S T A T E O F M I C H I G A N WORKERS COMPENSATION APPELLATE COMMISSION V DOCKET # OPINION

Transcription

1 1998 OPINION #344 S T A T E O F M I C H I G A N WORKERS COMPENSATION APPELLATE COMMISSION MICHAEL A. GANTZ, (DECEASED), SUSAN GANTZ, (SURVIVING SPOUSE), PLAINTIFF, V DOCKET # LOPATIN, MILLER, FREEDMAN, BLUESTONE, AND ACCIDENT FUND COMPANY, DEFENDANTS. APPEAL FROM MAGISTRATE JOHNSON. JOEL L. ALPERT FOR PLAINTIFF, JOHN J. HAYS FOR DEFENDANTS. GARN, COMMISSIONER OPINION This case comes before the Appellate Commission on defendant s appeal and plaintiff s crossappeal from the decision of Magistrate Cynthia Johnson, mailed October 31, 1995, in which she granted an award of death benefits. On appeal defendant argues that the magistrate erred in concluding that the last two days of decedent s work contributed to his death in a significant manner and that she did not properly apply the significant manner test. Plaintiff argues on cross-appeal that the magistrate erred in her determination of the percentage of the claimant s partial dependency. This Commission is to determine whether there is competent, material, and substantial evidence on the whole record to support the magistrate s findings of fact. MCL a(3). The Commission may also review the magistrate s conclusions of law and clarify or correct them where necessary. Abbey v Campbell, Wyant & Cannon Foundry (on rem), 194 Mich App 341 (1992). In the instant case we affirm the magistrate s decision as to the finding of a work-related death, but modify on the question of the determination of the percentage of dependency. The instant case was filed by the widow of Michael Gantz who, coincidentally, was a workers compensation attorney. Mr. Gantz had serious heart problems which had resulted in an acute anteroseptal infarction in Mr. Gantz had bypass surgery in November 1983, but remained a virtual poster boy for risk factors. By virtually all accounts he continued to eat poorly, did not exercise, smoked either tobacco or marijuana or both, and continued to have problems with hypertension, triglycerides and high cholesterol. In addition, his family history was positive for heart problems and he himself had a volatile temperament. Mr. Gantz treated with Dr. Westveer, but

2 ignored virtually all advice given regarding lifestyle changes. He was advised to cut his work schedule down to 20 hours a week, but refused to do so. On September 26, 1989, Mr. Gantz represented one Merrill Stromer, a personal friend, in a workers compensation trial. The decision was mailed nearly a year later, September 5, Mr. Gantz first saw the opinion on September 11, 1990 at which time he learned the trial had been lost. According to several witnesses present at that moment, Mr. Gantz began jumping up and down and screaming. He also threw the file and kicked a filing cabinet. In short, as one witness put it, he totally lost it. Later in the same day, Mr. Gantz left the office for the purpose of taking a medical deposition. He later met his wife at home and they went shopping and to a movie. At this time he had calmed down. On September 12, 1990, Mr. Gantz was scheduled to appear in Mount Clemens at 9:00 a.m. and two hours later in Detroit. His afternoon schedule called for depositions. At approximately 10:00 a.m. he spoke with Mr. Berndt from his office regarding the appeal of the Stromer case. Mr. Berndt described decedent as having a distraught tone of voice. Mr. Sinn, another attorney, had spoken with Mr. Gantz at the Mt. Clemens Bureau earlier that morning regarding the Stromer case. Mr. Sinn testified that Mr. Gantz became agitated and upset, and waved his arms. He also noticed that decedent was sweating. In the afternoon of September 12, 1990, decedent arrived at the office parking lot where he met Mr. Berndt and made arrangements to cover Mr. Berndt s 2:00 deposition himself. Mr. Berndt testified that Mr. Gantz stated he was not feeling well and did not want to go into the office and see his wife (who worked as his secretary). He also testified that decedent was shaking, sweating, breathing irregularly fast, almost as white as a sheet, and complaining of chest pains. Immediately thereafter, Mr. Bellefeuille also talked to decedent and tried unsuccessfully to calm him down. Instead, Mr. Gantz sped away for the deposition. As it happened the deposition was canceled and Mr. Gantz chose to go home rather than return to the office. Upon arrival, he hung his clothes in the closet and laid on the bed to take a nap. Approximately four hours later, Mrs. Gantz found her husband dead of an acute myocardial infarction at the age of 50. Plaintiff, decedent s widow, filed an application for hearing in January This petition was amended in September of The matter was tried over several hearings before then magistrate Susan Marcavage. Magistrate Marcavage, however, did not issue an opinion before her term expired and it fell to Magistrate Cynthia Johnson to review the record and issue an opinion. Her decision awarded 500 weeks of death benefits beginning September 13, Plaintiff was also awarded the statutory burial fee of $1,500. 2

