Opinion
No. 2050179.
Decided October 20, 2006.
Appeal from Jefferson Circuit Court (CV-04-7131).
The City of Birmingham ("the City") appeals from the trial court's judgment concluding that the City is subject to the Alabama Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975, and awarding Floyd Lee George workers' compensation benefits. We affirm in part and dismiss the appeal in part.
On December 1, 2004, George sued the City seeking workers' compensation benefits. The City answered, asserting that it was not subject to the Alabama Workers' Compensation Act pursuant to § 25-5-13(b), Ala. Code 1975, which states that the act "shall not apply to any city . . . which has a population of 250,000 or more according to the last or any subsequent decennial federal census. . . ." At trial, it was undisputed that the City's population was less than 250,000 as of the most recent decennial federal census in 2000. On July 26, 2005, the trial court entered a judgment concluding that the City is subject to the Alabama Workers' Compensation Act and finding George to be permanently and totally disabled pursuant to that act.
On August 25, 2005, the City filed a motion to alter, amend, or vacate the judgment. On October 5, 2005, the trial court granted the motion insofar as it requested a setoff of workers' compensation benefits for George's past and future medical expenses paid by the City and for temporary-injury leave paid to George by the City. In all other respects, the trial court denied the City's motion to alter, amend, or vacate. The City timely appealed to the supreme court. The supreme court concluded that the appeal was within the appellate jurisdiction of this court and transferred the appeal to this court.
On appeal, the City argues (1) that the City is not subject to the Alabama Workers' Compensation Act; (2) that the City is entitled to a setoff of workers' compensation benefits for "Extraordinary Disability" payments made to George; and (3) that attorney fees should not have been awarded to George's attorney.
The City first argues that the Alabama Workers' Compensation Act does not apply to the City. Section 25-5-13(b), Ala. Code 1975, provides:
"[T]his chapter shall not apply to any city (excepting school districts and institutions) which has a population of 250,000 or more according to the last or any subsequent decennial federal census, to any park and recreation board now or hereafter established for those cities, to any board or agency now or hereafter authorized and established by the governing body of those cities, nor to employees of the city or of any board or agency."
Act No. 29, Ala. Acts 1975 (4th Ex. Sess.) ("Act No. 29"), which amended the predecessor statute to § 25-5-13(b), provided:
"[T]he provisions of [Alabama's workers' compensation law], as now or hereafter amended, shall not apply to any city which has a population of 250,000 or more according to the last or any subsequent decennial federal census, to any park and recreation board now or hereafter established for such cities, to any board or agency now or hereafter authorized and established by the governing body of such cities nor to employees of any such city or of any such board or agency."
The City's argument depends on the contention that Act No. 29 is a "general act of local application." In Peddycoart v. City of Birmingham, 354 So. 2d 808 (Ala. 1978), our supreme court addressed whether a "general act of local application" is in fact a properly enacted general act or an improperly enacted local act under the Alabama Constitution. The court in Peddycoart stated:
"[W]e respectfully direct the legislature's attention to the fact that § 110 of the Alabama Constitution mandates the definition of a local law. It is one 'which applies to any political subdivision or subdivisions of the state less than the whole; . . .' (emphasis added). Applies when? Obviously, when it becomes law! If, when it becomes law it applies only to a subdivision of the state, it is a local law. That is the clear meaning of the language employed by our constitutional framers. In the face of this plain language, to conclude that the application of a law to less than the entire state makes no difference when a futuristic population classification is employed is to engage in sophistic reasoning. We reject such reasoning in favor of the clear definition of a local act which is contained in the Constitution. A population classification cannot be utilized in the future to avoid the definition of a local act.
