City of Danville v. Tate (ORDER) ( 2015 )


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  • VIRGINIA:
    In the Supreme Court of Virginia held at the Supreme Court
    Building in the City of Richmond, on Thursday, the 8th day of
    January, 2015.
    City of Danville,                                         Appellant,
    against       Record No. 140011
    Circuit Court No. CL11-228
    O. Ryland Tate,                                           Appellee.
    Upon an appeal from a judgment rendered
    by the Circuit Court of the City of Danville.
    Upon consideration of the record, briefs, and argument
    of counsel, the Court is of the opinion that the circuit court
    reached the right result, although for the wrong reason, in
    dismissing the City of Danville's complaint in this case.
    Therefore, the judgment of the circuit court will be affirmed.
    O. Ryland Tate ("Tate") was employed by the City of Danville
    (the "City") as a firefighter for thirty-nine years.   In March
    2009, Tate suffered a disabling heart attack, did not return to
    work, and retired six months later.   Having accrued nearly 6,000
    hours in sick leave, Tate received from the City the equivalent of
    his full wages in the form of sick leave pay totaling approximately
    $40,000.    When he retired in August 2009, Tate elected under the
    City's retirement system to use the balance of his accrued sick
    leave to obtain an extra year of credit (the maximum allowed)
    towards his retirement.   With this election, the City eliminated
    Tate's sick leave balance as provided for under its policies.
    In addition, Tate, before retiring, filed a workers'
    compensation claim seeking indemnity benefits (66 2/3% of his lost
    wages) based on his heart attack related disability.    The City
    initially denied the claim, but accepted it as compensable the
    following year.    Thereafter, the City paid indemnity benefits to
    Tate for his six-month period of disability pursuant to a Virginia
    Workers' Compensation Commission (the "Commission") award.    In
    doing so, the City did not request from the Commission a credit
    under Code § 65.2-520 against this award for the sick leave
    payments that the City made to Tate during the same disability
    period. 1
    The City then filed this action against Tate seeking recovery
    of his sick leave pay.    The City contended that under its
    controlling ordinance and regulations Tate was not entitled to
    receive both sick leave pay and workers' compensation indemnity
    benefits for the same disability period.
    After conducting an evidentiary hearing and considering the
    ordinance and regulations relied upon by the City as authority for
    recovering Tate's sick leave pay, the circuit court held that it
    did not have jurisdiction to decide the City's claim.    The court
    reasoned that "[t]he City could have availed itself of the remedy
    under § 65.2-520 but for some reason failed to do so."    That is,
    the City did not ask the Commission for "a credit against the
    workers' compensation award for the amounts the City paid [to] Tate
    1
    Code § 65.2-520 provides in relevant part:
    Any payments made by the employer to the injured employee
    during the period of his disability . . . which by the terms
    of this title were not due and payable when made, may, subject
    to the approval of the Commission, be deducted from the amount
    to be paid as compensation . . . .
    2
    for sick leave." 2   Moreover, according to the court, "[e]xclusive
    jurisdiction over the crediting of sick leave payments against a
    workers' compensation award lies with the Commission."    The court
    thus dismissed the City's complaint.
    On appeal, the City argues the circuit court erred because the
    court, not the Commission, had jurisdiction to decide its claim.
    Furthermore, the City argues it is entitled to judgment against
    Tate for recovery of his sick leave pay pursuant to its controlling
    ordinance and regulations.    We agree with the City on its
    jurisdictional argument but disagree on the merits.
    Under the Virginia Workers' Compensation Act, Code §§ 65.2-100
    through -1310 (the "Act"), the Commission does have jurisdiction
    over whether to credit an employer's sick leave pay, pursuant to
    Code § 65.2-520. 3   However, the Commission's jurisdiction remains
    "limited to those issues which are directly or necessarily related
    to the right of an employee to [workers'] compensation for a work-
    related injury."     Hartford Fire Ins. Co. v. Tucker, 
    3 Va. App. 116
    ,
    120, 
    348 S.E.2d 416
    , 418 (1986).    Code § 65.2-520 clearly provides
    that an employer is not required to request the credit authorized
    2
    The City in fact asserts, as it did below, that it did not have
    the option to request a credit under Code § 65.2-520 at the time
    Tate was awarded workers' compensation benefits because he was no
    longer a City employee and his sick leave balance had been
    completely settled in conjunction with his retirement. In light of
    our holding in this case, however, we need not decide this issue.
