Collins v. Department of Alcoholic Beverage Control, 1053-94-1

Citation21 Va.App. 671, 467 S.E.2d 279
Case DateFebruary 20, 1996
CourtCourt of Appeals of Virginia

Page 279

467 S.E.2d 279
21 Va.App. 671
Record No. 1053-94-1.
Court of Appeals of Virginia,
Feb. 20, 1996.
Rehearing En Banc Granted March 22, 1996.

Page 280

[21 Va.App. 673] From The Virginia Workers' Compensation Commission.

Karen M. Rye, Norfolk, for appellant.

W. Mark Dunn, Assistant Attorney General (James S. Gilmore, III, Attorney General; Gregory E. Lucyk, Senior Assistant Attorney General, on brief), for appellees.

Present: BAKER, BENTON, JJ., and HODGES, Senior Judge.

BAKER, Judge.

In this appeal from a decision of the Workers' Compensation Commission (commission), Donald F. Collins (claimant) contends that the commission erroneously permitted the Department of Alcohol Beverage Control and its insurance carrier (jointly referred to herein as employer) to recoup the overpayment of compensation benefits paid to claimant pursuant to an award. The commission found that because the calculation of claimant's average weekly wage had been based upon inaccurate information resulting in an erroneous award, "there has been a mutual mistake that entitled the employer to recoup the overpayment." Claimant asserts that the evidence does not support a finding of mutual mistake of fact and that Code §§ 65.2-708 and -712 prohibit retrospective recoupment of monies paid under an open award. For the reasons that follow, we affirm.

The material facts are not in dispute. Claimant sustained a compensable injury by accident on August 5, 1992, at which time his disability was accepted by employer as compensable. Initially, employer's insurance adjuster had difficulty obtaining a wage chart from employer. She requested that claimant [21 Va.App. 674] provide her with his last eight pay stubs to enable her to calculate his average weekly wage. The adjuster took this action in order to alleviate claimant's concerns that he would have no money to buy Christmas gifts or pay his bills.

Using the eight pay stubs as a basis, the adjuster calculated claimant's average weekly wage to be $534.24. If that sum were accurate, claimant would have been entitled to an award of $356.17 weekly benefits. The adjuster prepared a memorandum of agreement that was executed by the parties and presented to the commission for approval. The agreement certified that claimant's pre-injury average weekly wage was $534.24. On January 11, 1993, the commission entered an award approving the agreement. The award was not in accord with Code § 65.2-101 because it was based upon sums in excess of claimant's average weekly wage.

On February 23, 1993, employer forwarded to the adjuster a wage earning chart covering the period from July 1, 1991 to July 30, 1992. 1 That chart disclosed that claimant's average weekly wage was $210.64 instead of $534.24, which had been calculated from the eight pay stubs. Based upon an average weekly wage of $210, claimant's weekly compensation benefits should have been $140.43 instead of $356.17. Compensation has been paid through August 1, 1993 in an amount equal to the award.

Employer filed a form entitled "Application for Hearing" and requested that the award be vacated. Employer also sought permission to recoup its overpayments by off-setting credits against future benefits it would be required to pay claimant.

The foregoing evidence was presented to a deputy commissioner, who found as follows:

A review of the evidence leads us to conclude that the significant difference between the average weekly wage reflected on the Memorandum of Agreement and the actual [21 Va.App. 675] average weekly wage constitutes imposition. Furthermore, we find under these circumstances that the employer is entitled to a credit for overpayment made for excess compensation benefits and penalties in the amount of $8,629.60. There is no dispute concerning the claimant's average weekly wage at the time of the injury but rather only as to whether or not the Award should be adjusted

Page 281

and the credit granted. We find they should.

The commission affirmed the finding that employer was entitled to credit for the overpayment but based its conclusion on mutual mistake of fact, not imposition, and said:

The Commission clearly has authority to amend an average weekly wage which results from fraud, imposition or mutual mistake. In this case, there has been a mutual mistake as to the claimant's average weekly wage, and the employer is entitled to recoup the overpayment. The Opinion appealed from is AFFIRMED with the MODIFICATION that $60.00 per week shall be deducted until the overpayment is recovered.

