Varnell v. Union Carbide

Judith Rogers, Judge,

concurring. I concur in the result and decision of the court as it is both a correct statement and clarification of the law at the present time. I am concerned, however, that the burden of proof is such that it erects an almost impossible barrier for the employer to overcome to establish that such payments were intended as advance payment of compensation. Consequently, I am concerned that injured employees will not receive needed funds since payments may be withheld pending final adjudication. The employers may fear that the payments will subsequently not be credited as advance payments of compensation.

James R. Cooper, Judge, dissenting. I dissent because I believe there was substantial evidence to support the Commission’s finding that the payments made to the appellant by the appellee were advance payments of compensation. In Emerson Electric v. Cargile, 5 Ark. App. 123, 633 S.W.2d 389 (1982), we held that, where the employer provides insurance, the employer may attempt to show that the payments were advance payments of compensation. The Supreme Court drew distinctions between advance payment of compensation and other types of payments made by an employer in Southwestern Bell Telephone Co. v. Siegler, 240 Ark. 132, 398 S.W.2d 531 (1966). The Siegler Court held that an employer is entitled to an offset when the employer clearly establishes that the amount received by the employee was an advance payment of compensation:

The money which Siegler received might have been either (a) wages, (b) gratuities, (c) benefits, or (d) advance payment of compensation. Until the Company showed that under the Plan such payment could have been nothing except advance payment of compensation, the Company failed to establish its case.

Id. at 136 (emphasis in the original). I submit that an employer has met his burden under Siegler when he has produced substantial evidence to show that the payments to the employee were not wages, gratuities, or benefits, and could therefore have been nothing except advance payment of compensation, and that the Commission could properly find that the appellee did so in the case at bar.

With regard to wages, there was evidence to show that the appellant was not working when the payments were made and that, unlike the circumstances presented in Siegler, supra, the amount paid the appellant was not identical to her weekly wages. The amount paid the appellant also provided some evidence that the payments were not gratuities: the record shows that the payments were neither identical to the appellant’s wages, nor was the amount determined arbitrarily. Instead, there was evidence that the amount of the payments was calculated as a percentage of the appellant’s weekly wages. Workers’ compensation benefits are likewise computed as a percentage of the employee’s weekly wages. See Ark. Code Ann. § 11-9-518 (1987). Furthermore, this case is distinguishable from Looney v. Sears Roebuck, 236 Ark. 868, 371 S.W.2d 6 (1963), where the employer’s agent testified that the payments were intended as gratuities. No such testimony appears in this record.

The evidence with respect to benefits requires more discussion. Siegler, supra, draws a distinction between benefits and advance payments of compensation, but does not say what that distinction is. Compensation is itself a form of benefit, see Brooks v. Arkansas-Best Freight System, 247 Ark. 61, 444 S.W.2d 246 (1969), which defines “compensation” under what is now Ark. Code Ann. § 11-9-518 (1987) as “money benefits paid to the employee for disability.” Therefore, “benefits” under Siegler must refer to benefits other than those payable to employees for disability. Under the employer’s “Plan” in Siegler, benefits were not limited to disability, but were also payable to employees for loss of time for unspecified reasons and as pensions. 240 Ark. at 134-35. In the case at bar, however, the only evidence relating to the purpose for which such payments were made was the employer’s agent’s testimony that the payments were predicated on the employee having suffered an injury resulting in an inability to work. The evidence therefore showed that the payments were made for disability, and were thus not the type of “benefits” excluded under Siegler.

We review the findings of the Commission in the light most favorable to those findings, giving the testimony its strongest probative force in favor of the Commission’s action, to determine whether they are supported by substantial evidence. Tyson’s Foods, Inc. v. Disheroon, 26 Ark. App. 145, 761 S.W.2d 617 (1988). We are required to give the Commission’s findings the force and verity that would attach to a jury verdict, Central Mahoney, Inc. v. York, 10 Ark. App. 254, 663 S.W.2d 196 (1984), and even should the Commission’s findings appear to be contrary to the preponderance of the evidence, we must affirm if reasonable minds could have reached the conclusion reached by the Commission. Hyman v. Farmland Feed Mill, 24 Ark. App. 63, 748 S.W.2d 151 (1988). We reverse the decision only where we are convinced that fair-minded persons, with the same facts before them, could not have reached the conclusion arrived at by the Commission. Id. I am convinced that the appellee presented sufficient evidence to show that the payments were not wages, gratuities, or benefits to permit reasonable minds to conclude that the payments were intended as advance payment of compensation.

Nor do I agree with the majority’s holding that the appellant is entitled to an attorney’s fee based on the total amount controverted without reduction for amounts paid by collateral sources. As the majority correctly notes, attorney’s fees are calculated on the amount controverted and awarded. General Industries v. Gibson, 22 Ark. App. 217, 738 S.W.2d 104 (1987). Although the payment of part of the medical bills by a collateral source was not found to be significant in that case, the collateral source in Gibson was an insurer which had intervened in the case. In contrast, the collateral source in the case at bar was an insurer which had not intervened or otherwise disputed its liability in any manner. I do not agree that the amounts paid by the insurer in the case at bar were “controverted” for the purposes of awarding attorney’s fees.

I dissent.