Uninsured Employers' Fund v. Danner, No. 1315, September Term, 2003 (MD 9/8/2004)
| Decision Date | 08 September 2004 |
| Docket Number | No. 1315, September Term, 2003.,1315, September Term, 2003. |
| Parties | UNINSURED EMPLOYERS' FUND v. GERALD E. DANNER. |
| Court | Court of Special Appeals of Maryland |
Opinion by Moylan, J.
In this appeal from the Workers' Compensation Commission, by way of the Circuit Court for Baltimore County, the issue is not the correctness of the award of benefits to the claimant, nor is it the unquestioned obligation of the Uninsured Employers' Fund to step into any ultimate breach left by an uninsured employer. The issues before us are 1) what antecedent events trigger the obligation on the Fund to act; 2) what is the precise moment when that obligation on the Fund accrues; and 3) what enforcement mechanisms, if any, are possessed by the Commission if the Fund is unduly slow in acting.
The appellee, Gerald E. Danner, was working as a carpenter when, on February 16, 2001, he was severely injured on a job at 300 Cathedral Street in Baltimore City. He was taken to the University of Maryland Shock Trauma Unit, where he underwent surgery for a deep laceration to his left arm. As a result of the injury, he has lost the substantial use of his left arm and hand.
On April 18, 2001, Danner filed a claim with the Maryland Workers' Compensation Commission. At the time of the accident, Danner was employed by Timothy Stivers, an employer who did not maintain workers' compensation insurance. Accordingly, Danner was presented by the Commission with an Order for Information, requiring him to fill out a Claimant's Questionnaire and to send a copy of his answers both 1) to the Commission and 2) to the Uninsured Employers' Fund, the appellant in this case. Danner did so as of June 11, 2001.
On June 6, 2002, a hearing on Danner's claim was held before the Commission. At that hearing, the Fund participated. The Fund had received legal notice of the hearing on March 19, 2002, and was actually listed as the "Insurer" for the otherwise uninsured Timothy Stivers. The Fund was represented by an Assistant Attorney General, who cross-examined Danner on behalf of the Fund. On June 14, the Commission issued an Award of Compensation to Danner. In the opinion announcing that award, the Commission made the following pertinent findings of fact:
A. Stivers was an uninsured employer;
B. Claimant sustained an accidental injury arising out of and in the course of his employment by Stivers on February 16, 2001;
C. Claimant's disability is a result of the aforesaid accidental injury;
D. As a result of the accidental injury, Claimant was temporarily totally disabled from February 16, 2001 to the present and continuing;
E. Claimant's average weekly wage was $600.00;
F. Claimant be paid temporary total disability benefits at the rate of $400.00 a week, beginning February 16, 2001 and continuing;
G. The Employer pay causally related medical expenses in accordance with the Medical Fee Guide of the Commission; and,
H. The Commission reserves the jurisdiction to hold further hearings on permanent disability upon request.
(Emphasis supplied).
On the very day the award was issued, June 14, Danner 1) notified Stivers of the award, 2) sent Stivers a copy of the award, and 3) demanded payment under the award. When more than thirty days went by with neither payment nor any response forthcoming from Stivers, Danner made a request to the Fund to pay him in accordance with the June 14 award by the Commission. The first request for payment by the Fund was made by a letter dated July 17, 2002. Follow-up letters of request were sent on August 23 and September 25.
Although present and participating at the June 6, 2002, hearing before the Commission, the Fund never appealed the June 14, 2002, award of compensation to Danner. The Fund never filed any issues with the Commission with regard to the award of temporary total disability benefits to Danner. The entitlement of Danner to receive the payment of benefits from someone was undisputed. The Fund, nonetheless, refused to make any payment to Danner.
Aggrieved at the non-payment, Danner brought his plight to the attention of the Commission, which conducted a hearing on November 26, 2002. The Commission posed the issue before it as, "Is the claimant entitled to sanctions for the Uninsured Employer Fund's failure to pay compensation?" Applying Maryland Code, Labor and Employment Article, § 9-728, to the Fund, the Commission imposed sanctions in its order of December 11, 2002.
