SULLIVAN v. BOSTON UNIVERSITY

LEVINE, J.

The self-insurer appeals from a decision in which an administrative judge awarded the employee $3,325.12 in workers' compensation benefits withheld by the self-insurer from a prior award. The self-insurer contends that the amount was its rightful offset for attorney's fees owing in the earlier action pursuant to § 13A(5) of G.L.c. 152 (the Act). The self-insurer argues that the offset is authorized by § 13A(10) of the Act, which provides in pertinent part:

In any instance in which an attorney's fee under subsection (1) to (6), inclusive, is due as a result of a cash award being made to the employee either voluntarily, or pursuant to an order or decision, the insurer may reduce the amount payable to the employee within the first month from the date of the voluntary payment order or decision, by the amount owed the claimant's attorney; provided, however, that the amount paid to the employee shall not be reduced to a sum less than seventy-eight percent of what the employee would have received within that month if no attorney's fee were payable.

G.L.c. 152, § 13A(10) (St. 1991, c. 398, § 35). The employee contends that this section applies in this case only to the weekly indemnity payments of his award during and attributable to the month following the issuance of the prior judge's decision, not to the retroactive award of indemnity payments. We agree, and affirm the decision.

In a decision issued on May 1, 1995, an administrative judge awarded the employee § 34 temporary and total incapacity benefits from the date of injury, May 21, 1993, to date and continuing. The weekly compensation rate beginning May 21, 1993, was $525.58; as a result, there was a retroactive award of $37,612.85. The judge also awarded interest under § 50, and an attorney's fee of $3,820.66 pursuant to § 13A(5). The self-insurer has made the payments ordered in the decision except that it deducted the attorney's fee from its payment of benefits to the employee by interpreting § 13A(10), quoted above, as applying to the retroactive weekly compensation award. The employee disagreed with that interpretation, and brought the present claim for restoration of the § 13A(10) deduction, with the exception of 22% of the weekly benefits paid for the one month period after the issuance of the decision. (Dec. 2.)

The judge rejected the self-insurer's contention that the pertinent language — "the amount payable to the employee within the first month of the date of the . . . decision" — is unambiguous, and that the phrase necessarily refers to everything that the self-insurer must pay the employee within a month of the issuance of the decision. (Dec. 3.)

Since the judge viewed the language of § 13A(10) as susceptible of interpretation, he applied the definitional regulation, 452 CMR 1.02, which states as follows:

Amount Payable to the Employee Within the First Month from the Date of the Voluntary Payment, Order or Decision as used in M.G.L.c. 152, § 13A(10), shall mean any compensation due the employee under the terms of the voluntary payment, order or decision pursuant to M.G.L.c. 152, § 36 or § 36A and any future weekly benefits pursuant to M.G.L.c. 152 due the employee for the first 30 days subsequent to the date of the execution of a voluntary payment or the issuance of an order or decision.

(bold type added.) Applying this regulation, the judge concluded that the self-insurer was entitled to deduct $495.54, which is 22% of the amount due as weekly compensation for thirty days following the May 1, 1995 decision. This amount is far less than the entire attorney's fee award of $3,820.66, which the self-insurer had attempted to deduct. (Dec. 4.) The self-insurer contends that the decision is contrary to law.

In the May 1, 1995 decision, the judge ordered various amounts paid to the employee: the retroactive award of weekly compensation benefits, the award of weekly compensation benefits into the future, and § 50 interest. The self-insurer is correct that all of these amounts were "payable to the employee within the first month from the date of the . . . decision." However, it is more accurate to say that all of these amounts were "payable" immediately upon the self-insurer's receipt of the decision. The articulated one month does not correspond, in fact, to any other temporal provision in the Act regarding the payment of compensation benefits. Indeed, the requirement for timely payment reflected in the penalty provisions of § 8(1) is that all amounts payable to the employee must be paid within fourteen days, not one month.

We view the phrase, "the amount payable to the employee within the first month from the date of the . . . decision," as intended to refer to compensation benefits attributable to that time period; i.e., indemnification for incapacity experienced "within the first month from the date of the . . . decision." That amount is differentiated from the other amounts that are also payable to the employee, such as the retroactive award and interest, but which are not linked qualitatively to the one month period designated. In so interpreting the statute, we follow, as did the judge, the guidance of the definitional regulation, 452 CMR 1.02.

Important policy concerns would be ill-served by the self-insurer's proposed construction. If the 22% offset allowed by § 13A(10) were applicable to all amounts ordered to be paid to the employee initially, and in particular the retroactive weekly compensation award, the result would work an explicit and significant benefit to insurers choosing to protract litigation, rather than accepting and paying claims promptly in the early stages of the proceedings. This is because the longer an insurer can resist paying an employee's claim, the larger the retroactive amount of an agreement, conference award or decision. And the larger the retroactive amount the greater the § 13A(10) offset, up to the entire amount of the attorney's fee, as in the present case.

In contrast to the result which might follow from the self-insurer's interpretation, several other sections of the Act encourage, by financial incentives, prompt settlement and payment of claims. Examples are the pay-without-prejudice provisions of § 7, allowing that no attorney's fee is due when payment is commenced within twenty-one days; the graduating penalties in § 8(1) for late payment of agreed or ordered benefit payments due the employee; the interest provision in § 50; and the upward adjustment in § 51(A) of the statutory rate of compensation to that available on the date of the decision when no compensation has been paid on a claim. The intent of those sections to encourage prompt payment would be thwarted by an interpretation of § 13A(10) which increases the deduction from benefit payments in proportion to the amount of time passing before benefits become payable to the employee. In particular, the escalating amounts of attorney's fees payable under the various subsections of § 13A corresponding to stages in department proceedings could be borne entirely by the employee with no contribution by the insurer. We do not think that the legislature intended such a result, where it is inconsistent with the Act's overall policy of encouraging prompt payment of benefits to employees. See St. Germaine v. Pendergast, 411 Mass. 615, 626 (1992) (where possible, statutes addressing same subject matter should be interpreted in a manner which gives reasonable effect to both and creates a consistent body of law).

We affirm the decision.

So ordered.

______________________________ Frederick E. Levine Administrative Law Judge

______________________________ Sara Holmes Wilson Administrative Law Judge

______________________________ Carolynn N. Fischel Administrative Law Judge

Filed: August 22, 1997