Montgomery County v. Lake

ROSALYN B. BELL, Judge. In this appeal, we are asked to interpret Md.Code Ann. Art. 101, § 56 (1957, 1985 Repl.Vol.) to allow an employer to offset one workers’ compensation award against a separate workers’ compensation award granted to an injured employee. We decline to do so. The facts in this case were stipulated by the parties and present a chronological sketch of only the most pertinent events.

Charles Lake, a Montgomery County employee, made two claims for workers’ compensation benefits. The Workmen’s Compensation Commission determined that Mr. Lake sustained a thirty percent industrial loss of the use of his body on the first claim because of injury to his lungs and ordered permanent partial disability benefits of $89.00 per week for a period of 150 weeks. In the second claim, the Commission found that Mr. Lake suffered a five percent loss of the use of his right hand and a fifteen percent loss of the use of his body as a result of injuries to his nose, right shoulder and right elbow sustained after a second unrelated injury. The Commission ordered the payment of permanent partial disability benefits for this injury at the rate of $89.00 per week for a period of 87.5 weeks.

Montgomery County appealed the Commission’s orders in both claims. The Circuit Court for Montgomery County granted the County’s Motion for Partial Summary Judgment and ordered that the payments awarded under the second claim not be paid until the payments under the first claim were completed. Those payments commenced March 20, 1982. Subsequently, Mr. Lake applied to the Workmen’s Compensation Commission for a lump sum payment of the amount awarded on the first claim.

The Commission granted the application and accelerated $4,000.00 of the $4,711.00 then due Mr. Lake under that award. The County subsequently dismissed its appeal under the second claim. ²⁷² In a trial before a jury, the County succeeded in its appeal on the first claim. The jury reduced the claimant’s permanent partial disability from thirty percent to ten percent. The reduction created an overpayment of $8,900.00 in benefits on the first claim, since all of the payments due under that claim had already been made.

At the time of the jury decision there remained unpaid, unaccrued permanent partial disability benefits for the second claim amounting to $1,600.00. In an effort to recoup the overpayment, the County suspended the payment of benefits due under the second claim without either formal notice to the claimant or prior approval by the Commission. Mr. Lake complained to the Commission challenging the cessation of benefits and requesting attorney’s fees against the County. After a hearing, the Commission ruled that the County was not entitled to offset the overpayment in the first claim against the unpaid, unaccrued benefits awarded in the second claim.

It also ordered the County to pay $255.00 in attorney’s fees to Mr. Lake’s counsel. The County appealed the Commission’s orders to the Circuit Court for Montgomery County. The court upheld the decision of the Commission reasoning that “[tjhere is a presumption of propriety that attaches to any determination by the Workmen’s Compensation Commission____” Montgomery County appeals asking us to resolve whether I. “[tjhe Circuit Court used the wrong standard of review in deciding this case. II. “[tjhe County is entitled to a credit because it seeks to offset the overpayment against prospective benefits of the same type.

III. “[tjhe Commission exceeded its powers to award attorney’s fees ... because the proceedings to credit an overpayment were brought upon reasonable grounds.” ²⁷³ REVIEW OF COMPENSATION DECISIONS The Workmen’s Compensation Act was enacted in Maryland in 1914 to provide an expedient and inexpensive method of payment of compensation to injured employees and their dependents. Act of April 16, 1914, ch. 800 Preamble, 1914 Laws of Maryland 1429. The Act is to be liberally and broadly construed in furtherance of the benevolent purpose which prompted its enactment. Wiley Mfg.

Co. v. Wilson, 280 Md. 200, 217 , 373 A.2d 613 (1977); Howard County Assoc. for Retarded Citizens Inc. v. Walls, 288 Md. 526, 530 , 418 A.2d 1210 (1980). While the Act is to be liberally construed, a court is not at liberty to disregard its plain meaning. Lockerman v. Prince George’s County, 281 Md. 195 , 202 n. 5, 377 A.2d 1177 (1977). Maryland Code Ann. Art. 101, § 56, supra, provides that on appeal from a decision of the Workmen’s Compensation Commission, “[i]f the [reviewing] court shall determine that the Commission has acted within its powers and has correctly construed the law and facts, the decision of the Commission shall be confirmed; otherwise it shall be reversed, modified, or remanded to the Commission for further proceedings.” In that case, the decision of the Commission is prima facie correct and the burden of proof is upon the party attacking its propriety.

Md.Code Ann. Art. 101, § 56(c), supra. The Court of Appeals has ruled, however, that despite this principle, it has no application when the question is one of law instead of fact. Symons v. R.D. Grier & Sons Co., 10 Md.App. 498 , 271 A.2d 398 (1970). Although we shall affirm the circuit court in part, we do note that it erred when it upheld the Commission’s orders based on the principle that decisions of the Commission are prima facie correct.

The issues presented in this appeal are purely questions of law. Where the facts are proved without contradiction and there exists no dispute as to any material inference of fact, a reviewing court may decide the issue as one of law. Krell v. Maryland Drydock Co., 184 Md. 428, 435 , 41 A.2d 502 (1945). Thus no pre ²⁷⁴ sumption of correctness attaches to the Commission’s interpretations of the pertinent provisions of the statute.

