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Workers' Compensation Board

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Case # 30400360
Date of Accident: 12/18/2003
District Office: Albany
Employer: Prestige Delivery Systems, Inc.
Carrier: American States Ins Co
Carrier ID No.: W036578
Carrier Case No.: 127169725039
Date of Filing of Decision: 12/02/2016
Claimant's Attorney: Jonathan G. Jacobson Esq.
Panel: Kenneth J. Munnelly


The Full Board, at its meeting on November 15, 2016, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed June 3, 2016.


The issue presented for Mandatory Full Board Review is whether the carrier should be fined pursuant to Workers' Compensation Law (WCL) § 25(3)(f) for late payment of the proceeds of a settlement made pursuant to WCL § 32.

The Workers' Compensation Law Judge (WCLJ) found that the carrier did not timely pay $200,000.00 of the section 32 agreement and imposed a fine of $40,000.00 against the carrier pursuant to WCL § 25(3)(f).

The Board Panel majority affirmed the WCLJ decision.

The dissenting Board Panel member would find that the evidence supports finding that the carrier made timely payment of the proceeds of the section 32 settlement, and would reverse the WCLJ's finding that the carrier should be penalized pursuant to WCL § 25(3)(f).

The carrier filed an application for Mandatory Full Board Review on July 5, 2016.

The claimant filed a rebuttal on August 1, 2016.

Upon review, the Full Board votes to adopt the following findings and conclusions.


This case was previously established for work-related injuries to both shoulders, and amended to include the neck and back, as well as consequential depression and panic disorder. The average weekly wage for the year before the December 18, 2003, injuries was set at $655.10. Eventually, the parties settled the case pursuant to WCL § 32 for a gross amount of $478,209.00. The notice of approval for the section 32 agreement was filed on March 13, 2015, and awarded claimant's attorney a fee of $30,000.00.

The claimant filed a request for further action on March 30, 2015, asserting that the carrier failed to timely pay $200,000.00 to the claimant pursuant to the section 32 agreement. The claimant requested that a penalty be imposed for a late payment pursuant WCL § 25(3)(f).

A hearing to address the WCL § 25(3)(f) penalty occurred on September 2, 2015. The claimant gave brief testimony asserting that she never had problems with the mail service to her home, and she did not receive the $200,000.00 check for the indemnity portion of the section 32 settlement until April 15, 2015. On cross-examination the claimant confirmed she received the $22,230.00 check for the medical set aside (MSA) seed money on March 23, 2015. The carrier's attorney stated that $200,000.00 was issued the same day as the set-aside check and that the carrier was informed by claimant's counsel on March 25, 2015, and advised that claimant had not received the check. Thereafter, the carrier placed a stop payment order on the check. The WCLJ, after hearing this evidence, made a finding that the $200,000.00 section 32 settlement was paid untimely and issued a WCL § 25(3)(f) penalty in the amount of $40,000.00. The WCLJ also awarded claimant's attorney a fee of $4,000.00. The claimant's attorney had submitted an OC-400.1 indicating that since the settlement was approved, pursuant to which he had received a fee of $30,000.00, he had spent an additional 5.5 hours working on claimant's case. The findings made at the September 2, 2015, hearing are reflected in a decision filed September 8, 2015.

The carrier's application for administrative review contained three exhibits. The carrier's exhibit "A" is a screen grab of a computer program showing a $200,000.00 check was issued on March 16, 2015. Exhibit "B" is a copy of an email exchange about the reissuance of the claimant's $200,000.00 check. The carrier's exhibit "C" is a copy of a check registry that shows that the $200,000.00 payment was printed on check number 11224717. The ledger, however, contains text on the bottom which pertains to the litigation regarding the late payment issue in this case, which suggests that this ledger is not an original. Additionally, several lines of text are blacked out such that they are no longer visible. Absent from the carrier's evidence is any proof of a timely mailing.


12 NYCRR 300.36(h) requires the carrier to pay an award made in a WCL § 32 agreement within 10 days, and states that "[i]f the carrier fails to make such payments, the carrier shall be subject to penalties pursuant to [WCL § 25(3)(f)]." The WCL § 25(3)(f) penalty is "self-executing, and the penalty is mandatory and automatic if the award is not timely paid (see, Matter of Surdi v Premium Coal & Oil Co., 52 NY2d 860 [1981])" (Matter of Keser v New York State Elmira Psychiatric Ctr., 92 NY2d 100 [1998]). However, where the Board is asked to apply the WCL § 25(3)(f) penalty based on the carrier's failure to timely pay an award as required by 12 NYCRR 300.36(h), the Board, upon finding that exceptional circumstances caused the late payment, can exercise its discretion to suspend the application of the rule's timely payment requirement pursuant to 12 NYCRR 300.30, and find that no WCL § 25(3)(f) penalty is assessed (Matter of Anderson v Central N.Y. DDSO, 2 AD3d 1011 [2003]).

In this case there was no reasonable explanation for the carrier to be granted an extension by the Board pursuant to the Anderson decision. The carrier failed to present any evidence that it mailed a check to the claimant. The carrier's contention that the claimant lied under oath about receipt of the check is meritless. Furthermore, the WCLJ found the claimant's testimony to be credible and uncontroverted. Under these circumstances, the penalty imposed upon the carrier pursuant to WCL § 25(3)(f) is required.

Therefore, the Full Board finds that the preponderance of the evidence supports a finding that the carrier was properly penalized pursuant to WCL § 25(3)(f).

Attorney's Fee

The Board shall approve attorneys' fees "in an amount commensurate with the services rendered and having due regard for the financial status of the claimant and whether the attorney or licensed representative engaged in dilatory tactics or failed to comply in a timely manner with board rules. In no case shall the fee be based solely on the amount of the award" (12 NYCRR 300.17[f]). 12 NYCRR 300.17(d)(1) states:

An attorney or licensed representative shall file an application upon a form OC-400.1 in each instance where a fee is requested pursuant to sections 24 and 24-a of the Workers' Compensation Law, except where the fee requested is not more than $ 450, the attorney or licensed representative may, in lieu of such written application, make an oral statement on the record as to the services rendered and the time spent for the performance of such services. Notwithstanding the foregoing, the board may require a written application on form OC-400.1 for a fee of $ 450 or less. Any form OC-400.1 filed shall be accurately completed.

In this case, prior to the WCLJ decision filed September 8, 2015, which assessed a late payment penalty against the carrier and awarded a fee of $4,000.00, claimant's attorney had already been paid fees totaling $31,275.00. An OC-400.1 submitted by claimant's attorney listed all the work performed with respect to this claim since being retained by the claimant in 2005, rather than the work performed since previously having being awarded a fee. The OC-400.1 indicated that since the section 32 settlement was approved, claimant's attorney had spent an additional 3.2 hours working on claimant's case. Because claimant's attorney included work for which he had been previously compensated in the OC-400.1, the Full Board finds that the form was not accurately completed. Moreover, the Full Board finds that a fee of $4,000.00 is excessive when considering the work performed by claimant's attorney since the prior fee was awarded. Therefore, the fee is reduced to $450.00.


ACCORDINGLY, the WCLJ decision filed on September 8, 2015, is MODIFIED to reduce the fee awarded to claimant's attorney to $450.00. In all other respects that decision is affirmed and remains in effect. No further action is planned by the Board at this time.