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Universal Terminal & Stevedoring Corp. v. Parker

decided: November 17, 1978.

UNIVERSAL TERMINAL & STEVEDORING CORP. AND MIDLAND INSURANCE COMPANY, PETITIONERS
v.
WARDELL PARKER AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, RESPONDENTS



ON PETITION FOR REVIEW OF AN ORDER OF THE BENEFITS REVIEW BOARD (BRB No. 76-502)

Before Rosenn and Weis, Circuit Judges and Fisher, District Judge.*fn*

Author: Weis

Opinion OF THE COURT

The Longshoremen's and Harbor Workers' Compensation Act encourages employers to pay injured employees voluntarily and promptly. If the employer contests the obligation to pay compensation, the statute requires that a notice of controversion be filed within 14 days after notice of the injury. The Benefits Review Board has construed that provision to require that a notice of controversion be filed in situations where the employee has returned to work, voluntary payments have ceased, and all that remains is the possibility of a later claim for benefits. We conclude that in the instances where there is in fact no dispute between the parties, no notice of controversion need be filed.

Claimant injured his right hand during the course of employment on July 10, 1973. His employer voluntarily paid compensation under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950 (1976), until August 10, 1973, when claimant returned to work. About eight months later, claimant's attorney submitted to a deputy commissioner of the Department of Labor a claim for permanent partial disability. After conflicting medical reports had been obtained by claimant and his employer, a claims examiner for the Department of Labor, pursuant to § 14(h) of the Act, 33 U.S.C. § 914(h), arranged for an examination by an impartial physician who concluded that claimant had no permanent impairment. The claims examiner thereupon recommended that the claim for permanent partial disability be denied.

Claimant filed exceptions, and a hearing was held before an administrative law judge (ALJ) pursuant to § 19 of the Act, 33 U.S.C. § 919. The ALJ found that a permanent disability did exist. In addition to the compensation award, the ALJ concluded claimant was entitled to an additional 10% Because the employer had not filed a notice of controversion "within fourteen days after notice of the injury." The ALJ also awarded an attorney's fee pursuant to § 28(b) of the Act, 33 U.S.C. § 928(b), and 20 C.F.R. § 702.132.

The Benefits Review Board affirmed the decision of the ALJ, although it differed with his reason for assessing the 10% Penalty. In the Board's view, the employer was required to file the notice of controversion, but the 14-day period did not begin to run until voluntary payments ceased and claimant returned to work.

On appeal to this court, the employer argues that the Board erred in allowing the 10% Additional compensation and the attorney's fee; the award of permanent partial disability is not challenged.

Section 14(a), 33 U.S.C. § 914(a), requires that compensation be paid promptly and directly to the person entitled unless liability is controverted by the employer. Subsection (d), Id. § 914(d), reads:

"If the employer controverts the right to compensation he shall file with the deputy commissioner on or before the fourteenth day after he has knowledge of the alleged injury or death, a notice, in accordance with a form prescribed by the Secretary, stating that the right to compensation is controverted, the name of the claimant, the name of the employer, the date of the alleged injury or death, and the grounds upon which the right to compensation is controverted."

The subsection following provides that if any installment of compensation is not paid within 14 days "after it becomes due," a 10% Addition to the unpaid installment shall be made in the absence of excuse by the deputy commissioner. 33 U.S.C. § 914(e).

Clearly, under the language of the statute, the ALJ's reasoning in assessing a 10% Addition was faulty since the employer had no grounds for controverting the eligibility for benefits during the first 14 days after the accident occurred. The employer, in fact, conceded the right to compensation, paying voluntarily. At that time there was no dispute that the claimant was entitled to payments, and hence there was nothing to controvert. In compliance with § 14(g) of the Act, Id. § 914(g), the employer subsequently filed a notice of termination of payments with the deputy commissioner, who sent a copy to the claimant.

The Board concluded that the only way the employer could have avoided payment of the 10% Additional assessment would have been to file a notice of controversion within 14 days of the last voluntary payment. As the Director conceded in his brief, "it plainly would make no sense to require and indeed the Act's policy of prompt payment of compensation without resort to litigation militates against requiring that a controversion notice be filed while the employer is paying full and proper compensation in accordance with the Act." In our view, the Benefits Review Board's decision requiring that a notice of controversion be filed within 14 days after the employee returns to work, without regard to whether a dispute exists, similarly runs afoul of the Act's policy and is not required by its terms.

The Act is designed to encourage payment of compensation by employers voluntarily and without resorting to formal adversary proceedings. See Strachan Shipping Co. v. Hollis, 460 F.2d 1108 (5th Cir.), Cert. denied, 409 U.S. 887, 93 S. Ct. 114, 34 L. Ed. 2d 144 (1972).*fn1 The employer bears the burden of bringing any dispute to the attention of the agency through the notice of controversion. That notice brings the administrative process into play, setting into motion the deputy commissioner's formal claim resolution procedures. ...


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