Henrico v. Taylor

• Decision Date: 23 January 2001
• Docket Number: Record No. 1214-00-2.
• Citation: 34 Va. App. 233,540 S.E.2d 501
• Parties: HENRICO (COUNTY OF) PUBLIC UTILITIES v. Susan Marice TAYLOR.
• Court: Virginia Court of Appeals

540 S.E.2d 501

34 Va. App. 233

HENRICO (COUNTY OF) PUBLIC UTILITIES v. Susan Marice TAYLOR.

Record No. 1214-00-2.

Court of Appeals of Virginia, Richmond.

January 23, 2001.

Ralph L. Whitt, Jr. (John T. Cornett, Jr.; Williams, Lynch & Whitt, on briefs), Richmond, for appellant.

B. Mayes Marks, Jr. (Marks and Williams, P.C., on brief), Hopewell, for appellee.

Present: ELDER, ANNUNZIATA, JJ., and COLEMAN, Senior Judge.¹

ELDER, Judge.

In this appeal from an order of the Workers' Compensation Commission (the commission) awarding Susan Taylor disability benefits, the Henrico County Department of Public Utilities (the County) asserts that the commission erred by 1) finding that a de facto award of benefits existed between March 20 and September 14, 1996; and 2) holding that Taylor's January 13, 1998 supplemental change in condition application related back to her May 14, 1997 application. We hold that, pursuant to our decision in National Linen Service v. McGuinn, 5 Va. App. 265, 362 S.E.2d 187 (1987) (en banc), the commission had the authority to determine that a de facto award of benefits existed. We also hold that the County's procedural due process rights were not violated when the commission ruled that Taylor's January 13 filing related back to her May 14 application. Accordingly, we affirm the award of the commission.

Background

Taylor sustained a compensable injury to her back and leg on January 7, 1993. On July 21, 1995, the commission entered an award approving the memorandum of agreement filed by the County providing for payment of temporary total benefits to Taylor through May 14, 1995. Taylor returned to work, but the County terminated her employment on March 19, 1996, after she was unable to perform her pre-injury duties. The County then voluntarily paid Taylor the equivalent of her temporary total disability award from March 20 through September 14, 1996. The County unilaterally ceased making payments to Taylor effective September 15, 1996.

On May 14, 1997, Taylor notified the commission of the County's voluntary payments to her. She also requested "ongoing temporary partial compensation benefits." Two days prior to her January 15, 1998 hearing before the deputy commissioner, Taylor notified the commission that, while she was seeking temporary partial disability benefits beginning September 26, 1996, she would be seeking temporary total disability benefits effective on or about October 4, 1996 and continuing to the present.

The employer defended the claim on the ground that Taylor was barred from claiming additional benefits by the two-year statute of limitations established by Code § 65.2-708.²

The deputy found that a de facto award of benefits existed from March 20 through September 14, 1996. Although finding that the January 13, 1998 claim did not relate back to the May 14, 1997 filing, the deputy nevertheless concluded that Taylor's 1998 claim complied with the statute of limitations because it was filed within two years of the last payment made pursuant to the de facto award. The deputy awarded Taylor temporary total disability benefits effective October 16, 1997.³ On appeal, the full commission affirmed the deputy's finding of a de facto award. The majority opinion concluded, however, that they did not need to address whether the finding of the de facto award prevented the County from asserting a statute of limitations defense "because the May 14, 1997, Claim was filed within two years of [the] date compensation was last paid under the most recent, de jure, award. The January 13, 1998, Claim would be within two years of any compensation awarded pursuant to the May 14, 1997, Claim, and thus timely."

In ultimately concluding that Taylor was entitled to temporary total disability benefits effective February 14, 1997, the commission found that Taylor's 1998 filing amended and related back to the 1997 application. Based on correspondence from the County in July and September 1997, the commission found the County knew Taylor was pursuing a claim for temporary total disability benefits well before the January 13, 1998 filing. The commissioners found no evidence that the County was prejudiced by the amendment.

Existence of a De Facto Award

Code § 65.2-701 provides as follows:

A. If after injury or death, the employer and the injured employee or his dependents reach an agreement in regard to compensation or in compromise of a claim for compensation under this title, a memorandum of the agreement in the form prescribed by the Commission shall be filed with the Commission for approval. The agreement may be prepared by the employee, the employer or the compensation carrier. If approved, the agreement shall be binding, and an award of compensation entered upon such agreement shall be for all purposes enforceable as provided by § 65.2-710....

