                   IN THE SUPREME COURT OF TENNESSEE
                              AT NASHVILLE
                                OCTOBER 3, 2000 Session

                DOROTHY G. MACKIE, ET AL. v. YOUNG SALES
                         CORPORATION, ET AL.

                          An Appeal By Permission from the
               Supreme Court Special Workers’ Compensation Appeals Panel
                           Circuit Court for Davidson County
                        No. 96C-2724    Thomas Brothers, Judge



                   No. M1998-00590-SC-WCM-CV - Filed March 1, 2001


We granted review in this workers’ compensation case to determine whether the trial court erred in
awarding temporary total benefits and death benefits based on the maximum weekly wage where the
employee did not earn any wages in the 52 weeks prior to being diagnosed with malignant
mesothelioma. On appeal, the Special Workers’ Compensation Appeals Panel concluded that the
trial court erred in awarding benefits based on the maximum weekly wage because the employee was
voluntarily retired at the time of his diagnosis, and that benefits were to be based on the minimum
weekly wage. After reviewing the record and applicable authority, we conclude that an employee’s
voluntary retirement does not preclude workers’ compensation benefits for an injury arising out of
and in the course of employment and that the trial court properly awarded benefits based on the
maximum weekly rate under the facts of this case.

  Tenn. Code Ann. § 50-6-225(e); Findings of Fact and Conclusions of Law by the Special
     Workers’ Compensation Panel Rejected; Judgment of the Trial Court Affirmed

E. RILEY ANDERSON, C.J., delivered the opinion of the Court, in which FRANK F. DROWOTA, III,
JANICE M. HOLDER, and WILLIAM M. BARKER, JJ., joined. ADOLPHO A. BIRCH, JR., J., not
participating.

H. Douglas Nichol and Gregory D. Onks, Knoxville, Tennessee, for the appellant, Dorothy G.
Mackie

Bryan Essary, Nashville, Tennessee, for the appellee, Young Sales Corporation.


                                           OPINION
       The employee, James Mackie, installed asbestos insulation for much of his working life
between 1948 and 1988. According to a stipulation between the parties, Mackie’s last injurious
exposure to asbestos occurred while he was working for the defendant, Young Sales Corporation,
in 1973.1

         Mackie stopped working sometime in 1989 or 1990 because he wanted to retire. Although
he retained his union membership in Asbestos Workers Local 86 and could have returned to work,
subject to availability, Mackie did not return to work at any time after his retirement. On January
23, 1993, Mackie was diagnosed with asbestos-related malignant mesothelioma, which the parties
stipulated was caused by exposure to asbestos insulation. On May 15, 1993, Mackie died from the
illness.

        The plaintiff, Dorothy Mackie, filed this suit seeking workers’ compensation benefits for the
death of her husband. The trial court entered a judgment awarding total temporary disability
benefits, for the period of January 23, 1993 to May 15, 1993, and death benefits.2 The trial court
calculated the maximum weekly rate of $318.24 based on evidence in the record that members of
Asbestos Union Local 86 earned $17.22 per hour in 1993.

        On appeal, the Special Workers’ Compensation Appeals Panel concluded that the trial court
erred in awarding temporary benefits and death benefits based on the maximum weekly wage
because James Mackie was voluntarily retired at the time he was diagnosed with mesothelioma. The
Panel therefore modified the judgment to reflect a minimum weekly compensation rate of $35 per
week.3 We granted the appellant’s motion for review to consider these issues.


                                                      ANALYSIS

       We begin our analysis by observing that the workers’ compensation statutes, Tenn. Code
Ann. § 50-6-101, et seq. (1999), were enacted by the legislature to provide compensation to an


         1
                  The record ind icates that in the late 1 970's, M ackie and his wife, Dorothy G. Mackie, settled several
claims against various manufacturers o f asbestos following Mac kie’s diagnosis for asbestosis.

