F&P Prevails on Statute of Limitations Defense Before the Court of Special Appeals of Maryland
Franklin & Prokopik principal David Skomba recently prevailed on a statute of limitations defense argued before the Court of Special Appeals of Maryland. In an unreported opinion, the Court held the Maryland Workers’ Compensation Commission (“Commission”) was legally correct in finding that the five-year statute of limitations barred a claimant’s request for additional indemnity benefits.
The claimant, a forklift operator, sustained a compensable injury to her right knee as the result of a work-related accident on April 24, 2001. A year later, in 2002, the Commission found the claimant had sustained 12% permanent partial disability to her right leg in connection with the work accident. The claimant was awarded additional benefits in 2006 when the Commission determined her permanent disability had increased by 10%. The employer and insurer paid the final installment of the claimant’s permanency benefits in accordance with the 2006 Award on January 16, 2007.
In June 2009, the claimant was involved in a motor vehicle accident unrelated to her employment and sustained a fractured right foot. While the matter was on appeal and in extended litigation regarding the claimant’s entitlement to additional medical treatment in light of the intervening accident, the claimant filed a request for modification of her permanency award due to an alleged worsening of condition to her right knee. The employer and insurer objected, arguing the Commission did not have jurisdiction to consider the claimant’s request for modification while the matter was pending on appeal. The claimant’s attorney filed a request for a continuance of the hearing. In justification for the continuance, the claimant’s attorney indicated that both parties agreed the hearing to address the claimant’s worsening would be reset on request only after the claimant’s appeal was decided. The Commission granted the claimant’s request and continued the matter with a notation it would be reset on request only.
The claimant’s appeal regarding her medical treatment was resolved in favor of the employer and insurer in May 2014 and the matter was remanded to the Commission for further proceedings. The claimant again, on July 10, 2014, filed Issues with the Commission seeking a modification of her prior permanency award. In response to these Issues, the employer and insurer raised statute of limitations, among other defenses.
Pursuant to Maryland Law, Labor and Employment (“L.E.”) § 9-736, a request to modify a previous award must be made within five years of the date of the accident (or the date of disablement for occupational disease claims) or the date of the last compensation payment to a claimant, whichever is later. Maryland courts have interpreted the date of last compensation payment to mean the date the last payment check is received by the claimant. Compensation does not include medical benefits nor does it include the payment of attorney’s fees awarded as a sanction. If a claimant files and subsequently withdraws issues alleging a change in condition (i.e., a request for modification), the statute of limitations period is not tolled.1
In the instant case, the employer and insurer argued the last indemnity payment to the claimant was received on January 16, 2007, and the claimant was therefore barred by the five-year statute of limitations when she filed Issues for increased permanency benefits on July 10, 2014. Following a hearing in October 2014, the Commission determined the claimant had sustained no increase in permanent partial disability to her right leg and, more importantly, the claim was barred by the statute of limitations. The Commission denied the claimant’s request for a rehearing of its decision. The claimant petitioned the Circuit Court for Howard County for judicial review of both decisions. The lower court ultimately granted the employer and insurer’s preliminary motion to dismiss the claimant’s appeal, agreeing that the five-year statute of limitations precluded the claimant from seeking any further indemnity benefits. The claimant then filed an appeal of the Circuit Court’s decision with the Court of Special Appeals.
After considering briefs and oral arguments by the parties, the Court issued its unreported decision on February 9, 2017. The Court held the Commission had not erred in finding the five-year statute of limitations barred the claimant from seeking a modification of the Commission’s permanency Award when she applied for such a modification over seven years after the last disbursement of compensation benefits.
In reaching its decision, the Court rejected the claimant’s argument that the parties had agreed to a continuance of the claimant’s request for modification until after the conclusion of pending appellate activity and thus, the statute of limitations had been tolled. Critical to the Court’s analysis was the finding that a reset on request, or “ROR” notation, does not preserve the tolling effect of a modification application. In fact, the Court previously found in Giant Food v. Eddy, 179 Md. App. 633, 643-45 (2008), that a continuance reset on request is tantamount to a withdrawal of issues. Relying upon prior authority of Vest v. Giant Food Stores, Inc. 329 Md. 461, 475-76 (1993), the Court explained that the five-year limitations period set forth in L.E. § 9-736 is to be strictly construed and neither the parties nor the Commission can bypass this statutory restriction. Thus, the claimant’s argument that the parties unilaterally agreed to extend the statute of limitations failed.
As this case makes clear, employers and insurers should clearly document and retain records evidencing all compensation payments issued to a claimant or his attorney. No party, even by private agreement, can agree to extend the five-year statute of limitations and the Commission should strictly apply the requirements of L.E. § 9-736. If there is any issue as to the timeliness of a claimant’s request for modification of a prior award, it is good practice for employers and insurers to raise a statute of limitations defense pending further investigation.
For more information about this article, please contact Melissa McGaunn at 410.230.3062 or mmcgaunn@ fandpnet.com.
1. See McLaughlin v. Gill Simpson Elec., 206 Md. App. 242, 258 (2012).