Beverage Capital Corp. v. Martin

SALMON, Judge. Maryland Code (1991 Repl.Vol.), section 9-681 of the Labor and Employment Article (“LE”) reads, in pertinent part, as follows: (c) Duration of payment — In general. — Except as otherwise provided in this section, the employer or its insurer shall pay the weekly death benefit: (1) for the period of total dependency; or (2) until $45,000 has been paid. (d) Same — Surviving spouse who remains wholly dependent. — If a surviving spouse who was wholly dependent at the time of death continues to be wholly dependent after $45,000 has been paid, the employer or its insurer shall continue to make payments to the surviving spouse at the ⁶⁶⁵ same weekly rate during the total dependency of the surviving spouse. (e) Same — Surviving spouse who becomes self-supporting. — If a surviving spouse who is wholly dependent at the time of death becomes wholly or partly self-supporting before $45,000 has been paid, the employer or its insurer shall continue to pay death benefits until $45,000 has been paid. * * * (j) Continuing jurisdiction of commission. — The Commission has continuing jurisdiction to: (1) determine whether a surviving spouse or child has become wholly or partly self-supporting; (2) suspend or terminate payments of compensation; and (3) reinstate payments of compensation that have been suspended or terminated.

(Emphasis added.) The major issue in this case requires us to interpret the phrase “continues to be wholly dependent” as used in LE § 9-681(d). To be partially or wholly dependent, one must, of course, be dependent on some payor. The parties in this case are at odds as to the identity of the payment source upon whom the surviving spouse must be dependent. I. FACTUAL BACKGROUND Chester Martin was killed in a helicopter crash on January 14,1992.

At the time of his death, he was acting in the course of his employment for three employers, i.e., Beverage Capital Corporation; Great Distribution and Warehousing, Inc.; and Sun Dun, Inc. (“the employers”). He was not, however, an ordinary employee. Mr. Martin was the sole owner of Sun Dun, Inc., a stockholder as well as the president of Beverage Capital Corporation, and the president of Great Distribution and Warehousing, Inc. All Mr. Martin’s employers carried Maryland Workers’ Compensation insurance, which provided ⁶⁶⁶ his employers with Workers’ Compensation insurance for the subject accident. 1 Mr. Martin was survived by Patricia Martin, his wife of fifteen years. No children were born of the marriage.

From the time of the Martins’ marriage on July 2, 1976, until June of 1987, Mrs. Martin worked as a receptionist for Giant Food and earned approximately $18,000 per year. In the summer of 1987, Mrs. Martin left her job because her husband “wanted her to stay home.” In exchange for her agreement to give up her job at Giant, Mr. Martin, as the majordomo of Sun Dun, Inc., agreed to put his wife on the payroll of that corporation with the understanding that she would do no work. Accordingly, from 1987 until 1992, Mrs. Martin was shown on the books as an employee of Sun Dun, Inc., receiving approximately $40,000 annually. During the term of her “employment,” she performed no services for Sun Dun, Inc. After Mr. Martin’s death, Mrs. Martin ceased to receive paychecks from her “employer.” In 1990, the Martins’ combined income was $357,423, consisting of Mr. Martin’s salaries ($151,504), Mrs. Martin’s salary of approximately $38,000, and dividends and miscellaneous income of over $150,000.

In 1991, Mrs. Martin began a sideline business selling business forms. Most of her customers were either businesses owned by her husband or accounts that her husband helped her obtain. In the year 1991, Mrs. Martin earned only $4,246 from her job selling forms. The family income, however, totaled $230,338.

Mr. Martin was alive only for the first two weeks of 1992. The combined earnings of Mr. and Mrs. Martin for that year were $209,769. Of that sum, Beverage Capital and Sun Dun, Inc., paid Mrs. Martin $146,172, which represented the balance of what Mr. Martin’s salaries would have been had he ⁶⁶⁷ lived for the entire year. Mrs. Martin personally earned only $3,736 in 1992 because, due to Mr. Martin’s death, Sun Dun, Inc., stopped paying her after January 14, 1992.

In 1993, Mrs. Martin received payments from her husband’s employers in the amount of $88,230.65, but thereafter received nothing from these corporations. The Maryland Workers’ Compensation Commission (the Commission) held a hearing on January 21,1994, to determine if Mrs. Martin had been “wholly dependent” on her husband at the time of his death. The Commission found that she had been and ordered that the employers/insurers pay her death benefits at the rate of $475 per week, retroactive to January 15, 1992. Pursuant to LE § 9-681, the payments were to be made until Mrs. Martin had been paid $45,000. 2 By the end of January 1994, the employers/insurers had paid Mrs. Martin the $45,000 ordered.

