Workers' Compensation: Evidence: Appeal and
Error. The findings of fact made by the Nebraska
Workers' Compensation Court will not be set aside on
appeal unless clearly wrong. However, where there is not
sufficient competent evidence to support an award, an
appellate court must modify, reverse, or set aside the award.
Workers' Compensation: Wages: Appeal and
Error. The determination of average weekly wage is a
mixed question of fact and law. To the extent the
determination involves a question of fact, the Workers'
Compensation Court's factual findings will not be set
aside unless clearly wrong; to the extent a question of law
is involved, an appellate court is obligated to make its own
Pleadings. An amended pleading supersedes
the original pleading, whereupon the original pleading ceases
to perform any office as a pleading.
Pleadings: Proof. The pleadings alone are
not proof but mere allegations of what the parties expect the
evidence to show.
Statutes. Statutory language is to be given
its plain and ordinary meaning.
Workers' Compensation. The Nebraska
Workers' Compensation Act should be construed liberally
to carry out its spirit and beneficent purposes.
Workers' Compensation: Corporations: Words and
Phrases. Net profits or net income of a subchapter S
corporation do not necessarily qualify as "wages"
under Neb. Rev. Stat. § 48-126 (Reissue 2010).
Neb. 220] 8. Workers' Compensation: Corporations:
Employer and Employee: Wages: Words and Phrases.
"Wages" under Neb. Rev. Stat. § 48-126
(Reissue 2010) do not include payments received solely
because of the recipient's status as an S corporation
shareholder. Rather, "wages" under § 48-126
are compensation for the recipient's activities as a
___. The determination of "wages" under Neb. Rev.
Stat. § 48-126 (Reissue 2010) for an
employee-shareholder of a subchapter S corporation is a
Workers' Compensation: Evidence: Appeal and
Error. When testing the sufficiency of the evidence
to support findings of fact made by the Workers'
Compensation Court trial judge, the evidence must be
considered in the light most favorable to the successful
party, every controverted fact must be resolved in favor of
the successful party, and the successful party will have the
benefit of every inference reasonably deducible from the
Workers' Compensation: Appeal and Error.
On appellate review, the factual findings made by the trial
judge of the Workers' Compensation Court have the effect
of a jury verdict and will not be disturbed unless clearly
Petition for further review from the Court of Appeals. Moore,
Chief Judge, and Bishop and Arterburn, Judges, on appeal
thereto from the Workers' Compensation Court, Julie A.
W. Iliff and Adam J. Wachal, of Gross & Welch, P.C,
L.L.O., for appellants.
F. Thomas and Jay D. Koehn, of McGrath, North, Mullin &
Kratz, P.C, L.L.O., for appellee Terry Bortolotti.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik,
and Freudenberg, JJ.
appeal from the Nebraska Workers' Compensation
Court's award to Terry Bortolotti, the Nebraska Court of
Appeals [304 Neb. 221] reduced his weekly income benefit from
the maximum to the minimum and eliminated the award of
out-of-pocket medical expenses. On further review, we uphold the
reduced weekly benefit but reinstate the medical expense
income benefit depends on the correct determination of
Bortolotti's average weekly wage, which the compensation
court erroneously based on a superseded pleading. In a matter
of first impression, we address the definition of
"wages" where the worker is both an employee and a
shareholder of a subchapter S corporation.
Bortolotti's medical expenses, the Court of Appeals
failed to give his testimony the inferences mandated by the
deferential standard of review.
worked in a family business, Universal Terrazzo and Tile
Company (Universal), for over 30 years as an installer of
terrazzo tile and fabricator and installer of granite. In
2011, Bortolotti became the sole stockholder and the
president of Universal-a subchapter S corporation. Universal
had at least 15 employees. As president, Bortolotti spent 60
percent of his time performing office and managerial work as
opposed to physical labor. While he was president, Universal
changed workers' compensation insurance providers from
Columbia Insurance Group to Acuity Insurance Company.
injury at issue in this appeal occurred in June 2013.
Bortolotti's operative petition for workers'
compensation benefits alleged weekly earnings of $3, 625 at
the time of the injury. Universal and Acuity Insurance
Company denied the allegation. Henceforth, we collectively
refer to Universal and Acuity Insurance Company as
"Universal." We set forth additional facts in our
Neb. 222] The compensation court determined that Bortolotti
sustained a compensable injury. It specifically found
Bortolotti to be a credible witness. The compensation court
had difficulty determining Bortolotti's average weekly
wage due to a lack of exhibits. Based on an allegation in a
superseded pleading, the court held that Bortolotti's
average weekly wage was $1, 399.45, entitling him to the
maximum compensation rate of $728 per week.
regard to past medical expenses, the compensation court
stated that it was unable to use an exhibit offered by
Bortolotti, because it did not comply with a court rule. But
the court awarded Bortolotti $9, 849.38-the amount that he
testified he personally paid for his medical expenses and
which was itemized in greater detail on the exhibit he
appealed, and Bortolotti cross-appealed. Universal
challenged, among other things, the calculation of
Bortolotti's average weekly wage and the award of
out-of-pocket medical expenses.
