This appeal presents significant challenges to the constitutionality of Maryland Code (1957, 1964 Repl. Vol., 1972 Cum. Supp.), Art. 101, § 33, which reduces the workmen's compensation award of a public employee if he also receives benefits under his employer's pension plan. The Court of Special Appeals, in Mazor v. Dep't of Correction, 30 Md.App. 394, 352 A.2d 918 (1976), interpreted the statute to apply to the facts presented by this case and further held that the statute was constitutional. We then granted Mazor's petition for a writ of certiorari and, since we agree with the Court of Special Appeals, we shall affirm.
The facts are simple and undisputed. On July 17, 1972, appellant, Donald Louis Mazor, then a 50-year old penitentiary guard who had been employed by the Department of Correction for more than six years, suffered severe injuries when he was stabbed and beaten during an incident at the House of Correction. Unable to return to work, Mazor retired on September 1, 1973.
As a condition to employment with the state, Mazor had become a member of the Employees' Retirement System of the State of Maryland. Code (1957, 1970 Repl. Vol., 1972 Cum. Supp.), Art. 73B, §§ 1-3. Consequently, a contribution towards an annuity had been regularly deducted from his salary, while the Department of Correction for its part had contributed to a separate pension fund. Art. 73B, § 14. Having determined that Mazor was totally and permanently incapacitated for duty as a result of his injury, the retirement system awarded him, effective upon his retirement, an accidental disability pension of $421.59 and an annuity of $26.75, for a total of $448.34 per month or $5,380.08 per year. Art. 73B, § 11 (6).
Mazor was also eligible for benefits under the workmen's compensation laws in the event he sustained injury in the course of his employment. Art. 101, §§ 21, 36. Workmen's compensation benefits are supported exclusively by the employer, not by the employee. Art. 101, §§ 15, 16, 51. If the employer carries insurance with the State Accident Fund, as
In its October 1974 ruling, the Commission determined that Mazor's pension benefits were equal to or better than those provided under the workmen's compensation law, but rejected the contention that the insurer, as distinguished from the employer, was entitled to a discharge. Consequently, the Commission did not reach the last two issues. Rather, it found that Mazor suffered a permanent 60% disability solely as a result of the 1972 incident, and therefore awarded him $65 a week or $3,380 per year, not to exceed $26,000. Art. 101, § 36 (4), (4a).
The employer and insurer appealed the decision of the Commission to the Circuit Court for Baltimore County. After the case was removed to Harford County for trial, they moved for summary judgment. In granting the motion, the court (Close, J.) held that the insurer, as well as the employer, was entitled to a discharge of his obligation; that § 33 was not limited to death cases; and that the statute did
Because Mazor has conceded here that the benefits he receives from his disability pension are equal to or better than any benefits he could receive from workmen's compensation,
As we have so often said, the cardinal rule of construction of a statute is to ascertain and carry out the real intention of the Legislature. State v. Fabritz, 276 Md. 416, 421, 348 A.2d 275 (1975); Fairchild v. Maritime Air Serv., 274 Md. 181, 185, 333 A.2d 313 (1975); Purifoy v. Merc.-Safe Dep. & Trust, 273 Md. 58, 65, 327 A.2d 483 (1974). The primary source from which we glean this intention is the language of the statute itself. State v. Fabritz, 276 Md. at 421. And in construing a statute we accord the words their ordinary and natural signification. Bright v. Unsat. C. & J. Fund Bd., 275 Md. 165, 169, 338 A.2d 248 (1975); Md.-Nat'l Cap. P. & P. v. Rockville, 272 Md. 550, 556, 325 A.2d 748 (1974); Grosvenor v. Supervisor of Assess., 271 Md. 232, 237-38, 315 A.2d 758 (1974). If reasonably possible, a statute is to be read so that no word, phrase, clause or sentence is rendered surplusage or meaningless. Prince George's Co. v. White, 275 Md. 314,
Applying these principles, we conclude that § 33 not only provides for discharge of employers, but also applies in the same manner to insurers. Mazor recognizes that "when the Legislature by statute authorized employers to contract with insurance companies in order to cover possible claims under Article 101 it intended the insurance carrier to stand in the position of the employer." Flood v. Merchants Ins. Co., 230 Md. 373, 377, 187 A.2d 320 (1963). In an attempt to avoid application of this rule, Mazor contends that only by express provision may his benefits be reduced. He recognizes, however, that § 33 does discharge an employer's obligation. To adopt Mazor's interpretation here, then, would produce an anomalous consequence, whereby the insurer conceivably would pay benefits to the employee without receiving premiums from the employer. For the same reason, the effect of such an interpretation on self-insured employers, see Art. 101, § 16 (3), would differ from that on employers who are not self-insured. By interpreting the statute to discharge also the obligation of insurers, we avoid such "absurd consequences." Fairchild v. Maritime Air. Serv., 274 Md. at 186.
