Court Opinion

ID: 2799212
Source: CourtListenerOpinion
Date Created: 2015-05-07 13:09:40.617579+00
Date Added: 2024-06-11T11:29:31.216904
License: Public Domain

#27170-r-DG
2015 S.D. 25

                             IN THE SUPREME COURT
                                     OF THE
                            STATE OF SOUTH DAKOTA

                                    ****

PATRICIA WHEELER,                            Claimant and Appellant,

v.

CINNA BAKERS LLC, an Iowa
Limited Liability Company,
d/b/a CINNABON (EMPIRE MALL),                Employer and Appellee,

and

HARTFORD CASUALTY
INSURANCE COMPANY,                           Insurer and Appellee.

                                  ****
                   APPEAL FROM THE CIRCUIT COURT OF
                       THE SIXTH JUDICIAL CIRCUIT
                     HUGHES COUNTY, SOUTH DAKOTA
                                ****
                     THE HONORABLE MARK BARNETT
                                Judge
                                ****

JOLENE R. NASSER
N. DEAN NASSER, JR. of
Nasser Law Office, PC
Sioux Falls, South Dakota                    Attorneys for claimant and
                                             appellant.

RICHARD L. TRAVIS
ERIC D. DENURE
May & Johnson, PC
Sioux Falls, South Dakota                    Attorneys for employer, insurer,
                                             and appellees.

                                    ****
                                             CONSIDERED ON BRIEFS
                                             ON FEBRUARY 17, 2015
                                             OPINION FILED 05/06/15
#27170

GILBERTSON, Chief Justice

[¶1.]        Patricia Wheeler appealed the administrative law judge’s (ALJ’s)

determination that she not be allowed to aggregate her wages from three separate

employments in the calculation of her Average Weekly Wage (AWW). The circuit

court affirmed the ALJ’s determination. Wheeler appeals to this Court. We

reverse.

                           Facts and Procedural History

[¶2.]        Wheeler worked at the Cinnabon Store in the Empire Mall in Sioux

Falls, South Dakota. Cinna Bakers, LLC, owns Cinnabon, which made Wheeler an

employee of Cinna Bakers. Wheeler was also employed by Westside Casino and Get

’N’ Go convenience store in Sioux Falls. Wheeler held all jobs concurrently in order

to reach the earning level of full-time employment and had done so on a long-term

basis with the intent of continuing indefinitely. While working at Cinnabon,

Wheeler sustained two separate work-related injuries, which arose out of and in the

course of her employment with Cinna Bakers. As a result of her injuries at

Cinnabon, Wheeler was unable to work at Cinnabon and her two other concurrently

held jobs. 1 After initially denying Wheeler’s claim, Cinna Bakers and its insurance

company, Hartford Casualty Insurance Co., accepted Wheeler’s injuries as

compensable. However, the parties disputed whether income from all three of

1.      The ALJ found:
             Both injuries additionally required treatment for dental injuries,
             twenty-four sessions of occupational therapy, seven weeks off
             from all three of [Wheeler’s] concurrently held jobs, and several
             weeks of reduced hours and restrictions while transitioning to
             full-time work (each injury).

                                         -1-
#27170

Wheeler’s concurrent employments should be used to calculate her AWW. Wheeler

filed a petition and asserted that all three of her concurrent employments should be

aggregated to calculate her AWW. The ALJ determined that only Wheeler’s wage

from Cinna Bakers could be utilized to calculate her AWW. Wheeler appealed to

the circuit court, and it affirmed. Wheeler now appeals to this Court.

[¶3.]         Wheeler raises one issue:

              Whether the ALJ and the circuit court erred in holding that
              Wheeler could not aggregate her earnings from three separate
              employments to calculate her AWW after she was injured on the
              job at one employment.

                                  Standard of Review

[¶4.]         While our standard of review of an agency decision is set forth in SDCL

1-26-37, 2 the parties agree the question before the Court is one of statutory

interpretation. Statutory interpretation is a question of law reviewed de novo.

Whitesell v. Rapid Soft Water & Spas, Inc., 2014 S.D. 41, ¶ 6, 850 N.W.2d 840, 842

(citing Fair v. Nash Finch Co., 2007 S.D. 16, ¶ 7, 728 N.W.2d 623, 628).

