Average Weekly Wage Determinations After Stine v. Montgomery County, MD and Richard Beavers Construction, Inc. v. Wagstaff

Sec. 9-602(g) states: “(g)(1) Subject to paragraph (2) of this subsection, for the purpose of computing the average weekly wage of an individual who is a covered employee under § 9-234 of this title, the wages of the covered employee shall be:

• (i) for a covered employee who received a salary or wages from other employment at the time of the accidental personal injury or last injurious exposure, the salary or wages from the other employment; or

• (ii) for a covered employee who did not receive a salary or wages from other employment at the time of the accidental personal injury or last injurious exposure:

  1. if the covered employee derived income from a source other than salary or wages at the time of the accidental personal injury or last injurious exposure, an amount that allows the maximum compensation under this title;

  2. if the covered employee was not engaged in a business enterprise at the time of the accidental personal injury or last injurious exposure, the weekly income last received by the covered employee when engaged in a business enterprise; or

  3. if the covered employee had never been engaged in a business enterprise at the time of the accidental personal injury or last injurious exposure, an amount that allows the minimum compensation under this title.”

As previously mentioned, Mr. Stine was also a full-time college student working on a nursing degree, which is why he could only work part-time for LifeStar during the school year. As a result, his weekly wages earned during the school year were less than what he earned during the summer- e.g. his fourteen (14) week earnings prior to the March 26, 2016 were not representative of what he earned over the full year.

After a hearing before the Commission in July 2016 on the issue of Average Weekly Wage, the Commission found Mr. Stine’s Average Weekly Wage to be Sixty-Four Dollars and Sixty-Five Cents ($64.65), which was the gross weekly average of the wages earned by Mr. Stine for the fourteen (14) weeks preceding his March 26, 2016 work-injury when he worked only part-time for LifeStar. Mr. Stine thereafter took a de novo appeal to the Circuit Court for Montgomery County to present evidence on two alternative theories: (1) that the Commission should have utilized a fairer fifty-two (52) week time period to determine his average weekly wage based off his yearly earnings rather than just when he was working part-time; or (2) that because of his age and experience, Sec. 9-602(a)(3) allowed for a finding of an Average Weekly Wage consistent with Mr. Stine’s anticipated wages since his wages with LifeStar Response were “expected to increase under normal circumstances.”

The Circuit Court Proceedings

Mr. Stine requested a de novo petition for judicial review and a jury trial before the Circuit Court for Montgomery County. A de novo review permits a party to present more, less, or the same amount of evidence than was presented before the Commission. See Bd. of Educ. for Montgomery Cty. v. Spradlin, 161 Md. App. 155, 193, 867 A.2d 370, 393 (2005). To this end, Mr. Stine presented two separate and additional types of evidence, each in support of his two alternative theories.

In regards to his first theory -of utilizing the entire fifty-two (52) weeks rather than just the fourteen (14) weeks prior to his injury- Mr. Stine presented evidence of his yearly wages, via his 2015 W-2 Form. It showed his wages earned throughout the year, both when working full-time in the summer months and part-time in the school year. We argued that since he was injured in March, during the school year, his fourteen (14) week average weekly wage was not an accurate representation of his earning capacity at the time of the injury. On the contrary, a broader fifty-two (52) week period would have led to a more accurate calculation of his average wages. Alternatively, if the Court were to account for only his wages when “working full time” during the summer, it would be more in compliance with the explicit language of Sec. 9-602(a)(1).

With regard to his second theory – because of his age and experience his average weekly wage should be what he was expected to earn in the future – Mr. Stine retained a vocational expert. The testimony proffered was what his average weekly wage was “expected to increase” to upon completion of his nursing degree or while working as a full-time EMT, pursuant to Sec. 9-602 (a)(3).

Prior to trial, Montgomery County moved in limine to exclude the vocational expert on the grounds that Sec. 9-602(a)(3) was not applicable as Sec. 9-602(g) exclusively governed this case. The Circuit Court granted this motion. Next, the County moved to strike Mr. Stine’s jury demand arguing that the issue of average weekly wage was a legal question alone. The Circuit Court also granted this motion finding that the Commission was “restricted to find” the average weekly wage was only based upon the fourteen (14) week period prescribed in COMAR. In the alternative, the Circuit Court also stated that, even if COMAR permitted other evidence, the Commission did not abuse its discretion in ignoring it. Mr. Stine thereafter took an appeal to the Court of Special Appeals. After the Circuit Court’s judgment, but prior to oral argument, the Court of Special Appeals handed down the Wagstaff decision touching upon the same average weekly wage issue.

