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Morse v. The Industrial Commission of Arizona - 11/7/2006

Arizona Court of Appeals Division One Holds That Projected Earnings From a Job a Worker’s Compensation Claimant Has Not Yet Performed May Not Be Considered In Determining Claimant’s Average Monthly Wage.


Claimant was employed part-time with United Parcel Service (“UPS”). On the date she sustained her industrial injury, she was scheduled to begin working at a second job with Forward Air. Pursuant to A.R.S. § 23-1041, the Industrial Commission of Arizona (“ICA”) issued a notice of average monthly wage based on claimant’s average wages from UPS for the thirty days prior to her injury. Claimant requested a hearing and argued that the ICA should have increased her average monthly wage determination to reflect the additional wages she would have received from her work at Forward Air. The Administrative Law Judge (“ALJ”) upheld the ICA’s determination of average monthly wages and summarily affirmed his decision on administrative review. Claimant then brought a special action petition to the Court of Appeals.

The sole issue before the Court of Appeals was whether an ALJ in setting a claimant’s average monthly wage should consider prospective wages from an employer for whom the Claimant had not yet begun to work. Claimant relied on two prior cases to support her position that her prospective wages should have been considered. First, Claimant relied on Swift Transp. v. Indus. Comm’n, 189 Ariz. 10, 938 P.2d 59 (App. 1996), for the proposition that a claimant’s average monthly wage should reflect her “probable future earning capacity.” In Swift, a truck driver who was injured on the job had earned reduced training pay for the first three weeks prior to his injury and a regular salary for the final week. The ALJ calculated the truck driver’s average monthly wage based on the one week of regular salary he had received. On appeal by the employer, the Court of Appeals affirmed. Second, Claimant argued based on Lowry v. Indus. Comm’n, 195 Ariz. 398, 989 P.2d 152 (1999), that a Claimant seeking inclusion of income from more than one job need not have held both jobs on the date of her injury. In Lowry, the Supreme Court held that the average monthly wage of a volunteer firefighter injured on the job should include wages earned during the thirty days prior to his injury from his position as a building inspector, even though he had been terminated from that position shortly before his injury.

The Court of Appeals rejected Claimant’s arguments and affirmed the Award and Decision of the ICA. The Court held that A.R.S. § 23-1041 establishes the presumptive average monthly wage as the amount of wages actually received by the claimant during the thirty days prior to her industrial injury. The Court recognized that an ALJ has broad discretion to use an expanded wage base when the presumptive would not adequately reflect the Claimant’s earning capacity. However, the Court distinguished the two cases relied upon by the Claimant. In both cases, the focus was on wages actually earned during the thirty-day period before the industrial injury. Neither case supported the proposition that average monthly wages could be based upon projected earnings from a job the Claimant had not yet performed. Such a basis would be too speculative.

Judge Winthrop authored the unanimous opinion joined by Judges Thompson and Portley.

Posted On: 11/17/2006