         2
                    The trial court awarded death benefits for a period of 400 weeks minus the sixteen weeks of temporary
benefits, for a total of $122,296. The trial court further found, however, that the defendant was entitled to a credit of
$59,675.01 to reflect settleme nts previo usly entered by James and Dorothy Mackie. The net total lump sum award,
therefore, was $62,529.15. In addition, the trial court awarded $4,500 for burial expenses and $32,207.01 for medical
expenses.

         3
                  Although not discussed in the Panel’s o pinion, its application of the minimum weekly compensation
rate of $35 per week would result in a net loss to the plaintiff. See Tenn. Code Ann. § 50-6-102(15)(D) (1999). Under
the Panel’s decision, the benefits would include $35 per week for 400 weeks, or $14,000, plus funeral expenses of
$4,500 , plus medic al expense s of $32,2 07.01, fo r a total of $5 0,707.0 1. When offset against a credit to the defendant
of $59,675.01, the result is minus $8,968 . Likewise, if no weekly b enefits were affo rded, the lo ss to the plaintiff wo uld
be even greater.

                                                             -2-
employee who sustains an injury that arises out of and in the course of his or her employment. See
Mathis v. J.L. Forrest & Sons, 216 S.W.2d 967, 967 (Tenn. 1949). The purpose is to “provide
injured workers with periodic payments as a substitute for lost wages in a manner consistent with
the worker’s regular wage.” Perdue v. Green Branch Mining Co., 837 S.W.2d 56, 59 (Tenn. 1992)
(citing Van Hooser v. Mueller Co., 741 S.W.2d 329, 330 (Tenn. 1987)). In cases where the work-
related injury has resulted in the employee’s death, workers’ compensation benefits are to be paid
to the surviving dependents of the employee. Jones v. General Accident Ins. Co. of America, 856
S.W.2d 133, 134 (Tenn. 1993); see also Tenn. Code Ann. § 50-6-210 (1999).

        The workers’ compensation scheme does not require fault or negligence of the employer but,
rather, is a complete substitute for any tort remedies that the employee may otherwise have had
against the employer. See Liberty Mut. Ins. Co. v. Stevenson, 368 S.W.2d 760, 762-63 (Tenn.
1963). Because the workers’ compensation laws are remedial in nature, they must be construed
liberally to accomplish their intended purpose. Betts v. Tom Wade Gin, 810 S.W.2d 140, 142 (Tenn.
1991). For example, this Court has said:

                 [T]his Court must interpret those statutes in a manner designed to
                 protect workers and their families from the economic devastation
                 that, in many instances, can follow on-the-job injuries. Furthermore,
                 Tennessee’s workers’ compensation laws must be construed so as to
                 ensure that injured employees are justly and appropriately reimbursed
                 for debilitating injuries suffered in the course of service to the
                 employer.

Id. at 142-43.

        In reviewing the statutory provisions that are relevant to the present case, we observe that
where a trial court determines that an employee suffered temporary total disability, the schedule of
compensation is “sixty-six and two-thirds percent (66 2/3%) of the average weekly wages . . .,
subject to the maximum weekly benefit and minimum weekly benefit.” Tenn. Code Ann. § 50-6-
207(1)(A) (Supp. 2000). Similarly, “[i]n all cases of death of an employee covered by the Workers’
Compensation Law, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages, as
defined, shall be paid in cases where such deceased employee leaves dependents, subject to the
maximum weekly benefit.” Tenn. Code Ann. § 50-6-209(b)(1) (1999).

        In calculating the schedule of compensation, “average weekly wages” means “the earnings
of the injured employee in the employment in which the injured employee was working at the time
of the injury during the period of fifty-two (52) weeks immediately preceding the date of the injury
divided by fifty-two (52) . . . .” Tenn. Code Ann. § 50-6-102(2)(A) (1999). The statute further
provides:

                       Where by reason of the shortness of time during which the
                 employee has been in the employment of the employee’s employer it


                                                 -3-
               is impracticable to compute the average weekly wages as above
               defined, regard shall be had to the average weekly amount which
               during the first fifty-two (52) weeks prior to the injury or death was
               being earned by a person in the same grade, employed at the same
               work by the same employer, and if there is no such person so
               employed, by a person in the same grade employed in the same class
               of employment in the same district.

