Opinion
BOARD NO: 012129-00
December 3, 2002
REVIEWING BOARD DECISION (Judges Levine, Carroll and Wilson)
APPEARANCES John T. Underhill, Esq., for the petitioner Mary C. Garippo, Esq., for the respondent
The insurer appeals from a decision of an administrative judge denying its petition for § 37 reimbursement, which was based on payments it made to the employee pursuant to a conference order. An appeal from that conference order resulted in a hearing decision vacating those payments and thus resulting in an overpayment. We affirm the judge's conclusion that since compensation was ultimately not required, within the meaning of § 37, the insurer was not entitled to § 37 reimbursement. However, our reasoning differs somewhat from the judge's.
General Laws c. 152, § 37, as applicable to this date of injury, provided, in pertinent part:
Whenever an employee who has a known physical impairment which is due to any previous accident, disease or any congenital condition and is, or is likely to be, a hindrance or obstacle to his employment, and who, in the course of and arising out of his employment, receives a personal injury for which compensation is required by this chapter and which results in disability that is substantially greater by reason of the combined effects of such impairment and subsequent personal injury than that disability which would have resulted from the subsequent personal injury alone, the insurer or self- insurer shall pay all compensation provided by this chapter. The insurer or self insurer shall, however, be reimbursed by the state treasurer from the trust fund created by section sixty-five in an amount equal to seventy-five per cent of all compensation paid subsequent to that paid for the first one hundred and four weeks of disability.
Stipulated facts upon which the judge based his hearing decision include the following:
1. As a result of work activities at two concurrent employers, Beth Israel Hospital and Children's Hospital, the employee suffered the aggravation of underlining [sic] medical conditions which caused her to stop working on January 24, 1991.
2. A conference order was issued by an administrative judge that required Arrow Mutual, the insurer for Beth Israel Hospital, to pay benefits to the employee from January 25, 1991, and continuing.
3. Arrow Mutual paid the employee benefits under § 34, § 13, and § 30, from January 25, 1991, until June 29, 1993, when a hearing decision was issued that denied and dismissed the employee's claim.
4. On December 4, 1994, Arrow Mutual filed a petition for reimbursement under § 37... for the benefits paid.
(Dec. 2-3.) The remaining stipulated facts, relevant to the insurer's appeal, include that the de novo hearing decision was recommitted by the reviewing board; the decision after recommittal resulted in an award of a closed period of benefits (only until April 23, 1992) against the self insured concurrent employer, Children's Hospital. The insurer was not found liable at all. The self insurer reimbursed the insurer, but only to April 23, 1992. (Dec. 3.) The insurer seeks § 37 reimbursement for payments it made for the period of time more than two years from the onset of disability and for which it was not reimbursed by the self insurer.
The judge concluded that § 37 reimbursement was not due the insurer under these circumstances. The judge reasoned that the insurer was not liable for the underlying injury, as the hearing decision denied the employee's claim against this insurer. Therefore, the payments it made pursuant to the conference order were overpayments reimbursable under G.L.c. 152, § 11D(3). To the insurer's contention that its payment pursuant to the conference order satisfied the § 37 requirement that the insurer pay all compensation due to the employee for her injury, "for which compensation is required by this chapter," the judge responded as follows:
General Laws c. 152, § 1 1D(3), provides, in pertinent part:
An insurer that has paid compensation pursuant to a conference order, shall, upon receipt of a decision of an administrative judge or a court of the commonwealth which indicates that overpayments have been made be entitled to recover such overpayments by unilateral reduction of weekly benefits, by no more than thirty percent per week, of any remaining compensation owed the employee. Where overpayments have been made that cannot be recovered in this manner, recoupment may be ordered pursuant to the filing of a complaint pursuant to section ten or by bringing an action against the employee in superior court.
The "requirement" for the payment of compensation arises from the fact that the employee sustained a personal injury that arose out of and in the course of employment, and for which an insurer is liable. In this case, no liability has been established against the insurer. Without a finding of liability against an insurer, no "compensation is required" under this chapter, and, therefore, the provisions of § 37 do not apply.
(Dec. 4.) The judge also minimized the significance of the obligation to pay benefits awarded in a conference order:
An insurer, however, can choose not to comply with a conference order. This is evident from the fact that Chapter 152 does set financial penalties upon an insurer that does not comply with payment of benefits that have been ordered at conference. Section 12(1) places enforcement authority of a conference order or decision with the Superior Court, "notwithstanding whether the matters at issue have been appealed and a decision on the merits of the appeal is pending." This section clearly implies that an insurer that has been ordered to pay compensation by an administrative judge can choose not to comply with a conference order, thereby requiring a claimant to petition Superior Court for enforcement.
