Katherine Stovall v. New England Tel. Co.– (“Stovall II”)-  In Dec. No. 24-06, the Appellate Division finds that the contract ALJ erred in concluding the employee’s petition for restoration on her 9/12/96 injury was barred by the statute of limitations. In Stovall II, the contract hearing officer was considering the case on remand from the earlier decision of Stovall v. New England Tel. Co., ME W.C.B. No 21-35 (App. Div. 2021) (Stovall I).

On remand the contract ALJ rejected the employer’s claim that the petition on the 1996 injury was barred by res judicata. The contract ALJ determined that the parties had not litigated the claims presently presented for determination. But the ALJ found the claim was barred by the statute of repose because more than 6 years had passed between the filing of the claim and the last payment attributed by the employer to the 1996 injury. Mrs. Stovall had not met her burden of persuasion that the employer made payments during this period with contemporaneous notice that such payments were in part related to the 1996 injury. Without this contemporaneous notice, payments recorded under a 2001 injury were legally insufficient to extend the statute of repose on the 1996 injury.

The Appellate Division vacated the decision and entered judgment for Mrs. Stovall. In first determining the ALJ did not err in applying res judicata to bar the claim, the panel engaged in discussion of “might have been litigated” versus “actually litigated” application of res judicata in workers’ compensation cases. Rejecting the employer’s reliance on Somers and Johnson cases where the Law Court recited the “may have been litigated” language, the panel concluded those cases did not overrule earlier decisions which appear to limit res judicata in workers’ compensation cases to those where the parties actually litigated the claims at issue. This is consistent with other recent Appellate Division decisions declining to apply the “might have been litigated” language to apply res judicata.

Because a 2006 decision found that the 2001 injury was an aggravation of the 1996 injury, the panel agreed with Mrs. Stovall that the employer was deemed to have contemporaneous notice that payments on the 2001 injury were due in part to the 1996 injury, thereby extending the statute of repose. Additionally, the 2006 decree awarded ongoing benefits under the 2001 injury, without directly addressing payments under the 1996 injury. The employer had been paying incapacity benefit on the 1996 injury based on a 2005 Memorandum of Payment “accepting” the 1996 injury. When the 2006 decree issued, the employer switched its payments from the 1996 injury to the 2001 injury.

Accordingly, the Appellate Division further concluded that the 2006 decision granting the petition on the 2001 injury and ordering payment of benefits on the 2001 injury, without directly addressing the 1996 injury, was insufficient to end the ongoing payment obligation under a 2005 Memorandum of Payment “accepting” the 1996 injury. The 2005 Memorandum of Payment created a compensation scheme under sec. 205 where lost time incapacity benefits could only be discontinued by filing a petition for review and receiving an order as required by sec. 205(9)(B)(2). While the 2006 decree awarded benefits under the 2001 injury, it did not address or order cessation of the compensation scheme created by the 2005 Memorandum of Payment. Thus, the employer was obligated to pay incapacity under the 1996 injury from the date of the 2006 decision and continuing, with a credit for payments made under the 1996 injury.

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Daniel F. Gilligan