Court of Appeals' Decision
Court of Appeals affirmed the compensation court's award
as modified. It noted that documents establishing
Bortolotti's 2013 income were records in his control and
that he did not produce any such documentation. The Court of
Appeals concluded that the compensation court erred in
determining Bortolotti's average weekly wage from the
allegations in his petition, noting that Universal denied the
allegations. Because Universal adduced evidence that
Bortolotti's 2013 wages were $3, 950, the Court of
Appeals determined that Bortolotti should have been awarded
the minimum income benefit of $49 per week under Neb. Rev.
Stat. § 48-121.01 (Reissue 2010).
Court of Appeals eliminated the award for Bortolotti's
out-of-pocket medical expenses. It agreed with Universal that
because the compensation court did not rely on the exhibit
offered by Bortolotti, it had no basis to award the $9,
849.38 in expenses.
Neb. 223] Bortolotti filed a petition for further review,
which we granted.
ASSIGNMENTS OF ERROR
assigns two errors. He alleges that the Court of Appeals
erred by substituting its own judgment for that of the
compensation court in (1) failing to give him the benefit of
all factual inferences when it reduced his average weekly
wage and (2) finding that he failed to prove entitlement to
recover his out-of-pocket medical expenses.
STANDARD OF REVIEW
findings of fact made by the compensation court will not be
set aside on appeal unless clearly wrong. However, where
there is not sufficient competent evidence to support an
award, an appellate court must modify, reverse, or set aside
the award. These standards are central to our review,
but we set forth other standards where applicable.
Average Weekly Wage
Standard of Review
case law regarding whether determination of average weekly
wage is a question of law or fact or both is muddled.
Initially, we recognized it as a mixed question of fact and
In that case, we stated that "[t]he formula for
computing the average weekly wage depends upon whether
plaintiff was engaged in an occupation involving seasonal
employment or nonseasonal employment." When we next
considered determination of average weekly wage, we stated
that it was [304 Neb. 224] "essentially" a question
of fact. Unsurprisingly, the next time the issue
arose, we treated it as a factual question, stating that the
trial court's factual finding as to average weekly wage
was not clearly wrong. Nine months later, the Court of Appeals
addressed the question of what is included within the word
"wages" as a factual one.
decision in Hull v. Aetna Ins. Co. appears to have
created confusion. We stated:
We note that the determination of the definition of the
average weekly wage of a self-employed claimant is a question
of law. An appellate court is obligated in workers'
compensation cases to make its own determinations as to
questions of law. [Citations omitted.] Thus, we are obligated
to clarify the meaning of the term "business
expenses" in our previous holding.
a correct statement as to the definition of such
wage. Importantly, we did not say the
determination of average weekly wage is a question
of law. The Court of Appeals next confronted the issue and,
without citing Hull, opined that the trial
court's determination of average weekly wage was a
question of fact.
then, published Nebraska appellate cases have uniformly
stated that the determination of how the average weekly wage
of a workers' compensation claimant should be calculated
is a question of law. It began with Harmon v. Irby
Constr. [304 Neb. 225] Co.,  where we
proclaimed: "The determination of how the average weekly
wage of a workers' compensation claimant should be
calculated is a question of law. Hull v. Aetna Ins.
Co., 249 Neb. 125, 541 N.W.2d 631');">541 N.W.2d 631 (1996)." But, as
set forth above, that does not accurately recite what we said
in Hull. It snowballed from there. We cited
Harmon in Ramsey v. State.The Court of
Appeals then cited Ramsey in two cases,
and we cited Ramsey in Mueller v. Lincoln Public
Schools  In our most recent case to address
determination of average weekly wage,  we cited
traced the jurisprudential underpinnings regarding the
standard of review, we believe our original iteration to be
correct: The determination of average weekly wage is a mixed
question of fact and law. To the extent the determination
involves a question of fact, the compensation court's
factual findings will not be set aside unless clearly wrong;
to the extent a question of law is involved, we are obligated
to make our own determination.
amended petition alleged an average weekly wage of $1, 399.45
in June 2013. But a second amended petition and the third
amended petition-the operative petition-alleged weekly
earnings of $3, 625 at the time of the June 2013 injury. In
Universal's respective answers to each of these
pleadings, it denied the allegation of average weekly wage.
Neb. 226] During trial, counsel for each party referenced
figures contained on a tax return for Bortolotti, but
documents containing such figures are not in our record. Our
record contains only a 2013 "Schedule E," titled
"Income From Passthrough Statement," which showed
self-employment wages of $3, 950 and qualified production
activities income of $186, 783. Additional information can be
gleaned from the following colloquy between Bortolotti and
Q [by counsel for Bortolotti]. Okay. All right. Let's
talk about your ...