PATRICK J. AYD, Employee, v. AVR, INC., and STATE FUND MUT. INS. CO., Employer-Insurer/Appellants.

WORKERS’ COMPENSATION COURT OF APPEALS
OCTOBER 18, 2007

No. WC07-175

HEADNOTES

INTEREST.  Where the parties disagreed as to when permanent total disability benefits were due, but the issue was not raised during the hearing before the compensation judge and the compensation judge therefore did not resolve it, further proceedings were necessary to determine whether interest was payable on permanent total disability benefits paid prior to hearing.

Remanded.

Determined by: Wilson, J., Pederson, J., and Rykken, J.
Compensation Judge: Jane Gordon Ertl

Attorneys: Kenneth N. Potts, Minnetonka, MN, for the Respondent.  M. Chapin Hall, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Appellants.

 

OPINION

DEBRA A WILSON, Judge

The employer and insurer appeal from the compensation judge’s order regarding payment of interest.  We remand the matter for further proceedings.

BACKGROUND

On June 12, 2002, the employee sustained a work-related injury to his low back while employed by AVR, Inc. [the employer].  He was apparently off work for some period before returning to a light-duty assignment.  On October 3, 2003, the employee was taken off work again by his physician, and the employer’s insurer commenced payment of temporary total disability benefits.  Those benefits were discontinued effective July 21, 2005, because the employee had received the 104-week statutory maximum[1] as of that date.

In early January of 2006, the employee filed a claim petition alleging entitlement to benefits for a 29% whole body impairment and to permanent total disability benefits from and after July 22, 2005.  In their answer, the employer and insurer responded by alleging that it was “premature for a determination one way or the other with regard to permanent total disability benefits” and that there was insufficient information in the record to determine the basis for the employee’s physician’s 29% impairment rating.

Hearing on the employee’s claim petition was scheduled for March 8, 2007.  At some point prior to hearing, the employer and insurer paid the employee permanent total disability benefits, retroactive to October 3, 2003, based on their contention that the employee had been permanently and totally disabled since that date.  When the matter came on for hearing, as scheduled, issues included the onset date of the employee’s permanent total disability and the extent of the employee’s permanent partial disability.  By this time, the employer and insurer had also paid the  employee benefits for a 14% whole body impairment.

In a decision issued on May 10, 2007, the compensation judge concluded that the employee had been permanently and totally disabled as of October 6, 2003, and that the employee had a 29% whole body impairment.  Benefits were awarded accordingly, and the employer and insurer were also ordered to “pay statutory interest.”

Following the issuance of the decision, the parties corresponded with the judge concerning the interest payable, if any, on permanent total disability benefits.[2]  The compensation judge responded as follows:

The issue raised by the parties over the application of Minn. Stat. § 176.221, subd. 7 [concerning payment of interest] to payment of permanent total disability benefits was not addressed or litigated at the hearing.  I have insufficient information to reach a conclusion on the issue without further proceedings.  Those proceedings would need to be on the record.  Consequently, I don’t think a conference call would resolve the dispute.
If the parties disagree with my assessment, I believe your option is appeal to the W.C.C.A.  The parties also have the option of reaching a settlement on the issue or filing a Claim Petition.

The employer and insurer appeal.

DECISION

Pursuant to Minn. Stat. § 176.221, subd. 7, “[a]ny payment of compensation . . . not made when due shall bear interest from the date due to the date payment is made.”  That provision goes on to describe when payment is due for permanent partial disability and treatment expenses, but it does not specify when benefits for permanent total disability are payable.

The parties in the present matter do not agree as to whether interest is payable on permanent total disability benefits.[3]  The employer and insurer contend that no interest is payable because they paid permanent total disability benefits shortly after receiving evidence establishing that the employee was in fact permanently and totally disabled.  The employee, on the other hand, alleges that, because the employer and insurer did not pay benefits immediately after the filing of the claim petition, benefits were not paid when “due,” and interest is owing.

Because the compensation judge did not make a determination on the interest issue, the parties are, in essence,  requesting clarification as to just what is covered by the judge’s order for “statutory interest.”  However, this court has no authority to issue advisory opinions.  See, e.g., Herrly v. Walser Buick, Inc., 47 WCD 670, 675 (W.C.C.A. 1992).  Moreover, the  hearing record does not establish exactly when benefits were paid, and, perhaps more importantly, there exists a dispute, not yet addressed at the hearing level, regarding just when payment was in fact due.  It is true, as the employee asserts, that interest is “mandatory,” whether or not an employee has made a specific interest claim.  See, e.g., Helquist v. Kentucky Fried Chicken, slip op. (W.C.C.A. Oct. 19, 1993), citing Crimmins v. NACM N. Cent. Corp., 45 W.C.D. 435 (W.C.C.A. 1991).  However, interest is only mandatory when benefits are not paid when due, and that is the question that remains to be resolved here.  The information in the present record is not sufficient to allow a determination.  For these reasons, we remand the matter to the compensation judge for further proceedings regarding interest.


[1] See Minn. Stat. § 176.101, subd. 1(e).

[2] In their brief on appeal, the employer and insurer indicated that interest on permanent partial disability benefits has been paid, and the propriety of that payment is not at issue.

[3] At hearing, the employer and insurer’s counsel explained their payment of benefits as follows:

But at the time of the permanent total disability determination, and just for the record, you know, he actually didn’t meet the threshold under the statute and we didn’t stand on that sort of hypertechnical issue, should have been paid $119,225.44 in indemnity benefits.  And what we did, Judge, is we subtracted out, there were some costs that were embedded in that, $219.12, there were some Subdivision 7 fees that were previously paid, $2,538.28, and there was the 14 per cent permanency, $11,900.00.  All of those were subtracted out so that the past paid weekly indemnity, which was temp total and temp partial, Your Honor, $104,568.04, and that was the amount that was - - through the date that we declared and brought the underpayment that’s what we did pay through that date, and what we should have paid was $124,806.24.  That leaves a shortfall of $20,238.20.  We withheld, and continue to withhold, $4,047.64, and we sent a check to Mr. Ayd, which was I guess mistakenly recorded as not paid, but it was in fact paid, $16,190.56.  And then ever since, Your Honor, we’ve been paying the weekly ongoing permanent total disability benefit taking into account the Social Security offset, and we continue to withhold 20 per cent as I said.