Washington Metropolitan Area Transit Authority v. Washington

ZARNOCH, J. In this case, the employer/appellant, Washington Metropolitan Area Transit Authority (“WMATA”), appeals a judgment from the Circuit Court for Prince George’s County in favor of the employee/claimant, appellee, Robert Washington (“Washington”) stemming from a jury finding that he sustained a 64 percent disability and industrial loss of use as a result of an accident arising out of and in the course of his employment. Clouding that award, WMATA says, are evidentiary problems regarding Washington’s post-injury termination and his earnings from his private business. For the following reasons, we agree, in part, with WMATA and reverse and remand for further proceedings. FACTS AND LEGAL PROCEEDINGS On August 24, 2005, while working as a train operator with WMATA, Washington sustained an accidental injury when he slipped and fell at the train station, injuring the right side of his lower back.

At the time of the injury, Washington was also operating Tilly’s Limousine Incorporated (“Tilly’s”), a stretch limousine company he formed in 2004. 1 Immediately after hurting his back, Washington was taken to the emergency room at Fort Washington Hospital, where he received medical treatment and was prescribed physical therapy, which he engaged in for approximately two months. He filed a workers’ compensation claim, and he was off work until November 17, 2005, when he returned to WMATA as a train operator. 2 On that day, Washington filed another injury report due to a malfunctioning seat, which, he asserted, caused pain to his ⁴⁴³ lower back. He joined this incident with his August 2005 injury, and filed a consolidated claim. In early and mid-2006, the Workers’ Compensation Commission (the “Commission”) held several hearings to address Washington’s consolidated claim, resulting in a “directive to pay or in an affirmation of the parties’ agreement to pay temporary-total-disability benefits.” Then, Washington began working on a light duty basis as a parking lot inspector, which required him to constantly drive a car, look for suspicious activity in parking lots, and report back to WMATA.

In the summer of 2006, Washington asked the Commissioner and WMATA to return him to work as a bus operator. 3 In response, WMATA sent Washington to a “work hardening” program 4 in August 2006 with the expectation of having him return as a bus operator. After about one year, Washington increased his work tolerance to eight hours per day and was able to sit for 35 minutes without pain. In June 2007, Washington stopped receiving temporary-total-disability payments. Washington protested this discontinuance and filed a claim to restore payments, which the Commission heard on August 13, 2007.

When questioned about his ability to work, Washington testified without equivocation that he did not work two days prior to the hearing. WMATA then played footage from videotape surveillance that showed Washington working as a limousine driver for Tilly’s during the time he had denied working. Upon receiving this evidence and ascertaining from Washington that he owned the ⁴⁴⁴ limousine service business, the Commission ruled against Washington. Shortly thereafter, a WMATA superintendent interviewed Washington and discharged him on August 22, 2007 on the grounds of “false representations [made] in order to obtain [workers’ compensation] benefits.... ” Subsequent to his termination, Washington stopped receiving work hardening and other medical treatment.

Washington then pursued the grievance process under the collective bargaining agreement with his union. The grievance was resolved in favor of WMATA on February 9, 2009. On October 28, 2009, the Commission held a hearing in connection with Washington’s claim for permanent partial disability. After reviewing the evidence and the findings of the parties’ expert witnesses, the Commission concluded on November 6, 2011 that Washington suffered a permanent partial disability “amounting to 22% industrial loss of use of the body as the result of an injury to the back.... ” Dissatisfied with this award, Washington subsequently filed a petition for judicial review in the Circuit Court for Prince George’s County.

WMATA did not challenge the award. Prior to trial, WMATA moved unsuccessfully to exclude all evidence Washington planned to present concerning his past and current income as the owner of Tilly’s and his past or present loss of income resulting from his termination of employment with WMATA. WMATA argued that evidence of Washington’s wage differential was irrelevant, because the wage loss did not occur as a result of the accidental injury, but instead was caused by Washington’s fraudulent statements to the Commission. In addition, the employer contended that even if the evidence of wage loss was relevant, “it is very misleading,” because “the jury may decide to punish WMATA for terminating him or to give him a permanent rating that is the equivalent of having his WMATA job.” 5 Nevertheless, ⁴⁴⁵ the court denied the motion, concluding that it would instead give a jury instruction at the close of evidence that Washington was terminated from WMATA for cause.

