Clarence W. Gosnell, Inc. v. Hensley

BARBERA, Judge. This case presents the question whether the provision of the Maryland Workers’ Compensation Act, requiring the Workers’ Compensation Commission to round compensation payments to the next higher dollar, applies to the provision in the same subtitle that subjects permanent total disability payments to an annual cost of living adjustment (“COLA”). For the reasons that follow, we hold that the “rounding up” provision does not apply to yearly COLA payments. ²²⁷ FACTS AND PROCEEDINGS Marion Hensley, appellee, worked as a heavy equipment operator for appellant, Clarence W. Gosnell, Inc., for approximately 47 years. On September 12, 1990, Hensley injured his back while swinging a sledge hammer at work.

Hensley (hereafter “Claimant”) filed a workers’ compensation claim against Gosnell, Inc. and its insurer, fellow appellant City Insurance Company (hereafter, collectively, “Employer”). The Workers’ Compensation Commission (“Commission”) found Claimant’s injury to be compensable under the Maryland Workers’ Compensation Act (“Act”), Md.Code (1991, 1999 RepLVol.), § 9-101 el seq. of the Labor and Employment Article. 1 The Commission issued an automatic award on March 20, 1991. A second hearing was held on May 13, 1997, to ascertain the nature and extent of Claimant’s injury. The Commission subsequently issued an order directing Employer to pay Claimant $432.00 per week in permanent total disability compensation.

Because Claimant was found to be permanently and totally disabled, his weekly checks were subject to yearly COLA increases pursuant to § 9-638 of the Act. Employer made no COLA payments to Claimant from 1997 to 2001. In 2001, Claimant demanded the necessary adjustments, and Employer complied by paying Claimant $5,714.38 in COLA payments retroactive to January 1, 1997. Employer, however, refused to round to the next higher dollar any past and future COLA payments due Claimant.

Believing that annual COLAs are subject to rounding to the next higher dollar, Claimant filed issues of underpayment of COLA benefits with the Commission. He took the position that § 9-604(b) of the Act dictates that rounding up is to be done whenever the Commission computes any “rate of com ²²⁸ pensation” awarded under Subtitle 6; that the annually computed COLAs provided by § 9-638 come within the ambit of that rounding up provision; and that, consequently, rounding up of each annual COLA is required when determining the amount of Claimant’s total compensation. Following a hearing, the Commission concluded that the COLA is not a “rate of compensation” subject to the requirement of § 9-604(b). The Commission therefore denied Claimant’s issues.

Claimant sought review in the Circuit Court for Montgomery County, and the parties filed cross motions for summary judgment. After a hearing, the court granted summary judgment in favor of Claimant, stating: “As I read the statute, [§ 9-604] provides that all compensation awarded shall be subject to the rounding up, so the Court finds that it should be rounded up to the nearest dollar.” DISCUSSION I. By 1987 Maryland Laws Chapter 239, the General Assembly enacted the COLA provision of the Act. Currently codified at § 9-638, this section was the product of a recommendation by the Governor’s Commission to Study the Workers’ Compensation System. Its 1987 report states: “The intent of this Commission’s recommendation is straightforward: to protect the purchasing power of Permanent Total disabled workers’ and survivors’ monthly benefits from erosion by inflation.” Section 9-638 provides: (a) In general.—-Compensation paid under this Part [2] of this subtitle is subject to an annual cost of living adjustment. ²²⁹ (b) Report of change in consumer pnce index.—On or before June 30 of each year, the Department of Business and Economic Development shall determine and report to the Commission the rate of change in the Consumer Price Index in the preceding calendar year, using as the Consumer Price Index the lower of: (1) the Consumer Price Index (all urban consumers, all item index) published by the United States Department of Labor for the Washington, D.C.-Baltimore CMSA; or (2) the United States city average consumer price index (all urban consumers, all item index).

(c) Publication of cost of living adjustment.—(1) On or before July 31 of each year, the Commission shall publish the amount of the cost of living adjustment that shall become effective on January 1 of the following year. (2) The cost of living adjustment may not exceed 5%. (d) Detemdnaiion of adjustment.—The compensation payable to a covered employee under this Part V of this subtitle shall be adjusted by: (1) Multiplying the initial rate of compensation by the cost of living adjustment; and (2) Adding the product to the compensation, as adjusted, paid during the prior year. (e) Reduction due to Social Security benefits.—(1) If a covered employee who is entitled to compensation under this Part V of this subtitle also receives federal Social Security disability insurance benefits, the adjusted annual compensation paid shall be reduced to the extent necessary to avoid a diminution of the federal Social Security disability insurance benefits.

(2) If federal Social Security law on disability insurance benefits no longer imposes a diminution in the payment of the adjustment in compensation, payments of compensation shall be made to the full extent allowed under this section. ²³⁰ (f) Payment by Subsequent Injury Fund for violent crime victims. —Abrogated. § 9-638 (2003 Supp.). Eleven years before enacting § 9-638, the General Assembly enacted the provision of the Act that directs the Commission, when computing the rate of compensation, to round the computed compensation to the next higher dollar. See 1976 Md. Laws ch. 357. Now codified at § 9-604, that section reads: (a) In general.—The Commission shall compute all compensation awarded under this title in accordance with the applicable schedule in this subtitle.

