STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

RONALD BLOCKER, Applicant

ED WEBER INC, Employer

TRAVELERS INDEMNITY CO OF CT , Insurer
 

WORKER'S COMPENSATION DECISION
Claim No. 1998-025272


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own.

ORDER

The findings and order of the administrative law judge are affirmed.

Dated and mailed April 7, 2005
blocker . wsd : 101 : 2  ND § 7.24

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

By order dated July 28, 2003, ALJ Krueger found the applicant permanently and totally disabled in an earlier decision. As part of ALJ Kruger's July 2003 order, the insurer must pay the applicant $1,813.07 per month. The issue here is whether the payments have been made on time, and if not whether an inexcusable delay penalty is appropriate under Wis. Stat. § 102.22(1).

ALJ Krueger's July 2003 order finding permanent total disability states:

"In addition, beginning on August 25, 2003, they [the employer and insurer] shall pay to the applicant, Ronald Blocker, One thousand eight hundred thirteen dollars and seven cents ($1,813.07) per month..."

The applicant's wife testified some of the checks from the insurer have arrived after the twenty-fifth of the month. The insurer's own records at exhibit J indicate its checks were sometimes written after the 25th of the month. See exhibit 2, indicating an August 26, 2003 "issue date" and August 27, 2003 "action date"; a September 29, 2003 "issue date" and a September 30, 2003 "action date"; and a January 26, 2004 "issue date" and a January 27, 2004 "action date".) It appears from the "better Xeroxes" for exhibits A-I which were provided by the applicant's attorney that the "issue date" is the date of the check, while the "action date" is the date the check was actually mailed.

An intervening weekend does not explain these three delays, as August 25, 2003 was a Monday and September 25, 2003 was a Thursday. Further, while January 25, 2004 was Sunday, the check due on that date was not mailed until Tuesday January 27, 2004.

The insurer does offer testimony about why the checks were late. A claims representative testified she must ask a remote office specifically for a check each month for the applicant, and that manual input is required on the computer system, because the applicant has chosen to receive actual checks instead of direct deposit or some similar means. Transcript, pages 29 to 36.

The ALJ assessed a ten percent penalty on the three delayed checks noting the penalty for delayed payment. Though he did not specifically cite Wis. Stat. § 102.22(1) (1)  in his order, that statute authorizes the 10 percent penalty for inexcusable delay which he awarded.

On appeal, the insurer makes basically four arguments to excuse its occasional internal delay in mailing the checks due on the 25th day of each month:

None of these explanations is persuasive.

First, the commission is satisfied that the ALJ's order clearly requires payment by the 25th of each month. Otherwise, there would be no need to refer to a specific date in the month at all. It may be arguable whether the duty to pay by the 25th of the month is satisfied by mailing the checks by that day, or mailing by the next secular day after the 25th. However, even under that standard, the three checks at issue here are still late. Finally, the argument that the order gave the insurer the license to pay anytime within the month is somewhat contrary to the argument they were acting in good faith, especially as most of the rest of the checks were mailed on or before the 25th.

Second, citing Milwaukee County v. DILHR, 48 Wis. 2d 392, 399 (1970), a case written before the enactment of the separate bad faith statute in Wis. Stat. § 102.18(1)(bp), the insurer suggests inexcusable delay is delay without a "bona fide justification." However, in Coleman v. American Universal Insurance Co., 86 Wis. 2d 615, 625, 273 N.W.2d 220 (1979), the court stated:

"Milwaukee County points out that this provision [Wis. Stat. § 102.22] is designed to promote automatic payment of benefits without litigation and that, when there is no justification for delay, penalty provisions are applicable. This provision may be triggered in the absence of bad faith. If the delay is inexcusable because of poor management or deficient administrative practices of the insurance company, the penalty payments would still be applicable in the absence of an acceptable excuse. Conduct which is inexcusable is nevertheless in most cases far short of bad faith, which involves intent to deny payments without a bona fide reason. Conversely, the penalty payments would not be applicable when there is a good-faith basis for not making payments." (Emphasis added).

Martin v. National Union Fire Ins. Co., WC claim no. 2003-005425 (LIRC, February 28, 2005). (2)

Coleman seems to describe exactly the situation here, where the insurer is not acting in bad faith and is making some effort to get the checks out on time. However, the checks are late nonetheless. The commission cannot conclude the lateness is justified simply because the applicant insists on actual checks, which the law apparently allows, rather than direct deposits or on an ATM account.

