Cite as 2014 Ark. App. 90
ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-13-731
Opinion Delivered February 12, 2014
JEREMY A. ROYAL, DECEASED APPEAL FROM THE ARKANSAS
CRYSTAL ROYAL WORKERS’ COMPENSATION
APPELLANT COMMISSION [NO. G007193]
V.
BYPASS DIESEL & WRECKER, INC.
STARNET INSURANCE CO.
YORK RISK SERVICE GROUP,
INC., DEATH & PERMANENT
TOTAL DISABILITY TRUST FUND
APPELLEES
DEATH & PERMANENT TOTAL
DISABILITY TRUST FUND AFFIRMED ON DIRECT APPEAL;
CROSS-APPELLANT REVERSED AND REMANDED ON
CROSS-APPEAL
BRANDON J. HARRISON, Judge
Jeremy A. Royal died in a workplace accident in 2010. Jeremy was survived by his
widow, Crystal Royal, her children A.M. and D.S., Jeremy’s ex-wife, Rosana Royal, and
her children T.R. and A.R. The Commission found that Crystal Royal had no
expectation of monetary support from Jeremy and therefore could not receive survivor
benefits because she was separated from him and had already filed for a divorce when he
died. The Commission also found that Bypass Diesel & Wrecker, Inc., Jeremy’s
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employer, was entitled to a credit against its obligations to the Death & Permanent
Disability Trust Fund for the weekly death benefits it had paid to Crystal. Crystal appeals
the Commission’s denial of benefits to her; the Trust Fund cross-appeals the credit issue.
We affirm the Commission’s decision to deny Crystal benefits but reverse the credit and
remand the case for proceedings consistent with this opinion.
I. The Direct Appeal—Death Benefits
A. Factual & Procedural History
Jeremy Royal married his second wife, Crystal Royal, in 2006. The couple had no
children together but each had minor children from other marriages. Jeremy worked for
Bypass Diesel when he was killed in a work-related accident in August 2010. Crystal and
Jeremy had been separated for three months when he died. According to Crystal, she
filed for divorce in early June after Jeremy beat her badly. In her divorce complaint,
Crystal did not ask for spousal support. After filing for divorce, Crystal removed Jeremy
from her phone plan and dropped him from her health and life insurance.
Crystal’s and Jeremy’s finances are relevant given the death-benefits issue. Crystal
has worked for the Bowie Correctional Center for the past six years. Even with both
spouses working, the Royals had a hard time making ends meet. They had numerous
debts, and the IRS had frozen Jeremy’s checking account for failure to pay taxes. Crystal’s
checks were to be direct-deposited into an account with only her name on it. Jeremy
would sign his paychecks over to Crystal, and she would deposit them into her account.
The couple had a mortgage on the marital home, a loan for siding, a loan for a
refrigerator, a loan for Crystal’s brother’s truck, other vehicle loans, all-terrain vehicle
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loans, charges for gas and groceries at a local store, unpaid utility bills, and unpaid credit-
card balances.
Crystal testified at the agency hearing about their finances and relationship when
Jeremy died. Crystal was unsure if she and Jeremy would have gotten back together. She
testified that he beat her up over thirty times but this was the first time that she had filed
for divorce. She indicated that “it was over.” She did not drop the divorce before Jeremy
passed away in August. In fact, in terms of the assets, she and Jeremy were just splitting up
debt. She explained that they were not splitting up anything else because there were no
assets.
Crystal also testified that, on several occasions during their separation, Jeremy gave
her money to help support her. The payments ranged between $200–$300. Crystal said
that they would meet somewhere other than the marital home because Jeremy was under
a restraining order and wore an ankle bracelet to monitor him. Crystal also testified that
nobody else was giving her money to help pay the bills except Jeremy and that she did not
expect anyone other than Jeremy to help her.
Ida Calloway and Iona Jones testified on Crystal’s behalf, telling the administrative
law judge that Jeremy had financially supported Crystal during the separation and that the
couple would have likely reunited eventually. The parties also presented the deposition
testimony of Rosana Royal, Jeremy’s first wife. Rosana stated that Jeremy was in love
with a woman named Trista, planned on marrying her, and was living with her before he
died. Rosana also mentioned that, a day or two before he died, Jeremy promised to pay
$75 to sign A.R. up for football but he “didn’t have the money right then.”
