McDONALD, J.
These cases reach us in somewhat different procedural postures, but the issue is the same in both. Both cases concern a limit that the Legislature has placed on workers' compensation benefits that a retired public safety employee may receive under a special presumption in the Maryland Workers' Compensation Act—a limit based in part on the amount of retirement benefits that the individual also receives.
A provision of the workers' compensation law creates a presumption favorable to certain categories of public safety employees. In particular, the law presumes that certain disabling medical conditions, such as heart disease, hypertension, and lung disease, are occupational diseases suffered in the line of duty and are therefore compensable under the workers' compensation law. However, the statute caps those benefits: the sum of workers' compensation benefits and a retired employee's retirement benefits may not exceed the employee's average weekly salary during employment. The formula for capping workers' compensation benefits, seemingly simple in its description, inevitably raises questions in its implementation, particularly when its components take different forms paid on different timetables.
The retirement benefits involved in these cases derive in part from an optional retirement program once offered by Baltimore County. The program was designed to encourage senior employees, otherwise eligible to retire, to remain on the job in return for enhanced retirement benefits—an enhancement that can be taken in a lump sum upon retirement or in other ways that result in higher recurring retirement payments. The two retired firefighters in these cases—Carroll Thiergartner, the Respondent in No. 44, and Jeffrey Walters, the Appellant in No. 58
We hold that the statute that imposes the cap on weekly workers' compensation benefits necessarily contemplates a comparison involving payments, such as salary and retirement benefits, that are paid on different time schedules and that must be converted to a weekly number to apply the statutory formula. There is no evident reason to exclude a lump sum paid at the outset of retirement from such a conversion when applying the statutory formula.
As to the manner of including the lump sum payment in that formula, we decline to adopt the method proposed by the retirees, which would treat the lump sum differently from other retirement benefits and count it only for the particular week in which it was paid. Nor do we adopt the method proposed by the County which, although it would convert the lump sum to a weekly figure for a period of time, would
In our view, the most reasonable and accurate way to convert this portion of retirement benefits to a weekly figure would be to compute a figure for a stream of weekly amounts over the course of retirement that equates in some reasonable way to the lump sum payment. Such an approach is consistent with prior appellate decisions concerning another offset provision in the Workers' Compensation Act. The Workers' Compensation Commission adopted such a method in the Thiergartner case.
The Maryland Workers' Compensation Act, codified at Maryland Code, Labor & Employment Article ("LE"), § 9-101 et seq., is designed to ensure that employees receive compensation for disabilities resulting from work-related injuries and occupational diseases. R.P. Gilbert, et al., Maryland Workers' Compensation Handbook (4th ed. 2013), §§ 1.03, 7.01. That law provides special consideration for public safety employees by creating a presumption that certain disabling diseases or conditions are occupational diseases suffered in the line of duty and therefore compensable under the workers' compensation law. LE § 9-503.
Many firefighters who qualify for that presumption will be retired and will be receiving retirement benefits as a result of their employment as a firefighter. The statute provides for an adjustment of any workers' compensation benefits awarded to such an employee. Under that provision, the workers' compensation benefits received as a result of the presumption are to be offset in certain circumstances by retirement benefits that the individual receives.
LE § 9-503(e). On its face, the statutory formula appears to be a straightforward exercise that involves (1) adding two numbers (the weekly workers' compensation benefit and weekly retirement benefit), (2) comparing the result to the weekly salary earned by the firefighter during employment, and (3) if the result exceeds the weekly salary, reducing the workers' compensation benefit by the amount of the difference. But things are never so simple as they seem.
Like a number of other jurisdictions, Baltimore County has included in its personnel law a provision known as the Deferred Retirement Option Program ("DROP"). The DROP is designed to retain certain categories of long-time County employees who might otherwise choose to retire by offering them the option of an enhanced retirement benefit if an employee defers retirement and remains an active County employee.