                                       Decision

[¶5.]         Wheeler asserts on appeal that the ALJ and the circuit court erred

when they only used her wage from Cinna Bakers to determine her AWW. Wheeler

argues her wages from all three of her concurrent employments should have been

2.      SDCL 1-26-37 provides:
              An aggrieved party or the agency may obtain a review of any
              final judgment of the circuit court under this chapter by appeal
              to the Supreme Court. The appeal shall be taken as in other
              civil cases. The Supreme Court shall give the same deference to
              the findings of fact, conclusions of law, and final judgment of the
              circuit court as it does to other appeals from the circuit court.
              Such appeal may not be considered de novo.

                                          -2-
#27170

aggregated to calculate her AWW. In support of her argument, Wheeler points out

that a majority of jurisdictions allow for the aggregation of wages from concurrent

employments. Arthur Larson, Larson’s Workers’ Compensation Law, § 93.03[1][a]

(2014). Only a small number of states do not permit the aggregation of wages from

concurrent employments. Id. Of the jurisdictions that allow for the aggregation of

wages, most only permit aggregation when the employments are “similar” or

“related.” Id. Most of the remaining jurisdictions that permit aggregation allow

earnings to “be combined whether or not the employments were related or similar.”

Id. Professor Larson calls this last position the “growing minority rule.” Id.

Professor Larson endorses the “growing minority rule” when calculating the AWW. 3

[¶6.]         Although a majority of jurisdictions aggregate the AWW in some

manner, we have not yet addressed whether South Dakota’s workers’ compensation

scheme permits the aggregation of wages from concurrent employments when, as

here, the injuries arose out of and in the course of only one of those employments.

While other jurisdictions and Professor Larson may provide persuasive authority on

the matter, the issue before the Court is one of statutory interpretation. The

3.      After criticizing nonaggregation and aggregation of wages in similar or
        related employments, Professor Larson endorses the “growing minority rule”:
              From the point of view of achieving a result that makes sense in
              relation to the claimant’s real earning capacity in the past and
              future, . . . the only satisfactory calculation, particularly when
              the hourly rate of pay in the concurrent jobs is sharply different,
              is to combine the earnings in the [concurrent] jobs, rather than
              to round out to a full-time basis the hourly rate in the
              employment in which claimant was engaged at the time of
              injury.
        Larson, supra ¶ 5, at § 93.03[3].

                                            -3-
#27170

primary purpose of statutory interpretation is to discover legislative intent. Bostick

v. Weber, 2005 S.D. 12, ¶ 7, 692 N.W.2d 517, 519 (citing State v. Myrl & Roy’s

Paving, Inc., 2004 S.D. 98, ¶ 6, 686 N.W.2d 651, 653). Our first step in determining

legislative intent is to look at the plain language of the statute. See City of Rapid

City v. Anderson, 2000 S.D. 77, ¶ 7, 612 N.W.2d 289, 291 (quoting Dahn v.

Trownsell, 1998 S.D. 36, ¶ 14, 576 N.W.2d 535, 539). “Words and phrases in a

statute must be given their plain meaning and effect. When the language in a

statute is clear, certain and unambiguous, there is no reason for construction, and

the Court’s only function is to declare the meaning of the statute as clearly

expressed.” Id. “A statute or portion thereof is ambiguous when it is capable of

being understood by reasonably well-informed persons in either of two or more

senses.” Petition of Famous Brands, Inc., 347 N.W.2d 882, 886 (S.D. 1984) (quoting

Nat’l Amusement Co. v. Wis. Dep’t of Taxation, 163 N.W.2d 625, 628 (Wis. 1969)). If

statutes are ambiguous or lead to absurd and unreasonable results, we will utilize

the rules of statutory construction to discover the true legislative intent. See id. at

885; Anderson, 2000 S.D. 77, ¶ 7, 612 N.W.2d at 291 (quoting Dahn, 1998 S.D. 36, ¶

14, 576 N.W.2d at 539); State v. Davis, 1999 S.D. 98, ¶ 7, 598 N.W.2d 535, 537-38.

Additionally, if we conclude the language of the statutes is ambiguous or leads to an

absurd and unreasonable result, we “liberally construe[ the statutes] in favor of

[the] injured employee[]” because this is a workers’ compensation case. Hayes v.

Rosenbaum Signs & Outdoor Adver., Inc., 2014 S.D. 64, ¶ 28, 853 N.W.2d 878, 885

(quoting Caldwell v. John Morrell & Co., 489 N.W.2d 353, 364 (S.D. 1992)); Mills v.

