Swedo v. W.R. Grace & Co.

SALMON, J. When a worker in Maryland suffers an accidental injury that results in a permanent partial disability, his or her award is expressed by a number of dollars per week for a fixed number of weeks. For instance, the injured worker who brings this appeal was initially granted an award by the Maryland Worker’s Compensation Commission (the “Commission”) of $234 per week for 200 weeks. If a petition for judicial review had not been filed, the worker would have received a total of $46,800 ($234 x 200). In this case, however, the injured worker filed a petition for judicial review in the Circuit Court for Baltimore County in which he claimed that the award was too low.

It took 148 weeks before the Circuit Court action was concluded and the Commission passed a new order. In that period, the injured worker received from his employer a total of $34,632 ($234 x 148). A jury determined that the claimant had a higher percentage of permanent partial disability than that found by the Commission. That higher percentage of disability would have, if it had been an original order, indisputably entitled the claimant to receive $525 per week for 333 weeks or $174,825.

The problem that arose in this case concerns how much credit the employer/insurer should receive for the 148 payments it made between the initial award and the time that the Commission passed a new order based on the jury award. The injured worker takes the position that the employer/insurer should receive a dollar credit, i.e., a credit for $34,632. The employer, W.R. Grace & Co. and its insurer, Hartford Insurance Co. of the Mid West (hereinafter referred to collectively ³⁹⁴ as “the employer”), however, take the position that a credit should be given for the number of weeks payments were made in accordance with the Commission’s original order. According to the employer, it was only required to pay $525 for the 185 weeks (338 less 148) that remained and should be given a credit, not in the amount of the dollars paid, but based on the number of weeks payments were made.

The argument espoused by the injured worker will hereinafter be referred to as the “dollar credit” theory. The employer’s argument will be referred to as the “weeks credit” theory. Under the dollar credit theory, the claimant, after giving the employer credit for the $34,632 paid, would be entitled to receive “new money” in the amount of $140,193 ($174,825 less $34,632). Under the weeks credit theory, however, the employer would get credit for the payments made for 148 weeks and would only have to pay $525 per week for 185 weeks.

In other words, instead of paying the worker “new money” in the amount of $140,193 the employer would be required to pay only $97,125 ($525 x 185). In 2001, the Maryland General Assembly passed a statute attempting to clarify whether the dollar credit theory or the weeks credit theory should be utilized when the compensation amount was either increased or decreased on an appeal 1 to the circuit court. That statute is now codified in Md.Code (2008 RepLVol.), Labor and Employment Article (“LE”) section 9-633: If an award of permanent partial disability compensation is reversed or modified by a court on appeal, the payment of any new compensation awarded shall be: (1) subject to a credit for compensation previously awarded and paid; and ³⁹⁵ (2) otherwise made in accordance with this Part IV of this subtitle. 2 In the subject case, after the jury’s award, the Commission ruled in favor of the employer by adopting the position that the credit should be based on weeks rather than dollars. The claimant filed a second petition for judicial review in the Circuit Court for Baltimore County in which he claimed that the Commission erred by rejecting his dollar credit theory.

The employer and the claimant filed cross-motions for summary judgment. The circuit court ruled that the weeks credit position espoused by the employer was legally correct. Accordingly, the court granted the employer’s motion for summary judgment and denied the claimant’s motion. In this timely appeal, the claimant raises one question, which he phrases as follows: Does ...

LE § 9-633 require the ... Commission to issue credits in terms of dollars or in terms of weeks in those situations where a Circuit Court has reversed the Commission’s first ever permanent partial disability award? The question appellant presents was the subject of four reported decisions decided by Maryland appellate courts prior to October 1, 2001, which was the effective date of LE § 9-633. Since then, however, no reported Maryland case has dealt with a case where section 9-633 was directly at issue.

Nevertheless, the Court of Appeals in Del Marr v. Montgomery County, 397 Md. 308 , 916 A.2d 1002 (2007), said, in dicta, that absent a strong showing of legislative history demonstrating a contrary intent [concerning the enactment of LE § 9-633], credit should be given the employer based on weeks rather than dollars. 397 Md. at 320 , 916 A.2d 1002 . In our view, based on the language used in LE § 9-633 together with the legislative history of LE § 9-633, a dollar credit rather than a weeks credit methodology should have been utilized in this case. We shall therefore reverse the ³⁹⁶ judgment of the circuit court and remand the case to that court with instructions to enter summary judgment in favor of the injured worker and to remand the case to the Commission with instructions to grant the employer credit based on the dollars paid by the employer for 148 weeks. I. Undisputed facts.

