Town of Ashland v. Robert Joseph Hendrick ( 1996 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Coleman, Elder and Senior Judge Cole
Argued at Richmond, Virginia
TOWN OF ASHLAND, ET AL.
MEMORANDUM OPINION * BY
v. Record No. 0829-96-2 JUDGE LARRY G. ELDER
NOVEMBER 26, 1996
ROBERT JOSEPH HENDRICK
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
P. Dawn Bishop (Sands, Anderson, Marks &
Miller, on briefs), for appellants.
Gerald G. Lutkenhaus for appellee.
The Town of Ashland and Virginia Mutual Group Self-Insurance
Association (appellants) appeal from a decision of the Workers'
Compensation Commission (commission) awarding benefits to
Robert J. Hendrick (appellee) and finding that his claim was not
barred by the statute of limitations. Appellants contend that
the commission erred (1) when it let stand the conclusion of the
deputy commissioner that the Town of Ashland (Town) was subject
to the doctrine of estoppel and (2) when it held that the Town's
actions estopped it from asserting the statute of limitations as
a bar to appellee's claim. For the reasons that follow, we
affirm.
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
I.
FACTS
On February 13, 1985, appellee, then an equipment operator
for the Town of Ashland (Town), sustained a compensable injury to
his left foot and ankle. Soon after the accident, Harold
Mitchell, who was both the Town's treasurer and contact person
for any workers' compensation claims made against it, told
appellee that if he needed anything "to come to him, and he would
take care of the paperwork."
During the next two years the Town initiated all of the
paperwork signed by appellee regarding his workers' compensation
claim. In 1985, the parties executed a Memorandum of Agreement
and an Agreed Statement of Fact regarding appellee's award of
benefits for the five months of work he missed following his
accident. In 1988, the parties executed a Supplemental
Memorandum of Agreement and another Agreed Statement of Fact to
formalize another award of benefits for a month-long absence from
work that ended on January 18, 1987. In addition, whenever
appellee received a check from the Town's insurance carrier he
would endorse it to the Town because the Town always paid him his
full salary during his absences. Each agreement or check was
initially received by Mr. Mitchell from the Town's workers'
compensation insurance carrier. Upon receipt, Mr. Mitchell would
call appellee in from where he was working and direct him to sign
each document as required.
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Following his return to work in July, 1985, the Town also
established a simple procedure for appellee to receive his full
wage following an injury-related absence. Appellee would report
any such absences to his supervisor, who indicated them on his
weekly timesheets by marking "WC." This signified to the town
that the time missed was covered under workers' compensation and
should not be deducted from appellee's accrued sick leave or
vacation time. Appellee was paid his full wage for every
injury-related absence he reported to his supervisor from 1985
until 1995.
After the expiration of appellee's last formal award of
compensation on January 18, 1987, appellee continued to miss
substantial periods of work due to multiple surgeries related to
his injury. However, Mr. Mitchell failed to communicate with the
Town's carrier regarding any of appellee's subsequent absences
until August, 1991, when he learned that the carrier would no
longer reimburse the Town for appellee's claim because it was
time-barred. Despite the fact that Mr. Mitchell ceased asking
appellee to sign paperwork after 1988, appellee did not think
there was a problem with his claim because he continued reporting
his injury-related absences to his supervisor and receiving his
full wage for his lost time. In addition, on at least one
occasion, appellee took a "problem" medical bill to Mr. Mitchell
who "took care of it" by calling the Town's carrier.
In March, 1994, appellee's left great toe was amputated
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because of damage sustained when he was injured in 1985. After
the surgery, appellee requested additional compensation for the
loss of his toe, and the Town's carrier denied his claim, stating
that it was time-barred under Code § 65.2-708(A). The carrier
also sent appellee a copy of the commission's workers'
compensation guide, which was the first time appellee had seen
the guide. In the spring or summer of 1994, appellee met with
Mr. Mitchell and the Town manager, who informed him that he would
not receive additional compensation from the Town for the
amputation of his toe because his claim was barred by the statute
of limitations.
On October 31, 1994, appellee filed an application for
compensation with the commission that was subsequently denied by
a claims examiner. Appellee appealed this decision, and the
commission reversed and remanded the case to a deputy
commissioner for a hearing to determine whether appellants were
estopped from asserting the statute of limitations as a bar.
After a hearing, the deputy commissioner awarded compensation to
appellee, holding that the doctrine of estoppel applied to
governmental entities and prevented appellants from asserting the
statute of limitations as a bar. The Town appealed the decision
of the deputy, and the full commission affirmed.
II.
DOCTRINE OF ESTOPPEL AND GOVERNMENTAL ENTITIES
Appellants argue that the commission erred in ruling that
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the Town was estopped from raising the statute of limitations as
a bar because governmental entities are not subject to the
doctrine of estoppel. We disagree.
We hold that a governmental entity is subject to the
doctrine of estoppel when it asserts the statute of limitations
as a bar to a workers' compensation claim filed against it. "[A]
municipal corporation has both governmental and proprietary
functions." Bialk v. City of Hampton, 242 Va. 56, 58, 405 S.E.2d
619, 620 (1991). It is well established that the doctrine of
estoppel does not apply to the state or its political
subdivisions in the discharge of their governmental functions but
that it does apply when the governmental entity is acting in its
proprietary capacity. Monument Associates v. Arlington County
Board, 242 Va. 145, 151, 408 S.E.2d 889, 892 (1991) (citing
Westminster-Canterbury v. City of Virginia Beach, 238 Va. 493,
503, 385 S.E.2d 561, 566 (1989)). An act by a governmental
entity is "governmental" if it is "done . . . for the common
good, without the element of corporate benefit or pecuniary
profit." Bialk, 242 Va. at 59, 405 S.E.2d at 621 (citing Fenon
v. City of Norfolk, 203 Va. 551, 556, 125 S.E.2d 808, 812
(1962)). In this case, the actions of the Town that appellee
asserts estop it from raising the statute of limitations were the
handling and processing of an employee's workers' compensation
claim by a Town officer following an accident.
