Mazor v. State, Department of Correction

³⁹⁶ Menchine, J., delivered the opinion of the Court. Donald Louis Mazor, (claimant) employed by the State of Maryland, Department of Correction as a penitentiary guard, on July 17,1972 was injured in an inmate uprising. As a result of the injury therein sustained, Mazor applied for and on September 1, 1973 was granted, under the State pension system, pursuant to Maryland Code Article 73B, § 11 (6) and (7), 1 life pension accidental disability benefits of $421.59 monthly. 2 As a result of that same injury Mazor also filed a claim for workmen’s compensation benefits against the State of Maryland, Employer and State Accident Fund, Insurer (employer and insurer). On October 30, 1974 he was awarded workmen’s compensation benefits by the Workmen’s Compensation Commission (Commission) at the rate of ³⁹⁷ $65.00 per week, not to exceed the sum of $26,000.00, for permanent disability under “other cases” calculated on the basis of 60% industrial loss of use of the body under Maryland Code Article 101, § 36 (4) (a). 3 Employer and insurer contended that by virtue of the provisions of Maryland Code Article 101, § 33, 4 it was discharged in full from any liability or obligation to pay any benefit under Article 101 because of the life pension ³⁹⁸ provided by the State of Maryland under Article 73B.

The Commission found that the pension benefits provided by Article 73B were equal to or better than any weekly benefit the claimant could receive under any type of permanent disability awarded under Article 101. It is manifest, however, that the Commission adopted claimant’s position that the State Accident Fund was not entitled to an offset under Section 33. Employer and insurer and claimant appealed to the Circuit Court for Baltimore County with the cause thereafter being removed to the Circuit Court for Harford County for trial. After motion filed in the Circuit Court for Harford County, Judge Close granted summary judgment in favor of the employer and insurer, “Because the Employer has provided benefits [under Article 73B, § 11 (6) and (7)] greater than those possible [5] under Article 101, it is relieved and discharged of any liability or obligation to provide benefits under it [by reason of § 33].” Claimant on appeal asks us to decide that § 33 of Article 101 has no application to pensioned employees, but is limited in application solely to workmen’s compensation cases where there have been awards of “benefits resulting from the death of an employee.” Claimant recognizes that in Nooe v. Mayor & City Council of Baltimore, 28 Md. App. 348 , 345 A. 2d 134 (1975), 5a we considered the precise question here in issue. ³⁹⁹ He asks us to reconsider our holding in Nooe, “* * * that the payment * * * of the pension [providing a benefit equal to or better than any benefit provided for in Article 101] satisfied and discharged in full the liability or obligation of the [employer] for any benefit under the Workmen’s Compensation law.” 28 Md. App. at 356 [139].

We have reviewed and now reaffirm our decision in Nooe . For the reasons stated in Nooe we reiterate that § 33 must be interpreted to apply to cases involving permanent disability and hold that under the circumstances of this case the section must be interpreted as applying to this claimant. Alternatively, appellant contends that § 33 is unconstitutional under both the State and the United States Constitutions. 6 The desirability for coordination of the overall system of wage-loss protection and the constitutional issues arising in statutory efforts to achieve it, are discussed in Larson’s Workmen's Compensation Law in the following sections: “§97.00 Once it is recognized that workmen’s compensation is one unit in an overall system of wage-loss protection, rather than something resembling a recovery in tort or on a private accident policy, the conclusion follows that duplication of benefits from different parts of the system should not ordinarily be allowed. Since most social legislation in the United States has appeared in unrelated fragments, lack of coordination resulting in cumulation of benefits is quite common; but newer legislation is more carefully drawn to prevent this result. “§97.10 Impropriety of duplicate benefits Wage-loss legislation is designed to restore to the worker a portion, such as one-half to two-thirds, of wages lost due to the three major causes of wage-loss: physical disability, economic unem ⁴⁰⁰ ployment, and old age.

The crucial operative fact is that of wage loss; the cause of the wage loss merely dictates the category of legislation applicable. Now if a workman undergoes a period of wage loss due to all three conditions, it does not follow that he should receive three sets of benefits simultaneously and thereby recover mere than his actual wage. He is experiencing only one wage loss and, in any logical system, should receive only one wage-loss benefit. This conclusion is inevitable, once it is recognized that workmen’s compensation, unemployment compensation, non-occupational sickness and disability insurance, and old age and survivors’ insurance are all parts of a system based upon a common principle.

