SPHNIX ENTERPRISES v. SANTA CRUZ

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Docket Number

No. 89-3014.

Attorney(S)

Robert L. Teitler, of Walton Lantaff Schroeder Carson, Miami, for appellants/cross-appellees. Guy A. Gladson, Jr., of Gladson and Sullivan, South Miami, for appellee/cross-appellant.

Judges

WIGGINTON, Judge.

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Smart Summary

Factual and Procedural Background

This appeal and cross-appeal arise from a workers' compensation case decided by the Judge of Compensation Claims, Alan M. Kuker. The underlying dispute involves an award of attendant care benefits furnished by the claimant's wife. The claimant contested the calculation of his average weekly wage, specifically the exclusion of tips and unreported wages. The appellants/cross-appellees challenge the award of attendant care, while the appellee/cross-appellant contests the wage calculation. The District Court of Appeal of Florida, First District, reviews the Judge's order.

Legal Issues Presented

Whether the award of attendant care furnished by the claimant's wife was proper.
Whether the claimant's average weekly wage should include tips and unreported wages despite the employer's failure to report them.

Arguments of the Parties

Appellants/Cross-Appellees' Arguments

They challenge the award of attendant care benefits furnished by the claimant's wife.
They implicitly contest the inclusion of tips and unreported wages in the claimant's average weekly wage.

Appellee/Cross-Appellant's Arguments

The claimant argues that tips and unreported wages should be included in the calculation of his average weekly wage.
The employer had actual knowledge of the gratuities but failed to establish reasonable reporting procedures, which should not bar inclusion of tips.
There is uncontested evidence that claimant received additional unreported cash wages beyond what was officially reported.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hanks v. Tom Brantley's Tire Broker, 500 So.2d 614 (Fla. 1st DCA 1987)	Employer's actual knowledge of gratuities and failure to establish reasonable reporting procedures does not preclude inclusion of tips in wage calculation.	Distinguished from the current case to support inclusion of tips despite employer's failure to report.
Hyatt Hotel v. Peterson, 493 So.2d 1063 (Fla. 1st DCA 1986)	Addressed circumstances under which tips may be excluded from wage calculations.	Distinguished from the present case because employer here had actual knowledge of tips.
Preferred Aircraft Painting v. Duarte, 532 So.2d 715 (Fla. 1st DCA 1988)	Failure to report tips to the IRS does not bar their inclusion in wage calculations when employer is aware of tips.	Supported the court's decision to include tips in calculating average weekly wage.
International House of Pancakes v. Ellis, 492 So.2d 454 (Fla. 1st DCA 1986)	Similar principle regarding inclusion of tips despite lack of IRS reporting.	Reinforced the court's approach to including tips in wage calculations.
Nash v. Holiday Inn at Calder, 395 So.2d 306 (Fla. 1st DCA 1981)	It is error to exclude tips from average weekly wage calculation even if only claimant's testimony supports the amount.	Used to confirm that tips must be included despite testimonial nature of evidence.

Court's Reasoning and Analysis

The court affirmed the award of attendant care benefits, indicating no error in the Judge of Compensation Claims' determination on that issue. Regarding the average weekly wage, the court found the employer had actual knowledge of the tips received by the claimant but failed to establish a reasonable reporting procedure, thus tips should be included in wage calculations. The court distinguished this case from Hyatt Hotel v. Peterson where circumstances differed. The court further held that failure to report tips to the IRS does not bar their inclusion if the employer was aware of them, citing multiple precedents. As to unreported wages, the court found uncontested evidence that the claimant received $450 weekly in cash wages beyond the $250 reported, and this must be included. Consequently, the court remanded the case for recalculation of the claimant's average weekly wage to include both tips and unreported wages.

Holding and Implications

The court affirmed the award of attendant care benefits furnished by the claimant's wife.

The court reversed the portion of the order that excluded tips and unreported wages from the claimant's average weekly wage and remanded for recalculation including these amounts.

The direct effect is that the claimant's average weekly wage must be properly calculated to include tips and unreported cash wages, potentially increasing compensation benefits. No new legal precedent was established beyond the application of existing case law.

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SPHNIX ENTERPRISES, INC., D/B/A CLUB 49, FIDELITY CASUALTY COMPANY OF NEW YORK AND CONTINENTAL LOSS ADJUSTING SERVICES, APPELLANTS/CROSS-APPELLEES, v. RAYDELL SANTA CRUZ, AND THE FLORIDA DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, DIVISION OF WORKERS' COMPENSATION, APPELLEE/CROSS-APPELLANT.

WIGGINTON, Judge.

Before us is a workers' compensation appeal and cross-appeal from the order of the judge of compensation claims awarding, inter alia, attendant care furnished by the claimant's wife. We affirm the award of attendant care but reverse on the cross-appeal where the judge failed to include in claimant's average weekly wage tips and unreported wages received by the claimant.

In regard to the tips, it was uncontested that the employer had actual knowledge that the gratuities were received but had failed to establish a reasonable reporting procedure. Hanks v. Tom Brantley's Tire Broker, 500 So.2d 614 (Fla. 1st DCA 1987). These facts served to distinguish this case from the circumstances in Hyatt Hotel v. Peterson, 493 So.2d 1063 (Fla. 1st DCA 1986). Failure to report tips to the IRS is not a bar to their inclusion in arriving at a correct average weekly wage, where the employer was aware of the tips being received. Preferred Aircraft Painting v. Duarte, 532 So.2d 715 (Fla. 1st DCA 1988); International House of Pancakes v. Ellis, 492 So.2d 454 (Fla. 1st DCA 1986). Also, in Nash v. Holiday Inn at Calder, 395 So.2d 306 (Fla. 1st DCA 1981), we held that it was error for the judge not to include tips in the computation of average weekly wage even though the only testimony of the amount of the tips was supplied by claimant's testimony (although it was held that the judge did not have to accept the highest figure or even the lowest figure testified to by the claimant).

In regards to the unreported wages, it was essentially uncontroverted in the record by any competent evidence that claimant in fact received $450 weekly in cash "under the table," although the employer only reported the $250 to the carrier as claimant's wages. The employer's production of the $250 check would not dispute claimant's and his wife's testimony that he received cash wages over and above that amount.

Accordingly, we remand this cause to the judge to recalculate claimant's average weekly wage by including the tips and unreported wages.

SMITH and WENTWORTH, JJ., concur.