Jacob Williams v. Reeds, LLC

Issued by THE LABOR AND INDUSTRIAL RELATIONS COMMISSION

(Modifying Award and Decision of Administrative Law Judge)

**Injury No.:** 15-104779

**Employee:** Jacob Williams, deceased

**Claimants:**

- Laura Williams

- Jennifer Williams, next friend of Courtney Williams and Kennedy Williams

**Employer:** Reeds, LLC

**Insurer:** American Family Mutual Insurance Company

This workers' compensation case is submitted to the Labor and Industrial Relations Commission (Commission) for review as provided by § 287.480 RSMo. We have reviewed the evidence, read the parties' briefs, and considered the whole record. Pursuant to § 286.090 RSMo, we modify the award and decision of the administrative law judge. We adopt the findings, conclusions, decision, and award of the administrative law judge to the extent that they are not inconsistent with the findings, conclusions, decision, and modifications set forth below.

Employee, sole member of employer Reeds Limited Liability Company, an automobile repair and parts company, died instantaneously on December 1, 2015, when the bed of a truck he was working on fell on his chest.

Laura Williams claims benefits as employee's widow. Employee's former wife Jennifer Williams claims benefits as mother and next friend of Courtney Williams and Kennedy Williams, children of employee's prior marriage.

The parties asked the administrative law judge to resolve the following issues:

1. Employee's compensation rate; and
2. Division of death benefits between Laura, Courtney, and Kennedy Williams.

The administrative law judge found that employee's situation, including his status as both an employee and single member of the employer and varying reports of his income to different agencies and organizations, justified application of § 287.250.4 RSMo in the computation of his average weekly wage. This section allows the Division and Commission, in a situation that presents exceptional facts, to deviate from statutory formulas and determine an employee's average weekly wage "in such manner and by such method" as the Division or Commission considers fair. He cited *Nielsen v. Max One Corp.*, 98 S.W.3d 585 (Mo. App. 2003), *Oberley v. Oberley Engineering*, 940 S.W.2d 953 (Mo. App. 1997) and *Ash v. Ahal Construction*, 916 S.W.2d 439 (Mo. App. 1996), cases involving similarly unusual facts, in support of this finding.

Claimant Laura Williams, employee's widow, testified regarding the personal nature of numerous expenses she and employee claimed as business deductions on their joint tax return.

Injury No. 15-104779

Employee: Jacob Williams, deceased

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Claimant Jennifer Williams produced the deposition of family law attorney Charles Robert Baird as an expert witness on the issue of employee's income and average weekly wage. Employer/insurer objected, claiming that Mr. Baird lacked the requisite educational background and proper certifications to qualify as an expert. The administrative law judge overruled employer/insurer's objection and found that Mr. Baird's knowledge, skill, and experience qualified him to opine on the issue of calculation of employee's income and average weekly wage pursuant to § 287.250.4.

The administrative law judge included payments by employee from his business account to himself and for his personal expenses as earnings in computing the employee's average weekly wage pursuant to § 287.250.2 RSMo. He cited Oberley v. Oberley Engineering, 940 S.W.2d 953 (Mo. App. 1997) as authority for considering these payments as a "similar advance" employee received from the employer that should be included in employee's gross wages. See § 287.250.2 RSMo.

Based on Laura Williams' testimony, her records of personal expenses paid to employee from Reeds, LLC, and attorney Baird's testimony regarding the concept of "imputed income" the administrative law judge found that employee had annual income from Reeds in the amount of $62,100.13. The administrative law judge's findings of fact state, "This total, divided by 52 weeks, yields $796.15." Award, p. 6.

Courtny Williams' Dependency Status

The administrative law judge found that employee's daughter Courtny Williams, who turned eighteen on August 7, 2018, qualified for continued receipt of death benefits as employee's dependent pursuant to § 287.240(3)(b) RSMo based on her enrollment at Ozarks Technical Community College.

The administrative law judge apportioned the 796.15 weekly death benefit rate in three equal amounts, to Laura Williams (265.39 per week), Courtny Williams (265.38 per week), and Kennedy Williams (265.38 per week).

Application for Review

Employer/insurer appealed, claiming the administrative law judge's award was not based on competent and substantial evidence in that:

- Employee and claimant Laura Williams signed and filed tax returns certifying income of 13,127 in 2014 and 13,337 in 2015 and never amended those returns.

- The "personal" payments Laura Williams claims Reeds, LLC made to her husband are the same expenses she certified to the IRS as business expenses.

- Section 287.250 RSMo precludes the alleged personal payments to employee from Reeds, LLC from being considered "gross wages" or "wages."

- (1) Family law attorney Charles Robert Baird's testimony about what constitutes imputed income for purposes of the Missouri Child Support Statutes is irrelevant to what constitutes employee's average weekly wage.

MNKOI 0000811699

Injury No. 15-104779

Employee: Jacob Williams, deceased

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for purposes of the Missouri Workers' Compensation Act; (2) Mr. Baird lacks the educational background and certification to qualify as an expert regarding tax law and accounting principles.