If this is denied, then all coordination becomes impossible and social legislation becomes a grab-bag of assorted unrelated benefits. For example, if workmen’s compensation is thought of as a quasi-tort recovery, there will be a temptation to say that the injured workman should be entitled to keep the entire recovery without reference to any other legislative benefits he may receive for the same wage loss. Again, if non-occupational disability insurance is viewed, as it was for a time in Rhode Island, as essentially equivalent to private health and accident insurance, the argument will be heard that a worker has just as much right to keep both occupational and non-occupational disability benefits as he would have to collect both workmen’s compensation and the proceeds of a private accident policy. “§97.32 Constitutionality of the offset provision The constitutionality issue is at this writing before the United States Supreme Court, [7] and consequently the discussion of the point will be ⁴⁰¹ confined to a brief account of the state of case law in the lower courts and the principal lines of argument. All but one [8] of the decisions on the constitutional issue in federal district and circuit courts have held the offset constitutional.

The case for constitutionality is well expounded in the Sixth Circuit’s opinion in Lofty v. Richardson [ 440 F. 2d 1144 ] * * * The main line of attack in this case was that Congress did not also create an offset for such benefits as private insurance proceeds and recoveries in damage suits. The court reviewed the development of Supreme Court cases establishing a very broad congressional discretion in adopting classifications for legislative purposes. It then examined the legislative history of the offset, stressing that the main purpose was to eliminate the kind of duplication of benefits that in many instances resulted in total benefits exceeding actual previous wage while working. The court set out in full a table ‘purporting to show that continued duplication of benefits under terms of the then pending bill would mean at least some payments in excess of prior average “take home pay” in every state, and up to a maximum of 247% in the instance of Arizona.’ The adverse effect of this situation on incentives to become rehabilitated and to return to work was noted.

As to the invidious classification argument, the court adduced three answers. The first was that there had been widespread complaints about double coverage as to compensation and social security, but no such complaints as to the proceeds of private insurance or negligence actions. The second was that administratively it would be relatively simple to enforce the compensation offset, while to calculate and apply a reduction for private insurance and ⁴⁰² civil damages might offer severe difficulties. The third reason was the most important: ‘Finally, it is entirely conceivable to us that Congress may have considered Social Security benefits and Workmen’s Compensation benefits to be more arguably duplicative of one another than could appropriately be claims concerning Social Security benefits and the other two types of payments.

Both Social Security and Workmen’s Compensation are social welfare legislation. Private accident or disability insurance is a private - contract, frequently paid for entirely by the recipient. And, of course, court awards for injuries are private rights derived from the common law involving the principle of compensation for negligence or fault. Most of the argument for the Workmen’s Compensation offset came from employers who generally pay all of the costs for Workmen’s Compensation and half of the costs of the Social Security benefits.

Their argument before Congress was that they were paying twice for the same injury. This argument would have, of course, no merit at all in relation to a damage action award or to the proceeds of privately purchased accident or disability insurance.’ ” [Quotation from Lofty v. Richardson cited in text.] Lofty v. Richardson, 440 F. 2d 1144 (6th Cir. 1971) dealt with a congressional offset amendment requiring reduction of social security disability benefits when their recipients also are receiving State workmen’s compensation benefits and the combined total of both exceed 80% of the worker’s average wage. The Court rejected the contention that the offset statute’s failure to include benefits derived from private insurance or from civil damage suits produced “an arbitrary and capricious classification which cannot stand ⁴⁰³ when tested against the due process clause” (at 1146). In doing so the Court pointed out that “* * * there is a good deal of case law which serves to illustrate the breadth of legislative power accorded the Congress (or the states) by the Supreme Court’s interpretation of the constitutional limitations contained in the due process and equal protection clauses” (at 1146).

See: e.g. Admr., Motor Veh. Adm. v. Vogt, 267 Md. 660, 676 , 299 A. 2d 1, 9 (1973), declaring: “* * * a cardinal rule to be observed in determining whether a statute is violative of the Equal Protection Clause is that the legislature exercises a broad scope of discretion in establishing classifications, subject only to the requirement of reasonableness in doing so.”; A & H Transp. Inc. v. Baltimore, 249 Md. 518, 529 , 240 A. 2d 601, 606 (1968), declaring, “These [constitutional] limits are not exceeded under the due process clauses of the Maryland and Federal Constitutions unless the party challenging the ordinance can show that it is arbitrary, oppressive or unreasonable.” Appellant contends, without justification, we think, that the pension