The Commission finds on the issue presented that the answer is "YES"; and finds that the Uninsured Employer's Fund shall pay unto Frederick W. Miller, Esquire, counsel for the claimant, a counsel fee in the amount of $500.00; and shall pay unto the claimant a 40% penalty on all moneys due the claimant beginning February 16, 2001 and ending November 12, 2002.
It is, therefore, this 11th day of December, 2002, by the Workers' Compensation Commission ORDERED that the Uninsured Employer's Fund is hereby assessed penalties as hereinabove set forth; and further ORDERED that the above-entitled claim be reset only upon request.
(Emphasis supplied).
The Fund appealed that order to the Circuit Court for Baltimore County. After unrecorded argument, the court granted Danner's motion for summary judgment and denied a cross-motion for summary judgment by the Fund. In its rulings, the Circuit Court did two things. It directed the Fund to pay to Danner the benefits that he had been awarded by the Commission. It also affirmed the Commission's imposition of penalties on the Fund for its dilatoriness in making payments to Danner. This appeal is from both of those rulings by the Circuit Court.
The Fund has expressly raised two contentions, both based, however, on a single underlying rationale.
1. The court erred when it ordered appellant to pay compensation benefits previously awarded when the Commission award had not ordered appellant to pay benefits and when appellant's unique statutory authority exempts it from a duty to pay while an issue is still awaiting resolution by the Commission, or while an appeal is pending.
2. The court erred when it affirmed the Commission's imposition of penalty and attorney's fees on appellant for failure to pay compensation benefits previously awarded because the Fund is exempt from any obligation to pay benefits pending appeal as long as an issue is still pending before the Commission or while an award is pending on appeal in the circuit court.
(Emphasis supplied).
One of the two rationales offered by the Fund for the first contention and the only rationale offered by the Fund for the second contention is that
THE FUND IS EXEMPT FROM ANY OBLIGATION TO PAY BENEFITS PENDING APPEAL AS LONG AS AN ISSUE IS STILL PENDING BEFORE THE COMMISSION OR WHILE AN AWARD IS PENDING ON APPEAL IN THE CIRCUIT COURT.
We consider first the Fund's contention that it should not have been ordered to pay benefits because it had not been named in the Commission's award of June 14, 2002, as the party required to make payments. Of course, it had not. The party named as required to make payments was Timothy Stivers. The Commission had expressly found that Stivers was Danner's employer at the time of the accident and further found that Stivers was an uninsured employer.
The obligation of the Fund to assume responsibility for paying the benefits arose not from the Commission award per se but from § 9-1002, which provides in pertinent part:
§ 9-1002. Payment from Uninsured Employers' Fund.
(a) In general. — An award is payable out of the Fund in accordance with this section.
(b) Default. — Unless an application for review has been timely filed under subsection (g) of this section or a notice of appeal timely served, an employer is in default on a claim by a covered employee ... if the employer fails to:
....
(3) pay compensation in accordance with an award within 30 days after the date of the award.
...
(e) Application for payment from Fund. — If the employer does not pay the award and does not notify the Commission of its objection to the award in accordance with subsection (d) of this section, the covered employee ... may apply to the Director for payment from the Fund.
(f) Payment or application for review. On receipt of an application for payment, the Fund may:
(1) pay the award; or
(2) apply for review under subsection (g) of this section.
(Emphasis supplied).
In this case, it is undisputed that Stivers, who had been found to have been Danner's uninsured employer, 1) did not apply for a review or rehearing by the Commission pursuant to subsection (g), 2) did not file an appeal from the Commission's decision, and 3) did not pay the award within thirty days after the date of the award. The uninsured employer was, therefore, ipso facto in default.
It is also unquestioned that Danner, in the wake of that default, properly and timely applied to the Fund for payment. It is further undisputed that the Fund 1) had not applied to the Commission for review under subsection (g) of any of the findings pertinent to the award of benefits to Danner and 2) did not pay the award. The fact that the Fund had not been named in the Commission's decision of June 14, 2002, is immaterial. Its obligation to pay the benefits was predicated on § 9-1002(f) and on events (the default by Stivers) that happened after the award had been made.
The Fund's primary argument as to why it was not obligated to pay the benefits to Danner as of July of 2002 is that one of the issues that had originally been before the Commission at the June 6, 2002, hearing had not yet been finally resolved. In its opinion of June 14, 2002, to be sure, the Commission had listed six issues that were before it. It resolved...
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