Court Opinion

ID: 1067683
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:27:15.649451+00
Date Added: 2024-06-11T15:30:08.501659
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Willis, Fitzpatrick and Annunziata
Argued by Teleconference

MORAD EGHBAL
                                              OPINION BY
v.          Record No. 1128-96-4      JUDGE JERE M. H. WILLIS, JR.
                                           DECEMBER 17, 1996
BOSTON COACH CORPORATION
and
PACIFIC EMPLOYERS INSURANCE COMPANY

       FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
            Rebecca Arch (Kathleen G. Walsh; Ashcraft &
            Gerel, on brief), for appellant.

            No brief or argument for appellees.

     Pursuant to Code § 65.2-313, the Workers' Compensation

Commission awarded Boston Coach Corporation (Boston Coach) an

offset of $57,239.82 against continuing and future liability to

Morad Eghbal under the Worker's Compensation Act.    On appeal, Mr.

Eghbal contends that the commission erred (1) in denying him the

right to file a written statement in support of his request for

review of the commission's award, and (2) in calculating the

amount of the offset due Boston Coach from the third-party

recovery.   We modify and affirm the award of the commission.

     Mr. Eghbal was injured in a job-related accident for which

Boston Coach accepted workers' compensation liability.    The

commission entered an appropriate award.    Thereafter, Mr. Eghbal

recovered $95,000 from the third-party who caused the accident.

In doing so, he incurred attorney's fees and expenses totaling

$35,398.73, equaling 37.26 percent of the total third-party
recovery.   Prior to the third-party recovery, Boston Coach had

paid Mr. Eghbal $37,760.18 in benefits.   From the third-party

recovery, it was reimbursed that amount, less 37.26 percent for

recovery costs, pursuant to Code §§ 65.2-309 and 65.2-310.

     By letter of January 18, 1996, counsel for Mr. Eghbal

informed the commission of the amount and distribution of the

third-party recovery and requested that Mr. Eghbal's award be

modified to reflect Boston Coach's right of offset and to require

Boston Coach to pay 37.26 percent of future payments.    On

February 7, 1996, the commission entered an award, which provided

in pertinent part:
       Pursuant to § 65.2-313, Code of Virginia, the
     employer/carrier is entitled to a credit in the amount
     of $57,239.82 against its liability for additional
     compensation payments and medical expenses, after which
     its responsibility to make such payments shall resume.

       The claimant remains entitled to a reimbursement of
     attorney fees and expenses at the rate of 37 percent of
     any additional compensation entitlements as they are
     incurred.

     Mr. Eghbal requested full commission review of the

February 7, 1996 award, "tak[ing] exception to Deputy paragraph 2

of the Award in which the employer/carrier is entitled to a

$57,239.82 credit against its liability for additional

compensation payments and medical expenses."   By opinion dated

April 2, 1996, the full commission affirmed the February 7, 1996

award.   On April 10, 1996, Mr. Eghbal moved the commission to

vacate its April 2, 1996 opinion on the ground that he had been

denied the opportunity to file a written statement of position.

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By letter dated April 16, 1996, the commission refused to vacate

the April 2, 1996 opinion.

                                I.

     Mr. Eghbal first contends that the commission erred in

denying him the opportunity to submit a written statement in

support of his request for review.     He cites Rule 3 of the Rules

of the Commission, relating to Post-hearing Procedures, which

provides in pertinent part:
       3.2 Written Statements. The Commission will advise
     the parties of the schedule for filing brief written
     statements supporting their respective positions. The
     statements shall address all errors assigned, with
     particular reference to those portions of the record
     which support a party's position.

     The commission held that Rule 3.2 applies "to reviews of

opinions and decisions made by deputy commissioners," as

distinguished from award adjustments based upon changes in

condition.   Noting that the decision on review came from the

Claims Department, the commission held that in such cases its

rules provide for review on the record, without further evidence,

without argument, and without written statements of position.

     Rule 1.6 of the Rules of the Commission, relating to changes

in condition, provides for review on the record, without further

evidence and without oral argument.    Rule 1.6 requires that the

letter requesting review "should specify each determination of

fact and law to which exception is taken."    Mr. Eghbal's request

for review appeared to meet that requirement.
     [T]his Court [has] recognized that the [Workers'

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     Compensation Commission], having the right to make and
     enforce its rules, should also have the opportunity to
     construe its own rules. Consequently, our review is
     limited to a determination whether the commission's
     interpretation of its own rule was reasonable.

Classic Floors, Inc. v. Guy, 9 Va. App. 90, 93, 383 S.E.2d 761,

763 (1989) (citations omitted).

