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Injured Workers' Insurance Fund v. Subsequent Injury Fund

Court of Appeals of Maryland

April 22, 2016

INJURED WORKERS' INSURANCE FUND
v.
SUBSEQUENT INJURY FUND, et al. BALTIMORE COUNTY, MARYLAND
v.
SUBSEQUENT INJURY FUND, et al

Page 366

          Circuit Court for Baltimore City. Case Nos. 24-C-13-008443, 03-C-13-014577.

         Argued by Lyndsey Beidle Meninger (Injured Workers' Insurance Fund of Towson, MD) on brief for Petitioner.

         Argued by Ellen Dunn Jones, Assistant Attorney General (Brian E. Frosh, Attorney General of Maryland of Hunt Valley, MD) on brief for Respondents.

         Barbera, C.J.[*] Battaglia, Greene, Adkins, McDonald, Watts, Harrell, Jr., Glenn T. (Retired, Specially Assigned), JJ.

          OPINION

Page 367

         [447 Md. 214] Greene, J.

         The two cases before us arise out of decisions from the Workers' Compensation Commission (" the Commission" ). In both cases, the Commission concluded that under Md. Code (1991, 2008 Repl. Vol., 2015 Cum. Supp.), § 9-806 of the Labor and Employment Article (" LE" ),[1] the amount owed to the Subsequent Injury Fund (" the SIF" or " the Fund" ) by the employers, the Maryland Transit Administration (" the MTA" )[2] and Baltimore County (" the County" ), is 6.5% of the Commission's award of compensation prior to the deduction of any statutory offset.

         In the first case, the employer, the MTA, filed in the Circuit Court for Baltimore City a petition for judicial review of the Commission's decision in the MTA's case. On April 21, 2014, after a hearing, the Honorable Pamela J. White of the Circuit Court for Baltimore City entered an Order affirming the decision of the Commission. The MTA filed a timely Notice of Appeal to the Court of Special Appeals. In the second case, the employer, the County, filed in the Circuit Court for Baltimore County a petition for judicial review of the Commission's decision in the County's case. Subsequently, both the [447 Md. 215] County and the SIF filed Motions for Summary Judgment. A hearing was held on July 29, 2014 before the Honorable Ruth A. Jakubowski of the Circuit Court for Baltimore County. Judge Jakubowski found that there were no issues of disputed fact and that the issue was strictly a matter of legal interpretation. On the same day, Judge Jakubowski entered an Order granting the SIF's Motion for Summary Judgment and denying the County's. The County filed a timely Notice of Appeal to the Court of Special Appeals. On December 17, 2014,

Page 368

the Court of Special Appeals granted the MTA's and the County's Joint Motion to Consolidate the cases. In a reported opinion, the Court of Special Appeals affirmed the judgments of the Circuit Court for Baltimore City and the Circuit Court for Baltimore County. Injured Workers' Ins. Fund v. Subsequent Injury Fund, 222 Md.App. 347, 112 A.3d 1092 (2015). The MTA and the County each filed a petition for writ of certiorari with this Court in the cases of Injured Workers' Ins. Fund v. Subsequent Injury Fund, 443 Md. 234, 116 A.3d 474 (2015) and Baltimore Cty. v. Subsequent Injury Fund, 443 Md. 234, 116 A.3d 474 (2015), respectively. We granted certiorari in both cases and consolidate them in this opinion to address the common question, which we have rephrased:[3]

Should the SIF assessment under LE § 9-806 be calculated based on the amount of an award prior to the statutory offsets granted by § § 9-610 and 9-503(e)?

         We shall answer this question in the affirmative and affirm the judgment of the Court of Special Appeals.

         [447 Md. 216] FACTUAL AND PROCEDURAL BACKGROUND

          The SIF originated in Chapter 637 of the Acts of 1945.[4] It was created by the General Assembly for the purpose of encouraging employers to employ disabled individuals " by limiting the [employer's] liability . . . in the event the previously disabled or injured individual sustained a subsequent occupational injury, although not of itself disabling, but which, coupled with previous impairment, rendered the individual permanently disabled." Anchor Motor Freight, Inc. v. Subsequent Injury Fund, 278 Md. 320, 324, 363 A.2d 505, 508 (1976) (citing Subsequent Injury Fund v. Pack, 250 Md. 306, 308, 242 A.2d 506, 508 (1968)). In the event an employee with a previous impairment suffers a subsequent injury on the job, the employer is liable to the employee only for injuries attributable to the work-related injury. See LE § 9-802. The SIF compensates the employee for the proportion of the injury that is attributable to a pre-existing condition. Id.

