BRIAN G. BARAGAR, Employee, v. JORDAN TRANSFORMER, L.L.C., and WESTERN NAT. MUT. INS. CO., Employer-Insurer/Appellants.

WORKERS’ COMPENSATION COURT OF APPEALS
APRIL 27, 2011

No. WC10-5187

HEADNOTES

WAGES - MULTIPLE EMPLOYMENTS; WAGES - SELF-EMPLOYMENT; STATUTES CONSTRUED - MINN. STAT. § 176.011, SUBD. 18.  Where it appeared that the employee had essentially given up his self-employment by the time he took his job with the employer, and where there was no evidence that he ever followed up on any intention to continue in self-employment during his employment with the employer, the compensation judge’s conclusion that the employee was “regularly employed” at both jobs at the time of his work injury, and so was entitled to have earnings from his self-employment included in his weekly wage, was clearly erroneous and unsupported by substantial evidence.

Reversed.

Determined by: Pederson, J., Johnson, C. J., and Rykken, J.
Compensation Judge: Catherine A. Dallner

Attorneys: Kirsten M. Tate, Osterbauer Law Firm, Minneapolis, MN, for the Respondent.  Ronald M. Stark, Jr., Minneapolis, MN, for the Appellants.

 

OPINION

WILLIAM R. PEDERSON, Judge

The employer and insurer appeal from the compensation judge’s determination that the employee was regularly employed by two employers for purposes of calculating his weekly wage on the date of his work injury.  We reverse.

BACKGROUND

On February 4, 2008, Brian Baragar sustained a work-related injury to his right upper extremity in the course of his work as an assembler with Jordan Transformer, LLC, for whom he had worked for three weeks, since January 14, 2008.  Jordan Transformer, LLC [the employer], and its insurer acknowledged liability for the injury and commenced payment of benefits.  Mr. Baragar [the employee] was thirty-eight years old on the date of his injury and was earning from the employer a weekly wage of $440.00.  On the date of his injury, the employee was also owner of a private business, Brian Baragar Construction [Baragar Construction], under auspices of which he had performed mainly concrete work and chimney sweeping since 2005.  By the date on which he was hired by the employer, January 14, 2008, the employee had completed 95% of a project with Baragar Construction that had entailed pouring a flat slab of cement for a barn for Alliance Land Company [Alliance Land].  The employee had commenced the project in mid November of 2007 and was eventually paid in 2008 $7,000.00 for his work, for a net after-expenses income of $6,668.00.[1]  The employee has been unable to complete his work for Alliance Land or otherwise to return to any work with Baragar Construction since his work injury.

This matter came on for hearing on August 11, 2010, on which date the employer and insurer were continuing to pay temporary total disability benefits to the employee.  The sole issue at hearing was the employee’s average weekly wage on the date of his injury and whether his earnings from any self-employment with Baragar Construction should be included in it.  Evidence submitted at hearing included the employee’s Federal Income Tax Return for 2008, a brief letter to the employee from the owner of Alliance Land, certifying simply that he had paid the employee $7,000 for concrete work that the employee had performed in 2008, and testimony from the employee.

At hearing, the employee testified, with regard to his self-employment before being hired by the employer in January of 2008, that his work with Baragar Construction since 2005 had been fairly steady, although the hours varied, sometimes as many as seventy hours a week and sometimes as few as twenty hours a week.  He testified that he had found a lot more work during the first two years of that self-employment than he had more recently, due to the drop in the housing market.  He testified that, in 2007, the year prior to his taking his job with the employer, he had found it necessary to begin bidding his work by the hour instead of by the foot, because bidding jobs by the foot had “pretty much stopped because people were running out of money to afford big jobs so a lot of people were just bidding by the hour so they could have some work.”  He estimated that he had earned between $25,000 and $30,000 at his self-employment in 2007.  He indicated that he had begun his concrete job for Alliance Land in mid November of that year and that he had taken his job with the employer about two months later, seeking a more “regular job,” with more income security.  “I definitely wanted to do more [self-employment work] but it depends on the demand.  If there’s no demand you’ve got to look for other stuff.”  Although jobs in the construction industry had grown increasingly difficult to find, he intended, he testified, to continue to work at his self-employment “[w]eekends and whenever I had time off” while employed by the employer. This testimony was challenged on cross-examination, however, based on the employee’s earlier and contrary deposition testimony that, when he started working for the employer, he didn’t intend to do any work in addition to his job with the employer, that he simply wanted the security of a regular job.

