{ "id": 1893822, "name": "MID-STATE CONSTRUCTION COMPANY, and Fidelity & Casualty Company of New York v. SECOND INJURY FUND, and Ray Davis", "name_abbreviation": "Mid-State Construction Co. v. Second Injury Fund", "decision_date": "1988-03-14", "docket_number": "87-221", "first_page": "1", "last_page": "9", "citations": [ { "type": "official", "cite": "295 Ark. 1" }, { "type": "parallel", "cite": "746 S.W.2d 539" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "217 Ark. 821", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8724659 ], "weight": 2, "year": 1950, "opinion_index": 0, "case_paths": [ "/ark/217/0821-01" ] }, { "cite": "17 Ark. App. 101", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6651074 ], "weight": 2, "year": 1986, "pin_cites": [ { "parenthetical": "Newbern, J., dissenting - explaining Arkansas Workmen's Compensation Commission v. Sandy, 217 Ark. 821, 233 S.W.2d 382 (1950)" }, { "parenthetical": "Newbern, J., dissenting - explaining Arkansas Workmen's Compensation Commission v. Sandy, 217 Ark. 821, 233 S.W.2d 382 (1950)" } ], "opinion_index": 0, "case_paths": [ "/ark-app/17/0101-01" ] }, { "cite": "102 Idaho 356", "category": "reporters:state", "reporter": "Idaho", "case_ids": [ 4427148 ], "weight": 2, "year": 1981, "pin_cites": [ { "parenthetical": "citing case law from Alaska, California, Florida, New York, and Tennessee" }, { "parenthetical": "citing case law from Alaska, California, Florida, New York, and Tennessee" } ], "opinion_index": 0, "case_paths": [ "/idaho/102/0356-01" ] }, { "cite": "5 Ark. App. 90", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6138173 ], "weight": 2, "year": 1982, "opinion_index": 0, "case_paths": [ "/ark-app/5/0090-01" ] }, { "cite": "2 Ark. App. 364", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6142801 ], "weight": 3, "year": 1981, "pin_cites": [ { "page": "370", "parenthetical": "discussing \"disability\"" } ], "opinion_index": 0, "case_paths": [ "/ark-app/2/0364-01" ] }, { "cite": "17 Ark. App. 58", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6649567 ], "weight": 4, "year": 1986, "pin_cites": [ { "parenthetical": "defining disability as \"loss of earning capacity due to a work-related injury\"" }, { "parenthetical": "defining disability as \"loss of earning capacity due to a work-related injury\"" } ], "opinion_index": 0, "case_paths": [ "/ark-app/17/0058-01" ] }, { "cite": "Ark. Code Ann. \u00a7 11-9-102", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "pin_cites": [ { "page": "(5)" } ], "opinion_index": 0 }, { "cite": "262 Ark. 695", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1675866 ], "weight": 2, "year": 1978, "pin_cites": [ { "parenthetical": "citing Ark. Stat. Ann. \u00a7 81-1302(e) (Repl. 1976), now Ark. Code Ann. \u00a7 11-9-102(5) (1987)" }, { "parenthetical": "citing Ark. Stat. Ann. \u00a7 81-1302(e) (Repl. 1976), now Ark. Code Ann. \u00a7 11-9-102(5) (1987)" } ], "opinion_index": 0, "case_paths": [ "/ark/262/0695-01" ] }, { "cite": "289 Ark. 509", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1875385 ], "weight": 3, "year": 1986, "pin_cites": [ { "parenthetical": "Newbern, J., dissenting - explaining Arkansas Workmen's Compensation Commission v. Sandy, 217 Ark. 821, 233 S.W.2d 382 (1950)" } ], "opinion_index": 0, "case_paths": [ "/ark/289/0509-01" ] }, { "cite": "270 Ark. 672", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1709155 ], "weight": 3, "year": 1980, "opinion_index": 0, "case_paths": [ "/ark/270/0672-01" ] }, { "cite": "15 Ark. App. 319", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6142545 ], "weight": 2, "year": 1985, "opinion_index": 0, "case_paths": [ "/ark-app/15/0319-01" ] }, { "cite": "Ark. Code Ann. \u00a7 11-9-525", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "opinion_index": 0 } ], "analysis": { "cardinality": 639, "char_count": 15445, "ocr_confidence": 0.914, "pagerank": { "raw": 7.997882206861892e-07, "percentile": 0.9735332059900017 }, "sha256": "94a1f13edd26d83d36249e5bc67ba1dfc389124013330c9b51b08022ac06642b", "simhash": "1:2026e4cc5da722eb", "word_count": 2496 }, "last_updated": "2023-07-14T18:11:27.354550+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "MID-STATE CONSTRUCTION COMPANY, and Fidelity & Casualty Company of New York v. SECOND INJURY FUND, and Ray Davis" ], "opinions": [ { "text": "Jack Holt, Jr.,\nChief Justice. In this case we granted a petition to review a decision of the court of appeals announced in an opinion not designated for publication, Mid-State Construction Company v. Second Injury Fund, CA 86-429 (Ark. App. July 15, 1987). The court of appeals affirmed an award made by the Workers\u2019 Compensation Commission against petitioners Mid-State Construction Company (\u201cMid-State\u201d) and its carrier Fidelity & Casualty Company of New York (\u201cFidelity\u201d) for a compensable injury suffered by an employee of Mid-State. Mid-State and Fidelity challenge the court of appeals\u2019 definition of the term \u201cimpairment\u201d contained in Ark. Code Ann. \u00a7 11-9-525 (1987), formerly codified at Ark. Stat. Ann. \u00a7 81-1313(i)(1) (Supp. 1985), as involving a \u201closs of earning capacity,\u201d which to the detriment of Mid-State and Fidelity had precluded liability as to the Second Injury Fund (the \u201cFund\u201d).