Ferretto v. Subsequent Injury Fund

Adkins, J., delivered the opinion of the Court. On April 9, 1980, the Workmen’s Compensation Commission passed a Supplemental Award of Compensation holding that appellant Marco Ferretto had sustained a permanent partial disability to his back under "other cases” (Code, Art. 101, § 36 (4) and (4a)) amounting to 85 percent industrial loss of his body (567 weeks). Of this disability, the Commission attributed 50 percent (333 weeks) to an accidental injury Ferretto had sustained on December 16, 1977. The remaining 35 percent (234 weeks) was attributed to a pre-existing impairment.

The Commission ordered the employer/insurer to pay Ferretto $41,625 and appellee, the Subsequent Injury Fund, to pay him $29,250. Both awards were to be paid at the "serious disability” rate prescribed by Art. 101, § 36 (4a), as opposed to the "straight” rate provided by § 36 (4) (a). ⁵¹⁶ All parties appealed to the Baltimore City Court, but the appeals of Ferretto and the employer/insurer were voluntarily dismissed. Thus, the sole issue before the Baltimore City Court was whether the Subsequent Injury Fund should be required to compensate Ferretto for the pre-existing impairment component of his 85 percent loss of industrial use at the "serious disability” rate or at the "straight” rate. That is also the sole issue on this appeal.

Judge Allen, reversing the Commission, decided in favor of the "straight” rate. We agree, and affirm. This case involves the interplay between Art. 101, §§ 36 (4a) and 66 (1). The latter, which controls the Subsequent Injury Fund, represents a concept originally enacted in this State by Ch. 637, Acts of 1945, and adopted substantially in its present form by Ch. 809, Acts of 1963.

See Subsequent Injury Fund v. Howes, 11 Md. App. 325, 329-331 , 274 A.2d 131, 133-134 (1971). The portion relevant to this case provides: Whenever an employee who has a permanent impairment due to previous accident or disease or any congenital condition, which is or is likely to be a hindrance or obstacle to his employment, incurs subsequent disability by reason of a personal injury, for which compensation is required by this article resulting in permanent partial or permanent total disability that is substantially greater by reason of the combined effects of the impairment and subsequent injury than that which would have resulted from the subsequent injury alone, the employer or his insurance carrier shall be liable only for the compensation payable under this article for such injury. However, in addition to such compensation to which the employer or his insurance carrier is liable and after the completion of payments therefor provided by this article, the employee shall be entitled to receive and shall be paid additional compensation from a special fund to be known as the "Subsequent Injury Fund”, created ⁵¹⁷ for such purpose, in the manner described hereafter in this section, it being the intent of this section to make the total payments to which such employee shall become entitled equal to the compensation that would be due for the combined effects of the impairment and subsequent injury resulting in permanent total disability or a substantially greater permanent partial disability. The purpose of § 66 (1) is to persuade the employer to employ the handicapped individual by limiting the liability, which the employer may otherwise have incurred, in the event the previously disabled or injured individual sustained an accidental injury, although not of itself disabling, but which, coupled with the previous impairment, rendered the individual permanently disabled, thus exposing the employer to liability for the cumulative effect of the prior and subsequent injuries.

By the terms of the statute, if the employee sustains a subsequent compensable disability, but the cumulative effect of the disability and the prior disability resulted in a permanent total or permanent partial disability, the employer and his insurance company would only be liable for the compensation payable by reason of the subsequent injury. The Subsequent Injury Fund, funded by assessments imposed upon employers and insurers by statute, would contribute the balance of the total award, so that the sum of the two payments would equal the compensation provided by statute for the combined effects of both the previous disability and the subsequent injury. Subsequent Injury Fund v. Pack, 250 Md. 306, 308 , 242 A.2d 506, 508 (1968). Section 36 (4a) was initially adopted by Ch. 322, Acts of 1965.

It provides: A person who, from one accident, receives an award ⁵¹⁸ of compensation for a period of [250] weeks or more under subsection (3) or (4) or a combination of both, is thereby considered to have a serious disability.... The weeks for such award shall be increased by one third ..., and the compensation shall be for sixty-six and two-thirds per centum of the average weekly wage... . This section stands in contrast to the "straight” rate provisions of § 36 (4), which call for compensation, in the case of permanent partial disability "other than those specifically enumerated ... in subsection (3) ... in such proportion as the determined loss bears to 500 weeks, the said compensation to be paid weekly at the rate of sixty-six and two-thirds per centum of the average weekly wages, in no case to exceed thirty-three and one-third percentum of the State average weekly wage. . . .” Its purpose, as expressed in the title of Ch. 322 is to "create certain new categories of persons having a serious disability” and to provide enhanced compensation with respect to them. Neither § 66 (1) nor § 36 (4a) refers expressly to the other.