As applicable to the case before us, "average weekly wage" means the total earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury, divided by fifty-two. John Driggs Co. v. Somers, 228 Va. 729, 732, 324 S.E.2d 694, 696 (1985); Code § 65.2-101(1)(a). If the average weekly wage is miscalculated and the employer voluntarily has paid the claimant sums that were not due, the employer may recoup the sums by credits or a shortened period of time for which compensation must be paid, subject to the approval of the commission. Code § 65.2-520. 2 Here, the claim had advanced to a stage beyond the [21 Va.App. 676] provisions of that code section. An award based upon an agreed memorandum had been made by the commission, and the overpayment was made pursuant to that award, not voluntarily.

Claimant argues that if employer's application for a hearing was based upon a change in condition pursuant to the provisions of Code § 65.2-708, he cannot recoup the overpayment made prior to filing his application, as relief granted pursuant to a change in condition may be prospective only. See Bristol Door & Lumber Co. v. Hinkle, 157 Va. 474, 161 S.E. 902 (1932). Employer contends that its application for a hearing was not premised upon Code § 65.2-708, but, instead, was based upon the doctrine of imposition established not by statute but rather by the courts. See Somers, 228 Va. at 735, 324 S.E.2d at 697; Harris v. Diamond Constr. Co., 184 Va. 711, 36 S.E.2d 573 (1946); Avon Prods, Inc. v. Ross, 14 Va.App. 1, 415 S.E.2d 225 (1992).

Claimant concedes that, in appropriate cases, the doctrine of imposition may be applied. Claimant argues, however, that the commission did not base its decision upon the doctrine of imposition but, instead, erroneously ordered recoupment based upon mutual mistake of fact. Claimant argues that the record does not support a finding of mutual mistake of fact and that the provisions of Code §§ 65.2-500, -707, and -712 do not permit retrospective credits for overpayment made pursuant to an award.

Employer asserts that these code sections do not bar recoupment. Employer concedes that if its application for a hearing were premised upon change in condition provided for by Code § 65.2-708, it could only recover prospectively. See Hinkle, 157 Va. 474, 161 S.E. 902. Employer argues, however, that it requested that the January 11, 1992 award be vacated upon principles of imposition. In support thereof, [21 Va.App. 677] employer contends that the deputy commissioner was correct in applying the doctrine of imposition and that neither Code §§ 65.2-500, -708, nor -712 bar its request. Employer also contends that nothing in Code §§ 65.2-500 or -712 prohibits an employer from recouping by credits or prohibits the use of the imposition principle.

Claimant concedes that employer is entitled to relief but contends that credits should be allowed only on overpayments made after employer's application for a hearing was filed; that is, prospectively. Claimant bases

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this contention upon the prohibitions contained in Code §§ 65.2-520, 3 -708, and -712.

Nothing in this record shows that employer's application for a hearing was based upon the change in condition provisions contained in Code § 65.2-708. That code section is not controlling. Of the statutes relied upon by claimant to limit the payments, only Code § 65.2-712 contains language that arguably is relevant. In pertinent part, that code section provides:

Any payment to a claimant by an employer or insurer which is later determined by the Commission to have been procured by the employee by fraud, misrepresentation, or failure to report any incarceration, return to employment or increase in earnings may be recovered from the claimant by the employer or insurer either by way of credit against future compensation payments due the claimant, or by action at law against the claimant.

We now turn to claimant's substantive argument that the commission is not authorized to order recoupment by credits against future payments for overpayment made pursuant to an award and prior to employer filing its application for hearing, whether by applying either Code § 65.2-712 or the doctrine of imposition.

"The general principle that statutes should be given a prospective rather than a retrospective construction has been [21 Va.App. 678] given statutory approval in Code § 1-16." Brushy Ridge Coal Co. v. Blevins, 6 Va.App. 73, 79, 367 S.E.2d 204, 207 (1988).

Retrospective laws are not favored, and a statute is always to be construed as operating prospectively, unless a contrary intent is manifest; but the legislature may, in its discretion, pass retrospective and curative laws provided they do not partake of the nature of what are technically called ex post facto laws, and do not impair the obligation of contracts, or disturb vested rights; and provided, further, they are of such nature as the legislature might have passed in the first instance to act prospectively.


We have been cited no authority, and have found none, that permits the commission to use the imposition doctrine to override the clear provisions of a workers' compensation statute. Claimant argues that except as provided in Code §§...

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