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After the hearing the administrative law judge issued a written opinion denying
Crystal weekly death benefits. The law judge wrote: “I find that the parties were
dividing debts for the things they needed but there was simply insufficient income to
expect continuing support. . . . Crystal Royal had no expectation of support from Jeremy
Royal who died after divorce proceedings were initiated.”
Based on Rosana Royal’s deposition testimony, the law judge found that Jeremy
was living with another woman that he planned on marrying and “there just wasn’t
enough income to go around” for him to support Crystal. “[I]f Jeremy Royal was giving
Crystal Royal money to make payments on the loans, she did not do so. According to
Rosana Royal, Crystal was saving money to leave [him].” The law judge emphasized
Rosana’s testimony that Jeremy Royal didn’t have the $75 needed to pay for his son’s
football-enrollment fee.
Conversely, the law judge placed little weight on Ida Calloway’s and Iona Jones’s
testimony because they did not know anything about the domestic abuse Crystal had
suffered or Jeremy’s troubles with the IRS. The law judge found it significant that
Calloway could not specify the amount of money that Jeremy had given Crystal and that
Jones admitted to having a failing memory.
The law judge ultimately concluded that there was “no evidence that the parties
were trying to reconcile,” observing that Jeremy had stopped paying for Crystal’s brother’s
truck, and that Crystal had cut ties with Jeremy because of domestic abuse, filed for
divorce, removed him from her phone plan, dropped his health and life insurance, and
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was unable to contact him until she obtained his phone number from Rosana Royal to
discuss the court-ordered restitution in the criminal domestic-abuse case.
The Commission affirmed and adopted the law judge’s opinion on this point. So
we must consider the law judge’s order and the Commission’s order in our review. Death
& Permanent Total Disability Trust Fund v. Branum, 82 Ark. App. 338, 107 S.W.3d 876
(2003).
B. Analysis
In reviewing decisions from the Workers’ Compensation Commission, we view
the evidence and all reasonable inferences in the light most favorable to the Commission’s
decision and affirm if that decision is supported by substantial evidence. Smith v. City of
Ft. Smith, 84 Ark. App. 430, 143 S.W.3d 593 (2004). Substantial evidence is that which a
reasonable mind might accept as adequate to support a conclusion. Id. The issue is not
whether the reviewing court might have reached a different result from the Commission.
If reasonable minds could have reached the Commission’s result, then we affirm. Id.
Arkansas Code Annotated section 11-9-527(c) (Repl. 2007) outlines the benefits to
be paid to the family of a worker who dies. The statute requires that compensation “be
paid to those persons who were wholly and actually dependent upon the deceased
employee.” A widow is a family member who is eligible for survivor benefits. Ark. Code
Ann. § 11-9-527(c)(1)–(2). Section 11-9-102(20)(A) states that “a [w]idow shall include
only the decedent’s legal wife, living with or dependent for support upon him at the time
of his death.”
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Whether Crystal was actually dependent upon Jeremy when he died is a fact
question. Death & Permanent Total Disability Trust Fund v. Rodriguez, 104 Ark. App. 375,
378, 292 S.W.3d 827, 830 (2009); Ark. Code Ann. § 11-9-527(h) (dependency
determined at time when injury occurred). “Actual dependency” does not require a
finding of total dependency. It may be established by showing either actual dependency
or a reasonable expectancy of future support—even if no actual support has been
provided. Id.
Was the Commission’s decision to deny Crystal benefits supported by substantial
evidence? Crystal argues that she is entitled to benefits because she, Ida Callaway, and
Iona Jones proved that Jeremy was paying household bills, loans, and giving Crystal
money after they had separated. Crystal also notes that Jeremy was giving her money that
she relied on to maintain her standard of living while they were separated. Although they
were not living together when he died, Crystal maintains that “there was no evidence that
[she and Jeremy] were destined for a final decree of divorce.”
Crystal makes good points, but substantial evidence supports the Commission’s
decision that she was not actually dependent on Jeremy when he died. When Jeremy
died, Crystal was working full time to support herself and her children. She lived apart
from Jeremy and had filed for divorce without asking for any support from him. Her own
testimony caps his monthly contributions to the family at $200–$300, which, when added
together with all the expenses, was “insufficient,” as the law judge’s order determined.