With regard to the three-week period of his employment with the employer, the employee testified that, by the date on which he was hired by the employer, January 14, 2008, his Baragar Construction project for Alliance Land was 95% completed.  By the time of his work injury three weeks later, on February 4, 2008, he testified, he had put in a little better than eighty hours of work on that project, having done only some minor work on it since being hired by the employer and having only some cutting work left to do.  He testified that his new job with employer was as an assembler and that he had taken it anticipating that, after a period of training, he would be joining a road crew, which work he expected would increase his wages, due to substantial overtime pay and per diem allowances.  Although he continued to maintain that he had intended to continue pursuing his work with Baragar Construction even during his employment with the employer, the employee acknowledged that the only work he did on the Alliance Land project over the three-week course of that employment was to “pull forms, pull insulation, take down heaters, stuff like that,” and he was unable to recall any particular bids for other jobs that he may have had in place, other than maybe a “chimney sweep or two but not nothing too big, I was concentrating on [the employer].”

By findings and order filed October 8, 2010, the compensation judge concluded that earnings from the employee’s self-employment with Baragar Construction were includable in his weekly wage for workers’ compensation purposes, and she calculated the employee’s total average weekly wage at the time of his injury to have been $916.29 - - $440.00 from his work for the employer and $476.29 from his work for Baragar Construction, based solely on the Alliance Land job.  Accordingly, the judge went on then to order temporary total disability benefits to be calculated based on that total average weekly wage.  The employer and insurer appeal.

STANDARD OF REVIEW

In reviewing cases on appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.”  Minn. Stat. § 176.421, subd. 1.  Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.”  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240.  Similarly, “[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.”  Northern States Power Co. v. Lyion Foods Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).  Findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.”  Id.

DECISION

On appeal, the employer and insurer challenge the compensation judge’s finding that the employee was regularly employed by two employers on the date of his injury.  Minnesota Statutes section 176.011, subdivisions 3 and 18, set forth the basis for determining wage calculations for workers’ compensation purposes.  Subdivision 3 provides, in relevant part, “If, at the time of injury, the employee was regularly employed by two or more employers, the employee’s earnings in all such employments shall be included in the computation of the daily wage.”  Minn. Stat. § 176.011, subd. 3.  Subdivision 18 goes on to provide, “If, at the time of injury, the employee was regularly employed by two or more employers, the employee’s days of work for all such employments shall be included in the computation of weekly wage.”  Minn. Stat. § 176.011, subd. 18.

In the present case, we see no definite evidence of continuing “regular” work by the employee for Baragar Construction during the three-week period of his employment with the employer.  Nor do we see any evidence that such employment and resultant earnings would likely recur or continue on an ongoing basis.  His 2008 income tax return, the only evidence of any self-employment earnings during the period of his employment with the employer, reports no self-employment earnings aside from the employee’s earnings on the Alliance Land project, which was 95% complete by the time the employee took his job with the employer, with only a few “wrapping up” tasks still to be performed.  We see no evidence that the employee was anything but in transition between two jobs, no evidence that he was in any real sense “regularly” employed at both of them at the same time.  Although he testified at hearing that he intended to continue on with his self-employment even after taking his new job, “[w]eekends and whenever I had time off” and as construction opportunities presented themselves, that intention was only speculative at best, even from the employee’s point of view.  Nor is there any evidence that the employee ever acted on such an intention by scheduling or even bidding on any self-employment jobs post-dating the beginning of his employment with the employer.  Moreover even this speculative intention is contradicted by the employee’s own deposition testimony.

The object of wage determination is to “arrive at a fair approximation of [the employee’s] probable future earning power which has been impaired or destroyed because of the injury.”  Sawczuk v. Special School Dist. #1, 312 N.W.2d 435, 437-38, 34 W.C.D. 282, 287 (Minn. 1981) (quoting Johnson v. D. B. Rosenblatt, Inc., 265 Minn. 427, 430, 122 N.W.2d 31, 33 (1963)).  It appears to us that the employee in this case had, for all practical purposes, given up his self-employment with Baragar Construction by the time he took his job with the employer, with only a few “wrapping up” details still to be completed--5% of his most recent project.  The employee had evidently been able to complete 95% of that project prior to his employment with the employer, but there is no evidence that he was able to complete just 5% of the project simultaneous with his three weeks of employment with the employer.  In light of the evidence, we conclude that it was unreasonable for the compensation judge to presume that the employee was - - or perhaps even could have been - - “regularly” employed at, and earning roughly the same wages at, both jobs simultaneously.  Therefore, concluding that it is unsupported by substantial evidence, we reverse the judge’s decision to include earnings from the employee’s self-employment in his weekly wage for worker’s compensation purposes.  See Hengemuhle, 358 N.W.2d at 59, 37 W.C.D. at 239.



[1] According to the employee’s 2008 Federal Income Tax Return, Petitioner’s Exhibit E, and a January 22, 2009, letter from the owner of Alliance Land, Petitioner’s Exhibit C.