Arizona Dept. of Public Safety v. Industrial Commission

LANKFORD, Judge,

dissenting.

I respectfully dissent.

The questions presented in this proceeding are: (1) whether the administrative law judge erred in concluding that the claimant’s termination from employment for misconduct was irrelevant, and (2) whether the judge erred in excluding evidence offered by the State Compensation Fund that claimant’s discharge was the cause of his diminished earning capacity.

Resolution of these questions requires the interpretation of a statute, which is an issue of law reviewable de novo on appeal. Arizona State Board of Accountancy v. Keebler, 115 Ariz. 239, 564 P.2d 928 (App.1977).

The statute involved is A.R.S. § 23-1044, subd. C, which governs compensation for unscheduled permanent partial industrial disability. The statute conditions compensation on proof of two facts: that the industrial injury caused the disability, and that the reduced earning capacity resulted from the disability: “[W]here the injury causes permanent partial disability for work, the employee shall receive during such disability compensation equal to fifty-five per cent of the difference between his average monthly wages before the accident and the amount which represents his reduced monthly earning capacity resulting from the disability ...” A.R.S. § 23-1044, subd. C.

Prior Arizona cases do not resolve how this provision should be applied in a case in which the employee has been terminated for misconduct after returning to his regular job following an injury. Nor does the statute specifically address this situation.

Our duty in interpreting any statute is to follow the Legislature’s intent, Calvert v. Farmer’s Ins. Co., 144 Ariz. 291, 697 P.2d 684 (1985), and our first recourse is to examine how that intention was expressed in the language of the statute. See Walker v. City of Scottsdale, 163 Ariz. 206, 786 P.2d 1057 (App.1989).

The statutory language requires both that the claimant’s loss be caused by the disability, and that the disability in turn be caused by the industrial injury. In this case, there is no question that an industrial injury caused a partial disability. The only question is whether the disability caused the diminished earning capacity as a matter of law, despite evidence that the real cause was claimant’s termination for misconduct.

The very existence of a statutory requirement of causation demonstrates that the Legislature contemplated that factors other than the industrial injury might cause an employee’s disability, and that factors other than disability might cause a loss of earning capacity. Nothing in the statute directs the Commission to disregard termination for misconduct as a possible cause of reduced earning power.

The pivotal fact in this case is that the claimant was perfectly able to continue his pre-injury employment.** In fact, he resumed his regular work as administrative sergeant for about two and one-half years before his termination. Consequently, this is at least arguably not a situation in which the termination for misconduct had no possible effect on claimant’s earning capacity because the injury alone would disqualify him from work which offers earnings equal to his former employment.

The majority opinion expresses concern that denying compensation for losses *281caused by the worker’s dismissal for just cause would work a “forfeiture” of benefits. The simple answer to this argument is that one cannot “forfeit” benefits to which one has no entitlement. Because the Legislature limited compensation to loss of earning capacity caused by a disability resulting from industrial injury, the claimant has no right to benefits unless he can establish causation. See In re Estate of Bedwell, 104 Ariz. 443, 454 P.2d 985 (1969); Franco v. Industrial Commission, 130 Ariz. 37, 633 P.2d 446 (App.1981) (applicant bears burden of proving causation of disability and of loss of earning capacity).

That this court may think the refusal of benefits “draconian and severe” (Maj. Opinion at 279, 823 P.2d at 1287) is of no significance, for it is the Legislature’s prerogative to limit the scope of compensation. The Legislature has done so by requiring proof of causation as a condition to awarding benefits. Although the judiciary may agree with the leading authority on this subject that legislation could avoid the difficult all-or-nothing choice between either fully compensating the employee whose voluntary misconduct reduced his earnings or denying all benefits despite the presence of some disability, 2 A. Larson, Workmen’s Compensation Law § 57.64(a) at p. 10-269 (1989), amending the statute is a legislative decision, not a judicial one.

Other states have confronted this issue and, while they are divided on the question, many do not agree with the position taken by the majority in this case. Most decisions appear to follow one of two courses of action in cases of this type. Some deny compensation when the employee resumed his regular employment after suffering the injury and later was discharged solely for misconduct. E.g., Calvert v. General Motors Corp., 120 Mich.App. 635, 327 N.W.2d 542 (1982). See Larson, supra at p. 10-264.

Most jurisdictions treat the question of causation as one of fact when the employee presents evidence that his disability hindered his efforts to secure other employment. See Larson, supra at p. 10-267 to 269. When the employee fails to present evidence that the cause of his loss is the disability rather than the termination, these courts deny compensation or uphold the agency’s decision to deny benefits. E.g., Bob’s Barricades, Inc. v. Catalano, 414 So.2d 580 (Fla.App.1982); Computer Sciences, Inc. v. Hendricks, 382 So.2d 804 (Fla.App.1980); Epprecht v. Curtis Wright Corp., 26 A.D.2d 888, 274 N.Y.S.2d 440 (1966); Woodard v. Workmen’s Comp. Appeal Bd., 49 Pa.Commw. 558, 411 A.2d 890 (1980). Other courts have remanded for the taking of evidence on causation and the entry of a finding by the agency. E.g., Johnston v. Super Food Services, 461 So.2d 169 (Fla.App.1984); Scott v. Kalamazoo College, 77 Mich.App.194, 258 N.W.2d 191 (1977); Marsolek v. George A. Hormel Co., 438 N.W.2d 922 (Minn.1989).

The claimant here should have an opportunity to prove that the loss of earning capacity was caused by his industrially related disability rather than by his termination for misconduct. In my opinion, we should vacate the award, permit both the claimant and the Fund to present evidence regarding causation, and allow the administrative law judge to make a finding on this issue following the hearing.

Because claimant successfully returned to his regular work, this case does not involve the effect of "sheltered work” on earning capacity. See Doles v. Industrial Commission, 167 Ariz. 604, 810 P.2d 602 (App.1990).