BEAL v. CITY OF NEWTON, No. 4677-83 (May 26, 1995)


GORDON L. BEAL, EMPLOYEE vs. CITY OF NEWTON EMPLOYER, SELF-INSURER

BOARD No. 4677-83Commonwealth of Massachusetts Department of Industrial Accidents
Filed: May 26, 1995

REVIEWING BOARD:

Judges Fischel, Wilson, and McCarthy.

APPEARANCES:

Frederick C. Homan, Esq., for the employee.

Richard Chmielinski, Esq., for the insurer.

FISCHEL, J.

The self-insurer appeals from the decision of an administrative judge denying restitution for an alleged overpayment of § 31 benefits to the children of a deceased employee. The self-insurer contends that it made payments beyond statutory requirements and therefore should be reimbursed for payments it made to the dependents in excess of their statutory entitlement.

When Gordon Beal died of a heart attack sustained within the scope of his employment on April 19, 1983, the city of Newton was ordered to pay compensation benefits to his three surviving dependent children.[1]

Pursuant to the provisions of G.L.c. 152, § 31[2] and § 32,[3] and pursuant to an order of payment filed on March 22, 1983, the self-insurer commenced payment to the deceased employee’s three dependent children, Phillip, Lisa and Robert, at the rate of $198.11, based upon an average weekly wage of $297.16, from April 19, 1983 to date and continuing. Each of the three children were paid their proportional share of what a surviving spouse would have been entitled to, that being $66.04 respectively.[4] The order further stated that when any child was no longer a dependent as defined under § 32 (d),[5]
that child’s share should be divided between the remaining dependent children. Payments were made by the city of Newton pursuant to the order.

Survivors’ benefits are governed by a maximum allowable benefit, or statutory cap, with three statutory exceptions. First, children who have not attained the age of majority shall receive § 31 survivorship benefits in excess of the cap. Secondly, a dependent unremarried widow or widower will receive such survivorship benefits in excess of the cap during the period the widow or widower is not fully self-supporting. Third, a child physically or mentally incapacitated from earning who attains the age of majority receives continued § 31 survivorship benefits beyond the statutory cap. Those are the only exceptions set forth in § 31 which extend benefits beyond the statutory cap.

Section 31 contains no provision for the continuing payment to dependents beyond the age of eighteen by reason of full-time student status. Under social security law, a dependent child of a deceased wage earner would be eligible for continuing benefits beyond age eighteen if enrolled in school on a full-time basis. There is no such provision under Massachusetts workers’ compensation law. As the self-insurer concedes in its brief to the reviewing board, the city “inadvertently and erroneously believ(ed) that the status of `full-time student’ was the standard by which § 31 payments should continue to the children beyond attainment of age eighteen” (self-insurer’s brief p. 4).

There was no evidence in this case to suggest that any of the three Beal children was physically or mentally incapacitated. Nor does the case present a “dependent unremarried widow or widower,” where the deceased and his ex-wife had divorced in October 1974.

Based on its alleged misapprehension as to the standards pursuant to which payments should be made to children of decedents, the city of Newton continued to pay the Beal children benefits under § 31 even though they attained the age of eighteen. Philip Beal reached the age of eighteen on November 30, 1983. Lisa Beal reached the age of eighteen on February 13, 1986. On November 19, 1990 the city received correspondence from Philip and Lisa that they were no longer full-time students. (Dec. 4). The self-insurer, assuming that student status served as the measure of entitlement to § 31 benefits, terminated payment to these two children at that point, and increased the benefits which it had been paying to the youngest child, Robert Beal, in an amount equal to his two siblings’ share (Dec. 4). Robert reached the age of eighteen on April 10, 1988. He argues that as of the time of hearing below, he was a continuing student “qualified under USCS, Internal Revenue Code Section 151 (e).” (Employee’s brief p. 3)

On or about August 6, 1992 the city of Newton discovered that it had continued § 31 payments well beyond what it by then had come to perceive as being the maximum allowable cap. (Dec. 4) The city notified Robert Beal that it was unilaterally terminating his weekly benefits. (Dec. 4)

Claims were filed and the matter came before the hearing judge on three issues. First, Robert Beal argued that the self-insurer acted in a fashion contrary to law by unilaterally terminating benefits to which he was entitled. (Dec. 3). The city of Newton denied the claimant’s entitlement to continuing benefits, and asserted that it had acted correctly and within the law in unilaterally discontinuing payment of the benefits in question. Second, the self-insurer invoked § 14 of the act, alleging that the claimant had no reasonable basis for maintaining the subject action. Thirdly, the self-insurer sought an order of restitution in the amount of $67,603.38 against the claimant and two of his siblings. (Dec. 3) The latter children were not made parties to the proceeding (Dec. 3). The matter was heard on stipulated facts and legal memorandum.

