Saunders v. MacBride Dunham
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MAINE SUPREME JUDICIAL COURT				Reporter of Decisions
Decision:	1998 ME 72
Docket:	WCB-96-762
Argued:	February 3, 1998
Decided:	April 6, 1998	

Panel:  WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN,  LIPEZ, and SAUFLEY, JJ.

FREEMAN SAUNDERS

v.

MacBRIDE DUNHAM MANAGEMENT

and

HANOVER INSURANCE CO.

LIPEZ, J.

	[¶1]  The employee, Freeman Saunders, appeals from a decision of the
Workers' Compensation Board denying the employer's petition for review
and awarding continuing partial benefits based on the difference between
his 1990 average weekly wage and his post-injury wages in 1997.  39
M.R.S.A. § 55-B (Supp. 1990), repealed and replaced by P.L. 1991, ch. 615,
§ D-7.  Saunders contends that to compute his loss of earning capacity
accurately, the Board should have used the Board's inflation multipliers to
"deflate" his 1997 earnings in terms of 1990 dollars.  We disagree and
affirm the decision of the Board.

I.

	[¶2]  Saunders suffered a work-related injury on August 2, 1990 while
employed by MacBride Dunham Management.  His average weekly wage at
the time of the injury was $422.70.  MacBride accepted the injury and paid
Saunders varying rates benefits until September 1992, when the parties
agreed to a fixed level of partial benefits in the amount of $252.  MacBride
filed a petition for review in 1993 seeking to reduce benefits, contending
that the employee's work related incapacity had ended.  The parties
stipulated that Saunders earned $240 in his post-injury employment at the
time of the hearing.  Applying the Board's inflation multipliers, Saunders
contended that his post-injury earnings, deflated for inflation, would be
$197.19 as expressed in 1990 dollars and would result in an earning
incapacity of 53%.  The Board denied the employer's petition and awarded
continuing partial benefits, but rejected the employee's computation of
earning incapacity.  Comparing his pre-injury wages, unadjusted for inflation,
with his stipulated post-injury earnings, the Board arrived at a 43% earning
incapacity.  The Board denied the employee's motion for findings of fact,
and we granted his petition for appellate review pursuant to 39-A M.R.S.A.
§ 322 (Supp. 1997).

II.

	[¶3]  Pursuant to former section 55-B, applicable to the 1990 injury,
benefits are calculated as two-thirds of the difference between the
employee's pre-injury average weekly wage and what the employee is "able
to earn" after the injury.  39 M.R.S.A. § 55-B (Supp. 1990), repealed and
replaced by P.L. 1991, ch. 615, § D-7.  Although we have stated that an
employee's actual wages after an injury are prima facie evidence of the
employee's post-injury earning capacity, Fecteau v. Rich Vale Constr., Inc.,
349 A.2d 162, 165 (Me. 1975), post-injury earnings are not dispositive.  In
Severy v. S.D. Warren Co., 402 A.2d 53, 55 (Me. 1979), we cited Professor
Larson's treatise, 1C A. Larson, The Law of Workmen's Compensation,
§ 57.21 (1993), for the principle that "the mere fact, standing alone, that
the employee is earning the same after the injury as he did before will not
bar an award for partial disability."  Saunders now relies on section 57.21(d)
of Larson's treatise to contend that the effects of inflation must be
discounted in determining post-injury earning capacity.{1}  We have never
held, however, that inflationary factors must be discounted in determining
post-injury earning incapacity, and we expressly declined to address this
issue in Severy because it had not been preserved for appeal.{2}
	[¶4]  Moreover, the Legislature has chosen to address the issue of
inflation by statutory enactment.  Former 39 M.R.S.A. § 55-A (Supp. 1987),
repealed by P.L. 1987, c. 559, Pt. B, § 29, provided for the annual
adjustment of partial benefits according to inflationary (or deflationary)
fluctuations in the state average weekly wage.  This statutory inflation
adjustment was repealed in 1987.  P.L. 1987, ch. 559, Pt. B, §§ 29, 30,
codified as 39 M.R.S.A. § 55-B.  The 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.  
	[¶5]  Saunders contends, however, that he is not strictly seeking an
"inflation adjustment" as that term has been used in the past, but an
adjustment of his post-injury earnings for purposes of arriving at an accurate
estimate of lost earning capacity.  As Saunders contends, the statutory
inflation adjustment was usually applied directly to the employee's partial
benefits and did not affect the initial determination of earning capacity. 
Bernard v. Cives Corp., 395 A.2d 1141, 1148 (Me. 1978).  As the employer
notes, however, in certain circumstances when the employee's post-injury
partial benefits varied from week-to-week, the inflation adjustment was
applied directly to the employee's pre-injury average weekly wage in order
to fairly reflect the effect of inflation on the employee's benefits.  Lagasse v.
Hannaford Bros. Co., 497 A.2d 1112, 1116 (Me. 1985).  The purpose and the
effect of the adjustment in either case was the same-to protect "injured
workers against shrinkage in the value of the dollar caused by inflation,
while simultaneously guaranteeing that during deflationary economic
conditions the entire system would not suffer from inability to make
appropriate adjustments in compensation payments."  Bernard, 395 A.2d at
1148.  
	[¶6]  In 1987, however, the Legislature determined that, in order to
reduce compensation payments generally and to prevent insurance carriers
from withdrawing business from the state, it was necessary to discontinue
the adjustment of partial benefits for inflation.  L.D. 1929, Emergency
Preamble (113th Legis. 1987).  To permit the consideration of inflation in
the determination of earning incapacity on a petition for review would defeat
this legislative purpose and could potentially lead to an unwarranted
increase in the filings of petitions for review by employees seeking such an
adjustment.  
	The entry is:
Decision of the Workers' Compensation Board
affirmed.
Attorney for the Employee:				

James MacAdam, Esq.	      (orally)			
McTEAGUE, HIGBEE, MacADAM,
CASE, WATSON & COHEN
Four Union Park
P.O. Box 5000
Topsham, Maine 04086-5000	

Attorney for the Employer:

Robert Brooks, Esq.            (orally)
VERRILL & DANA
P.O. Box 586
Portland, Maine 04112

FOOTNOTES******************************** {1} Larson states that post-injury developments, such as the "increase in general wage levels since the time of accident; claimant's own greater maturity or training, longer hours worked by claimant after the accident; payment of wages disproportionate to capacity out of sympathy to claimant; and the temporary and unpredictable character of post-injury earnings," tend to inflate an employee's post-injury earnings in relation to that employee's pre-injury wage. Id. (emphasis added). A strict comparison, therefore, between pre- and post- injury wages may not always result in an accurate reflection of an employee's actual loss of earning capacity due to an injury. Id. Larson states that "[o]nly by the elimination of all variables except the injury itself can a reasonably accurate estimate be made of the impairment of earning capacity to be attributed to that injury." Id. {2} We stated: The employee also attacks the Commissioner's decree for failing to take into account the general rise in salaries caused by the inflation which the region, and indeed the country, has experienced since the employee was injured in 1974. This argument holds that with the decline of purchasing power a dollar-for-dollar comparison of the employee's current salary with his salary in 1974 would be extremely misleading. . . . Our examination of the record reveals that the employee did not advance this argument before the Commissioner, [and therefore the issue was not preserved for appeal]. Severy, 402 A.2d at 56.