Subsequent Injury Fund v. Baker

• Decision Date: 11 October 1978
• Docket Number: No. 1008,1008
• Citation: 40 Md.App. 339,392 A.2d 94
• Parties: The SUBSEQUENT INJURY FUND v. Dorothy J. BAKER.
• Court: Court of Special Appeals of Maryland

Page 339

40 Md.App. 339

392 A.2d 94

The SUBSEQUENT INJURY FUND v. Dorothy J. BAKER.

No. 1008.

Court of Special Appeals of Maryland.

Oct. 11, 1978.

E. George Bendos, Asst. Atty. Gen., with whom was Francis Bill Burch, Atty. Gen., on brief, for appellant.

Joel H. Pachino, Baltimore, with whom were Friedman, Pachino & Friedman, Baltimore, on brief, for appellee.

Argued before THOMPSON, DAVIDSON and MASON, JJ.

MASON, Judge.

The sole issue we are concerned with on this appeal is whether the doctrine of Res judicata precluded the Workmen's Compensation Commission (Commission) from reopening and modifying its award to Appellee, Dorothy J. Baker, ¹ against the Subsequent Injury Fund (Fund), Appellant.

On October 4, 1973, Carlton Baker sustained a fracture of his right arm in the course of his employment. While in the hospital for treatment of this injury it was discovered that he had multiple myeloma, a form of bone cancer, which antedated the accidental injury. As a result of this pre-existing condition the Fund was impleaded and made a party to the case. On September 3, 1974, the Commission found that Baker was permanently and totally disabled and awarded him benefits in the amount of $45,000. The employer-insurer was ordered to pay $6,667 of this amount based on a finding by the Commission that the accidental injury caused Baker to sustain a 40% Loss of use of his right hand. The Fund was ordered to pay the balance, $38,333. The employer-insurer filed an appeal to the Circuit Court for Baltimore County from this decision; the Fund, however, did not appeal.

On October 20, 1975, a hearing was held on the employer-insurer's motion for summary judgment based on the case of Gillespie v. R. & J. Construction Co., 275 Md. 454, 341 A.2d 417, decided July 8, 1975. That case held that the Workmen's Compensation Commission cannot award a greater disability for the loss of an eye than the highest medical rating. In this case the highest medical rating was 20% Loss of use of the arm whereas the Commission awarded Baker 40% Loss of use of the hand. Judge Turnbull in ruling on the motion for summary judgment said:

"Gentlemen, I think in the light of the Gillespie case, the matter must be remanded so that the Workmen's Compensation Commission can pass an order in light of the decision of the Court of Appeals.

I will sign an Order remanding this case to the Workmen's Compensation Commission for further proceedings in light of the decision of the Court of Appeals of Maryland in Gillespie v. R. & J. Construction Company."

On remand of the case to the Commission, the Fund filed additional issues and requested the Commission to modify its prior award against the Fund on the basis of the case of Subsequent Injury Fund v. Thomas, 275 Md. 628, 342 A.2d 671, decided August 6, 1975. In Thomas, supra, the Court held, in essence, that the Fund is not liable for a disability caused by the deterioration of a pre-existing impairment which arises after a subsequent compensable injury and is neither aggravated nor accelerated by the subsequent compensable injury. Based on Thomas, supra, the Commission modified its prior order by eliminating the $38,333 it had awarded to Baker against the Fund, but it affirmed the award of $6,667 against the employer-insurer. From this decision the employer-insurer and claimant appealed. After a hearing Judge Land passed an order restoring the claimant's award of $45,000. The employer-insurer was directed to pay $2,100 which represented a 20% Loss of use of the hand, and the Fund was ordered to pay the balance, $42,900. In reaching this decision the lower court reasoned that because the Fund did not appeal the original order of the Commission directing it to pay Baker $39,990, that order was Res judicata and the Commission exceeded its authority on remand by reopening the case and hearing issues that were previously determined. We disagree.

In Alvey v. Alvey, 225 Md. 386, 390, 171 A.2d 92, 94 (1961), the Court of Appeals, in explicating the doctrine of Res judicata stated: "The doctrine of res judicata is that a judgment between the same parties and their privies is a final bar to any other suit upon the same cause of action, and is conclusive, not only as to all matters that have been decided in the original suit, but as to all matters which with propriety could have been litigated in the first suit, . . . ." Accord, M.P.C., Inc. v. Kenny, 279 Md. 29, 32, 367 A.2d 486 (1977); Frontier Van Lines v. Maryland Bank & Trust Co., 274 Md. 621, 623, 336 A.2d 778 (1975).

