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Case # 00338746
Matter of DCR Trucking & Recyling
2014 NY Wrk Comp 338746

BOARD PANEL DECISION

By: Board Members Dudley, Finnegan and Foster

Ruling:

Zenith Insurance Co. (Zenith), as the new third party administrator for TIG Insurance Co. (TIG), requests review of the Workers' Compensation Law Judge (WCLJ) decision filed on February 25, 2014. The claimant filed a rebuttal.

ISSUES

The issues presented for administrative review are:

  1. Whether the Workers’ Compensation Law (WCL) § 114-a(3) penalty should be rescinded, because notice of the hearing held on February 20, 2014, was not sent to the new third party administrator.
  2. Whether the award made for the period from April 12, 2011, to December 12, 2011, at the February 20, 2014, hearing should be rescinded.
  3. Whether the case should be returned to the District Claims Office for computation of the previously directed mandatory deposit into the Aggregate Trust Fund (ATF).

FACTS

This is an established case under WCL Article 8-A for RADS, sinusitis, GERD, rhinitis, depressive disorder and PTSD, which the claimant sustained as a participant in World Trade Center clean-up operations in the course of his employment for DCR Trucking & Recycling (DCR), with a date of disablement of July 22, 2004. In a WCLJ decision filed on December 7, 2011, the WCLJ found Article 8-A applicable, established the date of accident as June 19, 2002 (the last date on which the claimant worked at ground zero), and found that DCR employed the claimant on the date of accident.

Thereafter, in a WCLJ decision filed on January 24, 2012, the WCLJ found that TIG was the liable carrier. The WCLJ decision was affirmed by a Board Panel Memorandum of Decision filed on July 5, 2012. At that time, Risk Enterprise Management (REM) was the third party administrator for TIG. Thereafter, Tri Star Risk Enterprise Management (Tri Star) appeared as TIG's third party administrator.

In a WCLJ decision filed on July 3, 2013, the claimant was classified with a permanent partial disability resulting in a 75% loss of wage earning capacity, awards were made, and the carrier was directed to continue payments at the rate of $400.00 per week. In addition, the carrier was directed to make a deposit into the Aggregate Trust Fund of the present value of all unpaid benefits in accordance with WCL § 27, in an amount to be set forth in a supplemental decision. On July 6, 2013, Tri Star filed a form C-8/8.6, in which it indicated that the awards made by the WCLJ's July 3, 2013, decision had been paid, and that payments would continue at the $400.00 per week ppd rate as directed.

In an RFA-1LC filed on August 29, 2013, the claimant's attorney requested a hearing in order to make awards for periods held in abeyance. The claimant's request for further action was supported by the April 12, 2011, medical report of the claimant's treating psychiatrist, Dr. Cowen, which indicated that the claimant suffered from a causally related major depressive disorder, generalized anxiety disorder and post-traumatic stress disorder, and that his symptoms prevent him from working. In response, the Board scheduled a hearing for October 17, 2013, to consider that issue.

At the October 17, 2013, hearing, the WCLJ made a finding that there was no compensable lost time for the period from July 23, 2004, to April 12, 2011, and scheduled the claimant's testimony on that issue for November 13, 2013. The WCLJ's scratch sheet (ECF-16.1P) for the October 17, 2013, hearing indicates that TIG was represented by counsel at that hearing.

At the November 13, 2013, hearing, TIG's attorney advised the WCLJ that the hearing could not proceed because Tri Star had been discharged as TIG's third party administrator. The WCLJ continued the case, directed TIG to appear at the adjourned date, and directed TIG to show cause at the next hearing why a penalty should not be assessed against it pursuant to WCL § 114-a(3).

The next hearing was originally scheduled for January 9, 2014, and was adjourned by the Board to February 20, 2014. The Board file shows that TIG was provided with notice of both the January 9, 2014, hearing and the February 20, 2014, adjourned date. The Board file further shows that the Board had not been contacted by any new third party administrator for TIG at any time prior to the February 20, 2014, hearing, nor had TIG provided eCase access to any third party administrator to act on its behalf with respect to this case prior to those hearings.

No one appeared for TIG at the February 20, 2014, hearing. The WCLJ found that TIG had caused an unnecessary adjournment of the November 13, 2013, hearing, and assessed a $2,000.00 penalty against it under WCL § 114-a(3). In addition, the WCLJ made an award for a temporary disability at the rate of $400.00 per week for the period from April 12, 2011, to December 12, 2011, based upon the medical reports of Dr. Cowen covering that period. The WCL § 114-a(3) penalty and the award for the period from April 12, 2011, to December 12, 2011, are incorporated in the WCLJ decision filed on February 25, 2014.

In a letter dated and filed on April 18, 2014, Zenith advised the Board that it became the claim administrator for TIG on October 1, 2013, with respect to this case, and requested that all future communication regarding this case should be directed to TIG Insurance Co. c/o Zenith Insurance Co., P.O. Box 1558, Sarasota, FL 34230-1558.

LEGAL ANALYSIS

In its application for review, Zenith requests that the WCL § 114-a(3) penalty assessed against TIG and the award for the period from April 12, 2011, to December 12, 2011, be rescinded. As to the WCL § 114-a(3) penalty, Zenith argues that the Board had been advised at the November 13, 2013, hearing that TIG had arranged for a new third party administrator, and that Zenith was not thereafter placed on notice by the Board and did not receive electronic notice of the February 20, 2014, hearing. Zenith also argues that the medical reports in the Board file are insufficient to support the award for the period from April 12, 2011, to December 12, 2011, because they do not indicate the claimant's degree of disability.

In his rebuttal, the claimant notes that he would be entitled to awards at the rate of $400.00 per week with a disability of 55% or greater. The claimant argues that the medical reports of Dr. Cowen sufficiently set forth an opinion regarding the claimant's disability to support the award made for the period from April 12, 2011, to December 12, 2011.