3 The primary question before the magistrate was, of course, work-relatedness. As a heart case, this matter is considered within the auspices of MCL (2) which provides in pertinent part as follows: Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner. This section, as it applies to a heart case, was applied by the Supreme Court in Farrington v Total Petroleum, 442 Mich 201 (1993): After enactment of the significant manner amendments, these occupational factors must now be considered together with the totality of claimant s health circumstances to analyze whether the heart injury was significantly caused by workrelated events. Non-occupational factors noted by the Court in a footnote included, age, weight, diet, previous cardiac ailments or injuries, genetic predispositions, and the claimant s consumption of alcohol and use of tobacco or other drugs. To apply Farrington and the statute to this case, the magistrate was required to compare a singular work event with numerous non-occupational factors. Despite defendants protests to the contrary, we believe that Magistrate Johnson conducted just such a review. She wrote: The Supreme Court in the case of Farrington v Total Petroleum, Inc., 442 Mich. 201 (1993) interpreted the 1982 amendments to the Act dealing with heart conditions. The court stated that a plaintiff has to show that the heart disease or heart injury was significantly caused or aggravated by employment. The court also stressed that the trier of fact must consider the totality of all the occupational factors and the claimant s health circumstances and nonoccupational factors. The court noted in a footnote that the factors to be considered are age, weight, diet, previous cardiac ailments or injuries, genetic predispositions, alcohol consumption, tobacco usage and the use of other drugs. In looking at the plaintiff, all of those factors were present and all of those factors were nonoccupational. However, as stated, the Supreme Court indicated that the heart disease or injury must be significantly caused or aggravated by the employment even with those other factors. In my opinion, the plaintiff s reaction to the Stromer decision and his continual dwelling on this adverse decision significantly aggravated and in my opinion precipitated the heart attack which caused his death. I base this upon the testimony of the individuals who saw him on September 11 and September 12 and also upon the medical testimony. 3

4 Magistrate Johnson had previously set forth her review of the medical testimony. We find her review of the same to be accurate in its summary. She noted the various opinions and the reasons they were based upon. In addition she observed factors such as the presence of epinephrin in the blood stream, how it gets there and how long it stays. Based upon these factors, which supported the concept that plaintiff s anger over the Stromer decision had a strong temporal relationship to the heart attack, the magistrate concluded that the significant manner requirement of the statute had been satisfied. We believe the magistrate could just as easily have found in favor of a defendant on this question. There certainly is a great deal of evidence on this record which would support such a finding. Indeed, Magistrate Johnson herself wrote, In my opinion, based upon the plaintiff s lifestyle and his general makeup, he was a heart attack waiting to happen. However, as noted above, our charge on appeal is to determine whether there is competent, material and substantial evidence supportive of the decision the magistrate made, rather than for an alternative finding that was not made. Holden v Ford Motor Co., 439 Mich. 257 (1992). We affirm the finding of a work-related death. The next question for consideration is that of dependency. Specifically we are asked to determine whether the magistrate correctly determined the percentage of dependency of Mrs. Gantz. MCL provides in pertinent part: Questions as to who constitutes dependents and the extent of their dependency shall be determined as of the date of the injury to the employee, and their right to any death benefit shall become fixed as of such time, irrespective of any subsequent change in conditions except as otherwise provided in sections 321, 331, and 335. Additionally, the average weekly wage of decedent must be determined in order to establish the appropriate rate of benefits to be paid to any dependents. MCL ; MCL The section which sets forth the process of determining the average weekly wage is MCL (2) which provides as follows: As used in this act, average weekly wage means the weekly wage earned by the employee at the time of the employee s injury in all employment, inclusive of overtime, premium pay, and cost of living adjustment, and exclusive of any fringe or other benefits which continue during the disability. Any fringe or other benefit which does not continue during the disability shall be included for purposes of determining an employee s average weekly wage to the extent that the inclusion of the fringe or other benefit will not result in a weekly benefit amount which is greater than b of the state average weekly wage at the time of injury. The average weekly wage shall be determined by computing the total wages paid in the highest paid 39 weeks of the 52 weeks immediately preceding the date of injury, and dividing by 39. (Emphasis added). 4

