Stonebraker v. Director, Office of Workers' Compensation Programs, BRB 92-0478 BLA
| Decision Date | 26 June 1995 |
| Docket Number | BRB 92-0478 BLA |
| Court | Court of Appeals of Black Lung Complaints |
| Parties | JOSEPH STONEBRAKER Claimant-Petitioner v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR Respondent |
UNPUBLISHED OPINION
Appeal of the Decision and Order of Thomas M. Burke, Administrative Law Judge, United States Department of Labor.
Donald J. McCue (McCue & Husband), Connellsville, Pennsylvania, for claimant.
Edward Waldman (Thomas S. Williamson, Jr., Solicitor of Labor Donald S. Shire, Associate Solicitor; Rae Ellen Frank James Deputy Associate Solicitor; Richard A. Seid and Michael J Rutledge, Counsel for Administrative Litigation and Legal Advice), Washington, D.C., for the Director, Office of Workers' Compensation Programs, the United States Department of Labor.
Before: HALL, Chief Administrative Appeals Judge, SMITH and DOLDER, Administrative Appeals Judges.
DECISION and ORDER.
Claimant[1]appeals the Decision and Order (90-BLO-0190) of Administrative Law Judge Thomas M Burke denying waiver of the recovery of an overpayment of benefits on a claim filed pursuant to the provisions of Title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended, 30 U.S.C. §901 et seq. (the Act). The administrative law judge found pursuant to stipulation that from November 19, 1979, through December 1980, claimant received benefits both from the Black Lung Disability Trust Fund (Trust Fund) and under a state workers' compensation award. Applying the regulations at 20 C.F.R. Part 725, the administrative law judge concluded that claimant had received an overpayment of $5, 353.70, [2]which was later reduced to $2, 119.20 when employer paid part of claimant's reinstated federal black lung benefits directly to the Department of Labor (DOL). In making this finding, the administrative law judge rejected claimant's contention that the overpayment was completely offset by the $6, 481.80 in attorney's fees that he incurred in securing his state benefits.
The administrative law judge found that claimant could not be "considered to be without fault" in creating the overpayment, because he knew or should have known that some of his federal benefits were duplicative. Decision and Order at 3-4. Assuming arguendo that claimant was without fault, the administrative law judge found that claimant failed to establish that recovery of the overpayment would either defeat the purpose of the Act or be against equity and good conscience. Accordingly, he denied waiver of the recovery of the overpayment.
On appeal, claimant challenges the administrative law judge's finding that his state attorney's fee does not completely offset the overpayment, asserting that the amount of the attorney's fee excluded from the offset calculation is incorrect and that he is entitled to the funds that employer paid directly to DOL. The Director, Office of Workers' Compensation Programs (the Director), responds, urging affirmance. Employer has not participated in this appeal.[3]
The Board's scope of review is defined by statute. The administrative law judge's Decision and Order must be affirmed if it is supported by substantial evidence, is rational, and is in accordance with law. 33 U.S.C. § 921(b)(3), as incorporated by 30 U.S.C. § 932(a); O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965).
The deputy commissioner initially determined that claimant was entitled to benefits and notified him that he was being paid interim benefits from the Trust Fund. Director's Exhibits 3, 4. Claimant was also informed that he had to notify DOL immediately of "any award" of benefits from any other state or federal agency. Director's Exhibit 4. DOL paid claimant a lump sum to cover the period from August 1979 through February 1980 and commenced monthly benefits of $381.00 in March 1980. Director's Exhibit 4. However, on May 1, 1980, employer accepted responsibility for the payment of benefits, paid claimant a lump sum to cover the period from August 1979 through April 1980, and began paying monthly benefits of $381.00. Director's Exhibit 6. DOL stopped paying benefits to claimant in December 1980. Director's Exhibit 11.
On January 22, 1982, claimant was awarded state benefits based on his partial disability due to pneumoconiosis. Director's Exhibit 9. The state award required employer to pay claimant $207.75 per week, effective November 19, 1979, for 500 weeks, deducting twenty percent of each payment for the first three years to be paid directly to claimant's attorney. Director's Exhibit 9 at 4. Employer suspended the payment of federal benefits, paid claimant a lump sum for state benefits retroactive to November 19, 1979, deducted the amount of the federal benefits that it paid to claimant from November 19, 1979 through January 1982, and commenced bi-weekly payments of state benefits. Director's Exhibit 18 at 2.