General Laws c. 152, § 8(1), states in relevant part that "any failure of an insurer to make all payments due an employee under the terms of an order.., shall result in a penalty."
(Dec. 5.) (Footnote in original). Finally, the judge reasoned that the circumstances of the case presented a claim for § 11D(3) recoupment, not § 37 reimbursement. (Dec. 5-6.)
We agree with the insurer that not all the judge's reasons for denying its petition are sound. However, there is merit in the judge's § 11D(3) analysis, and therefore we affirm the decision.
First, we address the judge's erroneous analyses. The judge may have understood that "a finding of liability," (Dec. 4), against the insurer by a hearing decision was necessary to satisfy the "compensation is required" language of § 37. However, this view defines the scope of § 37 reimbursement too narrowly. Clearly, payments made pursuant to an unappealed conference order would qualify as "compensation [that] is required" under § 37, even though a conference order is generally lacking in "findings" as we understand the term; i.e., subsidiary findings of fact based on evidence presented at hearing. See Hendricks v. Federal Express, 10 Mass. Workers' Comp. Rep. 660, 662 (1996) (findings are in decisions, not conference orders). On the other hand, when the reviewing board or an appellate court reverse a hearing decision in which a judge had found liability, "compensation is [no longer] required." In a different context, with respect to § 37 petitions based on payments made pursuant to lump sum agreements, we have stated that "the § 37 element of "a personal injury for which compensation is required' [can be] established. . . by the insurer's threshold showing of medical evidence in the underlying claim that could have supported an administrative judge's finding of liability against the insurer." Walsh v. G.T.E. Gov't Sys., 15 Mass. Workers' Comp. Rep. 445, 450 (200 1) (emphasis added). Questions of liability per se, and at what point in the proceeding such determination is made, do not necessarily resolve how we should construe the § 37 prerequisite, "compensation is required."
It is clear, however, that all orders, decisions and agreements are required to be timely paid by the insurer. See G.L.c. 152, § 8(1). All documents providing for the payment of benefits under c. 152 establish an immediate obligation, i.e., a liability, which is not stayed pending an appeal. See G.L.c. 152, § 12(1). Therefore, the judge's reliance on the Superior Court enforcement mechanism appearing in § 12(1) misses the mark. Certainly, "compensation is required" under the terms of a conference order, hearing decision or agreement between the parties, so long as such document is in effect, even if the employee must seek enforcement pursuant to § 12(1).
Nevertheless, the judge's alternative rationale accurately states the law. The denial of the employee's claim for benefits after the de novo hearing means that the insurer made overpayments when it paid the employee in compliance with the conference order. Such overpayments are recoupable from the employee under § 11D(3); but they logically cannot support a petition for § 37 reimbursement. This is because, as of the filing of the hearing decision denying the claim, such overpayments can no longer be characterized as "compensation" that is required by c. 152. In fact, the hearing decision established just the opposite. This is not to gainsay that the payments made pursuant to the conference order were compensation required under the act at all times prior to issuance of the hearing decision. And, arguably, had a § 37 petition been filed prior to the issuance of the hearing decision, the petition could not have been properly denied on the basis that the payment of compensation was not required under the terms of the conference order. Nevertheless, such requirement ceased, nunc pro tunc, with the issuance of the hearing decision denying the claim. Therefore, the judge correctly denied the insurer's petition for § 37 reimbursement.
The fact that the first hearing decision was replaced by a recommittal decision does not change the result.
The insurer's citation to Cosgrove v. Penacook Place, 15 Mass. Workers' Comp. Rep. 166 (2001), is misplaced. That case involved a § 37 petition based on payment of compensation pursuant to a § 48 lump sum agreement. In that case the question was the reasonableness of the lump sum's allocation of payments to § 34A. That inquiry is relevant to the 1991 amendment of § 37, but it is not applicable to the present case. Id. at 171-172. However, to the extent that a comparison can be made, the apt analogy would be to a lump sum agreement that was rescinded due to mutual mistake. Likely, there would be no entitlement to § 37 reimbursement once the agreement was rescinded.
The insurer s remedy would have been to file a claim against the employee under § 11D(3) for recoupment of overpayments. The decision is affirmed.
So ordered.
Frederick E. Levine Administrative Law Judge
Martine Carroll Administrative Law Judge
Sara Holmes Wilson Administrative Law Judge FEL/kai Filed:
FILED December 3, 2002 Dept. of Industrial Accidents