Aldrich v. City of Lumber City

• Decision Date: 20 December 1999
• Docket Number: No. A99A0847.,A99A0847.
• Citation: 241 Ga. App. 724,530 S.E.2d 195
• Parties: ALDRICH v. CITY OF LUMBER CITY et al.
• Court: Georgia Court of Appeals

530 S.E.2d 195

241 Ga. App. 724

ALDRICH v. CITY OF LUMBER CITY et al.

No. A99A0847.

Court of Appeals of Georgia.

December 20, 1999.

Reconsideration Denied January 7, 2000.

Certiorari Granted July 13, 2000.

Larry N. Hollington, Augusta, for appellant.

Drew, Eckl & Farnham, Daniel C. Kniffen, Terrence T. Rock, Atlanta, for appellees.

ELDRIDGE, Judge.

Bobby Aldrich's application for discretionary review was granted to consider the superior court's affirmance of a workers' compensation award in favor of the City of Lumber City, the City of Alamo, the Georgia Municipal Association Workers' Compensation Fund, and Sedgwick James of Georgia, Inc. ("Sedgwick James"), the servicing agent. The judgment obligates Aldrich to repay the amount of total disability benefits he received over a several-year period during which Aldrich was employed and about which he failed to notify his former employer, the City of Lumber City, or its insurer. Aldrich appeals, contending that the principle of res judicata and the existence of a 1994 settlement agreement foreclosed this result.

In August 1989, while on duty as a police officer for Lumber City, Aldrich sustained a compensable injury when he experienced a "lightning sting" which aggravated his pre-existing diabetic condition. Aldrich asserted that certain medical complications relating to his right foot were caused when lightning struck a nearby pole then exited the top of his shoe. Although Lumber City controverted Aldrich's claim, and the administrative law judge ("ALJ") denied benefits, on May 3, 1991, the appellate division of the State Board of Workers' Compensation decided that Aldrich's claim was compensable and awarded benefits. The appellate division directed Lumber City to pay medical expenses as well as weekly income benefits commencing September 22, 1989, and "continuing until changed or terminated according to law."

While appealing the initial denial of benefits and after receiving temporary total disability benefits, Aldrich secretly worked for several other employers, including as a contractor for the Department of Family & Children Services in 1991 and later as a night security officer for a Hardee's restaurant. On August 1, 1994, while still receiving benefits from Lumber City and its insurer, Aldrich began working as a police officer for the City of Alamo. While employed by the City of Alamo, Aldrich continued to receive weekly workers' compensation benefits as well as Social Security disability payments.

On November 3, 1994, Aldrich's patrol car struck a cow. Alleging that he had hurt his left knee and sprained his neck, Aldrich then filed a claim for workers' compensation benefits. When an adjuster, Stella Jones, recognized Aldrich's name, she confirmed his identity and employment with the City of Alamo. The City of Alamo then controverted Aldrich's claim on the basis that Aldrich was receiving total disability benefits from Lumber City. Notice of an intent to suspend benefits effective December 7, 1994, was filed with the State Board. According to Jones, she had no record in her files that Aldrich had notified her that he had returned to work.

Aldrich sought additional income and medical benefits based on a change in condition for the worse from his original injury with Lumber City in 1989 or, in the alternative, a new injury while working for the City of Alamo. The ALJ found that Aldrich was "unworthy of belief," "unresponsive," and "evasive in his testimony"; that Aldrich had not been injured when his patrol car struck the cow; that he had not undergone a change in condition for the worse with respect to the 1989 injury; that his pre-existing diabetic condition had resolved to its pre-1989 injury state; and that, after February 7, 1991, Aldrich's physical condition was no longer attributable to the 1989 injury, the aggravation of his pre-existing diabetic condition.¹ The ALJ determined that "through carelessness, work activities and numerous additional accidents, the aggravation of claimant's diabetic condition ceased to be related to the 1989 injury." Finding that Aldrich did not qualify for benefits relating to the 1989 injury after February 7, 1991, the ALJ terminated benefits effective that date. The ALJ ordered Aldrich to make reimbursements for the overpaid disability benefits received after February 7, 1991, until the suspension of benefits on December 7, 1994.

In issuing its award, the appellate division embraced the factual findings and legal analysis of the ALJ. The appellate division agreed that Aldrich had undergone a change in condition for the better and was, therefore, not entitled to income benefits and medical expenses after February 7, 1991. Finding evidence in the record which supported the award, the superior court affirmed the appellate division's decision.

