McKenzie v. C.C. Kottcamp & Sons, Inc.

RODOWSKY, Judge. The issue in this permanent, total .disability, subsequent injury, workers’ compensation case is the rate at which the compensation apportioned to the employer is paid. Although the total amount of compensation payable by the employer is apportioned as if the injury were a permanent partial one, we shall hold for the reasons given below that ⁵⁶ periodic payments of the amount so apportioned are to be paid at the rate at which permanent total disability compensation is paid. In October 1976 the petitioner, Robert D. McKenzie (McKenzie), injured his back while in the employ of one of the respondents, C.C. Kottcamp & Sons, Inc. (Kottcamp).

On appeal of the ensuing compensation claim a jury found that McKenzie was permanently, totally disabled, that sixty-five percent of the disability was attributable to the 1976 accident, and that thirty-five percent was attributable to a pre-existing condition. On remand the Workmen’s Compensation Commission (the Commission) entered the order which is at issue here. Kottcamp was ordered to pay “compensation for permanent partial disability at the rate of $118.00, payable weekly, beginning November 9, 1984, for a period of 433 weeks[.]” The Commission further ordered the Subsequent Injury Fund (the Fund) to pay McKenzie “compensation for permanent total disability at the rate of $176.00, payable weekly, to begin at the end of compensation benefits herein awarded for permanent partial disability to be paid by the employer[.]” Perceiving some inconsistency in compensating his total disability at partial disability rates for the first 433 weeks of compensation, McKenzie appealed to the Circuit Court for Allegany County which affirmed the Commission. McKenzie pressed on to the Court of Special Appeals which affirmed the Circuit Court for Allegany County.

McKenzie v. C.C. Kottcamp & Sons, Inc., 69 Md.App. 413 , 518 A.2d 141 (1986). The claimant petitioned this Court for a writ of certiorari, pointing out that the question presented is the very one which the Fund had attempted to raise, but had failed to preserve, in Subsequent Injury Fund v. Kraus, 301 Md. 111 , 482 A.2d 468 (1984). We have previously commented that “[t]he Compensation Law fails to meet the test of logical consistency in many respects.” Bata Shoe Co. v. Chvojan, 188 Md. 153, 159 , 52 A.2d 105, 108 (1947). The particular order under review ⁵⁷ here is a product of seemingly conflicting signals contained in § 66(1), ¶ l. 1 In relevant part it reads: 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 ... shall be liable only for the compensation payable under this article for such injury.

However, in addition to such compensation ... 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 [the Fund], 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. [Emphasis added.] Kottcamp and the Fund rest their argument on the language first italicized above. McKenzie rests his argument on the language secondly italicized above. Each italicized portion embodies one of the policies which the Fund was created to achieve. Here the policies clash and our task is to construe the statute under these circumstances.

The policy of limiting the employer’s liability for compensation to that payable for the subsequent injury is designed to encourage employers to hire handicapped persons. Subsequent Injury Fund v. Pack, 250 Md. 306, 308 , ⁵⁸ 242 A.2d 506, 508 (1968). The court in Reliance Ins. Co. v. Watts, 16 Md.App. 71 , 293 A.2d 836 (1972) set the course for determining the amount of compensation payable by the employer in § 66(1), ¶ 1 cases.

The court noted “that the only explicit authority to apportion under § 66(1) arises when the subsequent injury results in death.” 16 Md.App. at 73 , 293 A.2d 836 . Death cases are governed by § 66(1), ¶ 3 under which the employer and the Fund concurrently pay weekly compensation in the respective percentages for which each is responsible. See C & P Telephone Co. v. Subsequent Injury Fund, 297 Md. 339 , 466 A.2d 39 , aff'g per curiam, 53 Md.App. 508 , 453 A.2d 1243 (1983). Cases in which death does not result are governed by § 66(1), II1 under which the Fund does not begin its payments until after the completion of payments by the employer.

See Subsequent Injury Fund v. Kraus, supra, 301 Md. at 115 , 482 A.2d 468 . In Reliance the court recognized that in order to limit the liability of the employer to compensation for the subsequent injury it was necessary to imply in § 66(1), ¶ 1 the authority to apportion. Reliance implied in § 66(1), ¶ 1 a method of apportioning through “the precise determination of the compensation payable for the current injury.” 16 Md.App. at 73 , 293 A.2d 836 . The pre-existing disability of the claimant in Reliance was the loss of one leg and the subsequent injury was the loss of the other leg.

Reliance held that the Commission had erred in apportioning the combined effect, i.e., permanent total disability, fifty percent to the Fund and fifty percent to the employer. Id. at 74 , 293 A.2d 836 . Rather, compensation payable for the subsequent injury had to “be determined upon the assumption that the employee had no pre-existing ‘permanent impairment.]’ ” Id. at 75 , 293 A.2d 836 . Reliance concluded by saying: The [Commission should have ordered the employer and insurer to make the payments called for by the schedule in § 36(3)(b) for the loss of a leg, plus the additional payments provided in § 36(3)(a) for serious disability, and should have ordered the [Fund], after ⁵⁹ completion of those payments, to pay additional compensation to make the total payments equal to the compensation for permanent total disability. [Id. at 75-76, 293 A.2d 836 .] The apportionment technique implied into § 66(1) under the Reliance rationale was employed by the Commission in the award reviewed in Kraus .

There we said, with reference to the total of compensation payments apportioned to the employer, that “[b]y this method the Commission correctly honored the limitation of § 66(1) para. 1 that ‘the employer ... shall be liable only for the compensation payable under this article for such injury.’ ” 301 Md. at 116 , 482 A.2d 468 . That apportionment technique was also used in the instant matter. Reviewing how the subject award was computed sets the stage for the issue concerning rate of payment. The jury agreed with the Commission’s conclusion that, absent any prior impairment, McKenzie’s accidental back injury of October 1976 would have produced a sixty-five percent permanent partial disability.

Had there been no prior impairment, that back injury would have been compensable under § 36(4)(a) for 325 weeks (sixty-five percent of 500). 2 That compensation would have been increased as a serious injury pursuant to § 36(4a) by one-third, or 108 weeks, to a total of 433 weeks. 3 Likewise on ⁶⁰ the assumption that McKenzie had no prior impairment, § 36(4a) would have fixed the amount of weekly compensation at two-thirds of the claimant’s