Court Opinion

ID: 5073350
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:58:07.054308+00
Date Added: 2024-06-11T08:19:55.970749
License: Public Domain

DROWOTA, Justice,
dissenting.
I respectfully dissent. I agree with the appellant that the knowledge requirement applies to § 50-6-208(b).
The majority opinion rests on the ground that § 50-6-208(b) advances two policies, which would be defeated by the knowledge requirement. I address initially the second policy identified by the majority. The majority holds that removal of the knowledge requirement in § 50-6-208(b)(l) prevents the loss of benefits to the worker from the second injury fund. I disagree.
This Court has long held that an employer takes an employee as he or she is and is liable for disability resulting from an accident which aggravates a pre-existing physical impairment. See, e.g., E.I. duPont de Nemours & Company v. Friar, 218 Tenn. 554, 404 S.W.2d 518, 521 (1966). If an employee has a claim against the Second Injury Fund, the liability of the employer and its insurance carrier is limited. Travelers Insurance Company v. Austin, 521 S.W.2d 783, 787 (Tenn.1975).
The 1985 statute, however, (as well as the prior statute) expressly places on the employer the burden of proving actual knowledge. The statute states in relevant part that “the employer must establish that the employer had actual knowledge of the permanent and pre-existing disability.” If the employer fails to meet this burden, it is liable to the employee for 100% permanent disability benefits. If it meets the burden, employer’s liability is limited, with the Second Injury Fund liable for the difference. In either case, employee receives 100% permanent disability benefits. The knowledge requirement affects the employer’s liability, but it does not adversely affect the employee.1
The other policy identified by the majority is that subsection (b)(1) is intended to limit the exposure of any and all employers of a worker to a sum total of one hundred percent disability to the body as a whole throughout the worker’s productive life. Although I agree that subsection (b)(1) intends such a result, that policy is not incompatible with the knowledge requirement. On the contrary, in any view the majority reasoning is incompatible with the fundamental purpose of the Second Injury Fund.
The basic purpose of the Second Injury Fund is to encourage the employment of persons with permanent disabilities, by limiting to some extent the employer’s workers’ compensation liability for these employees. E.I. duPont de Nemours & Company v. Friar, 218 Tenn. 554, 404 S.W.2d 518 (1966). In harmony with this purpose, we stated in Friar that recovery from the Second Injury Fund should not be extended to prior conditions of which the employer was unaware. We therefore held that in the absence of a prior disability that is patent
“[t]he presumption would be that the employer was unaware of such pre-existing disability, and the employer would have to stand the burden of proving knowledge of such a condition at the time of hiring.”
Id., 404 S.W.2d at 522.
The knowledge requirement was originally a product of judicial construction; the statute contained no express provision regarding it. In 1973, however, the General Assembly codified the knowledge requirement, and indeed made it more stringent, by requiring the employer to establish by written records that it had prior knowledge of the permanent and pre-existing impairment. Public Acts of 1973, ch. 379, § 10; U.S. Pipe & Foundry Co. v. Caraway, 546 S.W.2d 215, 218 (Tenn.1977). This legislative action recognized what we had previously held, namely, that the knowledge requirement is integral to the “clear purpose of this legislation [which] is to encourage employers to hire workers with an existing *889handicap.” Friar, supra, 404 S.W.2d at 521.
The 1985 legislation has retained this knowledge requirement, although it has replaced the “written records” requirement with the “actual knowledge” requirement. True, this statutory requirement contained in subsection (a) is not duplicated verbatim in subsection (b). In my view, however, the General Assembly did not intend subsection (b) as a wholly separate basis of recovery from the Second Injury Fund. For instance, in the preceding clause of the same sentence containing the “actual knowledge” requirement, subsection (a) also requires that “the injured employee must be the employee of an employer who has properly insured his workers’ compensation liability or has qualified to operate as a self-insurer.” No such requirement appears in subsection (b), yet I do not think that an employer who has failed to meet the insurance or self-insurance requirements of T.C.A. § 50-6-405 may nevertheless take advantage of the Second Injury Fund under § 50-6-208(b). In my opinion, these requirements were intended to apply to all Second Injury Fund cases.
Furthermore, the legislative history shows no intention of departing from the fundamental policy behind the Second Injury Fund, but instead indicates an intention to keep that policy. The remarks of the Senate Sponsor are pertinent:
“The Second Injury Fund is opened up so that an employee who has been a 100% disability from a previous injury that has been rehabilitated and goes back on the job can then if he’s injured go into the Second Injury Fund and get his recovery. This encourages the employer to hire people who have been previously injured so that they’re not going to be worried about having to pay for an employee who has a problem and if he gets hurt they’ll end up paying for his old injury. This protects him if that other employee got a 100% disability.
Remarks of Senator Riley C. Darnell, May 2, 1985, Tape S-94, State Library and Archives [emphasis supplied]. These remarks indicate that the legislature intended no change in the fundamental purpose of encouraging the hiring of employees with pri- or disabilities. The knowledge requirement is an integral part of this policy of encouragement, which
“would have no application where employer had no notice or knowledge at the time of the hiring of employee’s permanent disability at the time he was employed.”
Strong v. Insurance Company of North America, 490 S.W.2d 162, 168 (Tenn.1973).
For these reasons I would hold that the actual knowledge requirement applies to § 50-6-208(a) & (b). The employer having failed to show actual knowledge of the prior disability, I would hold that it is liable for 100% permanent disability benefits.

. None of the three parties to this appeal suggested that the employee’s recovery could be limited to 92.5%. The issue drawn by the parties, rather, is whether the remaining 7.5% should be paid by the Second Injury Fund or by the employer.