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WCB AD Decision on Unilateral Discontinuance, Retirement Presumption and Mediation Agreement

The Maine Workers’ Compensation Appellate Division has issued a new decision affirming an ALJ’s decision that (1) the employer improperly discontinued incapacity benefits, (2) the retirement presumption did not apply, and (3) a mediation agreement for closed-end incapacity benefits was enforceable.

In John White v. Maine Turnpike Authority , White injured his left knee in 2009 and his right shoulder in 2010. In May 2011 MTA filed a MOP and paid White ongoing varying partial incapacity benefits on his shoulder injury. In July 2011, White announced his intention to retire and draw his retirement pension effective 9/30/11. On 8/1/11, White reinjured his left knee at work, requiring additional work restrictions. MTA was unable to accommodate those restrictions and put White out of work entirely as of 8/10/11 -- a few weeks before he was set to retire.

On 8/17/11, MTA unilaterally discontinued White’s varying partial benefits on the shoulder injury based on his prior “increased earnings” at MTA. White and MTA then entered into a mediation agreement requiring MTA to pay total incapacity benefits on the 2011 knee injury from 8/11/11 to 9/30/11. White later filed petitions on all 3 dates of injury. Judge Stovall found that White’s earnings at MTA were less than his pre-injury AWW, so MTA lacked authority under § 205 (9) (A) to unilaterally discontinue his benefits. He ordered reinstatement of varying partial benefits on the 2010 shoulder injury pending a proper discontinuance of those benefits, at which point White would be entitled to fixed partial benefits, based on an imputed earning capacity and offset by MTA’s proportional contribution to White’s pension benefits, once the parties determined that proportion. Both parties appealed.

MTA argued that White’s decision to retire was made before his 8/1/11 injury, raising the retirement presumption that his lost earnings were not the result of an injury. The Appellate Division affirmed Judge Stovall’s decision not to apply the retirement presumption, consistent with the Maine Supreme Court’s 1997 decision in Cesare v. GNP, as White was out of work with a work injury before he actually retired. MTA also argued that White’s post-injury earnings allowed MTA to unilaterally discontinue benefits, but the Appellate Division panel found competent evidence to support Judge Stovall's finding that White’s earnings were diminished, thus requiring MTA to use a 21-day certificate to suspend benefits.

White argued that, because MTA did not produce evidence at the hearing of the parties' proportional pension contributions to retirement benefits, Judge Stovall should have found that MTA did not contribute to the benefits at all and ordered MTA to pay benefits accordingly, rather than allowing MTA to produce the missing evidence later. The Appellate Division rejected that argument, finding the ALJ has the authority to reserve issues for future discussion and resolution. Finally, White argued that, despite the closed-end mediation agreement, MTA should still have used a 21-day discontinuance to stop payment of benefits. He contended that a formal mediation did not occur because an advocate was not assigned. The Appellate Division rejected that argument, holding that mediation agreements have the force and effect of decrees, even if one or both of the parties are not represented by counsel at that stage.

If you have any questions about this decision, please let us know.

Thomas Getchell
Daniel Gilligan
Michael Richards
Attorneys at Law