Midwest Equipment & Supply Co. v. James Garwood
87 N.E.3d 33
| Ind. Ct. App. | 2017Background
- James Garwood worked for Midwest Equipment & Supply Co.; promoted to warehouse supervisor in 2013.
- During the 52 weeks before his July 24, 2014 work injury, Garwood received two bonuses: a $20,000 profit‑sharing bonus (Nov. 1, 2013) and a $1,750 shipping bonus (Apr. 4, 2014).
- Midwest calculated Garwood’s average weekly wage excluding those bonuses and paid benefits accordingly.
- Garwood filed for adjustment; a hearing member and then the full Worker’s Compensation Board held the bonuses should be included in the 52‑week earnings calculation and awarded additional benefits.
- Midwest appealed to the Court of Appeals contesting inclusion of the bonuses; Garwood sought an increase of his award under I.C. § 22‑3‑4‑8(f).
Issues
| Issue | Plaintiff's Argument (Garwood) | Defendant's Argument (Midwest) | Held |
|---|---|---|---|
| Whether bonuses received during the 52 weeks prior to injury count as "earnings" for calculating average weekly wage | Bonuses received within the 52‑week period are earnings and must be included | Bonuses were discretionary, not governed by written agreement, not automatic, and thus should be excluded | Included: Court held the statute defines average weekly wages by earnings in the 52 weeks and does not exclude bonuses, so both bonuses are included |
| Whether Wage Payment Statute precedents control interpretation of "earnings" under the Worker’s Compensation Act | Not applicable; Worker’s Comp Act focuses on aiding injured workers | Cites cases holding bonuses not "wages" under Wage Payment Statute to argue exclusion | Rejected: Court found Wage Payment Statute has different purpose and is not persuasive for Worker’s Comp calculation |
| Whether out‑of‑state cases excluding bonuses govern interpretation here | N/A | Points to Illinois and Iowa cases excluding bonuses under their statutes | Rejected: Those statutes expressly excluded bonuses; Indiana’s statute contains no such exclusion, so those decisions are inapposite |
| Whether appellate affirmance warrants 10% penalty increase to award under I.C. § 22‑3‑4‑8(f) | Requests 10% increase, arguing Midwest’s appeal was frivolous | Opposes 10% claim; appeal raised a novel legal question | Affirmed 5% increase as mandatory; 10% denied because the appeal presented a nonfrivolous, novel legal issue |
Key Cases Cited
- Christopher R. Brown, D.D.S., Inc. v. Decatur Cty. Mem' l Hosp., 892 N.E.2d 642 (Ind. 2008) (standard of appellate review and deference to Board/statutory interpretation)
- DePuy, Inc. v. Farmer, 847 N.E.2d 160 (Ind. 2006) (Worker’s Compensation Act construed liberally in favor of employees)
- Tunny v. Erie Ins. Co., 790 N.E.2d 1009 (Ind. Ct. App. 2003) (purpose of Act to shift economic burden to employer/consumers)
- Highhouse v. Midwest Orthopedic Inst., P.C., 807 N.E.2d 737 (Ind. 2004) (distinct analysis under Wage Payment Statute regarding bonuses)
- Herremans v. Carrera Designs, Inc., 157 F.3d 1118 (7th Cir. 1998) (bonus not a wage under federal interpretation of wage statute)
- Levkovitz v. Indus. Comm'n, 628 N.E.2d 824 (Ill. Ct. App. 1993) (Illinois statute expressly excluded bonuses from average wage calculation)
- Noel v. Rolscreen Co., 475 N.W.2d 666 (Iowa Ct. App. 1991) (Iowa statute excluded irregular bonuses from gross earnings)
- McCausland v. Walter USA, Inc., 918 N.E.2d 420 (Ind. Ct. App. 2009) (distinguishing statutory schemes governing wage payment and worker’s compensation)
- Inland Steel Co. v. Pavlinac, 865 N.E.2d 690 (Ind. Ct. App. 2007) (criteria for awarding a 10% increase on affirmance)