Opinion
BOARD No. 05869591
Filed: March 28, 1996
REVIEWING BOARD DECISION
(Judges McCarthy, Fischel and Wilson)
APPEARANCES
Bernard T. Loughran, Jr., Esq. for the employee
Jean M. Shea, Esq., for the insurer
The employee appeals from a decision in which the judge dismissed her claim because he did not find her account of her industrial accident persuasive. The employee argues that the judge erred by considering that liability was at issue at the hearing, because the insurer and employee had already executed an Agreement to Pay Compensation for a closed period of § 34 incapacity benefits. The insurer responds by contending that the Agreement to Pay Compensation was without prejudice to the insurer, as it was executed during the § 8(1) one hundred eighty day "pay-without-prejudice" period, and provided for benefits to be paid within that same period of time. We think that the employee is correct with regard to this issue of first impression under the new § 8(1), amended as of 1991 by St. 1991, c. 398, § 23. We reverse the judge's decision as to liability, and remand the case for further findings regarding causal relation and the extent of incapacity.
The word, "liability," is used here as a short-hand expression for whether the employee suffered an industrial injury arising out of and in the course of her employment.
Soon after the insurer received notice of an incident in which the employee injured her back at work on October 24, 1991, the insurer timely filed its Notification of Denial of Compensation, pursuant to G.L.c. 152, § 7(1). (Employee's Ex. 2A.) Approximately three months later, on February 19, 1992, the employee and the insurer executed an Agreement to Pay Compensation ("Agreement") while attending a conciliation at the Department of Industrial Accidents. The Agreement provided for temporary total incapacity benefits to be paid from October 24, 1991 to January 14, 1992. (Employee's Ex. 2B.) The Agreement was filed with and approved by the conciliator. The employee then filed a claim for continuing total incapacity benefits from January 15, 1992. At conference the judge awarded § 35 partial incapacity benefits of decreasing amounts from the claimed date and continuing. The insurer appealed to a hearing de novo. (Dec. 2, 4.)
The judge's description of the Agreement as providing for the payment of § 34 benefits from December 24, 1991 is not correct. (Dec. 4.)
At hearing the insurer raised, over the employee's objection, the issue of liability. (Dec. 3; Tr. 8-12.) The judge allowed the insurer to raise liability, stating in his decision that, "This claim is not an accepted case." (Dec. 4.) The hearing proceeded, and the employee testified. The parties stipulated, and the judge allowed, that testimony of three lay witnesses be taken by deposition. Based on the testimony of two of those witnesses, the judge found that the employee's account of her industrial accident was not persuasive. (Dec. 1, 14.) The judge therefore ordered that the case be dismissed.
The question posed by the employee is whether the Agreement executed by the parties precluded the insurer from raising liability as an issue at the hearing. We think that it did.
In Kareske's Case, 250 Mass. 220 (1924), the Supreme Judicial Court addressed the question of "the effect to be given to an agreement with regard to compensation, a memorandum of which has been filed with the department of industrial accidents and approved by it . . . ." Id. at 224. The court answered the query:
[I]t stands like a decision of a single member which the parties have not sought to have reviewed; that it is a final determination of all issues involved in the establishment of the right to compensation; that, as in the case of every other determination whether or not embodied in a decree, the board has jurisdiction to modify the award of compensation as changes take place in the condition of the injured employee . . . [citations omitted] . . . but the basic questions of liability under the law are not open for further consideration or different determination.
Id. (Emphasis added.) The Kareske rationale was affirmed in Perkins's Case, 278 Mass. 294, 299 (1932), in which the court stated, "[W]hen the agreement has been made and approved . . . further inquiry into the merits of the original controversy, both as to liability and compensation for the period covered, is at an end in the absence of fraud or mistake." More recently, the Appeals Court stated, "that approved agreements for compensation are still governed in general by the concepts set out in Perkins's Case; . . ." Cabral's Case, 18 Mass. App. Ct. 141, 144 (1984). See also Hansen's Case, 350 Mass. 178, 180 (1966). Therefore the employee's fundamental contention, that the approved Agreement forecloses the issue of liability from being reopened in any subsequent proceeding, is correct.
The "mistake" that can vitiate an Agreement to Pay Compensation must be an "error or misapprehension common to all the parties. The mistake must relate to the same matter and be mutual. Mistake of one party only is no ground for relief; it must be shared by all the parties.Perkins, supra at 301. There is no contention in the instant case that there was any mistake on the part of the employee regarding the effect of the Agreement.
