Carpet Transport, Inc. v. Pittman, 76126

• Decision Date: 08 June 1988
• Docket Number: No. 76126,76126
• Citation: 370 S.E.2d 651,187 Ga.App. 463
• Parties: CARPET TRANSPORT, INC., et al. v. PITTMAN.
• Court: Georgia Court of Appeals

Page 651

370 S.E.2d 651

187 Ga.App. 463

CARPET TRANSPORT, INC., et al. v. PITTMAN.

No. 76126.

Court of Appeals of Georgia.

June 8, 1988.

James T. Fordham, R. Kevin Silvey, Dalton, for appellants.

Michael R. Eddings, Calhoun, for appellee.

CARLEY, Judge.

On January 24, 1986, appellee-employee injured his shoulder. The injury occurred while he was on the premises of appellant-employer Carpet Transport, Inc. The employee immediately reported to his supervisor that he had suffered a work-related injury and he was taken to a local hospital for treatment. The employee was thereafter afforded workers' compensation income benefits from the appellant-insurer on or before such benefits would otherwise have become payable pursuant to OCGA § 34-9-221(b). Income benefits were then suspended when, on February 17, 1986, the employee returned to work. In April of 1986, the employee was discharged from his employment for reasons having nothing to do with his injury.

Thereafter, the employee requested a hearing, asserting his entitlement to a resumption of income benefits based upon a change for the worse in his economic condition. The employer/insurer then filed notice that the claim for workers' compensation benefits would be controverted, on the ground that the employee's January 1986 injury had not arisen out of and in the course of his employment but had resulted from "horseplay" with a co-worker. The employer/insurer also asserted that the evidence which supported their notice to controvert on this ground was "newly discovered," because it had been brought to their attention only seven days previously.

In August of 1986, the administrative law judge (ALJ) conducted a hearing as to the issue of the employee's entitlement to a resumption of income benefits based upon his January 1986 injury. The ALJ entered an award wherein the following finding of fact was made: "The employer/insurer had paid the [employee's] medical bills and temporary total benefits and now contend that they have a right to controvert the claim based on newly discovered evidence. I find this contention to be groundless in that the supervisor of the [employee] knew all the facts and circumstances of the [employee's] injury on the date of the original injury (January 24, 1986). Therefore, the employer/insurer had ample opportunity to investigate the [employee's] claim." Having thus found that the employer's/insurer's notice to controvert was not based upon "newly discovered evidence," the ALJ proceeded to find that the employee had in fact suffered a worsening of his economic condition attributable to his on-the-job injury. Accordingly, the ALJ awarded the employee a resumption of income benefits based upon his January 1986 injury.

The employer/insurer appealed the award to the Full Board, which adopted the award of the ALJ. The employer/insurer appealed the award of the Full Board to the superior court, which affirmed the award. The employer/insurer then filed an application to this court for a discretionary appeal from the superior court's affirmance of the Full Board's award. This appeal results from our grant of the employer/insurer's application for a discretionary appeal.

1. The employer/insurer urge that the superior court should have reversed the employee's award on the ground that the Full Board had erroneously failed to consider the merits of their notice to controvert.

OCGA § 34-9-221 contemplates three different time periods within which an employer/insurer can file a notice to controvert liability for workers' compensation benefits. Subsection (d) of OCGA § 34-9-221 provides that the employer's/insurer's initial notice to controvert is to be filed "on or before the twenty-first day after knowledge of the alleged injury or death...." However, this provision is clearly inapplicable in the case at bar, because the employer/insurer did not file such a timely initial notice to controvert liability but, instead, voluntarily initiated payment of benefits to the employee without an award. When, as in the present case, the payment of benefits has already been initiated without an award, it is not subsection (d) but subsection (h) of OCGA § 34-9-221 that is the applicable provision. Within that single provision, two different time periods for the employer/insurer to controvert are established. "Where compensation is being paid without an award, the right to compensation shall not be controverted except upon the grounds of change in condition or newly discovered evidence unless notice to controvert is filed with the board within 60 days of the due date of first payment of compensation." OCGA § 34-9-221(h). Thus, notwithstanding subsection (d) of OCGA § 34-9-221, the employer/insurer is nevertheless entitled to controvert, for any reason, if the notice is filed within 60 days of the due date of the first voluntary payment of compensation. However, this portion of OCGA § 34-9-221(h) is also inapplicable in the case at bar, because the employer/insurer did not file a timely notice to controvert within 60 days of the due date of their first voluntary payment of compensation to the employee. What is the applicable provision here is that portion of OCGA § 34-9-221(h) which provides that, after the passage of 60 days from the due date of the first payment of compensation made without an award, the employer/insurer "shall not" controvert liability "except upon the grounds of change in condition or newly discovered evidence...." In the present case, the ALJ found that the employer's/insurer's evidence as to their lack of liability was not "newly discovered" and that they had, therefore, shown no right to have consideration given to the merits of their notice to controvert the employee's claim. It is this finding that the employer/insurer urge was erroneously affirmed by the superior court.