A jury trial began on March 22, 2011. During opening statements, Washington’s counsel asked the jury to award Washington a 75 percent industrial loss of use rating based on the following wage depression: [W]hen Mr. Washington was working as a train operator, he was earning about thirteen hundred and some odd dollars a week. And you are going to hear that as he operates Tillys right now, he’s making about fourteen hundred and fifteen dollars a month. And what he’s making per month is basically, he pays for the mortgage that he [and his wife] live in out of the business which he runs out of his house.

That’s the only benefits right now he’s getting. He presently owns four limousines[ 6 ] has a few drivers, hasn’t turned a profit. The only benefit is saving the house. Counsel continued: If you do believe Mr. Washington, then the only evidence you are going to have is going to show you that he’s lost 75 percent.

Because when you compare $364 a week he’s making now at Tillys to the $1333.00 per week he was making as a train operator for WMATA, you are going to see that’s about 25 percent of what he used to make before he lost his job ... and that’s where we think the evidence will show you the answer to the question are you going to be presented is 75 percent. ⁴⁴⁶ Both parties presented videotaped depositions of two medical experts, which were conflicting. Washington’s expert, Dr. Michael Franchetti, opined that Washington had reached maximum medical improvement and had suffered a 28 percent “whole person impairment.” According to Franchetti, Washington’s work injury prevented him from participating “in any activities that involve bending or twisting of his back, and that he should not sit or drive more than 35 minutes without a change of position.” Dr. Philip Schneider, WMATA’s expert, concluded that Washington was impaired at the level of 15 percent of his body as a whole, but that there was nothing “in particular” that would have limited Washington from returning to work as a train operator. Washington testified that his back felt like his body was deteriorating, and he could not walk, exercise, or bowl as frequently as he could before the injuries, and that he constantly felt like there was a “fist pressing up against” his back. Washington stated that, since losing his job at WMATA, he had not “done a lot of looking” for another job, but instead worked for Tilly’s, where he hired others to drive, “occasionally” drove, and performed clerical work. 7 He testified the business operated at a loss every year since its incorporation, and that he only withdrew the funds necessary to make his monthly mortgage payment, which amounted to $1415.00 per month.

With respect to the remainder of the revenue generated at Tilly’s Washington testified: “I pay $7,000 right now in limousine notes. I pay [$1,258.00] insurance for each vehicle, for all the vehicles a month.” During cross-examination, counsel elicited the following testimony concerning Tilly’s limousine business: in 2007 and 2008, Washington purchased some limousines with funds from a loan from his relatives, that he had recently received another loan for $10,000.00, and that he paid back the loans in monthly installments of $1540.00. He also confirmed that he wrote off ⁴⁴⁷ $212,245.00 on his 2008 income tax returns because of limousine purchases. During closing arguments, Washington’s counsel focused on Washington’s wage loss from his termination from WMATA, arguing over objection that “[w]age loss is the strongest evidence of disability ... [tjhat’s why [Washington’s] employment with Tilly’s is so important.” According to his counsel, in the six years since his termination from WMATA, Washington was now earning 25 percent of what he was earning as a train operator.

He urged the jury to award Washington 75 percent permanent partial disability, representing the difference between Washington’s WMATA wages and his earnings from Tilly’s: I will end with where I started. Where is this 75 percent coming from? How can it be 75 percent when he owns and operates a business? Here is how ...

Mr. Washington now earns $1415 a month [$16,908 per year] ... All he has ever made is what he used to pay his mortgage. Gee, wouldn’t he like to have that $67,000 a year he was earning as a train operator to help keep that business going to build it up ... If you compare [what] Mr. Washington is now earning in 2007, six years after the injury, 25 percent of what he was earning as a train operator.

What has he lost? The difference between 100 percent and 25 percent. Not a number Mr. Washington picked out of the air. It’s a number that is his best indication of how this injury has affected his ability to earn wages.

In WMATA’s closing argument, its counsel noted: Why doesn’t [Washington] have the wages anymore? He doesn’t have the wages anymore because he was terminated from the Authority. We see an individual who got fired from his job, and from WMATA’s perspective rightfully so, then he has asked you to use his old wages to compare it to the current job that he got, has, his own business, where he is pouring the profits from the business into more vehicles. ⁴⁴⁸ With regard to the $1303 per week he was making at Metro. He lost that on his own accord, because of his own decision to lie on the stand, because of his own decision to submit temporary total disability certificates to Metro when in fact he wasn’t totally disabled.

