Summary
In Barbosa v. Armstrong World Industries, Inc., 9 Mass. Workers' Comp. Rep. 566 (1995), we were confronted with this same issue. After a detailed discussion, not repeated here, we came to the following conclusion.
Summary of this case from Trainor v. Boston Edison Company, NoOpinion
BOARD NO. 800001-81
Filed: October 19, 1995
REVIEWING BOARD DECISION
(Judges Maze-Rothstein, Kirby and Smith)
APPEARANCES
William H. Murphy, Esq., for the employee.
Patricia A. Costigan, Esq., for the insurer.
Can an employee, who has industrially related permanent and total incapacity receive § 34B cost of living benefits when a third party settlement, derived from the same work injury, results in an excess beyond the amount of the workers' compensation insurance lien? We answer yes.
The employee sustained an accepted industrial injury in 1981. The self-insurer paid $224.40 in § 34 temporary total weekly incapacity compensation until the statutory maximum was exhausted. After a contest on the extent of the employee's incapacity, an October 28, 1986 decision ordered payment of § 34A permanent and total benefits from November 14, 1984 and continuing. On October 1, 1987, the employee's first § 34B potentially effective review date, she concurrently received social security disability benefits that would be reduced had the self-insurer also paid a § 34B cost of living ("COLA") supplement. Given those circumstances, and in accordance with the provisions of § 34B, in October 1987 the employee did not receive a COLA supplement.
Section 34B at this time for the employee's date of injury read in pertinent part as follows:
October first of each year shall be the review date for the purposes of this section.
Any person receiving or entitled to receive the benefits under the provisions of section thirty-one or section thirty-four A whose benefits are based on a date of personal injury at least twenty-four months prior to the review date shall be paid, without application, a supplement to weekly compensation to the extent such supplement shall not reduce any benefits such person is receiving pursuant to federal social security law. Added by St. 1985, c. 572, § 43A. Amended by St. 1986, c. 662, § 30. (Emphasis added.)
A subsequent amendment St. 1991, c. 398, § 61 was deemed substantive § 106g St. 1991, c. 318 and has no bearing here.
Later in 1987, the employee's civil action against the third party allegedly responsible for her injury, resulted in a favorable jury verdict. In April 1989, the Supreme Judicial Court affirmed the third party judgment. Shortly thereafter, on June 1, 1989 the trial court entered an execution of that judgement. The employee's counsel ascertained that the self-insurer had a $144,070.46 lien for workers' compensation benefits paid. After paying its proportionate share of costs and attorney's fees, the self-insurer discharged its lien for $95,286.95 out of the third party suit proceeds. There was statutory excess within the meaning of G.L.c. 152, § 15. Excess proceeds of a third party judgment, after reimbursement to the workers' compensation carrier, are subject to offset against future claims for compensation.
Section 15 at this time read in pertinent part:
Where the injury for which compensation is payable was caused under circumstances creating a legal liability in some person other than the insured to pay damages in respect thereof, the employee shall be entitled, without election, to the compensation and other benefits provided under this chapter. . . . The sum recovered shall be for the benefit of the insurer, unless such sum is greater than that paid by it to the employee, in which event the excess shall be retained by or paid to the employee. For the purposes of this section, "excess" shall mean the amount by which the total sum received in payment for the injury, exclusive of interest and costs exceeds the compensation paid under this chapter. The party bringing the action shall be entitled to retain any costs recovered by him. Any interest received in such action shall be apportioned between the insurer and the employee in proportion to the amounts received by them respectively, exclusive of interest and costs. The expense of any attorney's fees shall be divided between the insurer and the employee in proportion to the amounts received by them respectively under this section.
Amended by St. 1986, c. 662, § 5A.
The employee contends that the civil action included claims for loss of consortium. (Employee's Brief p. 2.) Statutory excess would be reduced by any allocations to family members stemming from their claims arising from the injury to the employee. Sums allocated to these individuals in the distribution of the third party proceeds are not considered to have been received by the employee and are therefore not part of the excess against which the insurer may later seek credit. Percoco v. James Farina Corp., 7 Mass. Workers' Comp. Rep. 48, 49 n. 3 (1993); DiMartino v. Quality Industrial Propane, Inc., 407 Mass. 171 (1990). In the instant case there is no indication that allocations were made in response to any loss of consortium claims.
Effective June 15, 1989, the self-insurer availed itself of credits against the excess proceeds and reduced the weekly payment it was obliged to make for the employee's work-related incapacity. The self-insurer reduced payments to $75.98 per week from the prior $224.40 weekly § 34A compensation rate.
