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Fred Schoemehl sustained an on-the-job knee injury in May 2001, and filed a claim for workers’ compensation benefits against his employer and against the Treasurer of the State of Missouri in her capacity as custodian of the state’s Second Injury Fund.1 Because of the severity of his injury, Mr. Schoemehl was awarded Permanent Total Disability (PTD) benefits for the rest of his life, beginning in December 2003. One month later, however, Mr. Schoemehl died of causes unrelated to the knee injury. His widow, Annette, claimed that she should receive her husband’s benefits for the rest of her life. The Missouri Labor and Industrial Relations Commission rejected Mrs. Schoemehl’s claim, and the Missouri Court of Appeals affirmed.2 As a case of first impression, the Supreme Court of Missouri reversed in a four-to-three decision.3

Mrs. Schoemehl’s claim rested on her understanding of three sections of Missouri workers’ compensation law.4 Schoemehl also argued that the law violated the Equal Protection Clauses of the state5 and federal6 constitutions by treating recipients of PTD benefits differently than recipients of permanent partial disability benefits. Because the court awarded Mrs. Schoemehl’s claim through the statutes, it did not reach her constitutional arguments.

Under section 287.200.1, “Compensation for permanent total disability shall be paid during the continuance of such disability for the lifetime of the employee at the weekly rate of compensation in effect under this subsection on the date of the injury for which compensation is being made.”7 Section 287.020.1 defines “employee”: “Any reference to any employee who has been injured shall, when the employee is dead, also include his dependents, and other persons to whom compensation may be payable.”8 And under the heading “Payment of compensation at death of employee—exceptions,” section 287.230.2 reads, “Where an employee is entitled to compensation under this chapter for an injury received and death ensues for any cause not resulting from the injury for which he was entitled to compensation, payments of the unpaid accrued compensation shall be paid, but payments of the unpaid unaccrued balance for the injury shall cease and all liability therefore shall terminate unless there are surviving dependents at the time of death.”9

Mrs. Schoemehl argued that because she was her husband’s dependent, she was an “employee” under the statute. And, although the statute indicates that PTD benefits are payable only “during the continuance of such disability for the lifetime of the employee,” she is still alive, and so Mr. Schoemehl’s disability and benefits were not extinguished by his death. The state argued that benefits are only payable “for the continuation of such disability,” and that Mr. Schoemehl’s disability ceased when he died. The state noted that Mrs. Schoemehl’s interpretation of the law allows for PTD benefits to continue indefinitely: if Mrs. Schoemehl can become an “employee” by virtue of being Mr. Schoemehl’s dependent, then her dependents also can collect Mr. Schoemehl’s benefits as “employees” when she dies, ad infinitum.

To reconcile these apparently-conflicting statutory provisions, Judge Richard B. Teitelman, writing for the majority, began by observing that the court’s interpretation of a statute is informed by its purpose. Citing the statute itself for the proposition that Missouri workers’ compensation law “shall be liberally construed with a view to the public welfare,”10 Judge Teitelman cited precedent for the rule that “[a]ny doubt as to the right of an employee to compensation should be resolved in favor of the injured employee.”11

The majority concluded that Mrs. Schoemehl is an employee under the statute. The majority rejected the state’s interpretation as placing too much emphasis on “during the continuation of such disability,” while ignoring the phrase “for the lifetime of the employee.” Because “any interpretation rendering statutory language superfluous is not favored,” Judge Teitelman rejected the state’s approach, concluding, “[a]n entire clause of the statute should not be relegated to excess verbiage.” The majority further argued that it is “unreasonable” to conclude that the legislature meant for surviving dependents of permanent partial disability recipients to receive the deceased worker’s benefits, but to deny claims from surviving dependents of PTD benefit recipients. Judge Teitelman ultimately held, “The ‘continuance of the disability’ clause extinguishes PTD benefits in the event the injured worker recovers from his or her disability. The ‘during the lifetime of the employee’ clause provides that, if the worker does not recover, the ‘employee’ is entitled to compensation during his or her lifetime.”