The Board Panel notes that 12 NYCRR 300.8 provides that all notices of hearing shall specifically state the purpose of the hearing and shall be mailed to the claimant, the carrier and their authorized representatives. A third-party administrator is neither a party of interest nor a legally authorized representative of a party. Furthermore, the Appellate Division has indicated that: "[where] the employer's third-party administrator apparently did not receive notice of the WCLJ decision, such an omission may be overlooked as the employer is the real party in interest and did, in fact, receive such notice" (Matter of Wilkinson v Bendix Friction Corp., 32 A.D.3d 636 [2006]). TIG, the liable carrier, was provided with electronic notice of the November 13, 2013, hearing, which listed the address which was then on file with the Board for that purpose. The Appellate Division has noted that "the Board reasonably requires employers and carriers to ensure that correct addresses are on file" and "there is no requirement that additional notice be given to [the carrier's] third-party administrator" (Matter of Conway v CBI Servs., 1 AD3d 739 [2003] [internal citations omitted]).

A carrier is free to discharge or change its third party administrator at any time, without notice to the Board. This is one reason why it is the obligation of the carrier, and not the Board, to see that its third party administrator receives notice of any hearings where the carrier wants the third party administrator to act on its behalf. The obligation to defend a compensation claim remains the obligation of the carrier, and if the carrier chooses to do so through a third party administrator, it is the carrier's obligation to ensure that notices of hearings, among other things, are sent to its third party administrator.

In the instant case, a review of the record reveals that the notice for the November 13, 2013, hearing was sent electronically to TIG at the address listed in the Board file. The Board was not notified of any change in the third party administrator with respect to this case until long after this hearing notice was sent, and was not required to reschedule the November 13, 2013, hearing merely because TIG had elected to change third party administrators.

The Board Panel further notes that, under the Board's procedures for its electronic case filing system, the eCase administrator for TIG could have granted eCase access to this case to Zenith at any time. As set forth in the Board's instructions for "eCase Administrator's Responsibilities," which is available on the New York State Workers' Compensation Board's web site, the carrier's eCase administrator "has the responsibility of disseminating eCase information that is received from the Board to the appropriate people in his/her organization." In addition, the carrier's eCase administrator, "using the eCase on line administrator tool, will grant and remove access to eCase users in different organizations, for cases in which the administrator's organization is listed as a party of interest."

The Board has one address on file for TIG Insurance Co., which is the address to which it has and will continue to send notices, decisions and other documents and correspondence in this case. If TIG wants such notices to go to the Sarasota, Fl. address listed in Zenith's letter dated April 18, 2014, TIG can forward such documents to Zenith through its eCase Administrator.

The Board Panel notes that, although the Board provided separate electronic notice to TIG's former third party administrator, Tri Star, it is unable to do so for Zenith. Tri Star is a licensed third party administrator, and as such is assigned a T code (i.e. third party administrator code), which was used in the Board's electronic case file to provide Tri Star with notice of hearings, decisions and other documents filed by the Board in this case. Zenith is an authorized workers' compensation carrier, and as such is eligible to be licensed as a third party administrator (see WCL §50[3-d]). A review of the Board's list of authorized third party administrators, which is also available through the Board's web site, shows that Zenith is not a licensed third party administrator, and does not have a T code assigned to it. Therefore, the Board is not able to add Zenith as a third party administrator in the electronic case file for this case, even though it has assumed the function of a third party administrator for TIG. In order to administer the claim for TIG, Zenith must become licensed as a third party administrator.

Under the circumstances, the Board Panel finds that TIG was properly assessed a penalty under WCL § 114-a(3), for causing an unnecessary adjournment of the November 13, 2013, hearing, which resulted in a continuation of the case without reasonable grounds. The Board Panel finds that the $2,000.00 penalty assessed by the WCLJ is excessive, and reduces the amount of the penalty to $1,000.00.

The Board Panel has reviewed the medical reports of Dr. Cowen dated April 11, 2011, May 4, 2011, June 5, 2011, July 13, 2011, and September 12, 2011. The Board Panel finds that these reports adequately set forth a medical opinion and sufficient information concerning the claimant's disability during that time period to support the award made by the WCLJ for the period from April 12, 2011, to December 12, 2011. Therefore, the awards made by the WCLJ are affirmed.

Lastly, the Board Panel notes that no Supplemental Decision has yet been issued by the WCLJ setting forth the amount of the carrier's deposit into the ATF, deposit requirements which is mandatory for private insurance carriers such as TIG under Workers' Compensation Law § 27(2). As the direction for a mandatory ATF deposit was made by the WCLJ decision filed on July 3, 2013, but no Supplemental Decision has yet been filed setting forth the amount of the ATF deposit, the case is returned to the Board's Claims Office to arrange for the computation of the amount of the ATF deposit, and for preparation and filing of a Supplemental Decision by the WCLJ to direct payment of the ATF deposit as so computed.

Therefore, the Board Panel finds, upon review of the record and the preponderance of the evidence, that the WCL § 114-a(3) penalty assessed against TIG is reduced to $1,000.00 dollars, and that the award made for the period from April 12, 2011, to December 12, 2011, is proper.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed on February 25, 2014, is MODIFIED, by reducing the WCL § 114-a(3) penalty assessed against TIG to $1,000.00 dollars. In all other respects, the decision REMAINS IN EFFECT. The case is returned to the Board's Claims Office to arrange for the computation of the amount of the ATF deposit, and for preparation of a Supplemental Decision for the WCLJ to direct payment of the ATF deposit as so computed, as previously directed by the WCLJ decision filed on July 3, 2013. No further action is planned at this time.

All concur.