Weatherly v. Great Coastal Express Co., Inc.
BARBERA, J. Maryland’s workers’ compensation law provides for dependency death benefits to “individuals who were wholly dependent” upon a worker at the time of his or her “death resulting from an accidental personal injury or occupational disease[.]” See Md.Code (1991, 1999 RepLVoL, 2004 Supp.), § 9-681 of the Labor and Employment Article (“LE”). 1 The statute caps the dependency benefits at $45,000.00, but allows extended benefits to a “surviving spouse” or “child” who continues to be wholly dependent after $45,000.00 has been paid to that individual. See LE § 9-681(c), (d), (g). This case presents the question whether an individual who lived with, but was not married to, the deceased worker qualifies for extended benefits if that individual continues to be wholly dependent after the $45,000.00 cap in benefits is attained. Appellant, Dicie Weatherly, Personal Representative of the Estate of Edward Bernard Scheibel, resided with, but never married, Mr. Scheibel.
After the Workers’ Compensation Commission (“Commission”) determined that Ms. Weatherly was wholly dependent upon Mr. Scheibel at the time of his death, she was awarded dependency benefits pursuant to LE § 9-681. More than three years later, Great Coastal Express Co., Inc. (“Great Coastal”) and Liberty Mutual Fire Insurance Co. (collectively, “appellees”) informed Ms. Weatherly that 360 more than $45,000.00 had been paid to her, and her benefits would cease. Ms. Weatherly initiated proceedings before the Commission, arguing that she was entitled to continued dependency benefits. Appellees responded that Ms. Weatherly’s benefits should be terminated on the theory that, under LE § 9-681, she was not entitled to receive more than $45,000.00.
The Commission decided that Ms. Weatherly’s benefits were not required to be capped at $45,000.00. Appellees filed a petition for judicial review of the Commission’s decision in the Circuit Court for Howard County. The circuit court reversed the Commission’s decision, ruling that- LE § 9-681 limits Ms. Weatherly’s benefits to $45,000.00 because she is not a surviving spouse. In her appeal to us, Ms. Weatherly contends that the Commission correctly decided that she was entitled to continued benefits and that the circuit court erred when it reversed the Commission’s order to that effect.
For the reasons we discuss below, we agree with the circuit court that the Commission erred as a matter of law when it decided that Ms. Weatherly is entitled to benefits exceeding the $45,000.00 cap. We therefore affirm the circuit court’s judgment. FACTS AND LEGAL PROCEEDINGS On December 8, 1999, Edward Bernard Scheibel, an employee of Great Coastal, died after sustaining a work-related injury in an automobile accident on Interstate 95 in Howard County. In July 2000, Ms. Weatherly filed a “Dependent’s Claim” -with the Commission.
In an order dated October 30, 2000, the Commission found that Mr. Scheibel died after “sustain[ing] an accidental injury arising out of and in the course of [his] employment” with Great Coastal. The Commission also found that Ms. Weatherly, who evidently resided with Mr. Scheibel for 30 years before his death, was “wholly dependent” upon him at the time of his injury and death. 361 The Commission determined that Mr. Scheibel earned an average weekly wage of $720.40. The Commission therefore ordered appellees to pay $5,000.00 toward Mr. Scheibel’s funeral expenses and to pay Ms. Weatherly “compensation for her own use and benefit at the rate of $481.00, payable weekly, beginning December 8, 1999 and amounting to $45,000.00 and subject to further payments as provided in [LE § ] 9-681 ... so long as [Ms. Weatherly] continues to be wholly dependent[J” Appellees requested a rehearing on whether Ms. Weatherly was wholly dependent, and they filed a motion for modification of the order. Appellees did not challenge that aspect of the Commission’s order stating that Ms. Weatherly’s benefits could exceed $45,000.00 “subject to further payments as provided in” the statute.
The Commission denied appellees’ request for rehearing and motion for modification. Appellees then filed a petition for judicial review of the Commission’s orders in the Circuit Court for Howard County, challenging the Commission’s finding of total dependency. In February 2002, the circuit court entered summary judgment in favor of Ms. Weatherly and affirmed the Commission’s orders. Nearly two years after the initial award of benefits, Ms. Weatherly filed issues with the Commission.