Tenn. Code Ann. § 50-6-102(2)(C) (1999).

        In the present case, it is undisputed that the employee was voluntarily retired and did not
work at all in the fifty-two weeks preceding his diagnosis of asbestos-related malignant
mesothelioma. The plaintiff nonetheless asserts that the trial court properly calculated temporary
total benefits and death benefits based on the wages that her husband would have received had he
been working a forty-hour week at the time he was diagnosed with malignant mesothelioma. The
defendant argues, and the Panel agreed, that the plaintiff was not entitled to compensation based on
the maximum weekly rate because the employee was voluntarily retired and lost no earnings as a
result of the work-related illness.

         Although this precise issue is a question of first impression in Tennessee, we have considered
similar issues in other cases. In Bishop v. United States Steel Corp., 593 S.W.2d 920 (Tenn. 1980),
the trial court awarded permanent partial disability benefits to an employee who developed silicosis
due to his workplace exposure to hazardous material. The employer argued on appeal that the
disability for silicosis was not compensable because at the time the claim was filed the employee was
totally disabled from an unrelated condition of phlebitis. Id. at 921. This Court rejected the
employer’s argument: “We see no basis either in the Workmen’s Compensation Act [sic] or in logic
to deprive a workman, who suffers a compensable injury, of benefit, merely because of the existence
of an independent, concurrent, noncompensable cause of disability.” Id. at 922.

        Likewise, in Oliver v. State, 762 S.W.2d 562 (Tenn. 1988), an employee’s injury to his wrist
while employed with the state did not manifest itself as a permanent injury for some twenty years,
by which time the employee had retired from employment with the federal government due to an
unrelated back injury. Although the employee had not worked at all during the fifty-two weeks
preceding the onset of the permanent wrist injury, this Court observed that Tenn. Code Ann. § 50-6-
207(3) “sets out the schedule of compensation for an individual entitled to permanent partial
disability benefits, without any mention or requirement that the claimant prove a decrease in earning
capacity.” Id. at 565 (emphasis added). In concluding that the injury was compensable, this Court
wrote:

                       The undisputed evidence in this case is that [the employee]
               suffers a 50% permanent anatomical impairment to the left upper
               extremity and wrist. This impairment resulted from a work-related
               accident but did not manifest itself until some 20 years after the


                                                 -4-
                  injury. Under T.C.A. § 50-6-207(3) one suffering such a work-
                  related disability is entitled to compensation for the partial loss of the
                  use of the scheduled member of his body without regard to his loss of
                  earning power or wages.

Id. at 566 (emphasis added).

        The defendant argues, however, and the appeals panel agreed, that Bishop and Oliver are
distinguishable because they involve employees who were not working due to a disability and not
due to voluntary retirement. The defendant relies upon the decision in McKinney v. Feldspar Corp.,
612 S.W.2d 157 (Tenn. 1981), in which this Court reversed the trial court’s determination that a part-
time employee was entitled to benefits based on a full, 40-hour week. This Court said that the
“computation of the ‘average weekly wage’ of a part[-]time employee . . . must be based upon his
actual part[-]time earnings rather than upon the basis of the standard hourly wage or the standard
work week of 40 hours.” Id. at 160 (citations omitted).4

        In the present case, the relevant statutory provisions do not expressly address the issue of an
employee who learns of a work-related injury or occupational disease following his or her voluntary
retirement.5 We note, however, that the employees in Oliver and Bishop were not working at the
time of their work-related injuries, nor, apparently, had they worked within 52 weeks of their
injuries. Despite the fact that they lost no actual earnings, this Court held that the injuries were
compensable. As we said in Oliver, the schedule of compensation under Tenn. Code Ann. § 50-6-
207 is to be determined “without regard to . . . loss of earning power or wages.” Oliver, 762 S.W.2d
at 566.6

