The Full Board, at its meeting held on May 21, 2013, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on September 13, 2012.
The issue presented for Mandatory Full Board Review is whether a late payment penalty pursuant to Workers' Compensation Law (WCL) § 25(3)(f) should be assessed against the self-insured employer (SIE).
The Workers' Compensation Law Judge (WCLJ) found "[n]o issue of late payment" and declined to assess a penalty.
The Board Panel majority reversed the WCLJ's decision, and assessed a penalty against the SIE in the amount of $1,220.08 payable to the claimant, and an assessment in the amount of $50.00 payable to the Board, pursuant to WCL § 25(3)(f).
The dissenting Board Panel member would have affirmed the WCLJ and found that no late payment penalty should be imposed on the SIE pursuant to WCL § 25(3)(f).
In its application for Mandatory Full Board Review filed on October 12, 2012, the SIE requests that the Board Panel majority decision be reversed because there is no issue of late payment. The SIE argues that it did in fact pay the award timely and that the situation was entirely caused by the claimant when she failed to cash the original check that was sent to her.
In a rebuttal filed with the Board on November 9, 2012, the attorneys for the claimant request that the Board Panel majority decision be affirmed. The claimant argues that there is no dispute that the SIE failed to timely pay the amount of $6,100.40, and the penalty imposed pursuant to WCL § 25(3)(f) is self-executing.
Upon review, the Full Board votes to adopt the following findings and conclusions.
This claim is established for a right knee injury that resulted from an accident on January 10, 2008. In an administrative decision filed on September 22, 2008, the average weekly wage (AWW) was found to be $312.67, and awards were made for the period from January 11, 2008, to June 23, 2008, at the temporary total rate of $208.45 per week.
A notice of proposed decision was filed on April 4, 2011, in which an award in the amount of $12,006.72 was made for a 20% schedule loss of use of the right leg.
On April 13, 2011, the SIE filed a C-8/8.6 (Notice That Payment of Compensation has Been Stopped or Modified) to report that it paid the claimant a total of $6,100.40, which is the amount that was owed to the claimant from the total award of $12,006.72, less reimbursement to the employer in the amount of $1,070.28, and prior payments to the claimant in the amount of $4,836.04. The C-8/8.6 indicates that the most recent payment of compensation was made on September 26, 2008 (sic).
On April 14, 2011, the Board received an OC-400 (Notice of Retainer and Appearance) dated April 13, 2011, and signed by the claimant and the attorney that she retained to represent her in her workers' compensation claim.
On April 18, 2011, the Board received a letter dated April 14, 2011, from the claimant's attorney, stating its objection to the proposed decision filed on April 4, 2011.
The proposed decision was cancelled by a notice of cancellation of proposed decision filed on April 25, 2011, which indicated that the action set forth in the proposed decision will not be taken.
On June 14, 2011, the claimant testified that in addition to working as a teacher's aide for the SIE at the time she was injured, she also worked as a teacher's aide for a different employer during the summers. The claimant worked for this other employer for two summers prior to the accident in 2008 and for the summer after the accident. She was paid $88 per week for five days of work during her summer employment. The WCLJ found that the money from the claimant's summer employment should be included in the calculation of her AWW, and therefore modified the AWW to $358.38, from the previously established AWW of $312.67. As the WCLJ was calculating the amount of the schedule loss of use award to the claimant to account for the increased AWW, the claimant's attorney requested a fee in the amount of $1,100.00. The SIE then noted that the check for the schedule loss of use award in the amount of $12,006.72 has already been cashed by the claimant. However, the claimant testified that she returned the check. The SIE noted an exception to the modification of claimant's AWW.
In the resulting decision, filed on June 17, 2011, the WCLJ modified the AWW to $358.83 and awarded a 20% schedule loss of use of the right leg, for a total award amount of $13,779.07, less payments already made, and less an attorney fee in the amount of $1,100.00. The SIE did not file an application for administrative review of the decision filed on June 17, 2011.
On June 17, 2011, the SIE filed a C-8/8.6 to report that it paid the claimant a total of $672.35, which represents a total award amount of $13,779.07, less an attorney fee in the amount of $1,100.00, and less prior payments to the claimant in the amount of $12,006.72. The C-8/8.6 indicates that the most recent payment of compensation was made on April 19, 2011 (sic).
On June 30, 2011, the claimant's attorney filed a request for further action (form RFA-1LC) and requested a hearing to address the issue of a late payment penalty based on the awards made in the decision filed on June 17, 2011.
At a hearing on September 23, 2011, the claimant's attorney argued that a penalty should be imposed on the SIE for its late payment in the amount of $6,100.40 because, although the SIE initially issued a check following the proposed decision filed April 4, 2011, that decision was subsequently cancelled and the claimant testified that she returned the check to the SIE. The SIE's attorney argued that no late payment penalty should be imposed because the SIE never received the check that was returned by the claimant, and that her testimony, without some other evidence, is insufficient on this issue. The claimant's attorney argued that it was the SIE's burden to produce proof of a cancelled check to show that payment was made timely. The SIE stated that after receiving the claimant's request for further action, it cancelled the original check, and reissued another check.
After hearing the arguments of the parties, the WCLJ noted that "[n]o one has produced any documentary evidence in the form of canceled checks … postmarked envelopes [or] any documentation of that sort to substantiate their position." The WCLJ found that it appears that the claimant was paid and that under the circumstances presented, "since the initial check was sent to the claimant there is no issue of late payment." The claimant's attorney objected to the finding, arguing that under WCL § 25(3)(f), the only proper excuse for late payment is an application for administrative review, which was never filed.
The WCLJ's findings were set forth in a decision filed on September 28, 2011, and the claimant filed an application for administrative review.
Workers' Compensation Law § 25(3)(f) provides, in pertinent part:
"If the employer or its insurance administrator shall fail to make payments of compensation according to the terms of the award within ten days…except in case of an application to the board for modification, rescission or review of such award, there shall be imposed a penalty equal to twenty percent of the unpaid compensation which shall be paid to the injured worker…and there shall also be imposed an assessment of fifty dollars, which shall be paid into the state treasury."
Here, a penalty in the amount of $1,220.08 was properly imposed against the SIE for late payment of the awards made in the decision filed on June 17, 2011, based on an amount not timely paid of $6,100.40. The SIE does not dispute the amount of the award owed to the claimant ($6,100.40) but alleges that WCL § 25(3)(f) does not apply because the SIE timely paid the claimant after the award was made in the proposed decision filed on April 4, 2011. However, in a decision filed on April 25, 2011, the parties were notified that the proposed decision filed on April 4, 2011, was cancelled, and thereafter, at the hearing held on June 14, 2011, the claimant testified that she returned the check that was issued by the SIE after the proposed decision filed on April 4, 2011. The SIE did not dispute this testimony at the hearing, and requested no further development of the issue. Further, the SIE failed to submit any documentation indicating that the check had been negotiated to refute the claimant's testimony that she never cashed the check.
Therefore, the Full Board finds that a WCL § 25(3)(f) penalty should be assessed against the SIE in the amount of $1,220.08, payable to the claimant, and $50.00, payable to the Board.
ACCORDINGLY, the WCLJ decision filed September 28, 2011, is REVERSED and a late payment penalty is imposed on the SIE in the amount of $1,220.08 payable to the claimant, plus an assessment of $50.00 payable to the Board, pursuant to WCL § 25(3)(f). No further action is planned by the Board at this time.