Laker v. Industrial Commission

679 P.2d 105, 138 Ariz. 459, 1984 Ariz. App. LEXIS 355
CourtCourt of Appeals of Arizona
DecidedFebruary 21, 1984
DocketNo. 1 CA-IC 2948
StatusPublished
Cited by4 cases

This text of 679 P.2d 105 (Laker v. Industrial Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laker v. Industrial Commission, 679 P.2d 105, 138 Ariz. 459, 1984 Ariz. App. LEXIS 355 (Ark. Ct. App. 1984).

Opinion

OPINION

JACOBSON, Chief Judge.

Dean Laker sustained a job-related injury on January 30, 1979. His claim was accepted and closed on July 29, 1981 with an award for unscheduled permanent partial disability, with a 19.30% reduction in earning capacity. Less than a year later, the insurance carrier filed a petition for rearrangement of compensation, alleging that “claimant is earning more, or as much as at date of injury.” On May 5, 1982, the Industrial Commission issued an award rearranging compensation. Laker requested a hearing which was granted. The administrative law judge found that the evidence established an increase in Laker’s earning capacity subsequent to the original award and reduced the loss of earning capacity thereby to 10.40% decreased compensation from $86.83 to $46.80 per month. That decision was affirmed on review and Laker now seeks relief from the rearrangement award in this court. Other facts will be discussed as they pertain to each issue.

Laker raises three issues on appeal: (1) whether the rearrangement petition alleged a change of circumstances sufficient to confer jurisdiction on the Industrial Commission to alter a prior final award; (2) whether the administrative law judge properly compared the original loss of earning capacity award, which was based on hourly rate and overtime, to Laker’s current wages which included an hourly pay differential; and (3) whether A.R.S. § 23-1047(D) prohibits the filing of a petition to rearrange within the year following the original loss of earning capacity award.

JURISDICTION

Laker argues that although the Industrial Commission retains jurisdiction of all [462]*462compensation cases to alter an existing award, it cannot act unless the allegation of “change of earning capacity” is a “change external to the injured worker.” He therefore argues that a carrier seeking to reduce an award under A.R.S. § 23-1044(F)(3) (Supp.1983) must allege and prove the same type of “changes” required by A.R.S. § 23-1044(F)(2) (Supp.1983). He submits that Whyte v. Industrial Comm., 71 Ariz. 338, 227 P.2d 230 (1951) and Arizona Sand & Rock v. Industrial Comm., 123 Ariz. 448, 600 P.2d 752 (App.1979) and principles of fairness mandate this result. We do not agree.

Neither the statute nor case law supports the proposition that a petition which alleges increased earnings is not sufficient to bring a worker’s prior award under the purview of the commission. A.R.S. § 23-1044(F)(3) allows rearrangement when it is shown that “earning capacity has increased.” 1 It is well established in Arizona that evidence of post-injury earnings creates a presumption of commensurate earning capacity. Arizona Public Service Co. v. Industrial Comm., 16 Ariz.App. 274, 492 P.2d 1212 (1972). Therefore, it is enough for the carrier to allege in the petition a change of circumstances in terms of increased earnings.

Laker submits that the post-injury earnings presumption is unfair in that it works in favor of the carrier both when it is seeking rearrangement or when the worker seeks rearrangement. This is an inaccurate assessment of the law. The presumption can be rebutted by the worker in each case by showing that post-injury earnings are not a true indicator of earning capacity. It is the worker’s burden to show that the source of the new income is an unreliable indicator of earning capacity. This burden is met by a showing among other things, that the increase is due to a rise in general wage levels, claimant’s own maturity, longer hours, employer sympathy or temporary and unpredictable income. Allen v. Industrial Comm., 87 Ariz. 56, 347 P.2d 710 (1959); 2 A. Larson Workmen’s Compensation Law § 57.21 (1980). When it is the worker seeking to rearrange because his earning capacity has changed, the worker need only show that his inability to secure or retain work is at least partially injury related. Fletcher v. Industrial Comm., 120 Ariz. 571, 587 P.2d 757 (App.1978); Oquita v. Industrial Comm., 120 Ariz. 610, 587 P.2d 1187 (App.1978). The burden then shifts to the carrier to show that the decrease in earning capacity is in no way caused by the injury. Wiedmaier v. Industrial Comm., 121 Ariz. 127, 589 P.2d 1 (1978); A.R.S. § 23-1044(G) (Supp.1983).

This analysis is consistent with the previous decisions in Whyte, supra, and Arizona Sand & Rock, supra. In the former case it was held that:

A reduction or increase in earning capacity occasioned by general business conditions ... cannot be considered by the commission as a basis for fixing or adjusting the compensation of an injured employee.

Whyte, 71 Ariz. at 346, 227 P.2d at 235. However, where the difference in wages is due to a change in the physical condition of the injured employee resulting from the injury or to the “peculiar or special efficiency of such employee” the Commission may consider the difference as indicative of changed earning capacity. Id.

Furthermore, the allegation of an increase in earnings presupposes a “change external to the claimant” as that phrase is [463]*463used in Arizona Sand & Rock, supra. The burden then shifts to the worker to prove that the increase in earnings is not commensurate with an increase in earning capacity. We find the allegations of the petition sufficient.

Laker next argues that a portion of the increase in earnings designated “merit raises” were in fact paid to all employees of St. Mary’s Hospital. From this premise, he argues that the carrier failed to present evidence that this was not a cost of living raise and failed to prove that Laker’s merit raise was anything more than an industry-wide increase, and therefore rearrangement is improper on this basis.

First, we note that merit raises which are based on continued satisfactory performance or longevity are subject to rearrangement by the Commission. Charles v. Industrial Comm., 25 Ariz.App. 280, 542 P.2d 1160 (1975). Second, Laker’s argument ignores the fact that once the carrier alleges an increase in earnings, the weight of the presumption that earning capacity is commensurate carries the employer’s burden of going forward.

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861 P.2d 603 (Arizona Supreme Court, 1993)
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Laker v. INDUSTRIAL COM'N OF ARIZONA
679 P.2d 105 (Court of Appeals of Arizona, 1984)

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Bluebook (online)
679 P.2d 105, 138 Ariz. 459, 1984 Ariz. App. LEXIS 355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laker-v-industrial-commission-arizctapp-1984.