          The SIF has only one source of revenue.[5] It is funded by a 6.5% statutory assessment imposed on employers and insurers for " (i) each award against an employer or its insurer for permanent disability or death, including awards for disfigurement and mutilation; [or] (ii) . . . each amount payable by an employer or its insurer under a settlement agreement

Page 369

approved by the commission . . . ." [6] LE § 9-806(a). The assessment [447 Md. 217] " is for [the] payment of claims submitted to the Subsequent Injury Fund and is not a tax intended to benefit the State." LE § 9-806(e).

         The MTA Award

         On November 22, 2010, claimant, Salvatore Glorioso, Jr. (" Glorioso" ),[7] suffered a work-related injury in the course of his employment with the MTA. He subsequently filed a claim with the Commission. After a hearing, the Commission issued an Award of Compensation on September 11, 2012. It found that Glorioso sustained permanent partial disability " amounting to 30% industrial loss of use of the body as the result of an injury to the back." To compensate for this permanent partial disability, the Commission awarded weekly payments of $307.00 for a period of 150 weeks, for a total award of $46,050.00. The MTA was, however, entitled to an offset under LE § 9-610[8] because Glorioso also received disability [447 Md. 218] retirement benefits from the MTA. The offset of $118.27

Page 370

per week lowered the final amount of compensation to $28,390.50.

         On August 9, 2013, the SIF filed Issues with the Commission, stating " [t]he Employer and Insurer refuse to pay the 6.5% assessment on the award dated 9/11/12." The SIF took the position that " the assessment is due on the amount of the award regardless of any offset for retirement benefits" and requested a hearing on the issue. Following a hearing, the Commission issued an Order on December 17, 2013 requiring the MTA to pay the 6.5% assessment on the amount of compensation prior to offset. It stated that, " [t]he Commission gave or awarded the claimant 30% industrial loss of use of the body as a result of injuries to the back." Basing its decision on the rules of statutory construction,[9] it explained [447 Md. 219] that " the 6.5% assessment is on the amount that the Commission gave to the claimant[,] which is 30%."

         In the December 17, 2013 Order, the Commission also addressed the MTA's argument that the assessment should be on the amount payable, i.e., the amount the employer owes after the offset. The Commission concluded that " [a]n assessment on an amount payable is only for a settlement agreement." (emphasis in original). It noted that LE § 9-806(a)(1) distinguishes between settlement agreements and awards for permanent disability or death, using the phrase " amount payable" to impose the assessment on settlement agreements, but not to impose the assessment on awards for permanent disability or death.[10] Therefore, it reasoned that the phrase " amount payable" is inapplicable to the present case which involved an award of compensation for permanent disability.

         The County Award

         On May 13, 2002, claimant, a Baltimore County (" County" ) firefighter, Gary Shipp (" Shipp" ),[11] became disabled as a result of hypertension and coronary artery disease. He filed a claim with the Commission. After a hearing, the Commission issued [447 Md. 220] an Award of Compensation on March 5, 2012. It found that Shipp sustained permanent partial disability " amounting to 50% industrial loss of use of the body as the result of injuries to the body (hypertension) and coronary artery disease." To compensate for this permanent partial disability, the Commission awarded weekly payments of $525.00

Page 371

for a period of 333 weeks, for a total award of $174,825.00. The County filed a request for rehearing when it realized the March 5, 2012 Award of Compensation did not account for the statutory offset that it was entitled to under LE § 9-503(e). The County pointed out that it had been paying Shipp service retirement benefits.[12] LE § 9-503(e) provides an offset to prevent the weekly total retirement benefits and occupational disease compensation from exceeding an employee's weekly salary. The Commission issued a new Award of Compensation on March 29, 2012 and rescinded the March 5, 2012 Award. The new Award of Compensation accounted for the LE § 9-503 offset. Shipp received service retirement benefits [447 Md. 221] in the amount of $605.55 per week, which was subtracted ...


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