Injured Workers' Insurance Fund v. Subsequent Injury Fund

³⁴⁹ WRIGHT, J. This consolidated appeal arises from decisions of the Workers’ Compensation Commission (“Commission”) in two separate cases concluding that, pursuant to Md.Code (1991, 2008 RepLVol.), Labor & Employment Article (“LE”), employers must compensate appellee, the Subsequent Injury Fund (“SIF”), a 6.5% assessment based on the Commission’s entire award to the employee, not merely the amount payable after any offsets for retirement benefits. The employer in the first case, appellant, Maryland Transit Administration (“MTA”), 1 filed a petition for judicial review of the Commission’s decision regarding MTA employee, Salvatore Glorioso’s, claim in the Circuit Court for Baltimore City on December 26, 2013. Following a hearing on April 21, 2014, the Circuit Court for Baltimore City affirmed the Commission’s decision. The employer in the second case, appellant, Baltimore County (“County”), filed a petition for judicial review of the Commission’s decision regarding County firefighter, Gary Shipp’s, claim in the Circuit Court for Baltimore County on December 18, 2013.

Subsequently, the County and SIF filed cross-motions for summary judgment. Following a hearing on July 29, 2014, the Circuit Court for Baltimore County granted SIF’s motion and denied the County’s. Both MTA and the County timely appealed. 2 We are asked to determine whether LE requires employers to pay the 6.5% assessment to SIF based on the full amount of all permanent disability awards regardless of any offset for retirement benefits. 3 We answer this question in the affirmative and, accordingly, affirm the circuit courts’ judgments. ³⁵⁰ Facts SIF is a State agency created by the Maryland General Assembly to pay part of a workers’ compensation claim when an injured employee has a preexisting medical or physical condition that exacerbates his or her work-related injury. See LE § 9-802.

When an employee who is injured on the job has this type of preexisting condition, the employer compensates the employee only for any disability directly attributable to the employment-related incident, and SIF compensates the employee for the additional extent of the disability attributable to the preexisting condition. Id.; Subsequent Injury Fund v. Kraus, 301 Md. 111, 115 , 482 A.2d 468 (1984). In establishing SIF, the General Assembly sought to encourage employers to hire individuals with preexisting medical or physical conditions. Subsequent Injury Fund v. Pack, 250 Md. 306, 308 , 242 A.2d 506 (1968) (“Its purpose was to persuade the employer to employ the handicapped individual by limiting the liability, which the employer may otherwise have incurred”).

SIF’s sole revenue source is a statutory assessment that the Commission imposes on an employer or its insurer whenever the Commission makes an “award ... for permanent disability or death” or approves a settlement. See LE §. 9-806(a). The assessment is “6.5%, payable to [SIF], on: (i) each award against an employer or its insurer for permanent disability or death, including awards for disfigurement and mutilation;” or “(ii) ... each amount payable by an employer or its insurer under a settlement agreement approved by the Commission[.]” Id. A. The MTA Award It is undisputed that in 2010, Glorioso suffered a work-related injury and subsequently filed a claim with the Corn- ³⁵¹ mission.

After hearing the matter on August 80, 2012, the Commission issued a decision on September 11, 2012, finding that Glorioso had a permanent partial disability “amounting to 30% industrial loss of use of the body as a result of an injury to the back.” As a result, the Commission awarded $46,050.00, which it detailed as follows: “at the rate of $307.00, payable weekly, beginning May 3, 2012, for a period of 150 weeks.” Because Glorioso also received disability retirement benefits from the MTA, however, the Commission added that pursuant to LE § 9-610, 4 the compensation was “subject to an offset effective April 1, 2012 in the amount of $118.27,” thus lowering the award to $28,309.50. In addition, the Commission noted that the award was “subject to a total assessment of ... 6.5% ... on the amount payable pursuant to [LE] § 9-806[.]” 5 On August 9, 2013, SIF filed Issues with the Commission, asserting that that MTA and its insurer “refuse to pay the 6.5% assessment on the award dated 9/11/12.” SIF requested a hearing and took “the position ... that the assessment is due on the amount of the award regardless of any offset for retirement benefits,” for a total of $2,993.25. Following a hearing on November 20, 2013, the Commission issued an order on December 17, 2013, directing MTA to “pay the assessment of 6.5% on the award of 30% loss of use of the body, as awarded [on] September 11, 2012[.]” The Commission reasoned that the General Assembly specifically used the ³⁵² term “amount payable” when imposing the assessment on settlement agreements but not when imposing it on awards for permanent disability or death. B. The County Award It is undisputed that in 2002, Shipp became disabled as a result of hypertension and coronary artery disease and, thereafter, filed a claim with the Commission.

After hearing the matter on February 9, 2012, the Commission issued a decision on March 5, 2012, finding that Shipp had a permanent partial disability “amounting to 50% industrial loss of use of the body.” As a result, the Commission awarded $174,825.00, which it detailed as follows: “at the rate of $525.00, payable weekly, beginning May 14, 2012, for a period of 333 weeks[.]” On March 7, 2012, upon realizing that the Commission did not account for the statutory offset resulting from Shipp’s service retirement, the County filed a request for rehearing. Subsequently, the Commission issued a new order, adding the following paragraph: The Commission finds that the claimant is receiving a service retirement effective year 2002 in the amount of $31,488.54 per year or $605.55 per week. Pursuant to LE [§] 9-503(e),[ 6 ] the employer is entitled to offset as follows: Average Weekly Wage: $800.00 minus $605.55 = $194.45. ³⁵³ Therefore, the claimant’s permanent partial disability shall be paid at the weekly rate of $194.45. This modification lowered the Commission’s award to $64,751.85.