The parties stipulated that Mr. Scheibel’s average weekly wage should have been determined to be $764.32, not $720.40. In an order dated October 3, 2002, the Commission corrected its earlier determination of Mr. Scheibel’s average weekly wage and amended its benefits award by directing that appellees pay Ms. Weatherly $510.00 (rather than $481.00) per week. On September 11, 2003, the Commission ordered appellees to pay Ms. Weatherly’s attorneys’ fees of $10,000.00. The Commission ordered that, for 85 weeks, $117.65 of her weekly benefits would be used to effectuate that award.
At the conclusion of that time period, Ms. Weatherly’s weekly benefits would resume at $510.00. 362 In a letter dated December 3, 2003, counsel for appellees informed Ms. Weatherly that her benefits would be terminated. The letter stated that she had been paid “in excess of $50,000.00 more than [the $45,000.00] she was entitled to under [LE] § 9-681[ ].” 2 Appellees took the position that LE § 9-681 capped dependency benefits at $45,000.00, and that, because Ms. Weatherly had not been married to Mr. Scheibel, she could not seek additional benefits. Ms. Weatherly responded to appellees’ letter by requesting an emergency hearing before the Commission. On January 30, 2004, the Commission held a hearing on the question whether appellees were obligated to pay Ms. Weatherly benefits in excess of $45,000.00.
Ms. Weatherly argued that appellees waived the argument that her dependency benefits were capped at $45,000.00, and that, in any event, the statute did not cap her benefits at $45,000.00. In an order dated February 2, 2004, the Commission found that Ms. Weatherly remained wholly dependent upon Mr. Scheibel. The Commission ordered appellees to “pay unto [Ms.] Weatherly, dependency benefits at the rate of $510.00” per week, retroactive to December 3, 2003, pursuant to LE § 9-681. 3 The Commission did not state why it believed Ms. Weatherly was eligible for the extended benefits. On February 25, 2004, appellees filed in the Circuit Court for Howard County a petition for judicial review of the Commission’s February 2, 2004 order.
That same day, appellees filed a motion to stay the Commission’s award, a motion for summary judgment, and a motion to shorten time for Ms. Weatherly to respond to the motion for summary judgment. 363 Ms. Weatherly opposed appellees’ motions and requested a hearing. She filed her own motion for summary judgment, arguing, inter alia, that appellees were barred from contesting the Commission’s order by application of the doctrines of res judicata and collateral estoppel. She also filed a motion for attorneys’ fees and costs. While the petition for judicial review was pending, Ms. Weatherly initiated another emergency hearing with the Commission.
She sought enforcement of the Commission’s February 2, 2004 order and requested attorneys’ fees. The Commission held a hearing and, on March 31, 2004, ordered appellees to pay Ms. Weatherly “a 20% penalty on the accrued benefits paid late per the Order of February 2, 2004; and pay unto [Ms. Weatherly’s counsel] an attorney fee in the amount of $500.00.” Appellees timely filed in the Circuit Court for Howard County a petition for judicial review of that order. Ms. Weatherly moved for summary judgment on the ground that the Commission had jurisdiction to award attorneys’ fees. She also sought attorneys’ fees in the judicial review action and moved to consolidate the two cases then pending in the circuit court.
On June 11, 2004, all pending motions came on for a hearing. The court consolidated the cases and, after hearing argument from counsel, orally rendered its ruling on each petition. The court determined that LE § 9-681 limited Ms. Weatherly’s benefits to a maximum of $45,000.00. The court viewed LE § 9-681 as expressing the General Assembly’s intent to limit death benefits payable to a claimant to $45,000.00, unless the claimant is “a surviving spouse” or is among a “certain class[ ] of children.” The court rejected Ms. Weatherly’s res judicata and collateral estoppel arguments.
The court also mentioned that it had not heard any argument concerning whether appellees were entitled to reimbursement of funds they paid to Ms. Weatherly in excess of $45,000.00. On this issue, the court 364 stated that it likely would not entertain that argument and implied that it would not be inclined to order reimbursement. 4 With regard to appellees’ petition for judicial review of the Commission’s February 2, 2004 order, the court granted appellees’ motion for summary judgment and denied Ms. Weatherly’s motion, thereby reversing the Commission’s order. The court granted Ms. Weatherly’s summary judgment motion on the petition from the Commission’s March 31, 2004 order, which had assessed a penalty and attorneys’ fees against appellees, thereby affirming that order. Appellees have not appealed that ruling.