They refused, however, to continue to make payments to her. Mrs. Martin filed issues with the Commission, alleging that she remained wholly dependent, and therefore sought continued payments of death benefits. The Commission heard testimony on this issue, and on August 22, 1995, found that Mrs. Martin remained wholly dependent and ordered the employers/insurers to continue making payments of death benefits. The employers/insurers filed a petition for judicial review in the Circuit Court for Anne Arundel County.

Both sides agreed that there were no disputes as to material facts, and the matter was heard on cross-motions for summary judgment. Among other documents, federal tax returns for the years 1990-1995 were considered by the motions court. The tax returns showed that in 1993 Mrs. Martin became an independent contractor brokering Evian Water, Crystal Light, and Pennsylvania Dutch Birch Beer to Giant Food for the Canada Dry Corporation. Mrs. Martin earned, after deduction for business expenses, $11,249.50 in 1993 in her brokering ⁶⁶⁸ business.

In 1994, after expenses, she earned $9,651 in that business; and in 1995, she earned, after expenses, $15,879. 3 In the circuit court, it was undisputed that Mrs. Martin lived on the amount she earned as an independent broker together with the monies she received from the Workers’ Compensation carriers. Mrs. Martin owned her own home, which was not encumbered by a mortgage, and owned stock that generated dividends, which she reinvested. 4 In the circuit court, as well as in the hearing before the Commission, the sole issue to be decided was whether Mrs. Martin continued to be wholly dependent within the meaning of LE § 9-681(d) after the $45,000 had been paid by the insurers. The employers/insurers contended in the circuit court that the uncontroverted proof showed that Mrs. Martin was only partially dependent on the Workers’ Compensation payments she received and, therefore, under LE § 9-681(d) she was no longer entitled to receive any compensation. The trial court, in a written opinion, rejected the employers/insurers’ argument and affirmed the award of the Commission.

This timely appeal followed in which the employers/insurers raise one question: Did the lower court err in holding that Martin remained wholly dependent as a matter of law where the uncontradicted evidence established that her earnings after her husband’s death were not temporary, occasional, or minor? ⁶⁶⁹ We answer this question affirmatively and reverse the decision of the circuit court.

II

ANALYSIS “[T]he cardinal principle of statutory construction is to determine the legislative intent. To do this we look first to the language in the statute.” Ryder Truck Lines v. Kennedy, 296 Md. 528, 535 , 463 A.2d 850 (1983) (citations omitted). If the statutory language is clear, we ordinarily need look no further. Nevertheless, [w]hile the language of the statute is the primary source for determining legislative intention, the plain meaning rule of construction is not absolute; rather, the statute must be construed reasonably with reference to the purpose, aim, or policy of the enacting body.

The Court will look at the larger context, including the legislative purpose, within which statutory language appears. Construction of a statute which is unreasonable, illogical, unjust, or inconsistent with common sense should be avoided. Tracey v. Tracey, 328 Md. 380, 387 , 614 A.2d 590 (1992) (citations omitted); accord Tucker v. Fireman’s Fund Ins. Co., 308 Md. 69, 73-75 , 517 A.2d 730 (1986); Barr v. Barberry Bros., Inc., 99 Md.App. 33, 38 , 635 A.2d 64 (1994).

When a worker is killed in the course of his or her employment, it is incumbent upon the Commission to determine whether the surviving spouse (or other dependent) is wholly dependent at two discrete points in time. The Commission determines whether the claimant was wholly dependent at the time of the worker’s death. See LE § 9-679(1); see also Cline v. Mayor of Baltimore, 13 Md.App. 337, 339 , 283 A.2d 188 (1971), aff'd, 266 Md. 42 , 291 A.2d 464 (1972). Under the Maryland Workers’ Compensation Act (the Act), in order to be considered “wholly dependent” upon the earnings of a deceased worker at the time of the worker’s death, the claimant must have no other consequential source or means of maintenance in addition to what he or she received from the deceased worker. 5 Johnson v. Cole, 245 Md. 515, 520 , 226 ⁶⁷⁰ A.2d 268 (1967) (citing Larkin v. Smith, 183 Md. 274 , 37 A.2d 340 (1944)).

