                   COURT OF APPEALS OF VIRGINIA


Present: Chief Judge Fitzpatrick, Judges Benton and Kelsey
Argued at Richmond, Virginia


DANE BROWN, T/A DANE BROWN ELECTRICAL AND
 PRINCETON INSURANCE COMPANY
                                               OPINION BY
v.   Record No. 1598-02-2              JUDGE JAMES W. BENTON, JR.
                                             MARCH 11, 2003
DANE B. BROWN


        FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

          S. Vernon Priddy III (Cecil H. Creasey, Jr.;
          Sands Anderson Marks & Miller, on brief), for
          appellants.

          Craig B. Davis (Emroch & Kilduff, on brief),
          for appellee.


     The sole issue raised by this appeal is whether the

commission erred by calculating an average weekly wage using the

sole proprietor's profit and loss statements for the fifty-two

weeks immediately preceding the injury rather than Schedule C

from the sole proprietor's prior year's tax return.   We hold

that the commission did not err, and we affirm the award.

                               I.

     Dane Brown filed an application for benefits alleging an

injury by accident.   At the evidentiary hearing, Brown testified

that he is a sole proprietor doing business as Dane Brown

Electrical and has elected coverage under the Act.    In his

business, Brown performs standard electrical contracting
services; he sells and installs stand-by automatic generators;

and he provides estimates for electrical generators to his

clients and to other electrical contractors' clients.    On April

9, 2001, Brown visited the office of an electrical contractor

and obtained the name of a customer who needed an estimate for a

generator.   Brown was en route to see that customer when a

vehicle hit the rear of his automobile.   Brown sustained neck

and back injuries and received emergency treatment.   He has not

been released for employment.

     Brown testified that he had cervical spine surgery on

February 5, 2001 that was unrelated to this claim.    Prior to the

February surgery, Brown was in pain and could not perform the

duties of his job as well as normal, but he continued to work

because he "had to do it, . . . had to make a living."   After

the February surgery, Brown did not work for approximately eight

weeks.   Before the accident on April 9, 2001, however, Brown had

been released to return to his employment and had been working

two weeks.

     Brown's wife testified by deposition that the business

operates from an office in their home.    Brown's wife is not an

employee of the business; she is, however, its bookkeeper and

prepares the taxes for the business.   Brown's wife testified

that she regularly uses a computer-based accounting program when

she writes checks, pays bills, makes invoices, and does other

accounting functions.   When she prepares the income tax returns
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for the business, she uses the computer-based accounting program

and a computer-based income tax preparation program; she

"plug[s] what's in [the] Quicken [accounting program] into the

Turbo Tax [program] and it does the taxes."

     Brown's wife testified that Schedule C from the business's

income tax returns for the year 2000 showed gross receipts of

$186,820 and a net profit of $4,174.   That tax period ended

December 31, 2000, four months before Brown's injury.   At the

request of Brown's attorney, she used the computer programs to

prepare profit and loss statements for the fifty-two weeks

preceding Brown's injury.   Brown's wife prepared two profit and

loss statements -- one for the electrical contracting work and

another for the generator estimates and sales aspect of the

business.   The statements showed gross receipts of $231,714

between April 8, 2000 and April 8, 2001 and a net income of

$35,996.27 for this same period.   A substantial portion of the

net income was attributable to the generator aspect of the

business.

     The deputy commissioner ruled that Brown proved he suffered

a compensable injury by accident and that he has been totally

disabled since the day of the accident.   In determining Brown's

average weekly wage, the deputy commissioner found that the tax

return was not the most accurate account of Brown's net earnings

for the statutory period.   The deputy commissioner noted the

significant difference between the net profits reported on
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Schedule C for the year 2000 and reported on the profit and loss

statements.   The deputy commissioner found, however, that in

preparing those documents Brown's wife had, in each instance,

"merely taken the database which she kept on a contemporaneous

basis using the computer software and used the software to

produce these figures including the tax returns."   In addition,

the deputy commissioner found that because the figures were

"essentially computer generated," Brown's wife did not

artificially change the figures to enhance Brown's claim.    The

deputy commissioner credited her explanation that the net profit

shown on Schedule C was lower than the actual profit, in part,

because Schedule C required her to use a mileage deduction for

business mileage, as opposed to actual mileage, and because it

included an allowance for the business use of the home.   In view

of that testimony, the deputy commissioner found that the net

profit shown on the profit and loss statements should be reduced

by the home office expenses and used the prior year's

calculation of the home office expenses to reduce the net profit

shown on the profit and loss statements.   The deputy

commissioner found that Brown had net earnings of $32,586.27

from his business for the fifty-two weeks preceding the accident

and determined that Brown's pre-injury average weekly wage was

$626.66.

     Upon review, the commission affirmed these findings and

specifically noted that the Schedule C covered a different
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fifty-two week period than the profit and loss statements.    The

commission found that using Schedule C as the basis for

computing the average weekly wage would deprive Brown of the

benefit of the increase in his earnings from the business

through April 9, 2001.

                                 II.

        The employer and the insurer contend the commission relied

upon an incorrect source in computing Brown's average weekly

wage.    They argue that "case law and the evidence in this matter

required the commission to accept the Schedule C from Brown's

2000 tax return."    We disagree.