The gist of Mazor's second argument is that § 33 applies only where the injury results in the employee's death. To sustain this position, as we understand it, he would have us parse the first sentence in this manner:
Appellees, on the other hand, contend that the sentence should be read quite differently:
We agree with appellees' interpretation and believe that the statute is clear and unambiguous on its face, thus obviating the necessity of referring to any legislative history. Cf. Blumenthal v. Clerk of Cir. Ct., 278 Md. at 403 (ambiguity found). To agree with Mazor's position would require us to read this portion of § 33 as a grammatically incorrect English sentence whereby the phrase, "the dependents and others entitled to benefits under this article as a result of the death of such employees," would have absolutely no structural function. As a corollary of the rule that we accord words their ordinary meaning, we must accord sentences an ordinary grammatical structure. In
We regard as persuasive the decision of the Court of Special Appeals in Nooe v. City of Baltimore, 28 Md.App. 348, 345 A.2d 134 (1975), cert. denied, 276 Md. 748 (1976), where it considered the identical question presented here. There, the court also held that death of the employee is not a condition precedent to the discharge of the employer's obligation to provide workmen's compensation benefits. As the court in Nooe aptly recognized, adoption of the employee's position would lead to consequences not intended by the Legislature: the rights of widows and orphans of a deceased employee would be severely restricted, while an employee who sustained relatively minor injuries resulting in a disability pension award would be entitled to double benefits. Id. at 356.
Our holding recognizes that workmen's compensation is one facet of an overall system of wage-loss protection, and that the underlying principle of the system is to restore to the worker a portion of wages lost by physical disability, unemployment, or old age. It follows that although two or more causes of wage loss may coincide, the benefits need not cumulate, for the worker experiences but one wage loss. 4 Larson, Law of Workmen's Compensation §§ 97.00, 97.10 (1976).
A majority of American jurisdictions provide some form of setoff in the area of wage-loss legislation. 4 Larson, supra, § 97.20; cf. Social Security Act § 224, 42 U.S.C. 424a (1970) (reduction of Social Security benefits where individual is entitled to workmen's compensation). The cases cited by Mazor for the proposition that one may receive full workmen's compensation benefits while receiving other disability payments are distinguishable because all of the cases involved a meshing of federal and state programs.
Secondly, Mazor contends that even if we interpret the statute as discharging the obligation of the employer and insurer to provide him with workmen's compensation benefits, the statute violates several of his constitutional rights. Since the protection afforded by some of these rights overlaps, we need not treat all of them separately. We hold, however, that the statute infringes on none of his rights and is thus constitutional.