        In addition to these decisions, we reiterate that in the absence of express statutory guidelines,
we must interpret the workers’ compensation provisions in a manner that is consistent with the
remedial purpose of compensating employees for injuries sustained in the workplace. In filing a
workers’ compensation claim, the burden is on the employee to establish (1) that an injury or disease
arose out of and in the course of his employment, and (2) that the employee provided timely notice
of the condition to his or her employer. A workers’ compensation claim must also be filed within
the one-year statute of limitations, which begins to run when through the exercise of reasonable care
and diligence it becomes discoverable and apparent that the employee sustained a compensable

         4
                   The defendant also relies upon decisions in two jurisdictions that have held that employees who had
retired were not en titled to workers’ co mpensatio n benefits. Appeal of Gelinas, 698 A.2 d 1248 (N.H. 19 97); Arlinton
County Fire Dep’t v. Stebbins, 466 S.E.2d 124 (Va. 199 6).

         5
                 W e note that there are obvious practical barriers to creating a statutory distinction based on “voluntary
retirement.” An employee’s retirement may occur at any age, for example, and may or may not be a permanent status.


         6
                 The decision in McKinney is distinguishable inasmuch as the employee was working part-time and
had an actual wage at the time of his injury upon which benefits should have been calcu lated. McKinney, 612 S.W.2d
at 160.

                                                           -5-
injury. See Tenn. Code Ann. § 50-6-203 (1999); Ogden v. Matrix Vision of Williamson County,
Inc., 838 S.W.2d 528, 540 (Tenn. 1992). Obviously, in some cases the statute of limitations may not
begin to run until after an employee’s retirement. Accordingly, we conclude that an employer may
not simply rely on the fortuitous timing of an employee’s retirement to avoid the responsibility for
providing compensation.

         In applying these considerations in this case, there is no dispute that Mackie’s malignant
mesothelioma arose out of and in the course of his employment and that the illness would have been
compensable but for the question of his retirement. There is also no dispute that the defendant
obtained the benefit of Mackie’s labor and that neither Mackie nor the plaintiff had any other
recourse or remedy against the defendant. In our view, disallowing compensation in these
circumstances would conflict with the tradeoff that is at the heart of the workers’ compensation
system – that the employee has a remedy for injuries arising out of and in the course of his or her
employment and the employer has a limit on the amount of its liability and complete protection from
tort liability.

        Accordingly, we disagree with the Panel’s conclusion that the employee’s voluntary
retirement automatically precluded compensation as awarded by the trial court.7 The only remaining
question for the trial judge, then, was determining the appropriate amount of benefits. The trial
court’s determination that benefits should be based upon the maximum weekly rate was predicated
upon evidence in the record regarding the nature of Mackie’s work, the retention of Mackie’s union
membership, and the proof regarding the availability and pay for such work at the time Mackie
learned of his work-related malignant mesothelioma. Our review indicates that the evidence in the
record does not preponderate against the trial court’s finding.


                                               CONCLUSION

        Accordingly, after reviewing the record and applicable authority, we conclude that an
employee’s voluntary retirement does not preclude workers’ compensation benefits for an injury
arising out of and in the course of employment and that the trial court properly awarded benefits
based on the maximum weekly rate under the facts of this case. We therefore reject the findings and
conclusions of the Special Workers’ Compensation Appeals Panel and affirm the judgment of the
trial court. Costs of the appeal are taxed against the appellee, Young Sales Corporation, for which
execution may issue if necessary.


                                                             ___________________________________
                                                             RILEY ANDERSON, CHIEF JUSTICE



        7
                   Indeed, the Panel’s conclusion that voluntary retirement precluded compe nsation was inte rnally
inconsistent with its decision to modify the judgment so as to allow compensation based on the minimum weekly rate.

                                                       -6-