Spink Elec. Co-op, 442 N.W.2d 243, 246 (S.D. 1989) (holding workers’ compensation

                                          -4-
#27170

is “remedial” in nature and should though be “liberally construed in favor of injured

employee[]”).

[¶7.]        Our first step is to analyze the plain meaning of the statutes in

question. Workers’ compensation statutes prescribe the calculation for the AWW.

There are three statutes that apply to such calculations. The first statute provides:

             As to an employee in an employment in which it is the custom to
             operate throughout the working days of the year, and who was
             in the employment of the same employer in the same grade of
             employment as at the time of the injury continuously for fifty-
             two weeks next preceding the injury, except for any temporary
             loss of time, the average weekly wage shall, where feasible, be
             computed by dividing by fifty-two the total earnings of the
             employee as defined in subdivision 62-1-1(6), during the period of
             fifty-two weeks. However, if the employee lost more than seven
             consecutive days during the period of fifty-two weeks, then the
             division shall be by the number of weeks and fractions thereof
             that the employee actually worked.

SDCL 62-4-24 (emphasis added).

[¶8.]        The second method prescribed by statute is not utilized unless SDCL

62-4-24 does not apply. The second statute provides:

             As to an employee in an employment in which it is the custom to
             operate throughout the working days of the year, but who is not
             covered by § 62-4-24, the average weekly wages shall, where
             feasible, be ascertained by computing the total of the employee’s
             earnings during the period the employee worked immediately
             preceding the employee’s injury at the same grade of
             employment for the employer by whom the employee was
             employed at the time of the employee’s injury, and dividing such
             total by the number of weeks and fractions thereof that the
             employee actually worked. However, if such method of
             computation produces a result that is manifestly unfair and
             inequitable or if by reason of the shortness of time during which
             the employee has been in such employment, or the casual nature
             or terms of the employment, it is impracticable to use such
             method, then regard shall be had to the average weekly amount
             which during fifty-two weeks previous to the injury was being
             earned by a person in the same grade, employed at the same

                                         -5-
#27170

            work, by the same employer, or if there is no person so
            employed, by a person in the same grade, employed in the same
            class of employment in the same general locality.

SDCL 62-4-25 (emphasis added).

[¶9.]       The third statute is used to calculate the AWW if neither SDCL 62-4-

24 nor SDCL 62-2-25 apply. The third statute provides:

            As to an employee in an employment in which it is the custom to
            operate throughout the working days of the year and where the
            situation is such that it is not reasonably feasible to determine
            the average weekly wages in the manner provided in § 62-4-24
            or 62-4-25, the average weekly wages shall be determined by
            multiplying the employee’s average day’s earnings by three
            hundred, and dividing by fifty-two.

SDCL 62-4-26 (emphasis added).

[¶10.]      All three AWW statutes utilize the definition of “earnings” as defined

by SDCL 62-1-1(6) to calculate the AWW. See SDCL 62-4-24; SDCL 62-4-25; SDCL

62-4-26. The statute defining “earnings” provides:

            “Earnings,” the amount of compensation for the number of hours
            commonly regarded as a day’s work for the employment in which
            the employee was engaged at the time of his injury. It includes
            payment for all hours worked, including overtime hours at
            straight-time pay, and does not include any sum which the
            employer has been accustomed to pay the employee to cover any
            special expense entailed by him by the nature of his
            employment; wherever allowances of any character made to an
            employee in lieu of wages are specified as a part of the wage
            contract, they shall be deemed a part of his earnings[.]

SDCL 62-1-1(6) (emphasis added).

[¶11.]      The critical phrase in SDCL 62-1-1(6) is “for the employment in which

the employee was engaged at the time of his injury.” (Emphasis added.) The circuit

court held the italicized phrase unambiguously referred to the specific employment

in which an employee was engaged (i.e., engaged in the more narrow sense of

                                        -6-
#27170

“actively engaged”) at the time of the injury. Wheeler contends the italicized phrase

is subject to another reasonable interpretation. She argues “employment” and

“engaged” have a broader connotation related to the status of the individual, i.e.

being in the state of employment. Wheeler points out that she also “was engaged at

the time of [her] injury” in her other concurrent employments and intended to

remain concurrently employed indefinitely. Because, as Wheeler argues, her

proposed interpretation is equally reasonable and we construe a statutory

ambiguity in the employee’s favor, Wheeler asks us to reverse the ALJ and the

circuit court and hold the AWW statutes allow for aggregating an employee’s wages

from concurrent employments. We agree.