Under the DROP related to firefighters, a County firefighter who is eligible to retire and has the requisite years of service may elect to participate in the DROP. The employee then continues to work for the County as an active employee while deferring certain compensation related to the forgone pension payments and ongoing employee pension contributions in a special account. Baltimore County Code, § 5-1-302(b)-(e). In particular, when the employee elects to participate in the DROP, an account is created for the employee that includes (1) an amount equivalent to a year's worth of pension payments for each year that the employee continues to work for the County after the employee becomes eligible for retirement (the "DROP period"); (2) the retirement contributions made by the employee during the DROP period; and (3) interest earned on the amounts in the DROP account. Baltimore County Code, § 5-1-302(e).
When the period of deferred retirement comes to an end and the employee actually retires, the employee has a choice as to how to receive the amount in the DROP account. The employee can elect to receive the accumulated amount in the DROP account as a lump sum or roll it over into an eligible retirement plan and thereby enhance future retirement benefits. Baltimore County Code, § 5-1-302(f).
Mr. Thiergartner was employed as a sworn firefighter with Baltimore County for 33 years. He retired in September 2005. At the time of his retirement, Mr. Thiergartner elected to receive a lump sum from his DROP account. He received a payment of $189,346.90 within 30 days of that election. He also began to receive a monthly retirement allowance of $3,672.07. Converted to a weekly figure, that amount is $847.40 per week.
In February 2011, more than five years after his retirement, Mr. Thiergartner filed a workers' compensation claim for heart disease related to his employment. In his claim, he identified the date of disablement as May 19, 2010.
In June 2011, applying the presumption in LE § 9-503(a), the Workers' Compensation Commission found that Mr. Thiergartner had sustained an occupational disease—coronary artery disease—related to his employment as a firefighter and agreed that the first date of disablement was May
The Commission also computed the offset under LE § 9-503(e)(2). As described above, in order to apply the offset, one must compare Mr. Thiergartner's combined retirement and workers' compensation benefits, expressed as an aggregate weekly amount, with his "weekly salary." Setting aside the lump sum DROP payment for the moment, Mr. Thiergartner's ongoing pension payment, converted from a monthly figure to a weekly figure, is $847.40; his maximum weekly workers' compensation benefit under the Commission's award is $307.00. Added together, they amount to $1,154.40 per week. Assuming that "weekly salary" for purposes of LE § 9-503(e) is equivalent to "average weekly wage,"
In February 2012, the Commission held that the DROP benefit should be included in the computation on a pro-rated basis. To come up with a pro-rated figure, the Commission looked to the higher monthly retirement benefit that Mr. Thiergartner would have received if he had not elected to receive the DROP benefit as a lump sum payment. That amount, converted to a weekly figure, was $946.15.
The County sought judicial review of the Commission's decision in the Circuit Court for Baltimore County. The County did not challenge the Commission's conclusion that Mr. Thiergartner was entitled to benefits as a result of the statutory presumption, but excepted to its computation of the offset. Following a hearing on the parties' cross motions for summary judgment, that court granted Mr. Thiergartner's motion,
The County appealed the decision to the Court of Special Appeals. The intermediate appellate court affirmed the judgment of the Circuit Court in favor of Mr. Thiergartner, but ordered that the case be remanded to the Commission to recalculate the monthly benefit in a way that eliminated any offset. 216 Md.App. 560, 88 A.3d 844 (2014). It held that, because the offset formula in LE § 9-503(e) referred to a "weekly total" of retirement and workers' compensation benefits, there was no occasion for factoring in the lump sum DROP payment that Mr. Thiergartner had received at the outset of his retirement well before he was awarded any workers' compensation benefits.
We granted the County's petition for a writ of certiorari to consider whether the lump sum DROP payment should be factored into the computation required by LE § 9-503(e)(2) and, if so, how.