Crystal did not produce documents tending to establish that Jeremy gave her money that
she would deposit into her bank account. The debt-collection schedule in the record
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showed that she was behind on her loan payments. The law judge concluded that if
Jeremy was giving Crystal money for the loan payments, then Crystal did not use it for
that purpose because she was saving up money to leave him and was therefore not actually
dependent on him. The law judge’s conclusion that Crystal was not actually dependent
on Jeremy was not unreasonable under the circumstances.
Did Crystal have a reasonable expectation of support from Jeremy when he died?
No; or at least the record contains substantial evidence that Crystal did not have the
statutorily required expectation. Again, the law judge placed little weight on Calloway’s
and Jones’s testimony that Jeremy had supported Crystal—and that it was likely they
would reunite—because they did not know about the domestic abuse or Jeremy’s tax
problems. And Crystal herself could not say with certainty that they would have
reconciled had Jeremy not died. On cross-examination, she agreed that the relationship
“was over.” Moreover, Crystal had not withdrawn the divorce papers, had not asked for
spousal support in her complaint, and a valid protection order was in place against Jeremy
when he died. And as we have also mentioned, Crystal had removed him from her phone
plan and dropped his health and life insurance. The law judge’s conclusion that Crystal
did not have a reasonable expectation of support from Jeremy when he died is a
supportable one given this record.
Crystal had the burden to establish facts showing dependency upon Jeremy before
being entitled to benefits. See Lawhon Farm Servs. v. Brown, 335 Ark. 272, 984 S.W.2d 1
(1998). The Commission was charged to find the facts and assess the credibility of the
witnesses. Its decision carries the force of a jury verdict. Finley v. Farm Cat, Inc., 103 Ark.
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App. 292, 288 S.W.3d 685 (2008). Because we are not left with a firm and definite
conviction that the Commission made a mistake when it concluded that Crystal was not
dependent on Jeremy, we affirm the Commission’s decision to deny Crystal weekly death
benefits.
III. The Cross-Appeal
A. Procedural & Factual History
Bypass Diesel and its insurance carrier realized at some point that Jeremy and
Crystal were separated when he died, controverted Crystal’s claim for $246.16 in weekly
death benefits, and asked for reimbursement and a credit for the money it had mistakenly
paid her. This issue was tried at the agency hearing in 2012.
The Trust Fund argued to the law judge that if Crystal was not entitled to benefits,
then the payments that Bypass Diesel made to her were void from the start because they
were made to an unqualified individual. The Trust Fund also argued that Bypass Diesel
should not get any credit against its obligation to the Fund for the erroneous payments.
The law judge concluded that Bypass Diesel and its insurance carrier were “not entitled to
a credit or reimbursement.”
The Commission reversed on this point, relying on a good-faith strand:
We find that [Bypass Diesel and its carrier] [are] entitled to classify
and credit all benefits paid to Crystal Royal as weekly benefits for death
pursuant to Ark. Code Ann. § 11-9-502(b)(1)(B) (Repl. 2007). Benefits
were paid to Crystal Royal as weekly benefits for death pursuant to Ark.
Code Ann. § 11-9-502(b)(1)(B) (Repl. 2007). Benefits were paid to Crystal
Royal in good faith based on information provided to [Bypass Diesel and its
carrier] at the time of the claimant’s injury and the filing of the requested
Commission forms.
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Upon later learning that Crystal Royal did not qualify for benefits,
[Bypass Diesel and its carrier] ceased payment. Accordingly, [Bypass Diesel
and its carrier] paid benefits pursuant to Ark. Code Ann. § 11-9-527(c)
(Repl. 2002) which accrues toward their liability under Ark. Code Ann. §
11-9-502(b)(1)(B) (Repl. 2007) even though such benefits were paid in
error.
The Trust Fund filed a motion for reconsideration and clarification from the
Commission’s order. In that motion the Trust Fund argued that no statute or the caselaw
permits a credit when an employer made weekly payments “in good faith” to a person
who was not legally entitled to receive benefits. This is because benefits that are paid to
someone who is not entitled to them do not fall under the definition of “compensation”
under the statute. The Commission, in the Fund’s view, impermissibly expanded the
statute’s plain terms to include a “good faith” exception when none exists and unlawfully
accelerated the date upon which the Fund would have to take over payments.
