Schiano v. Bliss Exterminating Co.

• Decision Date: 09 April 2002
• Docket Number: (SC 16540)
• Citation: 792 A.2d 835,260 Conn. 21
• Parties: JAMES SCHIANO v. BLISS EXTERMINATING COMPANY ET AL.
• Court: Connecticut Supreme Court

260 Conn. 21

792 A.2d 835

JAMES SCHIANO v. BLISS EXTERMINATING COMPANY ET AL.

(SC 16540)

Supreme Court of Connecticut.

Argued January 9, 2002.

Officially released April 9, 2002.

Sullivan C. J., and Borden, Katz, Palmer and Vertefeuille, Js. Karla A. Turekian, assistant attorney general, with whom were Richard R. Hine, assistant attorney general, and, on the brief, Richard Blumenthal, attorney general, and William J. McCullough, assistant attorney general, for the appellant-appellee (defendant second injury fund).

Richard G. Kascak, Jr., with whom, on the brief, was Serge G. Mihaly, for the appellee-appellant (plaintiff).

Opinion

KATZ, J.

The principal issue in this appeal is whether the defendant second injury fund (fund) may be assessed a penalty, pursuant to General Statutes § 31-303¹ of the Workers' Compensation Act (act), on attorney's fees it paid after the prescribed time limitation for "[p]ayments due under an award," when the fees were included in an award pursuant to General Statutes § 31-300.² The fund appeals³ from the decision of the compensation review board (review board) that reversed the decision of the workers' compensation commissioner for the fourth district (commissioner), which had denied the claim of the plaintiff, James Schiano, for an assessment of a 20 percent penalty against the fund on its late payment of attorney's fees. We conclude that the phrase "payments due under an award" within the meaning of § 31-303 does not encompass attorney's fees included in an award. Accordingly, we hold that such fees are not subject to a penalty as a late payment under that section. We therefore reverse the decision of the review board.

The record reveals the following undisputed facts and procedural history. On February 25, 1986, the plaintiff sustained an injury to his lower back in an accident that occurred during the course of his employment with the defendant Bliss Exterminating Company (company). Thereafter, the plaintiff and the company entered into a voluntary agreement establishing a base compensation rate for the plaintiff's disability and a dependency allowance, which the commissioner approved on June 6, 1986. On August 12, 1988, liability was transferred from the company's insurer, Aetna Life and Casualty Company, to the fund, pursuant to General Statutes § 31-349. On April 13, 1989, the commissioner approved a second voluntary agreement that established that the plaintiff had a 50 percent permanent partial disability of his back, which entitled him to 260 weeks of compensation at the same base rate as the prior agreement. The agreement further established that specific payments⁴ would commence on February 21, 1989. In April, 1989, the commissioner issued two separate orders of commutation of thirty weeks of compensation, accordingly reducing the plaintiff's entitlement to 200 weeks. See General Statutes § 31-302. During 1989, the plaintiff worked periodically at other jobs, but was unable to continue after September of that year because of severe pain, and thereafter was bedridden for nine weeks. The plaintiff then made a request for additional compensation, pursuant to General Statutes § 31-315, after an authorized treating physician determined that the plaintiff was totally disabled. On November 15, 1991, the commissioner issued findings and an award, concluding that, as of October 15, 1989, the plaintiff had become totally disabled as a result of his prior, compensable injury and that he was entitled to temporary total disability benefits as of that date. The commissioner found that the fund had made specific payments to the plaintiff from January, 1990, until July 28, 1990. The commissioner further found, however, that the plaintiff had not received either specific payments or temporary total disability payments for the time period between February 21, 1989, the date on which specific payments were due to commence under the terms of the second voluntary agreement, and the January, 1990 payment.⁵

On February 7, 1992, the plaintiff received a check for $3286.70 from the fund. On February 23, 1992, the fund commenced making temporary total disability payments, along with appropriate cost of living increases and dependency allowances. In 1993, the plaintiff made a claim for the temporary total disability benefits he was owed from October, 1989, until February, 1992. After hearings on the matter, the commissioner issued his findings and award in September, 1993, which, in essence, reiterated what he had determined in November, 1991, namely, that the plaintiff was entitled to the payment of the benefits as of October, 1989.

