Sprayberry v. Commercial Union Ins. Co., 52529

• Decision Date: 22 November 1976
• Docket Number: Nos. 1,3,No. 52529,2,52529,s. 1
• Citation: 140 Ga.App. 758,232 S.E.2d 111
• Parties: R. K. SPRAYBERRY v. COMMERCIAL UNION INSURANCE COMPANY et al
• Court: Georgia Court of Appeals

Page 111

232 S.E.2d 111

140 Ga.App. 758

R. K. SPRAYBERRY v. COMMERCIAL UNION INSURANCE COMPANY et al.

No. 52529.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Nov. 22, 1976.

Rehearing Denied Dec. 15, 1976.

Brown, Harriss, Hartman & Ruskaup, Don L. Hartman, Rossville, for appellant.

Savell, Williams, Cox & Angel, John M. Williams, Cullen Hammond, Atlanta, for appellees.

MARSHALL, Judge.

The question presented in this workmen's compensation case is whether an insurer may receive credit for payments made to an injured employee pursuant to the laws of another state which state did not have jurisdiction to authorize such payments.

Claimant was injured while working as an employee of Steadman Heating and Air Conditioning Company. Steadman's place of business is in Georgia and it does most of its work in Georgia, but it has a Tennessee mailing address and does work in Tennessee. The claimant is a Georgia resident and the injury occurred in Chickamauga, Georgia, near the Tennessee state line. Claimant had worked for Steadman in Tennessee. Following his injury claimant was treated by physicians in Tennessee. Claimant began receiving weekly checks in the amount of $70.00 from Steadman's workmen's compensation insurer. The checks were sent pursuant to Tennessee's workmen's compensation laws (which benefits were less than claimant could have received under Georgia law). Claimant received and cashed these checks for nearly a year before he began to question the amount he was receiving. Just before the running of the one year limitation for filing a claim in Georgia, he retained counsel and made demand against the insurer, and, upon its being denied, filed a workmen's compensation claim under Georgia law. Claimant had received $3,570 in benefits up to that time.

The administrative law judge awarded the claimant full benefits under Georgia's workmen's compensation laws and denied the insurer's request for credit for the payments it had already made under Tennessee law. On appeal to the full board, the insurer was awarded credit for such payments. The board found that the payments were made in accordance with Tennessee law, were not gratuities, and were made in good faith; that the absence of jurisdiction in Tennessee was not known until the administrative law judge adjudicated that fact; that insurer was entitled to credit for monies already paid; and that insurer should not be assessed attorney fees for the reasons aforesaid. The superior court affirmed, and claimant appeals to this court.

Claimant contends that the board erred in finding that the insurer's payments were made 'in accordance with Tennessee law' and in finding they were made in 'good faith since it was not known that Tennessee did not have jurisdiction until the administrative law judge adjudicated that fact.' Claimant further contends that the payments made were gratuities because made without any agreement or approved award, and that claimant was entitled to attorney fees because of the bad faith shown by the insurer. Held:

1. The board's finding that the claimant received payments 'in accordance with Tennessee law' is supported by evidence in the record in the form of a stipulation made by claimant's counsel that claimant had been receiving payments of $70 per week under the provisions of Tennessee law. Such evidence is competent and is sufficient to support the board's finding. Code § 114-710. See Fox v. Hartford Accident & Indemnity Co., 130 Ga.App. 104(1), 202 S.E.2d 568.

2. The finding of the board that the payments were made 'in good faith' was made relative to the board's determination that claimant's attorney fees should not be assessed against the insurer. This finding is also supported by the record, for it is reasonable or at least arguable that Tennessee had jurisdiction over the claim. See Tenn.Code Ann. § 50-917 (which provides extraterritorial jurisdiction as to injuries occurring outside the state under certain circumstances). There is no evidence that the payments were made by the insurer to avoid paying the higher Georgia benefits, or to 'lull' claimant into letting the one year statute run. An award of attorney fees may not rest upon pure speculation and conjecture. Frith v. Liberty Mut. Ins. Co., 107 Ga.App. 285, 289, 129 S.E.2d 812. The issue contested by the insurer is not whether claimant is entitled to payments under Georgia law, but whether it is entitled to a credit for previous payments made. This issue is by no means a settled one. See division 3, infra. 'Attorney fees may not be awarded where the matter was closely contested on reasonable grounds. Gulf Life Ins. Co. v. Moore, 90 Ga.App. 791, 798, 84 S.E.2d 696.' Pacific Employers Inc. Co. v. Peck, 129 Ga.App. 439, 442, 200 S.E.2d 151, 154. Attorney fees were properly denied in this case.