- Laura Williams' deposition was improperly admitted over Insurer's objection because the deposition was a discovery deposition taken as part of a subpoena duces tecum and was not subject to the same rules as an evidentiary deposition. The administrative law judge therefore improperly relied on Laura Williams' deposition testimony regarding personal payments to employee from Reeds, LLC.

- Courtney Williams turned eighteen on August 7, 2018, was not enrolled as a full time student at that time and therefore did not qualify as a dependent pursuant to § 287.240 RSMo.

Law

Section 287.560 RSMo provides, in pertinent part:

> Any party shall be entitled to process to compel the attendance of witnesses and the production of books and papers, and at his own cost to take and use depositions in like manner as in civil cases in the circuit court, except that depositions may be recorded by electronic means.

Section 287.250 RSMo provides the framework for calculating an employee's average weekly wage, and provides, in relevant part, as follows:

> 2. For purposes of this section, the term "gross wages" includes, in addition to money payments for services rendered, the reasonable value of board, rent, housing, lodging or other similar advance received from the employer [emphasis added].

> 4. If pursuant to this section the average weekly wage cannot fairly and justly be determined by the formulas provided in subsections 1 to 3 of this section, the division or the commission may determine the average weekly wage in such manner and by such method as, in the opinion of the division or the commission, based upon the exceptional facts presented, fairly determine such employee's average weekly wage.

Section 287.240(3) RSMo provides, in pertinent part:

> The payment of death benefits to a child or other dependent as provided in this paragraph shall cease when the dependent dies, attains the age of eighteen years, or becomes physically and mentally capable of wage earning over that age, or until twenty-two years of age if the child of the deceased is in attendance and remains as a full-time student in any accredited educational institution [emphasis added].

MNKOI 0000811674

Injury No. 15-104779

Employee: Jacob Williams, deceased

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We adopt the administrative law judge's findings regarding Mr. Baird's qualifications as an expert and the relevance of Mr. Baird's testimony to the issue of employee's average weekly wage and wage rate. We further endorse his analysis of § 490.065.1 and related case law concerning admission of opinion testimony in civil actions.

Section 287.560 RSMo applies to depositions in workers' compensation proceedings before the Division. This section permits use of depositions "in like manner as in civil cases in the circuit court". Section 287.560 implicates no specific rule of civil procedure. See *Butterball, LLC v. Dobrauc*, 559 S.W.3d 495 (Mo. App. 2020). We therefore find the administrative law judge properly overruled employer/insurer's generic objection that "rules of evidence" precluded the use of Laura Williams' deposition other than for impeachment purposes. *Transcript*, 50.

We approve the administrative law judge's application of § 287.250.4, based on the exceptional facts of this case and employee's unusual circumstances, to determine employee's wage rate. We affirm the administrative law judge's conclusion, based on his discussion of relevant case law, referenced supra, that employee's payments from his business account to himself for personal expenses constituted "similar advances" pursuant to § 287.250.2 RSMo. We credit Mr. Baird's explanation of the concept of "imputed income" and find that the administrative law judge's appropriately applied this concept to determine employee's average weekly wage.

Consistent with the administrative law judge's factual findings, referenced supra, we supplement the award's Rulings of Law and Summary to explicitly find, pursuant to § 287.240(2), that employer/insurer owes weekly compensation in the total amount of $796.19 for death benefits to employee's dependents, based on 66.67% of employee's average weekly wage of 1,194.23 (62,100.13 divided by 52). Our calculation of the weekly death benefit, consistent with the administrative law judge's determination of employee's average weekly wage, results in a $.04 increase in the weekly benefit rate cited in the administrative law judge's award (796.19 vs. 796.15).

Employer/insurer timely raised the issue of Courtny Williams' dependency status at hearing and in its application for review. Employer/insurer has a legitimate interest in monitoring and verifying the status of any benefit recipients to ensure it satisfies its legal obligation. It therefore clearly has standing to dispute the administrative law judge's determination regarding Courtny's dependency status.

Documentation from the registrar of Ozarks Technical Community College verified Courtny's enrollment for three course credits for the fall semester of July 30, 2018, through December 14, 2019. *Transcript*, 398. We find, as a factual matter, that enrollment for three course credits at an accredited educational institution does not constitute full-time attendance. The statute includes no provision that allows a child over the age of eighteen to revive his or her status as a dependent through later enrollment for a full-time course of study. Courtny failed to satisfy the prerequisite of enrollment and continued attendance "as a full-time student at an accredited

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Injury No. 15-104779

- educational institution [emphasis added]" as of age eighteen necessary to extend her dependency status until age twenty-two, pursuant to § 287.240(3) RSMo. Therefore, based on the evidence in the record, we find that Courtny Williams' dependency status terminated as of August 7, 2018, her eighteenth birthday.

**Award**

We modify the award of the administrative law judge as to the issue of dependency status of claimant Courtny Williams. Courtny Williams' entitlement to death benefits ceased when she attained the age of eighteen on August 7, 2018. Thereafter, employer/insurer is ordered to pay Laura Williams weekly death benefits in the amount of 398.09 and Kennedy Williams