(b) Rounding off.—In computing the rate of compensation, the Commission shall round off any fractional dollar of compensation to the next higher dollar. The question before us is whether an annual COLA is a “rate of compensation” to which the rounding up provision of § 9-604(b) applies. Employer argues that the answer to the question is “no,” and, consequently, the circuit court erred in granting summary judgment in favor of Claimant on this issue. Employer reasons that COLAs are a “strict mathematical formula based upon a percentage change set forth by the commission yearly.” The COLA is not a rate of compensation, argues Employer, but is, instead, simply an accelerator to account for annual inflation.

Claimant, of course, disagrees. As Claimant sees it, “the sum found by adding the cost of living adjustment to the initial rate of compensation, itself forms a new weekly ‘rate of compensation’ within the meaning of the law.” We conclude that Employer has the better part of the argument.

II

As we have mentioned, this case is before us by way of a grant of summary judgment. This Court reviews an order granting summary judgment de novo. Tyma v. Montgomery County, 369 Md. 497, 504 , 801 A.2d 148 (2002); Candelero v. Cole, 152 Md.App. 190, 198 , 831 A.2d 495 (2003). ²³¹ Summary judgment is only appropriate when, upon review of the facts and inferences therefrom in the light most favorable to the non-moving party, there is no genuine issue of material fact and the party in whose favor judgment is entered is entitled to judgment as a matter of law. Md. Rule 2—501(e); Sadler v. Dimensions Healthcare Corp., 378 Md. 509, 515 , 836 A.2d 655 (2003).

Once we have concluded that there is no genuine issue of material fact, we review the trial court’s grant of summary judgment to ascertain if it was legally correct. Jahnigen v. Smith, 143 Md.App. 547, 555 , 795 A.2d 234 , cert. denied, 369 Md. 660 , 802 A.2d 439 (2002). The issue before us is a question of law, involving the construction of two provisions of the Act and the interplay, if any, between them. In analyzing this question, we are guided by the review standard set forth by the Court of Appeals in Philip Elecs.

N. Am. v. Wright, 348 Md. 209 , 703 A.2d 150 (1997): In construing the [Workers’ Compensation] Act, as in construing all statutes, the paramount objective is to ascertain and give effect to the intent of the legislature. In interpreting the Act, we apply the following general principles. First, if the plain meaning of the statutory language is clear and unambiguous, and consistent with both the broad purposes of the legislation, and the specific purpose of the provision being interpreted, our inquiry is at an end. Second, when the meaning of the plain language is ambiguous or unclear, we seek to discern the intent of the legislature from surrounding circumstances, such as legislative history, prior case law, and the purposes upon which the statutory framework was based.

Id. at 216-17 , 703 A.2d 150 (internal citations omitted). To these general principles of statutory construction the Court of Appeals added: “Last, applying a canon of construction specific to the Act, if the intent of the legislature is ambiguous or remains unclear, we resolve any uncertainty in favor of the claimant.” Id. at 217 , 703 A.2d 150 ; accord Harris v. Board of Educ. of Howard County, 375 Md. 21, 57 , ²³² 825 A.2d 365 (2003). The Court of Appeals cautioned in Philip Elecs., however, that an appellate court “may not stifle the plain meaning of the Act, or exceed its purposes, so that the injured worker may prevail. Similarly, the Court may not create ambiguity or uncertainty in the Act’s provisions where none exists so that a provision may be interpreted in favor of the injured claimant.” 348 Md. at 217 , 703 A.2d 150 (internal citations omitted); accord Jung v. Southland Corp., 114 Md. App. 541, 548 , 691 A.2d 263 (1997), aff'd, 351 Md. 165 , 717 A.2d 387 (1998).

We also take into account that appellate courts “are to be guided by the general statutory command that the decision[s] of the Commission [are] entitled to prima facie correctness. A court, therefore, may reverse a commission ruling only upon a finding that its action was based upon an erroneous construction of the law or facts.” Martin v. Beverage Capital Corp., 353 Md. 388, 402 , 726 A.2d 728 (1999) (citations and internal quotation marks omitted). We thus give a degree of deference to the Commission in its interpretation of the statutes it administers. See id. at 421 , 726 A.2d 728 (adopting the Commission’s interpretation and administration of § 9-681(d) (2003 Supp.), “in deference to the Commission’s interpretation of the statute”).

III

The rules of statutory construction outlined above require us first to examine the plain language of the two statutes in question, because that is the principal source of legislative intent. We look first to § 9-604, which contains the rounding up provision at issue in this case. Section 9-604 is entitled “Computation of compensation,” and directs the Commission to compute the compensation that is awarded a claimant under the Act. Subsection (a) of the statute provides that “[t]he Commission shall compute all compensation awarded under this title in accordance with the applicable schedule in this subtitle.” Subsection (b) further directs the Commission, once it has computed the appropriate ²³³ rate of compensation, to round off any fractional dollar to the next higher dollar.

The question whether § 9-604 applies to COLAs turns on the subsidiary question whether a COLA is a rate of compensation, as that phrase is used in subsection (b) of the statute. For several reasons, we conclude that it is not. We note preliminarily that, although the term “compensation” is defined in the Act as “the money payable