Third, the commission's prior decision cited by the insurer, Peters v. Aarrow Electric Castings, WC Claim no. 1993-068348 (LIRC, November 25, 1996) is distinguishable. There a July 6, 1995 ALJ order required payment on a compromise order with 10 days, but insurer did not receive the ALJ order until July 11. The insurer mailed the three checks required under order on July 17 and 18 (the later check was due to the fact it had to be made to a restricted account per the ALJ order). The commission found no inexcusable delay.

Peters involved a one-time payment (albeit in the mailing of three checks) on an order requiring payment within ten days and one or two days of lateness. This case involves much more lead time, as ALJ Krueger's permanent total disability order was dated and mailed July 28, 2003 and the first of the periodic payments was due on August 25, 2003. And this is a repeated failure involving late payment in three months. Finally, the inexcusable delay standard does not depend on showing prejudice to the worker, but it is discretionary, permitting the commission to order payment in some cases and not others, depending on the facts.

Fourth, the commission is not persuaded the applicant really is being paid in four weeks in advance as the insurer's claims representative testified. Transcript page 29. As the commission reads ALJ Krueger's order, (3)  the first payment due on August 25, 2003, for example, would be for compensation due from July 25 to August 24. In any event, ALJ Krueger's order requires payment by the 25th of each month, prospective or not.

In sum, the $543.92 ordered paid by ALJ Krueger in his May 3, 2004 order is affirmed under Wis. Stat. § 102.22(1).

cc:
Attorney Joseph Danas, Jr.
Attorney Michael J. Donovan



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Footnotes:

(1)( Back ) 102.22(1) provides:

If the employer or his or her insurer inexcusably delays in making the first payment that is due an injured employee for more than 30 days after the day on which the employee leaves work as a result of an injury and if the amount due is $500 or more, the payments as to which the delay is found shall be increased by 10%. If the employer or his or her insurer inexcusably delays in making the first payment that is due an injured employee for more than 14 days after the day on which the employee leaves work as a result of an injury, the payments as to which the delay is found may be increased by 10%. If the employer or his or her insurer inexcusably delays for any length of time in making any other payment that is due an injured employee, the payments as to which the delay is found may be increased by 10%. Where the delay is chargeable to the employer and not to the insurer s. 102.62 shall apply and the relative liability of the parties shall be fixed and discharged as therein provided. The department may also order the employer or insurance carrier to reimburse the employee for any finance charges, collection charges or interest which the employee paid as a result of the inexcusable delay by the employer or insurance carrier.

 

(2)( Back ) The commission also observed in Martin:

A deliberate withholding of compensation in a disputed claim would today be properly analyzed as an issue of bad faith under Wis. Stat. § 102.18(1)(bp). Accordingly, given the historical and factual context in which the phrase "without a bona fide justification or motivation" arose, the commission no longer considers that phrase to be helpful in determining whether an employer or insurer is guilty of inexcusable delay in payment. The word "inexcusable" is defined in Merriam-Webster's New International Dictionary, (3rd ed. 1993) as "being without excuse or justification." This definition is consistent with the court's language in the Coleman case, where the court referred to "the absence of an acceptable excuse." While Coleman was also decided prior to the enactment of the bad faith statute, and in fact prompted that enactment, the court dealt directly with what at that time was determined to be the tort of bad faith. The court specifically distinguished behavior constituting bad faith from behavior constituting only inexcusable delay. Thus, the description of inexcusable delay found in Coleman is useful because it addresses the meaning of Wis. Stat § 102.22, rather than the meaning of bad faith.

 

(3)( Back ) ALJ Kruger's July 28, 2003 order found the applicant permanently totally disabled as of January 8, 2003. As of July 25, 2003, 28 weeks and 1 day of PTD compensation at $523 per week, or $14,731.17 would have accrued. That sum, plus the $30,342.76 in prior TTD identified by ALJ Krueger, totaled the $45,073.93 "amount of temporary and permanent disability owed" and ordered paid in ALJ Krueger's July 28, 2003 order. The compensation ordered monthly beginning August 25, 2003, reflected permanent total disability compensation accruing beginning on July 25, 2003, with the first month's payment for the period from July 25 to August 24, 2003.

 


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