Andrew Swedo, Jr. was injured on November 8, 2002 when he fell from a ladder and sustained injuries to his right shoulder and left leg. He also suffered psychiatric injuries. He was injured while in the course of employment with W.R. Grace & Co., Inc. The Commission filed an order on June 23, 2006 finding that Mr. Swedo had a 70% permanent partial disability under “other cases,” industrial loss of use of the body, “40% of which is reasonably attributable to the accidental injury that occurred on November 3, 2002.” This computed to a total award of $46,800 ($234 x 200 weeks). Mr. Swedo filed a petition for judicial review in the Circuit Court for Baltimore County and requested a jury trial.

The jury found in favor of Mr. Swedo by modifying his permanent partial disability to 70% permanent partial disability under “other cases,” 50% of which was due to the November 3, 2002 accident. The change from 40% to 50% disability increased the award to $525 per week for a period of 333 weeks. As previously mentioned, the Commission gave the employer credit for the 148 weeks that compensation had been paid.

II

Maryland appellate cases decided prior to the effective date of LE § 9-633. A. Wright v. Philip Electronics North American Corporation, 112 Md.App. 642 (1997). Patricia Wright was injured in an accident while working for Philip Electronics North America Corporation. Id. at 644 , 685 A.2d 1216 .

Initially, the Commission found that Ms. Wright ³⁹⁷ had sustained a permanent partial disability of 50% and was entitled to benefits of $178 per week for 333 weeks. Philip Electronics and its insurer filed a petition for judicial review in the Circuit Court for Dorchester County where a jury found that Ms. Wright had sustained a permanent partial disability of only 40%. The Commission interpreted the decision to mean that Ms. Wright was entitled to only $144 in permanent partial disability benefits for 200 weeks, subject to a credit for the dollars actually paid by the employer. Wright filed a petition for judicial review in which she argued that the amount of credit should be based on weeks rather than dollars.

In the circuit court, both sides filed summary judgment motions. Id. The circuit court granted the employer’s motion and affirmed the Commission’s ruling that the employer was entitled to a dollar credit. Id.

Ms. Wright filed an appeal to this court and we reversed the circuit court’s decision. Id. 112 Md.App. at 655 , 685 A.2d 1216 . We held that the weekly credit approach should have been utilized because it was “consistent with the Act’s benefit structure.” Id. at 649 , 685 A.2d 1216 . We went on to explain: It follows naturally that if the compensation structure is expressed in terms of ‘weeks,’ then any credit for previous payments should also be expressed by ‘weeks.’ Only by using this method is it possible to insure that credit given for previous payment is consistent with the Act’s policies and structure.

Id. at 649-50 , 685 A.2d 1216 . B. Philip Electronics v. Wright, 348 Md. 209 (1997). In Philip Electronics , the Maryland Court of Appeals affirmed the judgment of this court, holding that the employer “was entitled to a credit only for the number of weeks of benefits actually paid pursuant to the Commission’s original order.” 348 Md. at 229 , 703 A.2d 150 . The Court stated: We conclude the language of § 9-627(k), as well as the language of § 9-629 and § 9-630, clearly and unambiguously demonstrate a legislative commitment to the payment of ³⁹⁸ permanent partial disability benefits within a weekly framework.

The purpose sought to be achieved by the Act further reinforces this legislative intent. In addition, Philip Electronic’s argument that the payment to Wright of another 58 weeks of benefits is inequitable, and amounts to an unjust windfall to her, fails when analyzed within the circumstances surrounding the statutory history of the Act. Id. at 218, 703 A.2d 150 . After a detailed analysis of LE, sections 9-627, LE 9-629 and LE 9-630, the Court also said: It is telling that in barring an offset against an award from another subsection of the Act, the General Assembly chose to characterize an award under § 9-630(a) in terms of weeks rather than as a monetary amount.

Id. at 220-21, 703 A.2d 150 . As can be seen, in Philip Electronics v. Wright, the injured worker benefitted by a weeks credit approach. C. Ametek v. O’Connor, 126 Md.App. 109 (1999). The issue presented in Ametek , as in the present case, called for a determination as to how to calculate the credit due to an employer/insurer for benefits paid to a claimant prior to an increase in the claimant’s award that resulted from judicial review. 126 Md.App. at 111 , 727 A.2d 437 .

