Marlin Roske v. Culbertson Company and Virginia Surety Company, Inc. ( 2013 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Frank, Petty and Senior Judge Haley
PUBLISHED
Argued at Alexandria, Virginia
MARLIN ROSKE
OPINION BY
v. Record No. 0060-13-4 JUDGE WILLIAM G. PETTY
NOVEMBER 12, 2013
CULBERTSON COMPANY AND
VIRGINIA SURETY COMPANY, INC.
FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION
James E. Swiger (The Law Office of James E. Swiger, on briefs), for
appellant.
Dennis Boyd Cook (Franklin & Prokopik, on brief) for appellees.
Marlin Roske appeals from an order of the Workers’ Compensation Commission
affirming the deputy commissioner’s denial of Roske’s change-in-condition claim. The full
commission concluded that Culbertson Company, the employer, Virginia Surety Company, Inc.,
its insurer, and Firstcomp Underwriting Group, the claim administrator, (collectively referred to
as “employer”) did not waive the time limitation prescribed in Code § 65.2-708 and that there
was no de facto award granted to Roske. On appeal, Roske assigns two errors to the
commission’s decision. First, Roske argues that the commission erred in concluding that
employer’s voluntary payment of compensation from January 5, 2011 to May 17, 2011 did not
constitute either (1) a waiver of the time limitation in Code § 65.2-708 or (2) a de facto award of
compensation, thus tolling the time limitation in Code § 65.2-708. Second, Roske argues that the
commission erred by failing to enter an appropriate temporary total incapacity award effective
June 30, 2011 and continuing. For the reasons stated below, we affirm the commission’s ruling.
I. BACKGROUND
“On appeal from a decision of the Workers’ Compensation Commission, the evidence
and all reasonable inferences that may be drawn from that evidence are viewed in the light most
favorable to the party prevailing below.” Artis v. Ottenberg’s Bakers, Inc., 45 Va. App. 72, 83,
608 S.E.2d 512, 517 (2005) (en banc).
On May 20, 2005, while employed by Culbertson Company, Roske injured his right
shoulder while he was working with sheet metal. On January 12, 2006, Roske had surgery on his
shoulder and did not return to work until May 24, 2006. On February 27, 2006 and November 30,
2009, Roske filed claims for benefits with the commission. In October 2010, Roske was awarded
temporary total disability payments from January 12, 2006 to May 24, 2006. Roske performed
light-duty work, with a lifting restriction of thirty pounds, from May 24, 2006 to January 4, 2011.
On January 5, 2011 a second surgery was performed on Roske’s shoulder. Roske testified
that prior to the surgery there had been a dispute regarding whether the carrier would be responsible
for paying for the medical treatment. The day after his surgery, however, Roske contacted “the
adjuster” about receiving disability payments and was told that “paychecks would start coming in”
within a couple weeks. Indeed, employer made voluntary payments to Roske from January 5, 2011
to May 17, 2011, a period of nineteen weeks. In April 2011, Roske was released to return to
light-duty work; however, employer had no such work available and Roske was terminated from his
employment on June 29, 2011.
On February 7, 2011 and July 26, 2011, Roske filed claims alleging a change in condition
and requesting temporary total disability benefits from January 5, 2011 and thereafter. Employer
defended on the grounds that the claim was filed beyond the time limitation—which, in this case,
was May 25, 2010—as set forth in Code § 65.2-708 for review of a change-in-condition claim.
Following a hearing, the deputy commissioner held that the claim was not timely filed.
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Roske timely filed a request for review to the full commission. In his request for review,
Roske argued that by voluntarily paying disability payments to Roske for the nineteen-week period
in 2011, employer waived the time limitation of Code § 65.2-708. He further argued that the
voluntary payments constituted a de facto award of compensation and reasoned that because the
time limitation in Code § 65.2-708 runs from the date compensation was last paid pursuant to an
award, his change-in-condition application was timely. The full commission, in a split decision,
found that the de facto award doctrine was not applicable because Roske was not misled into
believing that he would receive compensation prior to the surgery. The commission also concluded
that employer had not waived its right to rely on the time limitation in Code § 65.2-708. Roske
appeals to this Court.
II. ANALYSIS
Roske makes the same argument before this Court as he did before the commission: that
the voluntary payments constituted compensation pursuant to a de facto award and that employer
waived its right to assert the time limitation contained in Code § 65.2-708 for filing a
change-in-condition claim. Thus, Roske argues that it necessarily follows that an award for
temporary total incapacity benefits effective June 30, 2011 should be entered.
“In reviewing the commission’s decision, we are guided by
well-settled principles. ‘It is fundamental that a finding of fact
made by the commission is conclusive and binding upon this court
on review.’ ‘That contrary evidence may be in the record is of no
consequence if there is credible evidence to support the
commission’s findings.’”
