STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

PAUL M MILLER, Employee

COUNTY OF WINNEBAGO, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02403191AP


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked for more than twenty years as a parks caretaker for the named employer, a county government. He was injured in May, 1999, and began receiving workers compensation payments, in the form of temporary total disability payments in weeks 22 through 25 of 1999, and in the form of temporary partial disability in weeks 26 of 1999 through 1 of 2000. He filed an earlier claim for unemployment insurance in week 45 of 2000. That claim expired in week 14 of 2001. In a separate decision issued on today's date, the commission found that he did not receive temporary total or temporary partial disability payments in each week in the first and second quarters of 2000. He filed his most recent claim for benefits in week 51 of 2001.

For the claim beginning in week 51 of 2001, the employee's base period is comprised of the third and fourth quarters of 2000 and the first and second quarters of 2001. When questioned about the employee's earlier claim, beginning in week 45 of 2000, the department witness testified that the department utilized a weekly wage for each week in which the employee was receiving temporary or partial disability of $606.00 per week. A second department witness, who specializes in obtaining workers compensation data from an internet website for purposes of unemployment insurance benefit computation, testified that as of the employee's new injury date (November 22, 1999, or week 48 of 1999), the department would properly utilize a weekly wage for each week in which the employee was receiving temporary total or partial disability of $607.20. This weekly wage was intended to replicate "the wages he would have been paid during those periods," which is more than the total benefit received, because the workers compensation benefit is not at the 100% level.

The dispute at the hearing in this matter surrounded the proper treatment of a subsequent "Compromise Agreement" entered into between the employee and the named employer on May 1, 2002, and approved by the Workers Compensation Division on May 29, 2002. The employee was not represented by an attorney during negotiations that preceded the agreement. The agreement was drafted by the employer's attorney, after that attorney represented to the employee that: "Regarding you unemployment insurance claim, we will for the time being take no further action to challenge your eligibility, and if you are found eligible, we will not appeal this ruling." The compromise agreement contains the following language, in pertinent part:

That the applicant claims as a result of said accidents to have sustained injuries, arising out of the employment, while performing services growing out of and incidental to the employment for which he claims various benefits under Chapter 102 for these injuries, including, but not limited to temporary disability from January through December 2000 temporary disability from September through December 2001, and permanent disability equivalent to 75 weeks beginning December 14, 2001.
                                  . . . .
IT IS FURTHER STIPULATED AND AGREED that the respondent and insurance carrier deny that Mr. Miller was entitled to any additional disability benefits beyond that conceded and paid; and deny any and all other liability in this matter whatsoever.
                                  . . . .
IT IS FURTHER STIPULATED AND AGREED by and between the applicant, the employer and its insurance carrier that as full and complete compromise and settlement of any and all liability of the respondent and the insurer to the applicant under the Worker's Compensation Act of Wisconsin, or otherwise . . . that the respondent and insurer will pay as follows: $29,000.00 to Mr. Miller; $16,958.45 to Hendrickson Chiropractic plus any other related medical expenses to January 8, 2002, waiving no defenses with respect to any additional medical expenses submitted for payment, and until such sums being paid, the respondent and insurer shall stand relieved of any and all liability whatsoever to the applicant, subject to review by the Department of Workforce Development within one (1) year from the date hereof.

The issue to be resolved is the amount of wages that the claimant was paid for services performed in covered employment during the base period quarters. A secondary issue is whether the claimant's benefit rate was correctly calculated based upon those wages paid.

Wisconsin Statutes § 108.02(4m) provides as follows:

BASE PERIOD WAGES. "Base period wages" means:

(a) All payments for wage-earning service made to an employee during his or her base period as a result of employment for an employer;

*                     *                     *

(d) For an employee who, as a result of employment for an employer, receives temporary total disability or temporary partial disability payments under ch. 102 or under any federal law which provides for payments on account of a work-related injury or illness analogous to those provided under ch. 102, all payments that the employee would have been paid during his or her base period as a result of employment for an employer, but not exceeding the amount that, when combined with other wages, the employee would have earned but for the injury or illness. . . .