In Ametek , the claimant, Susan O’Connor, argued “that the credit must be commensurate with the total monetary benefits actually paid, while the employer/insurer contended that the credit must be based on the actual number of weeks for which benefits were paid.” Id. The Commission initially found that Ms. O’Connor had sustained a permanent partial disability of 10% of her body as a whole, and therefore was entitled to benefits of $81 per week for 50 weeks or $4,050 ($81 x 50). Id. But after a jury found that Ms. O’Connor had sustained a permanent partial disability of 70% of the body as a whole, the Commission determined that she was entitled to a disability benefit of $134 per week for 467 weeks or $63,784.

Ms. O’Connor’s employer, Ametek , filed a motion for reconsideration in which it sought a credit ³⁹⁹ for the 50 weeks of compensation benefits that were paid to Ms. O’Connor prior to the jury’s increase in the percentage of disability. Id. The Commission agreed to reduce the employer’s obligation by 50 weeks. Accordingly, Ms. O’Connor’s disability benefits were calculated at $134 per week for 417 weeks rather than 467 weeks.

Id. The circuit court, however, reversed the Commission and ordered the employer to pay permanent partial disability benefits of $134 for 467 weeks less a credit of $4,050. Id. This court affirmed the circuit court’s judgment.

Id. at 123 , 727 A.2d 437 . In doing so, we acknowledged that the case “presents the flip side of Philip Electronics North America v. Wright ....” Id. In upholding the ruling by the circuit court, we stressed that the Worker’s Compensation Act “is a remedial statute, and its provisions are liberally construed in favor of employees in order to realize the Act’s benevolent purposes.” Id. at 116 , 727 A.2d 437 . We went on to say: “that when an award is increased upon judicial review, the [ejmployer is not entitled to a credit based on the number of weeks for which benefits were paid.

Rather, the [ejmployer is entitled to a credit for the total amount of money actually paid to the claimant prior to the increase.” Id. at 233 , 703 A.2d 150 . The Court of Appeals subsequently granted Ametek’s petition for a writ of certiorari, 355 Md. 610 , 735 A.2d 1105 (1999). D. Ametek v. O’Connor, 364 Md. 143 (2001). Ametek was decided by the Court of Appeals on May 10, 2001, which was approximately one month after the General Assembly passed LE § 9-633 but eight days prior to the date that Governor Parris Glendening signed that legislation into law.

In Ametek, the Court of Appeals reversed our decision and held that credits should be calculated based on the weeks theory, regardless as to whether that theory would benefit the employer or the injured worker. 364 Md. at 159 , 771 A.2d 1072 . The court said: Just as predictability and administrative ease are important from the standpoint of the timing of actions, so too are they important in establishing the rules governing the award of permanent partial disability benefits. It simply will not do ⁴⁰⁰ to have different rules, depending upon whether it is the claimant or the employer to whom the result is inequitable. Whether a credit is the amount the employer has paid or for the number of weeks the employer has paid should be determined on some principled and consistent basis and not made to depend upon which of the parties it will benefit.

As the petitioner submits, “The Act should not be interpreted differently depending on the outcome in different claims.” Id. In its opinion, the Ametek Court did not discuss LE section 9-633, nor was there any reason to do so inasmuch as the effective date of that statute had not yet arrived.

III

Del Marr v. Montgomery County, 397 Md. 308 (2007). The Del Man* case was decided after LE § 9-633 was enacted, but the language of section 9-633 did not control the court’s decision because the case did not involve a situation where “an award of permanent partial disability [was] reversed or modified by a court on appeal....” LE § 9-633. Instead, the Del Marr case dealt with a reopening of a prior award based on a worsening of an employee’s prior condition. 397 Md. at 313 , 916 A.2d 1002 . The sections of the Labor & Employment Article germane to cases dealing with a reopening were sections 9-627 through 9-630.

Id. at 315 , 916 A.2d 1002 . Paul Del Marr suffered an accidental injury to his back in January, 2001, while employed by the Montgomery County Board of Education (“the Board”). Id. at 312 , 916 A.2d 1002 . The Commission, in May, 2002, found that Del Marr had a 20% industrial loss of use of his body, half of which was attributable to his accidental injury and half due to a preexisting condition.