We hold that the Town acted in a proprietary capacity when
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it handled and processed an employee's claim. By setting up
procedures for appellee to report his injury-related absences and
handling paperwork related to appellee's work-related injury, the
Town was attempting to provide appellee with the benefits to
which he was entitled under the Act and to limit its litigation
costs. The record shows that Mr. Mitchell, the Town's treasurer
and contact person for workers' compensation claims, told
appellee that he would take care of appellee's claim, initiated
two Memoranda of Agreement with appellee, communicated with the
Town's insurance carrier and approved the payment of appellee's
full wage for injury-related absences for ten years. Mr.
Mitchell's actions indicate that they were intended to benefit
both the Town and appellee and not the general public. In
addition, by attempting to limit litigation costs by executing
agreements with appellee and by seeking reimbursement from the
Town's carrier, Mr. Mitchell's actions contained the element of
corporate benefit. VEPCO v. Hampton Redevelopment and Housing
Authority, 217 Va. 30, 36, 225 S.E.2d 364, 369 (1976) (holding
that Housing Authority acts in proprietary capacity when it
operates a housing project because the service "inures to the
benefit of a few rather than to 'the common good of all'"); City
of Richmond v. Virginia Bonded Warehouse Corp., 148 Va. 60,
72-73, 138 S.E. 503, 507 (1927) (holding that city acts in
proprietary capacity when it installs sprinkler system in private
building because such systems are installed "for the private
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benefit and interest of the owner of the building"). We hold
that Mr. Mitchell's actions were proprietary in nature and that
the Town, as a governmental entity, is subject to the doctrine of
estoppel when it asserts that appellee's workers' compensation
claim is barred by the statute of limitations.
III.
APPLICATION OF THE DOCTRINE OF ESTOPPEL
Appellants contend that the commission erred in concluding
that estoppel applies to them in this case because appellee
failed to prove that the Town engaged in a deliberate, fraudulent
effort to prejudice his right to file a claim within the
limitation period. We disagree.
As a preliminary matter, we note that appellants set forth
an incorrect legal test for the application of equitable
estoppel. While appellants correctly assert that the doctrine of
estoppel applies to those situations where a claimant shows that
an employer deliberately intended to cause prejudice through acts
of fraud or concealment, these are not the only bases that will
estop an employer from asserting a statute of limitations
defense. The doctrine of estoppel does not require a claimant to
prove either that an employer's representation was false or that
the employer made the representation with the intent to induce
reliance. Cibula v. Allied Fibers & Plastics, 14 Va. App. 319,
325, 416 S.E.2d 708, 711 (1992), aff'd, 245 Va. 337, 428 S.E.2d
905 (1993) (applying Stuart Circle Hosp. v. Alderson, 223 Va.
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205, 208, 288 S.E.2d 445, 446-47 (1982)). Instead, a claimant
makes a case for estoppel if he proves by clear, precise and
unequivocal evidence that the employer made a representation or
committed any act that did in fact induce the claimant to refrain
from filing a claim within the limitations period. Id. Under
this theory of estoppel, the essential elements are "a
representation, reliance, a change of position, and detriment."
T . . . v. T . . ., 216 Va. 867, 873, 224 S.E.2d 148, 152 (1976).
We hold that the commission did not err in concluding that
appellants are estopped from asserting the statute of limitations
in this case. The record clearly shows that the Town made
representations and committed acts that induced appellee to fail
to file his claim before the limitations period of Code
§ 65.2-708(A) had expired. After appellee's injury, Mr. Mitchell
told appellee to come to him if he needed anything and that he
would take care of the paperwork. Although this general
representation may not have been sufficient to relieve appellee
of his responsibility to file a claim in order to protect his
rights, for almost three years after the injury, Mr. Mitchell
prepared and submitted to the carrier necessary paperwork
required to formalize appellee's entitlement to benefits,
including the execution of two Memoranda of Agreement and two
Agreed Statements of Fact. In each instance, Mr. Mitchell called
appellee in from the field and "lay [the document] on his desk
with a pen where [appellee] needed to sign." In addition, the
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Town established a system whereby appellee would report his
injury-related absences to his supervisor and receive his full
wage. Following the last payment of compensation pursuant to the
Supplemental Memorandum of Agreement in 1987, Mr. Mitchell
continued to approve the full payment of wages for appellee's
injury-related absences until 1995. Appellee stated that he
believed that his workers' compensation claim was being paid
because of Mr. Mitchell's representations and acts:
I was trusting Harold Mitchell. I mean, he brought me
all the other forms and I was waiting for him to bring
me the rest of them and he didn't, and I didn't know
that there was any to be brought to me.
The record shows that appellee did not receive a workers'
compensation guide until after the amputation of his great toe in
1994. Because the Town made representations and committed acts
that induced appellee to refrain from filing a timely claim,
appellants are estopped from raising the statute of limitations
as a bar to appellee's claim.
In light of the foregoing reasons, we affirm the decision of
the commission.
Affirmed.
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