The Wagstaff Decision

In its Stine decision, the Court of Special Appeals had the opportunity to revisit and expand on its recent decision in Richard Beavers Construction, Inc. v. Wagstaff, 236 Md.App. 1 (2018), which was issued after the Circuit Court’s judgment in Stine, but before oral arguments. Both cases involved situations which exemplified why, in some instances, an employer/insurer’s wage statement does not result in a just or accurate average weekly wage calculation for an injured worker and why claimant’s counsel has to be vigilant in exploring all possibilities.

Wagstaff concerned an injured worker who was injured six weeks into his employment. Although he had been hired to work forty (40) hour week, during the first six weeks of his employment he never worked a full forty hours as inclement weather prevented a full work week. The employer submitted a six-week wage statement which calculated his average weekly wage based upon those six shortened weeks. The claimant countered that his average weekly wage should be based upon what his wages would have been for a full forty (40) hour week for which he was hired to work. The claimant prevailed before the Commission and in the circuit court on summary judgment.

The employer/insurer thereafter appealed to the Court of Special Appeals arguing that both the Commission and the circuit court erred in ignoring, what the employer/insurer believed to be, the “plain reading” of Labor & Employ. Sec. 9-602(a)(1) and COMAR 14.09.03.06. In their incorrect reading, the employer/insurer argued that the average weekly wage could only be determined based upon “wages actually earned.” The Wagstaff Court stoutly refused to go along with the employer/insurer’s interpretation and, in refuting this analysis, highlighted the benevolent purposes of the Workers’ Compensation Act:

“Little imagination is needed to think of scenarios in which an inflexible requirement tying an injured employee’s compensation to pre-accident earnings would subvert the goal of compensating employees for lost earning capacity. Suppose that, immediately after an employee’s first day of full-time work, an event such as a natural or manmade disaster shut down the place of employment for a few weeks, in which the new employee received no pay; then, immediately upon the employee’s return, the employee became disabled in a workplace injury. In such a scenario, an average of actual earnings during the weeks before the injury would not accurately represent what the employee normally would earn from that employer under the contract that was existing at the time of the injury. This unfortunate employee would certainly suffer financial hardship if the employee’s compensation were strictly computed by dividing the actual gross earnings by the number of weeks since being hired. In many situations involving recently-hired employees, the rule proposed by RBCI and its insurer would violate the principle that the Act should be construed “to afford substantial, and not merely nominal, relief[.]” Merrill v. State Military Dep’t, 152 Md. at 478, 136 A. 897.”
Wagstaff, 236 Md. App. 1, 20, 180 A.3d 211, 222–23 (2018)

As a result, the Court held that, in determining a claimant’s average weekly wage, the Commission is not confined to only using the actual wages of the injured worker during the weeks preceding the date of injury, but may look to what the claimant would have earned during those same weeks if not for circumstances outside the worker’s control such as weather or sickness. Put simply, the employer/insurer’s wage statement is not the final word on the average weekly wage of a claim. The Wagstaff opinion reminds us that the employer/insurer’s wage statement is just one in several pieces of evidence that may be presented to the Commission and by no means establishes any sort of “presumption.” To this point, the Stine Court not only highlighted, but further enhanced this principle.

The Stine Decision

The Stine Court split its opinion by reversing the Circuit Court on its flawed interpretation of the COMAR fourteen (14) week “rule” and remanding the case back for a jury trial (thereby reaffirming that average weekly wage is a factual issue ripe for submission to a jury which the claimant properly requested). This last point has possible implications for de novo requests for jury trials, discussed further below. Despite ruling in favor of the claimant on this issue, the Stine Court also, however, affirmed the Circuit Court’s exclusion of Mr. Stine’s vocational expert stating that, at least here, Sec. 9-602(a)(3) was not applicable.

