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WCB App Div Affirms Double Recovery

On November 3, 2016, the Maine Worker's Compensation Board’s Appellate Division issued a noteworthy decision, declaring that the procedures in 39-A MRSA §205 for reducing an employee’s incapacity benefits to account for his current earnings do not apply to pre-1993 injuries. Until a judge rules otherwise, those employees get to collect both their weekly benefits and their full earnings until the employer obtains a Board decision reducing benefits based on the employee’s earnings.

In Genest v. S.D. Warren (Decision No. 16-36), Genest injured his neck at work on 6/6/87 and injured his arm at work on 4/10/92. S.D. Warren paid benefits on both injuries until 9/10/02, when former H.O. Johnson ruled that Genest had reached the durational limit (520 weeks) on the 1992 injury, that the 1992 injury contributed 50% toward his incapacity, and that S.D. Warren could therefore reduce his benefits on the 1987 injury to 50%.

By that time, S.D. Warren had terminated Genest’s employment, but he had found another job earning less than his pre-injury job. By 2013, however, Genest’s wages had increased to over $1200 per week, plus fringe benefits. S.D. Warren filed a Petition for Review and unilaterally reduced Genest’s incapacity benefits pursuant to 39-A MRSA §205(9)(B)(2) to account for his increased earnings.

Judge Stovall found that S.D. Warren’s reduction was improper because §205(9)(B)(2) expressly applies to payments made under 39-A MRSA §212 and §213, but does not mention former Title 39. Therefore, it does not apply to payments made on the 1987 injury under former §55-A. While former 39 MRSA §100 allowed for a unilateral reduction of benefits paid under §55-A, §100 was repealed when the 1992 changes were enacted. The appellate panel did not address S.D. Warren’s argument that the amendment to §205(9)(B)(2) should apply retroactively to all dates of injury because it was procedural, not substantive, and affirmed the Judge Stovall’s ruling.

The Appellate Division panel also upheld Judge Stovall’s decisions regarding the method of comparing pre-injury and post-injury fringe benefits, and the method of determining whether fringe benefits should be included in the benefit calculation: the parties must first take the 50% reduction in benefits before comparing that figure to 2/3 of the state average weekly wage. This order of comparison is different from the method used in applying the retirement offsets, as described in the Ricci and Hanson cases.

This Appellate Division decision may warrant legislative changes to §205(9)(b)(2) to prevent employees with pre-1993 injuries from getting a double recovery of benefits. The Legislature made such a change to §203, broadening its application beyond only §212 and §213, after the Law Court rendered its Gifford decision on similar grounds.

If you have any questions about this or any other case, please let us know.

Thomas Getchell
Daniel Gilligan
Michael Richards
Attorneys at Law