IN THE SUPREME COURT OF TENNESSEE
AT JACKSON
April 6, 2011 Session
ROBERT LAZAR v. J.W. ALUMINUM
Appeal as of Right from the Chancery Court of Madison County
No. 66188 James F. Butler, Chancellor
No. W2010-00659-SC-R3-WC - Filed July 26, 2011
An employee settled his claim for workers’ compensation benefits. The settlement stated that
the award of vocational disability benefits to which the parties agreed was not based on the
medical impairment rating of either the treating physician or the employee’s independent
medical examiner. After the employee was laid off, he sought reconsideration of his benefits
pursuant to Tennessee Code Annotated section 50-6-241(d)(1)(B)(iv) (2008). The chancery
court declined to use the impairment rating of the treating physician or the independent
medical examiner. The court further declined to base its increased award on a rating from
an independent medical evaluation of the employee conducted after the settlement by a
physician listed in the Medical Impairment Rating registry of the Tennessee Department of
Labor. The chancery court instead awarded additional permanent partial disability benefits
based on an impairment rating computed from the percentage of permanent partial disability
reflected in the settlement. The employer appealed. We affirm the chancery court.
Tenn. Code Ann. § 50-6-225(e) (2008) Appeal as of Right;
Judgment of the Chancery Court Affirmed
J ANICE M. H OLDER, J., delivered the opinion of the Court, in which C ORNELIA A. C LARK,
C.J., and G ARY R. W ADE, W ILLIAM C. K OCH, J R., and S HARON G. L EE, JJ., joined.
Blakely D. Matthews and J. Cole Dowsley, Jr., Nashville, Tennessee, for the appellant, J.W.
Aluminum.
George L. Morrison III and Spencer Barnes, Jackson, Tennessee, for the appellee, Robert
Lazar.
OPINION
I. Facts and Procedural History
Robert Lazar sustained an injury to his right shoulder while working for J.W.
Aluminum on December 5, 2007. Mr. Lazar’s treating physician, Dr. Adam Smith,
surgically repaired the injury and released Mr. Lazar from his care. Mr. Lazar then returned
to work for J.W. Aluminum in his previous position.
Mr. Lazar filed a claim for workers’ compensation benefits. Dr. Smith assigned Mr.
Lazar an impairment rating of 2% to the body as a whole. Mr. Lazar also obtained an
independent medical evaluation from Dr. Samuel Chung, who assigned Mr. Lazar an
impairment rating of 17% to the body as a whole. Following a benefit review conference,
Mr. Lazar and J.W. Aluminum settled Mr. Lazar’s claim for 12.4% permanent partial
disability to the body as a whole. See Tenn. Code Ann. § 50-6-206(a)(1) (2008). The
Tennessee Department of Labor approved the settlement. See Tenn. Code Ann.
§ 50-6-206(c).
Less than four months after reaching the settlement, J.W. Aluminum laid off Mr.
Lazar. Mr. Lazar initiated a second benefit review conference requesting a reconsideration
of the workers’ compensation benefits. Tenn. Code Ann. § 50-6-241(d)(1)(B)(iv) (2008).
The parties failed to reach a settlement.
Mr. Lazar filed a complaint in the chancery court of Madison County requesting a
reconsideration of his workers’ compensation benefits pursuant to Tennessee Code
Annotated section 50-6-241(d)(1)(B). Shortly thereafter, J.W. Aluminum obtained an
independent medical evaluation of Mr. Lazar by a physician listed in the Medical Impairment
Rating (MIR) registry of the Tennessee Department of Labor. Tenn. Code Ann.
§ 50-6-204(d)(5) (2008). The MIR registry physician, Dr. John Stanton, conducted an
evaluation and opined that Mr. Lazar retained a 7% impairment to the body as a whole.
The chancery court held a hearing to reconsider Mr. Lazar’s permanent partial
disability. The parties stipulated to the impairment ratings assigned by Dr. Smith, Dr. Chung,
and Dr. Stanton. Mr. Lazar testified as to his physical condition.
