BRB No. 97-1515
GLINN VESSELL )
)
Claimant-Petitioner ) DATE ISSUED: 07/22/1998
)
v. )
)
TODD CORPORATION )
)
and )
)
EAGLE PACIFIC INSURANCE )
COMPANY )
)
Employer/Carrier- )
Respondents ) DECISION and ORDER
Appeal of the Decision and Order and Decision on Reconsideration of
Alfred Lindeman, Administrative Law Judge, United States Department of
Labor.
Michael F. Pozzi, Seattle, Washington, for claimant.
Russell A. Metz (Metz & Associate, P.S.) Seattle, Washington, for
employer/carrier.
Before: HALL, Chief Administrative Appeals Judge, BROWN and McGRANERY,
Administrative Appeals Judges.
PER CURIAM:
Claimant appeals the Decision and Order and Decision on Reconsideration (96-LHC-2123) of Administrative Law Judge Alfred Lindeman rendered on a claim filed
pursuant to the provisions of the Longshore and Harbor Workers' Compensation Act,
as amended, 33 U.S.C. §901 et seq. (the Act). We must affirm the
findings of fact and conclusions of law of the administrative law judge which are
rational, supported by substantial evidence, and in accordance with law.
O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965);
33 U.S.C. §921(b)(3).
Claimant, a painter and scaler for employer, sustained a work-related injury
on October 15, 1993, when he was hit by a sandblasting hose and particulates were
embedded in his lower left cheek. Claimant underwent dermabrasion, but was left
with facial scarring and skin depigmentation; employer paid medical benefits for
the treatment of claimant's injury pursuant to Section 7 of the Act, 33 U.S.C.
§907, but, as no work time was lost, did not pay any disability compensation.
On April 17, 1996, claimant filed a claim for disfigurement benefits pursuant to
Section 8(c)(20) of the Act, 33 U.S.C. §908(c)(20). An informal conference
was held before a claims examiner on June 4, 1996, following which the claims
examiner recommended that employer pay claimant a disfigurement award of $3,000;
as claimant was not represented by legal counsel at that time, attorney's fees were
not at issue. Employer filed a controversion of the disfigurement claim on June
14, 1996, noting that the controversion was filed in order that employer might
investigate the claim. On July 2, 1996, the claim was referred to the Office of
Administrative Law Judges for formal adjudication and, in a pretrial order dated
October 17, 1996, the case was set for formal hearing on March 10, 1997.
Thereafter, claimant retained counsel and, by letter dated November 15, 1996,
claimant's attorney offered to settle the claim for $6,500, plus reasonable
attorney's fees. By letter dated January 8, 1997, employer offered to settle the
claim for $4,000. Claimant's counsel responded by letter dated January 15, 1997,
requesting clarification as to whether the $4,000 proposed settlement amount was
exclusive of attorney's fees and stating that claimant's attorney would
nevertheless advise claimant to reject employer's offer and would recommend a
settlement amount of $5,750, plus attorney's fees. Thereafter, a formal hearing
was held on March 10, 1997.
In his Decision and Order, the administrative law judge determined that, as
claimant sustained a "serious" facial disfigurement, his injury was automatically
compensable. Noting that Section 8(c)(20), 33 U.S.C. §908(c)(20), provides
for an award of "proper and equitable compensation not to exceed $7,500..." for a
serious facial disfigurement, the administrative law judge rated the degree of
seriousness of claimant's disfigurement as a three on a scale of one to ten.
Accordingly, he awarded claimant compensation in the amount of $2,250. Lastly, the
administrative law judge found that claimant's counsel is not entitled to a fee
payable by employer, inasmuch as employer had offered to settle the case for an
amount greater than the amount awarded by the administrative law judge.
In a Decision on Reconsideration, the administrative law judge reaffirmed his
$2,250 disfigurement award, rejecting claimant's argument that a "serious" facial
scar automatically entitles claimant to the maximum award of $7,500. The
administrative law judge further reaffirmed his finding that employer is not liable
for attorney's fees because claimant was not awarded compensation greater than that
tendered by employer.