RECOVERY BACK OR OFFSET The question presented by this appeal has not been decided in this State. Appellant asserts the overpayment of compensation benefits in one claim can be offset against the same type of benefits awarded in another claim when the latter benefits are unpaid and unaccrued when the overpayment arose. 1 Appellant continues that a credit was necessary to prevent unjust enrichment to the claimant because he received benefits in excess of that which he was entitled. Although the argument of unjust enrichment is attractive in a situation such as this where the claimant is overpaid in excess of $8,900 on a claim, it must nevertheless be rejected. It is firmly established in Maryland that once monies are paid out on a claim, those funds are not recoverable “on any theory,” absent fraud, even if the award is reduced or reversed on appeal.

St. Paul Fire & Marine Ins. Co. v. Treadwell, 263 Md. 430, 439 , 283 A.2d 601 (1971). Appellant argues, however, that it is not seeking recovery back of funds paid out, but instead is merely offsetting funds overpaid in one claim against unpaid, unaccrued funds awarded in a second claim. Appellant suggests that ²⁷⁵ St. Paul Fire & Marine Ins.

Co., supra, is therefore inapposite. We disagree. Whether appellant terms it “offset” or instead “recovery back,” the effect is the same. Appellee claimant is deprived of funds awarded to him by the Commission for a separate injury.

Let us explain. —Offset— The Court of Appeals has held that “[t]he workmen’s compensation act establishes a procedure of its own covering every phase of the right to compensation and of the procedure for obtaining and enforcing it, which procedure is complete and exclusive in itself.” St. Paul Fire & Marine Ins. Co., supra at 436, 283 A.2d 601 , quoting Tompkins v. George Rinner Construction Co., 196 Kan. 244 , 409 P.2d 1001, 1003 (1966). Thus, in St. Paul Fire & Marine Ins. Co., supra, the Court interpreted Art. 101, § 56, supra and concluded that since the Act did not provide a procedure for recovery of funds after overpayment, it was the intent of the Legislature to prohibit such a right.

St. Paul Fire & Marine Ins. Co., supra, 263 Md. at 431 , 283 A.2d 601 . Similarly, we hold that since the compensation statute does not provide a procedure to offset separate claims when overpayment results, the Legislature did not intend to permit this procedure. The decision in Mayor and City Council of Baltimore v. Oros, 301 Md. 460 , 483 A.2d 748 (1984), is apposite to our conclusion as well.

In Oros, supra, police officers who sustained accidental injuries separately filed compensation claims and the Commission awarded temporary total disability payments for each claimant. Although the awards were granted, the City paid each officer his full wage for all periods of temporary total disability pursuant to a collective bargaining agreement. Subsequently, each claimant sought compensation benefits for permanent partial disability. The City asserted that it was entitled to setoff as against an award of permanent disability the difference between the temporary total disability rate and the full ²⁷⁶ salary rate paid in lieu of temporary total disability benefits.

The Court of Appeals examined Art. 101, § 83, supra, providing for a discharge or diminution of compensation benefits by the employer when benefits, pension or otherwise, are furnished to an employee by the employer, and ruled that setoff was not permissible: “We find nothing in the provision of § 33 to indicate that the Legislature intended to permit a [government] employer to provide an excess benefit for but one of the disabilities provided in Article 101, § 36 [2] and then to suggest it has provided a largess that would lessen or eliminate its liability for the other benefits it is bound by the Act to furnish. Such a contention flies in the teeth of the basic legislative design—that an injured worker (or his dependents) is entitled to receive seriatim the benefits for each of the separate disabilities as were caused by the nature and extent of his injury.” Oros, supra at 470 , 483 A.2d 748 . Similarly, we find nothing in Art. 101, §§ 33, 56 or any other provision to suggest offsetting is permissible. We disagree with appellants assertion that because appellee’s claims both involved only one type of disability—permanent partial—offsetting of compensation benefits is not governed by Oros, supra.

As the Court recognized, a claimant is entitled to separate benefits for each of his or her separate disabilities. Id. at 470 , 483 A.2d 748 . Merely because appellee’s injuries in the case sub judice were of the same “type” does not mean that each claim and payment therefore can be merged or combined. Accordingly, offsetting of separate claims is not allowed under Art. 101, supra.

The question then becomes whether recovery back of funds is permissible where the sum paid out on a claim was ²⁷⁷ awarded under the lump sum provisions of the Act. We again must answer in the negative. —Lump Sum Recovery— A stay of payments awarded by reason of an appeal challenging the underlying award is prohibited. Bayshore Industries, Inc. v. Ziats, 229 Md. 69, 76-77 , 181 A.2d 652 (1962). The purpose behind the prohibition is that of affording day-to-day support to an injured employee and his or her dependents.

Id. at 77 . Following this rationale, the Court of Appeals in St. Paul Fire & Marine Ins. Co., supra, held that restitution or recovery back of payments would not be permitted because “it is not the intention and spirit of the [Workmen’s Compensation] act to allow [an employer] to recover back money paid