Mr. Walters' case began earlier than Mr. Thiergartner's case, but arrived at our Court later. Like Mr. Thiergartner, Mr. Walters was a firefighter with Baltimore County for more than 30 years. He retired in June 2006. Mr. Walters had participated in the DROP and, upon retirement, elected to receive a lump sum in the amount of $146,959.90. He also began to receive monthly retirement benefits of $3,745.00. Converted to a weekly figure, the retirement benefits amount to $846.23 per week. (The record does not indicate what his monthly retirement benefit—or its weekly equivalent—would have been, if he had elected to take the DROP benefit as an enhanced monthly retirement payment instead of as a lump sum).
Two years after his retirement, Mr. Walters had a heart attack and was diagnosed as having heart disease. In July 2008, Mr. Walters filed a claim for workers' compensation benefits. The County contested the claim. In February 2009, the Commission awarded Mr. Walters permanent partial disability benefits of $685 per week for 333 weeks. In order to determine the offset under LE § 9-503(e)(2), it determined that his average weekly wage was $1,282.00 and converted his monthly retirement benefits to $864.23 per week. This resulted in a partial offset that reduced Mr. Walters' workers' compensation benefit to approximately $417 per week.
Unlike Mr. Thiergartner's case—which would not come before the Commission until two years later—the County initially did not ask the Commission to include the DROP lump sum payment in its computation of the offset amount and the Commission's order made no reference to the DROP payment.
The County later sought judicial review of the Commission's award in the Circuit Court for Baltimore County, arguing that there should be an offset for the DROP lump sum, and also asked the Commission to modify its order for the same reason. In the meantime, it did not pay any workers' compensation benefits to Mr. Walters, apparently on the theory (1) that the offset provision in LE § 9-503(e)(2) was effective as a matter of law, even if not included in the Commission's order, and (2) that Mr. Walters' workers' compensation benefits should be offset dollar for dollar by the lump sum DROP payment until the amount of the offsets equaled the amount of the lump sum—a time that, given the figures involved, would be considerably in the future.
Before the Circuit Court, Mr. Walters won the battle—the court ordered the County to comply with the Commission order while the matter was under judicial review—but lost the war. The Circuit Court eventually sided with the County on its interpretation of the offset provision and, in a written opinion issued in July 2011, ordered that the lump sum be applied to offset workers' compensation benefits until the full amount of the DROP payment has been credited against the workers' compensation benefits, a period that it computed to be 352 weeks.
Mr. Walters appealed that decision. After briefs had been filed, but before argument was held in the Court of Special Appeals, the County filed a petition for certiorari and suggested that we hear the case together with the Thiergartner case in the interest of judicial economy. Mr. Walters, who is represented by the same counsel as Mr. Thiergartner, did not oppose the petition. We granted the petition and accepted the County's suggestion that we consider the cases together.
There is no dispute as to the underlying facts in either of these cases. The result in both cases turns on a question of law: Is a lump sum DROP payment a retirement benefit that is to be offset against workers' compensation benefits pursuant to LE § 9-503(e)(2) and, if so, how?
In a judicial proceeding to review an award of the Commission, the decision of the Commission is "presumed to be prima facie correct." LE § 9-745(b)(1). A court may reverse a Commission decision only if the court finds that the Commission's action was based on an erroneous construction of the facts or law. Frank v. Baltimore County, 284 Md. 655, 658, 399 A.2d 250 (1979); LE § 9-745(c)(3). As indicated above, the facts are undisputed and the issue is purely one of law.
Because we are dealing with a question of law, we accord no special deference to the decisions of the Circuit Court or the Court of Special Appeals. Of course, as in any case where another court has given thoughtful consideration of the legal issue at stake, this does not prevent us from taking advantage of the reasoning and analysis of the courts that have considered the same issue that is before us. Sturdivant v. Department of Health & Mental Hygiene, 436 Md. 584, 587-88, 84 A.3d 83 (2014).