1. Aldrich asserts that the judgment by the superior court violates the doctrine of res judicata. He claims that after the State Board found in its May 3, 1991 award that he had sustained a compensable injury, it lacked jurisdiction to alter that award. We disagree.

In 1978, the legislature expressly empowered the State Board to order an employee to repay income benefits to an employer when there has been a change of condition hearing. Bahadori v. Nat. Union Fire Ins. Co., 270 Ga. 203, 204(1), 507 S.E.2d 467 (1998).

If the decision determines that an overpayment of income benefits has been made and no future income benefits are due, the administrative law judge or the board, in its discretion, may order the employee or beneficiary to repay to the employer or the insurer[] the sum of the overpayments.

(Emphasis in original.) Id. See also OCGA § 34-9-104(d)(2).

By law, provided that certain statutory requirements are met, an award can be subsequently modified.

[A]ny party may apply under this Code section for another decision because of a change in condition ending, decreasing, increasing, or authorizing the recovery of income benefits awarded or ordered in the prior final decision, provided that the prior decision of the board was not based on a settlement; and provided, further, that at the time of application not more that two years have elapsed since the date [of] the last payment of income benefits pursuant to Code Section 34-9-261.

OCGA § 34-9-104(b). Here, the record confirms that the modification was based on a change of condition which altered the recovery of income benefits awarded in a prior final decision; the State Board had approved the 1991 award; and the final award had not been based on a settlement. Nor was the modification untimely since two years had not elapsed since payment of income benefits to Aldrich. See Bahadori, 270 Ga. at 204(2), 507 S.E.2d 467 (limitation period for recovery of overpaid benefits under OCGA § 34-9-104(d)(2) is two years from date of last payment of income benefits). Thus, under OCGA § 34-9-104, the State Board had jurisdiction to modify the earlier award.

Notwithstanding Aldrich's claim to the contrary, Gaddis v. Ga. Mountain Contractors, 213 Ga.App. 126, 127(1), 443 S.E.2d 710 (1994) neither authorizes nor requires a different result. In that case, unlike here, because the State Board was not seeking to alter an earlier award based on a change in condition, the doctrine of res judicata precluded any attempt to modify that final judgment. Id. at 127-128(1), 443 S.E.2d 710. Aldrich's reliance upon Webb v. City of Atlanta, 228 Ga.App. 278, 279(1), 491 S.E.2d 492 (1997) is similarly misplaced. In that case, unlike here, the applicability of the doctrine of res judicata was addressed in the context of whether disability payments should have been credited against income benefits. Webb was not a change of condition case and did not concern the application of OCGA § 34-9-104(a). Id. at 280(2), 491 S.E.2d 492.

Aldrich asserts that the ALJ was required to find that the change of condition took place after May 3, 1991, and, thus, erred in finding that it occurred in February 1991. But OCGA § 34-9-104(d) specifically permits such retroactivity.

[T]he award or order contained in the final decision entered by the administrative law judge or the board shall be effective as of the time of change in condition as found by the administrative law judge or board, notwithstanding the retroactive effect of the award or order.

OCGA § 34-9-104(d)(1).

The legislature amended the Act in 1978 to provide that where a change in condition action was before the State Board, it could also address any prior overpayment. See OCGA § 34-9-104(d)(2). But Aldrich's twisted interpretation of the statutory language of subsection (d) would eviscerate an employer/insurer's right to recover such overpayments and is counterintuitive to the logic of the Supreme Court in Bahadori, 270 Ga. 203,507 S.E.2d 467. In construing this subsection, the Supreme Court did not find that the employer and its insurer were limited to recovering only overpayments made to Bahadori after "last established by award or otherwise." On the contrary, assuming arguendo that the employer/insurer could surmount the statute of limitation problem by proving fraud, then the overpayments made to Bahadori in 1992 could be recovered for the period during which Bahadori was secretly working for another employer.²

OCGA § 34-9-104(d)(1) expressly authorizes an award to "be effective as of the time of change in condition as found by the administrative law judge or board, notwithstanding the retroactive effect of the award." In these circumstances, the State Board was authorized to enter an award retroactive to and effective on February 7, 1991, the date on which the ALJ found that a change in condition had occurred.

2. Aldrich contends that the superior court erred as a matter of law in affirming the award because the State Board had previously approved an agreement entered into between Lumber City and the Subsequent Injury Trust Fund ("Trust Fund") as of June 29, 1994...