The Employee was a professional football player for the Employer for the 2016-2017 football season. The Employee sustained an admitted Achilles tendon injury on November 13, 2016. The Employee underwent surgery, and after complications the Employee developed a staph infection, and the tendon was unable to be properly reattached. The Employee was unable to continue playing professional football.
The Employee, after moving to his home state of Tennessee, started a real estate business which was registered as a limited liability company. The Employee ultimately purchased two properties and rented these properties for income. At one point, a property management company was hired, which was cancelled a few months later. The Employee then took over day to day management of the properties including renting, leasing, managing the property, researching other property purchases, meeting contractors, and handling accounting. The Employee did not draw a salary, but rather reinvested the returns.
The Employee filed a claim petition alleging entitlement to TPD. The Employee alleged entitlement based on the monthly income of the rent. The Employer and Insurer argued the employee was not earning income, the value of the work activities could not be determined in the absence of an expert, and in the alternative, if the rent constituted income, then all of the Employee’s investments should be considered income.
The compensation judge found the rental income represented income for purposes of TPD benefits.
The Employer and Insurer appealed. The Employer and Insurer argued the Employee was not earning income, rather was an investor receiving passive income. The WCCA disagreed and found he performed day to day management of the properties. Also, the failure to take income as a self-employed worker is not a disqualifying act to preclude an award of TPD.
The issue becomes the market value of the Employee’s labor. This can be determined by the company’s tax returns, what it would cost to hire someone to do the work, expert vocational testimony, or a judge may use any method of wage calculation that a judge’s findings reasonably reflects the Employee’s injury related loss of earning power. The judge finding the entire rental income to be the Employee’s income was not unreasonable.
The WCCA also found the Employee’s other investments need not be included because there is not any evidence that his income from other investments involved any sort of labor for which wages are typically applicable.
The compensation judge’s findings are supported by substantial evidence and is affirmed.
Takeaway: An Employee can be entitled to TPD based a reasonable determination of post-injury wages of rental property income as a result of the Employee’s work activities.