Ryan's Family Steak Houses, Inc., et al. v Gowan

COURT OF APPEALS OF VIRGINIA
Present: 	Judges Coleman, Annunziata and Bumgardner
Argued at Salem, Virginia
RYAN'S FAMILY STEAK HOUSES, INC.
AND BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA
OPINION BY
v. 	Record No. 1435-99-3 	JUDGE ROSEMARIE ANNUNZIATA
MAY 16, 2000
BRENDA SNOW GOWAN
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Robin A. Bergsohn (Robert C. Baker, Jr.;
Mell, Brownell & Baker, on brief), for
appellants.
George L. Townsend (Chandler, Franklin &
O'Bryan, on brief), for appellee.
Ryan's Family Steak Houses, Inc. ("RFS") and its insurance
carrier appeal the Workers' Compensation Commission's decision
affirming the deputy commissioner's finding that appellants had
made a de facto award to appellee, Brenda Gowan, by paying her
disability benefits for a period of sixteen weeks without filing
a memorandum of agreement with the commission. 	On appeal, RFS
contends 1) the finding of a de facto award lacks statutory
authorization; 2) the doctrine of de facto awards is
unconstitutionally vague, because it is subject to arbitrary
application by the courts; and 3) even if de facto awards are
valid, the facts of this case do not support the commission's
conclusion that RFS made such an award to Gowan. 	We disagree,

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and, for the reasons that follow, we affirm the commission's
decision.
BACKGROUND
On April 20, 1997, Gowan was employed by RFS as a waitress
in RFS's Lynchburg, Virginia restaurant. 	On that date, she
suffered an injury when she tripped on a buckled rug and fell on
her left knee. 	Gowan sought treatment for her injury on April
23, 1997 in the emergency room of Lynchburg General Hospital.
On May 1, 1997, she was examined by Dr. Terry Miller, who
diagnosed her injury as a contusion and sprain of the left knee.
Dr. Miller instructed Gowan to stay off work until her
appointment with him the following week. 	On May 12, 1997, Gowan
returned to Dr. Miller's office and was examined by his partner,
Dr. Paul Fitzgerald. 	Dr. Fitzgerald administered an injection
to Gowan's knee and referred her for physical therapy. 	On May
30, 1997, Dr. Miller noted that Gowan was not yet fit to return
to work.
On June 10, 1997, Dr. Miller observed that physical therapy
had not improved Gowan's condition and that she was still not in
condition to resume working. 	Gowan continued her treatment with
Dr. Miller through the summer and fall of 1997 but showed no
sign of improvement. 	On October 8, 1997, Dr. Miller scheduled
her for arthroscopic surgery. 	Dr. Miller noted on October 27,
1997, however, that the surgery was cancelled because Gowan's

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insurance carrier refused to authorize it. 	Gowan continued her
treatments with Dr. Miller through the summer of 1998, and on
June 5, 1998, Dr. Miller noted that Gowan was capable of
returning to work with certain physical restrictions.
RFS's insurer, Birmingham Fire Insurance Company of
Pennsylvania ("Birmingham"), voluntarily paid Gowan temporary
total disability benefits from April 20, 1997 through August 23,
1997. 	On November 6, 1997, Gowan filed a claim for disability
benefits, alleging compensable injury resulting from the April
20, 1997 accident. 	RFS and Birmingham stipulated that Gowan had
suffered a compensable injury as a result of the accident and
that she was totally disabled through June 10, 1997. 	The
appellants further stipulated that no memorandum of agreement
was submitted to Gowan and that her average weekly wage was
$128.67. 	In his opinion of September 25, 1998, the deputy
commissioner found that Birmingham's voluntary payment of
benefits to Gowan for the sixteen-week period from April 20
through August 23, 1997 constituted a de facto award; as a
consequence, the deputy commissioner found that RFS and
Birmingham bore the burden of proving that Gowan's disability in
the period following June 10, 1997 was not causally related to
the accident. 	Upon appeal, the full commission affirmed the
deputy commissioner's findings. 	Appellants then noted their
appeal to this Court.

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I.
Appellants contend the Workers' Compensation Act's award
procedures, Code §§ 65.2-700 et seq., provide no basis for
making de facto awards of compensation. 	We disagree.
De facto awards of compensation have been long recognized
by this Court, beginning with National Linen Service v. McGuinn,
5 Va. App. 265, 326 S.E.2d 187 (1987) (en banc). 	De facto
awards are premised on Code § 65.2-701(A).1 The statute reads,
in pertinent part:
If after injury . . . the employer and the
injured employee . . . reach an agreement in
regard to compensation or in compromise of a
claim for compensation under this title, a
memorandum of agreement in the form
prescribed by the Commission shall be filed
with the Commission for approval.
In McGuinn, we held that where the employer has stipulated to
the compensability of the claim, has made payments to the
employee for some significant period of time without filing a
memorandum of agreement, and fails to contest the compensability
of the injury, it is "reasonable to infer that the parties
ha[ve] reached an agreement as to the payment of compensation,"
and a de facto award will be recognized. 	McGuinn, 5 Va. App. at
269-70, 362 S.E.2d at 189.
1 This Court in McGuinn established the prerequisites for
finding a de facto award based on our interpretation of former
Code § 65.1-93, the forerunner to Code § 65.2-701(A).

