Opinion
C.A. No. 07A-06-008 FSS.
Submitted: July 18, 2008.
Decided: September 19, 2008.
On Appeal from the Industrial Accident Board — AFFIRMED.
OPINION AND ORDER
The Court must decide if the Worker's Compensation Fund, also called the Second Injury Fund, must reimburse an employer for 22 months of total disability benefits based on a claim stemming from an accident that occurred six years earlier. The answer depends on when 19 Del. C. § 2327's two-year statute of limitations is triggered.
19 Del. C. § 2327(a), in pertinent part:
Whenever a subsequent permanent injury occurs to an employee who has previously sustained a permanent injury. . .the employer for whom such injured employee was working at the time of such subsequent injury shall be required to pay only that amount of compensation as would be due for such subsequent injury. . . . Whenever the subsequent permanent injury in connection with a previous permanent injury results in total disability. . .the employee shall be paid compensation for such total disability . . .; any insurance carrier desiring reimbursement from the Fund shall file a petition for payment, provided all claim for reimbursement shall be forever barred unless the insurance carrier files a petition. . .within 2 year [sic] after the date on which the employee was first paid total disability benefits following the subsequent permanent injury.
Kent Construction paid two rounds of total disability benefits for a second injury from November 1999 until November 2000, and from December 2004 until September 2005. On September 30, 2005, Kent petitioned the Fund for reimbursement of the second round of payments. The Fund denied Kent's petition, but the Industrial Accident Board ordered the reimbursement.
The Fund asserts the Board could not hear Kent's claim because Kent did not file the petition within the two-year limitations period. The Fund argues the statute's language, history, and purpose make it a statute of repose that went into effect on July 1, 2001 and included all then existing, eligible claims, such as Kent's. Further, the Fund claims Kent's first total disability payment for Smith's second injury, in November 1999, triggered the statute. Thus, although Kent was no longer paying total disability benefits, it nevertheless had until July 1, 2003 to file a second injury petition. The Fund argues that even though Kent's claim only arose after the Board held Kent liable retroactively, Kent cannot seek reimbursement now because it failed to seek reimbursement before the statute expired. If § 2327 is a statute of repose, it would cut-off Kent's claim, regardless of whether Kent knew about it.
The Board implicitly found that § 2327 did not mandate that harsh result. The Board determined that § 2327 is a statute of limitations, rather than a statute of repose, and it declared:
[t]o effect the overall intent of Section 2327(a), which is to share the burden of total disability payments in second injury cases, the most reasonable reading of the statute is that `first payment' refers to the first payment of total disability after the second injury becomes permanent. An employer cannot be expected to know that reimbursement is even an option until the injury is permanent.
Smith v. Kent Constr. Co., No. 1160813, at 2-3 (Del. I.A.B. April 12, 2006) (quoting Benton v. Allied Sys., Ltd., No. 1191962 (Del. I.A.B. Feb. 22, 2006)) (emphasis in original).
The Court must now consider whether the Board correctly found that § 2327 is a statute of limitations and if it is, whether the Board applied § 2327 properly.
I.
James Smith, Claimant, has received total disability payments from two employers for his injured back. Smith was hurt in early 1989, while working construction for an employer in South Carolina. That injury resulted in a permanent impairment to his lower spine. Ten years later, on November 15, 1999, Smith injured another section of his spine while working for Kent. Smith did not experience any back problems during the years between injuries.
On November 30, 1999, without a permanency finding as to the second injury, Smith received a total disability payment from Kent. Kent continued paying Smith until November 21, 2000, when the Board terminated the payments. In March 2001, the 1999 second injury was determined to be permanent. By that time, however, Smith was not receiving disability payments from Kent. On March 30, 2001, the parties stipulated to the permanency finding and agreed to a lump sum permanent impairment disability payment. Kent also paid Smith partial disability benefits from April 6, 2001 until November 10, 2004.
In October 2002, while receiving partial disability payments from Kent, Smith obtained a light-duty job with another employer, Hopkins Contracting. On February 28, 2003, Smith experienced a recurrence of his back injuries. Because the pain worsened, Smith stopped working in March 2003. Later, on October 2, 2003, Dr. Ganesh Balu gave Smith a total disability note. The note signified the first moment when Smith's injuries and disability were simultaneously found to be total and permanent. The Board's decision turned on that fact.
On April 20, 2004, Smith filed a Petition to Determine Additional Compensation Due to assess whether he suffered from a new injury or a recurrence of the November 1999 injury. On November 9, 2004, the Board heard deposition testimony from six medical doctors and determined that Smith had suffered a recurrence of his 1999 injury. The Board accepted Dr. Balu's opinion that the recurrence left Smith totally disabled. Adopting the date of Dr. Balu's opinion on total disability, the Board ordered Kent to resume total disability payments effective October 2, 2003. Smith received the first payment from the second round of total disability benefits on December 8, 2004. Kent continued paying Smith until September 23, 2005, when the Board terminated the payments.
