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Holben v. Pepsi Bottling Ventures, LLC

Superior Court of Delaware, Kent

December 13, 2018

TERESA HOLBEN, Claimant-Below, Appellant,
PEPSI BOTTLING VENTURES, LLC, Employer-Below, Appellee.

          Submitted: October 3, 2018

          Walt F. Schmittinger, Esquire, & Candace E. Holmes, Esquire, Schmittinger & Rodriguez, P. A., Dover, Delaware, Attorneys for the Appellant.

          Robert S. Hunt, Esquire, Franklin & Prokopik, Wilmington, Delaware, Attorney for the Appellee.


          CLARK, J.

         Appellant Theresa Holben (hereinafter "Ms. Holben") appeals an Industrial Accident Board (hereinafter "the Board" or "the IAB") decision in favor of her employer, Pepsi Bottling Ventures, LLC (hereinafter "Pepsi"). At the hearing, the parties stipulated that Ms. Holben was partially disabled, but contested her disability rate. After the hearing, the Board fixed the amount.

         On appeal, she first challenges the Board's calculation of her partial disability benefits. She primarily argues that a presumption providing that post-injury wages equal post-injury earning power applies to her case.

         Second, she appeals the Board's decision to not award her attorney's fees pursuant to 19 Del. C. § 2320(10)b. (hereinafter the "thirty-day rule"). Pepsi offered her a compensation amount that exceeded what the Board awarded her, but excluded medical witness fees from the offer. Approximately fifteen days after Pepsi made the offer, she incurred a non-refundable fee for her treating physician's deposition. The Board ultimately awarded medical witness fees, but denied her attorney's fees notwithstanding her success on that issue.

         For the reasons discussed below, a presumption that post-injury wages equal the earning capacity of a claimant does not apply in this case. The presumption (1) permits only an inference of non-impairment of earning power, and (2) does not apply when a claimant's post-injury wages are significantly less than his or her pre-injury wages. Furthermore, though Ms. Holben's compensation award did not exceed Pepsi's offer, she is nevertheless entitled to attorney's fees because she prevailed on the issue of medical witness fees. To provide otherwise would ignore the plain language of the statute and the purpose of the rule.


         Pepsi employed Ms. Holben as an account manager for approximately three years before she suffered a work-related right knee injury. As a result, she had a knee surgery on March 23, 2017. For some period afterward, Ms. Holben was totally disabled as a result of the injury. When she partially recovered, Pepsi sought to terminate her total disability payments. After an April 2018 IAB hearing, the parties stipulated to her partial disability. Accordingly, the Board terminated her total disability benefits and found her to be partially disabled as of July 25, 2017.

         At the hearing, the IAB considered Ms. Holben's testimony, her treating physician's testimony, the testimony of a defense medical expert, and the testimony of Mr. Truman Perry, a certified vocational case manager. Ms. Holben earned $869.97 per week while working at Pepsi. Prior to that, she worked as a lead stacker at Food Lion, set up displays for Frito-Lay, and set out clothing at Salvation Army. She also had managerial experience as a department manager at Walmart.

         When she was released to restricted duty, Pepsi could not accommodate her work restrictions. As a result, Ms. Holben accepted a part-time job at Royal Farms as a facilities/maintenance employee earing $9.50 an hour, totaling $380 a week. She began work at Royal Farms on March 8, 2018, and remains employed there in the same part-time capacity. Ms. Holben testified that she could fulfill her work duties in her new part-time position notwithstanding her work restrictions. She also testified that she hoped that the position would lead to full-time work. In the meantime, she was still seeking full-time employment elsewhere.

         Mr. Perry's testimony is also relevant to her appeal. He testified as a certified vocational case manager. Mr. Perry had prepared a labor market survey with Ms. Holben's restrictions in mind, spoke to potential employers he had identified, and visited job sites. In total, there were thirteen jobs listed in his survey and supplement, ranging from sedentary to medium duty capacity jobs. Mr. Perry calculated the average weekly wage for those positions as $670.68. Furthermore, he testified that nine jobs he had identified in his survey were still available as of nine days before the hearing.