The chancery court declined to use any of the three impairment ratings assigned by
the physicians and instead determined that the parties’ settlement of 12.4% permanent partial
disability was based on an impairment rating of 8.27%. The chancery court assumed that the
settlement of 12.4% permanent partial disability represented one and one-half times the
medical impairment rating, the maximum permanent partial disability award permitted by
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Tennessee Code Annotated section 50-6-241(d)(1)(A) for employees returned to work. The
trial court awarded Mr. Lazar benefits based on 38% permanent partial disability to the body
as a whole, less a credit for the amount previously paid as a result of the prior settlement.
J.W. Aluminum appealed. The appeal was referred to a Special Workers’
Compensation Appeals Panel. Tenn. Sup. Ct. R. 51 § 1. After oral argument before the
Panel, this Court transferred J.W. Aluminum’s appeal to the full Court for consideration.
Tenn. Sup. Ct. R. 51 § 2.
II. Analysis
J.W. Aluminum contends that the trial court erred in awarding Mr. Lazar additional
benefits based on a medical impairment rating computed from the permanent partial
disability reflected in the settlement. J.W. Aluminum also asserts that the trial court’s award
of permanent partial disability benefits was excessive.
A. Reconsideration of Workers’ Compensation Awards
The Workers’ Compensation Law limits the permanent partial disability benefits that
an injured employee may receive if the pre-injury employer returns the employee to work “at
a wage equal to or greater than the wage the employee was receiving at the time of the
injury.” Tenn. Code Ann. § 50-6-241(d)(1)(A). For injuries occurring on or after July 1,
2004, an employee returned to work may receive maximum permanent partial disability
benefits of one and one-half times the employee’s medical impairment rating. Tenn. Code
Ann. § 50-6-241(d)(1)(A).
An employee may seek reconsideration of permanent partial disability benefits if the
employer no longer employs the employee at a wage equal to or greater than the pre-injury
wage within four hundred weeks from the employee’s return to work. Tenn. Code Ann.
§ 50-6-241(d)(1)(B)(i); but see Tenn. Code Ann. § 50-6-241(d)(1)(B)(iii). A court may
award an employee meeting these qualifications additional permanent partial disability
benefits greater than one and one-half times the employee’s medical impairment rating. An
award of permanent partial disability benefits, however, cannot exceed six times the
employee’s impairment rating. Tenn. Code Ann. § 50-6-241(d)(2)(A); see Nichols v. Jack
Cooper Transp. Co., 318 S.W.3d 354, 361 n.1 (Tenn. 2010).
Section 50-6-241(d)(1)(B)(iv) provides, “Any new settlement or award regarding
additional permanent partial disability benefits . . . shall be based on the medical impairment
rating that was the basis of the previous settlement or award.” The settlement between J.W.
Aluminum and Mr. Lazar, however, does not reflect the medical impairment rating that was
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the basis for the award. To the contrary, the parties agreed “that no agreement has been
reached with respect to either Dr. Smith’s or Dr. Chung’s rating being the rating accepted for
the purposes of settlement in this case.” On appeal, therefore, we must determine the proper
application of section 50-6-241(d)(1)(B)(iv) to a settlement in which the parties have failed
to agree on the applicable medical impairment rating.
The construction of a statute and its application to the facts of a case are questions of
law, which we review de novo. State v. Marshall, 319 S.W.3d 558, 561 (Tenn. 2010). “Our
role in statutory interpretation is to give a statute the full effect of the General Assembly’s
intent without unduly restricting or expanding the statute’s intended scope.” Id. If the
statute’s language is unambiguous, we find the General Assembly’s intent in the plain and
ordinary meaning of the language. Id. In addition, a settlement is a contract and therefore
subject to the rules governing the interpretation of contracts. See Barnes v. Barnes, 193
S.W.3d 495, 498 (Tenn. 2006); Johnson v. Johnson, 37 S.W.3d 892, 896 (Tenn. 2001). We
ascertain the parties’ intent based on the natural and ordinary meaning of the contractual
language. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999). Interpretation of a
settlement is a matter of law subject to a de novo review. Barnes, 193 S.W.3d at 498.
Based on the language of Tennessee Code Annotated section 50-6-241, the
reconsideration of the employee’s permanent partial disability is not limited to the previous
award, but it must be based on the medical impairment rating on which the original award
was based. Tenn. Code Ann. § 50-6-241(d)(1)(B)(iv); cf. Brewer v. Lincoln Brass Works,
Inc., 991 S.W.2d 226, 229 (Tenn. 1999) (holding that an employee seeking benefits for a new
impairment must file a new workers’ compensation claim rather than attempt to enlarge a
previous award). A trial court may not consider additional evidence of an employee’s
impairment rating when a complaint for reconsideration of benefits is filed. Cf. 8 Arthur
Larson & Lex K. Larson, Larson’s Workers’ Compensation Laws § 131.03[2][a] (Rev. ed.
