TOPIC 3

Topic  3.2.2    Other Exclusions–Willful Intention

[ED. NOTE:  The following Michigan case is included for informational value only.]

Daniel v. Department of Corr., Mich., (No. 120460)(Mich. Supreme Court)(March 26, 2003).

            The Michigan Supreme Court ruled that a worker disciplined for sexual harassment is not eligible for depression-related compensation benefits since the injury was caused by intentional and willful action.  The court distinguished intentional and willful misconduct of a quasi-criminal nature from that of gross negligence where a worker can recover despite his responsibility for an injury.  Here a probation officer had propositioned several female attorneys and later alleged that he had felt “harassed.” by his accusers as well as by his supervisor who had suspended him.

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Topic  3.4       Coverage—Credit for Prior Awards

ERRATA

            The reference to “Topic 50.4.1” in the first paragraph of this subsection should have been to “Topic 85.4.1.”

Topic  3.4       Coverage—Credit for Prior Awards

Carpenter v. California United Terminals, 38 BRBS 56 (2004), grant'g and partly deny'g recon of 37 BRBS 149 (2003).

            This matter involves whether a second employer is entitled to a credit when a claimant first sustains a permanent partial disability while working for a first employer and then sustains a permanent total disability while working for the second employer. In this case, within the jurisdiction of the Ninth Circuit, the Board cited to Stevedoring Services of Americ v. Price, 366 F.3d 1045, 38 BRBS ___ (CRT)((9th Cir. 2004), rev'g in pert. part 36 BRBS 56 (2002) as being dispositive. In Price, the Ninth Circuit held that when an increase in an employee's average weekly wage between the time of a prior permanent partial disability and subsequent permanent total disability is not caused by a change in his wage-earning capacity, permitting him to retain the full amount of both awards does not result in any "double dipping."

            In the instant case, the ALJ had determined, as recognized by the Board, "that there was no increase, but rather a decrease, in claimant's income between the first and second injuries, and that the combination of the amounts between the first and second injuries, and that the combination of the amounts awarded in permanent partial and total disability benefits did not exceed two-thirds of claimant's average weekly wage at the time of [the second injury]. The Board affirmed the ALJ's finding that the instant case presented no danger of "double dipping," and his consequent determination that the claimant was entitled to receive concurrent awards of permanent partial and total disability benefits for purposes of Section 8(a).

            The Board further noted that the Ninth Circuit additionally held in Price that Section 6(b)(1) delineates the maximum compensation that an employee may receive from each disability award, rather than from all awards combined. In this regard, the Ninth Circuit reversed the Board's holding that the combined amount of the awards could not exceed the maximum compensation rate under Section 6(b)(1) is consistent with the plain language of the LHWCA. The Ninth Circuit's decision in Price thus rejects the Board's interpretation of Section 6(b)(1). The Board concluded that as the present case arises in the Ninth Circuit, the court's opinion was controlling.

            In the Board's first opinion in this matter, the Board reversed the ALJ's finding that the statutory maximum of Section 6(b)(1) is inapplicable and held that claimant's total award of benefits was limited to this applicable maximum. The Board then held, based on the reversal of the ALJ's aforementioned determination, that "[s]ince claimant is limited to the maximum award permissible under Section 6(b)(1), [the second employer] is entitled to a credit for permanent partial disability benefits paid by [the first employer.]" Now the Board finds that, pursuant to Price, "we vacate our prior decision regarding Section 6(b)(1) and reinstate the ALJ's holding that Section 6(b)(1) is inapplicable to the combined concurrent awards, there can be no credit due to [the first employer] for any payments made by [the second employer].

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Topic  3.4.1    LHWCA, Jones Act, and State Compensation

Songui v. City of New York, 2003 N.Y. App. Div. LEXIS 13890 (Index No. 10780/99)(Dec. 22, 2003).

            This is a summary judgment order wherein the private contractor, Reynolds Shipyard Corporation, successfully argued that a Jones Act claim should be dismissed since the barge repairman was a land-based worker with only a transitory connection to a vessel in navigation and was hired on a temporary basis to weld a metal plate onto a garbage barge owned by the City of New York. The court found that the worker was more properly covered under the LHWCA. The City of New York also moved for summary judgment claiming that federal maritime law should preempt state labor law. In denying the city's motion, the court noted that the New York Court of Appeals has previously held that the LHWCA does not preempt New York labor law and that an action may proceed to determine if there is any fault on the part of the city.

Topic  3.4.1    LHWCA, Jones Act, and State Compensation

[ED.  NOTE:   The following Social Security Disability offset case is included for informational value.]

Sanfilippo v. Jo Anne B. Barnhart, Commissioner of Social Security, 325 F.3d 391 (3rd Cir. 2003).

            At issue here is how a lump sum workers’ compensation settlement will offset the worker’s social security disability payments.  Here the claimant’s Social Security disability insurance benefit was reduced by his workers’ compensation benefit. Subsequently the worker settled his workers’ compensation claim for a lump sum.  The Social Security Administration chose to offset this lump sum by continuing to make the same monthly setoffs until the lump sum amount is reached (a period of 4.3 years).  The worker argued that the setoff of the lump sum award should have been prorated over his life expectancy (1,487 weeks).  The Third Circuit noted that when an individual’s workers’ compensation benefits are paid in a lump sum, the Social Security Act requires the Commissioner to prorate the lump sum payment and “approximate as nearly as practicable” the rate at which the award would have been paid on a monthly basis.  “In sum, we find nothing irrational about applying a periodic rate received prior to a lump-sum settlement to determine the offset rate that will approximate as nearly as practicable the hypothetical, future period rate of the lump-sum settlement.”

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