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Aetna Life Insurance Co. v. Harris

filed: June 14, 1978.

AETNA LIFE INSURANCE CO., PETITIONER
v.
RAYMOND HARRIS, RESPONDENT, DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U.S. DEPARTMENT OF LABOR, RESPONDENT. SUN SHIPBUILDING & DRY DOCK CO., PETITIONER V. RAYMOND HARRIS, RESPONDENT, DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U.S. DEPARTMENT OF LABOR, RESPONDENT



ON PETITIONS FOR REVIEW OF AN ORDER OF THE BENEFITS REVIEW BOARD (BRB Nos. 76-395 & 76-395B).

Aldisert, Gibbons and Higginbotham, Circuit Judges.

Author: Higginbotham

Opinion OF THE COURT

HIGGINBOTHAM, Circuit Judge

We hold today that an insurance carrier providing coverage for non-occupational injuries and illnesses may intervene in proceedings under the Longshoremen's and Harbor Workers' Act (the Act), 33 U.S.C. § 901 et seq., and recover amounts paid out for injuries or illnesses that are found to be work-related.

Raymond Harris filed two claims against his employer, the Sun Shipbuilding & Dry Dock Company (Sun), alleging that he suffered hernias as a result of his employment. Sun is a self-insurer with respect to work-related illness and injuries. Aetna Life Insurance Company (Aetna) insures Sun against non-work-related illness and injuries. Aetna had paid Harris a total of $4,844.17 under this latter coverage for the injuries which Harris now claims are work-related.

A hearing was held before Administrative Law Judge Joyce Capps. Aetna moved to intervene in order to recover the benefits it had previously paid out. The Administrative Law Judge granted the motion to intervene, found that Harris was entitled to compensation from Sun and that Aetna was entitled to reimbursement out of the compensation award payable by Sun.

Pursuant to a petition for review by Harris and the Director of the Office of Workers' Compensation Programs (the Director), the Benefits Review Board (the Board), in a two-to-one decision, vacated the Administrative Law Judge's decision and Order and held that the Administrative Law Judge erred in allowing Aetna to intervene and in allowing reimbursement to Aetna out of the compensation award. Aetna and Sun filed petitions for review in this Court pursuant to 33 U.S.C. § 921(c).*fn1 These petitions have been consolidated and are considered together here. The issues presented here are purely questions of law over which we exercise our power of plenary de novo review. The views of the Board with respect to these issues are not entitled to special deference. Director, O.W.C.P. v. O'Keefe, 545 F.2d 337, 343 (3rd Cir. 1976).

If Aetna has a right to obtain the reimbursement it seeks in proceedings under the Act, it certainly has a right to intervene in such proceedings. We, therefore, will first discuss Aetna's right to reimbursement. This issue has not, to our knowledge, been addressed by any federal court.*fn2 33 U.S.C. § 919 provides the following with respect to what issues may be heard in proceedings under the Act:

§ 919. Procedure in respect of claims (a) Subject to the provisions of section 913 of this title a claim for compensation may be filed with the deputy commissioner in accordance with regulations prescribed by the Secretary at any time after the first seven days of disability following any injury, or at any time after death, and the deputy commissioner shall have full power and authority to hear and determine all questions in respect of such claim.

(d) Notwithstanding any other provisions of this chapter, any hearing held under this chapter shall be conducted in accordance with the provisions of section 554 of Title 5. Any such hearing shall be conducted by a hearing examiner qualified under section 3105 of that Title. All powers, duties, and responsibilities vested by this chapter, on October 27, 1972, in the deputy commissioners with respect to such hearings shall be vested in such hearing examiners. (emphasis supplied).

The issue here is thus whether the question of Aetna's entitlement to reimbursement is a question in respect to a compensation claim. We conclude that it is.

Aetna's claim for reimbursement is derived from the same nucleus of operative facts as Harris' claim for compensation. A finding that a claimant's injuries are work-related is, in operative effect, a finding that payments should not have been made under a policy covering non-occupational injuries. Deciding reimbursement claims at the same time as compensation claims avoids essentially duplicative litigation thus reducing the expenditure of time and money by the parties and the courts. Facilitating reimbursement of improperly paid benefits also encourages insurance companies such as Aetna to make swift payment of legitimate claims. Thus on the basis of these policy considerations and the close factual relationship between reimbursement and compensation ...


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