Opinion ID: 2198250
Heading Depth: 2
Heading Rank: 2

Heading: The Director's Interpretation

Text: In addition to the statutory language, both the Director and the hearing examiner relied heavily on our decision in Travelers Insurance Co. v. Haden, supra . [7] Haden involved an employee who was injured when he fell into an open manhole. His employer paid him $4,254.76 for his injuries without a formal award. The employee then sued the District of Columbia (which owned the manhole) for damages and eventually settled for $1,500 without approval from his employer. The employer's insurance carrier, in turn, sued the employee under section 933(g) of the LHWCA, seeking to recover all of the compensation that had been paid to him. The court noted that section 933(g) prevents recovery by conclusively presuming prejudice to the claimant's employer, without requiring proof of actual prejudice. Haden, 418 A.2d at 1083 (quoting Bell v. O'Hearne, 284 F.2d 777, 780 (4th Cir. 1960)). The court held, however, that section 933(g) did not apply to the employer's claims for reimbursement of money received prior to settlement without a formal compensation award. Id. at 1084 (We find Sections (f) and (g) relevant to the employer's liability for further payments, not to the situation where, as here, the employee has received benefits without an award (emphasis in original)). Because the statutory bar did not apply, the court inquired into the prejudice resulting from the settlement and concluded that the employer was entitled to reimbursement for the amount by which his subrogation right was impairedin other words, the amount for which the claim was settled, but nothing more. Id. The Director and the hearing examiner relied on the language in Haden stating that subsection (g) conclusively presum[es] prejudice when there is an unauthorized settlement. Petitioner argues that the Director's reliance on Haden is misplaced and that Haden actually supports her argument because it stands for the proposition that subsection (g) is not applicable when an employee has not received a compensation award. Thus, she contends, the appropriate analysis is whether the employer's subrogation rights have been impaired. Petitioner's reliance on Haden fails, however, because Haden held that the employer could not be reimbursed for unawarded compensation given before the settlement. The court specifically noted that subsection (g) was relevant to the employer's liability for further payments. Haden, 418 A.2d at 1084. Because petitioner is claiming to be entitled to further compensation from the employer after the settlement, the reasoning in Haden is not applicable to her claim. The Director's reliance on the language in Haden concerning the presumption of prejudice, however, is also somewhat misplaced. Because the court in Haden never applied section 933(g), the court's interpretation of the statute is dictum. As a result, Haden's reading of the statute is entitled to less weight, especially because Haden involved a different (albeit similar) statute and thus was not controlling to begin with. We conclude nevertheless that the Director's interpretation of the statute was reasonable. First, even though the language about conclusively presuming prejudice to the ... employer was dictum, Haden was still relevant authority. In interpreting the statute, the Director looked for, but was unable to find, any case law directly on point. Haden offered some guidance in that it addressed an identical provision in an act from which the language in our statute was derived. Furthermore, even though the passage in Haden on which the Director relied was dictum, it was quoted directly from a case in which the Fourth Circuit held that section 933(g) was a bar to an employee's claim for further benefits after a settlement. See Bell v. O'Hearne, 284 F.2d at 780. Bell's interpretation of the statute was not dictum, and thus was also persuasive authority under such cases as Nguyen and Grayson.