B. An employer or insurance carrier which fails to file a memorandum of such agreement with the Commission within fourteen calendar days of the date of its complete written execution as indicated thereon may be subject to a fine not to exceed $1,000 and to any other appropriate sanctions of the Commission.

C. Nothing herein contained shall be construed so as to prevent settlements made by and between the employee and employer, but rather to encourage them, so long as the amount of compensation and the time and manner of payment are approved by the Commission. A copy of such settlement agreement shall be filed with the Commission by the employer.

In McGuinn, we addressed the consequences of an employer's failure to submit a memorandum of agreement to the commission where the employer voluntarily paid disability benefits to the claimant. After the claimant injured his ankle at work, the employer voluntarily paid him total disability benefits for a period of thirteen months. The employer did not, however, submit a memorandum of agreement to the commission. After the employer ceased paying benefits, the claimant filed an application for hearing seeking continued benefits. The employer defended on the ground that the claimant had failed to market his residual capacity. See McGuinn, 5 Va.App. at 267-68, 362 S.E.2d at 188.

In allocating the burden of proof, we noted that, had the employer filed the memorandum of agreement with the commission, the employer would have shouldered the burden of proving that the claimant was not entitled benefits. We concluded that Code §§ 65.1-45 and 65.1-93 required the employer to submit a memorandum of agreement to the commission when it voluntarily decided to compensate the claimant for his injuries.⁴ See McGuinn, 5 Va.App. at 270, 362 S.E.2d at 189-90. We further held that a de facto award of disability benefits arose when the employer paid the claimant benefits for thirteen months without filing the memorandum of agreement with the commission. See id. at 269-70, 362 S.E.2d at 189.

The County seeks to limit our holding in McGuinn to initial claims for benefits. The County reasons that changes of condition are governed by Code § 65.2-708, while McGuinn was decided under what is now Code § 65.2-701. We do not, however, view this distinction as diapositive. Whether an agreement between the parties pertains to an initial award or a supplemental award following a change of condition, the employer is still obligated to file a memorandum of agreement with the commission. Code § 65.2-701 refers to agreements reached "after injury" and does not expressly state or imply that the employer's obligation to file memoranda of agreement is limited to the initial award. See Commission Rule 4 ("All agreements as to payment of compensation shall be reduced to writing by the employer and promptly filed with the Commission." (Emphasis added)).

We are not persuaded by the County's suggestion that a de facto award is precluded because the claimant has the responsibility for applying for a change of condition that is favorable to her. Code § 65.2-708 does not require a claimant to file an application for change of condition if she can reach a satisfactory agreement with her employer regarding her entitlement to continuing disability benefits. Taylor was not required to file a change of condition application in March 1996 because the County voluntarily paid the equivalent of temporary total disability benefits to her. Having evidently conceded that Taylor was entitled to these benefits, it was the County's responsibility to file a supplemental memorandum of agreement with the commission.

The County asserts that, by finding a de facto award, the commission, in effect, overruled this Court's decisions in Niblett v. Piedmont Aviation, Inc., 12 Va.App. 652, 405 S.E.2d 635 (1991), and Sparrer v. Commonwealth, 9 Va.App. 251, 385 S.E.2d 908 (1989). The County also challenges the commission's authority to find a de facto award in the absence of a showing of fraud or deceit by the employer.

In Niblett, after receiving benefits pursuant to a de jure award, the claimant went back to work. When the claimant's injuries flared up again and she was unable to work, the employer voluntarily began making disability payments to her. The employer submitted a proposed supplemental memorandum of agreement to the claimant, but she refused to sign it. Thereafter, the claimant filed an application seeking to have the commission compel the employer to continue making the disability payments that it had been making until approximately seven months before the date of the application. The application was filed nearly four years after the last disability payment made pursuant to the de jure award. The commission held that, although a mistake of fact existed regarding whether an open award existed when the employer ceased its voluntary payments, the claimant was barred from pursuing her claim because it was filed outside the statute of limitations period. See Niblett, 12 Va.App. at 654, 405 S.E.2d at 637.

We rejected the claimant's assertion that mutual mistake of fact...