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Workers' Compensation Board

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Case # 09157372
Matter of NY Jets Football Club
2014 NY Wrk Comp 9157372

BOARD PANEL DECISION

By: Board Members Lobban, Higgins and Foster

Ruling:

The Full Board, at its meeting held on March 18, 2014, resolved that the Board Panel Memorandum of Decision (MOD) filed on December 12, 2013, be rescinded, and the matter returned to the Board Panel for further consideration.

The claimant requests review of the Workers' Compensation Law Judge (WCLJ) decision filed October 30, 2012. The Board's Waiver Agreement Management Office (WAMO) filed a timely rebuttal.

ISSUES

The issue presented for administrative review is whether WAMO is subject to the late payment penalty set forth in Workers' Compensation Law (WCL) § 25(3)(f).

FACTS

This case is established for an injury to the claimant's neck sustained in a work-related accident that occurred on October 18, 1987. In an amended decision filed on August 10, 1998, the claimant was classified with a permanent partial disability and this claim was deemed subject to the provisions of WCL § 15(8)(d).

In a W-C-32 (WAMO Settlement Agreement) filed with the Board on July 6, 2012, the claimant and WAMO agreed to a settlement in the gross amount of $55,770.00, with a fee to the claimant's attorney in the amount of $9,000.00, resulting in a net settlement amount of $46,770.00 to the claimant.

The parties' agreement was memorialized in an EC-32.3 (Notice of Approval) filed on August 28, 2012.

A C-8/8.6 (Notice that Payment of Compensation Has Been Stopped or Modified) was filed with the Board on September 12, 2012, indicating payment to the claimant, and her attorney, consistent with the August 28, 2012, EC-32.3.

The claimant's attorney filed an RFA-1LC (Request for Further Action by Legal Counsel) with the Board on September 21, 2012, requesting a hearing for the purpose of assessing a late payment penalty. Attached to the C-8/8.6 is a check dated September 11, 2012, drawn from the State of New York, indicating payment to the claimant in the amount of $46,770.00.

At a hearing held on October 25, 2012, a representative of WAMO argued that a strict interpretation of WCL § 25(3)(f) required a finding that a late payment penalty cannot be assessed against the Special Disability Fund or WAMO, that there is no motive for WAMO's late payment to the claimant, and that if it is found to be subject to a late payment penalty under the statute, that the payment time limits established for the UEF should apply. The claimant's attorney argued that a late payment penalty should be assessed against WAMO as it is not specifically excluded from the provisions of WCL § 25(3)(f). The WCLJ concluded based on WAMO's persuasive argument that a late payment penalty would not be assessed in this case.

The findings reached at the October 25, 2012, hearing were memorialized in a decision filed on October 30, 2012.

LEGAL ANALYSIS

In his November 9, 2012, application for Board Review, the claimant argues that the WCLJ's decision was arbitrary, capricious and an error as a matter of law. The claimant contends that WAMO is subject to the penalty provisions of WCL § 25(3)(f) based on its late payment to the claimant, that WAMO is not excluded from the requirements of the statute and that the statute specifically includes the UEF and Special Funds. WAMO's own guidelines require timely payments be made to the claimant. The claimant concludes by requesting a 20% penalty on the late payment of $55,770.00, and an additional attorney fee in the amount of $1,650.00.

In its rebuttal application, WAMO argues that the assessment of a WCL § 25(3)(f) penalty is not appropriate as the Special Disability Fund is only secondarily or vicariously liable once WCL § 15(8) liability has been established. WAMO also argues that the terms of the waiver agreement are controlling with respect to the payment of benefits, and there is no statutory mandate that subjects WAMO to a penalty if payments are not specifically made in ten days. WAMO notes that the UEF is permitted thirty days after the ten day period from the decision to pay. WAMO also contends that strict construction of WCL § 25(3)(f) requires a finding that it is only applicable to employers and insurance carriers, and that it does not profit from making late payment of awards as a carrier would, and has no incentive to withhold payments from a claimant as its only incentive is to close the Special Disability Fund.

WCL § 25(3)(f) provides as follows:

If the employer or its insurance carrier shall fail to make payments of compensation according to the terms of the award within ten days or the uninsured employers' fund shall fail to make payments of compensation according to the terms of the award within thirty days after such ten day period except in case of an application to the board for a 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 or his or her dependents, and there shall also be imposed an assessment of fifty dollars, which shall be paid into the state treasury.

The Board Panel finds, upon review of the evidence of record, that a WCL § 25(3)(f) penalty may not be assessed against WAMO. The plain language of WCL § 25(3)(f) provides that a penalty for the late payment of compensation may be assessed only against an employer, insurance carrier or the UEF. WAMO is a Board office that was created by the 2007 Reform Legislation "to negotiate and seek Board approval for WCL § 32 waiver agreements on behalf of the Special Disability Fund (see WCL § 32[e])." As such, WAMO is clearly not an employer as defined in WCL § 2(3), an insurance carrier as defined in WCL § 2(12), or the UEF. While the Board has permitted the assessment of the WCL § 25(3)(f) penalty against the Special Funds Conservation Committee when liability for payment of an award has been shifted to it pursuant to WCL § 25-a (see DeMayo v Rensselaer Polytechnic Institute, 74 NY2d 459 [1989]), it did so based on the conclusion that the entity "will step into the shoes of the insurance carrier and succeed to its rights and responsibilities (id.)" The Board Panel is not inclined to conclude in this case that WAMO has "stepped into the shoes of the carrier" by merely facilitating a WCL § 32 settlement and paying the proceeds of said settlement to the claimant on behalf of the Special Disability Fund. The Third Department has similarly concluded, based on a strict statutory interpretation of WCL § 27, that the Liquidation Bureau is not subject to the mandatory Aggregate Trust Fund deposit requirement as it is not a stock corporation or mutual association as defined therein.

CONCLUSION

ACCORDINGLY, the October 30, 2012, WCLJ decision is AFFIRMED. No further action is planned at this time.

All concur.