“The scope of a judicial review of the fact finding function
of a workers’ compensation commission[, therefore,] is ‘severely
limited, partly in deference to the agency’s expertise in a
specialized field.’”
Southside Va. Training Ctr. v. Ellis, 33 Va. App. 824, 828, 537 S.E.2d 35, 37 (2000) (alteration
in original) (quoting Georgia-Pacific Corp. v. Robinson, 32 Va. App. 1, 4-5, 526 S.E.2d 267, 268
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(2000)). “However, the commission’s legal determinations are not binding on appeal and will be
reviewed de novo.” Wainwright v. Newport News Shipbuilding & Dry Dock Co., 50 Va. App.
421, 430, 650 S.E.2d 566, 571 (2002).
Code § 65.2-708 provides:
A. Upon its own motion or upon the application of any
party in interest, on the ground of a change in condition, the
Commission may review any award and on such review may make
an award ending, diminishing or increasing the compensation
previously awarded . . . . No such review shall be made after
twenty-four months from the last day for which compensation was
paid, pursuant to an award under this title . . . .
* * * * * * *
C. All wages paid, for a period not exceeding 24
consecutive months, to an employee [who is provided light-duty
employment at equal wages,] shall be considered compensation
pursuant to an award for compensation . . . .
The parties agree that the last date for which compensation was paid pursuant to an actual
award of the commission was May 24, 2006. There is no dispute that, upon his return to work,
Roske was provided light-duty work at a wage equal to his pre-injury wage. Pursuant to Code
§ 65.2-708(C), the statute of limitations began to run on May 24, 2008. Thus, unless employer
waived the filing deadline or unless the subsequent voluntary payments constituted a de facto
award, Roske was required to file his change-in-condition application on or before May 25,
2010.
A. Waiver
Roske argues that employer waived its right to rely on the time limitation in Code
§ 65.2-708 by voluntarily making compensation payments after the filing deadline had expired.
We disagree.
Waiver, a doctrine at law, is voluntary action or inaction with
intent to surrender a right in esse with knowledge of the facts and
circumstances which gave birth to the right. . . .
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In waiver, both knowledge of the facts basic to the exercise
of the right and the intent to relinquish that right are essential
elements. . . .
Employers Ins. Co. v. Great American, 214 Va. 410, 412-13, 200 S.E.2d 560, 562 (1973).
Furthermore, “the burden rests on the party relying on a waiver . . . to prove the essentials of
such waiver . . . by clear, precise and unequivocal evidence.” Utica Mutual v. National
Indemnity, 210 Va. 769, 773, 173 S.E.2d 855, 858 (1970).
In support of his argument that employer has waived its right to rely on Code § 65.2-708,
Roske relies on Binswanger Glass Co. v. Wallace, 214 Va. 70, 197 S.E.2d 191 (1973). In
Binswanger Glass, the employer agreed that the injury was compensable and entered into an
agreement with the claimant. Id. at 70, 197 S.E.2d at 192. The commission subsequently
entered an award for temporary total work incapacity. Id. at 70-71, 197 S.E.2d at 192. When the
claimant returned to work, the award was terminated. Id. at 71, 197 S.E.2d at 192. One year and
three days after he was last paid compensation, the claimant again became disabled from the
same injury. Id. Code § 65.1-99 (now, Code § 65.2-708) required that an application for an
award based on a change in condition be filed within one year of the date for which
compensation was last paid pursuant to an award. Despite this time limitation, the employer and
the claimant entered into a supplemental agreement for the payment of benefits and the employer
resumed payment of compensation. Id. Based on that agreement, the commission entered a
supplemental award for benefits. Id. Approximately five months later, the employer filed an
application for a hearing with the commission alleging, among other things, that the commission
lacked jurisdiction to enter the supplemental award because the application was filed after the
one-year time limitation had expired. Id.
In addressing the employer’s argument, the Supreme Court held that “the 12-month
limitation provided in Code § 65.1-99 is not jurisdictional. It is only a time limitation and as
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such can be waived.” Id. at 74, 197 S.E.2d at 194. The Supreme Court went on to hold that
“[t]he voluntary execution of the supplemental memorandum of agreement by the parties, and
the voluntary payment of compensation thereunder, constituted such a waiver.” Id. (emphasis
added).
The supplemental agreement entered into by the parties in Binswanger Glass
distinguishes that case from this one. The supplemental memorandum of agreement in
Binswanger Glass was “clear, precise and unequivocal evidence” that the employer intended to
waive the filing deadline contained in Code § 65.1-99. Utica Mutual, 210 Va. at 773, 173 S.E.2d
at 858. Here, however, there was neither a supplemental memorandum of agreement nor any
payment of compensation pursuant to such an agreement. The commission made no finding that
employer intended to surrender its right to rely on the statute, and the record before us is devoid
of evidence of any such intent. Therefore, we conclude that the commission did not err in
holding that Roske’s application for a change-in-condition award was time barred because
employer did not waive its right to rely on Code § 65.2-708.
