McCAFFERTY v. P. J. O’DONNELL CO., INC., No. 058791-88 (Feb. 14, 1995)

Board No. 058791-88Commonwealth of Massachusetts Department of Industrial Accidents
Filed: February 14, 1995

REVIEWING BOARD:

Judges McCarthy, Fischel, and Wilson.

APPEARANCES:

William Gately, Esq., for the employee.

Frederick W. Uehlein, Esq., for the insurer.

Paul R. Ingraham, Esq., for the Trust Fund.

James D. Chadwell, Esq., amicus curiae.

Amy Scarborough, Esq., amicus curiae.

McCARTHY, J.

John McCafferty injured his right hip and leg in July 1983. Five years later, while working for P.J. O’Donnell, Inc., on July 29, 1988, McCafferty suffered a new injury in the course of his employment. On January 15, 1991, a department judge, acting on behalf of the reviewing board, approved a $35,000.00 lump sum settlement of the July 1988 claim. The settlement included $5,000.00 in payment to employee counsel for legal services.

On April 14, 1992, Aetna Casualty and Surety Company (hereinafter Aetna), the workers’ compensation carrier for P.J. O’Donnell, seeking partial reimbursement from the Workers’ Compensation Trust Fund established under § 65,[1] filed claim against the Trust Fund for payments made to the employee under c. 152. The claim was for $33,782.59 and was made under the provisions of § 37, which provides in part as follows:

Whenever an employee who has a known physical impairment which is due to any previous accident, disease or any congenital condition and is, or is likely to be, a hindrance or obstacle to his employment, and who, in the course of and arising out of his employment, receives a personal injury for which compensation is required by this chapter and which results in a disability that is substantially greater by reason of the combined effects of such impairment and subsequent personal injury than that disability which would have resulted from the subsequent personal injury alone, the insurer or self-insurer shall pay all compensation provided by this chapter. If said subsequent injury is caused by the pre-existing impairment or if said subsequent personal injury of such employee shall result in the death of the employee, and it shall be determined that the death would not have occurred except for such pre-existing physical impairment, the insurer shall pay all compensation provided by this chapter.
Insurers making payments under this section shall be reimbursed by the state treasurer from the trust fund created by section sixty-five in an amount not to exceed seventy-five percent of all compensation due under sections thirty-one, thirty-two, thirty-three, thirty-four A, thirty-six A, and, where benefits are due under any such sections, section thirty . . . and provided . . . that no reimbursement shall be made for any amounts paid during the first one hundred and four weeks from the onset of disability or death. . . .

The amount sought included $3,750.00, representing 75% of the legal fee paid as part of the lump sum. The Trust Fund refused to reimburse Aetna for the legal fee,[2] and Aetna filed a claim. When the case was reached for hearing, the administrative judge recognized that there were no facts in dispute and thus heard no testimony. After considering the arguments and briefs of the parties, the judge filed a decision denying and dismissing the claim for partial reimbursement of the legal fee. We have the case on appeal by Aetna.

The question presented by this case is whether the insurer is entitled to include in the amount from which reimbursement from the Trust Fund under § 37 is determined the amount designated as attorney’s fees in the lump sum settlement entered into by the employee and insurer and approved on January 15, 1991.

The judge found that at the time of the employee’s injury and at the time of approval of the lump sum settlement, § 37[3] provided that an insurer was entitled to reimbursement from the Trust Fund in an amount equal to 75% of all compensation paid by the insurer subsequent to that paid during the first one hundred and four weeks of incapacity. (Emphasis added.) The section further provided that “[t]he word `compensation’ as used in this section for the purpose of reimbursement hereunder shall include all payments to the employee . . . provided for by sections thirty, thirty A, thirty-one, thirty-two, thirty-three, thirty-four, thirty-four A, thirty-five, thirty-five A, thirty-six and thirty-six A.”[4]

The insurer’s argument is that “compensation” includes attorney’s fees for purposes of reimbursement pursuant to § 37. As the administrative judge found, § 37 is self-defining with respect to what is compensation, setting out with specificity the sections of the Act to which § 37 applies in terms of reimbursable compensation. (Dec. 6.) Section 37 does not include § 13A among those sections, thereby evincing the legislature’s intent not to include attorney’s fees as compensation subject to reimbursement. Nor does the fact that § 13A(6) unlike the other subsections of § 13A, places the obligation for payment of attorney’s fees on the employee rather than the insurer affect the application of the § 37 definition of “compensation” to reimbursement in this case. By its plain language, the statute expresses an intent to include under the definition of compensation only those payments to the employee made pursuant to the listed sections. Se Hoffman v. M. B. T. A., 8 Mass. Workers’ Comp. Rep. 1 (1994); Hashimi v. Kalil, 388 Mass. 607 (1983).

Further, the fact that the term “compensation” under § 48[5] may include other sections of the Act under its definition does not require that the term be defined in the same way in § 37 when an insurer seeks reimbursement of a lump sum settlement.[6] The insurer argues that the gross amount of its obligation under § 48, that is, the amount before deduction of the attorney’s fee, is the amount of its obligation to pay compensation. The administrative judge found that the gross amount of the lump sum settlement includes subparts, “some of which are compensation, e.g., § 36 benefits, and some which are not compensation to the employee, e.g., inchoate rights. Attorney’s fees fall into the latter category.” (Dec. 6.) Therefore, the judge found that attorney’s fees are not reimbursable.

Although the question is a close one, we cannot say that the judge’s analysis was wrong as a matter of law. Accordingly, we affirm his decision.

Judges Fischel and Wilson concur.