2009) (“In short, no matter who brings the reopening proceeding, neither party can raise
original issues such as . . . degree of disability at the time of the first award.”). We therefore
conclude that if a settlement in the original claim does not specify an impairment rating, a
trial court may, as the trial court did in this case, extrapolate the impairment rating from the
parties’ underlying settlement.
We agree with the chancery court that J.W. Aluminum and Mr. Lazar “impliedly
agreed upon” a rating of 8.27% medical impairment from the original award of 12.4%
permanent partial disability. The settlement included a provision acknowledging that “the
maximum permanent partial disability award that Employee may receive is one and one-half
(1.5) times the medical impairment rating.” Accordingly, the settlement implies that Mr.
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Lazar received the maximum award available to him pursuant to the statute.1 Tenn. Code
Ann. § 50-6-241(d)(1)(A). Moreover, the trial court’s computation of 8.27% medical
impairment is consistent with the parties’ intent to use neither Dr. Smith’s rating nor Dr.
Chung’s rating for purposes of the settlement of 12.4% permanent partial disability.2
The chancery court also declined to use the MIR registry physician’s impairment
rating obtained by J.W. Aluminum subsequent to the original settlement. Tennessee Code
Annotated section 50-6-204(d)(5) governs the use of the MIR registry. The statute’s only
prerequisite to the use of the MIR registry is “a dispute as to the degree of medical
impairment.” Tenn. Code Ann. § 50-6-204(d)(5). By its terms, section 50-6-204(d)(5) does
not preclude the use of an impairment rating of an MIR registry physician in a
reconsideration action.
Nonetheless, we conclude that the use of an impairment rating obtained from an MIR
registry physician subsequent to the original award or settlement of a workers’ compensation
claim is inconsistent with the reconsideration of an award. When an award is subject to
reconsideration, the trial court is bound by the medical impairment rating that was the basis
of the original award or settlement. Tenn. Code Ann. § 50-6-241(d)(1)(B)(iv). The chancery
court therefore properly declined to apply the MIR registry physician’s impairment rating
obtained after the original settlement.3
1
Parties are free to settle both workers’ compensation claims and reconsideration claims subject to
the applicable statutory limitation. See Tenn. Code Ann. § 50-6-206(a)(1). Parties may, of course, settle
claims for less than the statutory maximum of one and one-half times the medical impairment rating. Our
resolution of this case does not require us to consider the manner in which reliance on a lesser impairment
rating would be established in a reconsideration case because the settlement agreement references the
maximum award available to the employee.
2
We also observe that Tennessee Code Annotated section 50-6-241(d)(1)(B)(v) prohibits an
employee from waiving or forfeiting, and the parties from compromising or settling, “the employee’s rights
to reconsideration pursuant to this section.” The parties did not raise and we do not reach the issue of
whether an agreement to dispense with an applicable medical impairment rating impermissibly waives or
compromises Mr. Lazar’s right to reconsideration based on a medical impairment rating at the time of the
settlement.
3
We are unable to determine from the appellate record whether the MIR registry physician based
his 7% medical impairment rating on Mr. Lazar’s medical condition at the time of the settlement or at the
time of the medical examination. It is unlikely that Dr. Stanton attempted to “recreate” the medical
impairment rating at the time of the settlement since the settlement for 12.4% permanent partial disability
would be in excess of maximum permanent partial disability that could have been awarded to Mr. Lazar.
Tenn. Code Ann. § 50-6-241(d)(1)(A). One and one-half times Dr. Stanton’s 7% medical impairment rating
is less than the award received by Mr. Lazar and would call the validity of the settlement into question. If,
(continued...)
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Excessive Award
We next consider whether the chancery court’s award of 38% permanent partial
disability is excessive. In a workers’ compensation appeal, we review a chancery court’s
findings of fact “de novo upon the record of the trial court, accompanied by a presumption
of the correctness of the finding, unless the preponderance of evidence is otherwise.” Tenn.