B. The De Facto Award Doctrine
Roske also argues that the commission erred by failing to hold that employer’s voluntary
payment of compensation constituted a de facto award. Roske reasons that the provisions of
Code § 65.2-708(A) would provide him an additional twenty-four months from the date of the
last voluntary payment of compensation, here May 17, 2011, in which to file his application for a
change-in-condition award. For the reasons discussed below, we conclude that the commission
did not err in concluding that the voluntary payments did not constitute a de facto award of
compensation and, thus, the period for filing the application had not been extended.
If an employer and an injured employee reach an agreement on the payment of
compensation, a memorandum of agreement must be filed with the commission. Code
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§ 65.2-701. Upon approval of the commission, “the agreement shall be binding, and an award of
compensation entered upon such agreement shall be for all purposes enforceable [as an order or
award of the commission].” Id. The agreement may be filed by the employer, the employee, or
the insurance carrier. Id.
In contrast to an actual award, a de facto award is “a legal fiction crafted by the courts, ‘a
creature of case law not statutory law.’” Lysable Transport, Inc. v. Patton, 57 Va. App. 408, 414,
702 S.E.2d 596, 598 (2010) (quoting Ryan’s Family Steak Houses v. Gowan, 32 Va. App. 459,
465, 528 S.E.2d 720, 723 (2000) (Bumgardner, J., concurring)). We first recognized this legal
fiction in National Linen Service v. McGuinn, 5 Va. App. 265, 362 S.E.2d 187 (1987).1 There,
the employee was injured in August 1983. Id. at 267, 362 S.E.2d at 188. In November of that
year, the employer began paying temporary total disability payments but failed to execute or
submit a memorandum of agreement to the commission. Id. In December 1984, the employee
was released to light duty, but the employer told him it did not have any such employment
available and terminated payment of benefits. Id. When the employee filed an application for
continued temporary total benefits, the employer defended against the claim on the ground that
the employee had not made a reasonable effort to market his remaining capacity for work. Id. at
267-88, 362 S.E.2d at 188. In affirming the commission’s award of benefits, we reasoned that
an employer cannot be permitted to ignore the mandatory wording
of the statute [requiring it to file a memorandum of agreement with
the commission] to the detriment of its employees . . . . [I]f [the
employer] had complied with the statute, [the employee] would
have been covered by the commission’s award. [The employer]
then would have been obligated to honor the award until it
established by a preponderance of the evidence a change in
condition . . . and had been authorized by the commission to
terminate the payment of benefits to [the employee]. We believe
1
Although we did not use the specific de facto language, it is well established that
McGuinn is the origin of the de facto award doctrine. See Tyco Elecs. & Ins. Co. of Pa. v.
VanPelt, 62 Va. App. 160, 174, 743 S.E.2d 293, 301 (2013); Gowan, 32 Va. App. at 463, 528
S.E.2d at 722.
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that because [the employer] paid compensation benefits to [the
employee] for thirteen months and failed to file with the
commission a memorandum of agreement, it should be held to the
same burden. To hold otherwise would be to allow an employer or
its carrier to unilaterally violate the clear requirements of [the
statute] and thereby frustrate the purpose behind that statute. The
Workers’ Compensation Act exists to protect employees not to
facilitate a deprivation of an employee’s rights by an employer
who has not complied with the statutory requirements.
Id. at 270, 362 S.E.2d at 189-90 (emphasis added) (internal citation omitted).
Therefore, we concluded that the combination of a failure to file a memorandum of
agreement as required by law, the payment of compensation for thirteen months, and the failure
to contest the compensability of the injury justified the imposition of a de facto award of benefits
against the employer. Id. at 269-70, 362 S.E.2d at 189.
It is clear from our language in McGuinn that the concept of a de facto award is grounded
in the well-established principle of estoppel. We recognized as much when we observed that in
McGuinn this Court “applied estoppel principles, holding that employee’s reasonable reliance on
employer’s actions created an enforceable de facto award of benefits.” United Parcel Service,
Inc. v. Ilg, 54 Va. App. 366, 376, 679 S.E.2d 545, 550 (2009). “Estoppel by conduct, whereby a
party will not be heard to deny that which he has induced others to rely upon as true, extends
without limit throughout the law.” Emrich v. Emrich, 9 Va. App. 288, 293-94, 387 S.E.2d 274,
276 (1989) (citing Harris v. City of Roanoke, 179 Va. 1, 5, 18 S.E.2d 303, 305 (1943)).