There can be no dispute that the DROP payment is a retirement benefit for
As noted above, the offset provision in LE § 9-503(e)(2) provides simply that "the benefits received [under the workers' compensation law] shall be adjusted so that the weekly total of those benefits and retirement benefits does not exceed the weekly salary that was paid to the ... firefighter...." The statutory offset formula thus contemplates a comparison of a retiree's "weekly salary" with the workers' compensation award (which is typically expressed as a weekly amount) and retirement benefits which, for purposes of the comparison, must be expressed as a weekly figure. This means that any retirement benefit payment not paid on a weekly basis—which is likely true for most, if not all, retirement payments—must be converted to a weekly figure for this formula. The statute does not explicitly state how to do this. What legislative history exists is also silent on this question.
A case concerning another offset provision of the Workers' Compensation Act provides some guidance. See Blevins v. Baltimore County, 352 Md. 620, 724 A.2d 22 (1999). Blevins concerned an offset provision, codified at LE § 9-610, that is designed to avoid duplicative disability payments to government employees and retirees.
Returning to the question before us: how should the DROP lump sum payment be converted to a weekly figure that reflects the entire period of the individual's retirement? Three possibilities have been proposed in these cases. For convenience, we shall refer to them as the Retiree Proposal, the County Proposal, and the Commission Approach.
Before the Commission and in the Circuit Court, counsel for Mr. Thiergartner and Mr. Walters argued that a lump sum DROP payment should be part of the offset computation only for the particular week in which it is paid.
The Court of Special Appeals adopted this approach in the Thiergartner case. In particular, it interpreted the statutory language to mean that "the restriction contemplated by the statute can only apply to
The problem with that conclusion is that there are few, if any, retirement benefits paid on a weekly basis. Indeed, the record in these cases indicates that the ongoing retirement benefit payments for both Mr. Thiergartner and Mr. Walters are made on a monthly basis.
In our view, the use of the term "weekly" in the statute does not restrict the type of retirement benefits to be taken into account by the frequency of payment. Rather, the statute refers to the "weekly total" of retirement benefits and workers' compensation benefits in order to provide a sensible formula that includes workers' compensation benefits—which are expressed as weekly dollar figure and which are the payment that will potentially be affected by the offset. Retirement benefits, whether paid monthly or bi-weekly or on some other timetable, must be converted to a weekly figure in order to be combined with workers' compensation benefits for one side of the statutory formula.
Thus, the reference to the "weekly total" of retirement benefits and workers' compensation benefits is not a limitation on what retirement benefits to include—i.e., only those paid weekly—but rather a direction on how to include retirement benefits in the computation—i.e., express the retirement benefits as a weekly amount so that the statutory comparison can be made. There is no obvious reason why the DROP lump sum payment, if it is part of the employee's "retirement benefits," should not be converted to a weekly figure, just as other portions of the employee's "retirement benefits" and the employee's salary are.
Accordingly, the Retiree Proposal is a strained construction of the statute and is inconsistent with the treatment of other payments used in the formula that are not typically expressed as a weekly figure or paid on a weekly basis.
The County Proposal would convert the DROP lump sum into a weekly figure, but
For example, in Mr. Thiergartner's case, the County would divide the lump sum payment of $189,346.90 by the maximum weekly workers' compensation award that Mr. Thiergartner could receive—$307—to come up with the number of weeks (617) for which the workers' compensation benefits would be completely offset. Perhaps unsurprisingly, this appears to maximize the offset for the County and would completely eliminate the worker's compensation award.
In Mr. Walters' case, the County Proposal would divide the lump sum payment of $146, 959.90 by the maximum weekly workers' compensation benefit that Mr. Walters could receive (after the partial offset for the monthly retirement payment)—$417—to come up with the number of weeks (352) for which workers' compensation benefits would be completely offset. At the conclusion of that period, there would no offset at all.
