Intercept Youth Servs., Inc. v. Estate of Lopez

71 Va.App. 760

840 S.E.2d 25

INTERCEPT YOUTH SERVICES, INC. and Key Risk Insurance Company

v.The ESTATE OF Lizbeth Y. LOPEZ

Record No. 1537-19-4

Court of Appeals of Virginia, Fredericksburg.

APRIL 7, 2020

Brian J. McNamara (Scott C. Ford ; Jillian M. Smaniotto; Ford Richardson, P.C., on briefs), for appellants.

Charles W. O’Donnell (Charles W. O’Donnell, P.C., on brief), Falls Church, for appellee.

Present: Judges Beales, Athey and Senior Judge Haley

OPINION BY JUDGE RANDOLPH A. BEALES

One day prior to the expiration of the statute of limitations, the Estate of Lizbeth Lopez filed a claim for benefits with the Virginia Workers’ Compensation Commission (the Commission). Several months later – after the statute of limitations had expired – Intercept Youth Services, and its insurer, Key Risk Insurance Company, (collectively, "Employer") filed an employer’s application for hearing. The day before the hearing, the Estate of Lopez moved to withdraw its claim for benefits. Following the hearing, the deputy commissioner granted the Estate’s motion and dismissed the Estate’s claims. Consequently, the deputy commissioner dismissed Employer’s application for hearing, concluding that it was not timely filed, that the Commission now lacked jurisdiction to consider it, and that it was moot, given the Estate’s withdrawal of its timely filed claim for benefits. The full commission affirmed the deputy commissioner’s dismissal of Employer’s application for hearing. Employer now appeals that decision to this Court.

I. BACKGROUND

Lizbeth Lopez worked for Intercept Youth Services, Inc. ("Intercept") in Lake Ridge, Virginia, where she acted as a counselor for at-risk youths in transition from foster care to independent living. Intercept taught these youths life skills and provided them with supervision in a residential apartment complex. On or about April 17, 2016, one of the individuals in the program, Ronald Dorsey, murdered Lopez.

On April 16, 2018, one day prior to the expiration of the statute of limitations for filing a claim before the Commission, Gladys Lopez, Lizbeth Lopez’s mother, and Lopez’s estate (collectively, "the Estate") filed a claim for "all benefits available in a fatal case" under the Workers’ Compensation Act (the "Act"). In the petition, counsel for the Estate stated that it was filing the claim as a "protective filing only" in order to preserve the claim before the statute of limitations expired. Counsel asked the Commission not to place the case on the docket for hearing until a request was made. On April 17, 2018, counsel for the Estate filed an amended claim for benefits, which also stated that it was a "protective filing only."

On June 21, 2018, Employer sent a letter to counsel for the Estate, advising that Employer had accepted the claim as compensable under the Workers’ Compensation Act and attaching a signed copy of a "Fatal Award Agreement." In the fatal award agreement, Employer offered to pay for "Burial and transportation expenses only." The Estate did not agree to the fatal award agreement.

On July 19, 2018, Employer filed with the Commission an "Employer and Insurer’s Request for Hearing," pursuant to Code § 65.2-702. The request sought a determination of the "compensability of the claim; the rate of compensation; the amount of funeral expenses incurred; and the identities of any eligible dependents." The request stated that it "incorporates by reference the assertions of fact, and the documents attached to, the claimant’s April 17, 2018 protective claim for benefits." The request also advocated that "[t]he fact that the claimant’s claim is filed as a ‘protective filing only’ has no effect on the employer[’s] and insurer’s right to request a hearing."

On July 30, 2018, the Estate filed a letter with the Commission requesting that the matter be placed on hold until the Prince William County Circuit Court had the opportunity to rule on an "anticipated Plea in Bar" in a wrongful death action pending in that court arising out of Lopez’s death. The Commission denied the motion, citing an employer’s statutory right to request a hearing as well as the lack of evidence that a plea in bar had even been filed in the circuit court case.

On February 18, 2019, the day before the scheduled hearing before the deputy commissioner, the Estate moved to withdraw its previous claims for benefits. In response, also on February 18, 2019, Employer filed a letter arguing that the Estate’s withdrawal of its claims should not affect the scheduled hearing because Employer’s request for a hearing was a "separate and independent request" in which Employer had "realleged each and every fact alleged by the claimant ...."

