Opinion
BOARD No. 011898-90
Filed: May 27, 1998
REVIEWING BOARD DECISION (Judges Levine, Fischel and Wilson).
APPEARANCES
Joseph Agnelli, Esq., for the employee.
Ralph Cafarelli, Esq., for the insurer.
The sole issue presented by this case is whether a cost of living adjustment under G.L.c. 152, § 34B, should be calculated based on those workers' compensation benefits payable to the employee subsequent to an offset taken by the insurer pursuant to Hunter v. Midwest Coast Transport, Inc., 400 Mass. 779 (1987), or on those benefits payable prior to such offset. Consistent with our opinion in Barbosa v. Armstrong World Industries, 9 Mass. Workers' Comp. Rep. 566 (1995), we determine that the compensation amount payable to the employee after the offset is the proper basis on which § 34B benefits are computed. We therefore reverse the decision of the administrative judge.
The parties stipulated to the following relevant facts. Edward Trainor, employed as a welder for Boston Edison for approximately twenty years, sustained multiple injuries in the course of his employment on March 16, 1990. As a result of his injuries he has not worked since that date. (Dec. 3.)
The insurer commenced the payment of § 34 temporary total incapacity benefits at the rate of $474.47 per week based on an average weekly wage of $1000.00. (Dec. 3.)
As a result of the injury, the employee brought a civil action in Superior Court against a third party. That action was settled by way of an agreement approved on January 24, 1994. The settlement resulted in the employee receiving an "excess" recovery after satisfaction of the lien held by the insurer pursuant to G. L. c. 152, § 15. This led the insurer to reduce future § 34 payments to the employee to the rate of $159.42 per week. These reduced payments continued until March 16, 1995 when the maximum benefits allowable under § 34 (260 weeks) were reached. Thereafter, the insurer commenced payment of § 34A permanent and total incapacity benefits at the same reduced rate. The employee continues to receive those payments. (Dec. 3-4.)
Section 15 at the time of the employee's injury stated, 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. Either the employee or the insurer may proceed to enforce the liability of such person. . . . 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 purpose 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.
In addition to workers' compensation payments the employee has been receiving monthly Social Security Disability Insurance benefits. These payments were offset by the workers' compensation payments, until the compensation payments were reduced. See 42 U.S.C. § 424a.
Subsequently the employee filed a claim for § 34B cost of living adjustments (COLA). The insurer denied the claim, contending that COLA payments were not applicable due to the § 15 excess recovery. Following a § 10A conference denial of his claim, the employee appealed to a hearing de novo. (Dec. 4-5.)
The version of § 34B, applicable to this employee's date of injury, stated, in pertinent part:
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, § 43 A. Amended by St. 1986, c. 662, § 30.
Based on the aforementioned stipulations of the parties the administrative judge issued a decision denying and dismissing the employee's claim after concluding that the intent of § 34B supports application of COLA benefits to the actual § 34A benefit. (Dec. 10-11.) The employee appeals, arguing that the judge committed legal error. We agree.
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.
Each weekly fractional payment for incapacity becomes the "base benefit" for purposes of § 34B COLA.
. . .
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.
Barbosa, supra, at 571
Nothing in the facts in the present case causes us to depart from this precedent.
The decision of the administrative judge is hereby reversed. We remand the case for the administrative judge to calculate and determine the § 34B supplement due on the weekly incapacity benefit.
So ordered.
_____________________ Frederick E. Levine Administrative Law Judge
_____________________ Carolynn N. Fischel Administrative Law Judge
FILED: May 27, 1998
FEL/kai
I dissent in this case for the same reasons stated in my dissent in Barbosa v. Armstrong World Industries, 11 Mass. Workers' Comp. Rep. 136, 137-140 (1997), appeal docketed, No. 97-J-139 (Mass.App.Ct. 1997). That case (Barbosa II) was before the reviewing board on the insurer's second appeal subsequent to the Barbosa I decision to recommit the case. See Barbosa v. Armstrong World Industries, 9 Mass. Workers' Comp. Rep. 566 (1995). The insurer's appeal of Barbosa II to the Massachusetts Appeals Court has been referred to a panel for oral argument and decision.
_____________________ Sarah Holmes Wilson Administrative Law Judge