Cartersville Ready Mix Co. v. Hamby, A96A0951

• Decision Date: 05 December 1996
• Docket Number: No. A96A0951,A96A0951
• Parties: , 96 FCDR 4320 CARTERSVILLE READY MIX COMPANY et al. v. HAMBY.
• Court: Georgia Court of Appeals

Page 767

479 S.E.2d 767

224 Ga.App. 116, 96 FCDR 4320

CARTERSVILLE READY MIX COMPANY et al. v. HAMBY.

No. A96A0951.

Court of Appeals of Georgia.

Dec. 5, 1996.

Reconsideration Denied Dec. 20, 1996.

Certiorari Denied May 2, 1997.

Savell & Williams, Tash J. Van Dora, Grant G. Morain, Atlanta, for Appellants.

James E. Greene, Cartersville, for Appellee.

SMITH, Judge.

Terry Hamby filed a claim for workers' compensation, contending he sustained a back injury at work. Although his employer, Cartersville Ready Mix Company, knew or suspected within a short time after Hamby's injury that it was not job-related, the employer did not controvert the claim within 21 days after learning of the injury. Instead, after a number of weeks it voluntarily commenced payment of workers' compensation benefits, paying a lump sum for five weeks but paying no penalty. Subsequently, although it had filed no penalty, the employer filed a notice to controvert payment pursuant to OCGA § 34-9-221(h) within 60 days of the date first payment of compensation was due. In conjunction with the notice to controvert, the employer also suspended payments on the basis that the injury did not arise out of and in the course of employment. At the hearing before the trial division of the State Board of Workers' Compensation, Hamby sought payment of the suspended benefits through the date he returned to work, along with benefits for a ten percent permanent partial disability resulting from the back injury. He argued that these benefits were due because the employer had not paid an increased benefit in the amount of $160 pursuant to OCGA § 34-9-221(e), and that under Southeastern Aluminum Recycling v. Rayburn, 172 Ga.App. 648, 324 S.E.2d 194 (1984), the employer was not entitled to file a notice to controvert payments under OCGA § 34-9-221(h) before paying the increased benefit. He also contended the back injury arose out of and in the course of his employment.

The administrative law judge (ALJ) denied Hamby's claim concluding that: (1) the employer's failure to pay the penalty due under OCGA § 34-9-221(e) did not prevent the employer from controverting payment, but subjected the employer to imposition of further attorney fee sanctions under OCGA § 34-9-108(b)(2); and (2) the credible evidence showed the injury at issue did not arise out of and in the course of Hamby's employment. The appellate division of the Board adopted the ALJ's decision.

On further appeal, the superior court reversed the appellate division. The superior court reasoned that because the employer failed to pay the increased amount due under OCGA § 34-9-221(e) prior to filing the notice to controvert pursuant to OCGA § 34-9-221(h), the notice to controvert was invalid under Rayburn, supra, and the employer had no right to controvert payment. The superior court therefore concluded that because the claim was not validly controverted, Hamby was entitled to the compensation he sought regardless of whether the injury arose out of and in the course of his employment. We granted the application for a discretionary appeal filed by the employer. Upon further review, we conclude that the decision of the superior court was correct, and we affirm.

1. The contention of the employer, Cartersville Ready Mix Company, that no evidence was presented showing that the penalty owed was not paid, is belied by the record.

2. Cartersville Ready Mix contends the superior court erred in finding that the notice to controvert was invalid and in determining its effect. Under normal circumstances, if an employer wishes to controvert a claim for workers' compensation without paying benefits, a notice to controvert must be filed within 21 days after learning of the alleged compensable injury. OCGA § 34-9-221(d). If no change of condition or new evidence is involved, however, and if the employer voluntarily pays benefits without an award, the claim may be controverted within 60 days of the due date of the first payment of benefits. OCGA § 34-9-221(h). This provision affords an employer another opportunity to controvert a claim if the employer changes its mind about controverting a claim, provided that the employer also voluntarily pays compensation to the employee without an award. Clearly, the provisions of OCGA § 34-9-221 require that unless an employer quickly controverts payment pursuant to subsection (d), it must commence compensation payments without an award and continue to make all payments due under the statute until the employer controverts and suspends payments under subsection (h).