The question that remains, however, is the effect, if any, of the new § 8(1) (St. 1991, c. 398, § 23) on the legal significance of approved agreements. § 8(1) was made effective December 23, 1991. However, it is procedural, and applies to all claims regardless of the date of injury. See St. 1991, c. 398, § 107. Therefore it applies to the instant claim with its October 24, 1991 date of injury.
G.L.c. 152, § 8(1), in pertinent part, provides that, "An insurer which makes timely payments pursuant to subsection one of section seven, may make such payment for a period of one hundred eighty calender days from the commencement of disability without affecting its right to contest any issue arising under this chapter." (Emphasis added.) The § 7(1) "timely payments" to which § 8(1) refers are as follows:
Within fourteen days of an insurer's receipt of an employer's first report of injury, or an initial written claim for weekly benefits on a form prescribed by the department, whichever is received first, the insurer shall either commence payment of weekly benefits under this chapter or shall notify the division of administration, the employer, and, by certified mail, the employee, of its refusal to commence payment of weekly benefits.
G.L.c. 152, § 7(1) (St. 1991, c. 398, § 20). In the instant case, the insurer denied the payment of compensation in a timely manner on the appropriate department form. (Employee's Ex. 2A.) We think that the insurer thereby foreclosed its one hundred eighty day pay-without-prejudice option. Three months later, when the insurer executed the Agreement, it did so under the provisions of G.L.c. 152, § 19(1), which, in pertinent part, states that, "Except as otherwise provided by section seven, any payment of compensation shall be by written agreement by the parties and subject to the approval of the department." (Emphasis added.) See also 452 CMR 1.05(2) ("When an insurer and an injured employee reach an agreement in accordance with the provisions of M.G.L.c. 152, § 19, a memorandum thereof on a form prescribed by the Department, signed by the parties, shall be filed with the Department within seven days thereof.") Cf. 452 CMR 1.05(1) ("When an insurer makes payment of benefits in a timely fashion it shall file a memorandum of payment on a form prescribed by the Department within 30 calender days of such insurer's receipt of an employer's first report of injury or an initial written claim for weekly benefits on a form prescribed by the Department, which is received first.") We think that the explicitly distinct treatment of the payment of benefits under § 7(1) — to which the provisions of § 8(1)'s pay-without-prejudice option apply — as opposed to payment pursuant to agreement under § 19(1), indicates that the two ought not be superimposed. The effects of payment pursuant to a § 19(1) agreement have not changed as a result of the 1991 enactment of § 8(1). By executing an agreement to pay compensation, an insurer still concedes the "final determination of the facts material to the existence of liability, of the fact of employment, of injury arising out of and received in the course of employment, of notice, etc.,. . . ."MacKinnon's Case, 286 Mass. 37, 38 (1934). The § 8(1) pay-without-prejudice option must be exercised diligently within the fourteen day time frame set out by the cross-referenced § 7(1).
We note that the sections of the Act addressing voluntary written agreements between employees and insurers have not changed in substance over the years. See Kareske's Case, 250 Mass. 220, 224-225 (1924) (describing effect of "a memorandum of the agreement filed with the department and approved by it" under then applicable § 6).
We therefore reverse the judge's conclusion that the employee failed to establish liability under the Act. We remand the case for further findings regarding causal relation and the extent of incapacity.
As a closing matter, we note that the judge's findings on liability was in error for another reason. The judge made specific credibility findings as to witnesses who testified by way of deposition. (Dec. 1, 14-15.) "[I]t is arbitrary, capricious and contrary to law for a judge to make findings based on the credibility or demeanor of witnesses whom the judge did not have an opportunity to observe." Antoine v. Pyrotector, 7 Mass. Workers' Comp. Rep. 337, 339 (1993). See also DiCenso v. Winchester Concrete and Carpentry, 7 Mass. Workers' Comp. Rep. 237, 239 (1993). However, because we reverse the judge's conclusion that the employee had failed to establish liability on the grounds discussed above, this error is moot.
So ordered.
________________________ William A. McCarthy Administrative Law Judge
_________________________ Carolynn N. Fischel Administrative Law Judge
_________________________ Sara Holmes Wilson Administrative Law Judge
Filed: March 28, 1996