Marvin Velazquez v. Mario Malone Enterprises, LLC, (IAB Hearing No. 1499984; Decided June 17, 2021)

The Board holds that employer, not the Fund, must pay the claimant compensation for temporary total disability for a gap period that resulted from employer’s clerical error in filing the termination petition.

This case is interesting given the recent development where the Fund has become very aggressive in seeking reimbursement for compensation that it has paid during the pendency of a termination petition. The claimant had a work injury on May 27, 2020, with an open agreement for total disability. On March 1, 2021, the employer filed a termination petition alleging that the “claimant returned to work.” Based on that allegation, the Fund did not initiate temporary total disability payments pursuant to Section 2347 of the Act. On April 13, 2021, the employer notified the Board of a clerical error, that the petition should have alleged the “claimant is physically able to return to work” and that it was not aware of any actual return to work by the claimant. Based on this update, the Fund initiated the payment of temporary total disability benefits on April 13, 2021.

The case came before the Board on the claimant’s motion seeking compensation for temporary total disability from the filing date of March 1, 2021, up through April 12, 2021. There was no dispute that the claimant should be paid for that period. However, the employer argued the Fund should pay those benefits, whereas the Fund contended that the period of nonpayment was owed by the employer due to its filing error. 

Section 2347 of the Act provides that where the Fund pays compensation following the filing of termination petition by an insured employer, the employer shall later repay the Fund the amount they paid out when the parties to an award or an agreement consent to the reinstatement of compensation or if the employer withdraws the petition or if the Board orders the employer’s petition dismissed.

The employer argued to the Board that, under the clear language of Section 2347, once the termination petition was filed, the responsibility for paying compensation to the claimant lies with the Fund. The employer reasoned that a Superior Court Rule concerning amending formal pleadings was analogous to this situation and allowed the petition to be amended as had been done. The Board rejected that argument and reasoned that the reality was that the employer made a clerical error in its filing and contended that it should be held blameless from the consequences of the error and the burden should be put on the Fund instead. The Board cited prior decisions that stand for the proposition that the burden in such a situation should fall on the party who made the error. They reasoned that to rule otherwise would allow an employer to file erroneous pleadings that could cause inconvenience or detriment to a claimant and yet would have no fear of any consequences whatsoever. The incentive to ensure that an employer is careful in filing accurate petitions is to have the employer bear the burden of consequences of its own mistakes. Therefore, the Board held that the employer was the party solely responsible for paying the claimant the temporary total disability compensation owing for the period from March 1, 2021, through April 12, 2021. Claimant’s counsel was also awarded a 30% fee of the compensation owing. 


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