The extent to which the doctrine of Res judicata applies to determinations of administrative agencies in this state is still unclear. In White v. Prince George's County, 282 Md. 641, 658, 387 A.2d 260, 270 (1978) the Court said:

"Although early cases often made the sweeping statement that decisions of administrative agencies can never be Res judicata, this Court later came to recognize that the principles of public policy underlying the rule of Res judicata were applicable to some administrative agencies performing quasi-judicial functions.

"The Tax Court is an administrative agency performing a quasi judicial function, as opposed to a court performing a judicial function, because of the limitations in the Maryland Constitution concerning the establishment of courts and the performance of judicial functions. Shell Oil Co. v. Supervisor, (276 Md. 36, 343 A.2d 521) supra. Nevertheless, under the provisions of Art. 81, §§ 224-231, it functions in many respects as a court. Among other things, the Tax Court has the power to issue subpoenas to compel the attendance of witnesses and the production of documents (§ 231); it is directed to conduct its proceedings 'in a manner similar to proceedings in courts of equity in this State' (§ 229(c)); and its 'order is final and conclusive' unless an appeal to the courts is taken (§ 229(i)). Particularly in light of this latter provision, we believe that the decisions of the Tax Court have res judicata effect."

See also Baltimore County Commissioners v. Racine, 24 Md.App. 435, 332 A.2d 306 (1975) where the doctrine of Res judicata and its application to determinations of administrative agencies was comprehensively reviewed. There, as here, we were urged to apply the doctrine of Res judicata not to a factual finding by an administrative agency, but to a mistaken interpretation of the law. In refusing we held:

". . . the principle of res judicata should not apply to an erroneous determination of law by an administrative body.

"We are guided to our conclusion by the language used in a very recent decision of the Court of Appeals of Maryland. Criminal Injuries Compensation Board v. Gould, 273 Md. 486, 331 A.2d 55 (1975), where it was said at 521 (1976):

'Mistaken interpretation of law, however honestly arrived at, are held not to be within the exercise of sound administrative discretion and the legislative prerogative, but to be arbitrary and illegal.'

"Perpetuation of illegality by an administrative body by inflexible application of the principle of Res judicata is impermissible." Id., at 452, 332 A.2d at 315.

See Davis, Administrative Law, § 18.03 at 566 (1958) where it is said:

"The desire for repose on which Res judicata rests relates primarily to findings of fact; repose on lively problems of law may even be affirmatively objectionable. A tribunal ought not to be barred from using trial-and-error methods of feeling its way into an undeveloped frontier of law and policy. Even when the principle of Res judicata should be rigidly applied to findings of fact, some relaxation of its application to rulings of law may be indicated. Many factors may argue against conclusive effect of an administrative decision of a question of law the function may be somewhat non-judicial, law, and policy may be in a state of flux, substantive reasons may require that the agency's authority to protect the public interest should remain unfettered, the administrative procedure may not have been geared to a careful consideration of the question of law, the agency may have been poorly staffed for deciding the question, or the legislative intent may have been that the agency's decisions of law should not be binding."

The general rule in other states is that the doctrine of Res judicata applies to decisions of compensation boards and commissions no less than to the decisions of a court. A. Larson, 3 The Law of Workmen's Compensation Acts, Section 79.071 at 15-307-324 (1976). See also Annotation, Res Judicata as Regards Decisions of Awards to Workmen's Compensation Commission Acts, 122 A.L.R. 550 Et seq. Whether the doctrine of Res judicata applies to workmen's compensation decisions in this state has never been directly answered other than in a collateral proceeding.

In Criminal Injuries Compensation Board v. Gould, 273 Md. 486, 331 A.2d 55 (1975) after the Workmen's Compensation Commission had determined that Gould, a cab driver and victim of a robbery, was not entitled to compensation because he was an independent contractor, the Criminal Injuries Compensation Board, in denying his claim, re-determined his status and ruled that he was an employee rather than an independent contractor. The Court of Appeals held:

"Since the Commission had jurisdiction over Gould's status and did, upon the undisputed facts, determine as a matter of law that he was an 'independent contractor,' that decision was subject only to appellate review in the courts as provided by Art. 101, § 56; when no appeal was taken, the decision was final and not subject to being controverted in a collateral proceeding. See Taylor v. Ramsay Co., 139 Md. 113, 124, 114 A. 830, 834 (1921). See also Cogley v. Schnaper & Koren Constr. Co., 14 Md.App. 322, 327-28, 286 A.2d 819, 822-23 (1972).

"Although the doctrine of res judicata has been held not to apply to decisions of administrative agencies, see Gaywood Ass'n. v. M.T.A., 246 Md. 93, 99, 227 A.2d 735, 738 (1967); ...