In 1995, after still having failed to receive payment for those benefits, the plaintiff filed another request with the commissioner for an award of such payment, along with a claim, pursuant to § 31-303, for a 20 percent penalty on the award due to the late payments. See footnote 1 of this opinion. On April 8, 1996, the commissioner issued his findings and award, concluding that the plaintiff was owed temporary total disability payments in the amount of $53,859.29, dating back to October 15, 1989. He further found that the fund's failure to make the payments "was an undue delay in adjustments of compensation and [accordingly] the [plaintiff] is entitled to a reasonable attorney's fee in the amount of $25,000" pursuant to § 31-300. Finally, the commissioner awarded to the plaintiff the interest due on the award, but denied the plaintiff's request for the assessment of a 20 percent penalty on the award against the fund.

The fund appealed from the commissioner's decision to the review board, claiming, inter alia, that the commissioner had abused his discretion in ordering the fund to pay the attorney's fees and in not allowing the fund to submit endorsed checks as evidence that it had made certain payments to the plaintiff.⁶ The plaintiff filed a cross appeal challenging, inter alia, the commissioner's decision not to award the 20 percent penalty pursuant to § 31-303.⁷ One year later, the review board granted the plaintiff's motion to dismiss the fund's appeal due to its failure to prosecute with due diligence, and also awarded additional attorney's fees to the plaintiff. The plaintiff then withdrew his cross appeal. The fund thereafter made three separate payments to the plaintiff: one for the disability benefits; one for the interest owed on the award; and one for the attorney's fees. The plaintiff received the benefits and attorney's fees payments thirty-seven days after the statutory deadline; see footnote 1 of this opinion; and received the interest payment seventy-one days late. The plaintiff then filed a claim with the commissioner for a 20 percent penalty on the late payments pursuant to § 31-303.

At a hearing before the commissioner in January, 1999, the fund claimed that it was not subject to the penalty provision because it was not an "employer" within the meaning of § 31-303. In July, 1999, prior to the commissioner's decision on the plaintiff's penalty claim, this court issued its decision in Casey v. Northeast Utilities, 249 Conn. 365, 377, 731 A.2d 294 (1999), wherein we held "that § 31-303 imposes a time limitation upon the fund, as well as upon employers, for making payments pursuant to an award." Moreover, we concluded therein that, "[b]ecause the fund essentially stands in the shoes of the employer for purposes of payment of compensation benefits to the injured employee . . . the penalty provision of § 31-303 is equally applicable to the fund." Id. Shortly thereafter, upon notice from the plaintiff of our decision in Casey, the fund issued a check to the plaintiff for the full amount of the penalty. The plaintiff then sent a letter to the commissioner notifying him that the claim had been settled. On August 6, 1999, the same day that the plaintiff's letter was received at the commissioner's office, the commissioner issued his decision ordering that the fund pay a 20 percent late penalty on the $53,859.29 benefits award.⁸ The commissioner denied the plaintiff's request for a penalty on the attorney's fees, but ordered that interest be assessed on the fees at the statutory rate. The plaintiff subsequently filed motions to reargue and to vacate the August 6, 1999 decision on the ground that the commissioner had been notified prior to that decision that the claim had been settled. The commissioner denied both motions.

The plaintiff then filed a petition for review with the review board, claiming that the commissioner: (1) lacked jurisdiction to render his August, 1999 decision; and (2) improperly had determined that the plaintiff was not required, pursuant to § 31-303, to assess a 20 percent penalty against the fund for its late payment of the attorney's fees. The review board rejected the plaintiff's first claim, but agreed that the commissioner was required, pursuant to the statute, to assess the penalty on the attorney's fees. The review board determined that any late "[payment] due under an award," regardless of whether it was a payment of disability benefits or payment of attorney's fees, fell within the plain language of the penalty provision of § 31-303. Although the review board noted that it "would be surprised if the legislature truly intended to offer attorneys the protection of a 20 [percent] penalty," it nevertheless concluded that the commissioner was bound to assess the penalty on the attorney's fees because of the unambiguous statutory language and the legislative history of the bill adding the penalty to § 31-303. The fund then filed this appeal. The plaintiff filed a cross appeal, claiming that the review board improperly had determined that the commissioner had not abused his discretion by denying the plaintiff's motion to reargue and motion to vacate the August 6, 1999 decision.

I

Before considering the principal issue in this appeal, we first address the jurisdictional question raised in the plaintiff's cross...