On February 19, 2019, the parties appeared before the deputy commissioner for a hearing on the matter. The deputy commissioner stated that the Estate’s withdrawal did not affect the Commission’s ability to hear the claim because the hearing was being conducted on Employer’s request. The hearing proceeded and the deputy commissioner heard evidence regarding Employer’s contention that Lopez’s death arose out of and in the course of her employment. The Estate took the opposite position that Lopez’s death did not arise out of her employment and that the matter was not compensable under the Act.

On April 23, 2019, the deputy commissioner entered an opinion granting the Estate’s motion to withdraw its claims for benefits and dismissing the Estate’s claims – a decision that neither party appealed to the full Commission. The deputy commissioner noted that the withdrawal of the claims extinguished the Estate’s right to ever seek benefits under the Act for Lopez’s death because the two-year period for filing a claim under Code § 65.2-601 had expired. The deputy commissioner reasoned that because the statute of limitations is jurisdictional, the Commission lacked jurisdiction to hear any claims on behalf of the Estate regarding Lopez’s death. The deputy commissioner also concluded that because Employer had no potential liability under the Act given that the claims had been withdrawn and could never be refiled, the Employer’s request for hearing and a determination of its rights under the Act was moot. The deputy commissioner stated, "It would be inappropriate for us to render an advisory Opinion on whether the deaths of these two women are compensable under the Act in order to address what we presume to be the employer’s concern regarding the wrongful death claims pending in Circuit Court."¹ As a result, the deputy commissioner dismissed Employer’s request for hearing.

Employer appealed the dismissal of its request for hearing to the full Commission, which affirmed with a unanimous opinion. Citing the Supreme Court’s decision in Chalkley v. Nolde Bros. Inc., 186 Va. 900, 45 S.E.2d 297 (1947), as well as to a number of the Commission’s own cases, the Commission recognized that an employer can make a request for a hearing even when an employee has not filed a claim for benefits or when an employee has filed a claim for benefits but then withdraws it without prejudice. See e.g., McKnight v. Va. Int’l Terminals, 69 O.I.C. 19, 21 (1990) ("[E]very employer who is subject to the provisions of the Virginia Workers’ Compensation Act may file a claim for an award under the Act which would provide benefits accruing to the interest of the employee or to the interest of the employer."); Petty v. Duffie Graphics, Inc., 76 O.W.C. 306 (1997) (concluding employer could request a hearing after claimant withdrew claim without prejudice because employer had a right to depose witnesses while the evidence was still fresh and because it was entitled to final determination on its responsibilities for the claim). While recognizing this right, the full Commission in its unanimous opinion also concluded that "in order to be timely, an employer’s application [for hearing] under Code § 65.2-702 must be filed within two years of the accident." Because Employer’s application for hearing was not filed within two years, the Commission found that its application was untimely.

The Commission also concluded that, because the Estate had withdrawn its claims for benefits (which it could never again refile due to the expiration of the statute of limitations) and because the employer’s request for hearing was filed too late to stand on its own, there was no claim before it to consider. Thus, the Commission stated, "In this unique procedural posture, we have no jurisdiction to decide the July 19, 2018 claim." It also concluded that Employer’s application for hearing was moot because it "had no actual or potential liability under the Act," given that the Estate could never again seek benefits under the Act for Lopez’s death.

II. ANALYSIS

On appeal to this Court, Employer argues that the Commission erred in finding that Employer’s request for hearing was not timely filed and in concluding that it lacked jurisdiction to consider the request for hearing because the Estate’s withdrawal of its claims for benefits deprived the Commission of jurisdiction and rendered the matter moot.²

In matters appealed from the Commission, this Court reviews questions of law de novo . Advance Auto & Indem. Ins. Co. of N. Am. v. Craft, 63 Va. App. 502, 514, 759 S.E.2d 17 (2014). However, "[t]he [C]ommission’s construction of the Act is entitled to great weight on appeal." Ceres Marine Terminals v. Armstrong, 59 Va. App. 694, 702, 722 S.E.2d 301 (2012) (quoting Fairfax Cty. Sch. Bd. v. Humphrey, 41 Va. App. 147, 155, 583 S.E.2d 65 (2003) ). Furthermore, in our review, "we construe the Workers’ Compensation Act liberally for the benefit of employees to effectuate its remedial purpose of making injured workers whole." Advance Auto, 63 Va. App. at 514, 759 S.E.2d 17.

Code § 65.2-702(A) states, in relevant part, "If the employer and the injured employee or his dependents fail to reach an agreement in regard to compensation under this title ... either party may make application to the...