In June, 1989, when the weekly sum paid to her was lessened, the total monthly compensation, combined with the social security disability benefits, fell well within the monetary guidelines that would allow for payment of COLA without concomitant reduction of the employee's social security disability benefits.
The employee claimed entitlement to COLA benefits from June 15, 1989 and continuing subsequent to her § 34A benefit reduction. The self-insurer denied the employee's entitlement to benefits under § 34B, and after a hearing upon stipulated facts the administrative judge agreed.
The judge concluded, that as of June 15, 1989 the self-insurer was "no longer paying the employee a § 34A base benefit. . . ." (Dec. 9.) Accordingly, the judge ruled that since no § 34A benefit was being paid, no § 34B cost of living benefit was payable. Id. The judge found that the $75.98 weekly sum paid to the employee was merely a Hunter-benefit after a third party recovery" and not compensation for work related incapacity. (Dec. 9); see Hunter v. Midwest Coast Transport, Inc., 400 Mass. 779 (1987) (outlining the general equation for third party offset agreements to ensure employees reimbursement of their proportionate share of attorneys' fees and paid expenses as the insurer exhausts its offset against any future claims).
A § 34B supplemental benefit must be paid "concurrently" with the base § 34A benefit.
We cannot agree. The judge incorrectly identified "entitlement" to weekly incapacity benefits with the "receipt" of such benefits. The plain language of § 34B is that "any person receiving or entitled to receive" § 34A benefits after two years from the injury date "shall" be paid a COLA supplement. (Emphasis added). See n. 1, supra. Where the language of a statute is plain and unambiguous, its words must be interpreted in accordance with their ordinary, natural and approved meaning. Conroy v. City of Boston, 392 Mass. 216, 219 (1984); Hashimi v. Kalil, 388 Mass. 607, 609 (1983). "Entitled" in its usual sense means, "[t]o qualify for; to furnish with proper grounds for seeking or claiming." Black's Law Dictionary 532 (rev. 6th ed. 1990). The word "shall" is ordinarily construed as having a compulsory, imperative and inescapable obligation or mandate. Hashimi v. Kalil, 388 Mass. at 609; Opinion of the Justices, 300 Mass. 591, 593 (1938). The statutory phrase noted above plainly indicates COLA is mandatorily paid, within the time frame guidelines, to claimants who are currently receiving specific categories of weekly benefits or who are entitled to so receive.
"Entitlement" is neither synonymous with nor equivalent to "receipt". One may receive something to which he is not entitled. One may be entitled, and have a right to claim, something he has not as yet received.
Looked at from another perspective, under the Workers' Compensation Act, payment is made for incapacity resulting from an industrial injury. If there is no incapacity, then there is no entitlement to weekly compensation. In this case, the employee was found entitled to § 34A permanent and total incapacity benefits as a result of the 1981 work injury. If her incapacity were to cease, the self-insurer's weekly compensation obligation would also cease. It would then be irrelevant whether the employee still had any proceeds of the third party suit. Where ceased incapacity eliminates entitlement to benefits, the workers' compensation insurer has nothing against which to offset. Thus, no one could seriously argue that under such circumstances the self-insurer would be obliged to continue its weekly payments based on the notion it asserts that it was merely returning Hunter fees and costs subsequent to a third party recovery. If indeed, a percentage of the employee's weekly payment were not compensation, but were instead only a Hunter benefit, then arguably the self-insurer would be compelled to pay it even if the employee was no longer permanently and totally incapacitated. But so long as the employee has work-related permanent and total incapacity, the self-insurer's obligation to pay and the employee's entitlement to receive § 34A benefits remains. Thus, the employee's § 34A entitlement is based on causally related incapacity, and not on the existence of or recovery from a third party action.
To highlight the above point, let us assume that during a period in which permanent and total incapacity has been adjudicated, third party credits were taken to the point that an excess was depleted. Then, undiminished § 34A benefits would resume, along with § 34B benefits (so long as there was then no issue of social security benefit reduction). The "entitlement" to § 34A in this example, would not be extinguished by the tort recovery.