    3
    See Code § 65.2-700 ("All questions arising under this title, if
    not settled by agreements of the parties interested therein with
    the approval of the Commission, shall be determined by the
    Commission, except as otherwise herein provided.").
    3
    by the statute when paying workers' compensation, stating only that
    the employer "may" do so "subject to the approval of the
    Commission." 4   This means an employer can satisfy its obligation by
    paying fully the benefits awarded by the Commission without regard
    to any sick leave payments to the employee, which might otherwise
    be treated as payments of workers' compensation.    Thus, where the
    employer does not request a credit under Code § 65.2-520, the
    statute is simply not implicated and, accordingly, no authority of
    the Commission relative to sick leave pay is triggered.    That was
    the case here.
    The Commission had no jurisdiction to decide this dispute
    between the City and Tate over the City's claim for recovery of its
    sick leave payments to Tate - no more than the Commission would
    have jurisdiction to decide a dispute over any other employment
    benefit such as annual leave or maternity leave.    The circuit court
    thus erred in holding that the Commission rather than the court had
    jurisdiction over this case. 5
    4
    In this regard, we also note that such approval of the treatment
    of sick leave pay as payment of workers' compensation benefits is
    conditioned upon the employer simultaneously reinstating the
    employee's sick leave. Augusta Cnty. Sch. Bd. v. Humphreys, 53 Va.
    App. 355, 363, 
    672 S.E.2d 117
    , 121 (2009).
    5
    The concurring opinion would affirm the circuit court in its
    holding on this jurisdictional issue. The concurrence would do so
    based on a misreading of Code § 65.2-520. The City's argument to
    the contrary notwithstanding, the concurrence is correct that the
    City's sick leave payments to Tate were "voluntary" for purposes of
    the statute. That is because the statute considers to be voluntary
    any payments "which by the terms of [the Act] were not due and
    payable when made" even if the payments were otherwise required
    outside the Act. 
    Id. But Code
    § 65.2-520 is expressly limited in
    4
    The circuit court nevertheless reached the right result, as a
    matter of law, in dismissing the City's complaint.    See Deerfield
    v. City of Hampton, 
    283 Va. 759
    , 767, 
    724 S.E.2d 724
    , 728 (2012)
    (applying the right result for the wrong reason doctrine).    The
    City did not have the authority under the ordinance or regulations
    upon which it relied to recover sick leave pay from Tate on the
    basis that he had also received workers' compensation for the same
    disability period.   The recovery authorized by those provisions
    pertains to a distinct type of claim by the City against an
    employee's workers' compensation payment. 6   But, here, of course,
    the City is seeking to recover Tate's sick leave payments, not his
    workers' compensation payments.
    its application to proceedings in which an employer requests that
    such payments "be deducted from the amount to be paid as
    compensation." Once again, absent that request, the Commission's
    authority extends only to determining whether the claimant is
    actually paid the workers' compensation to which he is entitled -
    which, in this case, Tate was paid. Indeed, as the Court of
    Appeals noted in Humphreys, the Commission has acknowledged that it
    has "'no jurisdiction to consider the employer's policies regarding
    sick leave or annual leave'"; rather, the Commission is only
    concerned with whether "'reinstatement of those [leave] benefits is
    proved'" when the employer is seeking the credit against the
    workers' compensation that is 
    owed. 53 Va. App. at 362-63
    , 672
    S.E.2d at 120 (quoting Myers v. City of Danville Police, VWC File
    No. 179-46-44, 1998 VA Wrk. Comp. LEXIS 4342, at *5 (April 28,
    1998)).
    6
    Regulation 5.7.1 of the City's regulations entitled "Worker's
    Compensation Administration" provides in relevant part:
    If the investigation of a claim is delayed or requires
    substantial time to make a determination of its
    compensability under workers' compensation, such as
    5
    For these reasons, we affirm the judgment of the circuit court
    dismissing the City's complaint in this case.   This order shall be
    certified to the said circuit court and shall be published in the
    Virginia Reports.
    _______________
    JUSTICE MILLETTE, with whom JUSTICE POWELL joins, concurring.
    The majority today affirms the ruling of the circuit court
    dismissing the City of Danville's suit against Ryland Tate on
    alternative grounds.   While I would likewise affirm the ruling of
    the circuit court, I would hold, as did the circuit court, that it
    lacked jurisdiction because exclusive jurisdiction lies with the
    Virginia Workers' Compensation Commission.