With respect to the third and fourth quarters of 2000, and the second quarter of 2001, the employee maintained that a portion of the $29,000 payment made to him as part of the compromise agreement should be allocated as base period wages. The commission disagrees.

The agreement constituted a compromise, not a concession, of liability. That is, the employer was not agreeing that the employee was entitled to the compensation sought, let alone that he was entitled to temporary disability during all the weeks (or quarters) claimed. Indeed, the reason for the compromise was because the employer did not agree that he was entitled to the compensation claimed. (1)    If the parties were conceding that the employee was entitled to the temporary disability throughout the time for which it was sought, it would not have been appropriate to compromise temporary disability. Compromises can only be made in contested claims.

The employee did not receive either temporary partial or temporary total disability benefits as a part of the compromise. The compromise specified that the employer and insurer were not conceding that the employee was entitled to any additional compensation. The employee was paid $29,000 to relinquish his claim to compensation and to forego any claim for additional medical expenses not specifically provided for in the compromise. The $29,000 payment did not constitute base period wages as defined in Wis. Stat. § 108.02(4m).

The commission therefore finds that pursuant to Wis. Stat. § 108.02(4m) the employee had base period wages as follows: $3,297.98 in the third quarter of 2000; $2,335.32 in the fourth quarter of 2000, $0.00 in the first quarter of 2001; and $2,774.38 in the second quarter of 2001.

The commission further finds that the employee was paid benefits in the amount of $7,364.00 for 51 and 52 of 2001, and weeks 1 through 40 of 2002, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of overpaid benefits must be waived.

Wisconsin Statute § 108.22(8)(c), provides that the department shall waive the recovery of overpaid benefits if the overpayment was the result of departmental error, and the overpayment did not result from the fault of the employee. Under Wis. Stat. § 108.02(10e)(a) and (b), department error is defined as an error made by the department in computing or paying benefits which results from a mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, or from misinformation provided to a claimant by the department, on which the claimant relied.

The overpayment in this case results from the appeal tribunal's misapplication or misinterpretation of the law. The commission further finds that waiver of benefit recovery is required under Wis. Stat. § 108.22(8)(c), because the overpayment did not result from the fault of the employee as provided in Wis. Stat. § 108.04(13)(f), but was the result of a department error. See Wis. Stat. § 108.22(8)(c)2.

DECISION

The decision of the administrative law judge is modified to conform to the foregoing findings and, as modified, is reversed. For the claim begun in week 51 of 2001,
the employee earned wages as set forth above. The employee is not required to repay the sum of $7,364.00 to the Unemployment Reserve Fund.

Dated and mailed October 2, 2003
millerp . urr : 132 : 1 :   BR 305  BR 335.01

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

NOTE: The commission did not consult with the ALJ who presided at the hearing regarding her impressions of witness credibility and demeanor. The commission's reversal of the ALJ's decision was not based on the credibility of the witnesses.


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Footnotes:

(1)( Back ) The ALJ reasoned that under DWD § 80.03(1)(d), the maximum amount of unaccrued permanent benefits that can be paid is $5,000.00, and therefore, the remaining $24,000 must have been for temporary disability. However, the employee sought temporary benefits from January of 2000 through December of 2000, and September of 2001 to December of 2001, and permanent disability of 75 weeks beginning December 14, 2001. On May 29, 2002, the department approved the agreement. Approximately 25 weeks of permanent partial disability had accrued by the time of the agreement, and at a permanent partial disability rate of $184, a total of $4,600 in permanent partial disability had accrued. Further, there remained 50 weeks of unaccrued permanent partial disability that would be limited to $5,000 pursuant to the department's rule. Therefore, there was the potential of $9,600 of the $29,000 actually going toward permanent disability. This does not attach any monetary amount to the part of the payment made in exchange for the employee giving up a claim to future medical expenses. Thus, even if the commission accepted that a portion of the payment was for temporary total disability, which it does not, the portion that constituted temporary disability was not as certain as the ALJ found. 

 


uploaded 2003/10/03