COURT OF APPEALS OF VIRGINIA 

Present: Judges Elder, Lemons and Senior Judge Cole 

Argued at Richmond, Virginia 

OVERHEAD DOOR COMPANY OF NORFOLK AND 

 HARTFORD FIRE INSURANCE COMPANY 

 OPINION BY 

v. Record No. 0597-98-2 JUDGE LARRY G. ELDER 

 JANUARY 26, 1999 

DANIEL LEE LEWIS 

 FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION 

 S. Vernon Priddy, III (Sands, Anderson, 

Marks & Miller, on brief), for appellants. 

 No brief or argument for appellee. 

 Overhead Door Company of Norfolk and Hartford Fire Insurance 

Company (collectively referred to as employer) appeal from a 

decision of the Workers' Compensation Commission denying 

employer's request to terminate or suspend an award of benefits 

payable by employer to Daniel Lee Lewis (claimant). Employer 

contends that claimant, who sustained his compensable injuries as 

a result of third-party negligence, failed to consult employer 

before settling a legal malpractice claim with an attorney whose 

negligence prevented claimant from recovering on the third-party 

claim.1

 Employer contends the commission erred (1) in failing to 

 

 1 Employer filed an earlier application for hearing seeking 

to terminate claimant's benefits on grounds not directly related 

to this appeal. In Overhead Door Co. of Norfolk v. Lewis, 22 Va. 

App. 240, 468 S.E.2d 700 (1996), a panel of this Court held that 

the negligence of claimant's attorney in the third-party suit, 

which resulted in employer's loss of its subrogation rights, 

could not be imputed to claimant and, therefore, would not serve 

as a basis for termination of benefits. 
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exercise its equitable powers to prevent claimant from realizing 

a double recovery; (2) in holding that employer had to have a 

valid lien on the malpractice settlement proceeds before the 

commission had power to grant the termination or credit employer 

sought; (3) in applying res judicata and/or collateral estoppel, 

based on prior circuit court rulings regarding employer's 

entitlement to a lien, to bar the application for termination or 

suspension of benefits; (4) in refusing to terminate claimant's 

claim after he settled his legal malpractice claim without 

employer's authorization; and (5) in issuing an opinion under the 

names of Commissioners Tarr, Dudley and Diamond, when the panel 

before which the parties argued consisted of Commissioners Tarr 

and Dudley and Chief Deputy Commissioner Link. For the reasons 

that follow, we affirm the commission's ruling. 

 I. 

 FACTS 

 While working for employer in 1990, claimant was injured in 

a motor vehicle accident in North Carolina due to the negligence 

of a third party. The commission entered an award for benefits, 

and claimant hired an attorney to pursue an action against the 

third party tortfeasor. The attorney failed to have the suit 

served in a timely fashion, and claimant's negligence action was 

dismissed with prejudice. 

 Claimant filed a malpractice action in the Virginia Beach 

Circuit Court against the attorney and his law firm. Employer 
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filed a notice of lien on the malpractice proceeds in that same 

court, alleging that it had paid over $120,000 in disability and 

medical benefits for claimant and that the Workers' Compensation 

Act (Act) entitled it to such a lien. Claimant and the attorney 

filed a joint motion to quash employer's notice of lien. They 

contended that Code §§ 65.2-309 and 65.2-310 provide an employer 

with subrogation rights when the injured employee recovers from a 

third party who caused the injury but that those code sections do 

not provide subrogation rights when the employee seeks damages 

from a party who did not cause the employee's injury. After 

considering the parties' pleadings and arguments, the trial court 

granted the motion to quash,2

 and claimant and the attorney 

settled the malpractice suit. 

 Employer petitioned the Virginia Supreme Court for an appeal 

of the trial court's order quashing the lien. On September 8, 

1995, the Court denied the petition on the merits, finding "no 

reversible error." 

 While awaiting the outcome of its appeal, employer pursued 

two other potential avenues for recovery. It filed an 

independent action for malpractice against the attorney in the 

Richmond Circuit Court, which was dismissed on the attorney's 

motion for summary judgment.3

 It also filed an application for 

 2 No transcript of any proceedings before the Virginia 

Beach Circuit Court appears in the record. 

