Opinion
No. 12–P–1140.
2013-09-16
MURPHY'S CASE.
By the Court (VUONO, AGNES & CARHART, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Scott A. Murphy appeals from a decision of the reviewing board of the Department of Industrial Accidents (board). The board determined that A.I.M. Mutual Insurance Company (AIM) miscalculated interest due on Murphy's compensation award for specific injuries. The board further concluded that a late payment penalty was not appropriate under the circumstances. Additionally, the board determined that AIM correctly reduced Murphy's compensation award by twenty-two percent for payment of attorney's fees. We affirm in part, and reverse in part.
Background. During Murphy's employment with American Steel & Aluminum Corp., he suffered the loss of function to his right dominant hand. On July 20, 2007, Murphy filed a claim for workers' compensation pursuant to G.L. c. 152, § 36, with the Department of Industrial Accidents (DIA). On April 27, 2009, an administrative judge of the DIA ordered AIM, the insurer of American Steel & Aluminum Corp., to pay Murphy $22,310.87 in § 36 benefits, with interest pursuant to G.L. c. 152, § 50. On May 5, 2009, AIM paid Murphy $21,162.32. This figure reflected the § 36 award, plus $3,759.90 in interest pursuant to § 50, and reduced by twenty-two percent for attorney's fees pursuant to G.L. c. 152, § 13A(10). AIM calculated the interest by using the calculator provided by the DIA on their website. See452 Code Mass. Regs. § 1.02 (1997). Murphy disputed the interest total, arguing that he was underpaid by $248.26, and consequently filed a $10,000 late penalty claim pursuant to G.L. c. 152, § 8(1). Murphy also disputed AIM's application of G.L. c. 152, § 13A(10). An administrative judge denied Murphy's claims, and Murphy subsequently appealed the decision to the board.
The board reversed the administrative judge on the issue of G.L. c. 152, § 50, interest, determining that as a matter of simple arithmetic AIM underpaid Murphy by $248.26. The board determined that the error, however, was in the fact that the DIA's online § 50 interest calculator worked properly for computing interest on periodic payments only, not for the one-time award of G.L. c. 152, § 36, benefits that Murphy received. The board concluded that 452 Code Mass. Regs. § 1.02 invites an insurer's use of, and reliance on, the online calculator and, therefore, imposing a late penalty on AIM would not be in harmony with the purpose of G.L. c. 152, § 8(1). Additionally, the board summarily affirmed AIM's reduction of attorney's fees pursuant to G.L. c. 152, § 13A(10).
Discussion. On appeal, Murphy first argues that G.L. c. 152, § 8(1), does not provide the board with the authority to excuse AIM's incorrect and, therefore, late payment. “We exercise de novo review of issues of statutory construction,” but give “substantial deference” to the DIA's reasonable interpretation of a statute that is within its charge. Johnson's Case, 69 Mass.App.Ct. 834, 838 (2007). We do not read § 8(1) to impose an automatic penalty on an insurer any time and for any reason a full payment is not made pursuant to an order or decision. General Laws c. 152, § 8(1), second par. 2, is a penal statute that is intended “to persuade insurers to make timely payments.” Ibid., quoting from Eastern Cas. Ins. Co. v. Roberts, 52 Mass.App.Ct. 619, 629 (2001). Further, the DIA encouraged the use of its online interest calculator “in order to promote uniformity and certainty” in calculating G.L. c. 152, § 50, interest. Nason, Kozial, & Wall v. Workers' Compensation § 18.29 (3d ed.2003).
Thus, we agree with the board that the purpose of the statute would not be served by imposing a late penalty on AIM in these circumstances. We also note that the board has alerted the director of the DIA to the inherent inconsistency arising from use of the G.L. c. 152, § 50, online calculator with respect to periodic and one-time payments. Timely payment of G.L. c. 152, § 36, benefits can be achieved by the DIA ensuring that its online interest calculator operates properly. Therefore, we affirm the board's decision in this regard.
Murphy's second argument is that AIM may not offset the G.L. c. 152, § 36, award with a reduction of attorney's fees pursuant to G.L. c. 152, § 13A(1). We agree. See Spaniol's Case, 466 Mass. 102 (2013). Accordingly, we reverse the decision of the board allowing AIM to withhold twenty-two percent of Murphy's award under § 36.
Because Murphy has prevailed on appeal, his request for reasonable appellate attorney's fees and costs is allowed. SeeG.L. c. 152, § 12A. Murphy is hereby directed to follow the procedure set forth in Fabre v. Wilson, 441 Mass. 9, 10–11 (2004) and, within fourteen days, file with this court and serve on AIM a motion for determination of appellate attorney's fees and costs, supported by an affidavit detailing such fees and costs. AIM shall have fourteen days thereafter to file with this court and serve on Murphy a motion in opposition.
So ordered.