Opinion ID: 1399383
Heading Depth: 3
Heading Rank: 2

Heading: did the board err in failing to impose a penalty on the employer for controverting harp's claim?

Text: Harp maintains that the employer had no valid reason to controvert her claims to TTD benefits, and that the employer should therefore pay Harp a penalty pursuant to former AS 23.30.155(e). The employer disagrees, claiming that its stated reasons for filing the notice of controversion evince its good faith, and therefore it should not be penalized. Alaska Statute 23.30.155 imposes a penalty on an employer who fails to pay an installment due to an employee if the employer does not controvert the employee's right to compensation within 21 days, or within seven days if the employer has previously made compensation payments. The Act does not state whether a controversion notice which is timely filed can under certain circumstances be ineffective to avert a penalty. A controversion notice must be filed in good faith to protect an employer from imposition of a penalty. In Stafford v. Westchester Fire Ins. Co. of New York, 526 P.2d 37 (Alaska 1974), this court wrote: In circumstances where there is reliance by the insurer on responsible medical opinion or conflicting medical testimony, invocation of penalty provisions is improper. However, when nonpayment results from bad faith reliance on counsel's advice, or mistake of law, the penalty is imposed. Id. at 42. See also 3 A. Larson, Larson's Workmen's Compensation Law § 83.41(b)(2) (1990) (Generally a failure to pay because of a good faith belief that no payment is due will not warrant a penalty.). For a controversion notice to be filed in good faith, the employer must possess sufficient evidence in support of the controversion that, if the claimant does not introduce evidence in opposition to the controversion, the Board would find that the claimant is not entitled to benefits. See Kerley v. Workmen's Comp. App. Bd., 4 Cal.3d 223, 93 Cal. Rptr. 192, 197, 481 P.2d 200, 205 (1971) (the only satisfactory excuse for delay in payment of disability benefits, whether prior to or subsequent to an award, is genuine doubt from a medical or legal standpoint as to liability for benefits). The evidence which the employer possessed at the time of controversion was, at best, neutral evidence that Harp was not entitled to benefits. As to the first stated reason for the controversion, that Harp failed to provide ongoing verification of her disability, the employer possessed no evidence that Harp was not disabled. Because the Act does not require an employee to provide updates of her medical condition, an employer must not be allowed to unilaterally terminate benefits when an employee fails to provide medical verification of her ongoing disability. [8] See Colomb v. Frito-Lay, Inc., 544 So.2d 710, 715-16 (La. Ct. App. 1989) (holding that the defendant employer, who controverted an employee's claim in the absence of any factual information that the employee was not entitled to benefits, must pay a penalty because it did not possess sufficient factual information to reasonably counter the factual information presented by the claimant). The Act expressly allows an employer to require an employee to submit to medical examinations requested by the employer, but the employer in this case did not take advantage of that opportunity. [9] See AS 23.30.095(e) (The employee shall, after an injury, at reasonable times during the continuance of the disability, if requested by the employer or when ordered by the board, submit to an examination by a physician or surgeon of the employer's choice... .). The employer also possessed insufficient evidence as to the second stated reason for controverting Harp's benefits, that her disability was not work-related. The employer points out that when Dr. Berkeley examined Harp in December 1987, he was at a loss to understand what [was] going on and why she had recurrent symptoms. This statement alone would not constitute substantial evidence that Harp is not entitled to benefits. Furthermore, it appears from the context of the statement that Dr. Berkeley was referring to the specific internal source of her pain, not to the external event which had aggravated her pain. [10] Finally, because Dr. Berkeley, along with Dr. Fu and Dr. Meinhardt, had previously concluded that Harp's disability was work-related, it is unlikely that Dr. Berkeley was questioning the work-relatedness of her injury in his December 1987 report. Because neither reason given for the controversion was supported by sufficient evidence to warrant a Board decision that Harp is not entitled to benefits, the controversion was made in bad faith and was therefore invalid. A penalty is therefore required by former AS 23.30.155(e).