Judge Laura Denvir Stith, writing for the dissent, argued that Section 287.200.1 “requires two prerequisites to be met before an injured employee is entitled to permanent total disability payments: (1) the continuance of the permanent total disability and (2) the continuance of the employee’s life.” The dissent argued that, even if Mrs. Schoemehl is an employee under the statute, the majority’s approach “improperly excises” from the statute the phrase “during the continuance of such disability.” Judge Stith argued that, even if the second prerequisite is met by Mrs. Schoemehl assuming her husband’s claim, the first is not, because the disability ended when he died (and she, even if an “employee,” is not herself disabled). The dissent used rational basis review to address Mrs. Schoemehl’s equal protection argument that the statute “operates to treat dependents of permanently totally disabled individuals worse than dependents of permanently partially disabled individuals.” The court observed that because a “permanent partial disability is ‘permanent in nature and partial in degree,’ . . . [t]he benefits to be paid to a permanently partially disabled employee are of a finite, fixed amount, to be paid for a predetermined number of weeks.” PTD benefits, on the other hand, “are measured in terms of the continuance of the employee’s life and disability that prevents the employee from working.” 

Although the dissent did not address it directly, this distinction also explains the phrase “. . . unless there are surviving dependents at the time of death” at section 287.230.2. In its decision on Mrs. Schoemehl’s claim, the Missouri Court of Appeals explained, “[t]he key word is entitled.” The court of appeals held that this section applied to permanent partial disability benefits, which were awarded at a set rate for a certain number of weeks. If the recipient dies before collecting all of his benefits (i.e., the benefits to which he is “entitled”), then his dependents can collect the remainder. The court of appeals held that to apply section 287.230.2 to PTD benefits “ignores a significant difference between compensation for permanent total disability and all other forms of compensation for work-injuries.” “[T]here is no pre-determined ending date to payment” for PTD benefits. But for permanent partial disability, temporary total disability, and temporary partial disability benefits, the insurer “must only continue to make payments to the injured employee for the finite time period mandated by the respective provisions of the statute”, and “the right to this finite amount of money survives to dependents of the injured employee when the employee dies of causes unrelated to the work-related injury.”

Schoemehl is a controversial decision in Missouri. Employers worry that the cost of paying PTD benefits to deceased workers’ dependents could be “unfathomable,” and workers’ compensation insurers predict that premiums will rise.12 The head of the Missouri Bar Association’s workers’ compensation committee acknowledges that Schoemehl is “a big change in the law” and that “there will be more money paid out,” but predicts it will not be too large as a percentage of all workers’ compensation benefits.13 Within three weeks of the court’s decision, legislation was introduced in the Missouri House14 and Senate15 to overturn the holding of Schoemehl. Whether the rule of Schoemehl will stand is an open question in the Show-Me State.

*John Hilton is a graduate of Harvard Law School and a member of the Kansas City Federalist Society chapter.

 

Endnotes

1 Section 287.200.2, RSMo 2000 (“In all cases in which a recovery against the second injury fund is sought for permanent partial disability, permanent total disability, or death, the state treasurer as custodian thereof shall be named as a party, and shall be entitled to defend against the claim.”). 

2 Schoemehl v. Treasurer of State, 2006 WL 1229637 (Mo. App. 2006). 

3 Schoemehl v. Treasurer of State, 2007 WL 58370 (Mo. banc 2007). 

4 Section 287.010 et seq., RSMo 2000. 

5 Mo. Const., art. I, sec. 2. 

6 U.S. Const., art. XIV, sec. 1. 

7 Section 287.200.1, RSMo 2000. 

8 Section 287.020.1, RSMo 2000. 

9 Section 287.230.2, RSMo 2000. 

10 Section 287.800, RSMo 2000. 

11 Wolfgeher v. Wagner Cartage Serv., Inc., 646 S.W.2d 781, 783 (Mo. banc 1983). 

12 David A. Lieb, “Supreme Court sets new precedent with workers’ comp ruling,” Southeast Missourian, 1/22/2007, available at http://www.semissourian.com/story/1186182.html (last viewed 3/5/2007). 

13 Id. 

14 House Bill 629, available at http://www.house.mo.gov/bills071/ bills/hb629.htm (last viewed 3/5/2007). 

15 Senate Bill 277, available at http://www.senate.mo.gov/07info/ bts_web/Bill.aspx?SessionType=R&BillID=4850 (last viewed 3/5/ 2007).

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