CASE NO. 5622 CRB-3-10-12
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
JANUARY 19, 2012
SABRINA M. MONACO-SELMER
TOTAL CUSTOMER SERVICE
TRAVELERS INDEMNITY COMPANY
The claimant was represented by Francis P. Cipriano, Esq., Law Offices of Francis P. Cipriano, 1220 Whitney Avenue, P.O. Box 6503, Hamden, CT 06517.
The respondents were represented by Timothy G. Zych, Esq., Law Offices of Cynthia M. Garraty, Crossroads Corporate Park, 6 Devine Street, North Haven, CT 06473.
This Petition for Review1 from the December 17, 2010 Ruling on the Claimant’s Motion to Preclude by the Commissioner acting for the Third District was heard June 24, 2011 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Stephen B. Delaney and Clifton E. Thompson.
JOHN A. MASTROPIETRO, CHAIRMAN. The respondents in this matter have appealed from the trial commissioner granting a Motion to Preclude due to the absence of a timely disclaimer to the claim. The respondents argue that as they did advance two payments to the claimant following the receipt of the Form 30C this relieved them of the obligation to file a prompt disclaimer. The trial commissioner determined that the payments to the claimant did not comport with the statutory requirements under § 31-294c(b) C.G.S. to pay a claim without prejudice. We agree. We affirm the decision of the trial commissioner and dismiss this appeal.
The trial commissioner laid out the relevant facts herein in her Memorandum of Decision issued January 25, 2011. She found the claimant filed her Form 30C on April 13, 2010. The respondents filed a Form 43 denying the claim on June 3, 2010; more than 28 days after the Form 30C had been filed. Prior to filing the Form 43 the respondents made two payments to the claimant of $150.00 each on May 5, 2010 and May 12, 2010. Respondent’s counsel said these payments were advances of temporary total disability benefits due for the weeks of April 28, 2010 and May 5, 2010. No other payments of indemnity were made. The claimant filed her Motion to Preclude on August 9, 2010.
In her reasoning, the trial commissioner considered the respondents position that the two payments they had advanced complied with § 31-294c(b) C.G.S. wherein the obligation to file a disclaimer is tolled if payments to the claimant are “commenced” within the statutory 28 day period. She rejected that position. She also found the respondents had not complied with Administrative Regulation § 31-296-2 as they had not calculated an average weekly wage or disability rate or provide the claimant with any written explanation as to how the respondents arrived at the amount of the payments. Finding the respondents had failed to meet their specific requirements under the statute the trial commissioner granted the Motion to Preclude.
The respondents did not file a Motion to Correct so this panel must give the facts found herein conclusive effect. Stevens v. Raymark Industries, Inc., 5215 CRB-4-07-4 (March 26, 2008), appeal dismissed, A.C. 29795 (June 26, 2008). The respondents argue that as a matter of law the trial commissioner erred as they believe they did comply with the terms of § 31-294c(b) C.G.S. and that Administrative Regulation § 31-296-2 is inapplicable. Based on the facts on the record, we believe the trial commissioner could reasonably find that the respondents had not complied with the statute and therefore we affirm the Motion to Preclude.
Our point of departure in evaluating this matter starts with the precedent in Harpaz v. Laidlaw Transit, Inc., 286 Conn. 102 (2008) which mandates that preclusion must be granted by the trial commissioner when a respondent fails to comply with § 31-294c(b) C.G.S. and does not proffer a timely disclaimer. As we pointed out in Mehan v. Stamford, 5389 CRB-7-08-10 (October 14, 2009), aff’d, 127 Conn. App. 619 (2011), cert. denied, 301 Conn. 911 (2011) Donahue v. Veridiem, Inc., 291 Conn. 537 (2009) decisively restated the policy enunciated in Harpaz in favor of the “harsh remedy” of preclusion when a respondent does not file a timely disclaimer. Donahue, supra, 550. In Mehan, this tribunal explained that “[t]o the extent there was any ambiguity as to the issues in this case following the Harpaz decision the Donahue decision has resolved them decisively in a manner adverse to the respondent.” Id.
In her opinion in Harpaz, Justice Katz undertook a review of the legislative history behind the preclusion statute. She concluded that while the 1993 amendments to the statute protected parties that paid compensation to the claimant during an investigation period not to exceed one year, the respondent in that case could not contest the extent of disability.
Although the 1993 public act did not state expressly that the conclusive presumption would bar such defenses, it expressly set forth the prerequisite for preserving the right to assert such defenses—timely payment of compensation. See Public Act 93-228, § 8. Upon satisfying that prerequisite, the employer would have one year to raise any defense, including contesting the extent of disability. The language limiting this right to certain employers for a specified period of time, indicates that, just as an employer would preserve its right to assert such defenses if it timely paid compensation, the employer necessarily would lose the right to assert those same defenses if it did not pay compensation within the prescribed period. Indeed, reading the public act otherwise, an employer who complied with the legislature’s clear intent to encourage timely payment would be subject to a one year limitation for contesting the extent of disability, but an employer who violated that intent by neither paying nor contesting compensability within the prescribed period would be subject to no statutory limitation on its right to contest the extent of disability.
Harpaz, supra, 129-130.
The respondents in the present matter place great weight on the verbiage of § 31-294c(b) C.G.S. They focus specifically on the word “commence” in this sentence.
If the employer or his legal representative fails to file the notice contesting liability on or before the twenty-eighth day after he has received the written notice of claim, the employer shall commence payment of compensation for such injury or death on or before the twenty-eighth day after he has received the written notice of claim, but the employer may contest the employee’s right to receive compensation on any grounds or the extent of his disability within one year from the receipt of the written notice of claim, provided the employer shall not be required to commence payment of compensation when the written notice of claim has not been properly served in accordance with section 31-321 or when the written notice of claim fails to include a warning that (1) the employer, if he has commenced payment for the alleged injury or death on or before the twenty-eighth day after receiving a written notice of claim, shall be precluded from contesting liability unless a notice contesting liability is filed within one year from the receipt of the written notice of claim, and (2) the employer shall be conclusively presumed to have accepted the compensability of the alleged injury or death unless the employer either files a notice contesting liability on or before the twenty-eighth day after receiving a written notice of claim or commences payment for the alleged injury or death on or before such twenty-eighth day. (Emphasis added.)
As the respondents appear to interpret the word “commence”, they appear to take the position that once the respondents provide any payment to the claimant following the service of a Form 30C, such a payment serves to toll the remedy of preclusion. In the present matter the respondents failed to provide any explanation at the time the payments were issued as to how they arrived at the compensation rate. Moreover, they made only two payments to the claimant. The final payment was made on May 12, 2010. The claimant’s Motion to Preclude was filed months later, on August 9, 2010.2
We believe this is precisely the sort of situation that the Harpaz opinion mandates preclusion should be ordered. As the opinion clearly states, the employer loses the right to contest the claim when it does not pay compensation. Id., at 129.3 A respondent enjoys safe harbor from preclusion not by virtue of making a single payment in lieu of filing a disclaimer, but may only preserve its rights if “it timely paid compensation.” Id. The record is bereft of any representation that the claimant’s right to compensation ceased after two weeks. The Harpaz opinion requires a respondent to commence “compensation” which is defined as “all benefits provided under the Workers’ Compensation Act.” Id., fn. 8.
In the present circumstance the trial commissioner determined on a factual basis the payments in question were not consistent with the respondent’s obligations under the statute. We agree with the trial commissioner that the term “commence” as envisioned herein is properly defined as the start of a continuing course of conduct. We note in particular the respondents offer no alternative definition in their brief to the definition cited by the trial commissioner.4 In light of the extensive discussion in Harpaz as to the application of § 31-294c C.G.S. we find the respondents reliance on Bailey v. Mars, 138 Conn. 593, 598 (1952) ineffective as appellate tribunals have addressed these circumstances at length. At the point where neither a payment without prejudice for total disability nor a Form 43 was proffered to the claimant the respondent’s safe harbor from preclusion lapsed.
The respondents argue that given the nature of the claimant’s income that they should be excused from not promptly determining a compensation rate for the claimant. They also argue Administrative Regulation § 31-296-2 is inapplicable. This regulation states as follows.
In any case in which the employer or the insurer doubts the fact of accident or the causal relationship between the accident and the disability, but wishes to make payment without prejudice and without admitting liability, he shall notify both the claimant and the commissioner by letter that payment will be made without prejudice. Such letter shall contain a statement of the average weekly wage, the compensation disability rate, the number of dependent children or stepchildren and the total weekly benefit to be paid. A formal notice of the employer’s intention to contest liability (Form 43) shall accompany such letter to protect the respondent’s rights. Payments without prejudice shall be made for not more than six weeks. If, at the end of such period, the employer or insurer has completed his investigation and determines the accident is compensable, a voluntary agreement shall be offered. Otherwise, the employer shall promptly request an informal hearing.
Citing Cantoni v. Xerox Corp., 251 Conn. 153, 160 (1999), the respondents argue the administrative regulation was superseded by statute. We do not find that the amendments made to the preclusion statute have had that effect except to the extent the period in which a respondent may pay without prejudice was extended from six weeks to one year. See Harpaz, supra, 117-128.5 We also note that in Sellers v. Sellers Garage, Inc., 80 Conn. App. 15, 23-26 (2003), cert. denied, 267 Conn. 904 (2003) the Appellate Court determined that although the circumstances of that case did not implicate Administrative Regulation § 31-296-2; the court referenced this Commission’s approach to reading this regulation in a consistent manner with the amendments to § 31-294d C.G.S., and raised no issue as to this interpretation of statute. Id. Our interpretation of Sellers is that the Appellate Court acted in an implied fashion to uphold the validity of the regulation.6
In light of these circumstances where the respondents reached an arbitrary approximation of the claimant’s compensation rate we are perplexed as to how the respondents believe they complied with the law. If we were to decide that the administrative regulation at issue is now ineffective, it would appear that the terms of § 31-310 C.G.S. would be applicable in determining the average weekly wage and the appropriate compensation rate for temporary total disability. The record provides no grounds to find compliance with that statute either. We do agree with the respondents that the Cantoni precedent herein has relevance, but only in terms of its holding that we are limited to the precise manner the statute is drafted in applying Chapter 568. The respondents offer no authority for their position that the arbitrary compensation rate they provided herein was consistent with either the statute or the regulation.
In Casey v. Northeast Utilities, 249 Conn. 365 (1999) the Supreme Court pointed out that “[t]he workers’ compensation system is also designed to minimize the adverse effects that administrative delays could have on the financial status of an injured employee.” Id., at 379. The purpose of the system “is to provide a prompt, efficient, simple and inexpensive procedure for obtaining benefits related to employment.” Pietraroia v. Northeast Utilities, 254 Conn. 60, 72 (2000).
In keeping with the clear imprimatur of cases such as Casey discussing our humanitarian purpose it is clear the statutory interpretation harmonious with that purpose requires that to “commence” payments a respondent must make consistent, regular payments to the claimant until a Form 43 or Voluntary Agreement is issued. Those payments must be calculated in a manner consistent with our statute and regulations so that the claimant receives adequate weekly compensation for his or her disability during the respondent’s investigation period, which may run as long as 52 weeks under our present statute. Fundamental fairness and our administrative regulations demand that when payments are made without prejudice that the claimant be properly informed of this decision. Following these clear directives achieves two important goals. It provides necessary sustenance to injured workers while prompting employers and insurers to reach prompt decisions as to how they intend to address disputed claims.
It is abundantly clear from reviewing Harpaz, supra, that the statute intended respondents to promptly decide whether to accept a claim, deny a claim, or make payments without prejudice. The respondent did not effectively perform its obligations pursuant to statute. The trial commissioner on the record herein could reasonably determine that the Motion to Preclude should be granted.
The Motion to Preclude is upheld. The appeal is dismissed.
Commissioners Stephen B. Delaney and Clifton E. Thompson concur in this opinion.
1 We note that extensions of time were granted during the pendency of this appeal. BACK TO TEXT
2 The commission records indicate that a Form 43 was received from the respondents on June 3, 2010. The respondents represent this form was filed on May 28, 2010. There is no dispute the claimant received no payment between May 12, 2010 and the date of the Form 43. BACK TO TEXT
3 Even if we were to assume the amount of the payment was enough to constitute substantial compliance with the statute, the terms of the Harpaz decision supports the trial commissioner’s reasoning since after only two payments were made and compensation ceased without Form 43. BACK TO TEXT
4 The trial commissioner termed the respondent’s definition of “commence” as encompassing a single event as “absurd and unworkable,” Harpaz v. Laidlaw Transit, Inc., 286 Conn. 102, 109 (2008). We agree. BACK TO TEXT
5 In the extensive discussion of the 1990, 1991 and 1993 amendments to the statute which appear in Harpaz v. Laidlaw Transit, Inc., 286 Conn. 102 (2008) there is no reference to any legislative intent to repeal or override the pre-existing regulation discussed herein. We must endeavor to apply a construction of the statute that makes a harmonious whole of its constituent parts, Fredette v. Connecticut Air National Guard, 283 Conn. 813, 821-822 (2007). BACK TO TEXT
6 In Sellers v. Sellers Garage, Inc., 80 Conn. App. 15, 23-26 (2003), cert. denied, 267 Conn. 904 (2003) the respondent had denied the claim, and then subsequently made a single payment without prejudice. The claimant argued the respondents were obligated to file a Form 36 discontinuing payments. We disagreed, see Sellers v. Sellers Garage, Inc., et al., 4391 CRB-5-01-5 (April 26, 2002) and for somewhat different reasons, the Appellate Court upheld the result. The respondents in the present matter, unlike the respondent in Sellers, had not disclaimed liability for the claim prior to advancing payments. Therefore, the trial commissioner concluded Administrative Regulation § 31-296-2 applied to these circumstances. Whether or not the respondents complied with this regulation is an ancillary issue as to whether they complied with § 31-294c(b) C.G.S. which governs preclusion. BACK TO TEXT