"We are mindful of prior decisions which have approved enactments based upon population classifications when the classifications were found to be 'substantial,' were not 'arbitrarily' fixed, and were based upon a 'reasonable necessity' for the several classifications. E.g., Dearborn v. Johnson, 234 Ala. 84, 173 So. 864 (1937). No citation of authority is necessary to demonstrate the elusive nature of such a judicial test, or to point out that a number of these cases might have been decided either way. The specificity of the constitutional framers manifested by §§ 104, 105 and 110 discloses their intent, and negates tolerance with any such tests which give to both courts and legislature such wide discretion. Henceforth when at its enactment legislation is local in its application it will be a local act and subject to all of the constitutional qualifications applicable to it. With regard to legislation heretofore enacted, the validity of which is challenged, this Court will apply the rules which it has heretofore applied in similar cases.
"With deference to those members of this Court who in the past have been concerned that such a construction would impinge upon the legislative power to enact local legislation, we must observe that such is not the case. As we have shown, our Constitution authorizes local legislation, and sets out a procedure for its enactment. Under that authorization local legislation reflecting responses to local needs may be enacted. It is only when those local needs already have been responded to by general legislation that § 105 of our state Constitution prohibits special treatment by local law."
"The effect of Peddycoart, of course, was to prospectively prevent the use of population classifications, i.e., 'bracket bills,' to govern the nature of the legislation in which they were used. Notwithstanding the presence of those classifications, Peddycoart held, if at the time legislation was adopted it applied to any political subdivision less than the whole state it was a local law."
Freeman v. Purvis, 400 So. 2d 389, 391 (Ala. 1981).
On November 19, 1980, in response to the Peddycoart decision, Amendment No. 389 to the Alabama Constitution of 1901 was ratified. Amendment No. 389 provides:
Amendment No. 389 is Art. IV, § 106.01, of the "Official Recompilation of the Constitution of Alabama of 1901, as Amended."
"Any statute that was otherwise valid and constitutional that was enacted before January 13, 1978 [the date Peddycoart was released], by the legislature of this state and was a general act of local application on a population basis, that applied only to a certain county or counties or a municipality or municipalities of this state, shall not be declared invalid or unconstitutional by any court of this state because it was not properly advertised in compliance with section 106 of this Constitution.
"All such population based acts shall forever apply only to the county or counties or municipality or municipalities to which they applied on January 13, 1978, and no other, despite changes in population.
"The population based acts referred to above shall only be amended by acts which are properly advertised and passed by the legislature in accordance with the provisions of this Constitution."
"The effect of [Amendment No. 389] was to validate all 'bracket bills' enacted without advertising before January 13, 1978, . . . and which were not otherwise unconstitutional." Freeman, 400 So. 2d at 391.
The City argues that Act No. 29 was a general act of local application that was validated by Amendment No. 389. It is undisputed that the City's population was less than 250,000 as of the most recent decennial federal census in 2000. The City notes that, as of January 18, 1978, according to the then most recent decennial federal census, the City's population was more than 250,000, meaning that the City was then still excluded from workers' compensation laws. The City contends that, pursuant to the second paragraph of Amendment No. 389, the City's population is forever "frozen" as it existed on January 18, 1978. Therefore, the City argues, it is forever exempt from the Alabama Workers' Compensation Act under the exemption provided by Act No. 29 and, later, under § 25-5-13(b), Ala. Code 1975, which contains substantially the same language as Act No. 29.
In concluding that the City's population was not "frozen" at its January 13, 1978, level, the trial court relied on Walker v. City of Montgomery, 833 So. 2d 40 (Ala. 2002). The trial court in its judgment summarized the pertinent facts and arguments inWalker:
"Walker, a practicing attorney, contended that a certain Act involving the collection of a privilege license tax should not be levied by the City of Montgomery. The gist of Walker's argument was that the City was 'locked into' or 'frozen in' the population bracket set forth in the Act at the time of its passage in 1957. Records available from the 1950 federal decennial census reported that the City had a population of 106,525. Walker's argument concentrated on the language in the Act stating that it applied to cities having populations between 100,000 and 125,000 'according to the last or any subsequent federal decennial census.' He argued that the disjunctive 'or' used in the statute, given the normal statutory construction, meant that because the Act applied to the City at the time of its passage in 1957, it continued to apply today. Walker contended that while other cities could be brought within the purview of the Act by their reported populations in a subsequent federal decennial census, the City could not grow out of the population bracket set out in the Act.