5 Magistrate Johnson properly relied upon Weems v Chrysler Corp, 448 Mich 679 (1995) in addressing the degree of dependency issue. She also correctly identified the problem presented by that Supreme Court decision. In that case the Court addressed the question of partial dependency and set forth the formula to be used in making the appropriate calculations. However, the Court then proceeded to apply a slightly different formula when it actually engaged in the calculations. As we have previously stated, we believe the formula as applied (using gross annual incomes for both decedent and survivor) is more appropriate. Burd v Piedmont Excavating, Inc, 1997 ACO #569. See also, Welch, Worker s Compensation Practice in Michigan, Magistrate Johnson found Mrs. Gantz to be partially dependent despite the fact she has been earning wages since She determined decedent s average weekly wage to be $ She arrived at his annual income by multiplying the above figure by 52 arriving at a figure of $71, Using the 1990 rate tables she determined his after-tax income to be $52, Regarding Mrs. Gantz, the figures were determined to be an average weekly wage of $ for 1989, $ for Based upon those figures, the magistrate determined the operative AWW for the highest 39 weeks to be $ She then computed the annual income to be $29, This figure was added to the $52, found above and then divided into that same 52,000 figure. This exercise yielded a percentage of 64%. Sixty-four percent when multiplied against the compensation rate of $427 provided a compensation rate of $ Plaintiff in the instant case claims that the formula outlined in Weems is flawed since it takes into account the employee s tax burden, but gives no consideration to the spouse s tax burden. We believe the Weems formula as applied requires us to use the gross income of both Mr. and Mrs. Gantz. We further note that since Mr. and Mrs. Gantz filed jointly, their tax liability was thereby unified, and therefore, the use of their gross annual incomes for all calculations is indeed appropriate. Burd, supra. Having established the formula to be used in the instant case, we must now plug in the relevant incomes of decedent and plaintiff in order to establish the percentage of dependency and subsequent weekly benefit. Both plaintiff and defendant appeal some of the facts and figures used by Magistrate Johnson in her calculation of these incomes. First, plaintiff contends that the $2,553 of miscellaneous income she was paid in 1989 (as reported on a 1989 form 1099) was not shown to have been earned during the 52 weeks prior to her husband s death. Plaintiff stated however that she was not sure for what work or period that money was paid. 1 Defendant asserts the money was paid for miscellaneous secretarial work done by Mrs. Gantz in We find no proof on this record that this income was received within 52 weeks of decedent s death. In fact, given that roughly eight months of the year 1989 would have been outside the 52 week period, there is a substantial likelihood that the income should not be included for purposes of calculating the percentage of dependency. The employer s 1 Hearing transcript, March 25, 1993, page Hearing transcript, May 12, 1993, page 6. 5

