Monday, May 13, 2013

Evidence of Wage Loss After a Proper Discharge is Admissible


In Washington Metropolitan Area Transit v. Robert Washington, the Court of Special Appeals found a proper discharge for lying under oath to obtain Worker’s Compensation benefits, did not bar subsequent testimony about loss of wages after termination from employment.

Mr. Robert Washington (“Washington”) appealed a decision of the Maryland Workers’ Compensation Commission (“Commission”) which issued an award of 22% disability and industrial loss of use of his body as a result of an injury to his back.  The appeal was heard in the Circuit Court for Prince George’s County, where the jury found Washington sustained a 64% disability and industrial loss of use of his body as a result of the accident arising out of and in the course of his employment.  The employer, Washington Metropolitan Area Transit Authority (“WMATA”) appealed the decision to the Court of Special Appeals of Maryland arguing the circuit court erred in allowing evidence of past and present lost wages and income.

During the initial appeal to the Circuit Court for Prince George’s County, WMATA unsuccessfully moved to exclude all evidence Washington intended to present on his past and present loss of income from WMATA as well as any evidence of his past and current income from his limousine company, Tilly’s. WMATA argued that evidence of any wage differential was irrelevant because the wage loss was not the result of the accidental injury, but instead due to his discharge of employment for making fraudulent statements under oath in order to obtain benefits.  WMATA also argued that the evidence was prejudicial and the jury may decide to punish WMATA as a result of discharging Washington

At the Circuit Court trial, Washington’s attorney relied heavily on the fact that his income from Tilly’s was approximately one quarter of his salary from WMATA and strongly suggested this was evidence Washington had a 75% disability and loss of use of his body.  He used this argument in both his opening and closing statements and presented evidence of the disparity of the wages before the accident compared to his current income from Tilly’s. 

At the hearing before the Court of Special Appeals, WMATA argued the evidence of wages, past and current, was irrelevant and had unfairly prejudiced the jury.  The test used to determine the degree of disability is whether a claimant’s injuries allow him to return to and adequately perform his prior job with the employer, and whether the workplace injury caused a reduction of wages.  Getson v. WM Bancorp, 346 Md. 48,62 (1997). 

While the issues have been resolved in other states with regard to temporary total disability (“TTD”), Maryland has not directly addressed these issues with regard to a permanency award.  WMATA argued that many states, albeit, the minority of states, have found that an employee who is fired for misconduct has voluntarily removed himself from the workforce and is not entitled to lost wages.  The Court of Special Appeals of Maryland does not agree with this argument and has held in the past that TTD was based on the diminished earning capacity and not actual loss of wages.  In fact, neither a voluntary retirement (Victor v Proctor & Gamble Mfg. Co. 318 Md. 624 (1990)) nor an incarceration after the injury (Bowen v. Smith, 342 Md. 449 (1996)) prevented the claimant from receiving TTD benefits.  In both cases, the court found it was the injury which caused the claimant to become disabled, not the retirement or incarceration. 

The Court of Special Appeals found it was no great leap to conclude from these cases that an employee’s termination would not automatically bar benefits if the claimant’s evidence demonstrated that his or her disability caused the subsequent inability to find work.  While the court did not want to condone such conduct as lying under oath as Washington had done at the TTD hearing before the Commission, the court noted that the General Assembly has barred compensation only for an employee who is convicted of knowingly affecting or attempting to affect the payment of workers’ compensation by means of a fraudulent representation.  Lab. & Empl. § 9-1106. 

Additionally, the court pointed to the requested and obtained a special verdict on the issue of whether the percentage of disability and incidental loss was the result of the loss of Washington’s job with WMATA.  The jury answered the question in the negative.

WMATA was successful on its second issue which was whether or not the Circuit Court erred in allowing testimony of the income Washington derived from Tilly’s.  Most of the income Tilly’s made was used to purchase additional limousines rather than to pay Washington.  The court agreed that evidence of the minimal business profits of Tilly’s should have been excluded.  The general rule is that profits derived from a business are not to be considered as earnings and cannot be accepted as a measure of loss of earning power unless they are almost entirely the direct result of the claimant’s personal management and endeavors.  This was not the case for Washington as he owned five limousines and clearly profits were not a result of his personal endeavors alone.  Given Washington’s persistence in suggesting his only income from Tilly’s was about one quarter of his wages at WMATA suggesting a 75% Loss of Use, the court believes the jury was prejudiced by this information. 

The Court of Special Appeals remanded the case back to Circuit Court due to its error in not granting, in part, WMATA’s motion in limine to exclude evidence on Washington’s private business income. 

Article Contributed by Alicyn C. Campbell

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