"The City of Montgomery argued that its population had since exceeded the bracketed amount and that as a result it had passed out of the classification and could levy the privilege tax. The trial court entered judgment for the City of Montgomery. The issue before the Alabama Supreme Court on appeal was whether municipalities, if once in a certain classification, could move into and out of such classifications with changes in their populations. The Alabama Supreme Court affirmed the trial court's judgment. . . ."
The supreme court in Walker seemingly evaluated the act in that case as a general act, not as a general act of local application. The court in Walker stated:
"In Montgomery County Commission v. Hobbie, 368 So. 2d 264 (Ala. 1979), this Court observed:
"'In Belcher v. McKinney, 333 So. 2d 136 (Ala. 1976), we reiterated the three tests which must be met if an act based on a population classification is to be a general act: (1) "There must be a substantial difference in population; (2) the classification must be made in good faith; and (3) the classification must be reasonably related to the purpose sought to be achieved by the act." 333 So. 2d at 139, citing Reynolds v. Collier, 204 Ala. 38, 85 So. 465 (1920). In addition the act must have application to a shifting class, i.e., "there must exist a possibility of application to other counties which may come within the classification fixed by the statute." Belcher, supra at 140; Brittain v. Weatherly, 281 Ala. 683, 207 So. 2d 667 (1968); State ex rel. Camp v. Herzberg, 224 Ala. 636, 141 So. 553 (1932). The act cannot be "so hedged about with limitations as to amount to a designation rather than a classification." Camp, supra at 639, 141 So. at 554; Brittain v. Weatherly, supra.'" 368 So. 2d at 269 (emphasis added [in Walker]). While Belcher v. McKinney, 333 So. 2d 136 (Ala. 1976), considered legislative acts applicable to counties, the same requirements apply in considering acts applicable to cities. See City of Birmingham v. Samford, 274 Ala. 367, 149 So. 2d 271 (1963). Further, this Court stated in Phalen v. Birmingham Racing Commission, 481 So. 2d 1108, 1114 (Ala. 1985), that '[t]he concept was that population classifications, when established in an act, were permitted if the possibility existed for other subdivisions to grow into the classification.' (Emphasis [on 'grow into'] added [in Walker].)
"While this Court has never expressly so stated, it has implied that a city or county could grow out of a population classification. The two cases relied on by the trial court provide good examples of this Court's touching on this subject. In Smith v. Lancaster, 269 Ala. 579, 114 So. 2d 568 (1959), this Court considered whether an act that established and applied a population classification to counties having a population between 80,000 and 94,000 was valid. Etowah County was the only county to which the act applied. In the course of determining that the act was invalid because it was a 'local law' that had been passed without compliance with the appropriate publication requirements, the Court stated:
"'According to the 1950 decennial census, Etowah County had a population of 93,892. So, if the 1960 census shows an increase in its population of as little as 109 it will not then be subject to the Act.'
"269 Ala. at 583, 114 So. 2d at 570 (emphasis added [inWalker]). Further, in Robinson v. City of Montgomery, 485 So. 2d 695 (Ala. 1986), this Court observed:
"'By 1962, Montgomery had outgrown the population classification of the original 1951 Trinity Act. The legislature, in order that the Act "continue in full force and effect," reenacted it, changing only the population classification.'
"485 So. 2d at 698 (emphasis added [in Walker]).
"Based on the foregoing, we conclude that an act based on a population classification must have application to a 'shifting' class in order to be a general law. See Hobbie, supra. While this Court has previously failed to explicitly so hold, we today determine and hold that if a class within a population classification is to be considered as 'shifting,' a city or county within that class must be able to outgrow the classification just as a city or county can grow into such a classification. See Phalen, supra."