    I am in agreement as to the relevant facts, and that the
    relevant Code section is § 65.2-520 of the Virginia Workers'
    Compensation Act, Code § 65.2-100 et seq. (the "Act").   The Code
    section, entitled "Voluntary payment by employer," states, in
    pertinent part:
    Any payments made by the employer to the injured employee
    during the period of his disability, or to his
    dependents, which by the terms of this title were not due
    occupational diseases of the heart, lung etc. an employee
    may elect to use his or her accumulated leave until such
    determination is made. Once a determination is made as
    to compensability under workers' compensation and
    indemnity payments are determined and the employee
    receives payment for this time, the check shall be
    endorsed to the City and the employee's leave will be
    reinstated.
    (Emphasis added.)
    6
    and payable when made, may, subject to the approval of
    the Commission, be deducted from the amount to be paid as
    compensation . . . .
    
    Id. Based on
    the plain meaning of this statutory language,
    recovery of voluntary payments must be made "subject to the
    approval of the Commission."    Thus, the central issue is whether
    the sick leave payments constitute voluntary payments under Code
    § 65.2-520 such that recovery of these payments falls under this
    section.   If the disputed monies are indeed voluntary payments
    under Code § 65.2-520, both Virginia jurisprudence and the
    statutory mandates of Code § 65.2-520 and Code § 65.2-700 squarely
    place exclusive jurisdiction for such disputes under the purview of
    the Commission.
    The City argues that its payments were not voluntary because
    the payments for sick leave were made according to City ordinances.
    The City further argues that the payments were not voluntary
    because, had Tate not received sick benefits in violation of City
    policy, Tate had a right to sue the City in circuit court.        In
    effect, the City contends that we must interpret "voluntary" to
    mean only benevolent payments not required by a statute,
    regulation, ordinance, or other legal mandate.
    Code § 65.2-520 defines by its terms the types of payment
    considered to be "voluntary" under the Act, however.        It states, in
    pertinent part, that "[a]ny payments made by an employer to the
    injured employee . . . which by the terms of this title were not
    due and payable when made, may, subject to the approval of the
    Commission, be deducted from the amount to be paid as
    compensation."    (Emphasis added.)       Sick leave benefits utilized
    7
    after an accident are, clearly, "payments made by an employer to
    the injured employee."   Code § 65.2-520.   Regardless of whether a
    municipal ordinance, personnel policy, or other regulation requires
    payment of sick leave, sick leave is not mandated "by the terms of
    this title," i.e., the Virginia Workers' Compensation Act.   Code
    § 65.2-520.   It is, therefore, a voluntary payment for the purposes
    of the Act.
    This question came before the Court of Appeals in Dodson v.
    Newport News Shipbuilding & Dry Dock Co., Record No. 0278-99-1,
    1999 Va. App. LEXIS 493, at *6 (Aug. 10, 1999) (unpublished).     In
    Dodson, the Court of Appeals found:
    Code § 65.2-520 does not distinguish between types of
    "voluntary payments." The statute states that any
    payment is voluntary which "by the terms of this title
    were not due and payable when made." . . . We,
    therefore, hold that the definition of "voluntary
    payments" includes any type of payment not required under
    the Act, whether the payment is an overpayment as a
    result of a mistake by the employer or a payment of
    benefits pursuant to another statute.
    
    Id. As a
    "voluntary payment," employers are entitled to seek a
    credit for sick leave under Code § 65.2-520 when an employee
    receives a Workers' Compensation award, once leave is reinstated.
    Augusta County School Board v. Humphreys, 
    53 Va. App. 355
    , 362-63,
    
    672 S.E.2d 117
    , 120-21 (2009).   By its explicit language, the
    statute requires that credit for such voluntary payments be repaid
    to employers "subject to the approval of the Commission," that is,
    8
    under the exclusive jurisdiction of the Commission.   Code § 65.2-
    520.
    The majority concludes that "where the employer does not
    request a credit under Code § 65.2-520, the statute is simply not
    implicated and, accordingly, no authority of the Commission
    relative to sick leave pay is triggered."   (Emphasis added.)     The
    majority's reliance on the fact that the employer in this case did
    not request a credit as a basis for its position that the Act does
    not apply is misplaced.   The employer does not have the option to
    circumvent the statute.   If the employer is going to seek a credit
    in any fashion from the employee, it must do so under Code § 65.2-
    520.    Whether recovery is sought in the form of signing over a
    portion of a compensation check or via direct reimbursement from
    the employee, it is nonetheless a deduction from compensation:      the
    recovery would not be sought had the employee not been compensated.