The employee's entitlement to § 34A permanent and total incapacity benefits triggers her right to receive § 34A benefits, minus the excess she already obtained, with credit for the fee she spent to obtain the proceeds. Secondarily, the same entitlement to § 34A incapacity benefits — once duration requirements are met — triggers the employee's right to receive § 34B COLA benefits. When an excess is fully recouped, an employee's entitlement to the complete past rate of § 34A benefits resumes. Entitlement to § 34A is ongoing so long as there is work-related total incapacity, and it cannot be said that obtaining excess from a third party means the employee is no longer entitled to permanent and total incapacity compensation.
The fact that the employee may have a tort recovery, or other collateral sources of income are not factors legislatively enumerated as warranting elimination or reduction of § 34B benefits. See G.L.c. 152, § 38. The tort recovery obtained by the employee is subject only to the provisions of § 15, barring double recovery. SeeRichard v. Arsenault, 349 Mass. 521, 524-525 (1965).
Section 38 provides:
Except as expressly provided elsewhere in this chapter, no savings or insurance of the injured employee independent of this chapter shall be considered in determining compensation payable thereunder, nor shall benefits derived from any other source than the insurer be considered in such determination.
Amended by St. 1986, c. 662, § 33.
Consistent with that prohibition, each time a weekly incapacity benefit would be due to the employee, the self-insurer pays its fractional share of the employee's § 34A benefit and third party suit fees and costs until the total amount offset is equivalent to the net of the statutory "excess". See Hunter, supra at 780-781, 783. Here, where the employee's weekly rate was $224.40, the self-insurer pays $75.98, and gets a credit of $148.42 against the employee's proceeds. Credits the insurer takes against the excess deplete the sum the insurer may offset on future compensation due. Id. This ensures there is no double recovery by the employee, and no windfall to the self-insurer.
Likewise, with respect to the payment of the § 34B COLA benefit, there will be no double recovery. Consistent with the self-insurer's ongoing obligation to make payment of a fraction of each weekly § 34A compensation benefit due, the self-insurer is obligated to pay the same fraction of the COLA supplement that would be due under § 34B. The self-insurer need not pay more than its fractional share of the § 34B benefit and is, in turn, reimbursed from the trust fund for the supplemental benefit paid. G.L.c. 152, § 34B(c).
Any COLA supplement available to the employee is subject to the offset created by G.L.c. 152, § 15, and recoverable by the trust fund established under the provisions of G.L.c. 152, § 65(2). Percoco v. James Farina Corp., supra at 52.
We therefore reject the self-insurer's contention that § 34B need not be paid to the employee because, as it contends, no "base benefit" is being paid. Each weekly fractional payment for incapacity becomes the "base benefit" for purposes of § 34B COLA. A proportional § 34B supplement, when due, shall be paid regardless of whether the base benefit is identical to the full § 34A weekly benefit. The base benefit may change, as for example, in Downey v. Blue Cross Blue Shield, 7 Mass. Workers' Comp. Rep. 376 (1993), where § 51A was applied, altering the § 34A base benefit due from the insurer. In Downey, the board found the insurer there was liable to pay § 34B COLA benefits, despite the change in the base benefit.
Downey involved a 1977 injury and a third party settlement approved in Superior Court on June 15, 1982, prior to the Hunter decision. There as yet being no case law instructing the insurer of its ongoing obligation to pay a portion of each new claim under c. 152, the insurer in Downey simply stopped paying any workers' compensation on June 15, 1982, the date the third party settlement was approved. The employee eventually claimed § 34A benefits, and a judge found he was permanently and totally incapacitated within the meaning of c. 152. The reviewing board upheld the judge's award of a § 34B supplement to the employee's § 34A benefits. It was of no significance in the case that over some periods of time no weekly incapacity payment had been made by the insurer at all.
We hold that after a third party judgment, where an employee is still permanently and totally incapacitated, that an insurer has an obligation to make ongoing payments of both the fraction of future compensation claims as warranted pursuant to § 15, and the fraction of COLA supplemental benefits due under § 34B.
The administrative judge was correct in deferring to the courts on the issue of the self-insurer's proportionate share of interest from the civil judgment award. See Percoco v. James Farina Corp., 7 Mass. Workers' Comp. Rep. 48, 51 (1993) (where settlement reached during an action at law, that court shall approve the § 15 agreement). We summarily affirm that determination. Yet we remand the case for an administrative judge to calculate and determine the § 34B supplement due on the weekly incapacity benefit.
So ordered.
____________________________________ Susan Maze-Rothstein Administrative Law Judge
____________________________________ Edward P. Kirby Administrative Law Judge
____________________________________ Suzanne E.K. Smith Administrative Law Judge
Filed: October 19, 1995