Allen v. Bath Iron Works
Download as PDF
Back to Opinions page

MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1999 ME 57
Docket:  	WCB-98-304	
Argued:	April 6, 1999
Decided:	April 15, 1999

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.

RICHARD ALLEN

 v. 

BATH IRON WORKS CORPORATION 

ALEXANDER, J.

	[¶1]  The employer, Bath Iron Works Corp., appeals from a decision of
the Workers' Compensation Board granting the employee's petition for
award of an inflation adjustment for partial incapacity benefits.  Partial
incapacity benefits are calculated based on the difference between the
employee's average weekly wage at the time of the injury{1} and the
employee's post-injury earning capacity.  See 39 M.R.S.A. § 55-B (1989),
repealed and replaced by the Maine Workers' Compensation Act of 1992,
P.L. 1991, ch. 885, §§ A-7, A-8.  For injuries after 1987, employees are not
entitled to an annual inflation adjustment of partial incapacity benefits.{2}  The
hearing officer concluded, however, that the employee's average weekly
wage, adjusted for inflation, must be considered when determining the
initial rate of partial benefits, because an adjusted weekly wage had been
previously used for a short-term award of total incapacity benefits.  We
disagree and vacate the decision. 
	[¶2]  The employee, Richard Allen, suffered two work-related back-
injuries.  The first injury occurred in 1991, while Allen was employed at
BIW.  The second injury occurred in 1997, while Allen was employed at
Rugby Builders.  Allen received short-term total benefits during a brief
period of total incapacity following his second injury, and partial benefits in
varying amounts after he returned to part-time employment, based on the
difference between his pre-injury wage and his varying post-injury earnings. 
Allen was subsequently laid off by Rugby Builders for reasons unrelated to his
injury.  Following his lay-off, Allen has received an increase in his benefits to
100% partial, based on his inability to find further post-injury employment. 
See, e.g., Tripp v. Philips Elmet Corp., 676 A.2d 927, 928-29 (Me. 1996).
	[¶3]  In April 1997 the parties concluded a mediation agreement in
which BIW and Rugby Builders agreed to share liability according to a
50%/50% apportionment.  Allen and BIW concluded a second mediation
agreement in July 1997, in which BIW agreed to pay an inflation adjustment
for its proportionate share of total incapacity benefits, but not for partial
benefits.{3}  Following the second mediation, Allen filed a petition for award of
an inflation adjustment, contending that his partial incapacity benefits from
BIW must be based on an adjusted average weekly wage.  The Board granted
Allen's petition, stating: "There is nothing in the language of § 54-B that
could lead the Board to conclude that [inflation adjustments] previously
applied for periods of total should be discarded during periods of partial." 
We granted BIW's petition for appellate review pursuant to 39-A M.R.S.A.    
§ 322 (Supp. 1998).
	[¶4]  Prior to 1987, partially incapacitated employees were entitled to
an annual adjustment of partial benefits to reflect inflationary (or
deflationary) fluctuations in the State average weekly wage.  39 M.R.S.A.      
§ 55-A (Supp. 1987), repealed by P.L. 1987, c. 559, Pt. B, § 29.  In 1987,
the Act was amended to remove the inflation adjustment for partial
incapacity benefits.  P.L. 1987, ch. 559, Pt. B, §§ 29, 30, repealed by P.L.
1991, ch. 885, § A-7.  The 1987 amendments were intended to reduce
workers' compensation costs, generally, and thereby prevent insurance
carriers from withdrawing business from the State.  P.L. 1987, ch. 559,
Emergency Preamble; McDonald v. Rumford Sch. Dist., 609 A.2d 1160,
1161 (Me. 1992).  
	[¶5]  In Saunders v. MacBride Dunham Management, 1998 ME 72, ¶
4, 708 A.2d 1030, 1032, we recently considered whether the effects of
inflation could be taken into account in determining an employee's initial
rate of partial benefits pursuant to section 55-B, notwithstanding the repeal
of the annual inflation adjustment.  In that case, the Board had computed the
employee's partial compensation based on a dollar-for-dollar comparison
between pre- and post-injury wages, without adjusting either wage for the
effects of inflation.  Id. at ¶ 2, 708 A.2d at 1031.  The employee contended
on appeal that, in order to accurately determine his loss of earning capacity,
the Board should have "deflated" his current earnings in 1997 when
comparing those wages with his pre-injury wage in 1990.  Id. at ¶ 3, 708
A.2d at 1031.  We affirmed the Board's decision, stating that "[t]he
enactment of a statutory inflation adjustment for partial incapacity benefits,
and the subsequent repeal of that adjustment, reflects a legislative intent to
remove any consideration of inflation with respect to partial benefits."  Id. at
¶ 4, 708 A.2d at 1032.   
	[¶6]  Our interpretation of section 55-B in Saunders also governs our
result in the present case.  As in Saunders, we conclude that section 55-B's
silence with respect to an inflation adjustment, in light of its history,
reflects a legislative intent to remove consideration of inflation in the
calculation of partial benefits.  We see nothing in the statute or in its
legislative history to suggest that the Legislature intended to treat partially
incapacitated employees with previous periods of total incapacity differently
from partially incapacitated employees without an intervening period of total
incapacity.
	[¶7]  Allen contends, however, that once an employee's pre-injury
wage has been "adjusted" for use in determining total benefits, the
employee is entitled to the application of the "adjusted" wage in the
determination of partial benefits.  We disagree.  Pursuant to former title 39,
the inflation adjustment was ordinarily applied to the amount of
compensation paid to the employee, not to the employee's average weekly
wage.  Saunders, 1998 ME 72, ¶ 5, 708 A.2d at 1032; Lagasse v. Hannaford
Bros. Co., 497 A.2d 1112, 1116-17 (Me. 1985); Bernard v. Cives Corp., 395
A.2d 1141, 1149-52 (Me. 1978).  Indeed, both former sections 54-B and
55-A expressly provided for an adjustment of the employee's "weekly
compensation," not the employee's pre-injury or post-injury wage.  39
M.R.S.A. § 54-B, repealed by P.L. 1991, ch. 885, § A-7; 39 M.R.S.A. § 55-A
(Supp. 1987), repealed by P.L. 1987, ch. 559, Pt. B, § 29.  The only limited
exception that we have recognized to this general rule is the so-called
"Arnold formula," applicable in limited situations when an employee's post-
injury earnings vary significantly from week-to-week.  Lagasse, 497 A.2d at
1116-17.  We, therefore, do not agree with the employee's assertion that
our decision in Lagasse stands for the proposition that an adjustment of the
employee's pre-injury wage is required in all cases of total or partial
incapacity pursuant to former title 39.
	[¶8] The fact that the employee received an inflation adjustment to
his short-term award of total incapacity benefits has no effect on the
calculation of his partial incapacity benefits.  Allen was not entitled to
receive an inflation adjustment to his partial incapacity benefits, and the
hearing officer erred in concluding otherwise.
	The entry is:
The decision of the Workers' Compensation
Board is vacated.  Remanded to the Workers'
Compensation Board for further proceedings
consistent with this decision.
Attorney for employee:

Jeffrey L. Cohen, Esq., (orally)
McTeague, Higbee, MacAdam, Case, Watson & Cohen, P.A.
P O Box 5000
Topsham, ME 04086-5000

Attorney for employee:

Stephen W. Moriarty, Esq.
Norman, Hanson & DeTroy, LLC
P O Box 4600
Portland, ME 04112-46000

FOOTNOTES******************************** {1} 1. The term "average weekly wage" is defined at 39-A M.R.S.A. § 102(4) (Supp. 1998). See Beaulieu v. Maine Medical Ctr., 675 A.2d 110, 111-12 (Me. 1996) (definition of average weekly wage applies retroactively to pre-1993 injuries). {2} 2. 39 M.R.S.A. § 55-B provides, in pertinent part: While the incapacity for work resulting from the injury is partial, the employer shall pay the injured employee a weekly compensation equal to 2/3 the difference, due to the injury, between his average gross weekly wages, earnings or salary before the injury and the weekly wages, earnings or salary which he is able to earn after the injury . . . . . . . . 39 M.R.S.A. § 55-B, repealed by P.L. 1991, ch. 885, § A-7. {3} 3. The law at the time of Allen's 1991 injury expressly provided an inflation adjustment for total incapacity compensation after a three-year waiting period. Former section 54-B provides, in pertinent part: While the incapacity for work resulting from the injury is total, the employer shall pay the injured employee a weekly compensation equal to 2/3 his average gross weekly wages, earnings or salary, but not more than the maximum benefit under section 53-B, nor less than $25 weekly. 1. Annual adjustment. Beginning on the 3rd anniversary of the injury, weekly compensation under this section shall be adjusted annually. The adjustment shall be equal to the lesser of the actual percentage increase or decrease in the state average weekly wages, as computed by the Bureau of Employment Security, for the previous year or 5%. The annual adjustment shall be made on the 3rd and each succeeding anniversary date of the injury . . . . . . . . 39 M.R.S.A. § 54-B, repealed by P.L. 1991, ch. 885, § A-7.