Opinion ID: 1666737
Heading Depth: 2
Heading Rank: 1

Heading: Setoff for Sickness-and-Accident Benefits

Text: Ala.Code 1975, § 25-5-57(c)(1), a part of the Workers' Compensation Act, § 25-5-1 et seq., Ala.Code 1975, provides: (c) Setoff for other recovery. In calculating the amount of workers' compensation due: (1) The employer may reduce or accept an assignment from an employee of the amount of benefits paid pursuant to a disability plan, retirement plan, or other plan providing for sick pay by the amount of compensation paid, if and only if the employer provided the benefits or paid for the plan or plans providing the benefits deducted. We have explained that this subsection allows an employer to reduce the amount of workers' compensation benefits due by the amount of benefits paid or payable under a qualifying disability, retirement, or sick pay plan. Ex parte Dunlop Tire Corp., 706 So.2d 729, 731 (Ala.1997). Thus, any payment by Fort James under such a qualifying plan would reduce its obligation to Irby for workers' compensation benefits by that amount. In this case, the amount at issue is $2,823.57, or $335 per week. The first issue we must address is the proper burden of proof. The party asserting an affirmative defense bears the burden of proof on that defense. Green Tree Fin. Corp. of Alabama v. Wampler, 749 So.2d 409, 415 (Ala.1999). In workers' compensation issues, other than certain threshold issues of compensability, the party bearing the burden of proof must meet that burden by a preponderance of the evidence. Ala.Code 1975, § 25-5-81(c). Yet the trial court found that Fort James had not proven by clear and convincing evidence that Fort James had paid Irby sick pay. We hold that the trial court erred in requiring Fort James to prove by clear and convincing evidence that it had paid Irby sick pay. The second issue for our review is whether Fort James met its burden of proof with regard to the setoff. The trial court, applying the clear-and-convincing-evidence standard, held that Fort James did not. The Court of Civil Appeals upheld the trial court's decision to deny the setoff under the rationale of Toborkey v. Workmen's Comp. Appeal Bd., 655 A.2d 636 (Pa.Commw.Ct.1995), approved by this Court in Ex parte Dunlop Tire Corp., supra . In Toborkey, the court explained that sick leave was `an incident or benefit provided under the work agreement and is an entitlement like wages for services performed.' Toborkey, 655 A.2d at 638 (quoting Temple v. Pennsylvania Dep't of Highways, 445 Pa. 539, 542, 285 A.2d 137, 139 (1971)). On this authority, the Toborkey court denied any setoff of workers' compensation benefits for amounts paid for sick leave. However, upon a closer examination of Toborkey, it appears that that court distinguished sick leave from sick pay. 655 A.2d at 639. Sick pay, noted the court, is earned not in the nature of wages but, rather, [as] payment[ ] provided in lieu of compensation, based on the claimant's inability to work. Toborkey, 655 A.2d at 639 (footnote omitted; emphasis added). Fort James argues that its provision of sickness-and-accident benefits constitutes sick pay, as defined by the Toborkey court, and not sick leave. Irby does not challenge this definition. Rather, he argues that Fort James has not produced any evidence indicating who funded the sickness-and-accident benefits. Yet one of the exhibits introduced by Fort James at trial, and which Irby cites, clearly states, [the sickness-and-accident] benefits are not insured by [Aetna] but will be paid from the Employer's funds. Irby offers no evidence to contradict that statement. Irby argues that even if Fort James paid those benefits out of its funds, he received them because he was unable to work, not because he was disabled. However, this distinction is irrelevant. Irby was paid under a Temporary Disability Benefit plan maintained by Fort James that covered any time lost from work as the result of an injury. Fort James is allowed the setoff for any plan contemplated by Ala.Code 1975, § 25-5-57(c)(1), including one that merely provides sick pay. In fact, disability plans and plans providing for sick pay are listed separately in that statute. Fort James has provided substantial evidence indicating that it was the sole source of funding for the plan. Irby has not offered any evidence indicating that he funded any portion of his sick-pay plan. Therefore, we conclude that the Court of Civil Appeals erred in affirming the trial court's order denying Fort James a setoff of the workers' compensation benefits for the sickness-and-accident benefits Fort James had paid to Irby. We reverse its judgment on this issue.