 3 Employer indicates on brief to this Court that the 

Supreme Court also refused its petition for appeal on this 

ruling. 
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hearing before the commission, the same application on which the 

current appeal is based, alleging that claimant's failure to 

obtain employer's consent prior to settling the malpractice claim 

prejudiced employer's "statutory assignment and subrogation 

rights" and seeking termination or suspension of benefits. 

Claimant contended that employer raised the same issue already 

ruled on by the Virginia Beach Circuit Court and that res

judicata and/or collateral estoppel therefore barred employer's 

application. Following briefs submitted by the parties in 

December 1995, the deputy commissioner issued an opinion adopting 

employer's arguments and suspending claimant's benefits. On 

appeal, following oral argument, the full commission issued an 

opinion reversing the deputy commissioner's suspension of 

benefits. It held that (1) absent a lien, the commission could 

not enforce any subrogation rights and that res judicata and 

collateral estoppel applied to bar any credit or suspension of 

benefits because the circuit courts already had concluded that no 

valid lien existed, and (2) because of the circuit courts' 

rulings, employer had no legally enforceable right which was 

prejudiced when claimant settled the malpractice claim without 

consulting employer. 

 II. 

 ANALYSIS 

 A. 

 COMMISSION'S AUTHORITY TO TERMINATE OR SUSPEND BENEFITS 
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 Code § 65.2-309(A) provides, in relevant part, as follows: 

 A claim against an employer under this title 

for injury or death benefits shall operate as 

an assignment to the employer of any right to 

recover damages which the injured employee, 

his personal representative or other person 

may have against any other party for such 

injury or death, and such employer shall be 

subrogated to any such right and may enforce, 

in his own name or in the name of the injured 

employee or his personal representative, the 

legal liability of such other party. 

"The purpose of the statute is to reimburse an employer who is 

compelled to pay compensation as a result of the negligence of a 

third party and to prevent an employee from obtaining a double 

recovery of funds." Tomlin v. Vance Int'l, Inc., 22 Va. App. 

448, 452, 470 S.E.2d 599, 601 (1996). Under Code § 65.2-310, an 

employer may petition the court for a lien against the 

third-party judgment in the amount of compensation and other 

benefits employer has paid. If the employee impairs the 

employer's right of subrogation by settling the claim without the 

employer's knowledge and consent, even when the employer has 

general knowledge that the third-party action is pending, 

employer may be entitled to a termination of the employee's 

benefits under the Act. See Green v. Warwick Plumbing & Heating, 

5 Va. App. 409, 411, 364 S.E.2d 4, 6-7 (1988). 

 We hold that the commission did not err in concluding it 

lacked authority to provide the requested relief pursuant to Code 

§§ 65.2-309 and 65.2-310. In employer's earlier appeal of the 

circuit court's denial of its request for a lien, the Virginia 
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Supreme Court denied employer's petition on the merits. See

Harward v. Commonwealth, 5 Va. App. 468, 476, 364 S.E.2d 511, 515 

(1988) (noting that "'decision to . . . refuse a petition for 

writ of error is based upon . . . the merits of the case'" 

(quoting Saunders v. Commonwealth, 214 Va. 697, 700, 204 S.E.2d 

421, 424 (1974))). This denial constituted a ruling that Code 

§§ 65.2-309 and 65.2-310 do not permit any employer to obtain a 

lien on proceeds from a legal malpractice suit under the facts of 

this case. See id. (noting that "doctrine . . . appl[ies] even 

when 'the precise issue involved' resulted in denial of a 

petition for a writ of error in a separate case'" (quoting 

Stillwell v. Commonwealth, 219 Va. 214, 226, 247 S.E.2d 360, 368 

(1978))). But see Williams v. Katz, 23 F.3d 190, 192-94 (7th 

Cir. 1994) (holding, under similar Illinois statute, that 

employer was entitled to lien on legal malpractice proceeds, 

which had been awarded in lieu of damages for medical malpractice 

resulting from treatment for compensable injury); Bongiorno v. 