A written order embodying the court’s ruling was docketed on June 25, 2004. Ms. Weatherly noted a timely appeal, raising the following questions: I. Whether the trial court erred in denying Ms. Weatherly’s motion for summary judgment on the grounds of res judicata and collateral estoppel.
II
Whether the trial court erred in ruling that the Commission erred in its interpretation of LE § 9-681, and thereby erred in reversing the Commission’s order granting Ms. Weatherly benefits above the $45,000.00 cap.
III
Whether the trial court erred in denying Ms. Weatherly’s motion for attorneys’ fees on the ground that appellees had filed a frivolous appeal from, and sought a stay of, the Commission’s order. We shall add facts as they become pertinent to our discussion. STANDARD OF REVIEW Our review of workers’ compensation proceedings is governed by § 9-745 of the Labor and Employment Article, which in pertinent part provides: 365 (b) Presumption and burden of proof — In each court proceeding under this title: (1) the decision of the Commission is presumed to be prima facie correct; and (2) the party challenging the decision has the burden of proof. (c) Determination by court. — The court shall determine whether the Commission: (1) justly considered all of the facts about the accidental personal injury ...; (2) exceeded the powers granted to it under this title; or (3) misconstrued the law and facts applicable in the case decided.
(e) Disposition. — (1) If the court determines that the Commission acted within its powers and correctly construed the law and facts, the court shall confirm the decision of the Commission. (2) If the court determines that the Commission did not act within its powers or did not correctly construe the law and facts, the court shall reverse or modify the decision or remand the case to the Commission for further proceedings. Md.Code (1991, 1999 RepLVol.), § 9-745 of the Labor and Employment Article. “[I]f the requirements of [Maryland] Rule 2 — 501[ ] are met,” a circuit court may enter summary judgment in an appeal from a decision by the Commission. Marshall v. Univ. of Md. Med.
Sys. Corp., 161 Md.App. 379, 382 , 869 A.2d 391 (2005). Pursuant to Maryland Code (1991, 1999 Repl.Vol.), § 9-750 of the Labor and Employment Article, we review the court’s ruling as we would rulings in other civil cases. 161 Md.App. at 382-83 , 869 A.2d 391 . “We [therefore] review the grant of summary judgment de novo.” Johnson v. Mayor & City Council of Baltimore, 387 Md. 1, 5 , 874 A.2d 439 (2005). 366 See also Marshall, 161 Md.App. at 383 , 869 A.2d 391 . “Summary judgment is only appropriate when, upon review of the facts and inferences therefrom in the light most favorable to the non-moving party, there is no genuine issue of material fact and the party in whose favor judgment is entered is entitled to judgment as a matter of law.” Clarence W. Gosnell, Inc. v. Hensley, 156 Md.App. 224, 231 , 846 A.2d 469 (2004). See also Md. Rule 2-501(f).
When asked, as we are in the present case, to interpret a statute, we recognize that “[t]he question before us is purely a legal one,” Johnson, 387 Md. at 5 , 874 A.2d 439 , so our review is de novo. We have “ ‘broad authority and may reverse the Commission’s decision when it is based on an erroneous conception of the law.’ ” Chaney Enters. Ltd. P’ship v. Windsor, 158 Md.App. 1, 25 , 854 A.2d 233 (2004) (quoting Bd. of County Comm’rs for Frederick County v. Vache, 349 Md. 526, 537 , 709 A.2d 155 (1998)). DISCUSSION Res Judicata and Collateral Estoppel Ms. Weatherly contends that the circuit court erred in denying her motion for summary judgment, because appellees should be precluded by the doctrines of res judicata and collateral estoppel from asserting the applicability of the $45,000.00 cap on dependency benefits.
Ms. Weatherly states that appellees did not raise the cap issue either in prior proceedings before the Commission or in their 2002 petition for judicial review. Citing LE § 9-736, Ms. Weatherly asserts that appellees should be “estopped” from arguing that her benefits should be capped at $45,000.00. Before addressing these contentions, we clarify what related issues are not before us. Although Ms. Weatherly’s first question presented in her brief characterizes her contention as implicating only res judicata and collateral estoppel, she also asserts, in the argument portion of her brief, a theory under the doctrine of equitable estoppel.
