frederick D. McDonald ) Chancellor and ) ) No. 03-S-01-9605-CH-00059 LARRY BRINTON, JR., ) DIRECTOR OF THE DIVISION OF ) WORKERS' COMPENSATION, ) TENNESSEE DEPARTMENT OF ) LABOR, SECOND INJURY FUND, ) ) Defendant/Appellant. )



### C O N C U R R I N G AND D I S S E N T I N G O P I N I O N

I agree with the majori

ty’s holding that an empl oyee who is permanently and totallydisabled is entitled to r eceive benefits until age 65 . I diss ent, however because: (1) I belie ve the maj ority's an alys is of the proper division betw een the employer

and the Second Injury Fund substitutes a judi cially-created poli cy of "equitable division" for the clear and established legislati ve policy that dict

ated the Seco nd Injury Fund legislation; and (2) I disagree with the majority's approach i n finding both subsection (a) and (b) ap plicable in cases of perma nent tot al disabi lity.1 5 DIVISION BETWEEN EMPLOYER AND SECOND INJURY FUND

I disagree with the majority’s decision to “e quita bly divide” the total award between the employer and the Second Inj ury Fund and not to limit the employer’s liability to the first 400 weeks of the award. Applying the majority's analysis, employers will be deterred from the hiring of the han dicapped. For example:

X is 20 years old and has a p rior non-co mpensable disability of 75 percent. X sustains a compensable di sability of 25 perce nt and is rendered permanently and total ly disabled. Yis 20 years old with no previous disability. Y sustains the pre cise injurythat X sustained. Y r eceivesa 25 percent disability rating and is able to contin ue working.
According to the majority, an employ er will pay 585 w

eeks (25% of 2340 weeks) of X's total compensation. Y, howe ver, will rec eive only 100 week

s (25% of 400 weeks) compensation for t h e same injury. Under the majority’s analysis, X's employer

has incurred an additional 485 w eeks or nearly six

times the liability of Y's employer

by having hired an

employee with a prior

disability instead of an employee with no p rior disabil ity. This result is contrary to the clear

purpose of the Second InjuryFund and will have a dev astating impact on the abili ty of the handicapped to obtain employment.

The majority asserts that "[t]here is no indication in the workers' compensation law that the legisl ature intended to limit an employ er's liability und er Tenn. Code Ann. § 50-6-2 08 to 400 weeks." Subsection (b), however, expressly limits an employer's liab i lity to "one hundred percent (100%) permanent disabilit y to the body as a whole." Ac cordingly, subsecti on (b) does purport to limi t an employer's liabil ity. The issue, therefore, becomes: To what does 100 percent t o1 6 the body as a whol e equate in terms of compensability as contemplated under subsection (b)?

If a worker has sustaine d prior permanent partial compensable i njuries to the body as a whole of 30 percent and 70 percent, the employer's liabil ity is limited to the first 10

0 percent or 400 weeks c ompensat ion. If a worker has a prior
com p ensable disability of 50 percent and subsequently sustains a compensable disability of 70 percent but is able to earn a wage, the employer's liability is still limited to 100 percent or 400 weeks total compensation

. Accordingly, I w ould find that the first 100 percent to the body as a w hole as contemplated under subsection (b) equates to 400 weeks of total compensation.
APPLICATION OF SUBSECTION (a) or (b)

I disagree with the majority's approach of finding both subsection (a) a nd subse c tion (b) applicable in cases of permanent total disability and then applying the subsection favoring the employer. The Second Injury Fund was created merely to assure that, in cases of permane nt total d isability, an employer incurs the same liability by hiring a disab led worker as it incurs by hiring a healthy worker. Accordin gly, the Second Injury Fund should be absolved from liabilit y when a worker with a preexisting disability sustains a ca tastrophic injury w

hich would render ev

en a healthy worker per

manently and totally di sabled.

Assumea worker

with a preexisti ng compensable disability of 35 percent is hired by an employer. The worker then sustains a catastrophic injury which would
cause permanent total disability or 100 percent vocational disabilit y absent any preexistingconditions. The majority's approach is as follows: (1) under subsection (a), the employer would be r esponsible for 100 percent; (2) under subsection (b),1 7 add 100 percent to the preexis ting 35 percent, ap portioning 65 percent to the employer

and 35 percent to the Second Injur y Fund; and (3) choose the result favoring the employer. Accordin gly, the majority would apply subsecti on (b) (65 percentinstead of 100 percent), and the Second Injur y Fund would incur liability for
an injury that would have caused perm anent t otal disability regardless of any preexisting conditi on.