It is difficult to comprehend the rationale underlying the County Proposal. Although the County promotes it as a method of pro-rating the lump sum for offset purposes, it appears to be designed primarily to minimize the workers' compensation benefit rather than spread the lump sum over the period of retirement in some logical and fair manner. In the two cases before us, Mr. Thiergartner received a substantially greater lump sum payment than Mr. Walters, but the County would "pro-rate" Mr. Thiergartner's lump sum at a much lower rate ($307 per week) than Mr. Walters' lump sum ($417 per week). Perhaps this would make sense if Mr. Thiergartner had a much longer life expectancy—i.e., the higher lump sum would be pro-rated at a lower rate because it was being spread over a longer period of time. But that is not the basis for the different rates by which the County would pro-rate the lump sums. The rate is based solely on the amount of the particular retiree's workers' compensation award—a figure quite independent of the retirement benefits or expected length of retirement.
The Commission approach would pro-rate the DROP lump sum payment by a method independent of the amount of the worker's compensation award. In Thiergartner, at the time of the initial award by the Commission, the County raised the question of how the lump sum DROP payment should be included in the offset computation. In response, the Commission recognized that some accounting should be made for the portion of Mr. Thiergartner's retirement benefits represented by the lump sum DROP payment.
The Court of Special Appeals has affirmed a similar approach by the Commission in applying the offset provision in LE § 9-610 of the Workers' Compensation Act. Garrett v. Board of Education, 94 Md.App. 169, 616 A.2d 446 (1992). As noted above, that statute also concerns an offset of workers' compensation benefits by retirement benefits. In Garrett, the retiree elected an option that involved a lower monthly retirement payment but with a future survivor benefit. The Court of Special Appeals held that the appropriate figure to use for the offset computation was an "actuarially equal" figure—derived from an alternative option under the retirement plan—that expressed the retirement benefit as a recurring payment during the period of the retiree's retirement.
Similarly, in these cases, the lump sum DROP payment is simply one option that an employee can pick to receive the enhanced retirement benefit provided by the DROP; the alternative to the lump sum would be a higher monthly benefit payment in the future. The lump sum is thus a benefit payment that relates to the entirety of the employee's retirement and not simply to the particular date on which it happens to be paid or to the period over which workers' compensation benefits are to be paid.
While the Commission's approach in Thiergartner represented the view of a single commissioner who stated a conclusion without a detailed analysis, in our estimate it is superior to either the Retiree Proposal or the County Proposal in that it converts the lump sum to a weekly figure and does so in a way that relates the lump sum to the entire period of retirement. This Court does not function as the chief actuary or chief economist under the Workers' Compensation Act and we do not hold that the Commission Approach is the only way to convert a lump sum retirement payment into a weekly figure for purposes of this statute. There may be other reasonable ways, consistent with the statute and the principle set forth in Blevins to do so. But any such method adopted by the
As is sometimes the case in statutory construction, the Legislature's enactment provides clear direction only up to a point, after which the court must earn its keep. Here, the offset provision in LE § 9-503(e)(2) clearly requires a comparison involving retirement benefits paid to a retiree without any exception based on the payment timetable of the benefits and thus includes a lump sum DROP payment. The statute also necessarily contemplates the conversion of such payments to a weekly figure for purposes of the offset computation. Under the principle stated in Blevins, any conversion must pro-rate the lump sum payment over the entire period of retirement to which it relates. But the statute provides no direction on the method of conversion. The approach adopted by the Commission in Thiergartner—looking to what the retirement system would have paid on a recurring basis under an alternate option—is one reasonable way to do so.
JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY IN NO. 58 VACATED AND CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
COSTS TO BE PAID BY BALTIMORE COUNTY.
In the Circuit Court in the Walters case, the County argued that the phrase "weekly salary" is susceptible to a different interpretation than "average weekly wage," which resulted, at least in that case, in a lower figure. See footnote 6 below. The County did not include that issue in its petitions for certiorari in these cases and the merits of the Commission's use of the average weekly wage figure is not before us.
