Anchor Motor Freight, Inc. v. Subsequent Injury Fund

• Decision Date: 28 September 1976
• Docket Number: No. 140,140
• Citation: 278 Md. 320,363 A.2d 505
• Parties: ANCHOR MOTOR FREIGHT, INC., et al. v. SUBSEQUENT INJURY FUND.
• Court: Maryland Court of Appeals

Page 320

278 Md. 320

363 A.2d 505

ANCHOR MOTOR FREIGHT, INC., et al. v. SUBSEQUENT INJURY FUND.

No. 140.

Court of Appeals of Maryland.

Sept. 28, 1976.

Glenn C. Parker and Alfred M. Porth, Baltimore (Theodore B. Cornblatt and Smith, Somerville & Case, Baltimore, on the brief), for appellants.

Dennis M. Andreone, Sp. Asst. Atty. Gen., Baltimore (Francis B. Burch, Atty. Gen., and H. George Meredith, Jr., Sp. Asst. Atty. Gen., Baltimore, on the brief), for appellee.

Argued and reargued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE and ELDRIDGE, JJ.

DIGGES, Judge.

This workmen's compensation case, here on certiorari to the Court of Special Appeals, involves the liability of an employer and its insurance carrier as well as that of the Subsequent Injury Fund when a claimant, initially determined to be only permanently partially disabled due to the combined effects of a previous impairment and a subsequent compensable injury, is later found on reopening to have become permanently totally disabled.

Two injuries to claimant Sidney Compton while employed by Anchor Motor Freight, Inc., one in 1961 and the other in 1966, and three entwining orders of the Workmen's Compensation Commission, in 1962, 1968, and 1974, have led to this controversy, but only the 1974 order is directly in dispute here. As a consequence of his first accident, wherein the employee suffered a fractured spine and severe injuries to both hands, the Commission in 1962 awarded Compton compensation after determining that he had sustained a permanent partial disability. In 1966 the employee was injured in the second accident whereby he suffered a fracture to his left ankle and left shoulder blade. Following this occurrence, the Commission in 1968 found the claimant was then afflicted with a permanent partial disability amounting to an 80% industrial loss of the use of his body, 28% due to the previous impairment associated with the 1961 accident and 52% due to the 1966 accident. The award made under the 'Other Cases' provision of Maryland Code (1957, 1964 Repl. Vol.), Art. 101, § 36(4), ¹ was apportioned between the employer and insurer (the petitioners) and the Subsequent Injury Fund (the respondent), the employer being required to pay 52% and the Fund being responsible, with a credit for that amount previously paid in conjunction with the 1961 accident, for the remaining 28%. ² Claiming a worsening of his condition, Compton, as authorized by Code, Art. 101, § 40(b) and (c), filed a timely petition in December of 1973 with the Commission, seeking an increase in his award. Subsequent to a hearing on this request, the Commission issued an order on May 9, 1974, which in pertinent part reads:

'The Commission, having granted the claimant's petition to reopen, finds on the issue presented that the claimant is now permanently totally disabled as a result of his accidental injury of November 29 196(6), and is entitled to compensation benefits in the amount of $30,000.00 under the provisions of Section 36, Subsection 1 of Article 101. Inasmuch as the claimant was awarded compensation benefits under the Order dated December 20, 1968 in the amount of $13,858.00 to be paid by the employer and insurer and $7,462.00 for the preexisting condition, the claimant is now entitled to $8,680.00 to be paid by the employer and insurer, which is in addition to money previously awarded under the Order dated December 20, 1968.

'It is, therefore, this 9th day of May, 1974, by the Workmen's Compensation Commission ORDERED that Anchor Motor Freight, Inc., employer, and Transportation Insurance Company, insurer, pay unto Sidney Compton, claimant, compensation for permanent total disability at the rate of $55.00 payable weekly . . . not to exceed the sum of $8,680.00 allowable under 'Other Cases'; . . .'

On rehearing the Commission affirmed this ruling and thereafter a series of appeals ensued. The employer-insurer appealed this decision to the Superior Court of Baltimore City, contending that although the claimant concededly had become permanently and totally disabled, the Commission had erred in charging the entire award against the employer. Judge James W. Murphy agreed and granted the petitioners' motion for summary judgment, the effect of which was to find as a matter of law that the $8,680 supplemental award should be apportioned between the employer and the Subsequent Injury Fund. On appeal by the Fund, ³ the Court of Special Appeals reversed this decision, Subsequent Injury Fund v. Compton, 28 Md.App. 526, 346 A.2d 475 (1975), and, after concluding that the trial court erred in its interpretation of the appropriate law, directed that further proceedings be conducted to determine the relative liabilities of the parties. We granted certiorari and will now affirm that decision.

