UTLEY S. KRONENBERG v. H.C. PRICE COMPANY

ALASKA WORKERS' COMPENSATION BOARD

P.O. Box 25512 Juneau, Alaska 99802-5512

UTLEY S. KRONENBERG,
Employee,
Applicant
v.
H.C. PRICE COMPANY,
Employer,
and
ALASKA NATIONAL INS. CO.,
Insurer,
Defendants. / )
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AWCB Case No. 199626920
AWCB Decision No. 99-0228
Filed with AWCB Fairbanks, Alaska
On November 9 , 1999

This claim for a compensation rate adjustment and temporary total disability (TTD) benefits, interest, penalties was heard at Fairbanks, Alaska on September 23, 1999. The employee represented himself; attorney Michael McConahy represented the defendants. The record was held open to review copies of tax and other payroll records and closed when we next met, on October 14, 1999.

Issues

1.  Whether the employee is due a compensation rate adjustment.

2.  Whether the employee is due temporary total disability (TTD) benefits from June 2, 1998 until September 18, 1998.

Factual and Procedural Background

The employee injured his shoulder while using bolt cutters on heavy electric wire on October 8, 1996, while working in his capacity as an electrician for the employer on the Healy Clean Coal Project (Healy project). He continued to work until he was laid off February 5, 1999.

The employee underwent a magnetic resonance imaging (MRI) scan in January 1997, which revealed a partial thickness rotator cuff tear. He underwent surgery for acromioplasty on May 5, 1997.

The defendants accepted the claim and paid temporary total disability (TTD) benefits at a rate of $110.00 per week. Upon receipt of tax returns and additional information, the defendants increased the compensation rate to $271.16 and then to $326.85 under AS 23.30.220(a)(6).

The employee argues that his compensation rate should be calculated according to 28.30.220(a)(4)(B). The defendants contend the employee's compensation rate was correctly calculated according to 28.30.220(a)(6).

Arguments
In support of its conclusion the employee’s rate is presently calculated correctly, the defendants assert the employee’s reported farm losses were correctly taken into account. In computing the employee’s compensation rate, the defendants provided the employee the benefit of depreciation related to his self employment farm income, in accord with Pioneer Construction v. Conlon, 780 P.2d 995 (Alaska 1989). As mentioned, his compensation rate was increased, from $110 to $271.16 to $326.85 upon receipt of earning information and depreciation information respectively. (See compensation reports of March 12, 1997, March 18, 1997, April 9, 1997, and May 6, 1997.)

It is undisputed that the employee is a seasonal worker. In his April 22, 1999 Application for Adjustment of Claim, the employee stated under Item 25: “Employee was a seasonal or temporary worker.” The employee also testified that his local union is in Minnesota and that he was working in Alaska as a “traveler.” Further, the employee signed a termination notice on February 5, 1997 saying the reason for his termination was a layoff/reduction in force. At hearing, however, the employee testified he was terminated for “political” reasons concerning a dispute between his supervisor and management over his injury-related work restrictions. He said in signing the termination notice he was following standard practice of signing such documents in a spirit of cooperation and to maintain good will within the industry.

The employee’s compensation rate was calculated per item 12 (g) of the Division’s Compensation Report Form 07-6104b: “Seasonal/Temporary = earnings in calendar year immediately preceding date of injury ÷ 50 = $508.58 gross weekly wage.” Anticipating that we would consider applying a “fairness” test in this case, the defendants presented the testimony of Don Neff, foreman of the project. Neff testified concerning the sequence and order of hires and lay offs for the job in question. His affidavit refers to a portion of Schedule A of the Project Labor Agreement and states, in part, as follows:

2. I was the electrical supervisor for HC Price on the Healy Clean Coal Project and, as such, I was familiar with the Project Labor Agreement and related the Schedule A agreement that applied to the union electricians and how electricians were hired and laid off. A copy of the cover of the Inside Agreement and pertinent two pages that applied to electricians on that job is attached as Exhibit 1 to this affidavit.

3. The project utilized union electricians under the Project Labor Agreement and Schedule A. Issues not addressed under the Project Labor Agreement were addressed by Schedule A. The sequence of the hiring and the lay off of electricians is one of the issues addressed by Schedule A.

4. The need for electricians varied according to the progress of the project.

5. There were different categories of union members that were dispatched to our job. “Group 2” hands are union members who do not belong to the Alaska Local IBEW 1547. The Schedule A contract mandates a particular hiring order, with Group 2 workers only being hired after Group 1 workers have been hired, and that Group 2 workers be laid off before Group 1 workers, unless they had a special skill that would exempt them from this procedure. If there was any slow down of work that required a reduction in force, the Group 2 workers were the first to be laid off.

6. Utley Kronenberg was a Group 2 hand and did not have any special skills that would exempt him from the sequence of a lay off set out in Schedule A..

7. We started hiring out electricians in April of 1995 and most were laid off in the fall of 1995 with a minimal crew kept on through the winter. Due to the nature of the project, electricians were hired thereafter as the demand necessitated and as the work peaked. As the project ebbed we laid people off according to the terms of Schedule A.

8. Mr. Kronenberg was laid off on February 5, 1997 because his services were no longer necessary due to slowdowns in project demands. Mr. Kronenberg's injury had no bearing on his lay off date. He was laid off, as were several other electricians, according to the terms of Schedule A during this same time and he had no reasonable expectation of any additional work regardless of his injury.