On appeal, claimant challenges the administrative law judge's decision to
award him less than the maximum amount of compensation set forth in the Act for
facial disfigurement. Claimant further contends that employer is liable in full
for attorney's fees incurred after June 20, 1996, because employer made no tender
for claimant's disfigurement prior to the expiration of 14 days after the
recommendation made by the claims examiner at the informal conference.
We first address claimant's contention that the administrative law judge erred
in awarding compensation of only $2,250 for claimant's facial disfigurement.
Specifically, claimant asserts that a serious facial scar, by definition, entitles
him to the maximum amount of compensation set forth in the Act. For the reasons
that follow, we reject claimant's contention of error. Section 8(c)(20) of the Act
provides as follows:
Disfigurement: Proper and equitable compensation not to exceed $7,500
shall be awarded for serious disfigurement of the face, head, or neck or
of other normally exposed areas likely to handicap the employee in
securing or maintaining employment.
33 U.S.C. §908(c)(20). In facial disfigurement cases, the administrative law
judge must initially find that the disfigurement is "serious" in order to find it
compensable, and there is no requirement that the disfigurement be likely to
handicap the claimant in securing or maintaining employment. See Schreck v.
Newport News Shipbuilding & Dry Dock Co., 10 BRBS 611, 612-613 (1978); see
also Boyd v. Ceres Terminals, 30 BRBS 218, 223 (1997). Once a disfigurement
has been found to be compensable, a plain reading of Section 8(c)(20) indicates the
intent of Congress to limit compensation for such disfigurement to a maximum of
$7,500, see Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102
(1980), and the administrative law judge has the discretion to set the amount of
compensation which will be "proper and equitable" for the particular serious
disfigurement. Schreck, 10 BRBS at 613.
In the case at bar, the administrative law judge determined, based both on his
personal observation of claimant and photographs of claimant taken in January 1997,
see CX-2, that claimant has a serious facial disfigurement, measuring that
impairment as equal to a three on a scale of one to ten. Accordingly, the
administrative law judge determined that an award of $2,250 represents "proper and
equitable" compensation for the particular disfigurement suffered by claimant in
the instant case. Claimant's contention on appeal that a "serious" facial scar,
by definition, is compensable at the maximum allowable amount of $7,500 is
inconsistent with the statutory mandate that the administrative law judge set a
"proper and equitable" amount of compensation, not to exceed $7,500, for a specific
disfigurement. See Schreck, 10 BRBS at 613. We conclude that there was no
abuse of discretion in the administrative law judge's determination that $2,250
represents "proper and equitable" compensation for claimant's facial disfigurement,
and we therefore affirm the administrative law judge's award.[1] See Schreck, 10 BRBS at 612-613.
Claimant next assigns error to the administrative law judge's determination
that employer is not liable for his attorney's fees pursuant to Section 28(b) of
the Act, 33 U.S.C. §928(b).[2] Section 28(b)
provides that in cases in which a controversy develops over the amount of
additional compensation to which the claimant may be entitled, an informal
conference is held, followed by a written recommendation made by the district
director.[3] If the employer refuses to accept
the written recommendation, it may limit its liability for claimant's attorney's
fees by tendering the amount of additional compensation it believes is due within
14 days of its receipt of the district director's recommendation. See National
Steel & Shipbuilding Co. v. Director, OWCP, 606 F.2d 875, 11 BRBS 68 (9th Cir.
1979). The Board has recognized that the Act encourages the voluntary payment of
compensation without resort to formal adversarial proceedings. See Armor v.
Maryland Shipbuilding & Dry Dock Co., 19 BRBS 119, 122 (1986).
In the instant case, employer neither accepted the recommendation made by the
district director at the June 4, 1996 informal conference, nor made any tender of
compensation within 14 days of the district director's recommendation. Employer's
failure to timely comply with the requirements of Section 28(b) compelled claimant
to retain legal counsel. Claimant's attorney thereafter obtained compensation in
the amount of $2,250 for claimant through resort to the adjudication process.