Thereafter, DOL notified claimant that an overpayment of $5, 844.45 had occurred as a result of his receipt of both federal and state benefits from November 19, 1979 through December 1980. Director's Exhibit 11. Claimant agreed, but contended that the overpayment was completely offset by the attorney's fee that he incurred in obtaining the state award. Director's Exhibit 12 at 1.
When his state award expired in June 1989, claimant requested reinstatement of his federal benefits. Director's Exhibits 16-18. In response, DOL again informed claimant that he had incurred an overpayment of $5, 353.70 by receiving both federal and state benefits from November 19, 1979 through December 1980. Director's Exhibit 19. Claimant responded that he repaid the full amount of the overpayment when employer deducted from the initial payment of his state award the amount of federal benefits that it paid to him from November 19, 1979, through January 1982. Director's Exhibit 22 at 1, 4. DOL replied that while claimant repaid the duplicate payment owed to employer, he had not reimbursed DOL for the federal benefits the Trust Fund paid to him from November 19, 1979 through December 1980, during which time he also received state benefits. Director's Exhibit 23 at 1.
On January 11, 1990, DOL ordered employer to resume payment of claimant's federal benefits retroactive to June 19, 1989, but requested that employer pay directly to DOL the retroactive portion of the resumed benefits, a lump sum of $3, 234.50 representing the amount due claimant from June 19, 1989 through December 1989. Director's Exhibits 25 at 3, 26; see Section 725.546. Employer's payment of $3, 234.50 reduced the outstanding overpayment to $2, 119.20. Director's Exhibit 28.
Claimant's main contention on appeal is that the attorney's fee incurred in obtaining his state award completely offsets the overpayment and thus he owes DOL nothing. Claimant's Brief at 2. Claimant compares his $6, 481.80 state attorney's fee with the $5, 353.70 overpayment and concludes that since the attorney's fee is greater, it cancels the overpayment. See Claimant's Brief at 2. We disagree. As the Director correctly asserts, the administrative law judge properly deducted claimant's attorney's fee to arrive at the $5, 353.70 overpayment figure. Director's Brief at 9-10.
Where the state award provides a method for paying legal fees, the Director uses that method for calculating the exclusion of legal fees from offset. Coal Mine (BLBA) Procedure Manual, Chapter 2-1403, ¶ 11(c); Director, OWCP v. Barnes and Tucker Co. [Molnar], 969 F.2d 1524, 1526, 16 BLR 2-99, 2-102 (3d Cir. 1992). Here, the state award provided that employer was to deduct twenty percent from each of claimant's weekly checks for the first three years. Director's Exhibit 9 at 4. The administrative law judge applied this "pro-rata" method and correctly determined that the net monthly amount of the state award to be offset against the federal award was $720.00.[4] Decision and Order at 3. Because the net monthly state benefit exceeded the $381.00 federal award, the administrative law judge found that the federal award was totally offset and must be repaid. Id. Inasmuch as the administrative law judge accurately applied the correct calculation method, we affirm his finding.[5]
Claimant also contends that, by obtaining state benefits, he saved DOL thousands of dollars in federal benefits. Claimant's Brief at 2. Thus, he argues, "Third Party Beneficiary Theory and Principals [sic] of Equity overwhelmingly suggest that the Claimant should not be penalized for creating a benefit to the Department." Id. We reject claimant's argument.
Section 725.533 specifically provides that a reduction in the amount of benefits paid monthly shall be made on account of any benefits received under a state workers' compensation law. 20 C.F.R. §725.533(a)(1); Carbon Fuel Co. v. Director, OWCP [Kyle], 20 F.3d 120, 18 BLR 2-228 (4th Cir. 1994). Claimant was informed that he had to notify DOL if he received additional benefits, Director's Exhibit 4, and he admitted that he received both federal and state benefits for the relevant time period, Claimant's Brief at 2, which created the overpayment in the first place. See Sections 725.540; 725.535(b). Thus, the issue is not the amount that claimant may have saved DOL by obtaining state benefits, but rather, the amount that he cost DOL by receiving benefits from the Trust Fund for the same time period also covered by his state benefits.
Claimant further asserts that the administrative law judge erred in concluding that only $96.10 of claimant's attorney's fee is...
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