ARABASZ v. LIN-EL, INC., No. 6315490 (Oct. 22, 1996)


John Arabasz, Employee v. Lin-El, Inc., Employer, Cincinnati Ins. Co., Insurer

BOARD No. 6315490Commonwealth of Massachusetts Department of Industrial Accidents
Filed: October 22, 1996

REVIEWING BOARD DECISION

(Judges Maze-Rothstein, McCarthy and Smith)

APPEARANCES

Brian Cloherty, Esq., for the employee.

David Perry, Esq., for the insurer Cincinnati, Inc. Co.

Gerald T. MacCurtain, Esq., for the insurer Liberty Mutual on brief.

MAZE-ROTHSTEIN, J.

We have the consolidated appeals of Cincinnati Insurance Co. (“Cincinnati”), from two separate decisions. The first decision was filed on September 1, 1992 (“Decision I).[1] The second decision was filed on January 30, 1995 (“Decision II”). They were consolidated on appeal to the reviewing board. Regarding Decision I, Cincinnati contends that the failure to find the employer’s insurer, Liberty Mutual (“Liberty”), liable was error because it had not properly terminated its coverage pursuant to G.L. 152, § 65B. On Decision II, Cincinnati argues that there was insufficient evidence in the record to support a finding of continued § 35 partial incapacity. We address both appeals in turn.

Now aged forty-seven, the employee worked as a glazier for various glass companies since he was fifteen. (Dec. 1, 3.) On September 19, 1990, the employee worked for Elite Erectors (“employer”) installing glass skylights at Harvard University’s Fogg Museum. (Decision I, 4.) To achieve this heavenly view, the employee climbed a ladder held at the base for stability by a co-worker. Incomprehensibly, the co-worker apparently found a more compelling duty or distraction and walked away from the ladder. Not surprisingly, the ladder began to shift. As he beat a hasty retreat from his precarious perch, Arabasz badly injured his left ankle. Id. Nevertheless, he remained on the job despite pain until September 29, 1990. He then sought medical treatment at a hospital emergency room where he was fitted for an ankle cast and advised to seek further treatment. (Decision I, 4-5, 7.)

Proceeding under the provisions of § 18,[2] on November 30, 1990 the employee filed a claim for G.L.c. 152, § 34 total incapacity benefits from the injury date onward against his employer, Elite Erectors, and its insurer Liberty. Because Liberty’s coverage was questionable, he also filed a claim against Lin-El, a contractor which had sub-contracted a limited portion of its work to Elite Erectors. Lin-El was insured by Cincinnati Insurance Company.[3] Both claims were joined at conference. An order issued on October 28, 1991 directing Cincinnati to pay weekly temporary total incapacity benefits. The claim against Liberty Mutual was denied. Cincinnati appealed to a hearing de novo.

At the hearing, Cincinnati argued that Liberty, as the employer’s carrier, was on the risk for the day of injury.[4]
Cincinnati also challenged the extent of the employee’s incapacity. On liability, the judge found that Liberty had properly cancelled the employer’s policy prior to the injury date, leaving the contractor Lin-El and, thus, Cincinnati at risk. The judge also found the employee partially incapacitated from the date of his decision and continuing. He therefore ordered Cincinnati to pay the § 35 partial incapacity benefits from September 1, 1992 onward. (Decision I, 7, 8.) We have Cincinnati’s appeal from this first decision.

During the pendency of the first appeal Cincinnati paid the employee § 35 benefits. On March 2, 1993, it filed a complaint to modify or discontinue compensation. (Cincinnati’s 1995 Brief, 2.) A § 10A conference was held and the complaint was denied. Cincinnati appealed to a hearing de novo. In his hearing decision, the judge found the employee remained partially incapacitated and ordered Cincinnati to continue § 35 payments. We also have Cincinnati’s appeal from this second decision.

