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Massachusetts Reviewing Board Holds Self-Insurer Must Pay Improperly Withheld Sums to Employee After Reaching Negotiated Amount for Benefits in Agreement

The Massachusetts Reviewing Board of Industrial Accidents recently affirmed a decision in favor of an employee after the employer’s self-insurer attempted to reduce the payment owed after having reached a negotiated agreement. The Board relied on precedent in a similar case, stating that when an agreement is reached, and a negotiated figure is determined, which is less than what the employee might originally seek or potentially recover, it is the obligation of the self-insurer (or party to the agreement) to pay that sum.chair

On August 25, 2010, the employee in this case suffered a compensable injury to her right knee.  Years later, in March 2013, she filed a claim for $19,269.23 for loss of function and for disfigurement benefits under § 36.  The parties then completed a Form 113, “Agreement to Pay Compensation,” and the judge approved the form. This Agreement obligated the self-insurer to pay the employee her § 36 benefits and her attorney’s fees.  Specifically, the agreement required the self-insurer to pay $14,000 in § 36(k) benefits and $1,000 in attorney’s fees under § 13(A).

The self-insurer did not pay this amount but relied on a payment reduction provision in § 13A(10). They reduced the payment to the employee by $1,000, due to the payment of $1,000 of attorney’s fees. The employee then filed a claim, seeking a § 8(1) penalty based on the self-insurer’s failure to pay her the full amount and for the $1,000 they offset. The judge denied the claim, and the employee appealed.

The court had found that the self-insurer failed to pay the employee the amount that was agreed upon in the Agreement, and it ordered it to pay the employee $1,000 in unpaid § 36 benefits, as well as a $10,000 penalty under § 8(1) and attorney’s fees.

The Reviewing Board stated that the self-insurer’s appeal failed because at the time the Agreement was reached, in 2013, the controlling legal authority was the Appeals Court decision in Spaniol’s Case, 81 Mass. App. Ct 437 (2012), aff’d on other grounds, Spaniol’s Case, 446 Mass. 102 (2013).  This case presented a similar factual scenario to the present case, in which an employee claimed § 36 benefits, and an agreement was reached to pay those benefits, as well as attorney’s fees.

Notably, the court stated that when an agreement was reached in Spaniol, as in the case at hand, the amount to be paid was a negotiated figure –  less than what the employee originally sought or could potentially recover by law. Here, as in Spaniol, the agreement did not state that the amount due would be subject to the payment-reduction provision of § 13 A(10).

Additionally, the court stated that at the time that the employee filed a claim for a § 8(1) penalty, the Supreme Judicial Court had already held that the payment production provision and the regulation would not apply to § 36 claims.

The court affirmed the decision of the appellate court, holding that the self-insurer must pay the employee’s attorney fee for $1,618.19.  The self-insurer must also pay the employee the $1,000 that had been improperly withheld under the terms set forth in the Agreement.

At Pulgini & Norton, an experienced Boston workers’ compensation attorney can provide legal guidance and strong advocacy on behalf of your right to compensation following a work-related injury.  We provide a free, confidential consultation with a dedicated workers’ compensation lawyer. Call our office today to discuss your claim at (781) 843-2200 or contact us online.

More Blog Posts:

Massachusetts Workers’ Compensation Benefits Upheld for Employee with Policy Goal of Protecting Employee and Self-Insured Employer, Massachusetts Workers’ Compensation Lawyer Blog, August 11, 2016

Massachusetts Reviewing Board Affirms Decision Awarding Injured Employee Workers’ Compensation Benefits, Massachusetts Workers’ Compensation Lawyer Blog, October 13, 2015

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