PROVIDENCE WASHINGTON INS. CO. v. GRANT

OPINION

MOORE, Justice.

This case involves a dispute over the method used by the Alaska Workers' Compensation Board [hereinafter "board"] to compute Virgil Grant's permanent partial disability benefits under the Alaska Workers' Compensation Act.1 Virgil Grant has been a structural painter and sandblaster for the last thirty years. On February 23, 1980, while working for Hamilton Painting [hereinafter "employer"], Grant fell more than thirty feet from a ladder, injuring his back, knee, ankle and ribs. On May 5, 1981 Grant's physician, Dr. Linder, released Grant to return to work, provided that his work did not require lifting more than 30 pounds or require repeated bending or stooping. Aside from a short return to Hamilton Painting, the only employment Grant held between the date he was injured and April 23, 1982, the date of the board's second ruling on Grant's case, was a job as an indoor painter on an on-call basis.

The statute used to determine compensation for permanent partial disability is AS 23.30.190. When Grant's case went before the board2 AS 23.30.190 provided in part:

On December 11, 1981, the board issued an order determining Grant's entitlement under the Alaska Workers' Compensation Act. The board found that Grant could not return to his previous occupation and was entitled to permanent partial disability benefits beginning October 30, 1981.3 The board ordered the employer to pay Grant an interlocutory award of $74.79 per week and invited the parties to petition for a modification of the order when information that more accurately determined Grant's loss of earning capacity became available.

On December 17, 1981, Grant petitioned the board for a redetermination of the December 11, 1981 order of permanent partial disability. He argued that under the workers' compensation statute he was entitled to separate awards for his back, knee and foot injuries. The board agreed and ordered weekly payments of $373.78 for Grant's knee disability and $373.78 for his foot disability, until the respective sums of $6,048 and $2,870 had been paid. The award for the foot disability was to begin when the award for the knee disability ended. The knee and foot disability awards were based on Dr. Linder's November 20, 1981 report that Grant suffered a 10% impairment to his foot and a 15% impairment to his knee.4

The board found that Grant's back disability was an unscheduled disability compensable under AS 23.30.190(a)(20), which then provided that "in all other cases ... the compensation is 66 2/3 per cent of the difference between his average weekly wages and his wage-earning capacity after the injury... ." The board found that Grant was employable but that he had not made all reasonable efforts to find employment, and stated that it could not evaluate Grant's loss of earning capacity until Grant had a more complete history of post-injury earnings.5 The board then multiplied Grant's compensation rate of $373.78 weekly by the 15% impairment to Grant's back to compute an interlocutory award of $56.07 weekly for the back injury.6 The parties were invited to request another hearing on the award for the back injury when more information on Grant's loss of earning capacity became available. Grant's employer appealed the board's order to the superior court and that court affirmed the order.

I. COMPENSATION FOR SCHEDULED OR UNSCHEDULED INJURIES

On appeal to this court, the employer argues that the approach taken by the board constitutes a double recovery for Grant. The basis of this argument is that Grant was separately awarded compensation for the scheduled disabilities of his knee and foot under AS 23.30.190(a)(2) and (4), respectively, and that his loss of earning capacity resulting from these scheduled injuries was also incorporated into the award for the unscheduled injury of his back, because that award is determined by the employee's loss of earning capacity under AS 23.30.190(a)(20). The employer argues that, if an employee has both an unscheduled disability and a scheduled disability, there should not be a separate award for the scheduled disability under AS 23.30.190(a)(1)-(19), but rather the scheduled disability should be compensated under AS 23.30.190(a)(20), because this section awards benefits according to the employee's loss of earning capacity resulting from all disabilities.