[¶12.]         The phrase—“for the employment in which the employee was engaged

at the time of his injury”—in SDCL 62-1-1(6) is ambiguous because it is “capable of

being understood by reasonably well-informed persons in either of two or more

senses.” See Petition of Famous Brands, Inc., 347 N.W.2d at 886. “Earnings” uses

the term “employment” in its definition. SDCL 62-1-1(6). “Employment” is not

defined in the workers’ compensation statutes relevant to the calculation of the

AWW. See SDCL 62-1-1. However, “employment” is defined in SDCL 61-1-10. 4

“Employment” is “any service performed, including service in interstate commerce,

by: . . . (2) Any individual who, under the usual common-law rules applicable in

determining the employer-employee relationship has the status of an employee.”

4.       Pursuant to SDCL 2-14-4, “Whenever the meaning of a word or phrase is
         defined in any statute such definition is applicable to the same word or
         phrase wherever it occurs except where a contrary intention plainly appears.”
         No contrary intention appears in either SDCL 61-1-10 or SDCL 61-1-1.
         Therefore, the definition of employment transfers.

                                           -7-
#27170

SDCL 61-1-10 (emphasis added). The definition of “employment” as promulgated by

the Legislature is concerned with the status of the individual, i.e. the employee,

rather than the specific or immediate activity. Wheeler maintained the status of

employee at her other occupations at all times relevant to this case.

[¶13.]         Moreover, “engaged” is not defined by our workers’ compensation

statutes. “Engaged” means “to put under pledge; to pledge; to place under

obligations to do or forbear doing something.” Webster’s New International

Dictionary 847 (2d ed. 1954). Wheeler was “engaged” in her other occupations at

the time of her injury in the sense that she was under a pledge and a continuing set

of obligations to those employments, i.e., she maintained the status of an employee

with her other employments even though she was not actively and immediately

doing work in those employments when she was injured at Cinnabon. It is

undisputed that Wheeler was “concurrently employed” at Cinnabon, Westside

Casino, and Get ’N’ Go convenience store at all times relevant to this case. She was

“engaged” in those employments to reach the earning level of full time employment

and had done so on a long term basis with the intention of doing so indefinitely.

Thus, in one sense, Wheeler “was engaged at the time of her injury” in her other

employments because she maintained the status of employee with her other

employments. 5 In another sense, she “was engaged at the time of her injury” only

5.       In addition, this broader definition of “engage” is consistent with other
         statutes in the workers’ compensation title. For example, SDCL 62-4-5.1
         provides, “[O]nce such employee is engaged in a program of rehabilitation . . .
         the employee shall receive compensation . . . during the entire period that the
         employee is engaged in such program[.]” (Emphasis added.) The word
                                                               (continued . . .)
                                             -8-
#27170

with Cinnabon in that she was actively working for Cinnabon. Therefore, there are

two reasonable interpretations of the earnings statute, and it is ambiguous.

Because the language used in SDCL 62-1-1(6) is ambiguous, we interpret the

definition of “earnings” used to calculate Wheeler’s AWW in her favor, and Wheeler

is entitled to aggregate her wages from her concurrently held employments to

determine her “earnings” under any of the three AWW-computation statutes. See

Hayes, 2014 S.D. 64, ¶ 28, 853 N.W.2d at 885 (quoting Caldwell, 489 N.W.2d at

364).

[¶14.]       Our interpretation is further buttressed by our rules of statutory

construction. First, the AWW statutes indicate a worker’s total earnings should be

used to calculate the AWW. See SDCL 62-4-24; SDCL 62-4-25; SDCL 62-4-26.

Wheeler’s total earnings include the wages she received from all of her concurrently

held jobs, not just her wages from Cinnabon. Second, the broader construction of

earnings is more consistent with the other workers’ compensation statutes. “[I]t is a

fundamental canon of statutory construction that the words of a statute must be

read in their context and with a view to their place in the overall statutory scheme.”

Expungement of Oliver, 2012 S.D. 9, ¶ 9, 810 N.W.2d 350, 352 (quoting Food &

Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133, 120 S. Ct.

1291, 1301, 146 L. Ed. 2d 121 (2000)) (internal quotation marks omitted). We said

in Caldwell that the primary purpose of workers’ compensation is to fairly

compensate the employee for his or her loss of income-earning ability:

________________________
(. . . continued)
         “engaged” refers to a status of being enrolled or committed to participate, not
         actually and immediately performing program requirements.

