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R. K. Grounds Care v. Wilson

Court of Special Appeals of Maryland

December 4, 2017

R. K. GROUNDS CARE, ET AL.
v.
KEVIN D. WILSON

         Circuit Court for Carroll County Case No. 06-C-15-069437

          Eyler, Deborah S., Meredith, Arthur, JJ.

          OPINION

          Eyler, Deborah S., J.

         In this appeal, we hold that the Workers' Compensation Commission ("Commission") does not have jurisdiction to decide whether money payable in an approved settlement of a claim is subject to garnishment.

         FACTS AND PROCEEDINGS

         After suffering an injury at work on December 14, 2012, Kevin D. Wilson, the appellee, brought a workers' compensation claim against his employer, R.K. Grounds Care ("RK"), and RK's insurer, Chesapeake Employers Insurance Company ("Chesapeake"), the appellants. On March 14, 2014, the parties agreed to settle the claim for $3, 500, which included an attorneys' fee and a medical evaluation fee. The settlement was memorialized in an "Agreement of Final Compromise and Settlement" ("Agreement"), which was submitted to the Commission for approval. On March 20, 2014, the Commission issued an order approving the settlement with one small change that is of no consequence to this appeal.

         At the time of all these events, three child support arrearage cases were pending against Wilson in the Circuit Court for Carroll County.[1] On March 31, 2014, in that court, the Carroll County Bureau of Support Enforcement ("Bureau") filed a "Notice of Child Support Lien" in each child support case, for a total of $ 6, 691.69 in child support arrears. As we shall discuss, the child support liens operated as judgments. RK and Chesapeake were notified of the child support liens that same day.

         On April 2, 2014, Chesapeake paid the attorneys' fee and medical evaluation fee due under the Agreement. The $2, 246.66 balance of the settlement money, i.e., Wilson's share, was far less than his child support arrearage. Chesapeake advised Wilson's lawyer by email that day that "claimant has a child support lien so his portion is not being sent out." Two days later, it further advised Wilson's lawyer that it was awaiting receipt of writs of garnishment and was planning to send all of Wilson's share of the settlement to the Bureau. By email of May 6, 2014, Wilson's counsel informed Chesapeake that, in his view, the Bureau was not entitled to receive the full amount of Wilson's share of the settlement.

         On July 2, 2014, the Circuit Court for Carroll County issued writs of garnishment in two of the child support cases, and, on July 8, 2014, it issued a writ of garnishment in the third case. The writs were served on Chesapeake as garnishee and mailed to Wilson as judgment debtor. Wilson did not file a motion (or any paper) in the garnishment proceedings. On August 5, 2014, Chesapeake issued three checks to the Bureau, judgment creditor, for sums totaling the full amount of Wilson's share of the settlement.[2]On August 14, 2014, Chesapeake filed answers in all three child support cases. Based on the payments made by Chesapeake, the judgments for child support arrearages in two cases were marked partially satisfied and the judgment in the third case was marked fully satisfied.

         More than three months later, on November 26, 2014, Wilson filed an "Issues" form with the Commission stating, "COMMISSION APPROVED THE AGREEMENT OF FINAL COMPROMISE AND SETTLEMENT ON 3/18/14, BUT THE CLAIMANT IS STILL AWAITING RECEIPT OF HIS SHARE OF SETTLEMENT PROCEEDS."

         On April 29, 2015, the Commission held a hearing, which consisted of argument of counsel. Wilson took the position that his share of the settlement money was exempt from garnishment, under Md. Code (1974, 2013 Repl. Vol.), section 11-504 of the Courts and Judicial Proceedings Article ("CJP"), and therefore Chesapeake should have paid it to him, not to the Bureau. RK and Chesapeake argued that that exemption did not apply. On July 6, 2015, the Commission issued a final order finding that CJP section 11-504(b)(2) applied to exempt Wilson's share from garnishment but that an exception in CJP section 11-504(i)(2) also applied. The Commission determined that, under the exception, 75% of Wilson's share of the settlement money had been subject to garnishment; therefore, Chesapeake should have paid Wilson $421.99 of his share. It further found that the Bureau had $529 in escrow, and that the $421.99 should be paid by the Bureau to Wilson. It ordered, however, "that in the event no monies remain in escrow, that [RK and Chesapeake] be responsible for paying the amount due [$421.99] to [Wilson]."[3]

         Unhappy with that outcome, RK and Chesapeake filed a petition for judicial review of the Commission's final order in the Circuit Court for Carroll County. The parties stipulated to the material facts and asked the court to render a decision based on the law.

         After a hearing, the court issued a memorandum opinion ruling that workers' compensation settlements are subject to garnishment under Title 10 of the Family Law Article; that garnishments under that title are limited by CJP section 11-504(b)(2); that CJP section 11-504(b)(2) applied; and that pursuant to CJP section 11-504(i)(2), 25% of Wilson's share of the settlement funds could be garnished. In an accompanying order, the court affirmed in part and reversed in part the final order of the Commission; determined that Wilson was entitled to $1, 684.99 (75% of his share of the settlement money); and ordered that "notwithstanding any prior payments which may have been made to the [Bureau], [RK] and [Chesapeake] are responsible for making" the $1, 684.99 payment to Wilson.

         RK and Chesapeake noted this timely appeal, presenting three questions for review, which we have consolidated and reworded:

I. Did the circuit court err by ruling that CJP section 11-504(b)(2) applied to Wilson's share of the settlement?
II. If not, did the circuit court err by ruling that under CJP section 11-504(i), 25% of Wilson's share of the settlement was subject to garnishment for unpaid child support?[4]

         We shall not address either question because, as stated above, we conclude that the Commission lacked subject matter jurisdiction to decide whether Wilson's share of the settlement money (or any part of that share) was exempt from ...


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