HISTORICAL ANAL YSIS

A prevailing vi ew during the devel opment of workers' compensation law was that an employer

took an employee as he found him. E. I. du Pont de Nemours & Co. v. Friar , 404 S.W.2d 518, 52 1 (T en n. 1966). The employer, therefore , was liable for all disabilities that resulted from an accident that aggravated a preex

isting physical impairme nt. Id . Accordingly, empl oyers assumed additional l iability by hiring individuals suffering physical impai rments. Id

. This additional liability led to considerable resistance i n the hiring of the handicapped. Id

.

The legislature recog nized that employment of the handi capped was in the interest of society and responded b y enacting the Second Inj ury Fund legislati on. Id

. The Second Injury Fund w as designed "to overcome some of the resistance to employment

of disab led perso ns." Id . To overcome this resis tance, the Second InjuryFund limited an employer's liability when the employer hir

ed a disabled worker and the worker subsequently became permanently and t o tally dis abled by a compensable injury. Id . Accordingly, the purpose of the Second Injury Fund legislation was "to encourage employers t o hire workers w

ith an existing handic

ap which would impair their competitive position as a job seeker." Id .; See also Brown
v. John Martin Const. Co. , 642 S.W.2d 145, 147 (Tenn. 1982) (noting statute "seeks to reward the employer's hu mane gestur e" by limiting its liability). The his tory of1 8 legislati ve encour ag ement in the hiring of the handic apped along with the rel ated conceptof limiting employer l iability must be consi dered when analyzi ng subsection (a) and the later addition of subsection (b).
Subsection (a)

The Second Injury Fund operates to relieve an employer of liability whi l e assuring that injured employees receive full co mpens ation. The statutory prov isions establishing the S ec ond Injury Fund are codifie d at Tenn. Code Ann. § 50-6-208. Subsection (a) of § 50-6-208 r eads in pertinent part:

If an employee has p reviously sustai ned a permanent physical disability from a ny cau se or origin and becomes per manently and totallydisabled through a subsequent injury, such employee shall be entitled to compensation from such empl oyee's employer or the employer's insuranc e compan y only for th e disabil ity that wou ld have resulted from the subseque nt injury, and such previous injur y shall not b e considered in estimating the compensation to which such employee may be entitled under this Chapter . . .
Tenn. Code Ann. § 50-6-208(a)(1) . Subsection (a) also pr ovides that:
Nothing in this section shall be c o nstrued to limit the employer's liability as provided by law

for aggravation of preex isting conditions

or disabilities

in cases where recovery against the second injury fund is not applicable.
Tenn. Code Ann. § 50-6-208(a)(4).
Reading subsections ( a)(1) a nd (a)(4) in pari materia , Lyons v. Rasar , 872 S.W.2d 895, 897 (Tenn. 1994), I find th at unde r § 50-6-208(a)(1), an employer is responsible only for that disabilit y that the sub sequent work-related injury occasioned. The legislature's insertion of subsection(a)(4) prohibits con sideration1 9 of aggravation or ex

acerbation of preexisting conditions when deter min ing an employer’s liability under subs ection (a). According ly , an employer under subsection (a) is responsible onl y for that disability

that would h ave resu lted from the subsequent injury h ad the earlier injury not existed.

This interpretation furthers the l egislative purpose of enac ting the Second InjuryFund. To interpret otherwise would r

un counter to the policy of enc ouraging employers to hire th e handic apped. I shall use the foll owing hyp o thetical for illustrative purposes:
Employer

hires two employees , X and Y. X has a congenital condition that causes a 5 percent anatomical disability. Y has no disabilities. Both X and Y suffer precisely the same compensable i nj ury. Y sustains a 70 percent vocational i mpairment. X, however, is rendered permanently and totally disabled w hen the compensabl e inju ry is superim posed ove r X's prior d isability. X is entitled to benefits until age 65. Y,however, is entitl ed to 70 percent of 400 weeks, or 280 weeks of compensation. The Second Injury Fund does not incur a portion of Y's award.

This example assumes tha t X would have sustai ned only a 70 percent voc ational disability absent the preexisting

condition. If theemployer pays benefits abov e and beyond 280 weeks, the empl oye r has a ssumed additional liability by hiring an individual with a preexisting disability. Moreove r, X's disability exceeding 70

percent is either attributable to a pr eexisting condition or to an aggravationof a preexisting disabili ty.