Act No. 29 and § 25-5-13(b) exempt from state workers' compensation laws a city that has a population of 250,000 or more "according to the last or any subsequent decennial federal census." The phrase "according to the last or any subsequent decennial federal census" is the same phrase describing the population classification at issue in the act in Walker. The court in Walker evaluated the act in that case as a general act that applied to a "shifting" class and concluded that a city could move both in and out of the population classification in the act. 833 So. 2d at 46. Based upon the analysis in Walker, we conclude that the City was capable of moving out of the classification providing an exemption from the state's workers' compensation laws for municipalities with a population of 250,000 or more.
The City also argues that, if it is subject to the Alabama Workers' Compensation Act, the City is entitled to a setoff of workers' compensation benefits for "Extraordinary Disability" payments made to George. In pertinent part, § 25-5-57(c), Ala. Code 1975, provides:
"(c) Setoff for other recovery. In calculating the amount of workers' compensation due:
"(1) The employer may reduce or accept an assignment from an employee of the amount of benefits paid pursuant to a disability plan, retirement plan, or other plan providing for sick pay by the amount of compensation paid, if and only if the employer provided the benefits or paid for the plan or plans providing the benefits deducted."
Upon the City's motion to alter, amend, or vacate the judgment, the trial court awarded the City a setoff for George's past and future medical expenses paid by the City and for "Paid Injury Leave" benefits paid to George by the City. The "Paid Injury Leave" fund is completely funded by the City. The City argues that it should also be allowed a setoff for the "Extraordinary Disability" payments made to George. The trial court's order granting in part and denying in part the City's motion to alter, amend, or vacate the judgment discussed the "Extraordinary Disability" payments:
"The Extraordinary Disability Benefit . . . [was established by] The Pension Act of the City of Birmingham, Act No. 1271, Acts 1973 and the Retirement and Relief Pension Plan contained therein. Under the said Pension Act, three types of benefits are paid[:] retirement, normal disability and extraordinary disability. . . . [N]ormal disability need not be the result of an on the job injury, while extraordinary disability necessarily must arise from an injury incurred within the line and scope of employment.
"The record in this case indicates that [George] exhausted all paid [injury] leave as of December 15, 2003, was granted Extraordinary Disability benefits as of December 16, 2003, and continues to receive said benefit which is equal to 70% of [George's] regular pay. [George], like all employees with [the] City, made contributions to the pension fund in regular payroll deductions, with [the City] matching the contributions. [George] was employed with [the City] for 8 years, 3 months and 17 days prior to his May 12, 2003 injury, making contributions to the pension fund throughout the course of his employment. It is from this one fund that the extraordinary disability benefits are paid, along with regular pension and normal disability payments."
Section 25-5-57(c)(1) states that an employer is allowed a setoff for benefits paid pursuant to a disability plan "if and only if the employer provided the benefits or paid for the plan or plans providing the benefits deducted." In Ex parte Fort James Operating Co., 895 So. 2d 294 (Ala. 2004), the employee was paid under a "sickness-and-accident benefits" plan maintained by the employer that covered time lost from work due to an injury. 895 So. 2d at 297. In concluding that, pursuant to § 25-5-57(c)(1), the employer was entitled to a setoff of the workers' compensation benefits for the sickness-and-accident benefits the employer had paid to the employee, the supreme court stated that "[the employer] has provided substantial evidence indicating that it was the sole source of funding for the plan. [The employee] has not offered any evidence indicating that he funded any portion of his sick-pay plan." Id.
In the present case, it is undisputed that George made payments to the pension fund from which the "Extraordinary Disability" payments were made. Because the "Extraordinary Disability" benefits were not paid from a fund that was fully funded by the City, the City is not entitled to a setoff pursuant to § 25-5-57(c)(1). The plain language of § 25-5-57(c)(1) requiring an employer to "provide the benefits or pa[y] for the plan or plans providing the benefits deducted" from workers' compensation benefits dictates this conclusion. Moreover, this conclusion is supported by the supreme court's emphasis in Ex parte Fort James Operating Co. on the fact that the employee had failed to present evidence indicating that he had contributed anything to the sickness-and-accident benefits plan. Id. Consequently, the employer in that case, which had completely funded the plan, was entitled to a setoff of the workers' compensation benefits for the sickness-and-accident benefits that the employer had paid to the employee. Id. That is not the case here.