                                           -9-
#27170

             Our [workers’ compensation laws are] designed to compensate
             an employee or his family for the loss of his income-earning
             ability which loss is occasioned by an injury, disablement, or
             death because of an employment related accident, casualty, or
             disease. [Workers’ compensation] guarantees employees
             compensation irrespective of tort law considerations and in
             return employees forego the right to a one hundred percent
             recovery. Employers, on the other hand, accept responsibility
             for injuries they might not otherwise be responsible for at
             common law and in return their liability is fixed and limited.

489 N.W.2d at 362 (emphasis added). “[S]tatutes [are] governed by one spirit and

policy, and [are] intended to be consistent and harmonious in their several parts

and provision.” Lewis & Clark Rural Water Sys., Inc. v. Seeba, 2006 S.D. 7, ¶ 12,

709 N.W.2d 824, 831 (quoting M.B. v. Konenkamp, 523 N.W.2d 94, 98 (S.D. 1994))

(alterations in Lewis & Clark Rural Water Sys., Inc.).

[¶15.]       Third, when the circuit court affirmed the ALJ and reasoned that the

workers’ compensation statutory scheme did not permit aggregation of wages, the

circuit court noted, “[C]arriers would be forced to set higher premiums to cover

unknown risks,” (i.e., wages earned at unknown other jobs). The circuit court also

noted that requiring the employer to pay higher rates to cover an employee’s other

jobs or lost income-earning ability would be “manifestly unfair.” While it is true

higher rates are undesirable, Professor Larson responds:

             [F]airness to the employee and fairness to the employer/carrier
             are not symmetrical, and cannot be judged by the same
             standards. To this one employee, this one loss is everything–he
             or she has nothing against which to offset. To the employer, and
             even more to the carrier, this is just one case among many. . . .
             Today this employer-carrier may be saddled with a slight extra
             cost; tomorrow positions may be reversed. . . .

             Concurrent employment is by no means the only compensation
             situation in which employers and carriers must console

                                         -10-
#27170

             themselves with the reminder that these things will all “wash
             out” in the end. . . .

             For the injured worker, however, there is no such consolation.
             That worker, alone, bears the burden of being reduced to $20 a
             week when his or her actual earnings may have been five times
             that much. That is real unfairness. By comparison, the
             “unfairness” to the employer, in the form perhaps of a slight
             premium increase, eventually offset by the times he or she will
             benefit by the same rule, is an artificial construct with no
             genuine content.

Larson, supra ¶ 5, at § 93.03[1][c]; see also Foreman v. Jackson Minit Markets, Inc.,

217 S.E.2d 214, 216-17 (S.C. 1975) (interpreting substantially similar statutes to

those of South Dakota and holding the definition of “earnings” did not preclude

aggregation of wages because aggregation of wages was the only fair way to

compensate employees for lost earning capacity).

[¶16.]       Lastly, we are persuaded to adopt the “growing minority rule,” as

Professor Larson calls it, and allow for aggregation of wages from all concurrently

held employments, not just similar or related employments. We see no reason why

the employments must be similar or related if workers’ compensation “is designed to

compensate an employee or his family for the loss of his income-earning ability.”

Caldwell, 489 N.W.2d at 362 (emphasis added). Professor Larson states:

             The rule refusing to combine earnings from concurrent
             employments unless they are “similar” or “related” is
             unnecessary from the point of view of statutory construction,
             unsound as a matter of accomplishing the purposes of the
             legislation, inhumane from the point of view of the claimant,
             and logically absurd as to the distinctions on which it is based.

Larson, supra ¶ 5, at § 93.03[1][c].

                                         -11-
#27170

                                     Conclusion

[¶17.]       The definition of “earnings” in SDCL 62-1-1(6) is ambiguous. We,

therefore, interpret “earnings” in Wheeler’s favor. Because “earnings” is utilized to

calculate a worker’s AWW, we hold that SDCL 62-4-24, SDCL 62-4-25, and SDCL

62-4-26 allow for the aggregation of wages when an injury at one employment

renders the worker incapable of performing that employee’s other concurrently held

employments. We also adopt the “growing minority rule” concerning aggregation.

Consequently, we reverse the ALJ and the circuit court.

[¶18.]       ZINTER, SEVERSON, WILBUR, and KERN, Justices, concur.

                                         -12-