JERALD A. BEEBE,		)
				)
Employee,			)	DECISION AND ORDER
Applicant,			)
				)	AWCB Case No. 8623709
v.				)	AWCB Decision No. 90-0077
				)
HOWARD S. WRIGHT CONSTRUCT.,	)	Filed with AWCB Anchorage
				)	April 23, 1990
Employer,			)
				)
and				)
				)
WAUSAU INSURANCE COMPANIES,	)
				)
Insurer,			)
Defendants.			)
				)

This claim was heard at Anchorage, Alaska, on April 11, 1990, 1990. Employee was present and represented by attorney Charles Schmidt and Eric Olson. Defendants were represented by attorney Allan Olson. The record closed at the end of the hearing.

1 Should Employee's gross weekly earnings be calculated under AS 23.30.220(a)(2)?

2. If AS 23.30.220(a)(2) applies, how shall we calculate Employee's gross weekly earnings?

3. Should Employee's attorneys be paid their actual attorney's fees?

It is undisputed that Employee injured his arm in the course and scope of his employment on November 7, 1986. However, his injury did not cause him to be disabled until December 10, 1987. At that time his injury was acknowledged as compensable by Defendants. Defendants voluntarily paid him temporary total disability (TTD) benefits based on gross weekly earnings (GWE) calculated under former AS 23.30.220(a)(2). That method provided a higher compensation rate than using his earnings from the two years before injury and dividing by 100 weeks as former AS 23.30.220(a)(1) required. Defendants computed Employee's GWE under former subsection 220(a)(2) by dividing his 1985 wages of $19,492.83 by 50 weeks. This resulted in a GWE Of $389.86 and a weekly TTD rate of $266.36.

Defendants paid Employee TTD benefits for the period of December 10, 1987 through May 12, 1989. On May 25, 1989, Defendants paid Employee his scheduled permanent partial disability (PPD) benefits in a lump sum based on a seven percent impairment rating. This equaled $5,220.66 PPD benefits, or 20 weeks of benefits.

At the time of the injury Employee was being paid $23.95 per hour working as a union carpenter and was working about 40 hours per week. He was working on the Fifth Avenue parking garage. He had been dispatched to this job on a "short call-out," which means it was for 10 days or less. Employee testified that some employers will put in a request through the carpenters' union for "short calls," and then if the person "works out" the employer will keep them on the job. In the approximately 10 days that he worked for Employer, he earned a total of $1,964.08.

Employee testified on direct examination that he had previously worked satisfactorily with Employer's foreman in 1982 or 1983. Employee testified that the foreman told him he could continue to work on the parking garage job until it ended. Employee estimated that the job continued for another year after he was injured. On cross-examination, Employee testified that the foreman told him he would keep him on the job until after Christmas, 1986.

Defendants presented the testimony of the adjuster, Madonna Edmiston, and submitted notes she had taken in August 1987 after talking with Employee. Her notes indicate that at that time Employee told her that he thought he would have stayed on the job until December 25, 1986. However, due to his previous experience with the foreman, he was afraid of losing his number on the union work list. He worked the 10 days on the parking garage and then went back to the union to sign up to be dispatched elsewhere.

Employee suggests two alternate ways of computing his GWE. First he suggests taking the $19,492.83 he earned in wages in 1985, adding the $12,713.00 he earned doing carpentry work for Nordic Warehouse, and dividing the result by 50. This produces GWE of $644.11. Alternately, Employee suggests taking his hourly wages while working for Employer and multiply by 40 hours to produce a GWE of $958.00.

Defendants contend that Employee's GWE are properly computed under AS 23.30.220(a)(1). Defendants urge us to use Employee's wages of $19,493.00 for 1985 and $5,593.00 for 1984, add them together, and divide by 100 weeks as subsection (a)(1) requires. This produces GWE of $250.86.

Defendants argue that Employee's income from Nordic Warehouse is not wages because he was an independent contractor. Therefore, this income should not be included in computing his GWE.

Although Employee has primarily received work through the carpenters' union, he did a couple of carpentry projects that were non-union jobs. He has never had a business license or contractor's license. He reported the income on Schedule C of his tax returns as a business profit of lost.

In 1985 he sporadically did remodeling work for Nordic Warehouse. He was paid $18.00 per hour by Nordic Distributors. He purchased the materials for the job, and was reimbursed for the materials in the same check that paid him for the hours worked. No withholding taxes were deducted from the check.

Stanley Thompson, owner of Nordic Warehouse, testified that he occasionally hires people like Employee to do some carpentry work. He does not withhold taxes from the money paid these people, but he would if they asked him to.

In 1986 Employee did some small projects for some neighbors and reported that income on Schedule C of his tax return. He did not do any carpentry work after 1986.

Based on this testimony, Defendants argue Employee's income from non-union jobs is not wages from an employer. Instead, they argue Employee is self-employed working as an independent contractor. Therefore, this income should not be included in computing his GWE.

Accordingly, they argue they have overpaid Employee. However, Defendants are not asking for a credit or repayment of the overpayment. Instead, they ask that we just deny Employee's request for an increase in his GWE and, if it every becomes necessary, then we can determine his appropriate GWE.