The City finally argues that the trial court erred by awarding attorney's fees to George's attorney. The gist of the City's argument is that, because the City paid George "Extraordinary Disability" benefits at a compensation rate higher than the workers' compensation rate awarded to George, George's attorney did not gain any additional benefit for George and therefore should not be entitled to attorney's fees. We conclude that the City lacks standing to challenge the award of attorney's fees to George's attorney.
"In Ex parte Fort James Operating Co., 871 So. 2d 51, 54 (Ala. 2003), our supreme court, relying on and quoting from Topline Retreads of Decatur, Inc. v. Moore, 484 So. 2d 1090, 1091 (Ala.Civ.App. 1985), in its analysis, concluded that an employer in a workers' compensation case, because it pays no portion of the attorney fee awarded to the worker's attorney, has 'no standing to obtain . . . review of the calculation of those fees.'"
Goodyear Tire Rubber Co. v. Moore, 900 So. 2d 1239, 1240 (Ala.Civ.App. 2004). See also Fort James Operating Co. v. Irby, 911 So. 2d 727, 729-30 (Ala.Civ.App. 2005) (stating that an employer lacked standing to challenge the calculation of an attorney-fee award). Because we conclude that the City does not have standing to challenge the award of attorney's fees, we dismiss the appeal as to that issue.
Insofar as the City appeals the award of attorney's fees, we dismiss the appeal. In all other respects, we affirm the judgment of the trial court.
AFFIRMED IN PART; APPEAL DISMISSED IN PART.
Thompson, Pittman, and Bryan, JJ., concur.
Crawley, P.J., concurs specially, with writing.
Murdock, J., dissents, without writing.
CRAWLEY, Presiding Judge, concurring specially.
In much of its argument to this court the City of Birmingham ("the City") contends that it cannot grow out of its population bracket because of the operation of Amendment No. 389 to the Alabama Constitution of 1901. The main opinion is correct in noting that Walker v. City of Montgomery, 833 So. 2d 40 (Ala. 2002), determines that municipalities can grow out of their population classifications. I write specially to note that the City's contention that Amendment No. 389 "freezes" in place the laws applicable to municipalities based upon their population in existence on January 13, 1978 is flawed in that the language of the Amendment neither compels nor implies such a result.
Amendment No. 389 states:
"Any statute that was otherwise valid and constitutional that was enacted before January 13, 1978, by the legislature of this state and was a general act of local application on a population basis, that applied only to a certain county or counties or a municipality or municipalities of this state, shall not be declared invalid or unconstitutional by any court of this state because it was not properly advertised in compliance with section 106 of this Constitution.
"All such population based acts shall forever apply only to the county or counties or municipality or municipalities to which they applied on January 13, 1978, and no other, despite changes in population.
"The population based acts referred to above shall only be amended by acts which are properly advertised and passed by the legislature in accordance with the provisions of this Constitution."
(Emphasis added.)
The language in the second paragraph of the amendment, taken in context, is clearly meant to restrict the effects of the amendment to previously passed "bracket bills" enacted without advertising. See Freeman v. Purvis, 400 So. 2d 389 (Ala. 1981). The amendment, by use of the word "only," indicates that it would apply only to counties or municipalities that fit within a population classification as of January 13, 1978, and that therefore it would not apply to counties or municipalities that might have otherwise "grown into" coverage under the previously enacted laws. Nothing in the plain language of this amendment indicates that a county or municipality is prevented from "growing out" of coverage under the previously enacted laws. Therefore, the majority's reliance on Walker, despite the fact that it only cursorily addresses the application of Amendment No. 389, is well placed.