Millhoff v. Village Country Inn, Inc. (July 10 1996)
STATE OF VERMONT
DEPARTMENT OF LABOR AND INDUSTRY
Kirk Millhoff File #: F-16395
By: Barbara H. Alsop
v. Hearing Officer
For: Mary S. Hooper
Village Country Inn, Inc. Commissioner
Opinion #: 39-96WC
Hearing held at Montpelier, Vermont, on May 28, 1996.
Record closed on June 12, 1996.
APPEARANCES
Peter H. Banse, Esq., for the claimant
Christopher McVeigh, Esq., for the defendant
ISSUE
What was the claimant's average weekly wage for purposes of his work related injury?
THE CLAIM
1. Benefits consistent with a claim of an average weekly wage of $931.81.
EXHIBITS
1. Claimant's Exhibit 1 Pay stubs from 1992
2. Claimant's Exhibit 2 Letter of 6/4/89 from defendant to claimant
3. Claimant's Exhibit 3 Claimant's W-2 form for 1992
FINDINGS OF FACT
1. The above exhibits are admitted into evidence, and notice is taken of all forms filed in this matter with the Department of Labor and Industry. Specifically, notice is taken of a Form 21, Agreement for Temporary Total Disability Compensation, revealing a compensation rate of $497.53, with a $10.00 allowance for one child, which was approved by the Department on February 14, 1994.
2. In 1989, the claimant was hired by the defendant to be the chef and food and beverage manager for the operations at the defendant. The defendant is a full service inn, with a tavern and a dining room serving breakfast and dinner. The Inn's busy seasons are from July 1 through October 31, and then from December 1 through the end of February.
3. In interim periods between the busy seasons, the Inn would maintain a skeleton crew, or would on occasion close down completely. The claimant always worked when a skeleton crew was in place. The claimant was paid biweekly the sum of $385.00, which increased to $425.00 several months prior to the injury, throughout his employment with the defendant, and would generally receive a bonus at the end of the foliage season.
4. The terms of the claimant's employment with the Inn included a profit-sharing agreement. The claimant was to receive 20% (later raised to 25%) of the profits from the food and beverage service. This amount was payable on March 1 of the year following the earning of the profits. As part of his initial agreement with the employer, he received a draw against future profits of $300.00 a week. He was shown on a quarterly basis an interim profit and loss statement by his employer in order to gauge how he was faring in terms of prepayment of profit. He also on occasion received an advance against the profit sharing. For example, in the summer of 1992, he received a $500.00 advance so that he could bring his parents to visit. This sum was also referred to as a loan, although the claimant has never been asked to repay it. The claimant was not guaranteed any profits in any given year. In 1992, the claimant received a significant sum of money at the end of the 1991 year in additional profits, and this amount was included in his 1992 W-2 form. There is the suggestion that the claimant would not be expected to repay any of the advance in the event of a profit shortfall, although the evidence on this issue is equivocal at best.
5. At some point, the employer gave the claimant a company gas credit card in lieu of a raise, and the claimant had the card until the termination of his employment. There was no limitation on the charges the claimant could make on the card, and the bill went straight to the employer. The claimant has never seen the bills for this card, and accepts those figures provided by the employer on the original Form 25 filed with the Department.
6. The claimant was injured on October 12, 1992, when he ruptured a tendon in his right arm. He continued to work thereafter, but ultimately required surgery. After the surgery, when it became apparent that he could no longer perform his duties at the Inn as a chef, the relationship between the parties was terminated.
7. The claimant has never received an accounting of his profit sharing for the 1992 year. He does not know whether there was a profit or loss for that year, although the quarterly profit and loss statements were not promising.
8. The claimant received, after the date of injury and after the foliage season, a bonus of $2,000.00 from the employer. This bonus was not part of the claimant's compensation agreement with the employer, and was completely discretionary with the employer.
9. The claimant's W-2 form for 1992 indicates compensation for the year of $48,454.00. This sum includes the $725.00 received weekly for his base wage and profit advance, his bonus of $2,000.00 and the excess profit sharing from 1991. The claimant's charge card payment was accounted for as an expense against the food and beverage service, and was not included in his wages for tax purposes.