There is authority for the employer's/insurer's proposition that, notwithstanding the literal language of the applicable portion of OCGA § 34-9-221(h), a viable notice to controvert liability based upon any and all grounds can be filed more than 60 days from the date that the first voluntary payment of compensation was made to an employee. "We are of the opinion that an interpretation of subsection (h) of [OCGA § 34-9-221] as a statute of limitation ... is inconsistent with the statutory scheme of OCGA § 34-9-221 as interpreted by this court. We hold, therefore, that subsection (h) is [not] a statute of limitation.... [U]nder the interpretation [of OCGA § 34-9-221(h) as establishing a 60-day statute of limitation, the employer/insurer would be] required to pay a claim which [might] be without merit solely because [they were] several days late in filing a notice to controvert. We find that inequity to be squarely within the abhorrence of penalties and forfeitures...." Cagle's, Inc. v. Kitchens, 172 Ga.App. 698, 699-700 324 S.E.2d 550 (1984). There is, however, also authority for the contrary proposition that the applicable portion of OCGA § 34-9-221(h) does, in effect, establish a 60-day statute of limitation, the running of which will serve to preclude the employer/insurer from filing a notice to controvert except on the limited grounds of change of condition or newly discovered evidence. See Spiva v. Union County, 172 Ga.App. 151, 322 S.E.2d 351 (1984). "These cases simply cannot be read consistently. The court in Spiva [v. Union County, supra,] went to considerable lengths to find 'newly discovered evidence' in order to comply with the provisions of subsection (h) [of OCGA § 34-9-221].... In [Cagle's, Inc. v.] Kitchens, [supra,] the Court readily acknowledged that there was no newly discovered evidence in the case nor was there any change in condition so [the Cagle's, Inc. decision] dispensed with subsection (h) altogether." Hiers & Potter, Ga. Workers' Compensation-Law & Practice, § 20-5, p. 93 (1986 Supp.). Accordingly, the issue which we must now decide is whether Cagle's, Inc. is correct and OCGA § 34-9-221(h) should be dispensed with or whether Spiva is correct and that statutory provision does effectively create a 60-day statute of limitation whereby, except on the limited grounds of change of condition or newly discovered evidence, the employer/insurer cannot controvert liability as to any injury for which benefits have already been voluntarily paid.

The interpretation given to subsection (h) of OCGA § 34-9-221 in Cagle's, Inc. v. Kitchens, supra, was based upon the interpretation which was given to subsection (d) of that statute in Raines & Milam v. Milam, 161 Ga.App. 860, 862, 289 S.E.2d 785 (1982): "We agree ... that the word 'shall' in [OCGA § 34-9-221(d) ] makes it mandatory that such notice [to controvert] be filed. We do not agree, however, that failure to file such notice within 21 days act as an estoppel preventing an employer and insurer from controverting a claim for compensation. The General Assembly has provided other sanctions against the failure to so file in [OCGA § 34-9-108(b)(2) ]." Although the provisions are similar, it is clear that subsection (d) and subsection (h) of OCGA § 34-9-221 are intended to accomplish different goals. Subsection (d) addresses the right of the employer/insurer to file an initial notice to controvert, shortly after the allegedly compensable injury has occurred. The intent is obviously to encourage a prompt investigation by the employer/insurer and an expeditious determination on their part as to whether or not to undertake the voluntary payment of benefits. Thus, those employers/insurers who are being asked to pay invalid claims can controvert and thereby avoid being subjected to an unwarranted financial exposure, whereas those employees who do have valid claims will not experience an unwarranted delay in their receipt of compensation. There is, however, nothing within the actual language of OCGA § 34-9-221(d) itself which would indicate a legislative intent that the employer's/insurer's act of...