In the alternative, the Fund argued that if Crystal Royal had somehow willfully
misled Bypass Diesel into paying her benefits, then the appropriate solution would be to
refer the case to the Fraud Unit or award costs for bringing a proceeding without
reasonable grounds, not awarding the employer a credit for payments. And if there was
no willful misrepresentation, then Bypass Diesel and its carrier should bear the cost of the
erroneous payments because they failed to be diligent in examining the circumstances of
the case. The Fund reasoned that if Bypass Diesel had investigated in a timely manner
after Jeremy’s death, it would have discovered the same set of facts that were revealed after
it had been erroneously paying survivor benefits for almost a year.
The last argument the Trust Fund made in its motion was that the Commission’s
majority opinion did not take into account the “serious financial damage” done to A.R.,
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who, according to the Trust Fund, “is the only survivor beneficiary entitled to benefits.”
The Trust Fund argued that an employer credit hurts A.R. because A.R. must receive
$182,650 in order for the Fund’s obligation to arise and by the Trust Fund’s count, A.R.
had been underpaid approximately $36,732 because Crystal was wrongly included in his
beneficiary class. The credit also hurt A.R. because he received no financial benefit from
the money paid to Crystal as he was living in a different household.
The Commission denied the Fund’s motion for reconsideration and clarification.
In its order the Commission repeated its reasoning for the credit: Bypass Diesel and its
carrier paid weekly death benefits to Crystal “in good faith” based on the information
provided to it. As for Jeremy’s biological child, A.R., the Commission wrote that “the
parties stipulated that he was the natural child of the deceased. Therefore, his rights are
statutorily controlled.”
B. Analysis
The sole issue here is whether Bypass Diesel and its insurance carrier are entitled to
a credit for the money they paid Crystal Royal. This question of law is one of first
impression that we will review de novo. See Craven v. Fulton Sanitation Serv., Inc., 361
Ark. 390, 206 S.W.3d 842 (2005). We are, however, required to strictly construe
workers’ compensation statutes, meaning that nothing may be taken as intended unless
clearly expressed in them. Parker v. Advanced Portable X-Ray, LLC, 2014 Ark. App. 11, at
5.
When an employee dies from a work-related event, those who were “wholly and
actually dependent” on the deceased may be compensated. Ark. Code Ann. § 11-9-
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527(c). Compensation is the “money allowance payable to the employee or his or her
dependents.” Ark. Code Ann. § 11-9-102(5). An employer must pay weekly death
benefits in the amount of 325 times the maximum total-disability rate established for the
date of the injury; after that, the Fund takes over the weekly payments. Ark. Code Ann.
§§ 11-9-502(b)(1)(B), 502(b)(2)(B). Section 11-9-807(a) provides that “if the employer
has made advance payments for compensation, the employer shall be entitled to be
reimbursed out of any unpaid installment or installments of compensation due.”
No statutory provision permits an employer to receive a credit against its
obligations to the Trust Fund when it paid a person who is not an employee or a
dependent of an employee. The Commission relied on Ark. Code Ann. § 11-9-
502(b)(1)(B) to support its credit, but that statute only provides the maximum amount of
money that an employer must pay as compensation for an employee’s work-related death.
The statute is wholly silent on whether a credit for good-faith, but ultimately mistaken,
payments may be given. Because Crystal was not Jeremy’s dependent, the $246.16 that
Bypass Diesel paid her each week cannot be counted as weekly death benefits or as
compensation. Consequently, these payments do not accrue as a credit against its
responsibility to the Trust Fund. We therefore reverse the Commission’s credit to Bypass
Diesel and its insurance carrier and remand the case for further proceedings consistent with
this opinion.
Affirmed on direct appeal; reversed and remanded on cross-appeal.
WYNNE and GLOVER, JJ., agree.
Moore, Giles & Matteson, LLP, by: Greg Giles, for appellants.
Mayton, Newkirk & Jones, by: David C. Jones; and David L. Pake, for appellees.
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