Code Ann. § 50-6-225(e)(2) (2008). We give considerable deference to the trial court’s
findings as to credibility and the weight to be given testimony when the trial judge has seen
and heard the testimony. Whirlpool Corp. v. Nakhoneinh, 69 S.W.3d 164, 167 (Tenn. 2002).
Mr. Lazar testified that he was forty-seven years old at the time of the hearing. He
graduated from high school but has no additional education. He stated that he has
“excellent” reading and writing skills. Prior to being hired by J.W. Aluminum, Mr. Lazar
had been a delivery truck driver for a liquor wholesaler, an automobile paint and body
repairman, and the first mate on a sport fishing boat. He had worked at J.W. Aluminum for
twelve years, performing various jobs involving fabrication of aluminum sheeting. After
J.W. Aluminum closed, he was unemployed for approximately two months. Mr. Lazar then
obtained a job through a temporary employment agency. The job requires Mr. Lazar to drive
a forklift truck for Bodine Aluminum, a company that manufactures aluminum engine blocks.
At the time of the hearing, Mr. Lazar continued to be employed in a temporary position with
Bodine Aluminum.
Mr. Lazar had neither sought nor received medical treatment for his injury after his
release by Dr. Smith in August 2008. He testified that Dr. Smith imposed restrictions of
lifting no more than seventy-five pounds and no above-the-shoulder work. Mr. Lazar
testified that his shoulder hurt all the time and that he used Tylenol Arthritis medication and
heating pads to alleviate the pain. Because of the injury, Mr. Lazar was unable to sleep on
his right side. His job at Bodine Aluminum required him to push and pull engine blocks on
rollers, causing increased pain. Lifting his arm above his shoulder was painful, and he
testified he did not have as much strength in his arm as he did prior to the injury. He also
testified that his pain prevented him from bowling and hindered his ability to fire a pistol for
recreation. Mr. Lazar believed that he would have difficulty performing any of his prior jobs.
He acknowledged, however, that he had been able to perform his job for J.W. Aluminum
satisfactorily during the period between his return to work and his discharge.
3
(...continued)
as is more likely, the medical impairment rating of 7% relates to the date of Dr. Stanton’s examination of Mr.
Lazar, it would require a trial court to use an impairment rating other than the rating on which the original
settlement was based, thereby contravening Tennessee Code Annotated section 50-6-241(d)(1)(B)(iv).
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In determining an employee’s permanent partial disability benefits, a trial court “shall
consider all pertinent factors, including lay and expert testimony, the employee’s age,
education, skills and training, local job opportunities, and capacity to work at types of
employment available in claimant’s disabled condition.” Tenn. Code Ann.
§ 50-6-241(d)(2)(A). The court may consider the claimant’s own assessment, expert
testimony, or both. See Uptain Constr. Co. v. McClain, 526 S.W.2d 458, 459 (Tenn. 1975).
The chancery court’s award of 38% permanent partial disability is less than five times
Mr. Lazar’s medical impairment rating of 8.27%. The chancery court therefore was not
required to include specific findings of fact supporting the award. Tenn. Code Ann.
§ 50-6-241(d)(2)(B). We observe, as did the chancery court, that all of Mr. Lazar’s previous
jobs involved heavy physical labor or overhead work, which Mr. Lazar testified would be
difficult for him to perform with his injury. Moreover, Mr. Lazar’s testimony shows that his
temporary employment causes him pain and is difficult for him to perform and that his pain
limits his recreational activities. Based on the record before us, we are unable to determine
that the evidence preponderates against the chancery court’s award of 38% permanent partial
disability to the body as a whole.
Conclusion
We hold that a court’s reconsideration of a workers’ compensation award is limited
to a determination of additional permanent partial disability based on the employee’s
impairment rating at the time of the initial award or settlement. The chancery court therefore
properly computed the 8.27% medical impairment rating based on the settlement’s
assignment of 12.4% permanent partial disability benefits and the provision stating that Mr.
Lazar may receive a maximum permanent partial disability award of one and one-half times
his medical impairment rating. We further conclude that the evidence does not preponderate
against the chancery court’s award to Mr. Lazar of 38% permanent partial disability to the
body as a whole. Costs are assessed against appellant, J.W. Aluminum, and its surety, for
which execution may issue if necessary.
_________________________________
JANICE M. HOLDER, JUSTICE
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