6 controller, Sydney Cohen, testified that he did not know what part of the year Mrs. Gantz performed the part-time work for which she was paid $2553. Regardless of who carries the burden of proof, the fact is that we have no evidence on this record to indicate that this income was generated within the necessary time frame. For that reason, we believe it should be excluded from consideration. In the meantime defendant contends that the $11, in referral fees paid to Mr. Gantz widow in September and November 1990 should not have been included for the purposes of determining his annual wage. Defendant argues that a cash basis tax payer reports income when it is received rather than when it is earned and that a similar rule should obtain here. We find defendant s argument persuasive for several reasons. First, as is noted above, 341 requires that dependency be determined as of the date of death. We believe that this requires us to take a snapshot of the situation as of that date. Second, 371(2) in outlining the procedure for determining average weekly wage, requires us to look back in time for one year. We determine the wage rate by computing the total wages paid in the highest paid 39 weeks of the previous 52. Therefore, in making such determinations, we are not able to take into account income that has not yet been paid as of the date of injury. In the instant case, plaintiff s date of injury was found to be September 12, The 1990 referral fees were received after the date of death according to defendant s controller, Sydney Cohen. 3 Finally, as a purely practical matter, we believe it makes greater sense to only look at income that was actually in hand at the time of death for purposes of these calculations. Some will argue, quite persuasively perhaps, that a doctrine of the sweat of the brow should prevail and that such income should be attributed in terms of chronology to the act or acts that resulted in the income. However, we believe that this is a cumbersome approach at best and a slippery slope of the greatest magnitude at worst. In instances such as this which involve referrals, the income is not determined or paid until the referred case is resolved. Taken to its extreme, it is conceivable that the record in a case already heard to conclusion, might have to continually be reopened as more referral fees mature and are paid. At the other end of the spectrum, we note that Mr. Gantz 1989 income included several thousand dollars in referral fees paid on September 18, 1989 and November 1, These fees obviously were paid on the basis of referrals made previous to September 12, Any income previous to the latter date cannot be included as we only look back one year in determining the average weekly wage. Plaintiff s argument essentially asks us to allow plaintiff to include these dollars on the basis of receipt as opposed to sweat of the brow. We cannot do otherwise in considering the 1990 fees. For all these reasons, both statutory and practical, we believe the magistrate should exclude the 1990 fees from her calculations. 3 Hearing transcript, May 12, 1993, page 11. 6

7 Next we must consider the issue of the inclusion of fringe benefits earned for the determination of percentage of dependancy. Under Ember v Wayne Village, 197 Mich.App. 307 (1992), the Court of Appeals held that: Average weekly wage, upon which workers compensation benefits payable to injured employee must be based, includes all items of compensation or advantage agreed upon in contract of hiring that are measurable in money, whether in form of cash or as economic gain to employee. Both plaintiff and defendant agree that because Mr. Gantz was entitled to the maximum rate due to his high annual wage, consideration of his fringe benefits for that determination is irrelevant since inclusion would cause the amount to exceed 2/3 of the State average weekly wage. 371(2). This is the only instance we find in the statute in which fringe benefits are excluded for the purpose of a certain calculation. We therefore conclude that the fringe benefits are not to be excluded and are indeed relevant for the purpose of determining the percentage of dependency. After all, such benefits were part of the family income earned by Mr. Gantz upon which Mrs. Gantz was dependent. They should not, therefore, be excluded from the calculation of the degree of that dependency. According to the record, decedent s fringe benefits included for 1990: Blue Cross Blue Shield Delta Dental Long Term Disability Group Life Insurance Auto Insurance $ per month $72.53 per month $25.57 per month $20.90 per month $ annually $ projected total for 1990 When divided by 52, this total yields a weekly fringe benefit value of $ Mr. Gantz fringe benefits for 1989 included an automobile insurance amount paid of $ Beyond that the fringe benefits were virtually the same with the exception of Group Life Insurance which was listed as $ Mr. Cohen testified as to the difference between 1989 and 1990: C They were approximately the same because they didn t make very many changes in 89, and 90 as far as our premiums were concerned. 4 We therefore will use the same values for Blue Cross coverage, Delta Dental, and long term disability in 1989 that were used in With those numbers the same, and the additional information regarding the 1989 auto insurance and group life insurance, we find a total of $ which in turn yields a weekly rate of $ In light of the above discussion, we calculate decedent s AWW as follows: 4 Hearing transcript, May 12, 1993, pages

8 Decedent s annual income 1990 $37,000 Wages $3, Referral Fees $40, $55,000 Wages $6, Referral Fees $61, The AWW for 1990 based upon 37 weeks worked at the time of death: $ The AWW for 1989 was $1, The AWW for the highest 39 weeks is therefore found by taking 15 weeks at the higher rate of $ ($17,828.40) and 24 weeks at the lower 1990 rate of $ ($26,218.80). The total of $44, must then be divided by 39 which yields an AWW of $ This figure does not include the fringe benefit figures. Mrs. Gantz AWW for the same periods is determined as follows: 1990 $29, Wages 1989 $15, Wages 1990 AWW $ AWW $ AWW for highest 39 weeks $21, ($ x37) $ ($ x 2) $21, /39 = $ Again, in order to level the field, we must also (for the purposes of dependency determinations, include plaintiff s fringe benefit values in determining her actual income rate). The record does not reveal whether Mrs. Gantz received any fringe benefits during any part of For that reason, we must assume none were paid. However, she indeed received fringe benefits in Nevertheless the record is confusing as to whether those fringe benefits were included in the amount of $29, which was reported on the W-2 (Plaintiff s Exhibit 6). That same form states she received an auto insurance premium fringe benefit in the amount of $ The confusion arises in the testimony of Mr. Cohen at page of the May 12, 1993 hearing. Q And a W-2 for Mrs. Gantz indicating earnings for that year of $29, as well as which includes, I assume, some payment for an automobile under other? 8