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The General Assembly recodified the Workers' Compensation
Act in 1991, and revised Code § 65.2-701 in 1997. 	In neither
the recodification of former Code § 65.1-93, nor the revision of
the present version of Code § 65.2-701 did the General Assembly
"reject[ ] or modif[y] [our] judicial interpretation of the
statute in issue. 	'Under these circumstances, the construction
given to the statute is presumed to be sanctioned by the
legislature and therefore becomes obligatory upon the courts.'"
Cochran v. Commonwealth, 258 Va. 604, 607, 521 S.E.2d 287, 289
(1999) (quoting Vansant and Gusler, Inc. v. Washington, 245 Va.
356, 361, 429 S.E.2d 31, 33-34 (1993)). 	We, accordingly, find
that Code § 65.2-701(A) authorizes de facto awards and that the
commission did not err in recognizing their validity.
II.
Appellants further contend the principles governing de
facto awards of compensation are vague and, as a result, have
been applied inconsistently by the courts. 	This argument is
without merit.
Assuming arguendo that Code § 65.2-701(A) is vague, our
interpretation of it in McGuinn sufficiently narrows and
clarifies it with respect to de facto awards to pass
constitutional challenge. 	See Wainwright v. Stone, 414 U.S. 21,
22-23 (1973) ("For the purpose of determining whether a state
statute is too vague and indefinite to constitute valid

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legislation 'we must take the statute as though it read
precisely as the highest court of the State has interpreted
it.'" (quoting Minnesota, ex rel. Pearson v. Probate Ct. of
Ramsey County, 309 U.S. 270, 273 (1940))); Commonwealth v.
Rivera, 18 Va. App. 103, 109, 442 S.E.2d 410, 413 (1994) ("[A]s
a state court, we may construe our statutes to have a limited
application if such a construction will tailor the statute to a
constitutional fit."); see also Perkins v. Commonwealth, 12
Va. App. 7, 14, 402 S.E.2d 229, 233 (1991). 	Any vagueness in
the statutory language is thus remedied.
With respect to their claim of inconsistent application of
the doctrine of de facto awards, appellants have identified no
case law which supports their contention that either the statute
or McGuinn's explication of it have been applied inconsistently,
and we have found none. 	"Statements unsupported by argument,
authority, or citations to the record do not merit appellate
consideration." 	Novak v. Commonwealth, 20 Va. App. 373, 389,
457 S.E.2d 402, 410 (1995) (citation omitted). 	We, accordingly,
reject their contention.
III.
Finally, appellants contend the commission's award to Gowan
was based upon insufficient evidence and should, therefore, be
reversed. 	When a conclusion of the commission is supported by
credible evidence in the record, we will not disturb the

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commission's findings on appeal. 	See Marcus v. Arlington County
Bd. of Supervisors, 15 Va. App. 544, 550, 425 S.E.2d 525, 529
(1993). 	We find credible evidence in the record to support the
commission's decision; accordingly, we affirm.
The commission noted that, because it found that
appellants' payments to Gowan constituted a de facto award
according to the principles set forth in McGuinn, the burden
shifted to appellants to prove a basis upon which the award
could be terminated. 	See McGuinn, 5 Va. App. at 270, 362 S.E.2d
at 189-90. 	The commission concluded that RFS failed to show
that Gowan's on-going disability was unrelated to her accident,
noting that RFS initially stipulated to the compensability of
Gowan's injury and that Gowan's physician, Dr. Miller, opined as
late as March 24, 1998, that Gowan's continued disability was
directly related to her accident of April 20, 1997. 	The
independent physician whose opinion was sought by appellants,
Dr. John C. MacIlwaine, likewise concluded that Gowan's left
knee pain was causally related to the accident.
Furthermore, appellants offered no evidence that Gowan was
at any time released to return to her pre-injury duties. 	Dr.
Miller never authorized such a release. 	On the contrary, he
noted on March 24, 1998 that Gowan had not yet been released,
and on June 5, 1998 that he was allowing her to return to work
with "modified duty restrictions." 	Dr. MacIlwaine concurred

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with continued restrictions on kneeling, squatting, standing,
and walking. 	Neither physician opined that Gowan was able to
return to her previous duties as a waitress. 	Based on our
review of the record, we find that appellants did not present
sufficient evidence to prove a change in condition.2
Accordingly, for the reasons stated in this opinion, we affirm
the commission's decision.
Affirmed.
2 Appellants claim that RFS's voluntary payment of benefits
to Gowan over a four-month period was "far too short a time to
justify a de facto award." 	Although none of our published
opinions concerning de facto awards have established a minimum
period of time necessary to constitute a de facto award, we find
that voluntary payment of benefits for a substantial amount of
time is sufficient to uphold a de facto award, and, upon these
facts, we deem four months to be substantial.

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Bumgardner, J., concurring.
I concur with the decision of the majority to affirm the
commission's decision, but I do not join in the rationale of the
opinion. 	This Court established the doctrine of de facto awards
in National Linen Service v. McGuinn, 5 Va. App. 265, 362 S.E.2d
187 (1987). 	The decision has not been altered or repealed by the
General Assembly. 	The doctrine is a creature of case law not
statutory law. 	It serves no purpose to apply to case law
precedent construing statutes and testing whether they are too
vague and indefinite.