        In pertinent part, Code § 65.2-101 defines "average weekly

wage" as follows:

             1.a. The earnings of the injured employee
             in the employment in which he was working at
             the time of the injury during the period of
             fifty-two weeks immediately preceding the
             date of the injury, divided by fifty-two
             . . . .

             b. When for exceptional reasons the
             foregoing would be unfair either to the
             employer or employee, such other method of
             computing average weekly wages may be
             resorted to as will most nearly approximate
             the amount which the injured employee would
             be earning were it not for the injury.

The commission must be "guided by [this] statute in determining

average weekly wage."     Dominion Assocs. Group, Inc. v. Queen, 17

Va. App. 764, 766, 441 S.E.2d 45, 46 (1994).




                                - 5 -
     "The reason for calculating the average weekly wage is to

approximate the economic loss suffered by an employee . . . when

there is a loss of earning capacity because of a work related

injury."   Bosworth v. 7-Up Distrib. Co., 4 Va. App. 161, 163,

355 S.E.2d 339, 340 (1987).   The commission's duty is "to make

the best possible estimate of future impairments of earning from

the evidence adduced at the hearing, and to determine the

average weekly wage."   Pilot Freight Carriers, Inc. v. Reeves, 1

Va. App. 435, 441, 339 S.E.2d 570, 573 (1986).    This issue

presents "a question of fact to be determined by the Commission

which, if based on credible evidence, will not be disturbed on

appeal."   Id.

     It is undisputed that the Schedule C tax form does not

correspond to the fifty-two week period immediately preceding

the date of Brown's compensable injury and that the profit and

loss statements do.   Our decisions in Smith v. Smith, 32

Va. App. 242, 527 S.E.2d 463 (2000), or Meredith Constr. Co. v.

Holcombe, 21 Va. App. 537, 466 S.E.2d 108 (1996), do not require

the commission to choose the Schedule C over the profit and loss

statements as the basis for computing the average weekly wage.

As we held in Smith, "Holcombe stands for the proposition that

net taxable income may be an appropriate method for determining

the income of a sole proprietor . . . .   However, Holcombe does

not require that only this method may be used."    Smith, 32

Va. App. at 252, 527 S.E.2d at 468 (emphasis added).
                             - 6 -
     The commission agreed with the deputy commissioner's

finding "that the tax return in this case was not 'necessarily

the most accurate account of [Brown's] net earnings from his

business" and, thus, not the proper foundation for determining

Brown's average weekly wage.   In particular, the commission

found as follows:

             We agree with the Deputy Commissioner
          that the primary difference between the
          employer's [profit and loss] statement[s]
          and the Year 2000 Schedule C appears to be
          that they cover different periods, and
          reflect different gross incomes. If the
          commission were to rely upon the Schedule C,
          it would be basing the pre-injury average
          weekly wage only upon the employer's gross
          receipts, and [Brown's] earnings from
          January 1, 2000 to December 31, 2000. This
          would deprive [Brown] of the benefit of an
          increase in his earnings from the business
          between January 1, 2001 and the date of the
          accident on April 9, 2001. This is a
          significant difference, considering that the
          employer had gross receipts of $186,820.00
          for tax year 2000, but had gross receipts of
          $231,714.51 for the fifty-two week period
          between April 8, 2000 and April 8, 2001.

These findings are supported by credible evidence.

     The employer does not contend that "exceptional reasons"

exist to deviate from the preferred statutory methodology.     See

Code § 65.2-101 (subpart b. of the "average weekly wage"

definition).   Instead, the employer argues that the record

contained no explanation of "the source of the heightened gross

receipts for the 12-month period covered by [the profit and loss

statements] as opposed to the calendar year 2000 tax return."

                               - 7 -
The employer points to evidence that Brown had surgery in

February 2001 and was away from his work for several weeks.

     The record clearly establishes, however, that the

commission accepted Brown's evidence about his finances and

bookkeeping.   Brown's wife testified that she maintains the

accounts of the business using a computer-based program and also

prepared the business's tax returns using a computer-based tax

program that synthesizes the information from the accounting

program.   She testified that she used these same programs to

generate profit and loss statements for the business which

covered the fifty-two weeks immediately preceding the date of

the injury.

     The commission considered these matters and found as

follows:

              While we recognize that [Brown] was
           incapacitated for some of the period between
           January 1, 2001 and April 9, 2001, [Brown]
           testified that he continued to work at full
           capacity until his surgery, and returned to
           full work duties weeks before the accident
           in this case. The testimony of [Brown] and
           his wife attributed the income during the
           period of his work for the employer, and the
           insurer has not offered compelling evidence
           to the contrary.

These findings are supported by credible evidence.

     The deputy commissioner and the commission also found that

the profit and loss statements were reflective of the statutory

period at issue and, when adjusted to reflect the business use

of the residence, were a more accurate representation of the
                              - 8 -
business's earnings during this period.   Brown's wife's

testimony and the documents support these findings, and they

also support the commission's finding that no adjustment was

needed for the car and truck expense because it was calculated

in the profit and loss statements.

     Accordingly, we hold that the commission did not err in

finding that the profit and loss statements more accurately

reflected Brown's earnings during the fifty-two weeks at issue

and that credible evidence supports the commission's use of

those statements as the basis for its calculation of Brown's

average weekly wage.   We, therefore, affirm the award.

                                                   Affirmed.




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