PRESENT: Hassell, C.J., Lacy, Keenan, Koontz, Kinser, and
Lemons, JJ., and Compton, S.J.
MONDELL H. WASHINGTON OPINION BY
SENIOR JUSTICE A. CHRISTIAN COMPTON
v. Record No. 030637 March 5, 2004
UNITED PARCEL SERVICE OF
AMERICA, ET AL.
FROM THE COURT OF APPEALS OF VIRGINIA
In this workers' compensation case, the sole issue properly
before the Court is whether the Court of Appeals of Virginia
erred in affirming the Workers' Compensation Commission, which
refused the claimant's request to assess a 20% penalty against
the employer's insurance carrier for its failure to pay the
claimant benefits as provided in an open award.
Mondell H. Washington, the claimant, worked in the
Fredericksburg area as a "preloader" for United Parcel Service
of America, the employer, which was insured by Liberty Mutual
Fire Insurance Company, the carrier.
The claimant sustained injury to his right knee by accident
during his employment on three separate occasions: June 18,
1997, August 4, 1998, and September 15, 1999. Although various
aspects of the claims for benefits arising from these accidents
were considered together by the Commission, this appeal directly
involves only the September 1999 accident.
In the employer's First Report of Accident filed for the
1999 incident, the claimant's injury was described: "WALKING
DOWN STEEP DRIVEWAY IN RAIN & SLIPPED. FELT RIGHT KNEE POP."
In an Award Order dated May 16, 2000, the Commission approved an
Agreement to Pay Benefits, and directed the payment of temporary
total compensation of "$469.91 weekly, during incapacity,"
beginning September 16, 1999.
On May 10, 2001, the claimant, by counsel, notified the
Commission that "Mr. Washington has not been paid compensation
pursuant to the Award Order." Counsel, referring to the
provisions of Code § 65.2-524, asked that the carrier be ordered
to pay the claimant "all compensation due and payable to him,
along with a 20% penalty."
In a letter to the Commission on the next day, May 11,
2001, claimant's counsel wrote: "Please accept this letter as
the Claimant's request for additional benefits based on a change
in condition . . . The Claimant's doctor removed him from the
work force on March 28, 2001." Also, counsel noted that the
claimant was "under an open award" and that "[h]e is not
receiving benefits."
On June 4, 2001, the carrier filed with the Commission
forms stating: "This claim is denied" for the reasons that:
"Any disability is unrelated to compensable accident or disease"
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and "[t]he medical treatment is unrelated to the industrial
injury or disease."
On June 7, 2001, the Commission, noting that it had been
advised that payments pursuant to the "May 16, 200[0] Award" had
not been timely made (the Commission erroneously referred to
2001), entered an order assessing a 20% penalty on all
compensation greater than two weeks in arrears to be paid
"immediately" along with the compensation owed.
On June 27, 2001, the Commission granted the claimant's
request to consolidate for hearing the claims arising from the
three accidents and set the hearing for September 4, 2001.
On July 9, 2001, the Commission entered an order requiring
the carrier to show cause why it should not be held in contempt
for failing to comply with the June 7, 2001 order.
In a July 18, 2001 letter, the carrier, by counsel,
acknowledged receipt of the June 7 penalty order and the July 9
show cause order. It stated that its "records reflect that the
claimant was paid temporary total disability compensation
beginning September 17, 1999 through May 17, 2000 at a rate of
$469.[9]1. At that time he obtained a full duty release and
returned to his pre-injury employment. It appears that the
carrier sent out agreement forms to the claimant which were
never returned." Counsel asked "that any decision on whether a
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penalty is due be deferred until the carrier can obtain the
necessary information from the employer."
Responding in a July 23, 2001 letter to the parties, the
Commission denied the carrier's request for a continuance of the
September hearing date. The Commission also advised the
claimant's attorney that the carrier "will soon file an
application alleging that the claimant returned to work at his
pre-injury wage" and that if such application is filed timely,
the Commission "would certainly consider hearing that issue
simultaneously with the other pending claims."
