GRAZIANO v. POLAROID CORPORATION, No. 807621-82 (Dec. 15, 1995)

BOARD No. 807621-82Commonwealth of Massachusetts Department of Industrial Accidents
Filed: December 15, 1995

REVIEWING BOARD DECISION

(Judges Fischel, McCarthy and Wilson)

APPEARANCES

Timothy Cleary, Esq., for the employee at hearing

Pasquale J. Ventola for the employee on brief to the reviewing board

David Cronin, Esq., for the self-insurer

McCARTHY, J.

Joseph Graziano, who is now seventy-five years of age, sustained a compensable low back injury on September 2, 1982 while at work as a mechanic for Polaroid. After a claim for weekly benefits was filed, the self-insurer accepted the case and commenced payment of weekly temporary total incapacity benefits at the rate of $269.93 per week based on an average weekly wage of $412.40. Some time later the employee successfully resisted the self-insurer’s effort to terminate or modify weekly benefits and was paid until the applicable statutory maximum was reached on May 22, 1987. See Graziano v. Polaroid Corp, 5 Mass. Workers’ Comp. Rep. 43 (1991).

On July 2, 1987 the employee filed a claim seeking permanent and total incapacity benefits under § 34A of the Act. Following a conference on that claim, an administrative judge issued an order on January 5, 1989 directing payment of § 34A benefits from May 22, 1987 and continuing. No appeal was taken from that conference order.

In 1985 as part of a massive reform of c. 152, cost of living adjustment (COLA) provisions were enacted in Massachusetts for the first time. Effective November 1, 1986,

“Any person receiving or entitled to receive the benefits under the provisions of section thirty-one or section thirty-four A whose benefits are based on a date of personal injury at least twenty four months prior to the review date shall be paid, without application, a supplement to weekly compensation to the extent such supplement shall not reduce any benefits such person is receiving pursuant to federal social security Law.” (G.L. 152, § 34B).

Since the employee was injured in 1982, he was entitled to COLA benefits from the first day of his § 34A entitlement, namely May 22, 1987. Under the express terms of § 34B, COLA benefits are to be paid withoutapplication (emphasis added). We take this to mean that on its own initiative an insurer must see to the payment of COLA to qualified individuals, who for their part should not be forced to file claims in order to receive COLA benefits.

For reasons which do not appear on the record, the self-insurer here failed to pay the COLA supplement to which the employee was entitled and on April 26, 1991 the employee filed a claim for these benefits together with interest under § 50 and an assessment of the whole cost of the proceedings under § 14. On June 23, 1991, within sixty days of the filing of this claim, the self-insurer made a payment of $18,579.12 in partial payment of the COLA entitlement. Then on June 28, 1991 the self-insurer made a second payment of $18,263.87. With these two payments the self-insurer fulfilled its delinquent COLA obligation to the employee.[1]

The COLA supplement paid, the employee nevertheless proceeded beyond conciliation to conference on his claim for interest on the late paid COLA and for costs under § 14. After a denial of the claims at conference the employee appealed and the case came to hearing before the same administrative judge. No testimony was taken and the case was submitted to the judge on an agreed statement of facts. Thereafter the judge filed a decision denying and dismissing the employee’s claims under §§ 50 14. We have the case on appeal by the employee.

When this claim was filed with the department, § 50 provided as follows:

Whenever compensation is not paid within sixty days notice to the insurer that compensation is claimed to be due an injured employee or his dependents, and there are one or more hearings on any question involving the said compensation, including appeals, and the decision is in the favor of the employee or his dependents, interest at the rate of twelve per cent per annum from the date of the receipt of the notice of the claim by the board to the date of payment shall be paid by the insurer on all sums due as compensation to such employee or his dependents. Whenever such sums include weekly payments, interest shall be computed on each unpaid weekly payment.[2]

We agree with the hearing judge that § 50 interest is due on unpaidcompensation and COLA benefits under § 50 are not compensation (emphasis added). The nature of COLA payments has been decided by the Supreme Judicial Court which held that COLA supplements under 34B are not to be treated as compensation and thus are not doubled in the context of a § 28 claim. See Armstrong’s Case, 416 Mass. 796 (1994). The court’s interpretation of § 34B in Armstrong is equally applicable here. See alsoLumi’s Case, 6 Mass. Workers’ Comp 40 (1992) where this board held that COLA benefits are not “compensation”.

There is another reason why there is no interest entitlement. Section 50 provides that interest be paid only when there has been a hearing and a decision in favor of the employee. In the case at hand the self-insurer paid the COLA after conciliation of the claim, but before it was reached for conference or hearing before an administrative judge.

Next we examine the claim for an assessment of costs under § 14. At the time this claim was filed, § 14 (1) read as follows:

If any member of the board, the reviewing board, or any court before which proceedings under this chapter are brought determines that such proceedings have been brought, prosecuted, or defended without reasonable ground, the whole cost of the proceedings shall be assessed upon the party who has so brought, prosecuted or defended them.

Although COLA payments were to be paid without application, no COLA was paid by the self-insurer during the years 1987, 1988, 1989, or 1990. The employee was obligated to file claim where by statute none should have been necessary. The self-insurer did not pay the claim upon receipt, and the claim went on to conciliation.

Conciliation is an integral part of the four step dispute resolution process at the Department of Industrial Accidents. See G.L.c. 152, § 10; see also Kaminsky v. University of Massachusetts,
9 Mass. Workers’ Comp. Rep. ___ (October 31, 1995). The self-insurer in this case resisted payment of the COLA supplement until after the conciliation took place. The COLA then due was not paid for the more than sixty days after the claim was filed. In our view this was defense without reasonable ground. Accordingly we reverse the denial of the claim under § 14 and return the case to the hearing judge to assess the whole cost of the conciliation proceeding against the insurer. We deem this to be necessary to effectuate the intent of the legislature that § 34B benefits be paid automatically, for if, as here, an insurer may fail for years to make such payments, and yet owe no interest on the late payment finally extracted, only the consequences of a § 14 finding can both protect the resources of the department from being burdened by such proceedings, and insure that § 34B benefits be paid automatically as intended. Since the employee prevailed in his claim under § 14, the administrative judge should also award a legal fee under the applicable subsection of section 13A. We return this case to the senior judge for reassignment to the administrative judge for further proceedings consistent with this opinion.

So ordered.

_________________________ William A. McCarthy Administrative Law Judge __________________________ Carolynn N. Fischel Administrative Law Judge
_________________________ Sara Holmes Wilson Administrative Law Judge

Filed: December 15, 1995