Sealy Furniture of Maryland v. Miller

• Decision Date: 10 November 1999
• Docket Number: No. 36,36
• Parties: SEALY FURNITURE OF MARYLAND, et al. v. Brenda MILLER.
• Court: Maryland Court of Appeals

740 A.2d 594

356 Md. 462

SEALY FURNITURE OF MARYLAND, et al. v. Brenda MILLER.

No. 36, Sept. Term, 1999.

Court of Appeals of Maryland.

November 10, 1999.

W. John Vernon (Lord & Whip, P.A., on brief), Baltimore, for petitioners.

Anne E. Hoke (Ingerman & Horwitz, on brief), Baltimore, for respondent.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, RAKER, WILNER, CATHELL, and THEODORE G. BLOOM (retired, specially assigned), JJ.

WILNER, Judge.

Apparently through oversight, an employer continued to make temporary total disability payments to a workers' compensation claimant after the employer became aware that the claimant had reached maximum medical improvement and was therefore no longer eligible for those payments. It sought to recover the overpayment through a credit against permanent partial disability benefits subsequently awarded to the claimant. This appeal presents the single issue of whether the Workers' Compensation Commission is authorized to order such a credit. We shall hold that it does not have that authority.

BACKGROUND

In April, 1989, respondent, Brenda Miller, filed a workers' compensation claim, alleging that her right hand had become swollen from pulling fabric while employed with petitioner, Sealy Furniture of Maryland. In an order entered a month later, the Workers' Compensation Commission found that Ms. Miller had sustained an accidental injury arising out of her employment and directed Sealy to pay temporary total disability benefits from and after January 12, 1989, the date of disablement.¹ In June, 1990, it was agreed that Ms. Miller was unable to continue her regular employment and the parties developed a vocational rehabilitation plan. On July 10, 1990, the Commission approved the stipulated rehabilitation plan and ordered Sealy to pay temporary total disability benefits of $273/week "during the continuance of claimant's period of vocational rehabilitation."²

After a number of unsuccessful attempts to obtain employment, Ms. Miller, with the consent of the rehabilitation counselor, decided to become a day care provider for children two years old or older. To that end, various modifications were made to her home, and she applied for a license from the Department of Human Resources. In June, 1994, she received what she claimed was a provisional license contingent upon completion of a fingerprint check by the Maryland State Police, a check that she said was not completed until some time in 1995. The record reveals, however, that in August, 1994, she received a certificate from the Department's Child Care Administration stating that she was registered to operate a family child care home to care for children from ages two to seven for a two-year period commencing August 30, 1994. Although the certificate was conditioned on continued compliance with applicable departmental regulations, it said nothing about any further State Police investigation. In any event, Ms. Miller never commenced a day care operation and never obtained other suitable employment. She said that she was unable to find children to watch.

On August 11, 1994, the parties were notified that vocational rehabilitation services had been terminated. On August 25, Sealy had Ms. Miller evaluated and concluded that she had reached maximum medical improvement. Nonetheless, for reasons which are unexplained in the record and were a mystery to Sealy's counsel, Sealy continued to pay temporary total disability benefits in the amount of $261/ week until February 1, 1995.³ On February 3, 1995, Sealy sent Ms. Miller a Termination of Temporary Total Disability notice, informing her that she had reached maximum medical improvement on August 25, 1994, and that temporary total disability payments would cease as of February 1. Issues were then filed regarding permanent partial disability.

In June, 1996, a hearing was held on those issues. In an order entered June 12, 1996, the Commission found that Ms. Miller had a permanent partial disability of 15% loss of use of the right hand. Sealy did not contest that finding but did request a credit for the temporary total disability payments made between August 25, 1994 and February 1, 1995—a total of $5,872 (22.5 weeks × $261). In its order awarding permanent partial disability benefits of $82.50/week for 37.5 weeks, a total of $3,093, the Commission allowed the credit sought by Sealy, the effect of which was to excuse any further payment.

Aggrieved by that result, Ms. Miller sought judicial review in the Circuit Court for Wicomico County. On the issue of whether the Commission was authorized to allow the credit, the court granted Sealy's motion for summary judgment. Trial was then held on the degree of disability, which the jury increased from 15% to 25%, thereby adding $2,062 to the award. Because of the credit, however, Ms. Miller would still have received no permanent partial disability benefits. The credit exceeded the total award by $716 (credit of $5,872 less total award of $5,156). Ms. Miller appealed to the Court of Special Appeals.

Citing its earlier decision in Montgomery County v. Lake, 68 Md.App. 269, 511 A.2d 541 (1986) and our decision in Philip Electronics v. Wright, 348 Md. 209, 703 A.2d 150 (1997), the Court of Special Appeals concluded that the Commission had no authority to set off an overpayment of one kind of award against benefits payable under a separate award and therefore reversed that part of the judgment of the circuit court. Miller v. Sealy, 125 Md. App. 178, 724 A.2d 743 (1999). We granted Sealy's petition for certiorari to address the question noted and shall affirm the ruling of the Court of Special Appeals.

DISCUSSION

In St. Paul Fire & Mar. Ins. v. Treadwell, 263 Md. 430, 283 A.2d 601 (1971), we held that when, as the law requires, an employer pays workers' compensation benefits in accordance with a Commission award pending judicial review of that award and the reviewing court later vacates the award, the employer is not entitled to reimbursement for the amount paid under the award. In light of the statutory provision precluding any stay of the Commission's award pending judicial review, we concluded that the Legislature must have foreseen the possibility that payments would be made to claimants whose awards were later reduced or vacated, and that it made no provision in the law for the recovery of those payments. Notwithstanding the "unjust enrichment" argument made by the employer, we discerned a legislative intent "to preclude `recovery back' upon any theory, except fraud perhaps." Id. at 439, 283 A.2d at 606. See also Hoffman v. Liberty Mutual, 232 Md. 51, 191 A.2d 575 (1963).

We confirmed that view more recently in Philip Electronics v. Wright, supra, 348 Md. 209, 703 A.2d 150. In that case, the reviewing court reduced, rather than vacated, the Commission award, which still had 53 weeks to run, and the question was whether the employer was entitled to credit against its new obligation for the entire amount it had paid to that point under the Commission's award or only a credit for the number of weeks for which the compensation had already been paid. Applying the principles enunciated in Treadwell, we opted for the latter, holding that "[t]he fair inference is that the General Assembly, having made no provision allowing an employer to offset payments made prior to the reduction of an award against subsequent, recalculated benefits, considered and rejected such a possibility." Id. at 223, 703 A.2d at 156. It is established, then, that when an overpayment arises from the payment of benefits pending judicial review, the employer is not entitled to recover any part of the overpayment, either directly from the employee or in the form of a credit against a continuing obligation to pay benefits. A major underpinning of that rule is the "no stay" provision of the statute.

There are, of course, a variety of other circumstances that also might lead to an overpayment of benefits, to which the "no stay" provision has no relevance. This is such a case, and there are others, some of which are noted by RICHARD P. GILBERT & ROBERT L. HUMPHREYS, JR., MARYLAND WORKERS' COMPENSATION HANDBOOK, § 7.14 (1988). At least...