In a Notice of Hearing to the parties for the September 4,
2001 hearing in the present claim (arising from the September
1999 accident), the Commission stated the "Subject" of the
hearing to be the claimant's request for benefits filed in April
2001, "to be heard with" the claims arising from the accidents
of June 1997 and August 1998.
The Commission's reference to the April request was to a
change in condition application dated April 6, 2001 seeking
benefits, including temporary total disability, beginning March
28, 2001.
Following the typically informal hearing before a deputy
commissioner, at which brief, disjointed testimony and comments
from counsel were received, the deputy rendered a written
4
opinion on September 27, 2001, which decided matters arising
from all three accidents. In a separate section of the opinion,
the deputy commissioner set forth the issue in the claim arising
from the instant September 1999 accident as follows: "Whether
the May 16, 2000, award should be terminated because the
claimant was released to return to full duty."
The deputy found a physician "released the claimant to full
duty as of June 8, 2000," and concluded that "[a]ny disability
suffered by the claimant after that date is causally unrelated
to the September 15, 1999, injury." The deputy terminated the
May 16, 2000 Award Order, and denied the claimant's April 2001
change in condition application. In the award, the deputy also
quashed the show cause order and stated "[t]here is no penalty
owing."
In another section of the opinion, which dealt with the
August 1998 injury, not the September 1999 injury, the deputy
commissioner stated the second issue relating to that claim to
be: "Whether the carrier is liable for a 20% penalty for
indemnity benefits pursuant to Va. Code 65.2-524 under the May
16, 2000, award of the Commission." Noting that on the date of
the hearing the May 2000 award "remained open," the deputy found
that the claimant was released "to full duty as of June 8, 2000.
. . . Therefore, any disability which the claimant suffered
5
after that date is causally unrelated to the August 4, 1998,
injury." Continuing, the deputy ruled: "While the defendants
were woefully remiss in not terminating the May 16, 2000, award,
the claimant was paid indemnity benefits until he returned to
work. The claimant was not owed further benefits, therefore, no
penalty is awarded because there were no benefits in arrears."
Upon the claimant's application for review, the full
Commission affirmed the deputy's opinion. On review, the
Commission rejected the claimant's contention that the only
issue properly before the deputy at the September 2001 hearing
relating to the 1999 injury was whether a statutory penalty
should be assessed against the carrier. Thus, the Commission,
noting the deputy correctly ruled on the causal connection
issue, determined "the Deputy Commissioner did not err in
terminating the claimant's outstanding Award in [the file
relating to the September 1999 accident]. Since the claimant is
not entitled to compensation benefits after June 8, 2000, no
penalty is owed."
Upon further review, the Court of Appeals affirmed the
Commission. Washington v. United Parcel Serv. of Am., 39 Va.
App. 772, 576 S.E.2d 791 (2003). We awarded the claimant this
appeal because the case involves a matter of significant
precedential value. See Code § 17.1-410(B).
6
In the Court of Appeals, one of the questions the claimant
presented was: "That the Commission erred as a matter of law in
considering issues not properly before it and in granting relief
not requested by the Defense." However, the Court of Appeals
stated: "On appeal, Washington contends only that the
commission erred in refusing to grant him benefits under the
open May 16, 2000 award and that the commission erred in
refusing to assess the 20% penalty against [the carrier] for
failing to pay him benefits consistent with the award." Id. at
778, 576 S.E.2d at 794.
Because the Court of Appeals did not directly discuss the
claimant's contention regarding just what issues properly were
before the deputy commissioner, a contention raised throughout
the proceedings below and in this Court, we shall address that
question initially.
We hold that the issue of causation was not properly before
the deputy, and should not have been decided given the
procedural posture of the matter. Although there is some vague
reference in the hearing transcript to an off-the-record
discussion of "the posture of this case and what issues are
properly before the Commission," we have found no concession in
the record by the claimant that the causation issue was viable
for decision.
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Indeed, the Notice of Hearing made no mention of the issue,
or that the Commission was considering terminating the
outstanding award based upon the claimant's change in condition
application, see Code § 65.2-708(A) (Commission, upon ground of
change in condition, may end compensation previously awarded).