During closing 367 argument at the hearing on the parties’ respective motions for summary judgment, however, Ms. Weatherly’s counsel stated her agreement with the court’s reasoning that equitable estoppel does not apply in this case. Counsel stated: “The court has a good point on equitable estoppel and I would concede with that point on the court but 1 would ask this court realistically to look at the issues as presented as, as res judicata, collateral estoppel and then summary judgment on the definition of the statutory code.” This express statement by Ms. Weatherly, through her counsel, constitutes a waiver of her present argument concerning equitable estoppel, and we decline to consider it. See Williams v. Maryland Dep’t of Human Res., 136 Md.App. 153, 176 , 764 A.2d 351 (2000) (stating that the appellant was precluded from challenging on appeal the grant of summary judgment in the appellees’ favor, after having acquiesced to summary judgment before the circuit court). We likewise decline to consider Ms. Weatherly’s argument that appellees are judicially estopped from asserting the cap issue. “[Jjudicial estoppel, also known as the doctrine against inconsistent positions, and estoppel by admission, prevents a party who successfully pursued a position in a prior legal proceeding from asserting a contrary position in a later proceeding.” Chaney, 158 Md.App. at 40 , 854 A.2d 233 (internal quotation marks and citations omitted).
Ms. Weatherly did not raise judicial estoppel in the circuit court, and raises it for the first time in her reply brief. For two reasons, then, the argument is not properly before us. See Md. Rule 8-131(a); Beck v. Mangels, 100 Md.App. 144, 149 , 640 A.2d 236 (1994) (stating that “Md. Rule 8-504(a)(5) requires a party to present ‘argument in support of the party’s position,’ ” and “ ‘to present and argue all points of appeal in [her] initial brief’ ”) (citations omitted) (some emphasis added), ce rt. dismissed, 337 Md. 580 , 655 A.2d 370 (1995). We now consider the arguments that are properly before us.
Ms. Weatherly argues that, by operation of the doctrines of res judicata and collateral estoppel, appellees are foreclosed 368 from challenging the Commission’s award to her of benefits above the $45,000.00 cap. Appellees respond that neither doctrine bars their claims. The doctrines of res judicata and collateral estoppel are two “branches of a doctrine known as estoppel by judgment!;.]” Klein v. Whitehead, 40 Md.App. 1, 13 , 389 A.2d 374 , cert. denied, 283 Md. 734 (1978). Res judicata and collateral estoppel have the same function: “ ‘to avoid the expense and vexation of multiple lawsuits, conserve judicial resources, and foster reliance on judicial action by minimizing the possibilities of inconsistent decisions.’ ” Colandrea v. Wilde Lake Cmty.
Ass’n, 361 Md. 371, 387 , 761 A.2d 899 (2000) (citation omitted). Yet the doctrines are distinct from, one another. Id. at 387-88 , 761 A.2d 899 . The Court of Appeals has said: Res judicata literally means “a thing adjudicated,” and generally indicates “[a]n affirmative defense barring the same parties from litigating a second lawsuit on the same claim, or any other claim arising from the same transaction or series of transactions and that could have been — but was not — raised in the first suit.” Lizzi v. Washington Metro.
Area Transit Auth., 384 Md. 199, 206 , 862 A.2d 1017 (2004) (citation omitted), cert. denied, — U.S. —, 125 S.Ct. 2919 , 162 L.Ed.2d 297 (2005). Often referred to as “claim preclusion,” res judicata applies when the following conditions are met: [T]he parties to a second suit are the same or in privity with the parties to a first suit; the first and second suits present the same claim or cause of action; and there was a final judgment rendered on the merits in the first suit, by a court of competent jurisdiction. Boyd v. Bowen, 145 Md.App. 635, 655 , 806 A.2d 314 (2002). Accord Colandrea, 361 Md. at 389 , 761 A.2d 899 ; Hughes v. Insley, 155 Md.App. 608, 611 , 845 A.2d 1 (2003), cert. denied, 381 Md. 675 , 851 A.2d 594 (2004). 369 When these three elements are present, “the first claim is merged into the judgment and bars the second claim.” Boyd, 145 Md.App. at 655 , 806 A.2d 314 .
See also Hughes, 155 Md.App. at 611 , 845 A.2d 1 . Furthermore, [b]ecause a “claim” encompasses all rights the plaintiff has to remedies against the defendant respecting all or any part of the transaction or series of connected transactions out of which the claim arises, the doctrine of res judicata bars subsequent litigation not only of what was decided in the original litigation of the claim but also of what could have been decided in that original litigation. Boyd, 145 Md.App. at 656 , 806 A.2d 314 . The doctrine of collateral estoppel, also referred to as “issue preclusion,” is closely related to res judicata.
Colandrea, 361 Md. at 387 , 761 A.2d 899 . Collateral estoppel applies “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment[ ] and the determination is essential to the judgment.” Id. (internal quotation marks and citations omitted). If these conditions are met, “the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Id.
(internal quotation marks and citations omitted). See also Boyd, 145 Md.App. at 657 , 806 A.2d 314 (stating that, “[ujnder the doctrine of collateral estoppel, ... a determination of fact that was actually litigated in a first suit between parties is conclusive in a second suit, on a different cause of action, between the same parties or their privies”). To invoke the doctrine of collateral estoppel, “the proponent must establish that: (1) the issue sought to be precluded is identical to one previously litigated; (2) the issue must have been actually determined in the prior proceeding; (3) determination of the issue must have been a critical and necessary part of the decision in the prior proceeding; (4) the prior judgment must be final and valid; and (5) the party against whom estoppel is asserted must have had a full and fair opportunity to litigate the issue in the previous forum.” 370 Thacker v. City of Hyattsville, 135 Md.App. 268, 288-89 , 762 A.2d 172 (2000) (quoting Sedlack v. Braswell Seros. Group, Inc., 134 F.3d 219 , 224 (4th Cir.1998)), cert. denied, 363 Md. 206 , 768 A.2d 55 (2001).
Before addressing whether either res judicata or collateral estoppel applies in this case, we note that, in Maryland, it is not entirely clear whether these doctrines apply at all to decisions of the Commission. See Sugarloaf Citizens Ass’n v. Northeast Md. Waste Disposal Auth., 323 Md. 641 , 658-59 n. 13, 594 A.2d 1115 (1991) (stating that “[i]t is unclear under Maryland law to what extent principles of res judicata and collateral estoppel apply to administrative decisions”); Murray Int’l Freight Corp. v. Graham, 315 Md. 543, 549 , 555 A.2d 502 (1989) (assuming, arguendo, that res judicata principles apply to the Commission’s decisions, collateral estoppel would not assist the party asserting it); Mackall v. Zayre Corp., 293 Md. 221, 227 , 443 A.2d 98 (1982) (stating that the court would “assume, without deciding, that under the circumstances [presented in the case], res judicata or collateral estoppel principles are applicable to ... the [Commission],” because the doctrines would not assist the party asserting them); Trojan Boat Co. v. Bolton, 11 Md.App. 665, 668 , 276 A.2d 413 (1971) (stating that it is unnecessary to decide whether res judicata applies to proceedings before the Commission, because the issue presented could not have been raised in an earlier appeal from a decision of the Commission). But see Batson v. Shiflett, 325 Md. 684, 701-03 , 602 A.2d 1191 (1992) (stating that an administrative decision will be given preclusive effect when (1) the agency was acting in a judicial capacity, (2) the issues on appeal were actually litigated before the agency, and (3) resolution of those issues was necessary to the agency’s decision); State of Md. Cent. Collection Unit v. Kossol, 138 Md.App. 338, 344 , 771 A.2d 501 (2001) (stating that the Court agrees with the proposition in Batson); Dep’t of Human Res. v. Thompson, 103 Md.App. 175, 195-96 , 652 A.2d 1183 (1995) (recognizing that the Batson Court identified the “test for determining when an agency decision is entitled to preclusive effect”). 371 Scholarly materials also seem to differ on the subject.