         Furthermore, Mr. Perry opined that Ms. Holben's part-time job at Royal Farms required skills below her abilities. He based that opinion primarily on her previous managerial experience. Mr. Perry testified that when he spoke to the potential employers listed on his labor market survey, they told him that Ms. Holben would be a very competitive applicant. He also testified that in January 2018, he contacted twelve of the potential employers. He claimed that five had responded and they stated Ms. Holben had not applied for their positions.

         Ms. Holben testified that she applied for the seven prospective positions listed in the labor market survey immediately after she received it.[1] She claimed that she received no response from any of them. Then, Royal Farms hired her for the part-time position. Thereafter, she received an updated survey but did not apply for the newly identified jobs because Royal Farms had already hired her.

         In its decision, the Board found Ms. Holben entitled to partial disability benefits, effective July 25, 2017. With regard to the rate, the Board found Mr. Perry's testimony and labor market survey to be credible. Because the Board found Ms. Holben to be underemployed at Royal Farms, it used Mr. Perry's average weekly wage to calculate the difference between her preinjury wages from Pepsi and her earning power after July 25, 2017. In other words, the Board found her post-injury $380 weekly salary to not represent her true earning power. In so finding, the IAB accepted Mr. Perry's testimony that Ms. Holben had a higher skill level than required by Royal Farms. In its decision, the Board placed significant weight on her managerial experience and the statements Mr. Perry relayed from employers describing her as a competitive candidate for their positions. After considering the evidence, the Board found that $670.68 per week was her true earning power.

         Thus, using the average weekly wage of $670.68 from the labor market survey, the Board found Ms. Holben to be entitled to weekly partial disability compensation at the rate of $132.86. Had the Board accepted Ms. Holben's argument, she would have been due significantly higher weekly benefits based upon a larger difference between her Pepsi wages and her Royal Farms wages. In its decision, the Board also awarded Ms. Holben medical witness fees pursuant to 19 Del. C. §2322(e). It did not, however, award her attorney's fees because "[t]he settlement offer was greater than the award."

         Ms. Holben argues that the Board should have applied a rebuttable presumption that her Royal Farms wages equaled her earning power. In light of that presumption, she contends that the record does not contain substantial evidence supporting the Board's decision. She also argues that the Board abused its discretion by relying on the thirty-day rule when denying her attorney's fees.[2] She emphasizes that although her recovery for partial disability benefits was less than Pepsi's pre-hearing offer, Pepsi did not include an offer to pay her medical witness fees. Since the Board awarded medical witness fees, she contends she is due attorney's fees.

         Pepsi counters that a rebuttable presumption that post-injury wages equal earning power does not apply. Furthermore, Pepsi argues that the Board weighed the credibility of the two competing witnesses - Ms. Holben and Mr. Perry. In doing so, Pepsi argues that although post-injury wages must be considered by the Board when calculating Ms. Holben's earning power, the Board was entitled to rely upon Mr. Perry's opinion free of a rebuttable presumption to the contrary. Finally, Pepsi argues that when it made its settlement offer, Ms. Holben had not yet incurred the medical witness fees. Accordingly, Pepsi argues that the Board did not commit legal error when refusing to award her attorney's fees.


         This Court's appellate review of the IAB's factual findings is limited to determining whether the Board's decision was supported by substantial evidence and whether it committed an error of law.[3] Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."[4] On appeal, the Court views the facts in the light most favorable to the prevailing party below.[5] Moreover, the Court does not weigh the evidence, determine questions of credibility, or make its own factual findings.[6] Absent errors of law, which are reviewed de novo, a decision of the IAB supported by substantial evidence will be upheld unless the Board abused its discretion.[7] The Board abuses its discretion when its decision exceeds the bounds of reason in view of the circumstances.[8]

         III. ANALYSIS

         This appeal is limited to two issues. The first issue is a substantial evidence issue regarding whether the Board erred in calculating Ms. Holben's partial disability benefits based upon the labor market survey rather than her post-injury wages. The parties disagree regarding whether the Board should have applied a presumption that her post-injury wages equaled her post-injury earning power. The second issue is whether the Board erred as a matter of law in denying Ms. Holben's attorney's fees.

         A. The rebuttable presumption does not apply to the facts of this case and the Board's calculation of partial disability benefits was supported by substantial evidence.