Id. at 312 , 916 A.2d 1002 . The Commission entered a permanent partial disability award requiring the Board and/or its insurer to pay the employee $114 per week for 50 weeks commencing on March 23, 2001, which was when the employee’s payments for temporary total disability ⁴⁰¹ ended. Id. at 312-13 , 916 A.2d 1002 . Subsequently, Del Marc-experienced an increase in pain and thereafter underwent corrective surgery.

Id. at 313 , 916 A.2d 1002 . Because of the worsening of his condition, the Commission, on January 9, 2003, amended its earlier award to find a 24% industrial loss of use of the body, 14% of which was due to the accidental injury. The Commission then increased Del Marc’s partial disability compensation to $114 per week for 70 weeks, subject to a credit “for monies previously paid” under the May 2002 order. Del Marc went back to work but later filed another petition to reopen the case based on further worsening of his condition.

Id. The Commission entered a new award in which it found that Del Marc had a 33% industrial loss of use of the body, 23% of which was due to the January, 2001 accidental injury. The Commission set compensation at $223 per week for a period of 115 weeks, commencing at the end of the period for which compensation had been awarded under the January, 2003 order. The third order called for an additional gross payment of $25,645 ($223 x 115 weeks).

That order was subject to a credit “for payments made” under the May, 2002 and January, 2003 orders. The Board filed a petition for judicial review in which it contended that it should be given credit based on the weeks theory. Id. at 313 , 916 A.2d 1002 . The Board had already paid the employee compensation for 70 weeks at the rate of $114 per week for a total of $7,980 and it construed the Commission’s order as limiting the credit to that dollar amount.

Id. at 314 , 916 A.2d 1002 . If only a dollar credit were allowed, the employee would be entitled to $25,645 less a credit of $7,980 or $17,665. Id. The Board claimed that the award should be construed to require the payment of $223 per week for only 45 weeks (115-70) a total of $10,035.

The circuit court agreed with the Board, and granted its motion for summary judgment. This court affirmed the circuit court’s judgment. Del Marr v. Montgomery County, 169 Md.App. 187 , 900 A.2d 243 (2006). The Court of Appeals affirmed our decision. 397 Md. at 320 , 916 A.2d 1002 .

The Court of Appeals said in regards to the Philip Electronics’ decision: ⁴⁰² We agreed with the conclusion of the Court of Special Appeals that the credit should be based on the number of weeks for which compensation had been paid under the initial order and not the dollar amount paid under that order. We regarded the issue as one of statutory construction and thus strictly one of law. After reviewing the same statutes at issue here—LE §§ 9-627 through 9-6S0—we declared that “[t]he plain language of the Act leads us to conclude that the Legislature expressed a commitment to the payment of permanent partial disability benefits based on a weekly framework, rather than focusing upon the total monetary value of such an award.” Id. at 221, 703 A.2d at 155 . That framework governed the calculations of credits.

Citing earlier decisions of this Court (principally St. Paul Fire & Mar. Ins. v. Treadwell, 263 Md. 430 , 283 A.2d 601 (1971) and Stapleford v. Hyatt, 330 Md. 388 , 624 A.2d 526 (1993)) and cases from other States we held that “when a claimant’s initial award by the Commission is reduced pursuant to a petition for judicial review, an employer shall be entitled to a credit for the number of weeks of benefits actually paid in accordance with the original order, rather than a credit based upon the amount of money previously paid to the worker.” Id. at 225-26, 703 A.2d at 158 . Id. at 315-16 , 916 A.2d 1002 . The Del Marr Court, although it recognized that LE § 9-633 was not applicable because section 9-633 did not apply to reopening cases (Id. at 317, 916 A.2d 1002 ), nevertheless discussed section 9-633 because, it had been relied upon, to some degree at least, in Del Marr’s brief and was also referred to in the amicus curia brief filed in support of Del Marr’s position by the Maryland Trial Lawyer’s Association.

The Court said: We first note that neither § 9-630(d) nor § 9-633 state anything inconsistent with our holdings in Philip Electronics or Ametek. Indeed, they are entirely consistent with the view expressed in those holdings that a modification that serves to increase or decrease compensation, whether occa ⁴⁰³ sioned by a judgment emanating from a judicial review action or a reopening, may have prospective effect only, achieved by allowing a credit for compensation previously paid calculated on a weekly basis. There is nothing in the text of those statutes requiring a inclusion that the weekly credit approach is impermissible in a modification arising from a reopening that increases the compensation from a first tier to a second tier. Absent some clearer expression of legislative intent, we are not willing to balkanize the Worker’s Compensation Law by creating special pigeonholes with different rules.