First, the Stine Court found that the Circuit Court erred by denying Mr. Stine’s request for a jury trial. Once again, on appeal to the Circuit Court, the Claimant had requested a de novo judicial review and jury trial. In addition to his vocational expert, Mr. Stine sought to present his fifty-two (52) week W-2 form as more reliable evidence of his average weekly wage to a jury. As mentioned above, parties on appeal from the Commission may introduce more, less, or the same evidence than at the underlying Commission hearing. By striking his jury trial demand and finding that the issue of the time period used to calculate an average weekly wage (ie. fourteen (14) weeks versus fifty-two (52) weeks) was a legal determination, the Circuit Court denied Mr. Stine the opportunity to do that. The Court of Special Appeals appropriately found this to be a mistake and appropriately reversed this judgment:

“First, we disagree that COMAR 14.09.03.06 compelled the Commission to calculate the average weekly wage from a fourteen-week sample. As we recently clarified in Wagstaff (which was decided after the circuit court’s decision), that regulation “does not purport to restrict the Commission in any manner from utilizing a different time period [than fourteen weeks] if the Commission deems it appropriate to do so.” 236 Md. App. at 24–25, 180 A.3d 211 (quoting Gross v. Sessinghause & Ostergaard, Inc., 331 Md. 37, 50, 626 A.2d 55 (1993) ). And indeed, the regulation contains nothing requiring the fourteen-week time period in all cases… the regulation does not restrict the determination of average weekly wage to that time period, and allows the Commission to consider other evidence in setting the average weekly wage at a hearing, if one is held. COMAR 14.09.03.06(C); see Wagstaff, 236 Md. App. at 24–25, 180 A.3d 211. (emphasis added)”
Stine v. Montgomery Cty., 237 Md. App. 374, 386–87, 185 A.3d 826, 833–34 (2018).

Moreover, the Court found that this issue is factual in nature and so the Claimant’s request for a jury trial must be honored. As such, the issue of whether the fourteen (14) weeks or the fifty-two (52) week periods should be used as a basis for his average weekly wage was remanded back to a jury trial. In a statement that has implications far beyond just the average weekly wage issue, the Stine Court stated:

“Mr. Stine had filed his petition for judicial reviews, then a request for a jury trial, which transformed the procedural posture of the case to an essential trial de novo, which means the Commission’s decision was not subject to review by the circuit court.”
Id at 388, 835.

With regards to the Court affirming the Circuit Court’s decision to exclude Mr. Stine’s vocational expert, the Court held that because Mr. Stine, as a volunteer EMT, fell under Sec. 9-602(g), a special subsection applicable only to volunteer fire fighters, EMTS and paramedics, and this subsection “does not contain any language referring back to the computation method or principles outlined in (a).” Consequently, Mr. Stine’s evidence (i.e. expert testimony) that his wages were “expected to increase” due to his anticipated nursing degree and hands-on work experience as an EMT for both LifeStar Response and Montgomery County were not applicable under these circumstances. Importantly, the Court did not indicate that this testimony would not otherwise be relevant if this case had not fallen under subsection (g)’s narrow application to volunteer EMTs. In other words, this opinion does not preclude another claimant from utilizing similar vocational expert evidence under subsection (a)(3).

Conclusion: The Implications of the Stine and Wagstaff Decisions

The most important takeaways from Stine and Wagstaff involve the ability of the Commission to consider any and all kinds of evidence relevant to the issue of average weekly wage. It is not bound to the fourteen (14) week wage statement. The Employer’s Wage Statement is just one piece of evidence among many that might be presented. Moreover, even when utilizing the wage statement, it might not accurately represent the claimant’s earning capacity if it does not account for days missed due to inclement weather, illness or other situations which preclude an employee firm working full time. Beyond that, the Commission can utilize other time periods, such as a fifty-two (52) week period represented by a tax return or W-2 Form, in determining a more reliable and fair average weekly wage.

The Stine opinion also illuminates one more important principle that goes beyond just the average weekly wage issue and covers any de novo workers’ compensation appeal. Put simply, where a party requests a de novo judicial review and a jury trial on any disputed factual issue, the circuit court must proceed with a jury trial on that factual issue.

If you have any questions or require assistance with your work-related injury or illness, please do not hesitate, contact Matthew Engler, Esq. today at 301-740-3322 or mengler@bsgfdlaw.com.