See Smith v. Kent Constr. Co., Nos. 1160813 1238889, at 17 (Del. I.A.B. Nov. 9, 2004) ("Based on the medical testimony, the Board finds that Claimant suffered a recurrence of his 1999 injury, not an aggravation or new injury.").
Therefore, the salient facts are: in 1989 Smith suffered a permanent back injury; in November 1999 the subsequent injury occurred and, without a permanency finding, Kent paid total disability benefits; in 2001, the 1999 injury's permanency was determined, thus making it the subsequent permanent injury; in 2003 Smith suffered a recurrence of the 1999 injury that resulted in total disability; and on December 8, 2004, Kent paid Smith the first total disability payment on the subsequent permanent injury, retroactive from October 2, 2003 until September 23, 2005.
II.
On September 30, 2005, Kent filed a second injury petition seeking reimbursement for the second round of total disability payments that began in 2004. Kent argued that Smith's recurrence of the 1999 subsequent permanent injury, combined with the 1989 prior permanent injury, resulted in total disability; thereby creating the basis for reimbursement by the Fund.
See 19 Del. C.
§ 2327(a). See Section IV.B., infra.
In response, the Fund filed a motion to dismiss. The Fund claimed, as it does now, that § 2327 is a statute of repose, and the Board had no jurisdiction to hear the petition because Kent filed too late. The Board denied the motion. On May 21, 2007, a hearing officer decided the claim on the merits and granted Kent's second injury petition. The Fund filed a timely appeal.
See Smith v. Kent Constr. Corp., No. 1160813 (Del. I.A.B. May 21, 2007).
III.
The court has a limited role on an administrative appeal. It determines whether substantial evidence supports the Board's legal conclusions and whether those conclusions are correct. The court's review of questions of law is plenary. It reviews the facts to determine whether a reasonable person would conclude the evidence supports the findings.The Fund argues, at length, that the pertinent testimony of Dr. John B. Townsend, III, was insufficient to support the Board's decision. In accordance with the standard of review, however, it was reasonable to conclude from Dr. Townsend's testimony that Smith's total disability resulted from the combination of the subsequent and previous permanent injuries. This is so, despite Dr. Townsend's cross-examination testimony that he, personally, never found Smith totally disabled. On direct, Dr. Townsend alluded to and accepted the medical opinions that Smith was totally disabled. On re-direct, Dr. Townsend clarified that his position had been based solely on the 1999 injury, but "if you took into consideration all of the patient's injuries to the back, then [Smith] could have been deemed totally disabled." Thus, the decision now turns on whether, as a matter of law, the Board correctly applied § 2327.
IV. A.
The first issue is whether the Board had jurisdiction to hear a second injury petition filed six years after the subsequent accident. As mentioned above, the Fund argues the Board lacks jurisdiction to hear preexisting claims filed more than two years after § 2327 went into effect, because it is a statute of repose. The Fund argues § 2327 is a statute of repose because it "expressly qualifies a claim by the time period articulated in the statute" and that a preexisting claim brought after the limitations period is "forever barred."
The Fund's argument that the statute's consequences distinguish a statute of repose from a statute of limitations is, a priori, flawed because both statutes of limitation and statutes of repose "forever bar" an untimely claim. Actually, the key difference between a statute of repose and a statute of limitations is the trigger.
As explained in Cheswold v. Lambertson, a statute of repose is not an ordinary statute of limitations. An "ordinary statute of limitations begins with an injury or the discovery date of an injury." A statute of repose, however, can begin to run before the cause of action arises because it begins "irrespective of the date of injury." In other words, when the cause of action triggers the statute, it is a statute of limitations. When the cause of action is not the trigger, it may be a statute of repose.
Cheswold Volunteer Fire Co. v. Lambertson Constr. Co., 489 A.2d 413, 421 (Del. 1984).
Id.
See Hardgrove v. Transp. Ins. Co., 103 P.3d 999 (Mont. 2004).
Cheswold, 489 A.2d at 421; see, e.g., May v. Remington Arms Co., Inc., 2005 WL 2155229, at *2 (Del.Super. Aug. 31, 2005).
Here, the payment of total disability benefits is the cause of action because it is the second injury petition's basis. An employer cannot bring a claim for reimbursement before making a total disability payment. The Fund acknowledges that payment triggers the statute. In fact, the Fund noted that during the state Senate debate, § 2327's limitations period was compared to that of a personal injury claim, where the cause of action arises upon the date of an injury. Because the cause of action here, a total disability payment, triggers the statue, it is a statue of limitations. In addition, the Board's determination that § 2327 is a statute of limitations correctly adheres to the Worker's Compensation statute's mandate of broad applicability. A limitations period triggered by the cause of action effectively avoids the chilling effect that a statute of repose would otherwise have on an employer's willingness to hire an injured worker.