Id. at 319-20, 916 A.2d 1002 . (Emphasis added). Earlier in the Del Marr opinion, the court, in rejecting the injured worker’s position, also mentions section LE § 9-633. That mention of the statute was discussed in the following context: In this case, Del Marr asks us to do precisely what we declared in Ametek we would not do.

He first seeks to distinguish Ametek and Philip Electronics on the basis that they involved modifications to an award by a court, on judicial review, rather than by the Commission on a reopening due to a worsening condition, and adds that the enactment of LE § 9-633 effectively overrules those two cases in any event and serves to resurrect a 1991 case from the Court of Special Appeals, Norris v. United Cerebral Palsy, 86 Md.App. 508 , 587 A.2d 557 (1991), that is inconsistent with Ametek and Philip Electronics . He argues that, in the limited circumstance of a permanent partial disability award being increased through a reopening procedure from a first tier award to a second tier award—namely, his case—the Commission either may or must allow a dollar credit, even if that results in a retroactive increase in compensation. We are not impressed with those arguments. Id. at 317-18 , 916 A.2d 1002 .

E. Legislative history of LE § 9-633. What is now LE § 9-633 had its origin in Senate Bill 877 and House Bill 1278, both of which were introduced in the ⁴⁰⁴ 2001 session of the Maryland General Assembly. 3 At the time that LE § 9-633 was passed, and at present, the word “compensation,” insofar as is here pertinent, was defined as meaning: “The money payable under this title to a covered employee or the dependents of a covered employee.” See LE section 9-101(e)(l). 4 And, as previously mentioned, section 9-633 reads, in material part, “[i]f an award of permanent partial disability compensation is reversed or modified by a court on appeal, the payment of any new compensation awarded shall be ... subject to a credit for compensation previously awarded and paid.... ” (Emphasis added). For our purpose, the key word in LE § 9-633 is “compensation.” Bill 877, prior to passage, was considered by the Senate Finance Committee. The Finance Committee floor report was written prior to the Court of Appeals decision in Ametek.

When the report was written, under governing Maryland precedent, if the employer, on appeal, succeeded in lowering the percentage of permanent partial disability, the employer was entitled to a “weeks credit,” Philip Electronics v. Wright, 348 Md. at 220-21 , 703 A.2d 150 , but if the employee was successful on appeal by raising the percentage of disability, the employer was entitled to only a dollar credit. Ametek, 126 Md.App. at 123 , 727 A.2d 437 . In other words, whether a dollar credit or a weeks credit was applied depended on who won on appeal. As will be seen, the legislative intent of both the Maryland House of Delegates and the Senate was to provide a uniform method of calculating credit for past payments regardless as to which party won on appeal.

A report by an analyst employed by the Senate Finance Committee appears in the legislative file kept by the Department of Legislative Reference. That report reads: ⁴⁰⁵ House Bill 1278 is similar to Senate Bill 877[,] which the Senate passed earlier this session. House Bill 877(sic) provides that, if an award of permanent partial disability under the State’s Workers’ Compensation laws is reversed or modified by a court on appeal, the payment of any new compensation awarded will be subject to a credit for compensation previously awarded and paid. Current law is silent as to whether a credit should he in the form of compensation previously paid or weeks previously paid.

(Emphasis added). A lengthy summary of Senate Bill 877 is contained in the Senate Finance Committee’s floor report. That summary reads, in relevant part, If an award of permanent partial disability compensation is reversed or modified by a court on appeal, the payment of any new compensation awarded shall be subject to a credit for compensation previously awarded and paid. • A dollar credit, a,s opposed to a number of weeks paid credit, is more equitable to all parties (especially for consistency, whether the award is increased or decreased on appeal). • The law is silent on the issue of how the credit is to be calculated—if this is not addressed in the law, then the court will need to decide—it is clear that they are struggling with this. (Emphasis added).

In the context of the portion of the summary just quoted, the phrase “compensation previously awarded and paid” clearly means dollars previously awarded and paid—not weeks. The