The administrative judge filed a decision which found that Beal’s claim for continuing § 31 benefits and for declaration that there had been an illegal discontinuance must fail. The judge found the claimant “could hold the self-insurer to a statutory obligation to pay benefits beyond the cap only where he can demonstrate a physical or mental incapacity from earning.” (Dec. 5). The judge found that the statutory cap having been attained, and none of the exceptions being relevant, the self-insurer had no further obligation to make payments, and thus its discontinuance of such payments beyond the cap was not unlawful.

As to the circumstances of the payments made beyond the statutory cap, the judge made the following findings:

Payments beyond that point were made pursuant to a payment scheme of the self-insurer’s own design. The city held out a willingness to make weekly payments to the claimant contingent only upon the latter’s demonstrating to the former’s satisfaction that he was a full-time student. This was done and, in consideration, the claimant received that which he had been led by the City to view as his due.
The extra-statutory exchange between the parties, sounding in grant, gift, loan or contract, is found, for purposes of the requested order of restitution, to lie beyond the jurisdiction of this forum.

(Dec. 5-6)

The judge further found that the claim presented by Robert Beal was not advanced without reasonable grounds for purposes of § 14 of the act. The judge denied and dismissed the cross claims of the parties. The employee appealed.

We agree with the administrative judge’s reading of § 31. It does not provide for any payment to dependent children beyond the age of eighteen based on student status, and imposes exceptions to the statutory cap which are not met in this case.

We do point out however that the judge was incorrect to state that it was “beyond the jurisdiction of this forum” to order restitution to the city of Newton. G.L.c. 152, § 11D gives a judge authority to order recoupment of overpayments up to a maximum of thirty percent of weekly compensation benefits. Section 11D(2), (3) further provides that “where overpayments have been made that cannot be recovered in this manner, recoupment may be ordered pursuant to the filing of a complaint” pursuant to “section 10 or by bringing an action against the employee in superior court.” The Department has jurisdiction and a judge has authority to order recoupment of an overpayment of compensation.

However, the language is quite clear that an order of recoupment is discretionary in that recoupment “may be ordered.” The self-insurer argues that the administrative judge committed reversible error by failing to order recoupment pursuant to § 11D(2), (3). That argument fails, since the language of the statute is clear that such order is discretionary. We do remand this matter to the judge for him to take jurisdiction over the question of recoupment, and to exercise his discretion in this regard.

We note in this case that the judge made findings as to the city’s “extra-statutory” payment scheme of its own design (Dec. 5-6) and that the judge found that the claimant received that which he had been led by the city to view as his due (Dec. 6). He further found that the payments to the employee “sound(ed) in grant, gift, loan or contract.” (Dec. ___) It may well be that the judge believed the city should be estopped from obtaining any recoupment. On remand, he should make clear his findings in this regard.

As to the self-insurer’s contention that the judge erred in denying § 14 penalties, where this was a novel issue, the judge did not abuse his discretion in denying § 14. This matter is recommitted for further findings in accordance with this opinion.

Judges McCarthy and Wilson concur.

[1] The deceased was divorced from his ex-wife, mother of these children, in October of 1974. (Dec. 3) During the marriage, the deceased and his then wife had three children, Philip William Beal, born November 30, 1965; Lisa Donna Beal, born on February 13, 1968; and Robert Francis Beal, born on April 10, 1970 (Dec. 3-4).
[2] The provisions G.L.c. 152, § 31, as amended by St. 1982, c. 663, § 1, applicable to this matter, provide at paragraph four:

The total payments due under this section shall not be more than the average weekly wage in effect in the commonwealth at the time of the injury . . . multiplied by two hundred and fifty plus any costs of living increases provided by this section except that payment to or for the benefit of children of the deceased employee under the age of eighteen shall not be discontinued prior to the age of eighteen, and except that after a . . . physically or mentally incapacitated child over the age of eighteen has received the maximum payments, he or she shall continue to receive further payments but only during such periods as he or she is in fact not fully self-supporting.

[3] G.L.c. 152, § 32 (c) provides for division of benefits and payments for children of former marriage:

The following persons shall be conclusively presumed to be wholly dependent for support upon a deceased employee:
(c) . . . in case of the death of an employee who has at the time of his death living children by a former wife or husband, under the age of eighteen years (or over said age, if physically or mentally incapacitated from earning), said children shall be conclusively presumed to be wholly dependent for support upon such deceased employee, and the death benefit shall be divided between . . . all the children of the deceased employee in equal shares . . .

[4] The order provided for payment to each dependent at the rate of $62.73 weekly but was corrected to $66.04 each in the judge’s decision.
[5] G.L.c. 152, § 32 (d) provides, in relevant part, for payment of § 31 benefits to the following dependents:

(d) Children under the age of eighteen years (or over said age but physically or mentally incapacitated from earning) upon a parent who was at the time of his death legally bound or ordered by law, decree or order of court or other lawful requirement to support such children although living apart from such child or children.