In addition, despite the Commission's warning to the claimant's
attorney in the July 23, 2001 letter, the carrier did not file
an employer's application alleging the claimant returned to work
at his pre-injury wage, which would have enabled the deputy,
with notice to the claimant, properly to consider the causation
issue at the hearing. The carrier only relied upon a doctor's
release to defend against Washington's claim, and the Commission
relied on that release to deny the claim.
This procedural snafu prevented the claimant from preparing
an adequate response on the causation question and from being
prepared to resist termination of the award based on his change
in condition application. He was not afforded the minimal due
process to which he was entitled. This was materially unfair to
him and constituted reversible error.
Now, we shall address the only substantive issue properly
before the Court, that is, the penalty question. Code § 65.2-
524, dealing with payment of workers' compensation, provides, as
pertinent, that "[i]f any payment is not paid within two weeks
8
after it becomes due, there shall be added to such unpaid
compensation an amount equal to twenty percent thereof. . . ."
Commission Rule 1.4(C)(1) requires compensation to be paid
through the date an employer's application for a hearing is
filed unless "[t]he application alleges the employee returned to
work, in which case payment shall be made to the date of the
return."
As we have said, the carrier failed to file a change in
condition application with the Commission alleging the claimant
had returned to work and requesting termination of the May 16,
2000 open award. Rather, the carrier unilaterally terminated
payment of benefits after it learned that the claimant had
returned to work without restrictions.
In deciding the penalty issue, the Court of Appeals
correctly stated that the relevant statutes do not give an
employer or carrier the unilateral right to cease paying
compensation benefits to a disabled employee under an
outstanding award, when that employee returns to work and the
employer or carrier does not file an application or agreed
statement of facts along with a supplemental memorandum of
agreement. Washington, 39 Va. App. at 779, 576 S.E.2d at 794.
Indeed, the Court of Appeals noted the "laudable purpose" of the
foregoing Commission rule as a method of policing the tendency
9
of employers and carriers to terminate first and litigate later.
Id.
Nevertheless, the Court of Appeals excused the carrier's
unilateral action. Indicating that it did not "condone" the
carrier's failure to file an application to terminate the May
16, 2000 award, the Court of Appeals said that the Commission's
equitable power, as exemplified in the doctrine of imposition,
includes the power to render decisions based on justice as shown
by the total circumstances of each case, even when no fraud,
mistake or concealment has been shown. Id. at 780, 576 S.E.2d
at 795. The doctrine of imposition grants the Commission
"jurisdiction to do full and complete justice in each case."
Harris v. Diamond Const. Co., 184 Va. 711, 720, 36 S.E.2d 573,
577 (1946). Accord John Driggs Co. v. Somers, 228 Va. 729, 734,
324 S.E.2d 694, 697 (1985).
Noting the claimant returned to work in June 2000 without
physical restrictions, the Court of Appeals stated he was not
released from full-duty work again, by a physician, until March
28, 2001. On that date, a physician released him from work for
a third arthroscopic surgery, "which the commission found was
causally unrelated to the injury upon which the May 16, 2000
award was based." Washington, 39 Va. App. at 780, 576 S.E.2d at
795.
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Also, the Court of Appeals said there was no evidence that
the employer or carrier "intentionally failed to file the
appropriate paperwork requesting termination of the award, or
that [the carrier] possessed any ill intent in failing to do
so." Id. at 780-81, 576 S.E.2d at 795.
Concluding, the Court of Appeals stated: "Therefore, as
the commission found that Washington was no longer entitled to
benefits under the award after June [8], 2000, we find no error
in the commission's determination that no benefits or penalty
should be awarded." Id. at 781, 576 S.E.2d at 795.
The Court of Appeals erred. As we already have said, the
issue of causal connection should not properly have been before
the Court of Appeals because that issue was not properly before
the Commission. Without the finding of no causal connection
between the September 1999 accident and the claimant's condition
after March 28, 2001, there was no basis for the Commission or
the Court of Appeals to find, as is implicit in the rulings
below, that the claimant would be unjustly enriched because he
may have received benefits to which he was not entitled.