         Under Delaware law, an employee who is partially disabled due to a work-related accident is entitled to compensation.[9] The Worker's Compensation Act authorizes reimbursement for partial disability as follows:

[f]or injuries resulting in partial disability for work ... the compensation to be paid shall be 66 2/3 percent of the difference between the wages received by the injured employee before the injury and the earning power of the employee thereafter... This compensation shall be paid during the period of such partial disability for work, not, however, beyond 300 weeks.[10]

         Partial disability is the "period of time in which an injured employee suffers a partial loss of wages as a result of his [or her] injury."[11] A partial disability award is calculated as the difference between pre-injury wages and post-injury earning power.[12] The phrases "earning power" and "earning capacity" are synonymous.[13]Earning power is a function of the employee's "age, education, general background, occupational and general experience, the nature of the work performable with the physical impairment, the availability of such work and so on."[14] Moreover, the term earning power is not synonymous with actual earnings or wages received, but rather with one's ability to earn.[15] The fact that a claimant receives lower wages post-injury does not require a finding of diminished earning capacity.[16] The employee must show that the reason for the reduction was the injury.[17]

         The parties dispute whether Ms. Holben's post-injury wages from her part-time job at Royal Farms create a rebuttable presumption that her earning power is the same. The Board did not reference such a presumption in its decision, so the Court assumes it did not apply one.

         In regards to the applicability of a presumption, the parties dispute whether the Delaware Supreme Court's decision in Ruddy v. I.D. Griffith & Co. applies to the facts of this case.[18] In Ruddy, the Delaware Supreme Court limited its holding to using actual earnings to presumptively fix earning power when an "employee receives post-injury compensation equal to that earned by him before the injury. . .."[19] Namely, the Court held that in circumstances:

[w]here the injured employee returns to his former work for the same employer at the same or higher wages . . . in such situation there is a well-recognized presumption of non-impairment of earning capacity.[20]

         In Ruddy, the Court cited Larson 's Worker 's Compensation Law when addressing the presumption.[21] That treatise recognizes that this presumption is almost universally applied to presume non-impairment of earning capacity when pre-injury wages and post-injury wages are the same.[22]

         Ms. Holben argues that the Ruddy case stands for a blanket proposition that an employee's post-injury wages are the best evidence of that employee's post-injury earning power and that they create a presumption to that effect. In support, she relies upon three Delaware Superior Court cases in arguing that Ruddy'?, holding has been extended. Namely, the Superior Court in Darnell v. BOC Group, Inc., Darling v. Sara Lee Corp., and Home v. Genesis Healthcare, relied upon the Ruddy decision and, to an extent each other, in referencing the presumption in the context of all subsequent employment settings where the claimant is receiving any wages.[23]Pepsi counters that the Ruddy decision was strictly limited to its facts and should not have been extended beyond situations where the claimant returned to the exact same job position with the same pay.

         Notwithstanding these three Superior Court decisions, the Court holds that the presumption is available only to support the fact that an employee did not suffer a loss of earning power. The presumption has never been properly applied in favor of fixing an impaired earning capacity. The controlling statute and a larger number of Superior Court cases recognize the same.

         First, the controlling statute does not reference a rebuttable presumption. It merely requires the Board to take post-injury compensation "into consideration." Namely, it provides that in addition to considering post injury wages:

[i]n construing the words "earning power of the employee thereafter" as those words appear in this section, the Board shall take into consideration the value of gratuities, board, lodging, and similar advantages received by the employee in subsequent employment.[24]

         In a case such as Ms. Holben's, where post-accident wages are significantly less than pre-injury wages and the new job is merely part-time, affording a presumption not otherwise required by statute goes too far. In all instances, post injury wages, after a reasonable effort to fulfill one's earning potential, must be considered along with other circumstances when determining earning power. Unless the two jobs involve the same earnings, however, such evidence does not rise to the level of a rebuttable presumption. In fact, in that limited situation, the presumption operates only to create an inference against the employee's loss of earning power.

         Ms. Holben understandably relies upon the three cases that recited an expanded presumption. They, however, discussed the presumption without applying it or discussing why. Furthermore, all three of these decisions affirmed the IAB's decision and did not hold that a presumption negated the Board's reliance on a labor market survey. In other words, notwithstanding references to the presumption, the courts did not apply it. Rather, all three decisions undertook a ...

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