We disagree with the employer's interpretation of the statute. AS 23.30.190(a)(1)-(19) provides for specific amounts of compensation for specific disabilities, such as the loss of body members, digits, hearing and vision. An employee is not required to show loss of earning capacity resulting from a scheduled disability. Bignell v. Wise Mechanical Contractors, 651 P.2d 1163, 1167 (Alaska 1982). In contrast, an employee's compensation for unscheduled injuries under AS 23.30.190(a)(20) is based on the employee's loss of wage-earning capacity. This distinction is the result of a legislative judgment that when a scheduled injury occurs there is usually a corresponding loss of earning capacity,7 and that the objectives behind the Workers' Compensation Act are achieved more efficiently if the employee is not required to show this loss of earning capacity.8 It would abrogate this distinction to hold that whenever an employee has an unscheduled injury coupled with a scheduled injury, the claimant loses the entitlements of AS 23.30.190(a)(1)-(19) for the scheduled injury and is limited to those of AS 23.30.190(a)(20).

We hold that the board properly found that Grant was entitled to compensation under AS 23.30.190(a)(2), (4) and (20) because of the disabilities to his knee, foot and back. We recognize that this approach could result in a double recovery if the loss of earning capacity resulting from the scheduled injuries were used to determine the employee's compensation for an unscheduled disability. To avoid this, when awarding the claimant for an unscheduled injury, the board must attempt to separate the loss of earning capacity resulting from scheduled disabilities from the loss of earning capacity resulting from the unscheduled injury.

In the case at bar, the board made an interlocutory award for the unscheduled disability because it did not have sufficient information at that time to accurately determine Grant's loss of wage-earning capacity. The board found that, based on Dr. Linder's ratings, Grant suffered a 15% impairment of his back. The board then based Grant's interlocutory award on the 15% impairment of his back. When the board makes its final determination of the compensation due Grant for his back injury, it should isolate his loss of earning capacity resulting from his back injury. Grant's award under AS 23.30.190(a)(20) should then be computed on the basis of the loss of earning capacity resulting from his back disability and not his foot or knee disabilities. The board may compensate Grant for his back injury based on the total loss of earning capacity resulting from his fall only if the board finds that his loss of earning capacity resulting from his foot or knee disabilities cannot be severed from his loss of earning capacity resulting from his back injury.9 Thus, in such a situation, Grant would be entitled to an award based on his total loss of earning capacity resulting from his fall plus an award for his scheduled injuries.

II. FORMULA FOR DETERMINING COMPENSATION

In Cesar v. Alaska Workmen's Compensation Board, 383 P.2d 805 (Alaska 1963), the claimant lost one-half of his thumb in the course of his employment. The scheduled award for the loss of a thumb at that time was fifty-one weeks of compensation, not to exceed a total of $1,800. The claimant argued that the formula that should be used to determine his compensation should be 65%10 of his average weekly wage multiplied by one-half of 51 weeks, not to exceed the $1,800 limit imposed by statute. This court held that since the claimant lost half of his thumb he was entitled to only one-half of the compensation that an employee would receive for losing an entire thumb, and that the maximum amount that could be collected was one-half of what it would be for the loss of an entire thumb.11 383 P.2d at 805.

In awarding for Grant's knee and foot injuries the board took 66 2/3% of Grant's average weekly wage of $560.64 to arrive at a compensation rate of $373.78 weekly. The board then multiplied this figure by the impairment percentages of 15% and 10% for the knee and foot, respectively, and by the number of weeks of compensation allowed for each injury under AS 23.30.190(a)(2) and (4). Under this formula Grant would be entitled to $13,904.62 for his knee disability and $6,466.39 for his foot disability. The board then multiplied the impairment percentages for Grant's knee and foot injuries by the maximum amounts of $40,320 and $28,700 allowed in AS 23.30.190(a)(2) and (4), respectively. This calculation yielded $6,048 for Grant's leg injury and $2,870 for his foot injury. Under the direction of Cesar the board awarded Grant compensation according to this latter formula because it produced the smallest award.