\nWe find that the court of appeals\u2019 definition of the term \u201cimpairment\u201d as involving a loss of earning capacity is wrong for in the context of Second Injury Fund cases it seriously undermines the purpose of the Fund to encourage hiring of the handicapped. We therefore reverse and remand for proceedings consistent with this opinion.\nThe claimant, Ray Davis, sustained a compensable back injury in June 1981 while working for the petitioner employer, Mid-State. In 1953, prior to his employment with Mid-State, Davis had lost his right eye in an accident with a firearm. In 1959, Davis suffered a neck injury which necessitated surgery and resulted in a 10 % anatomical impairment rating to the body as a whole.\nSometime in 1983, Davis sought compensation for permanent total disability based upon his condition resulting from the 1981 back injury, not the neck injury or loss of the eye. Davis testified that he suffered no disability from those earlier conditions either in combination with or independent from his 1981 injury. In proceedings not relevant to disposition of this review, it was determined both by the Commission and by the court of appeals that in light of Davis\u2019 prior conditions, the Second Injury Fund should be made a party.\nThe Commission subsequently affirmed the following findings of the Administrative Law Judge:\n1. Claimant is entitled to an award of permanent partial disability benefits consistent with a rating of 75% to the body as a whole.\n2. At the time of his June 4, 1981, compensable injury, claimant was not suffering from a disability in the compensation sense as contemplated by Ark. Stat. Ann. \u00a7 81-1313(i)(1) (Supp. 1985).\n3. The Second Injury Fund has no liability, and all claims against the Fund are dismissed.\nIn the opinion now on review, the court of appeals affirmed the Commission\u2019s determination that the Second Injury Fund was not liable premised on the fact that there was no evidence that Davis\u2019 condition prior to the 1981 injury involved a loss of earning capacity by which Davis could be said to have been suffering from either a disability or an impairment as those terms are defined in Osage Oil Co. v. Rogers, 15 Ark. App. 319, 692 S.W.2d 786 (1985), and subsequent decisions of the court of appeals. In this, the court of appeals erred.\nSection ll-9-525(a)(l) and (2) provides that the Fund is established and designed to insure that an employer employing a handicapped worker will not, in the event such worker suffers an injury on the job, be held liable for a greater disability or impairment than actually occurred while the worker was in the employer\u2019s employment. The employee is to be fully protected in that the Second Injury Fund pays the worker the difference between the employer\u2019s liability and the balance of his disability or impairment which results from all disabilities or impairments combined.\nSection 11-9-525(b)(3) and (4) then provides:\nIf any employee who has a permanent partial disability or impairment, whether from compensable injury or otherwise, receives a subsequent compensable injury resulting in additional permanent partial disability or impairment so that the degree or percentage of disability or impairment caused by the combined disabilities or impairments is greater than that which would have resulted from the last injury, considered alone and of itself, and if the employee is entitled to receive compensation on the basis of combined disabilities or impairments, then the employer at the time of the last injury shall be liable only for the degree or percentage of disability or impairment which would have resulted from the last injury had there been no preexisting disability or impairment.\nAfter the compensation liability of the employer for the last injury, considered alone, which shall be no greater than the actual anatomical impairment resulting from the last injury, has been determined ... the degree or percentage of [the] employee\u2019s disability that is attributable to all injuries or conditions existing at the time the last injury was sustained shall then be determined. . . and the degree or percentage of disability or impairment which existed prior to the last injury plus the disability or impairment resulting from the combined disability shall be determined, and compensation for that balance, if any, shall be paid out of the Second Injury Trust Fund ....\nIt is clear that liability of the Fund comes into question only after three hurdles have been overcome. First, the employee must have suffered a compensable injury at his present place of employment. Second, prior to that injury the employee must have had a permanent partial disability or impairment. Third, the disability or impairment must have combined with the recent compensable injury to produce the current disability status. We emphasize that in the case at bar we are concerned only with the second hurdle as it relates to the term impairment.