Should we determine that Employee's GWE must be computed under subsection 220(a)(2), Defendants still argue Employee's request for an increase should be denied. Defendants contend it is inappropriate to base his GWE on his earnings at the time of injury because he has never demonstrated such a wage-earning capacity before or after the injury.

The parties submitted a stipulation of Employee's earnings and profits for the years 1979 through 1987. It shows the following:

W-2 SCHEDULE C

YEAR EARNINGS PROFIT TOTAL

1987 $0 $0 $0

1986 2,253 612 2,865

1985 19,493 12,713 32,206

1984 5,593 0 5,593

1983 14,616 0 14,616

1982 18,672 0 18,672

1981 18,126 0 13,126

1980 9,293 0 9,293

1979 11,208 0 11,208

Defendants also argue that Employee's earning history does not support increasing his GWE. Employee testified that he first came to Alaska in 1974. In 1977 he moved Outside. In 1980 he returned to Alaska periodically to work while his family remained in Washington. in 1983, he moved his family to Alaska and has remained here since that time.

Defendants questioned Employee about his 1984 earnings. In that year he earned less than $6,000. Employee testified that he was in the labor market all of 1984, but there were "few decent calls." However, he clarified that by saying that he did not mean he refused any jobs in 1984.

Employee testified that in 1985 he "got lucky." He went out on a short call, but the foremen liked him, so he worked almost two months on that job.

Defendants argue that Employee was not disabled after the November 1986 injury until late in 1987, but he still had no earnings in 1987. Employee testified that after he left the Fifth Avenue parking garage job site, he returned to the union and signed up to be dispatched. He did not indicate to his union that he had any restrictions. He was not dispatched at all in 1987. He drew unemployment insurance benefits in 1987.

In addition to the wage issue, Employee seeks payment of his actual attorney's fees. His attorneys submitted itemized statement of the hours spent working on Employee's claim. They ask to be paid on an hourly basis.

At the time of Employee's injury, former As 23.30.220(a) provided in part:

The phrase "gross earnings" is defined in AS 23.30.265(15) as "periodic payments, by an employer to an employee for employment before any authorized or lawfully required deduction or withholding of money by the employer.

The Alaska Supreme Court has commented on the 1983 amendment to AS 23.30.220 in several recent opinions. in discussing section 220's history, the court stated in Phillips v. Houston Contracting, Inc., 732 P.2d 544, 546 n.6 (Alaska 1987):

(Cites omitted).

More recently in Phillips v. Nabors Alaska Drilling, Inc., 740 P.2d 457, 460 n.7 (Alaska 1987), the court noted:

Although Peck v. Alaska Aeronautical, Inc., 756 P.2d 282, (Alaska 1988), interprets a much older version of section 220, the general discussion about wage calculation appears relevant to all cases:

Peck, at 286 (quoting Deuser v. State, 697 P.2d 647, 649-50 (Alaska 1985), (quoting Argonaut Ins. Co. v. Industrial Accident Comm’n, 371 P.2d 281, 284 (Cal. 1962)).

The court went on to state: "As Professor Larson explained, [his] disability reaches into the future. . . . his loss as a result of injury must be thought of in terms of the impact on probable future earnings, perhaps for the rest of his life.’" Peck, at 287.

In all of the many cases filed by the court which address the wage calculation issue, the court has always compared documented wages at the time of injury (or time of disability if they were greater than at time of injury) with documented historical earnings to determine which is a more reliable basis for predicting the future loss. This is true even if the duration of the disability is unknown or long-term. Peck; Phillip, 732 P.2d 544; Johnson v. RCA/OMS, Inc., 681 P.2d 905 (Alaska 1984).

Johnson discusses AS 23.30.220 as it existed before its 1983 amendment. In Johnson, 681 P.2d 907, the court held that the worker's wages at the time of injury should be used where the discrepancy between those wages and the wages obtained under the historical earnings formula is so substantial that the latter wages do not fairly reflect the worker's wage-earning capacity.

In Deuser v. State, 697 P.2d 647, 648-650 (Alaska 1985), the court expanded upon its holding in Johnson. In Deuser the court determined that the difference between the worker's wages at the time of injury and his historical wages was substantial. The court held that the wages at the time of injury should have been used in computing compensation benefits because the evidence presented showed that these wages would have continued during the period of disability. Id. at 649-650.

The court held that Deuser's 25 weeks of temporary disability occurred during the period he probably would have been serving as an acting judge. Notwithstanding the language of AS 23.30.220(3) in effect at the time of injury, the court stated: "The disparity between Deuser's probable future earnings during the period of disability, $970 per week, and the average wage yielded by application of the subsection (2) formula, $468 per week, is substantial." Id. at 649 (emphasis added).

Finally, in State v. Gronroos, 697 P.2d 1047 (Alaska 1985), the court further expanded on its decisions in Johnson and Deuser. The Gronroos court noted that "[i]t is entirely reasonable to focus upon the probable future earnings during the period into which disability extends when the injured employee seeks temporary disability compensation." Id. at 1049 (citation omitted). The court also indicated that the employee's intentions as to employment in the future are relevant. Id. at 1049 n.2. See also Brunke v. Rogers and Babler, 714 P.2d 795 (Alaska 1986). By focusing on the likelihood that wages being earned at the time of injury will continue into the period of disability, we are in effect deciding whether the wages at the time of injury "fairly" reflect the wage loss the injured worker will suffer.