On cross-appeal Grant urges us to overrule Cesar. We agree that the results compelled by Cesar are contrary to the plain meaning of and policies behind AS 23.30.190. The provisions for scheduled disabilities dictate the number of weeks by which the compensation rate should be multiplied to compute the total compensation due an employee. These subsections also state the maximum amount that can be awarded for the scheduled injury. For example, AS 23.30.190(a)(2) provides: "leg lost, 248 weeks compensation, not to exceed $40,320... ." The plain language of this provision does not require that the maximum amount recoverable be multiplied by the percentage of impairment to the body member or function. Instead, it states the maximum amount recoverable under the subsection without referring to the percentage of impairment.

Overruling Cesar is consistent with the policies behind the Workers' Compensation Act. The purpose of the Act is to award benefits to the victims of work-related injuries regardless of fault. Arctic Structures, Inc. v. Wedmore, 605 P.2d 426 (Alaska 1979). Realizing that uncertainty and hardship would result from unlimited liability, the legislature established absolute limits on employers' liability under the Act. By establishing a maximum award of $40,320 for a leg disability, the legislature intended to assure employers that their liability under AS 23.30.190(a)(2) would never exceed $40,320. To follow Cesar and require that the maximum awards be pro-rated according to the employee's percentage of impairment to the body member or function would not further the policy of placing absolute limits on an employer's liability under the Act. Instead, such a requirement undermines the legislative policy, embodied in AS 23.30.190(a)(1)-(19), to award no more than specific amounts for specific disabilities, because the Cesar approach frequently requires that a claimant's award be reduced.12

In overruling Cesar, we are aware that the legislature has not amended the statute to displace the construction Cesar gave to it. Although AS 23.30.190 has been amended several times,13 none of the amendments has addressed this problem. We do not, however, believe that the legislature's silence indicates approval of the Cesar rule. Nor are we faced with a comprehensive revision and re-enactment of the statute that might raise a presumption of legislative approval.

As Mr. Justice Frankfurter observed many years ago,

Helvering v. Hallock, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 612-13 (1940) (footnotes omitted). We have found no references to the problem Cesar addressed in the legislative history of the statute's original enactment and its later amendments. Legislative inaction frequently indicates unawareness, preoccupation or paralysis.14 We decline to attribute significance to the legislature's mere inaction.15

The legislature has never undertaken a comprehensive revision of AS 23.30.190. Each time the statute has been amended, the amendments have been specific and limited, and the statute's general form has remained the same.16 No single amendment has constituted a "re-enactment" of AS 23.30.190. "Whatever may be the scope of the doctrine that re-enactment of a statute impliedly enacts a settled judicial construction placed upon the re-enacted statute, that doctrine has no relevance to the present problem." Helvering v. Hallock, 309 U.S. 106 at 121 n. 8, 60 S.Ct. at 452 n. 8, 84 L.Ed. 604 at 613 (1940). Thus we hold that the legislature has not implicitly forbidden us to re-examine a decision we now believe erroneous.

III. ATTORNEY'S FEES

In the first order of the board, issued December 1981, the employer was ordered to pay attorney's fees of $400 in the permanent partial disability award pursuant to AS 23.30.145(b).17 In its April 1982 order the board found that the employer had controverted Grant's claim and ordered the payment of his attorney's fees pursuant to the statutory minimum of AS 23.30.145(a).18 In February 1982, the superior court entered an order granting additional attorney's fees to Grant in the amount of $1,937.50 for his successful appellate work.19

The employer mistakenly argues that the superior court's award of attorney's fees20 should be overturned due to its alleged nonconformity with Appellate Rule 508. In McShea v. State of Alaska, 685 P.2d 1242 (Alaska 1984), we held that AS 23.30.145(c) controls the role of the superior court in determining attorney's fees in workers' compensation appeals. Accordingly, we affirm the superior court's award.

The employer further argues that the board's April 1982 award of attorney's fees under AS 23.30.145(a) was improper because it should have been reduced by the board's December 1981 award of $400 in attorney's fees under AS 23.30.145(b). We disagree. The $400 award under AS 23.30.145(b) was made for the distinct purpose of restarting benefits that the employer had stopped. It was not merely a first installment on the later award made under AS 23.30.145(a). Consequently, we also affirm on this issue.

AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent with this opinion.