Consequently, the May 16, 2000 award of benefits remains
valid, and the refusal to assess a 20% penalty was error. The
carrier violated the mandate of Code § 65.2-524 because benefits
were not paid within two weeks after they became due. And,
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without a finding of no causal connection, there is no basis to
employ the doctrine of imposition.
Therefore, the judgment from which this appeal was taken
will be reversed and the case will be remanded to the Court of
Appeals. The Court of Appeals shall remand the case to the
Workers' Compensation Commission for further proceedings in
connection with the claim arising from the September 1999
injury.
Upon remand, the Commission shall enter an award of
benefits to the claimant for the period from March 28, 2001 to
September 27, 2001 (for the weeks when he was unable to work),
as requested by the claimant in this Court, plus an additional
20% of the total amount due for that period of time.
Reversed and remanded.
JUSTICE KEENAN, with whom CHIEF JUSTICE HASSELL joins,
dissenting.
I respectfully dissent. The sole assignment of error
raised by the claimant in this appeal is: "The Court of Appeals
erred in upholding the Commission's ruling that Mr. Washington's
release to full-duty status in June 2000 served to terminate the
May 2000 award." By restricting his appeal to this single
assignment of error, the claimant has, of his own accord,
limited the scope of the appeal before this Court.
12
The majority, however, reaches beyond this assigned error
to review an additional question not before this Court, namely,
whether the deputy commissioner properly considered the issue of
causation. Despite the claimant's procedural abandonment of
this issue, the majority's holding is predicated on a sua sponte
resolution of that question. Thus, I must conclude that the
majority has decided this appeal in contravention of Rule
5:17(c), which states in material part: "Only errors assigned in
the petition for appeal will be noticed by this Court."
Both the deputy commissioner and the Commission held that
the claimant was not entitled to benefits for the period after
March 28, 2001, because the claimant's surgery on that date was
not related to the September 15, 1999 injury. Not only did the
claimant fail to assign error on these grounds in this Court,
the claimant also failed to challenge this holding of the
Commission in the Court of Appeals. In his "Questions
Presented" before the Court of Appeals, the claimant asked, "Did
the Commission err as a matter of law in considering issues not
properly before it and in granting relief not requested by UPS?"
However, in neither his opening brief nor in his reply brief
before the Court of Appeals did the claimant argue that the
deputy commissioner and the Commission improperly considered the
issue of causation. Instead, the claimant merely asserted that
13
the Commission lacked authority to terminate the claimant's
benefits in the absence of an application from UPS. Thus, as
asserted by UPS before this Court, the Commission's
determination that the claimant's March 2001 surgery was not
causally related to his compensable injury became the law of
this case and is binding on appeal before this Court.
Given this binding determination, an analysis of the issue
presented in this appeal must begin with the conceded fact that
the complainant was seeking benefits for injuries that were
unrelated to the open award of May 2000. Once that concession
is placed into the framework of this appeal, the entire appeal
collapses.
Examined in this context, the claimant's argument
effectively is reduced to an assertion that a penalty should
have been imposed on the employer for its failure to make
payments that the claimant was not entitled to receive in the
first place. Such a contention plainly amounts to no more than
a request for unjust enrichment, which the Court of Appeals
properly denied.
I agree that the employer was required to file an
application under Commission Rule 1.4(C) to terminate the open
award upon the claimant's return to work in June 2000.
Nevertheless, I would hold that the employer's failure to file
14
that application does not entitle the complainant to receive
payment of a penalty, when he was not entitled to the
compensation payments on which such penalty would be based.
Accordingly, I would further hold that, under the doctrine of
imposition, which gives the Commission "jurisdiction to do full
and complete justice in each case," Harris v. Diamond
Construction Company, 184 Va. 711, 720, 36 S.E.2d 573, 577
(1946), the Commission did not err in declining to impose a
penalty on the employer. On this basis, I would affirm the
judgment of the Court of Appeals.
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