The above result holds true whether

the employee's preexisting condition is compensable or noncompensable under the Act. The inverse, as the Second Injury Fund a rgues, should also be tr ue. The Second Injury Fund shou ld not be implicated if the su bsequent injury w ould have in and of itself caused permanent2 0 and total disability. See Church v. N.B.C Co. Inc. , 461 S.W.2d 387, 388 ( Tenn. 1970) (holding SecondInjuryFund not implicated when "empl oyee sustained total permanent disability (100 per cent) from the curren t disability (sil icosis) without considering the previous permanent disability [of 35 percent]").
Subsection (b)

I read subsection (b) as r elying on a mathematical c omputat ion to a ssess awardsrather

than on t he relati ve contrib ution of the subse quent inj ury. Tennessee Code Annotated § 50-6-208(b)(1)(A) reads as follows:

In cases where the injure d employee has received or will receive a workers' compensation award or aw ards for permanent di s ability to the body as a whole, and the combination of such awards equals or exceeds one hundred percent (100%) per manent disability to the body as a whole, the employee shall not be ent itled t o receive from the employer or its insur ance carrier any compens ation for permanent d isability t o the body as a whole that would be in excess of one hundred percent (100%) permanent disability to the body

as a whole, after combining awards.

The Second Injury Fund shall pay any benefits in ex

cess of 100 percent permanent disability to the body

as a whole after all compens able awards are combined. Tenn. Code Ann. § 50-6-208(b)(1)(B) (1996 Supp.); Henson v. City of Lawrenceburg , 851 S.W.2d 809, 812 (T enn. 1993).

Subsection (b) clearly li mits an employer's exp osure fo r all compensable awardsto the first 100 percent of combined perm anent voc ational disabilit y. Assessment

under subsection (b) is as follows: Employee has sustained two prior comp ensable awards with v ocational disabilities totaling 75 percent and a non
compensable injury of 5 percent. Emplo yee then s ustai ns a third compensable injurywhich causes an additio nal 30 percent vocational dis ability. The employee,2 1 however, can still perform light duty and earn a w age. Under this scenari o, the noncompensable injury should be ig nored and the employer should be responsible for 25 percent of 400 weeks with the Second Injury Fund incurring the rema ining 5 percent of the 400 weeks.

Application of subsections (a) and (b)
Having determined that assessment of liability is different under subsections (a) and (b), I shall now address under what cir cumstances a trial court applies either (a) or (b). I believe that this Court's interpr etation of both subsections' applications should further the legisla tive intent in enacting

the Second Injury Fund.

The Second Injury Fund legislation w as formerly codified at

Tenn. Code Ann. § 50-1027. The 1945 amendment to § 50-1027 reads as follows:

If an employee has previous ly sustained a per manent disability by reason of the loss of , or loss of use of , a hand, an arm , a foot, a leg, or an eye and becomes permanently and totall y incapacitatedthrough the loss, or loss of use of another member, he shall be en titled to compensation from his employer or the employer's insurance carrier;

. . . provided, however, that in addition to such compensation for said subsequent

injury, and after completi on of the payment s th erefor, then such employee shall be paid the remainder of

the compensation that would be due for the pe rmanent total disability out of a special fund to be known as the "second inj ury fund" herein created.

Accordin gly, the 1945 amendment addressed only th at situati o n in which an emp loyee was rendered permanently and totally disabled as the result o f a subsequent injury. The 19 45 amendment did not

contain aprovision comparable to Tenn. Code Ann. § 50-6-208(b)(1) that addresses c omp ensable permanent partial vocational di sabilities exceeding 100 percent in the aggregate.9 If an employee has previously sus tained a permanent physical disability from any cause or origin and becomes permanently and totally disabled thr ough a subsequent injury

. . . Tenn. Code Ann. § 50-6-208(a)(1). 2 2

The 1945 amendment is similar to Tenn. Code Ann. § 50-6-208(a)(1). 9 Both statutes require a subsequent i nj ury c ausing a permanent total disab ility. Both statutes further provide that pri or injuries shall not be considered when esti mating the current award. The 1945 amendment, however, limit ed recovery to situa

tions in which an employee prev iously sustained a permanent disability to a hand, arm, foot, leg, or

eye and subsequently became permanently and totally disabled as the result of an injury to "another member."

Our present statute , as amended, extends subsection (a)'s coverage to encompass all forms of preexisting conditions. See Tenn. Code Ann. § 50-6-208 (stating "[i]f an employee has sustain ed permanent p hysical i mpairment from any cause or origin . . .") (emphasis added). Ac cordingly, subsecti on (a) should apply when a permanently and totally disabled worker has sustain e d: (1) prior compensable injury(ies); (2) prior noncompensable injury(ies); or (3) a combination of prior compensable and non-compensable injuries. The legislature's incl usion of the "catch all" phrase in subsection (a) is an indication that the legi slature intended subsection (a) to applywhenever a subsequent injury causes permanent and total disabili ty.

Both the inclusion of the "catch all" phrase in subsec tion (a) and the addition of subsection (b) appeared in the 1985 amendment. I, therefore, find it improbable that the legislature intended subsection (b) to ap ply to subsequent injuries causing permanent and total disabilities when i t simultaneously broadened s ubsection (a) to encompass all permane nt total disabilities regardless of the origin of the preexisting conditions.2 3 I believe it an untenable p ropo sition that the legisl ature intended both subsectionsto apply to the same

case and render a different result. The majority's solutio n is to apply which ever subsection is “ favorable to the employer.” The statute, however, neither mandates nor requires this construction.