10. All of the figures relating to the credit card and the profit sharing were included in the calculations leading to the Form 21 signed and approved by the parties and the Department.
11. The claimant has presented no evidence of attorney's fees or costs in this matter.
CONCLUSIONS
1. In workers' compensation cases, the claimant has the burden of establishing all facts essential to the rights asserted. Goodwin v. Fairbanks, Morse Co., 123 Vt. 161 (1963).
2. The computation of the claimant's average weekly wage is determined by the language in 21 V.S.A. §650 and Rule 15 of the Workers' Compensation and Occupational Disease Rules. The pertinent language in §650 is that "[a]verage weekly wages shall be computed in such manner as is best calculated to give the average weekly earnings of the worker during the twelve weeks preceding his injury...." While there are exceptions to this language, they involve mainly those cases where employment has been of a short or temporary duration, or where it was peculiarly difficult to ascertain the compensation because of the terms of the employment. This case does not fall into any of the exceptions.
3. Rule 15 adds to the basic wage the benefits "for each of the twelve weeks preceding the injury" of overtime or tips, bonuses due or received, and the "value of any room, board, food, electricity, telephone, uniforms or similar benefits provided the claimant." Pursuant to this language, the carrier had correctly included the value of the claimant's gas credit card in the original computation of the claimant's average weekly wage.
4. The carrier also included in its original calculation the claimant's receipt of $300.00 on a weekly basis as an advance against profit sharing. Now the carrier alleges that this was incorrect because profits are not includible in establishing an average weekly wage, referring to the decision in Hotaling v. St. Johnsbury Trucking Co., 153 Vt. 581 (1990), and language in Larson, Workmen's Compensation Law at §60.12(e). The reliance on Hotaling is inapposite. Hotaling involved the question of whether the claimant's self employment in a trash collection business entitled the employer to pay only temporary partial disability compensation, rather than the temporary total disability compensation it had been paying. In fact, Hotaling includes the language that "[t]he Commissioner may scrutinize the conduct of a sole proprietorship to determine if the profits are the functional equivalent of wages."
5. Applying this reasoning to the instant case, it is clear that the claimant's receipt of $300.00 as a draw against profits was intended to be in the nature of a wage or salary. The claimant over the years of his employment for the defendant regularly received the draw, and planned his living expenses based on the regular receipt of that sum of money. Given the purpose of the average weekly wage statute, as quoted in Finding #2, inclusion of the $300.00 is necessary to approximate the claimant's actual earnings. Therefore, the inclusion of the $300.00 in the original Form 25 was also correct.
6. The claimant alleges that the appropriate measure of the claimant's average weekly wage is the figure from the W-2 form, divided by 52 weeks. While this would in fact have given the claimant a higher average weekly wage for purposes of benefit calculations, there is absolutely no support for this proposition in either the statute or the rule. In fact, claimant's counsel has not supported any authority of any sort for this proposition. Nor has claimant's counsel addressed the clearly contradictory language in the statute. There would be no need to address the twelve weeks prior to the date of the injury if the best measure of the claimant's average weekly wage were the claimant's yearly earnings. As Larson points out, many states have adopted an annualized basis for the determination of a compensation rate. Larson at §60.00. Vermont is not one of those states, and has specifically elected not to follow this path. The claimant's argument is without merit.
7. Similarly, the claimant's contention that the bonus received several weeks after the injury should be included in the calculation finds no support in the statute, regulation or case law. The regulation specifically limits the inclusion of bonuses to those received in the twelve weeks prior to the date of injury. The claimant again cites no authority and cannot prevail.
8. The claimant has presented no evidence regarding attorney's fees or costs as required by Rule 10, and hence would not receive an award, even if he had prevailed. Not having prevailed, he is not entitled to an award in any event.
ORDER
THEREFORE, based on the foregoing findings of fact and conclusions of law, it is ordered:
1. That the terms of the Form 21 signed by the parties and approved by the Department are confirmed; and
2. That all claims to the contrary by either the claimant or the defendant are denied.
DATED at Montpelier, Vermont this 10th day of July 1996.
___________________________
Mary S. Hooper
Commissioner