We turn first to Mazor's contentions that the statute deprives him of property without just compensation in contravention of Art. III, § 40 of the Maryland Constitution, and without due process of law contrary to both Art. 23 of the Maryland Declaration of Rights and the Fourteenth Amendment of the Federal Constitution. The due process violation, Mazor claims, lies not in the procedures employed, but in the substantive effect of the statute. Manifestly, these contentions are one and the same, since "the Fourteenth Amendment, Art. 23 of the Maryland Declaration of Rights, and Art. 3, Sec. 40 of the Maryland Constitution have ... the same meaning and effect in reference to an exaction of property...." Allied American Co. v. Comm'r, 219 Md. 607, 615-16, 150 A.2d 421 (1959) (citation omitted).
Because the workmen's compensation laws protect workers and their families from the hardships inflicted by work-related injuries, they represent an exercise of the
Inclusion of public employees within the coverage of workmen's compensation, as provided in § 21 (a) (2), is manifestly a legitimate exercise of the police power because the legislation generally promotes the welfare of the citizens of Maryland. Absent constitutional infirmities, however, there is no requirement that the Legislature include all public employees within the coverage of those laws. The question, then, given inclusion of public employees within the coverage of Article 101, is whether the Legislature may restrict the circumstances in which an employee may receive benefits.
We believe that the General Assembly does possess that power. First, the Legislature could rationally have determined that since an employee suffers only one wage loss, he should receive the equivalent of only one disability benefit. As a corollary, the Legislature may have concluded that permitting a disabled employee to receive the full amount of both workmen's compensation and pension benefits would not promote the public welfare sufficiently to merit its authorization.
Secondly, with an eye to budgetary constraints, the General Assembly may have found that only a limited amount of funds were available for wage-loss programs, and, therefore, that permitting some persons to recover "double" benefits would reduce the benefits others would receive. Consequently, the Legislature may have concluded that prohibiting "double" recovery would result in a fairer
Viewed in terms of the property interest at stake,
We hold, therefore, that there was no such taking of private property without just compensation as would violate either the federal or state constitutions.
Mazor contends further that § 33 deprives him of equal protection of the laws as guaranteed by the Fourteenth Amendment. "A statutory classification in the area of social welfare is consistent with the Equal Protection Clause ... if it is `rationally based and free from invidious discrimination.' [Dandridge v. Williams, 397 U.S. at 487]." Richardson v. Belcher, 404 U.S. at 81. Since the Legislature is presumed to have acted within its constitutional limits, the constitutionality of the statute will be presumed unless a clear and convincing showing by the party assailing the legislative classification establishes that it neither bears a rational relationship to a legitimate state purpose nor rests upon some ground of difference having a fair and substantial relation to the object of the legislation, but rather that it is essentially arbitrary. Davidson v. Miller, 276 Md. 54, 70, 79, 344 A.2d 422 (1975); Aero Motors v. Adm'r, M.V.A., 274 Md. 567, 576-77, 337 A.2d 685 (1975); Matter of Trader, 272 Md. 364, 400, 325 A.2d 398 (1974); Md. St. Bd. of Barber Ex. v. Kuhn, 270 Md. at 507; Adm'r Motor Veh. Adm. v. Vogt, 267 Md. 660, 677, 299 A.2d 1 (1973).
What we have said in disposing of the Due Process Clause issue is applicable here to demonstrate that a rational basis for the statute exists. See Md. St. Bd. of Barber Ex. v. Kuhn, 270 Md. at 512. Mazor asserts, within the context of the traditional equal protection standard, that the statute arbitrarily discriminates against him in two respects, but in our view the statute is free from any invidious discrimination. Noting that § 33 reduces or discharges the workmen's compensation obligations of only those employers enumerated in § 21 (a) (2), Mazor contends that "public employees," but not "private employees," suffer the hardship of reduction of workmen's compensation benefits. This distinction alone, however, does not establish an invidious classification. To the contrary, the statute simply reflects the differences that do exist between public and private employees. Just as the Legislature may regulate the terms and conditions, for example, of the hiring, the duties, the pay and the promotion and discharge of public
Even where a pension plan in private industry is not subject to state regulation, it may nonetheless provide for reduction or discharge of the employer's obligation in the event the employee receives workmen's compensation. Indeed, many employment contracts so provide, 4 Larson, supra, § 97.51, or provide for supplementation of statutory benefits. Id. at §§ 97.52-.54. Thus, the ostensible discrimination created by the statute may not exist in fact. That the Legislature chose to reduce public employees' workmen's compensation benefits rather than their pension benefits may simply reflect an analysis of anticipated costs or administrative problems.