A claimant will be considered wholly dependent even though he/she receives temporary gratuitous services, occasional financial assistance, or other minor benefits from sources “other than the deceased worker” so long as the aid from other sources or other benefits “do[es] not substantially affect or modify [the dependent’s] status toward the deceased employee.” Johnson, 245 Md. at 520-21 , 226 A.2d 268 (citing Superior Builders, Inc. v. Brown, 208 Md. 539, 543 , 119 A.2d 376 (1956)). In making the initial determination as to whether a surviving spouse is “wholly dependent,” there is no ambiguity in the statute as to what the surviving spouse must be wholly dependent upon because the statute specifically spells this out. See LE § 9-681 (a) (“If there are individuals who were wholly dependent on a deceased covered employee at the time of death resulting from an accidental personal injury ... [the employer/insurer] shall pay benefits in accordance with this section.”). ⁶⁷¹ If the Commission makes an initial determination that the claimant is wholly dependent upon the deceased employee, the surviving spouse has a right under the statute to the continuation of death benefits after the employer/insurer has made weekly payments totaling $45,000 only if the claimant is able to show that he or she “continues to be wholly dependent.” 6 LE § 9 — 681(d). The statute does not explicitly say upon what the surviving spouse must continue to be dependent.

The employers/insurers argue that LE § 9 — 681(d) should be interpreted to mean “continues to be wholly dependent upon Workers’ Compensation death benefits.” We agree with this interpretation. ⁶⁷² Instead of providing us with an exact interpretation, appellee merely hints at an alternative interpretation and then proceeds to provide us with a formula she contends should be utilized in determining whether a claimant continues to be wholly dependent. Relying almost entirely upon cases dealing with the issue of whether the claimant was wholly dependent on the deceased worker at the time of the worker’s death, Mrs. Martin contends that we should compare the amount earned by the worker at the time of death with the amount the surviving spouse earns after $45,000 has been paid. According to Mrs. Martin, if the amount earned after the $45,000 has been paid is “minuscule” when compared with the amount earned by the deceased worker, then the claimant remains “wholly dependent” upon the deceased employee. She argues: [Maryland caselaw] ... demonstrates that if the income that a claimant receives is a small percentage of the amount of support given to the claimant from the deceased employee, over a long period of time, the claimant is still dependent on the deceased employee despite having an income. [Appellee] submits that the amount of money that she has been earning since 1993 (approximately 3 to 9% of her husband’s 1991 income) [7] is negligible in terms of the total picture of the income that she received from her husband prior to the time of death.

Unfortunately, the statute does not define what. total dependency means. However, in today’s society where a family unit is held together by two income wage earners, [8] it is patently unfair to penalize the ⁶⁷³ spouse of the deceased worker if he or she makes substantially less income or negligible income as compared to the deceased by discontinuing compensation benefits. Although she does not say so explicitly, Mrs. Martin apparently reads LE § 9-681(d) as if it said “death benefits are to continue if, after $45,000 has been paid, the surviving spouse continues to be dependent upon the past income of the deceased worker.” As stated earlier, “[c]onstruction of a statute which is unreasonable, illogical, unjust, or inconsistent with common sense should be avoided.” Tracey, 328 Md. at 387 , 614 A.2d 590 . If we were to adopt appellee’s reading of LE § 9-681(d), persons whose spouses earn huge incomes would be more likely to be able to convince the Commission that they continue to be wholly dependent than those with modest income.

This would produce an illogical and unjust result and one at odds with the purpose of the Act. To illustrate: Suppose Spouse 1 and Spouse 2 are wholly dependent on the incomes earned by their husbands and both husbands die on the same date. Spouse l’s husband earns $320,000 per year and Spouse 2’s husband earns $40,060 annually. Both surviving spouses receive $475 per week in death benefits pursuant to LE § 9-681.

If, after the insurer has paid $45,000 in death benefits to both Spouse 1 and Spouse 2, both get a job paying $15,000 per year, Spouse 2, under appellee’s formulation, would have a much more difficult time convincing the Commission that she continues to be wholly dependent because her $15,000 annual income is 37.5 percent of the amount that her husband earned when he lived. On the other hand, Spouse 1, whose husband made eight times as much as Spouse 2’s husband, could argue that her current income is only 5 percent of her husband’s former salary — and thus, in comparison, minuscule. The Act was “passed to promote the general welfare of the State and to prevent the State and its taxpayers from having to care for injured work[ers] and their dependents” when under common law ⁶⁷⁴ they would have received nothing. Paul v. Glidden Co., 184 Md. 114, 119 , 39 A.2d 544 (1944).

Given that purpose, it scarcely could have been the intent of the General Assembly that payments should continue for widows of workers who were rich but be denied to similarly situated widows of workers with lesser means. Application of appellee’s formula would produce absurd results. Aside from the results that would be obtained, there is no language in § 9-681(d) that supports the argument that the Commission should compare what the surviving spouse now earns with the amount the deceased worker used to earn. Normally, what a surviving spouse “continues to be dependent upon” after $45,000 has been paid is that amount of income he or she now receives, not income he or she once received from the worker.