See Worker's Comp. Fund v. Transp. Serv., Inc., 812 A.2d 877 (Del. 2002) (approving the Board's broad approach to displaced workers' claims as consistent with the Worker's Compensation statute's mandate).
B.
As set out above, § 2327(a) requires an employer to file a second injury petition "within 2 year[s] after the date on which the employee was first paid total disability benefits following the subsequent permanent injury." The Fund argues "the two years are measured from the first payment of total disability after the date of the second accident," irrespective of whether the employer could know the injury is permanent. The Fund claims that its interpretation, which emphasizes the second accident's date, "provides a bright line test for determining the timeliness of petitions when they are filed." The Board rejected this interpretation because it ignores the statutory requirement that the subsequent injury also has to be permanent.Before addressing the issue, it is important to understand the process. If an employee, who had previously suffered a permanent injury, suffers a subsequent permanent injury with a different employer, that employee may receive total disability payments. After the second employer has made payments to an employee, that employer, or its insurer, may petition the Fund for reimbursement. The Fund acknowledges that, in order to award reimbursement, § 2327 requires a showing of "(a) a previous permanent injury and (b) a subsequent permanent injury which [combine to] (c) result in total disability."
See 19 Del. C. § 2327(a).
Id.
Spence v. University of Delaware, 311 A.2d 867, 869 (Del. 1973).
The Supreme Court has held that, "if [a] resulting evaluation renders the employee `permanently injured' and if the permanency is attributable to a subsequent injury, the employer may seek reimbursement from the Fund." Benton v. Allied Systems, a prior Board decision on which the Board relied here, indirectly followed Worker's Compensation Fund by finding that an employer's right to reimbursement "cannot accrue until the second injury becomes permanent in nature." The Board also stated that "[a]n employer cannot be expected to know that reimbursement is even an option until the injury is permanent." Further, Peters v. Chrysler held an injury's permanency "can be proven only by expert medical testimony." And so, the Board holds, and the Court agrees, that a second injury is not permanent for § 2327's purposes until it is found to be permanent.
Worker's Comp. Fund, 812 A.2d at 879.
Benton v. Allied Sys Ltd., No. 1191962, at 20 (Del. I.A.B. Feb. 22, 2006).
Id.
Peters v. Chrysler Corp., 295 A.2d 702, 704 (Del. 1972).
Under this case's facts, the subsequent injury was not determined to be permanent until March 2001, and so, it was not permanent for § 2327's purposes until then. Because the subsequent injury was not diagnosed as permanent until 2001, and the recurrence necessary to combine the two injuries did not occur until 2003, the total disability benefits Kent paid in 1999 did not trigger the limitations period. The first total disability payment, following a subsequent permanent injury as required by § 2327, was not made until December 8, 2004. The limitations period for § 2327, therefore, did not begin until that payment. Kent's second injury petition, filed on September 30, 2005, was well within the two year period.
Following the Fund's argument, which turns on the second accident's date rather than the permanency finding, would confront Kent with a catch-22. In order to obtain reimbursement from the Fund for total disability payments, an employer must meet the three conditions stated above. Also, in accordance with § 2327(a), the petition may be filed only after a "subsequent permanent injury." According to the Fund's logic, an employer would have to file a petition after a subsequent injury, regardless of whether it had been found permanent. The petition, of course, would be dismissed for failure to satisfy the elements required for reimbursement. In other words, if Kent had filed a second injury petition in 1999, the reimbursement would have been denied because the recurrence had not been precipitated, and the second injury had not yet been deemed permanent, an essential element to a second injury claim. That is the catch-22.
Finally, the Board's decision is justified in at least two ways. First, § 2327 was enacted to address the threat to the Fund posed by carriers filing claims when the mood struck. The specific, perceived threat, however, was not that the Board was making retroactive permanency findings, like the one here. If the Fund now feels threatened by the Board, it can approach the General Assembly as it did when it felt threatened by the carriers. Second, if the General Assembly wanted § 2327 to work as a statute of repose, it simply could have designated the subsequent injury's occurrence as the trigger. That would truly have divorced the limitation period from the carrier's payment and the Board's permanency finding. That approach would be drastic, but it would be clear and easily enforceable. For now, the Board's approach spares carriers from losing their claims through no fault or lack of diligence on their part.
The Board had jurisdiction to hear Kent's claim because § 2327 is a statute of limitation. Further, the limitations period was not triggered until the permanency of the subsequent injury was fixed. The statute was not fully satisfied until the 2003 recurrence and 2004 total disability finding came together. The Board correctly applied § 2327 to the facts.
V.
For the foregoing reasons, the Board's decision to grant Kent's petition is correct and it is AFFIRMED .
IT IS SO ORDERED.