Based on this testimony, the defendants assert the employee had no expectation of additional work, regardless of his injury. Thus, the defendants contend, the calculation used to determine the employee’s compensation rate fairly, and accurately, reflects those earnings, given that the employee was released to return to work in August 1997 and he worked at two subsequent jobs in October and November 1997. The employee testified he would have worked much more if his shoulder condition had not impaired him. He believes he should have been paid temporary total disability benefits covering those periods when he was unable to work, given that he subsequently had surgery, which has helped correct the condition.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I.  Compensation Rate

AS 23.30.220, as amended effective September 5, 1995, provides part:

(a) computation of compensation under this chapter shall be the basis of an employee's spendable weekly wage at the time of injury. An employee's spendable weekly wage is the employee's gross weekly earnings minus payroll tax deductions. An employee's gross weekly earnings shall be calculated as follows:

. . . .

(4) if at the time of injury the,

(A) employee's earnings are calculated by the day, hour, or by the output of the employee, the employee's gross weekly earnings are the employee's earnings most favorable to the employee computed by dividing by 13 the employee's earnings, not including overtime or premium pay, earned during any period of 13 consecutive calendar weeks within the 52 weeks immediately preceding the injury;

(B) employee has been employed for less than 13 calendar weeks immediately preceding the injury, then notwithstanding (1) - (3) of this subsection and (A) of this paragraph, the employee's gross weekly earnings are computed by determining the amount that the employee would have earned, not including overtime or premium pay, had the employee been employed by the employer for 13 calendar weeks immediately preceding the injury and dividing this sum by 13;

. . . .

(6) if at the time of injury the employment is exclusively seasonal or temporary, then, notwithstanding (1) - (5) of this subsection, the gross weekly earnings are 1/50th of the total wages that the employee has earned from all occupations during the calendar year immediately preceding the injury;

. . . .

(C) In this section,

(1) "seasonal work" means employment that is not intended to continue through an entire calendar year, but recurs on an annual basis;

(2) "temporary work" means employment that is not permanent, ends upon completion of the task, job, or contract, and ends within six months from the date of injury.

According to the defendants, the job the employee was hired to perform was not permanent; the employee was hired to work on the construction of the Healy Project, on a temporary basis, as defined by contract. The employer's supervisor, Don Neff, testified the employee was hired for the duration of the job, which ended by February 1997. Nevertheless, the employee asserts that if he had not been injured he would have been able to continue working for this or another employer. His union provided a letter stating that his job could have lasted until June, 1997 and estimated the wages he could have earned.

Based upon our review of the record, we find the employee was a “group 2” temporary worker, under the terms of his union contract. By a preponderance of the evidence before us, we find we find the employee’s job would have ended in February, 1997, regardless of whether or not he had been injured. Based upon our review of his work and work history, we find it is not clear whether he would have returned to work elsewhere as an electrician, or otherwise, or remained unemployed. Although his 1996 earnings totaled over $50,000, his previous two years’ earnings averaged only approximately half this figure. The employee submitted little evidence concerning his future employment opportunities, or evidence that he would pursue such jobs if they were available. Moreover, given his age and general health condition, including a history of smoking and heart problems, it is not clear he would have continued working, if he had not been injured.

In other Fairbanks venue cases of Thierolf and Barrette v. Alaska Petroleum Contractors, AWCB No's 96-0486, 96-0487 (December 30, 1996) we incorporated a "fairness" test in computing a compensation rate. (See, also, Lincoln v. TIC, AWCB No. 97-0212 (October 20, 1997). This approach was approved on appeal in the Fourth Judicial District case of Alaska Petroleum Contractors v. Thierolf and Barrette, Super Ct. No. 4FA-97-47 CI (September 24, 1997). Significantly, the approach was disapproved in the Third Judicial District case of H.C.Price Co. v. Vonder Haar, Super Ct No 3AN-98-6611 CI (July 21, 1999). Given the lack of evidence in this case, we decline to consider application of a “fairness” test in this case. Based on our review of the record, including our review of the employee’s work and work history, as applied to the law cited above, we find the defendant’s computations of compensation rate were correct. Accordingly, we conclude the employee’s request for a compensation rate adjustment must be denied.

II. Medical stability and recharacterization of PPI to TTD

AS 23.30.265(21) defines medical stability:

"medical stability" means the date after which further objectively measurable improvement from the effects of the compensable injury is not reasonably expected to result from additional medical care or treatment, notwithstanding the possible need for additional medical care or the possibility of improvement or deterioration resulting from the passage of time; medical stability shall be presumed in the absence of objectively measurable improvement for a period of 45 days; this presumption may be rebutted by clear and convincing evidence.

TTD is defined at AS 23.30.185 as follows:

In case of disability total in character but temporary in quality, 80 percent of the injured employee’s spendable weekly wages shall be paid to the employee during the continuance of the disability. Temporary total disability benefits may not be paid for the period of disability occurring after the date of medical stability.

As noted above, the employee did receive TTD benefits until he was determined medically stable and released to return to work on August 25, 1997 by his attending physician. He was given a 9% permanent partial impairment (PPI) whole person rating. On June 2 and 24, 1998, the employee was released for regular work. Once a medical opinion was received indicating that the employee was not stable and was again temporarily totally disabled, TTD benefits were recommenced on September 18, 1998. On January 12, 1999, the employee underwent additional surgery, which improved his condition. On June 7, 1999, he was again found to be medically stable and given an increased PPI rating of 11% on September 11, 1999. TTD was again commenced during the period of recovery.

Given his need for additional surgery, the employee believes he should be entitled to TTD from June 2, 1998 until September 18, 1998, and continuing until the recent date of medical stability. The defendants respond that in order to prevail on TTD for this limited window, there must be medical evidence to support the claim of temporary, total disability. The defendants also point out the employee was receiving unemployment insurance benefits from September 20, 1997 through July 18, 1998. AS 23.30.187 states: “Compensation is not payable to an employee under AS 23.30.180 or 23.30185 for a week in which the employee receives unemployment benefits.” Therefore, the defendants contend, the employee is not eligible for TTD benefits during this period.