9 A Q A Q A Yes. That s a portion of the premium that is paid by the firm for auto coverage as a fringe benefit. So, it was gross amount that was paid out, is $29, figure? [sic] That s correct. And what does that represent other than the payment of the premium for the auto insurance? It represents her secretarial work for the year. This testimony is not ambiguous. It very clearly establishes that the gross wages included the amount of the auto insurance premium. When contrasted with Mr. Cohen s testimony at page 14 regarding decedent s W-2, one can hopefully see the reason for our confusion. Q A For the year of 1990, was it also automobile insurance paid for Mr. Gantz? Yes. Q It was $ ? A Q A Q That s correct. But that was included in the $37,000 figure? No, it is not. It is over and above that? A It is over and above that. That s why you show them separately... Notwithstanding the above, we do find that plaintiff s long term disability fringe benefit in the amount of $10.23 per month and her group life insurance fringe benefit of $14.00 should be added to the annual income rate for These premiums result in an addition of $5.59 per week to the 1990 figures. To determine the degree of dependency we must recalculate to include fringe benefits as follows: 5 Hearing transcript, May 12, 1993 pages 12 and 13. 9

10 Decedent 1989 The average weekly wage of $ plus the fringe benefit value for 1989 of $ results in the amount of $ of actual 1989 income per week The average weekly wage of $ plus the fringe benefit value for 1990 of $ results in the amount of $ of actual 1990 income per week. Decedent s annual income $67, (actual income in 1990 [ x 37 weeks through September 13] and the last 15 weeks of 1989 multiplied by the 1989 actual income rate of $1,360.98). Survivor 1989 The actual income per week is $ (AWW plus no fringe benefits) The average weekly wage of $ plus the fringe benefit value for 1990 of $5.59 results in the amount of $ of actual 1990 income per week. Survivor s annual income $ (actual income in 1990 [$ x 37 weeks through September 13] and the last 15 weeks of 1989 multiplied by the 1989 actual income rate of $305.13). In following Weems, we next must add the incomes together. This results in a sum of $93, We next divide the sum into decedent s total income which yields 72%. The compensation rate for the partial dependent is then found by multiplying the maximum rate of benefits for 1990, $427.00, by 72%. Thus, Mrs. Gantz compensation rate is found to be $ Based upon the foregoing, we affirm the magistrate s finding of a work-related death and the dependency of the widow. We modify the magistrate s opinion on the question of the percentage of dependency and find Mrs. Gantz entitled to benefits at the rate of $

11 Commissioners Kent and Leslie concur. Marten N. Garn James J. Kent Richard B. Leslie Commissioners 11

12 S T A T E O F M I C H I G A N WORKERS COMPENSATION APPELLATE COMMISSION MICHAEL A. GANTZ, (DECEASED), SUSAN GANTZ, (SURVIVING SPOUSE), PLAINTIFF, V DOCKET # LOPATIN, MILLER, FREEDMAN, BLUESTONE, AND ACCIDENT FUND COMPANY, DEFENDANTS. This cause came before the Appellate Commission on appeal by defendant and cross appeal by plaintiff, from the decision of Magistrate Cynthia R. Johnson, mailed October 31, 1995, granting an award of death benefits. The Commission has considered the record and briefs of counsel, and believes that the magistrate's decision should be affirmed with modification. Therefore, IT IS ORDERED that we modify the magistrate s opinion on the question of the percentage of dependency and find Mrs. Gantz entitled to benefits at the rate of $ In all other respects we affirm the magistrate s opinion. Marten N. Garn James J. Kent Richard B. Leslie Commissioners