In further support of his equal protection claim, Mazor contends that § 33 treats some public employees differently from others. The first paragraph of the section, as applicable to this case, provided:
Members of the militia, says Mazor, are not subject to setoff against their state pension, only their federal benefits. In our view, this interpretation of this provision is incorrect. The statute clearly states that members of the militia are employees "within the meaning of this section." (Emphasis
The proviso in the paragraph in question does, of course, establish an offset, but only where the federal benefits are equal to or better than those provided by workmen's compensation. And therefore, before it was amended by Chapter 762, Laws of 1976, see Art. 101, § 33 (a), the offset established by this paragraph may well have permitted receipt of both workmen's compensation and federal benefits if the latter were not equal to or better than the former. See Montgomery County v. Kaponin, 237 Md. 112, 205 A.2d 292 (1964). Far from being arbitrary, however, this distinction, when made, stemmed from the unique circumstances and hazards of military employment. Significantly, the members of the militia may in an emergency be ordered into the active military service of the United States. Code (1957, 1972 Repl. Vol.) Art. 65, § 41. To the extent, therefore, that the statute permitted "double" recovery, it may have reflected the State's awareness of the services rendered to the State in time of need. Cf. Johnson v. Robison, 415 U.S. 361, 94 S.Ct. 1160, 39 L.Ed.2d 389 (1974) (conscientious objectors assigned to alternative civilian service may be excluded from certain veteran's education benefits offered for military service).
Finally, Mazor urges that § 33 impairs an obligation of contract in violation of Art. I, § 10 of the Federal Constitution. To sustain this argument, Mazor advances the contention that Art. 73B, § 16 establishes payment of the pension as a contractual obligation of the State; and that it is no answer to say that he would receive the full pension benefits, since it is equally improper to reduce his workmen's compensation benefits by applying his pension entitlement. With equal vigor, appellees contend that no contractual obligation exists, relying for their position on Richardson v. Belcher, 404 U.S. 78, in which the Supreme Court held that the obligations of the federal government to pay social security disability benefits may be discharged by payment to the employee of workmen's compensation
The only authority which Mazor cites for his contention that his contract rights are impaired regardless of which benefit is reduced is City of Lincoln v. Steffensmeyer, 134 Neb. 613, 279 N.W. 272, 274-75 (1938). The court there held that the Nebraska statute did not prohibit Steffensmeyer from receiving both workmen's compensation benefits and a fireman's pension, and that therefore the order in which he applied for benefits was of no consequence. Quite obviously, Steffensmeyer cannot stand for the proposition that it is immaterial to which benefit a reduction is applied.
In our view, the statute here clearly indicates that it is the workmen's compensation benefits which are to be reduced. Although both the pension and the workmen's compensation programs spring from the same purpose, to protect workers against the hardships of wage loss, the similarity ends there. The terms and conditions of eligibility for the benefits and awards differ widely between the two programs. Indeed, enactment of § 33 may have been a legislative response to our decision in Montgomery County v. Kaponin, 237 Md. 112. See Nooe v. City of Baltimore, 28 Md. App. at 350-52. In any event, it is manifest to us that reduction of workmen's compensation on the basis that a worker is receiving pension benefits is not equivalent to reduction of the pension itself. In sum, since there has been no reduction of Mazor's pension, there has been no impairment of a state obligation.
Judgment affirmed; appellant to pay costs.
Art. 101, § 21 (a) (2) subjects these employers to the provisions of the workmen's compensation laws: