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Injured Workers' Insurance Fund v. Uninsured Employers' Fund

Court of Special Appeals of Maryland

January 30, 2015

INJURED WORKERS' INSURANCE FUND
v.
UNINSURED EMPLOYERS' FUND, ET AL

For Appellant: Kevin E. O'Neill (Schmidt, Dailey & O'Neill, LLC on the brief) all of Baltimore, MD.

For Appellee: Maximilian A. Bulinski, Honors Attorney of Baltimore, MD (Scott E. Massengill of Towson, MD Douglas F. Gansler, Attorney General) all on the brief.

Deborah S. Eyler, Hotten, Reed, JJ.

OPINION

Page 610

[221 Md.App. 324] Eyler, Deborah S., J.

The Workers' Compensation Commission (" the Commission" ) awarded temporary total disability benefits to claimant Xiong Yao. Yao had two employers. The Injured Workers' Insurance Fund

Page 611

(" IWIF" ), the appellant, insured one of the employers. Ultimately, it paid the entire award. Yao's other employer was uninsured.

In two orders, the Commission ruled that because one of Yao's employers was uninsured, the Uninsured Employers' Fund (" the Fund" ), the appellee, was jointly and severally liable with IWIF for the award. It ordered the Fund to reimburse IWIF for one-half of the benefits paid. On judicial review of that decision, the Circuit Court for Baltimore County overturned the Commission orders, ruling that the Fund could not be ordered to reimburse IWIF.

IWIF appeals, presenting two questions for review, which we have combined and rephrased as follows:

Did the Commission have authority to order the Fund to reimburse IWIF for benefits IWIF paid to Yao?

We answer this question in the negative and shall affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

On June 24, 2005, Yao was working as a construction subcontractor at the Miyako Japanese Steakhouse in Ocean City when a propane gas explosion caused him to sustain burns to his entire body. Bo Hao Zhu and Qihua Chen were the owners of the restaurant.

Zhu had a workers' compensation insurance policy issued by IWIF. IWIF is an independent, but statutorily created, insurance company that is required to provide workers' compensation insurance to any employer in the state that is unable to obtain a policy in the private sector. See Md. Code (1991, 1999 [221 Md.App. 325] Repl. Vol., 2007 Supp.), § § 10-101 et seq. of the Labor and Employment Article (" LE" ).[1] Chen was uninsured.

On August 29, 2007, Yao filed a claim with the Commission for workers' compensation benefits arising out of the propane explosion accident. He identified Zhu and Chen as his employers.

On April 23, 2009, the Commission held a hearing on nine issues, including the identity of Yao's employer(s) at the time of the accident. On May 13, 2009, the Commission issued an award of compensation to Yao (" May 2009 Award" ). As relevant here, the Commission found that Yao had been temporarily totally disabled from June 24, 2005, until October 13, 2006, as a result of the accident; that Zhu was not Yao's employer; that Chen was Yao's employer; and that Chen was uninsured. It ordered Chen to pay Yao's causally related medical expenses and temporary total disability benefits (" TTD benefits" ) in the amount of $417 per week for the period of disability.[2],[3]

On May 29, 2009, the Fund intervened. The Fund is a statutory fund of last resort created by LE sections 9-1001, et seq., to pay a workers' compensation award to a covered employee whose employer is uninsured and defaults on an obligation to pay. The Fund requested a rehearing on the issue whether Zhu also was Yao's employer

Page 612

at the time of the accident. Three days later, the request for rehearing was denied. On June 10, 2009, in the Circuit Court for Worcester [221 Md.App. 326] County, the Fund filed a petition for judicial review of the May 2009 Award, and prayed a jury trial.

Meanwhile, on June 4, 2009, Yao made a written demand on Chen for payment of the May 2009 Award. Chen failed to respond or make payment. Thereafter, by letter dated July 7, 2009, Yao applied to the Fund for payment ...


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