Bernard v. Mead Publishing Paper Division

DANA, J.,

with whom CALKINS, J., joins, dissenting.

[¶ 18] I respectfully dissent. Because the Court considers itself a prisoner of Allen v. Bath Iron Works Corp., 1999 ME 57, ¶ 7, 728 A.2d 121, 123, it produces a decision that makes no sense.7 Unlike the *582statute at issue in Allen, former 39 M.R.S.A. § 55-A intends that the workers’ compensation benefit (two-thirds the difference between pre- and post-injury wages) be adjusted for inflation.8 The Court properly seeks to apply the inflation factor only to two-thirds of the difference. It fails in that effort by failing to remove the effects of inflation from the post-injury wage (i.e., the 12 years of inflation from 1987 to 1999). Inflation thus substantially reduces the benefit before the inflation factor is permitted to play its intended role in increasing the benefit.

[¶ 19] The Court concludes its opinion with instructions to the hearing officer as follows:

On remand ... first determine Bernard’s rate of compensation by calculating two-thirds of the difference between his unadjusted pre- and post-injury wages, and then applying the inflation factor to that compensation rate to adjust his benefits for inflation.

The difference between Bernard’s “unadjusted pre- and post-injury wages” is $310.15.9 Two-thirds of this difference is $206.77.10 The “inflation factor” we infer from the hearing officer’s opinion is 1.563.11 Therefore, presumably, the hearing officer will award Mr. Bernard a 1999 benefit of $323.17.

[¶ 20] Removing the implicit inflation from Mr. Bernard’s 1999 Harvard job produces a logical result. Had Mr. Bernard obtained his job at Harvard in 1987, we assume that he would have been paid $358.30.12 The “difference” would have been $511.87.13 Applying the inflation factor to two-thirds of this difference would yield a 1999 benefit of $533.33.14

[¶ 21] It will be observed that the hearing officer produced the same result by applying the inflation factor to the 1987 pre-injury wage and then awarding two-thirds of the difference between the equally inflation-adjusted wages. The Court scolds the hearing officer for applying the inflation factor to one of the two wages rather than to two-thirds of the difference. Unfortunately, it is the Court that permits inflation to creep into its calculations twice to the legislatively unintended detriment of the employee.15

I would affirm the hearing officer.

. In Allen, we relied, in part on our decision in Lagasse v. Hannaford Bros. Co., 497 A.2d 1112, 1116-17 (Me.1985), in which we affirmed the use of the "Arnold Formula” in cases when an employee's partial incapacity benefits vary from week-to-week. We stated in dicta that "the parties here are in agreement that, when incapacity is set at a fixed percentage by agreement or decree, section 55 is complied with by simply and directly applying the [inflation] factor to the weekly compensation rate payable at a fixed rate.” Id. While acknowledging that this is the common approach, we rejected the employer’s argument that the statutory language requires such a result in all cases: "We do not agree with [the employer] that [the statute] by its verbal formulation requires the adjustment to be made in one and only one way, to the exclusion of the Arnold formula.” Id. at 1117. We stated that "the language of [the partial incapacity statute] should not be parsed as an isolated grammatical exercise,” *582but should be read flexibly in some cases to meet "the demand of the statute that the hearing commissioner adjust the injured employee's compensation benefits to keep pace with statewide wage inflation (or deflation, if that should occur).”

. In Allen, we also relied, in part, on Saunders v. MacBride Dunham Mgmt., 1998 ME 72, ¶ 5, 708 A.2d, 1030, 1032. In Saunders, the employee did not begin receiving partial benefits for his 1990 injury until 1997. Id. ¶ 2, 708 A.2d at 1031. The employee argued on appeal that, although he was not entitled to an inflation adjustment for partial benefits pursuant to the law at the time of his injury, he was entitled to an "adjustment” of his post-injury wages (deflated for inflation) in order to accurately measure the difference between pre- and post-injury wages. Id. ¶ 5, 708 A.2d at 1032. We stated in dictum that, except in the case of varying rates compensation based on the Arnold formula, "the inflation factor [is] usually applied directly to the employee’s partial benefits and [does] not affect the initial determination of earning incapacity.” Id. We rejected the employee’s contention that his post-injury wages should be deflated for inflation based on a clear legislative intent "to remove any consideration of inflation with respect to partial benefits.” Id. ¶ 4, 708 A.2d at 1032. Saunders, like Allen, involved a statute that did not contain an inflation adjustment and is therefore distinguishable from the present case.

.

Pre-injury 1987 Wage $870.15
Post-injury 1999 Wage $560.00
Difference $310.15

. $310.15 x i = $206.77.

. 870.15 x Inflation Factor = 1360

Inflation Factor = 1360/870.15
Inflation Factor = 1.562948917

. 1987 Wage x Inflation Factor = 560.00

1987 Wage = 560 -h 1.562948917
1987 Wage = $358.30

.

Pre-injury 1987 Wage $870.15
Post-Injury 1987 Wage $358.30
Difference $511.85

. $511.85 xjix 1.562948917 = $533.33

. Inflation first reduces the benefit because of its inclusion in the 1999 wage (i.e., the bigger the wage, the smaller the benefit) and then inflation increases the benefit when the inflation factor is applied to two-thirds of the difference.