However, in order for there to be any estoppel, there must be detrimental reliance by the
party claiming estoppel. In other words, “‘the party sought to be estopped must have caused the
other party to occupy a more disadvantageous position than that which he would have occupied
except for that conduct.’” Ford Motor Co. v. Switzer, 140 Va. 383, 395-96, 125 S.E. 209, 213
(1924) (quoting Atlantic Coast Line v. Bryan, 109 Va. 523, 526, 65 S.E. 30, 31 (1909)).
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We recognized this requirement in Bowden v. Newport News Shipbuilding, 11 Va. App.
683, 686, 401 S.E.2d 884, 885 (1991), when, in explaining our holding in McGuinn, we said,
“This Court held that the employer’s default misled the employee to his prejudice.” Then, in
Gowan, we affirmed the existence of a de facto award, thereby imposing on the employer the
burden of establishing a basis for terminating the payment of compensation. 32 Va. App. at
464-65, 528 S.E.2d at 723. Had the commission held that the payments were not made pursuant
to a de facto award, the claimant would have borne the burden of establishing her entitlement to
continued compensation. See id. at 464, 528 S.E.2d at 723. Finally, in Strong v. Old Dominion
Power Co., 35 Va. App. 119, 128, 534 S.E.2d 598, 602 (2001),2 “[w]e decline[d] to apply the [de
facto award] doctrine to a case lacking misrepresentation or reasonable reliance.”
As we have noted in requiring an actual agreement or stipulation regarding
compensability, “statutory amendments [subsequent to McGuinn] have undercut the very reason
for the de facto doctrine, [and thus] we have been careful not to extend the judge-made concept
beyond its original parameters.” Lysable Transp., 57 Va. App. at 415, 702 S.E.2d at 599. Those
same considerations restrain us from extending the doctrine to apply where an employee has
2
We recognize that we also discussed the application of the de facto award doctrine in
Henrico Public Utilities v. Taylor, 34 Va. App. 233, 540 S.E.2d 501 (2001). In that case, “[t]he
employer defended the claim [for change-in-conditions benefits] on the ground that [the
claimant] was barred from claiming additional benefits by the two-year statute of limitations
established by Code § 65.2-708.” Id. at 237, 540 S.E.2d at 503. The deputy commissioner found
that a de facto award existed and that the claim was timely because it was filed within two years
of the last payment pursuant to the de facto award. Id. On review, “[t]he [full commission]
opinion concluded . . . that [it] did not need to address whether the finding of the de facto award
prevented the County from asserting a statute of limitations defense ‘because the May 14, 1997,
Claim was filed within two years of [the] date compensation was last paid under the most recent,
de jure, award.’” Id. at 237, 540 S.E.2d at 504. We expressly declined to decide whether the
statute of limitations ran from the last date of payment under a de facto award “because the
commission did not so hold.” Id. at 245, 540 S.E.2d at 508. Because the commission based its
decision on the existence of a de jure award, any discussion of a de facto award in Taylor
addressed an issue the commission did not rule upon. Thus, Taylor’s discussion of the de facto
award is dicta. See Simon v. Commonwealth, 58 Va. App. 194, 201, 708 S.E.2d 245, 248-49
(2011) (explaining that dicta is language in an opinion that does not address the issue presented,
is unnecessary to the disposition of the case, and therefore is not binding authority).
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neither suffered prejudice nor been placed in a more disadvantageous position as a result of the
absence of an actual award.
Here, the deadline for filing an application of a change-in-condition award expired
approximately seven months prior to Roske’s surgery. Further, there is no evidence that
employer promised Roske any benefits prior to his surgery. In fact, as the commission noted,
Roske did not contact employer regarding disability benefits until after his surgery. Simply put,
there is no evidence to establish that Roske suffered any prejudice as a result of his employer’s
actions. Although the record is unclear as to why employer made voluntary disability payments
to Roske after the time limitation of Code § 65.2-708 had run, “[m]aking voluntary payments, by
itself, falls far short of satisfying the preconditions of the de facto award doctrine.” Id. To hold
otherwise would be to create a windfall for claimants like Roske who, by being voluntarily paid
disability payments, are no worse off than if the payments had not been made. Thus, the
commission properly held that the voluntary payments made by employer did not constitute a de
facto award.
Moreover, because employer did not waive its right to rely on Code § 65.2-708, and
because there was no de facto award that would extend the filing deadline set out in Code
§ 65.2-708, the commission did not err in concluding that the application for a
change-in-condition award was not timely filed.
III. CONCLUSION
For the foregoing reasons, we affirm the Workers’ Compensation Commission’s decision.
Affirmed.
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