     A "change in condition" is defined as "a change in physical

condition of the employee as well as any change in the conditions

under which compensation was awarded, suspended, or terminated

which would affect the right to, amount of, or duration of

compensation."   Code § 65.2-101.   Mr. Eghbal's third-party

recovery created a change in the conditions under which he was

awarded compensation.   It affected his right to compensation and

the amount and duration of his compensation.   Thus, his
third-party recovery created a change in condition and the

commission properly applied its Rule 1.6.

                                  II.

     Code § 65.2-313 provides, in pertinent part:
     [I]f a recovery is effected, the employer shall pay to
     the employee a percentage of each further entitlement
     as it is submitted equal to the ratio the total
     attorney's fees and costs bear to the total third-party
     recovery until such time as the accrued post-recovery
     entitlement equals that sum which is the difference
     between the gross recovery and the employer's
     compensation lien.

     Mr. Eghbal argues that the terms "total third-party

recovery" and "gross recovery," employing different wording, must

have different meanings.   He argues that "total third-party

recovery" means the total amount received from the third-party

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wrongdoer, in this case $95,000, and that "gross recovery" means

the amount of money that he actually received from the

third-party recovery, after satisfaction of Boston Coach's lien

and payment of his share of recovery expenses.      He argues that

this figure equals $32,179.16.     He appears to argue that from

this figure should be deducted the amount of Boston Coach's lien,

to produce the net amount available to Boston Coach as offset.

We find this calculation unpersuasive.
        Mr. Eghbal offers no authority for his definition of "gross

recovery."    We think that his definition is plainly erroneous.

It describes "net recovery," rather than "gross recovery."

"[T]otal . . . recovery" and "gross recovery," in their common

usage, are synonymous.    Each term defines the total amount

recovered, before offsets and expenses.      Thus defined, "total

. . . recovery" and "gross recovery" are the same and, in this

case, equal $95,000.    This interpretation of Code § 65.2-313 is

consistent with the plain purpose of the statutory scheme

providing the employer an offset for a third-party recovery.

        By accepting Mr. Eghbal's workers' compensation claim,

Boston Coach became subrogated to Mr. Eghbal's rights against the

third-party wrongdoer to the extent of compensation benefits

paid.     See Code § 65.2-309.   Upon realization of the third-party

recovery, Boston Coach was entitled to reimbursement for benefits

that it had paid, less its proportionate share of recovery costs.

 See Code §§ 65.2-310 and 65.2-311.       Boston Coach was entitled to

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the suspension of its liability for the payment of further

benefits until the third-party recovery was exhausted.         However,

it remained liable to Eghbal for the recovery costs of each

increment of offset, as it accrued.        See Code § 65.2-313.   The

commission's award accomplished this.       From the total or gross

third-party recovery of $95,000 was subtracted $37,760.18, the

employer's lien for previously-paid benefits 1 .     The difference,

which the commission correctly calculated at $57,239.82, is the

offset against future compensation liability to which Boston

Coach is entitled.
        As each increment of Mr. Eghbal's future entitlement

accrues, Boston Coach will be entitled to an offset.       However, as

each increment accrues, Boston Coach will reimburse Mr. Eghbal

for the recovery costs attributable to that increment.         Thus, at

any given time, Boston Coach will have received its full

entitlement from the third-party recovery and Mr. Eghbal will

have been reimbursed for the recovery costs attributable to the

benefit received by Boston Coach.        The proceeds of the

third-party recovery will remain in Mr. Eghbal's hands, as his

property, until such time as they are charged to Boston Coach's

offset.    To the extent that those proceeds remain Mr. Eghbal's

property, he has been charged with their recovery costs.
    1
     When Boston Coach was reimbursed $37,760.18 for benefits that
it had previously paid, 37.26 percent of that amount, representing
recovery costs, was deducted from the reimbursement. Mr. Eghbal
was thereby reimbursed his costs relating to that segment of the
recovery.

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However, as each increment of offset accrues to the benefit of

Boston Coach, Boston Coach will reimburse Mr. Eghbal the recovery

costs attributable to that increment.

     The commission correctly structured Boston Coach's right of

indemnity and its obligation to reimburse recovery costs to Mr.

Eghbal.   However, it erred in requiring reimbursement of 37

percent "of any additional compensation entitlements as they are

incurred."   The figure should be 37.26 percent.   This error is

small, but over the possible course of offset, it could accrue

into a significant sum.   The error involves future calculations

and payments and is easily rectified.   The commission should

modify its award accordingly.
     The award of the commission, as modified, is affirmed.

                                              Affirmed.

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