In order to understand better why we agree with this ruling of the Court of Special Appeals, we think it useful to review briefly the policies behind and the rationale of the Subsequent Injury Fund. Judge Finan for this Court in Subsequent Injury Fund v. Pack, 250 Md. 306, 308, 242 A.2d 506, 508 (1968) encapsulated the Fund's purpose thusly:

'(It) was to persuade the employer to employ the handicapped individual by limiting the liability, which the employer may otherwise have incurred, in the event the previously disabled or injured individual sustained a subsequent occupational injury, although not of itself disabling, but which, coupled with previous impairment, rendered the individual permanently disabled, thus exposing the employer to liability for the cumulative effect of the prior and subsequent injuries. By the terms of the statute, if the employee sustained a subsequent compensable disability but the cumulative effect of the disability and the prior disability resulted in a permanent total or permanent partial disability, the employer and his insurance carrier would only be liable for compensation payable by reason of the subsequent injury. The Subsequent Injury Fund, funded by assessments imposed upon employers and insurers, by statute, would contribute the balance of the total award, so that the sum of the two payments would equal the compensation provided by statute for the combined effects of both the previous disability and the subsequent injury.' See Subsequent Injury Fund v Thomas, 275 Md. 628, 633-34, 342 A.2d 671, 674-75 (1975).

Payments from the Fund are regulated by Code (1957, 1964 Repl. Vol.), Art. 101, § 66(1), see note 2 supra, which contains three basic prerequisities to compensation, recently summarized for this Court by Judge Eldridge in Subsequent Injury Fund v. Thomas, supra, 275 Md. at 632, 342 A.2d at 674:

'First, the employee must have a 'permanent impairment due to a previous accident or disease of any congenital condition, which is or is likely to be a hindrance or obstacle to his employment.' Second, the employee must incur 'a subsequent disability by reason of a personal injury, for which compensation is required by' the Workmen's Compensation Act. Finally, the 'previous impairment and subsequent accidental injury,' when combined, must result in total disability or a permanent partial disability which exceeds 50% of the body and which is 'substantially greater . . . than that which would have resulted from the subsequent injury alone."

Assuming that these conditions are satisfied (and concededly they are in this case), the Fund is directed to contribute to the employee's compensation an amount equal to the difference between the award payable for the subsequent injury alone and that payable for the second injury combined with the previous impairment. Code (1957, 1964 Repl. Vol.), Art. 101, § 66(1); see Bosley v. Jackson, 250 Md. 401, 404-05, 243 A.2d 513, 514-15 (1968). See generally 2 A. Larson, The Law of Workmen's Compensation § 59.34 (1974). A graphic demonstration of this general principle as to haw the Fund supplements an award otherwise totally borne by the employer may be found in Reliance Insur. Co. v. Watts, 16 Md.App. 71, 293 A.2d 836 (1972). In that case a claimant who had had his left leg amputated following an automobile accident which occurred prior to his employment, suffered injuries during the course of his employment resulting in the loss of his other leg, the combined effects of which left him with a permanent total disability. Under the statute the employer was required to pay only for the loss of one leg under the specific schedule of benefits in § 36(3), as if that were the full extent of the injury, while the Fund was liable for the remainder of benefits payable under § 36(1) to which the claimant was entitled as a totally disabled person. Id. at 75-76, 293 A.2d at 838-39. Consequently the employer was not penalized for hiring a worker with a preexisting impairment.

Nonetheless, under the Mayland statute the Fund makes no contribution where the subsequent injury alone is of such severity that it accounts for the total permanent disability apart from any contribution by the previous impairment, because in such a case the injury is not 'substantially greater by reason of the combined effects of the impairment and subsequent injury than that which would have resulted from the subsequent injury alone . . ..' § 66(1). ⁴ As explained by Professor Larson in his treatise on workmen's compensation law:

'If the second injury alone, say the loss of both legs, would call for total permanent disability benefits, and if the claimant had a preexisting impairment such as blindness in one eye, plainly the different between the compensation payable for the second injury and that payable for the combined injuries is zero, and the Fund incurs no liability.' 2 A. Larson, supra, § 59.34 at 10-333 to -334. See generally Subsequent Injuries Fund v. Industrial Accident Comm'n, 44 Cal.2d 604, 283 P.2d 1039, 1040 n. 1 (1955); Tuomela v. Reserve Mining Co., 299 Minn. 203, 216 N.W.2d 638 (1974) (per curiam); Andersen v. New York Hospital, ...