Appeal I: Insurance Coverage and Policy Cancellation

We first address Cincinnati’s appeal of the September 1, 1992 decision (Decision I). Relying on the provisions of G.L.c. 152, § 65B, Cincinnati contends it was legal error to relieve Liberty of liability because there was no proper termination of its policy with the employer prior to the injury date. As grounds Cincinnati asserts: 1) Liberty did not properly notify the employer of the policy cancellation; 2) Liberty never received proper approval by the department; 3) even if approval is assumed, it was defective because the employer was not made aware of the commencement of the 10-day objection period provided in § 65B; and 4) the supposed notice of cancellation was sent to a different employer address than were other business mailings from Liberty.

Like any insurance contract, a worker’s compensation policy may be cancelled for no payment. Altinovitch’s Case,237 Mass. 130, 134 (1921). But because insurance is the fulcrum around which the entire worker’s compensation scheme rotates, the statutory requirements for cancellation have been strictly construed.Armstrong v. Aetna Ins. Co., 10 Mass. Worker’s Comp. Rep. ___ (June 25, 1996), appeal docketed No. 96-J-516 (AC July 25, 1996). Section 65B sets out the specific method of cancellation for policies issued under § 65A, more commonly known as “assigned risk” policies. Id. Section 65B provides in pertinent part:

If . . . it shall appear that the employer to whom the policy was issued is not or has ceased to be entitled to such insurance, the insurer, with the approval of the department,
may cancel such policy in the manner provided in this chapter; provided, that any insurer desiring to cancel such a policy shall give notice in writing to the department and the insured of its desire to cancel the same. The department may approve such cancellation unless the employer shall within ten days after receipt of such notice file with the department objections thereto. . . .

G.L.c. 152, § 65B (as amended in 1986) (emphasis added).

This version of § 65B requires insurers to 1) provide written notice to both the insured and the department of the insurer’sdesire to cancel any assigned risk policy and to 2) obtain approval by the department unless the employer files an objection within ten days after the receipt of the notice of the desire to cancel. These are the mandatory conditions precedent to a valid cancellation. If any one of the requirements is not satisfied the cancellation is invalid. Armstrong supra at ___.

Against this legal back drop Cincinnati makes several arguments. It first contends that Liberty’s notice to the employer was defective because it was mailed to a different address than the one used by Liberty in its prior dealings with it. (Dep. of Cornellier, 69-73.) This point touches upon an issue addressed inArmstrong, supra. There we held the requirement to notify the employer was not satisfied by notice sent to a vacant lot and returned unclaimed. Id. at ___.

Here, Liberty sent its notice to 101 Lin-El Drive on June 26, 1990. Cincinnati claims, however, that 751 Bethel Road was the correct address at that time. Mr. Cornellier, Liberty’s financial analyst, testified that Elite’s policy statement and payment bills reflect 101 Lin-El Drive as the correct address. (Dep. of Cornellier, 68-73.) We note that Liberty’s second notice sent August 16, 1990 was timely received by Elite four days later. It is not clear from this colloquy in the record which address was the correct one at the time Liberty sent its notice to the employer, and whether it received proper notice.

Cincinati [Cincinnati] also submits that the employer was not given sufficient notice to object to the cancellation within the statutory ten-day period because Liberty did not send the employer “other” formal notice of either the actual cancellation or of the cancellation notice filed with the department. (Cincinnati’s 1993 Brief, 5.) This argument lacks merit. Section 65B requires an insurer to give notice only of its “desire to cancel.” See § 65B,supra. The employer’s 10 day period for objection is triggered by the employer’s receipt of its own notice of that desire. Id. The statute does not require insurers to provide any additional notice to employers.

Cincinnati concedes in its brief that “[o]n or about June 26, 1990, Liberty Mutual sent Elite a Notice of Cancellation” which “stated Liberty Mutual’s intention to cancel the policy . . . as of July 15, 1990, if Elite did not pay the $627.00 premium by that date.” (Cincinnati’s 1993 Brief, 2.) Hence, the ten-day objection period would have begun run when and if the employer received notice of the insurer’s desire to cancel.