    Thus, an employer's attempt to recover compensation funds following
    an employee's award, even if not a formal request of "credit,"
    still substantively falls under this Code section.
    Code § 65.2-700 states that the Commission "shall" determine
    "all questions arising under [The Workers' Compensation Act]."
    (Emphasis added.)    But for the fact that a workers' compensation
    award was given and the City is seeking recompense for its sick
    leave, the City would have no basis to allege a violation of the
    ordinance prohibiting "double dipping," i.e., receipt of both
    workers' compensation benefits and sick leave payment for the same
    period of injury.    Recompense for voluntary payments such as sick
    leave is directly addressed by Code § 65.2-520.   The question of
    recompense clearly "arises" under the title.
    9
    The misapprehension of this jurisdictional line is illustrated
    by the majority's selective use of language from Hartford Fire Ins.
    Co. v. Tucker, 
    3 Va. App. 116
    , 
    348 S.E.2d 416
    (1986), apparently to
    stand for the proposition that the Commission's jurisdiction is too
    limited to encompass this case.   Quoted more fully, the Court of
    Appeals stated:
    The purpose and effect of the Workers' Compensation Act
    (Act) are to control and regulate the relations between
    the employer and the employee. Fauver v. Bell, 
    192 Va. 518
    , 521, 
    65 S.E.2d 575
    , 577 (1951). While the . . .
    Commission has jurisdiction "to do full and complete
    justice in each case," . . . its jurisdiction does not
    extend to the litigation and resolution of issues between
    two insurance carriers which do not affect an award of the
    Commission. Generally, the Commission's jurisdiction is
    limited to those issues which are directly or necessarily
    related to the right of an employee to compensation for a
    work-related injury.
    
    Id. at 120,
    348 S.E.2d at 418 (emphasis in original).   The full
    quote reveals that the Court of Appeals in Hartford was not stating
    that jurisdiction of the Commission is limited to causes of action
    by employees, but rather that its jurisdiction addresses relations
    between employers and employees as opposed to between two non-
    employee entities (insurance carriers).   Where, as here, the
    dispute remains between employer and employee and the effectual
    ultimate award amount, jurisdiction properly remains with the
    Commission under Code § 65.2-700.
    This Court has cited with approval the further statement by
    the Court of Appeals in Hartford that "[w]hen the rights of the
    claimant are not at stake, the Act clearly leaves the litigants to
    their common law remedies."   Bogle Dev. Co. v. Buie, 
    250 Va. 431
    ,
    10
    434, 
    463 S.E.2d 467
    , 468 (1995) (quoting 
    Hartford, 3 Va. App. at 121
    , 348 S.E.2d at 419).   Conversely, where, as here, the claimants
    rights are at stake, the Act requires litigants seek remedy before
    the Commission under Code § 65.2-700.
    The larger damage to our statutory integrity that should
    concern this Court is that, despite the City's limited reason for
    seeking jurisdiction in the circuit court in this instance, there
    is no rational reason to limit this holding to retirees.    Today's
    majority is an invitation for employers to skirt the long-respected
    jurisdictional boundaries created in the Virginia Workers'
    Compensation Act.   Code § 65.2-520 is wholly ineffectual if it
    pertains merely to requests that employees endorse over a portion
    of their workers' compensation awards and not also to pursuits for
    monetary recovery of those same funds.   The statutory scheme was
    clearly designed so that these disputes, which affect the rights of
    the employee, would be adjudicated before the Commission.
    Today's holding is all the more disquieting due to the City's
    candid admission at oral argument that its reasons for seeking
    jurisdiction in the circuit court stem from its belief that, based
    on precedent, the City would not be successful in a suit before the
    Workers' Compensation Commission.    The fact that the City lacks
    confidence that it would prevail under current precedent is an
    issue for the City to take up with the Commission or raise on
    appeal after bringing the issue before the Commission.   Doubt in
    the merits of one's claim hardly forms a valid basis to bring a
    cause of action where jurisdiction does not lie.
    Finally, even if a cognizable cause of action did exist today,
    the Virginia Code clearly takes precedence over any municipal
    11
    ordinance.   The Code grants the Commission exclusive jurisdiction
    over repayment of non-workers' compensation payments made by
    employers to injured parties during the period of their injury.
    For the foregoing reasons, I respectfully disagree with the
    majority and would affirm the rationale of the trial court below,
    dismissing for lack of subject matter jurisdiction.
    A Copy,
    Teste:
    Patricia L. Harrington, Clerk
    12