The facts in the case at hand illustrate this point. Mrs. Martin admits in her brief that she did not, after 1993, “continue to be dependent” on salary or other monies her husband was paid when he lived. As mentioned earlier, what Mrs. Martin is currently dependent upon is the money she receives from Workers’ Compensation in death benefits, plus her earnings from her brokerage business. Workers’ Compensation benefits constitute an “employment-related benefit which replaces the common law right of employees to bring tort actions against their employers for job-related personal injuries.” Queen v. Queen, 308 Md. 574, 585 , 521 A.2d 320 (1987).

In one sense, Mrs. Martin, like other recipients of Workers’ Compensation death benefits, does indirectly receive monies earned by her deceased spouse. This is true because a derivative benefit of holding a job is the right of the worker’s dependent to receive Workers’ Compensation death benefits should the worker be killed by accident or occupational disease while in the course of his or her employment. Thus, if a surviving spouse is wholly dependent upon weekly Workers’ Compensation death benefits after $45,000 has been paid, he or she can be said to be still wholly dependent on the decedent, but only in the narrow sense that ⁶⁷⁵ the payments are a derivative consequence of the deceased worker’s labor. We now turn to the issue of whether Mrs. Martin was wholly dependent on the Workers’ Compensation benefits she received after the employers/insurers had paid her $45,000 in death benefits.

As noted earlier, in 1994 Mrs. Martin’s net profit, after deduction for business expenses, from her brokerage business was $9,651; in 1995 her net profit from the business was $15,879. The amount of Workers’ Compensation benefits Mrs. Martin received in 1994 was $525 weekly, and by 1995 it had risen to $540. 9 The parties agree that the term “wholly dependent” as used in subsection d of LE § 9-681 is the converse of the term “partially self-supporting” as used in LE § 9-681(e) and LE § 9-681(j)(l). Therefore, if a party is “partially self-supporting,” then that party no longer can be considered wholly dependent upon the Workers’ Compensation benefits. The only reported Maryland case dealing with the issue of whether a claimant “continues to be wholly dependent” after the sum of $45,000 has been paid is Linder Crane Service Co. v. Hogan, 86 Md.App. 438 , 586 A.2d 1290 (1991).

At the time Linder Crane was decided by the trial court, the predecessor to LE § 9-681 read, in pertinent part, as follows: ⁶⁷⁶ [A]nd to continue ... to be paid during total dependency but not to exceed $45,000.00, except as otherwise provided in this section. If a surviving wife, husband, or child continues to be totally dependent after the total amount of $45,000.00 has been paid, further payments to the surviving wife, husband, or child shall be paid at the same weekly rate during his or her total dependency. If a surviving wife, husband, or child, ... who is wholly dependent at the time of death becomes thereafter wholly or partially self-supporting, payments shall nevertheless continue until the total sum of $45,000.00 has been paid, and thereafter further benefits shall cease. It is the intention herein that a surviving wife or husband who is wholly dependent at the time of death shall receive at least the total sum of $45,-000.00, even though she or he becomes wholly or partially self-supporting before that sum is paid.

The Commission has continuing jurisdiction to determine whether the surviving wife, husband, or child has become wholly or partially self-supporting, and to suspend, terminate or reinstate suspended or terminated payments of compensation. Md.Code (1957, 1973 Cum.Supp.), Art. 101, § 36(8)(a) (emphasis added). In the Linder Crane case, a widow, Mrs. Hogan, was totally dependent on her husband at the time of his death. Linder Crane, 86 Md.App. at 440 , 586 A.2d 1290 .

About two months after Mr. Hogan’s death, the Widow Hogan went to work as a clerk at a store. She later became store manager and earned approximately $260 weekly. After working at the store for 33 months, Mrs. Hogan received the $45,000 she was entitled to under the Workers’ Compensation statute, and upon receipt of the money, she quit her job. Id.

When the insurer stopped paying benefits, Mrs. Hogan filed a claim with the Commission to have the benefit payments reinstated. The question presented in the Linder Crane case was whether Mrs. Hogan was “totally dependent” upon her husband at the time she filed her claim for additional Workers’ Compensation benefits — which was after she left her job. Id. at 443 , 586 A.2d 1290 . Both the Commission and the trial court ruled that Mrs. Hogan ⁶⁷⁷ continued to be wholly dependent after $45,000 was paid.

In Linder Crane we agreed and said: Based on a benevolent reading of § 36(8) and the case law, [Mrs. Hogan’s] temporary employment in the case sub judice will not preclude her from wholly dependent status. The only evidence before the court demonstrated that [Mrs. Hogan] began to work