Finally, the parties agree that, nearly a month after the fact, the department received an August 3, 1990 notice that Liberty had cancelled its policy with the employer on July 15, 1990. As we have recently held, by its plain language § 65B requires “any insurer desiring to cancel such a policy shall give notice inwriting to the department . . . of its desire to cancel the same.” G.L.c. 152, § 65B, (emphasis added); see Armstrong, supra at ___ discussing the import the highlighted language).

The judge made no findings on any of the facts which go to the issue of coverage under § 65B. Though he reached a conclusion that Liberty’s cancellation was proper, it may very well be erroneous as a matter of law. But in the absence of findings on the issue, we do not know how he reached the legal conclusion on coverage, nor can we provide proper appellate review of whether that conclusion comports with or falls outside of the parameters of § 65B. See Praetz v. Factory Mutual Eng’g. and Research,
7 Mass. Worker’s Comp. Rep. 45 (1993). We therefore remand Decision I for further findings on whether Liberty strictly complied with each element of § 65B to effectively cancel the employer’s policy. See G.L.c. 152, § 11C.

Appeal II: Causal Relationship and Present Incapacity

Cincinnati’s second appeal challenges the April 26, 1994 decision (Decision II), which denied Cincinnati’s motion to modify or discontinue benefits, and ordered it to continue § 35 payments. At that hearing, Cincinnati contested the causal relationship between the employee’s right knee pain and the accepted left ankle injury as well as the extent of his incapacity.

On November 23, 1993, a doctor examined the employee pursuant to G.L.c. 152, § 11A. The physician diagnosed a sprained left ankle and post traumatic degenerative arthritis of both knees. He opined that the employee suffered a causally related nine percent loss of function in the left ankle. (Decision II, 6; Dep. of Dr. Rynne, 59.) However, because of the employee’s history of multiple injuries and twelve prior knee surgeries (six on each knee), the doctor could not offer an opinion on whether the subject industrial injury to the left ankle aggravated the pre-existing arthritis in his right knee. (Decision II, 7; Dep. of Dr. Rynne, 37-40, 49, 52, 61-62.) This prompted Cincinnati to move for an allowance of additional medical evidence due to inadequacy of the § 11A medical report and complexity of medical issues.[5] The motion was denied. Based on the § 11A report and with reference to his prior decision, (Decision I), the judge found that the employee remains partially incapacitated “as a result of the ongoing symptoms to the employee’s left ankle and right knee.” (Decision II, 8.) (Emphasis added.) He therefore denied Cincinnati’s request to modify or discontinue benefits. (Decision II, 9.)

On appeal of this second decision, Cincinnati contends it was arbitrary and capricious to award continuing partial incapacity benefits without findings of related medical disability firmly rooted in the evidence. (Cincinnati’s 1995 Brief, 5.) We agree.

The judge stated in Decision II that “[he] previously found [in Decision I] that the employee had developed right knee pain due to shifting his body weight onto his right knee to compensate taking the weight off his left ankle.” (Decision II, 5.) He therefore found that the employee’s disability as a glazier was “a result of the ongoing symptoms to the employee’s left ankle, andright knee.” (Decision II, 8.) This was error.

The judge’s statement about his “findings” in Decision I is inconsistent with what he actually found in that decision. He made no finding in Decision I on whether the employee’s right knee condition was causally related to his left ankle injury. Compare (Decision II, 5) with (Decision I, 7-8.) In Decision I, the judge merely recited that “the employee testified that he has developed pain in his right knee as a result of shifting his body weight to compensate when he develops pain in his left ankle.” (Decision I, 7-8). (Emphasis added). This is a recitation of what the employee said, not a declaratory statement about what the judge found. SeeKatz-Kelly v. City of Chicopee School Dept.,
10 Mass. Workers’ Comp. Rep. ___ (April 16, 1996) and cases cited therein.