Liberty Mut. Ins. Co., 630 N.E.2d 274, 277-78 (Mass. 1994) 

(holding, under similar statute, that general intent of 

legislature permitted employer to obtain lien on legal 

malpractice proceeds recovered by employee in lieu of damages 

from third-party tortfeasor); see also Toole v. EBI Cos., 838 

P.2d 60, 65-66 (Or. 1992) (en banc); Frazier v. New Jersey Mfrs. 

Ins. Co., 667 A.2d 670, 674-76 (N.J. 1995). Therefore, claimant 

had no duty under the Act to consult with employer prior to 
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settling the malpractice claim, and the commission had no 

authority under the Act to terminate claimant's benefits or give 

employer a credit for the amount of the malpractice proceeds. 

See also Code § 65.2-310 (providing that, in any third-party 

action by an employee which results in a judgment, the court

shall ascertain the amount of benefits paid by employer under the 

Act and order the third party to pay this amount directly to 

employer prior to paying the employee); Jones v. Arlington Hosp., 

61 O.I.C. 252, 253 (1982) (holding that whether employer has a 

valid lien on judgment against third-party tortfeasor is 

determination for court, not commission). 

 Because we affirm the commission's ruling based on the 

precedential impact of the Supreme Court's ruling, we need not 

consider whether the commission erroneously applied the doctrines 

of res judicata or collateral estoppel to bar employer's request 

for relief. See, e.g., Dziarnowski v. Dziarnowski, 14 Va. App. 

758, 762, 418 S.E.2d 724, 726 (1992) (upholding right result on 

appeal, even if reached for wrong reason). 

 Employer nevertheless contends that the commission had, and 

wrongly failed to exercise, the equitable power to award employer 

such a credit even in the absence of a lien. We reject this 

argument. On appeal to this Court, employer cites various cases 

from this Court and the Virginia Supreme Court, asserting the 

"ample power [of the commission] to do complete justice in each 
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case."4

 These cases deal with the doctrine of imposition, which 

has evolved as a method by which the commission may exercise its 

equitable power,5 although employer did not expressly mention 

this doctrine as a basis for its request. As we have noted 

repeatedly, the doctrine of imposition focuses on a party's or 

the commission's "use of superior knowledge [of, or] experience 

with[,] the . . . Act or use of economic leverage, which results 

in an unjust deprivation" of benefits under the Act or an unjust 

application of the Act's provisions. See Butler v. City of 

 

 4 Employer also cites two commission cases. We find those 

decisions factually distinguishable and, in any event, they would 

not be binding on this Court. 

 5 The Supreme Court discussed these equitable principles in 

Harris v. Diamond Construction Co., 184 Va. 711, 36 S.E.2d 573 

(1946). In that case, the Court was presented with the issue of 

whether the commission had the implied power to review and vacate 

an award upon a petition presented after expiration of the normal 

statutory review period. It concluded that 

 when the General Assembly established the 

[commission] for the summary disposition of 

cases arising out of industrial accidents, it 

intended that that tribunal should have 

jurisdiction to do full and complete justice 

in each case. It granted to the [c]ommission 

the power and authority not only to make and 

enforce its awards, but to protect itself and 

its awards from fraud, imposition and 

mistake. 

Id. at 720, 36 S.E.2d at 577. As a result, the Court held that 

"the [commission] has the implied power, incidental to those 

[powers] expressly granted [by the legislature], to entertain and 

hear an application, seasonably presented, to vacate and set 

aside an award procured through fraud or mistake." Id. at 721, 

36 S.E.2d at 578. It also held that "[w]hether an application is 

seasonably made must necessarily depend upon the facts and 

circumstances of the particular case" and is not dependent upon a 

statutory period for reconsideration or review. Id.
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Virginia Beach, 22 Va. App. 601, 605, 471 S.E.2d 830, 832 (1996). 