Contrary to the administrative law judge's reasoning, the fact that claimant's
ultimate award was less than both the amount recommended by the district director
and the amount tendered by employer in its settlement offer dated January 8, 1997,
does not absolve employer from its liability for attorney's fees incurred during
the period in which employer had neither accepted the district director's
recommendation nor made any tender of compensation. Thus, we agree with claimant's
argument on appeal insofar as he contends that employer's failure to comply with
the Section 28(b) requirements within the statutory 14-day period triggered
employer's liability for claimant's attorney's fees commencing with the date of the
expiration of the 14-day period. See generally National Steel, 606 F.2d at
875, 11 BRBS at 68; Armor, 19 BRBS at 121.
We disagree, however, with claimant's contention that employer's lack of
timely compliance renders employer indefinitely liable for payment in full of
claimant's attorney's fees. Although employer did not comply with Section 28(b)
in a timely manner, employer's subsequent $4,000 settlement offer made by letter
dated January 8, 1997, constitutes a tender of compensation within the meaning of
Section 28(b). See Armor, 19 BRBS at 122.[4]
As claimant ultimately was awarded an amount less than the amount offered by employer on January 8, 1997,
employer's liability for claimant's attorney's fees ended as of the date of employer's tender. To accept
claimant's argument that employer's failure to tender within the requisite 14-day
period renders employer liable for all attorney's fees incurred thereafter
would mean that an employer could not tender beyond the 14-day period without
remaining liable in full for claimant's attorney's fees even if claimant ultimately
received a nominal amount substantially less than the tendered settlement amount.
This position is contrary to the Act's policy of encouraging settlements.
Id. We therefore modify the administrative law judge's Decision and Order
and Decision on Reconsideration to reflect employer's liability for claimant's attorney's fees for
services rendered up to the date of employer's tender of compensation on January 8, 1997, and we remand the
case for the administrative law judge to award a fee payable by employer for that time period.
Accordingly, the administrative law judge's Decision and Order and Decision
on Reconsideration are modified to reflect employer's liability for claimant's
attorney's fees incurred prior to employer's tender of compensation, and the case
is remanded for entry of an attorney's fee award consistent with this decision.
In all other respects, the administrative law judge's decisions are affirmed.
SO ORDERED.
BETTY JEAN HALL, Chief
Administrative Appeals Judge
JAMES F. BROWN
Administrative Appeals Judge
REGINA C. McGRANERY
Administrative Appeals Judge
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Footnotes.
1)Claimant further contends that inflation has eroded the value
of the $7,500 maximum set by Congress in 1978. The Board, however, must apply the
Act as written; while claimant's contention may provide a persuasive justification
for a legislative review of the maximum allowable disfigurement award of $7,500,
such contention is outside the scope of the Board's review authority. See
Potomac Electric Power Co. v. Director, OWCP, 449 U.S. 268, 283-284 (1980).
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2)Section 28(b) states:
If the employer or carrier pays or tenders payment of compensation
without an award pursuant to Section 914(a) and (b) of this Act, and
thereafter a controversy develops over the amount of additional
compensation, if any, to which the employee may be entitled, the deputy
commissioner or Board shall set the matter for an informal conference
and following such conference the deputy commissioner or Board shall
recommend in writing a disposition of the controversy. If the employer
or carrier refuse to accept such written recommendation, within fourteen
days after its receipt by them, they shall pay or tender to the employee
in writing the additional compensation, if any, to which they believe
the employee is entitled. If the employee refuses to accept such
payment or tender of compensation, and thereafter utilizes the services
of an attorney at law, and if the compensation thereafter awarded is
greater than the amount paid or tendered by the employer or carrier, a
reasonable attorney's fee based solely upon the difference between the
amount awarded and the amount tendered or paid shall be awarded in
addition to the amount of compensation. In all other cases any claim
for legal services shall not be assessed against the employer or
carrier.
33 U.S.C. §928(b).
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3)Pursuant to Section 702.105 of the regulations, 20 C.F.R.
§702.105, the term "district director" has replaced "deputy commissioner" used
in the statute.
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4)Contrary to claimant's suggestion, the fact that employer's
settlement offer failed to address the issue of payment of claimant's attorney's
fees does not nullify employer's tender for purposes of attorney's fee liability
under Section 28(b).
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NOTE: This is an UNPUBLISHED LHCA Document.
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