Moreover, the record from Decision I is devoid of any medical evidence indicating a causal connection between the employee’s industrial injury and his disability resulting from his right knee condition. The biomechanical transference of pain from a related left ankle injury to the right knee that had been the subject of half a dozen knee surgeries prior to the work injury, was not so simple a medical issue that, in Decision I, the judge could have found a causal connection on the basis of the lay testimony alone. Compare Lovely’s Case, 336 Mass. 512 (1957).

If there had been medical evidence in the first adjudication upon which to base connectedness of the left ankle limping with an aggravation of the right knee pre-existing condition and if the judge had made an actual finding of that fact and not just a recitation in Decision I, only then could he have relied on it in Decision II because then res judicata would properly attach to a Decision I based finding of initial causal relationship. SeeDunham v. Western Mass. Hosp., 10 Mass. Workers’ Comp. Rep. (August ___, 1996) (where a decision is unappealed, initial causation if found is settled as a matter of law). Thus, as between the knee and ankle conditions, both initial and continuing causation have yet to be adequately addressed as well any § 30 medical benefits that may flow therefrom.

Accordingly, we remand Decision I for further findings on whether Liberty had properly cancelled the employer’s policy pursuant to § 65B. We also remand Decision II for further findings on initial and continuing causal relationship of the right knee complaints to the accepted left ankle injury and for a determination of the extent of the employee’s incapacity.

So ordered.

____________________________ Susan Maze-Rothstein Administrative Law Judge
____________________________ William A. McCarthy Administrative Law Judge
____________________________ Suzanne E.K. Smith Administrative Law Judge

Filed: October 22, 1996

[1] Decision I was entered into evidence by Cincinnati at the second hearing. (Decision II, 4.)
[2] In pertinent part G.L.c. 152, § 18 reads:

If an insured person enters into a contract, written or oral, with an independent contractor to do such person’s work, or if such a contractor enters into a contract with a subcontractor to do all or any part of the work comprised in such contract with the insured, and the insurer would, if such work were executed by employees immediately employed by the insured, be liable to pay compensation under this chapter to those employees, the insurer shall pay to such employees any compensation which would be payable to them under this chapter if the independent or subcontractors were insured persons. The insurer, however, shall be entitled to recover indemnity from any other person who would have been liable to such employees independently of this section; and if the insurer has paid compensation under this section, it may enforce, in the name of the employee or in its own name and for its benefit, the liability of such other person. The insurer shall also be entitled to recover from the uninsured independent contractor or the uninsured subcontractor all compensation benefits and expenses, medical, hospital or otherwise, that it has paid or may become obligated to pay on account of any injury to the employee or employees of any such uninsured independent contractor or uninsured sub-contractor; provided, that this provision shall not authorize the insurer to recover from such a contractor or sub-contractor an amount which, together with any sum recovered under this chapter from any other person on account of the payment of compensation to such employee or employees, will exceed in the aggregate the amount of such compensation benefits and expenses.

St. 1911, c. 751, pt. 3, § 17, amended by St. 1938, c. 102; St. 1939, c. 93.

[3] A claim was later also filed against the general contractor Walsh Brothers, Inc. and its insurer Aetna Insurance. The parties stipulated at hearing, however, to dismiss this claim and proceed with the workers’ compensation claim against either Liberty Mutual or Cincinnati. (Decision I, 1-2.)
[4] There is no dispute about the incident. The paramount issue is whether the Liberty was providing coverage to Elite Erectors on the day in question.
[5] General Laws c. 152, § 11A “gives an impartial medical examiner’s report the effect of `prima facie evidence’ with regard to the medical issues contained therein, and expressly prohibits the introduction of other medical evidence to rebut the prima facie effect of the impartial medical examiner’s report unless the judge finds that additional medical testimony is required due to the complexity of the medical issue involved or the inadequacy of the report submitted by the impartial medical examiner.” O’Brienv. Blue Cross/Blue Shield, 9 Mass. Workers’ Comp. Rep. 16 (1995)appeal docketed, No. 07058 (SJC October 30, 1995).