 In every case in which this Court or the Virginia Supreme Court 

has applied the doctrine of imposition, however, the commission 

either (1) could have exercised jurisdiction under the Act to 

render the requested result but did not formally obtain it due to 

the failure of a party to perform some act in a timely fashion6

or (2) actually exercised its jurisdiction under the Act to enter 

an award but later learned that the award was erroneous due to 

some misinformation.7

 We are unaware of any Virginia appellate 

cases applying the doctrine of imposition to permit the 

commission to exercise jurisdiction or to grant a form of relief 

never authorized by the Act under any circumstances, and we are 

unwilling to give the doctrine such an interpretation under the 

facts of this case. In any event, the doctrine would be 

inapplicable because the benefit accruing to the claimant in this 

case did not result from his use of superior knowledge or 

 

 6 In Avon Products, Inc. v. Ross, 14 Va. App. 1, 7-8, 415 

S.E.2d 225, 228-29 (1992), we applied the doctrine to permit 

entry of an award on an application for change in condition where 

the employer mistakenly represented to the claimant that it 

timely had filed all documents necessary to assure entry of the 

award. See also Odom v. Red Lobster # 235, 20 Va. App. 228, 

234-35, 456 S.E.2d 140, 143-44 (1995) (applying imposition to 

permit claimant's late filing of claim where acts of employer and 

commission had led her to believe timely claim had been filed). 

 7 In John Driggs Co. v. Sommers, 228 Va. 729, 734-35, 324 

S.E.2d 694, 697-98 (1985), the Court applied the doctrine to 

modify an award in order to relieve the claimant of an erroneous 

average weekly wage calculation prepared by the employer because 

the calculation "substantially deviate[d] from the statutory 

guidelines." 
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experience with the Act or economic leverage. Finally, employer 

has cited no other statute or legal principle supporting the 

result it seeks. In the absence of such citation, we conclude 

that the commission did not err in failing to exercise equitable 

authority separate from Code §§ 65.2-309 and 65.2-310 to 

terminate claimant's benefits or award employer a credit against 

any future benefits. 

 B. 

DISCREPANCY IN COMPOSITION OF COMMISSION PANEL 

HEARING ARGUMENT AND ISSUING OPINION 

 Lastly, employer contends that Commissioner Diamond 

improperly joined the opinion in this matter because Commissioner 

Diamond was not present at oral argument. According to a 

certified copy of the docket sheet from the commission's November 

10, 1997 oral arguments, Chief Deputy Commissioner Link sat in 

lieu of Commissioner Diamond. Although acknowledging the 

commission's authority under Code § 65.2-704(B) to permit a 

deputy commissioner to participate for an absent commissioner, 

employer contends that inclusion, in the resolution of a matter, 

of a commissioner who did not hear oral argument constitutes a 

denial of due process. 

 We see no indication in the record that employer presented 

this argument for the commission's consideration. Based on the 

record before us, we have no way of ascertaining whether 

Commissioner Diamond improperly participated in the deliberations 

after argument for which she was not present or whether the 
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inclusion of her name and initials on the opinion was a mere 

oversight. We recognize that employer was unaware of this 

alleged problem until the commission issued its written opinion 

and could not have raised the issue prior to that point, but we 

see no reason why employer could not have given the commission an 

opportunity to correct this alleged error prior to appeal. See

Code § 65.2-706 (providing that party may appeal award by filing 

notice within thirty days after entry or receipt of award); Rule 

5A:11; see also Anthony v. Coppedge Hauling, Inc., No. 131-71-63 

(Va. Workers' Comp. Comm'n June 15, 1995) (on motion for 

rehearing, vacating full commission's order and referring matter 

to hearing docket); Cline v. Shenandoah Presbytery Corp., No. 

145-59-79 (Va. Workers' Comp. Comm'n Feb. 25, 1994) (same). 

Employer conceded this fact at oral argument but contended it 

should be allowed either option--to present the issue to the 

commission or simply to raise the issue on appeal to this Court. 

 Under Rule 5A:18, 

 [n]o ruling of the trial court or the 

Virginia Workers' Compensation Commission 

will be considered as a basis for reversal 

unless the objection was stated with the 

grounds therefor at the time of the ruling, 

except for good cause shown or to enable the 

Court of Appeals to attain the ends of 

justice. 

This procedural bar applies even to constitutional claims. See, 

e.g., Deal v. Commonwealth, 15 Va. App. 157, 161, 421 S.E.2d 897, 

900 (1992). Under these principles, we hold that our review of 

this issue is barred. 
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 For these reasons, we affirm the commission's ruling. 

 Affirmed.