\nIn considering the question of Second Injury Fund liability, we first note that the claimant\u2019s former condition need not have met all elements of compensability under workers\u2019 compensation law. Chicago Mill & Lumber Company v. Greer, 270 Ark. 672, 606 S.W.2d 72 (1980). Also, the former condition and the recent compensable injury cannot both have occurred in the course of the employee\u2019s employment with the same employer. McCarver v. Second Injury Fund, 289 Ark. 509, 715 S.W.2d 429 (1986).\nThe term disability has consistently been defined to involve loss of earning capacity; a definition which the petitioners do not challenge and which in the general context of workers\u2019 compensation law is set by statute and has been affirmed by this court. See Rooney v. Charles, 262 Ark. 695, 560 S.W.2d 797 (1978) (citing Ark. Stat. Ann. \u00a7 81-1302(e) (Repl. 1976), now Ark. Code Ann. \u00a7 11-9-102(5) (1987)). That definition of disability has carried over into the context of Second Injury Fund cases. See Second Injury Fund v. Fraser-Owens, Inc., 17 Ark. App. 58, 702 S.W.2d 828 (1986) (defining disability as \u201closs of earning capacity due to a work-related injury\u201d).\nThe statute governing the Second Injury Fund was amended by Act 290 of 1981, which added the words \u201cor impairment\u201d after the word \u201cdisability.\u201d In Osage, supra, the court of appeals construed the legislative intent behind Act 290 as a response to this court\u2019s holding in Greer, supra, and distinguished between disability and impairment in that the latter would involve a \u201cnon-work related condition.\u201d However, the court went further and held that the impairment must have involved loss of earning capacity, as in cases involving a prior permanent partial disability. This was wrong. A claimant\u2019s non-work related condition suffered prior to the recent compensable injury need not have involved a loss of earning capacity.\nIn support of its position in Osage, the court of appeals relied upon its opinions in Harrison Furniture v. Chrobak, 2 Ark. App. 364, 620 S.W.2d 955 (1981), and Craighead Memorial Hospital v. Honeycutt, 5 Ark. App. 90, 633 S.W.2d 53 (1982), which cases had in turn relied upon our decision in Greer and language from 2 Larson, The Law of Workmen\u2019s Compensation, \u00a7 59.32(c), at 10-434 \u2014 437 (1987), to the effect that the prior impairment had to have been independently producing some disability prior to the second injury and afterwards. From this, it can be reasoned that if any existing impairments must have been producing some disability, and disability by definition involves loss of earning capacity, all impairments a fortiori must have involved loss of earning capacity. This reasoning, however, does not withstand close scrutiny.\nThe operative language in Greer, quoted from Larson\u2019s and reproduced by the court of appeals in Osage, reads as follows:\n[T]he prior impairment, although not actually a compensable disability, must have been of a physical quality capable of supporting an award if the other elements of compensability were present. [Emphasis ours.]\nIn other words, the claimant\u2019s prior impairment must have been of a physical quality sufficient in and of itself to support an award of compensation had the elements of compensability existed as to the cause for the impairment. It is the substantial nature of the impairment which is emphasized, and the elements of compensability, none of which may have existed as to the particular claimant, merely assist the fact finder in his determination as to whether the former condition was sufficient in degree to constitute an impairment qualifying the claimant as one of the \u201chandicapped\u201d for whose benefit the statute was enacted. Cf. Harrison Furniture, supra, 2 Ark. App. at 370 (discussing \u201cdisability\u201d).\nHence, before the fact finder may consider the final question of whether a claimant\u2019s former condition combined with a recent compensable injury to produce the current disability status, it must be determined whether the claimant\u2019s former condition constituted an \u201cimpairment,\u201d and the question which would be posed in each case is as follows:\nIs the physical quality of the claimant\u2019s former non-work related condition such that, were all other elements of compensability present, it would be capable of supporting an award?\nAs such, in determining what is an \u201cimpairment,\u201d loss of earning capacity becomes nothing more than one of the elements of compensability which, though possibly lacking in the particular case, constitutes a point of reference under the inquiry posed above.\nAny other conclusion flies in the face of Act 290 of 1981. To hold, as did the court of appeals, that there must in fact be evidence that the impairment involved a loss of earning capacity, mandates a prerequisite which (with the narrow exception that the impairment can be non-work related) directly conflicts with the language from Larson and our decision in Greer that the impairment need not have been a \u201ccompensable disability.