As the court has emphasized that an employee's historical earnings are the starting point of our inquiry under section 220, we first consider Employee's historical earnings. First, we note that Employee's earnings in 1985 are his highest earnings in any of the years between 1979 and 1987. Without deciding that Employee's 1986 income from Nordic Warehouse is appropriately included for purposes of computing his GWE, even adding it to his earnings in 1984, his earnings for the two years before injury totals only $37,799.00. Applying subsection 220(a)(1) and dividing by 100 weeks produces GWE of $377.99.

Next we compare his historical earnings with his earnings at the time of injury. He was earning $958.00 per week when he was injured. We find the difference between his historical earnings and his earnings at the time of injury to be substantial. Accordingly, we must determine his GWE under subsection 220(a)(2) based on his work and work history.

We find Employee has been a carpenter for many years. Except for the work he did for Nordic Warehouse in 1985 and the work he did for his neighbors in 1986, he has always earned his living by jobs to which he was dispatched by his union. In the seven years before the injury, the maximum annual amount the Employee ever earned was $18,672.00. Even dividing by just 50 weeks per year, this produces an annual average weekly wage of $373.44. We find his work history before the injury would not support increasing his GWE above the $389.86 which Defendants used to compute his compensation rate.

We next consider Employee's work after the injury. After the injury, Employee signed up with his union to be dispatched. In 1987 he never was dispatched to a job.

We also consider the duration of the job at which Employee worked at the time of the injury. Employee first testified that the foreman told him he would be able to stay an the job with Employer through the end of the job. Employee testified he thought the job lasted for one year after he was injured. However, on cross-examination Employee testified that the foreman told him he would be on the job until after Christmas.

We find the Employee's testimony is contradictory on how long he would have been employed. In addition, Employee testified that he was dispatched to the job on a 10-day "short call." He left the job on the tenth day. Other than Employee's testimony, there was no evidence presented that he was or would have been dispatched back to the job after the ten-day call out period. In fact, Defendants presented the adjuster's notes made in December 1987, in which she indicated Employee told her he thought he could have stayed on the job until Christmas 1986, but he did not want to take a chance at losing his number an the union work list so he went back to the union to get dispatched

elsewhere. Because Employee's testimony is contradictory, we conclude it cannot support a finding. At best, the evidence supports the conclusion that he would have remained on the job only until the end of 1986.

Furthermore, even if he had remained on the job until it was complete, the completion date was about the same time as his disability began. Therefore, we have no evidence that Employee would have been employed during the period of disability.

We conclude that Employee's association with the labor market is sporadic and he has never worked full-time, year round. We find Employee was temporarily disabled for one and one-half years, and entitled to an additional 20 weeks of permanent disability benefits. We find his work and work history would not support using his hourly rate times 40 hours per week for the period of disability. We find this would be turning a part-time worker into a full-time worker for disability purposes. The court has specifically cautioned against this in Gronroos.

Based on Employee's work and work history, we find the evidence does not support granting an increase in his GWE on Employee's proposed alternate basis either. He proposed taking his self-employment income and his earnings in 1985, adding them together, and dividing by 50 weeks. This produces an annual income of $32,205.83 and a weekly wage of $644.11. Employee's admitted he "got lucky" in 1985 in remaining on a job much longer than usual, In addition, without ruling on whether the payments from Nordic Warehouse are properly included as wages, we find this income was also an unusual event and not reflective of his work and work history. Accordingly, it should not be used as the basis to determine Employee's GWE. Thus, we conclude we must deny Employee's request to increase his GWE.

Because we have denied Employee's request for an increase in his GWE, we conclude we must also deny his request under AS 23.30.145 for attorney's fees to be assessed against Defendants.

1. Employee's request for an increase in his gross weekly earnings and his compensation rate is denied and dismissed.

2. Employee's request that his attorney's fees be assessed against Defendants is denied and dismissed.

DATED at Anchorage, Alaska this 23rd day of April, 1990.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Rebecca Ostrom
Rebecca Ostrom, Designated Chairman

/s/ HM Lawlor
Harriet M. Lawlor, Member

/s/ RL Whittbeck Sr.
Richard Whitbeck, Member

RJO:rjo

If compensation is payable under the terms of this decision, it is due on the date of issue and penalty of 20 percent will accrue if not paid within 14 days of the due date unless an interlocutory injunction staying payment is obtained in Superior Court.

APPEAL PROCEDURES

A compensation order may be appealed through proceedings in Superior Court brought by a part in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

CERTIFICATION

I hereby certify that the foregoing is a full, true and correct copy of the Decision and Order in the matter of Jerald A. Beebe , employee/applicant, v. Howard S. Wright Construction, employer, and Wausau Insurance Companies, insurer/defendants; Case No. 8623709; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 23rd day of April, 1990.

Clerk

SNO