He asks you to compare that to his limo business in which he is pouring all the profits back into the business. It seems to me that both of these numbers are seriously flawed, seriously flawed. So I submit to you that the 22 percent arrived at by the Maryland Workers’ Compensation Commission is fair and reasonable for the injury that he sustained. After deliberations, the jury returned a verdict in favor of Washington, concluding that he had sustained a 64 percent disability and industrial loss of use resulting from the 2005 injury to his back.

In addition, the jury verdict form reflects its conclusion that this percentage was not “the result of the loss of his job with” WMATA. 8 WMATA moved for remittitur and a new trial, which was denied on May 5, 2011. 9 On June 6, 2011, the circuit court entered an order vacating the Commission’s November 6, 2011 award of 22 percent industrial loss use, and remanded the case for issuance of an award of 64 percent permanent partial disability. WMATA noted this appeal. QUESTIONS PRESENTED WMATA presents three questions for review: 1. Whether the trial court erred in permitting Claimant to introduce evidence of his pre-injury wages at WMATA and speculative evidence regarding earnings from his startup limousine business to prove industrial loss of use where WMATA terminated Claimant as a result of his ⁴⁴⁹ misrepresentations before the Maryland Workers’ Compensation Commission? 2.

Whether, in the absence of properly admitted evidence regarding Claimant’s wages from WMATA or earnings from his start-up limousine business, Claimant presented sufficient evidence to support the jury’s award of 64 percent industrial loss of use in light of the Commissioner’s award of 22 percent? 10 3. Whether the trial court erred in denying WMATA’s objection, and sustaining the verdict, where Claimant had the burden of proof and failed to present vocational expert testimony or other sufficient evidence to establish loss of earning capacity in light of his termination for cause from WMATA? [ 11 ] Focusing in part on question one, we reverse the circuit court decision and remand the case for a new trial. In light of this disposition, we need not address the other issues presented by WMATA. DISCUSSION A. Introduction The touchstone of the workers’ compensation system is an industrial injury which results in an occupational disability or death.

Queen v. Agger, 287 Md. 342, 343 , 412 A.2d 733 (1980). A permanent partial disability is one that is “permanent in duration and partial in extent.” Wal Mart Stores, Inc. v. Holmes, 416 Md. 346 , 354 n. 2 (2010). Unlike payments for temporary disability, compensation awards for permanent disability are “not based solely on loss of wages, but [are] based ⁴⁵⁰ on actual incapacity to perform the tasks usually encountered in one’s employment, and on physical impairment of the body that may or may not be incapacitating.” Queen v. Queen, 308 Md. 574, 585-86 , 521 A.2d 320 (1987). As Professor Larson has observed, the “disability concept is a blend of two ingredients[:] ... disability in the medical or physical sense ... [and] the de facto inability to earn wages.” 4 Larson’s Workers’ Compensation Law (MB) § 80.02 (2007).

Thus, the test used to determine the degree of disability is whether a claimant’s injuries allow him to return to and adequately perform his prior job with the employer, and whether the workplace injury caused a reduction of wages. Getson v. WM Bancorp, 346 Md. 48, 62 , 694 A.2d 961 (1997) (For compensability, “[t]he Commission must do more than merely adopt medical evaluations of anatomical impairment; the Commission must assess the extent of the loss of use by considering how the injury has affected the employee’s ability to do his or her job”). In Maryland, permanent disability payments for unscheduled “Other Cases” are calculated by an evaluation of the factors set forth in Md.Code (1999, 2008 Repl.Vol.), Labor and Employment Article (“Lab. & Empl.”) § 9-627(k)(1)-(2): (1) In all cases of permanent partial disability not listed in subsections (a) through (j) of this section, the Commission shall determine the percentage by which the industrial use of the covered employee’s body was impaired as a result of the accidental personal injury or occupational disease. (2) In making [an industrial use of loss] determination ... the Commission shall consider factors including: (i) the nature of the physical disability; and (ii) the age, experience, occupation, and training of the disabled covered employee when the accidental personal injury