\u201d\nTo hold otherwise would result in the unfounded and unintended situation that Second Injury Fund liability is denied in a case where a potential employee suffers from an impairment such as loss of one eye which would clearly be capable of supporting an award if the other elements of compensability were present, and the individual is subsequently hired and suffers a compensable injury, such as loss of the other eye, which combines with the former condition to produce the current disability status \u2014 complete blindness. Under the definition of impairment as set out in Osage, there is no Fund liability simply because the claimant was unable to demonstrate that the former condition had involved a loss of earning capacity.\nThis would mean that the present employer and the carrier become potentially liable for the full disability. That result impermissibly distinguishes between two types of handicapped persons, contravenes the statutory scheme which makes employers liable only for the \u201cdegree or percentage of disability or impairment which would have resulted from the [recent compensable] injury had there been no preexisting disability or impairment,\u201d and defeats the purpose of the Fund to encourage the hiring of the handicapped.\nFor similar holdings in other jurisdictions, see Gugelman v. Pressure Treated Timber Co., 102 Idaho 356, 630 P.2d 148 (1981) (citing case law from Alaska, California, Florida, New York, and Tennessee).\nIn connection with our discussion of the issue at hand, we point out that the court of appeals has defined the term \u201chandicapped\u201d as meaning \u201ca physical disability that limits the capacity to work.\u201d Fraser-Owens, supra. To the extent the language \u201climits the capacity to work\u201d can be considered as conflicting with our holding in this case, the definition cannot stand.\nAs to other issues before the court of appeals in the decision now on review, such as that dealing with the presumption of loss of earning capacity which attends scheduled injuries, we find it inappropriate to reach those issues in light of our holding in this case. To the extent that argument dealing with solvency of the Fund has any relevancy in this matter, we recognize that it has previously been emphasized that the Second Injury Fund is a limited and restricted fund and that the statute is to be strictly complied with, lest the Fund be exposed to liability in every workers\u2019 compensation case. See, e.g., Fraser-Owens, supra; Second Injury Fund v. McCarver, 17 Ark. App. 101, 704 S.W.2d 639, aff'd, 289 Ark. 509 (1986) (Newbern, J., dissenting \u2014 explaining Arkansas Workmen\u2019s Compensation Commission v. Sandy, 217 Ark. 821, 233 S.W.2d 382 (1950)). However, under the facts and issues before us, we find that any concern as to solvency of the Fund as it would be affected by our holding today is entirely premature.\nLiability of the Fund was in the case at bar ruled out because there was no evidence that Davis\u2019 former condition involved a loss of earning capacity, and therefore Davis did not meet the definition of disability or impairment. We have discarded the definitional prerequisite that an impairment involve a loss of earning capacity. As such, it remains to determine: (1) whether Davis\u2019 former neck injury and loss of the right eye constituted an \u201cimpairment\u201d in that they were of a physical quality which, were the other elements of compensability present, would have been capable of supporting an award; and (2) whether, even if the first requirement is satisfied, Davis\u2019 former condition combined with his 1981 compensable injury to produce a disability greater than that which \u201cwould have resulted from the last injury, considered alone and of itself.\u201d Section ll-9-525(b)(3).\nWe find that this matter, on the record before us and in light of the grounds upon which the court of appeals based its holding in the decision on review, should be remanded to the Commission for appropriate proceedings consistent with this opinion and which resolve the issues as outlined.\nReversed and remanded.\nTo construe the clause beginning with \u201cif\u2019 in the language quoted from Larson as meaning \u201cprovided that or so long as the other elements of compensability were present\u201d would make the statement self-contradictory and lead to absurd results.", "type": "majority", "author": "Jack Holt, Jr.," } ], "attorneys": [ "Chester C. Lowe, Jr., for appellant.", "E. Diane Graham, Second Injury Fund, for appellee.", "Gregory Ferguson, for appellee Ray Davis." ], "corrections": "", "head_matter": "MID-STATE CONSTRUCTION COMPANY, and Fidelity & Casualty Company of New York v. SECOND INJURY FUND, and Ray Davis\n87-221\n746 S.W.2d 539\nSupreme Court of Arkansas\nOpinion delivered March 14, 1988\n[Rehearing denied April 4, 1988.]\nChester C. Lowe, Jr., for appellant.\nE. Diane Graham, Second Injury Fund, for appellee.\nGregory Ferguson, for appellee Ray Davis." }, "file_name": "0001-01", "first_page_order": 25, "last_page_order": 33 }