3. The critical issue in this case is whether the claimant is entitled to keep those benefits paid him by the insurer under Tennessee law as gratuities, or whether the insurer is entitled to a credit for them. Claimant cites several cases which propound the general principle that payments made to an employee in the absence of an approved agreement or award are mere gratuities. Reliance Inc. Cos. v. Richardson, 137 Ga.App. 678(1),224 S.E.2d 812; Mason v. City of Atlanta, 124 Ga.App. 849(1), 186 S.E.2d 285. These cases, and others (See, e.g., Hartford Acc. & Ind. Co. v. Snyder, 126 Ga.App. 31(9), 189 S.E.2d 919; Thomas v. Lumbermen's Mut. Cas. Co., 57 Ga.App. 434, 195 S.E. 894; Attaway v. First Nat. Bank,49 Ga.App. 270, 175 S.E. 258) hold that payments made without an agreement or approved award do not toll the running of the one year statutory period within which a claim must be filed in Georgia. It is conceded that the payments made under the Tennessee statute in this case did not toll the running of the one-year filing period in Georgia, and had claimant not filed within that one-year period, the claim would have been barred. Code § 114-305. However, the question here is not whether the claim is barred by the statute, but whether the insurer is entitled to credit for payments made, where a claim is timely made. We believe that Code § 114-415 is authority for the board to allow such credit. It provides: 'Any payments made by the employer to the injured employee during the period of his disability, or to his dependents, which by the terms of this Title were not due and payable when made, may, subject to the approval of the State Board of Workmen's Compensation, be deducted from the amount to be paid as compensation: Provided, that in the case of disability such deductions shall be made by shortening the period during which compensation must be paid and not by reducing the amount of the weekly payments.' The allowance for such credit to the insurer is discretionary with the board. See Davis v. Cobb County, 106 Ga.App. 336(2), 126 S.E.2d 710; Dodgen v. St. Paul Fire & Marine Ins. Co., 138 Ga.App. 499, 227 S.E.2d 64; Harrison Co. v. Norton, 244 Miss. 752, 146 So.2d 327. This coce section does not limit the credit allowable to payments made to an employee only after an award has been made. See e.g., Davis v. Cobb County, 106 Ga.App. 336, 126 S.E.2d 710, supra. The statute clearly allows credit for payments made to an employee 'during the period of his disability,' whether made before or after an award. To disallow such credit would permit double recovery and would be an injustice to the insurer and the premium paying public. We do not foresee a danger of 'lulling' claimants beyond the one year period for filing, for such attempts by an insurer/employer would constitute fraud, and would toll the running of the statute. See Indemnity Ins. Co. v. O'Neal, 104 Ga.App. 305(2), 121 S.E.2d 689; Whelchel v. American, Etc., Inc. Co., 54 Ga.App. 511, 188 S.E. 357.

To reach the above conclusion, we cannot avoid overruling Reliance Ins. Cos. v. Richardson, 137 Ga.App. 678, 224 S.E.2d 812, supra. This case holds that in the absence of an approved agreement or award, payments made to an employee are mere gratuities, for which 'the board is not authorized' to give the employer/insurer credit. (Emphasis supplied.) See also dictum in Mason v. City of Atlanta, supra; Baggett Transportation Co. v. Barnes, 113 Ga.App. 58, 147 S.E.2d 372 and Hennessee v. Jennings, 48 Ga.App. 188(3), 172 S.E. 583. Those cases rely on the cases wherein the statute of limitation had run on the claim and the board was without authority to award compensation. E.g., Thomas v. Lumbermen's Mut., Etc., Co., 57 Ga.App. 434, 195 S.E. 894, supra; Attaway v. First Nat. Bank. 49 Ga.App. 270, 175 S.E. 258, supra. The language borrowed from those cases, that voluntary payments made by the employer/insurer prior to an award were mere gratuities and did not toll the running of the statute, really has no bearing on the question of the board's authority under Code § 114-415, to allow credits for voluntary payments where the claim is filed within the statutory period. For these reasons Reliance Ins. Cos. v. Richardson, 137 Ga.App. 678, 224 S.E.2d 812, supra, is overruled, and language in the order cases to the contrary is disapproved. Baggett Transportation Co. v. Barnes, 109 Ga.App. 98, 135 S.E.2d 343, supra, is distinguishable in that there this court held that the board 'did not err in failing to give the employer credit.' This is not a holding that the board was not authorized to give credit, as was stated in Reliance, supra.

Judgment affirmed.

BELL, C.J., DEEN, P.J., and CLARK, STOLZ, WEBB and SMITH, JJ., concur.

QUILLIAN, P.J., and McMURRAY, J., dissent.

McMURRAY, Judge, dissenting.

This case involves solely the question of whether payments received by the employee which were paid to him, not with the approval of the Georgia Board of Workmen's Compensation but as stipulated, under the provisionss of the Tennessee Workmen's Compensation Law, during some 10 months before the Georgia claim was filed, should be...