The application of both subsections may occur under the majority's analysis whe never an employee becomes rehabilit ated after receiving per manent partial disability awards under the wor kers' compensation sta tute. For example, an employee who has prior permanent pa rtial compensable disabili ties totaling 80 percentreturns to work and is able to perform as we ll as prior to the inj uries. The employee then sustains a work- related injury that ca uses the employee to become permanently and totally disabled. The trial court finds under s ubsection (a) that the last injury caused a

40 percent vocational di sability absent consid eration ofthe prior injuries. Under

my analysis the employ ee would receive a 40 percent award from the employer, with the Second Injury Fund responsible forthe remaining 60 percent. I would not apply subs

ection (b).

The majority would ag ree that the employer is r es pons ible for 40 percent under subsection (a). Applying subsection (b), however, the maj ority would find the employer

responsible for 20 percent (the difference betw een the prior awards and 100 percent) and Second Injury Fund responsible for 20 percent (80 percent + 40 percent, with that portion exceeding 100 percent apportioned to the Second Inju ry Fund). Since the 20 percent finding is more favorable to the employer than the 40 percentfinding, the majo ri ty would apply s ubection (b). What the majority fails t o address is that the employee will receive only 40 percent of the total disability award under the majority's anal ysis.2 4 We should presume that the legislature did not intend an absurdity and adopt
a reasonable construction w hich avoids statutory

conflict. C ronin v . Howe , 906 S.W.2d 910, 912 (Tenn. 1995); Epstein, v. State , 211 Tenn. 633, 366 S.W.2d 914 (1963). Interpreting the subsections to be mutually exclusi ve avoi ds arbitrarily deciding which subsection shal l apply. I would t herefore overrule this Court’s holding in Perry

that the subsections are not mutually exclusi ve. Perry v. Sentry Ins. Co. , 938 S.W.2d 404 (Te nn. 1996).
Upon reading the statutes in pari materia and examining the plain language of the § 50-6-208(a) & (b), I would find that subsection (a) applies when there is a subsequent

injury and the

employee is rendered permanently and totally dis abled. Subsection (b) applies only w hen the employee is still able to earn a wage or be gainfully employed but has received compensable vocational disabilities which exceed 100 percent or 400 w eeks of compensation.

In this case, Bomely was r ender ed permanently and totally disabled as a result of the 1994 compensable injury. He previously had sustained both compensable and noncompensable injuries. Because Bomely is no long er able to
earn a wage, I would hold that subs ection (b) does not apply . His employer had notice of his preexisting c on dit ions. Accordingly, subsection (a) applies. I would
a ffirm th e trial court’s finding that, under subsection (a),Bomely sustained a 20 percentdisability as

a result of the 1994 injury and that the liability o f the employer is limited to the fi rst 400 wee ks of disa bility.

Under subsection (a) I believe we should det ermine what

vocational disability the 1994 injury would ha ve caused if Bomely had no pr ee xi sting condition. Although the trial judge erroneously decided the case under subsect ion (b), he alternativelyfound t hat unde r subsect ion (a) Bo mely would have su stained a 202 5 percentvocational disabili ty absen t consideration of his preex isting conditions. I would find that the trial judge's finding of 20 percent is support ed by the record. I would, therefore, apportion under subsection (a) as follows: (1) the employer is responsible for 20 percent of 400weeks; and (2) the Second Injury Fund is responsible for the remaining benefits until age 65.

I am mindful that this holding w ould have a harsh impact on th e Seco nd InjuryFund in light of

the legislative amendment which permits benefits unti l age 65. The legislature, howev

er, did not amend the language providi ng for assessment of li ability under subsections (a) and (b) when it amended Tenn. Code Ann

. § 50-6 207(4)(A)(I)

to permit benefits to age 65. Mor eover, the policy w

hich dictated the Second Injury Fund has not been altered. Accordingly, I believe we are constrained to interpret the statute in a manner which furthers the policy that dictated the legislation. I w ould overrule cases hol ding to the contrary. A l though I fully subscribe to the need for stare decisis , I am w illin g to abandon an analysis that in hindsight does not further the purposes of the Second Injur y Fund statute.

The majority bases its

analysis o n a theory o f equity. E quity, however, is not
a policy that dictated the Second Injury Fund legis lation. The Second Injury Fund
was created to encourage the hiring of the handicapped. The majority i n strivingfor equity, however, has essenti ally altered or re- legislated the policy that dictated the creation of the Second Injury Fund.

Janice M. Holder, Justice