Compare II Richard J. Pierce, Jr., Administrative Law Treatise § 13.3 (2002) (stating that “[t]he policy in favor of repose that underlies application of res judicata, or claim preclusion, to judicial decisions applies with equal strength to agency adjudications”), and A. Larson, 7 Workers’s Compensation Law § 127.07[2] (2000) (concepts of res judicata do apply to decisions of workers’ compensation commissions), with Richard P. Gilbert & Robert L. Humphreys, Jr., Maryland Workers’ Compensation Handbook, § 17.8 (2nd. Ed.1993) (stating that “[r]es judicata is not, generally speaking, applicable to awards made by the Commission”). 5 As the Court of Appeals and this Court have done in the past, we shall assume, without deciding, that both collateral estoppel and res judicata apply to Commission decisions. Even so, neither doctrine assists Ms. Weatherly. We first consider collateral estoppel.
Whether Ms. Weatherly has the entitlement to receive dependency benefits in excess of $45,000.00 was a question not litigated until appellees ceased making payments to Ms. Weatherly and she requested an emergency hearing on the issue. Because the issue was not “actually determined,” in a prior proceeding, Ms. Weatherly could not successfully rely upon that doctrine to bar appellees’ claim. The court properly rejected the argument as a basis for summary judgment. The court was also correct to deny Ms. Weatherly summary judgment on the ground of res judicata.
This doctrine applies only if appellees did not raise, but could have raised, the issue of Ms. Weatherly’s entitlement to benefits in 372 excess of the cap in an earlier proceeding before the Commission or the circuit court. The parties were not involved in litigating whether Ms. Weatherly was entitled to benefits in excess of $45,000.00 until Ms. Weatherly filed issues with the Commission regarding benefits in excess of $45,000.00. Before then, the proceedings focused on whether Ms. Weatherly was wholly dependent upon Mr. Scheibel, whether the appropriate amount of weekly benefits was awarded, and whether she was entitled to attorneys’ fees in that litigation. Even if appellees could have raised, at one of these proceedings, the question whether Ms. Weatherly is entitled to benefits above the $45,000.00 cap, we conclude that res judicata does not bar current litigation of that issue.
It has been said that the doctrine of res judicata is limited by the application of Maryland Code (1957, 1964 Repl.Vol., 1970 Cum.Supp.), Article 101, § 40(c), the predecessor to LE § 9-736(b). See Subsequent Injury Fund v. Baker, 40 Md.App. 339, 345 , 392 A.2d 94 (1978). LE § 9-736(b) provides: (1) The Commission has continuing powers and jurisdiction over each claim under this title. (2) Subject to paragraph (3) of this subsection, the Commission may modify any finding or order as the Commission considers justified.
(3) Except as provided in subsection (c) of this section, the Commission may not modify an award unless the modification is applied for within 5 years after the latter of: (i) the date of the accident; (ii) the date of disablement; or (iii) the last compensation payment. We discussed former § 40(c) in Baker, 40 Md.App. at 345-46 , 392 A.2d 94 . Our discussion in Baker informs our analysis in the present case, so we shall discuss it at some length. In Baker , Carlton Baker sustained an accidental injury during the course of his employment.
While recovering, doctors learned that Baker had a form of bone cancer, which 373 condition antedated his accidental injury. The Subsequent Injury Fund (the “Fund”) was impleaded as a party to the case, and the Commission awarded Baker $45,000.00 after it found him permanently and totally disabled. The Commission also found that Baker’s injury caused him to sustain a 40% loss of the use of his right hand, and ordered his employer/insurer to pay $6,667.00 of the award, leaving the Fund to cover the remainder. 40 Md.App. at 340, 392 A.2d 94 . The employer/insurer appealed the Commission’s decision to the Circuit Court for Baltimore County.
The Fund, however, did not file its own appeal or participate in the employer/insurer’s appeal. The circuit court remanded the case to the Commission to reconsider its award. Id. at 340-41 , 392 A.2d 94 . On remand, the Fund raised new issues with the Commission and argued that it was “not liable for a disability caused by the deterioration of a pre-existing impairment which arises after a subsequent compensable injury!.]” Id. at 341 , 392 A.2d 94 .
The Commission reaffirmed its earlier award against the employer/insurer, but eliminated its award against the Fund. Baker appealed, and the circuit court restored the Commission’s earlier award against the Fund. The circuit court concluded that, because the fund did not appeal the original award, as had the employer/insurer, that order was res judicata, and barred the Fund from litigating the issue. Id.
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