We recognized in Subsequent Injury Fund v. Chapman, 11 Md. App. 369, 375-376 , 274 A.2d 870, 873-874 (1981), aff'd per curiam, 262 Md. 367 , 277 A.2d 444 (1971) that: There are no provisions in Section 66 by which to determine the amount, manner, or method of paying benefits for permanent total or permanent partial awards made against the Fund; these matters can be determined only by reference to the provisions of Section 36, and the schedules therein contained, setting forth the formula to be followed in calculating the amounts of awards due injured employees for permanent total or permanent partial disability. It is thus readily apparent that the provisions of Sections 36 and 66 must be read together.... When this is done, argues Ferretto, it is apparent that the Workmen’s Compensation Commission was correct in ⁵¹⁹ awarding him compensation at the "serious disability” rate for the disability produced by both the 1977 accident and the pre-existing impairment. Only such a construction of the law, he says, will gratify the § 66 (1) language which entitles the employee to compensation "equal to the compensation that would be due for the combined effects of the impairment and subsequent injury... .” The Fund strongly contests application of that rate to the 234 week award for the pre-existing impairment.

Our duty in resolving this dispute is to ascertain and effectuate the legislative intent. Subsequent Injury Fund v. Chapman, supra. We have ample guidance as to how we should proceed to do so. A statute is to be read, when possible, so that all of its provisions are given effect, Smelser v. Criterion Ins.

Co., 293 Md. 384 , 444 A.2d 1024 (1982). Statutes relating to the same subject matter should be construed together and harmonized, even when they have been passed at different times and contain no reference to each other, Subsequent Injury Fund v. Chapman, supra. More specifically, "the Workmen’s Compensation Act should be construed as liberally in favor of injured employees as its provisions will permit in order to effectuate its benevolent purposes. Any uncertainty in the law should be resolved in favor of the claimant.” Howard County Assn. for Retarded Citizens v. Walls, 288 Md. 526, 530 , 418 A.2d 1210, 1213 (1980).

Moreover, "[t]he rule that statutes in derogation of the common law are to be strictly construed ... have no application to this article [the Workmen’s Compensation Act]; but this article should be so interpreted and construed as to effectuate its general purpose”; Art. 101, § 63. We have, however, sparse judicial guidance on the specific issue involved in this case. The parties have cited no reported Maryland appellate decisions directly in point. 1 Ferretto claims that the benefits awarded in Subsequent Injury Fund v. Pack and Subsequent Injury Fund v. Howes, ⁵²⁰ both supra, were computed by the Workmen’s Compensation Commission to award "serious disability” benefits consistent with his theory. But in neither case was the issue on appeal '’serious disability” rate vs. "straight” rate.

In the former, the sole issue was whether the Subsequent Injury Fund was authorized to appeal from a decision of the Workmen’s Compensation Commission. The latter involved the question of whether the Fund was entitled to representation at all stages of the proceedings. Subsequent Injury Fund v. Chapman, supra, is little more helpful. That case did hold that certain survivorship benefit provisions of § 36 were applicable to the Fund and, as noted above, commented on the relationship between §§ 66 and 36.

But after that decision the legislature promptly amended the law to provide that the survivorship provisions of § 36 (1) (d) and (4) (c) do not apply to awards against the Fund under § 66, thereby demonstrating an intention to narrow the judicial construction of § 66. 2 See Duckworth v. Kelly Springfield Tire Company, infra, at 354, 353 A.2d at 5. Three cases have been decided, however, which deal with the issue of aggregating claims in order to qualify a claimant for serious disability compensation, and taken together they demonstrate a clear legislative intent and pattern of judicial construction against such a practice. The first such case is Barnes v. Ezrine Tire Company, 249 Md. 557 , 241 A.2d 392 (1968). In that case, an employee received multiple injuries as a result of an accident which arose out of and in the course of his employment.

Under the law then in effect, 3 one of the injuries sustained qualified under § 36 (3a) as a "serious disability”, and the claimant was entitled to enhanced compensation, but two other injuries, falling under the "other cases” category, were not sufficiently disabling to qualify as "serious disabilities”, under § 36 (4a). But, the ⁵²¹ Workmen’s Compensation Commission combined the §§36 (3) and 36 (4) injuries, so that the entire accident qualified under both §§ 36 (3a) and 36 (4a) as a "serious disability”, and awarded the claimant compensation beyond what he would have received without this aggregation. When the employer and insurer appealed this formulation, the claimant made an argument similar to that