In Rayburn, supra, we found that "the legislative intent behind OCGA § 34-9-221 was to minimize the hardship on the injured worker by requiring the employer either to act quickly when it knows a claim is controvertible, so as to expedite final resolution of the matter, or to pay compensation while investigating the matter more closely." Id. at 649(1), 324 S.E.2d 194. Consistent with this view, we have also stated that subsection (h) of the statute "is clearly intended to provide some form of protection to the employee's right to continued receipt of the compensation." (Emphasis in original.) Carpet Transport, Inc. v. Pittman, 187 Ga.App. 463, 467, 370 S.E.2d 651 (1988).

This case turns on the question of what is included in the term "compensation." We held in Rayburn that the term "compensation" encompasses "all of the accrued income benefits ..., including penalties provided for any late payment." (Emphasis supplied.) Id. at 649(1), 324 S.E.2d 194. The amendment of the Workers' Compensation Act in 1994 offers no reason for modifying that holding. OCGA § 34-9-23 was added to the Act in 1994. It provides that the Act should "be liberally construed only for the purpose of bringing employers and employees within [its] provisions" and providing protection for both, and that its "provisions ... shall be construed and applied impartially to both employers and employees." OCGA § 34-9-23. Given the legislative purpose set forth in Rayburn, it is apparent that the legislature sought to minimize the hardship on the claiming employee and to require swift decisions from the employer regarding whether the claim will be controverted. Requiring both parties to comply with the procedure set forth in the Act satisfies the need for impartiality demanded in OCGA § 34-9-23 without sacrificing the legislative purpose set forth in Rayburn.

The solution proposed by the dissent, requiring resolution of the issue of whether a penalty is due, is unnecessary. Such a procedure would add a layer of litigation and delay to the proceedings, in order to determine an issue over which no dispute usually exists. In this case, for example, no question exists that Cartersville Ready Mix was late in beginning to pay benefits; under the clear language of OCGA § 34-9-221(e) an increased amount is therefore due the claimant. This issue needs no "resolution." The employer had only to comply with the statute by commencing voluntary payment of benefits on time or to pay the penalty--the increased benefit--to ensure that its notice to controvert would be valid. Moreover, the solution proposed by the dissent frustrates, rather than promotes, the legislative intent. It ensures that employers will routinely delay paying penalties, having no incentive to pay them promptly.

Relying upon Raines & Milam v. Milam, 161 Ga.App. 860, 862, 289 S.E.2d 785 (1982), Cartersville Ready Mix also argues that it should not be barred from defending the claim simply because it failed to pay the penalty due because other sanctions exist for its failure to comply with the statutory procedure, in the form of attorney fee sanctions under OCGA § 34-9-108(b). This argument is similarly without merit. As relevant to this case, Milam stands only for the proposition, unchanged by Rayburn, that failure to controvert within 21 days under OCGA § 34-9-221(d) is not an absolute bar for the employer; it has no bearing on the issue before us in this appeal. Milam is distinguished on its facts; it involved death benefits and is not analogous to this case. Moreover, in Milam, the employer did not controvert the claim until more than five months after the deaths, no compensation was paid without an award, and OCGA § 34-9-221(h) did not enter into the analysis.

OCGA § 34-9-23 requires even-handed treatment of both employer and claimant. We act even-handedly when we apply the Act as it is written. Just as the claimant must meet the statute's requirements in order to qualify for benefits, so must the employer adhere to the procedural requirements in order to controvert the claim. The clear language of the statute provides that employers who decide to controvert a claim after the first 21-day period must pay compensation without an award and controvert within 60 days of the date the first payment of benefits is due. The "penalty" at issue here is not a separate amount required of the employer; it is an increase in benefits to the claimant; it is "compensation." OCGA § 34-9-221(e); Rayburn, supra. Cartersville Ready Mix did not pay the required increased amount to this claimant even though it knew it had been late in paying benefits.

The language of OCGA § 34-9-221(h) is clear. Our interpretation of it was implicitly approved by the legislature; it did not change the wording of that subsection when enacting a comprehensive revision of the Act in 1994, after this Court's construction of the subsection was set forth in Rayburn. Because the employer did not follow the statute's clear mandate, its notice to controvert is invalid.

We note, finally, that we are constrained to ignore as irrelevant the indications in the record that Hamby did not in fact suffer a compensable injury. Had Cartersville Ready Mix followed the procedural requirements and paid all compensation due when it belatedly controverted Hamby's claim, that issue might properly have been decided in its favor. It did not do so,...