In its order, the Commission also noted that the award was “subject to a total assessment of ... 6.5% ... on the amount payable pursuant to [LE] § 9-806[.]” Thereafter, the County made payment to SIF in the amount of $4,208.87, or 6.5% of the award that resulted after subtracting the statutory offset. SIF requested a hearing, arguing that it was entitled to the balance of $11,363.68, which was 6.5% of the total award made by the Commission prior to accounting for the offset. Following a hearing on October 29, 2013, the Commission issued an order on December 12, 2013, directing the County to “pay the assessment of 6.5% on the award of 50% loss of use of the body, as awarded [on] March 29, 2012[.]” As in the MTA’s and Glorioso’s case, the Commission reasoned that the General Assembly specifically used the term “amount payable” when imposing the assessment on settlement agreements but not when imposing it on awards for permanent disability or death. Standard of Review An appellate court reviews a grant of summary judgment by the Commission for “legal correctness.” Wal Mart Stores, Inc. v. Holmes, 416 Md. 346, 358 , 7 A.3d 13 (2010).

Our role in reviewing an administrative agency adjudicatory decision is “narrow,” however, and “is limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.” W.M. Schlosser Co. v. Uninsured Employers’ Fund, 414 Md. 195, 204 , 994 A.2d 956 (2010) (citation omitted). Generally, “the decision of the Commission is presumed to be prima facie correct[.]” LE § 9 — 745(b)(1); see also Cmty. Realty Co., Inc. v. Siskos, 31 Md.App. 99, 105 , 354 A.2d 181 (1976) (citations omitted); Ackerhalt v. Hanline ³⁵⁴ Bros., Inc., 253 Md. 13, 20 , 252 A.2d 1 (1969) (citation omitted); Krell v. Maryland Drydock Co., 184 Md. 428, 435 , 41 A.2d 502 (1945). Although this presumption of correctness “does not extend to questions of law,” we nonetheless “afford the Commission a degree of deference, as appropriate, in its formal interpretations of the Workers’ Compensation Act.” Montgomery Cnty. v. Deibler, 423 Md. 54, 60 , 31 A.3d 191 (2011) (citations omitted); see also W.M. Schlosser Co., 414 Md. at 205 , 994 A.2d 956 (“an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts”) (citations omitted); Hart v. Subsequent Injury Fund, 172 Md.App. 159, 166 , 913 A.2d 666 (2006) (“we give due deference to the Commission’s own interpretation of the statute it administers”) (citation omitted).

Discussion Appellants argue that SIF’s assessment should be calculated using the amount payable to the claimant after the offset is granted. According to MTA, when LE § 9-806 is read in its entirety, “[t]he most commonsensical and natural reading would be that the amount awarded is the amount actually [ ] paid,” which then “forms the basis of the calculation for the SIF assessment.” Meanwhile, the County argues that the Commission did not have jurisdiction to determine the calculation of the assessment and, furthermore, that the Commission’s decision goes against “clear legislative intent.” Based upon these contentions, appellants ask us to reverse the circuit court’s judgment and remand with instructions to send the case back to the Commission for the purpose of recalculating SIF’s assessment using the amount payable to the claimant after the offset. In response, SIF argues that the Commission had jurisdiction to determine the correct amount of the assessment, and that its decision was correct because “the plain language of [LE § 9-806(a) ] requires that the Commission order a 6.5% assessment on the full amount of all awards for permanent disability or death.” Alternatively, SIF asserts that, “even if ³⁵⁵ the statute were ambiguous, this Court should defer to the Commission’s reasonable interpretation.” At the outset, we address the County’s assertion that the Commission did not have jurisdiction to determine the calculation of the assessment pursuant to LE § 9-806 because “the SIF assessment is clearly a tax” and “the Commission’s jurisdiction does not extend beyond administrative imposition of the same.” As SIF correctly notes, the County’s argument is “based entirely on a Court of Appeals opinion that the General Assembly later abrogated by statute.” See Workmen’s Comp. Comm’n v. Prop. & Cas.

Ins. Guar. Corp., 319 Md. 1 , 570 A.2d 323 (1990), abrogated by 1995 Md. Laws, ch. 293. Indeed, the Court in Workmen’s Comp.

Comm’n held that the assessment under LE § 9-806 was a “tax[j” for purposes of a statute exempting the Property and Casualty Guaranty Insurance Corporation from “all taxes levied by this State.” Id. at 4, 6, 570 A.2d 323 . In 1995, however, the General Assembly amended LE § 9-806 — specifically subsection (e) — to clarify that “[t]he assessment imposed under this section is for payment of claims submitted to the Subsequent Injury Fund and is not a, tax intended to benefit the State.” (Emphasis added). See 1995 Md. Laws, ch. 293 (“AN ACT concerning Subsequent Injury Fund — Assessments Not a Tax FOR the purpose of providing that the assessment payable to the Subsequent Injury Fund is not a tax; and providing that the Property and Casualty Insurance Guaranty Corporation is subject to the assessment.”). As such, we agree with SIF that even if the rationale in Workmen’s Comp.

Comm’n could be extended to this context, it no longer has any force. Having established that the Commission had