Montgomery Cnty. v. Van Leer

MONTGOMERY COUNTY, MARYLAND v. CLARK VAN LEER

No. 2455

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

March 2, 2021

Circuit Court for Montgomery County

Civil No. 461514-V

UNREPORTED

Berger, Beachley, Zic, JJ.

Opinion by Berger, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

This case arises from a workers' compensation claim filed by Clark Van Leer ("Van Leer"), appellant, and a subsequent petition for judicial review filed by Montgomery County, Maryland ("the County"). On October 4, 2019, the Circuit Court for Montgomery County issued an order granting Van Leer's Cross Motion for Summary Judgment and denying the County's Motion for Partial Summary Judgment. Additionally, the trial court remanded the case to the Workers' Compensation Commission ("the Commission") for an amended/redacted Order to be issued reversing, in part, the Commission's December 18, 2018 Order solely related to the issue of a credit to the County for the loss of consortium proceeds. The trial court's Order further provided that no credit would be given to the County for Van Leer's loss of consortium proceeds and affirmed the Commission's award of compensation. The County appealed from the circuit court's order and presents four questions for our review which we have rephrased as follows:¹

I. Whether the Commission had jurisdiction to evaluate and modify the allocations of monetary judgments of a settlement award in an independent, third-party claim.

II. Whether, if preserved, the trial court erred in its calculation for the reductions taken for costs and expenses and in its determination of proportionate payment of attorney's fees pursuant to Md. Code Ann., § 9-902 of the Labor and Employment Article.

III. Whether the trial court erred in finding there was sufficient evidence to support a claim of loss of consortium by Van Leer and his wife.

IV. Whether the trial court properly allowed Van Leer to shield the loss of consortium claim proceeds from recuperation by the County.

For the reasons set forth below, we shall affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

Van Leer was employed as a supervisor at the County's Department of Liquor Control.² On December 2, 2014, Van Leer sustained a head injury when he was thrown from a forklift that fell off of a truck in a work-related accident. A third party was operating the truck.³ As a result of this accident, Van Leer filed a Notice of Employee's Claim with the Commission on or about July 15, 2015. On August 28, 2015, the Commission found that Van Leer sustained an accidental injury arising out of and in the course of hisemployment pursuant to the Workers' Compensation Act (the "Act"). Pursuant to this determination, the Commission awarded Van Leer $998.00 weekly from the date of the accident and continuing throughout the time that Van Leer was temporarily disabled.

On December 1, 2017, Van Leer filed a negligence action in the Circuit Court for Montgomery County against Sunbelt Beverage Company, LLC; Reliable Churchill, LLLP; Sunbelt Holding, Inc.; and Larry Merritt ("Sunbelt Case") for the injuries sustained on December 2, 2014, claiming permanent physical injuries, past and future lost wages (from both the County and Giant), and a joint claim with his wife for loss of consortium.⁴ On November 14, 2018, the Sunbelt Case was dismissed after Van Leer settled for $168,000.00. The County was not involved in the Sunbelt Case and was not a party to the Settlement Agreement. The Settlement Agreement in the Sunbelt Case dated November 8, 2018 allocates the $168,000.00 settlement amount to cover: (a) $115,486.00 for Van Leer's bodily injury claim; (b) $42,000.00 for loss of consortium; and (c) $10,514.00 for secondary employment losses.

The Settlement Disbursement Sheet further outlines the costs of the litigation totalling $3,345.06 for various litigation and court costs. Based on the amount recovered for each claim, the costs were attributed as: $2,298.05 for bodily injury loss; $210.74 for loss of secondary employment; and $836.27 for loss of consortium. Further, the Settlement Disbursement Sheet provides that attorney's fees were to be paid as follows: $46,194.40for bodily injury loss; $2,636.00 for loss of consortium; and $0.00 for loss of secondary employment. Under the claim for bodily injury loss, the Settlement Disbursement Sheet notes that the $46,194.40 for attorney's fees is to be deducted from the $115,486.00 recovery for bodily injury. Next, the Settlement Disbursement Sheet divides the costs for this claim ($2,298.05) to be paid 60% by Van Leer and 40% to be deducted from the Workers' Compensation Lien. After all deductions, the amount left to pay the Workers' Compensation Lien totaled $66,993.55 according to the Settlement Disbursement Sheet.

Van Leer later applied for permanent disability. On December 17, 2018, the Commission held a hearing to determine the nature and extent of Van Leer's injuries for the purposes of providing compensation under the Act. The Commission issued an Order on December 18, 2018 awarding Van Leer permanent partial disability in the amount of $749.00 per week for 333 weeks (a total of $249,417.00) subject to an offset for Service-Connected Disability Retirement, effective April 1, 2017, in the monthly amount of $769.86. The Order further granted the County a credit for one-half of the loss of consortium proceeds awarded to Van Leer in the amount of $5,151.63.⁵ Van Leer retired effective April 1, 2016. Therefore, Van Leer received $749.00 per week from June 20, 2015 until March 31, 2016, a total amount paid of $31,802.27. In total, the County paid toVan Leer the amount of $153,972.91. Without expenses, the County paid Van Leer a total of $138,072.32.

On January 15, 2019, the County petitioned for judicial review to the trial court de novo. Van Leer also filed a cross-petition for judicial review contending that the award to the County for 50% of the loss of consortium claim was improper. On June 21, 2019, the County filed a motion for partial summary judgment. On July 11, 2019, Van Leer filed an opposition to the County's motion and a cross-motion for summary judgment. The trial court held a motions hearing on August 1, 2019. On October 4, 2019, the trial court entered an Order denying the County's partial motion, granting Van Leer's cross-motion, and remanding the case to the Commission to reverse, in part, the Commission's December 18, 2018 Order related to the Commission's award of a credit for third party loss of consortium proceeds. Additionally, the trial court ordered that the Commission should not issue any lien credit for Van Leer's loss of consortium proceeds, that the remaining balance of the Commission's award of compensation in the December 18, 2018 be affirmed, and that the case be closed with all costs assessed against the County.

The County filed a motion for reconsideration of the trial court's decision on October 15, 2019. Van Leer filed an opposition to the motion on November 1, 2019. On January 8, 2020, the trial court denied the County's motion. The County noted a timely appeal to this Court on February 4, 2020.

DISCUSSION

I. The Commission did not have jurisdiction to evaluate or modify the allocations of proceeds in Van Leer's settlement in the Sunbelt Case because it was an independent third-party action not before the Commission.

The Commission is a "creature of statute" which has "no inherent powers and its authority thus does not reach beyond the warrant provided by the statute." Holy Cross Hosp. of Silver Spring, Inc. v. Health Servs. Cost Review Comm'n, 283 Md. 677, 683 (1978); see also Holman v. Kelly Catering, Inc., 334 Md. 480, 487 (1994). Specifically, this Court has held that the Commission "only has those powers conferred upon it by statute." Greer v. Montgomery Cnty., 246 Md. App. 245, 253 (2020). Therefore, for the Commission to be authorized to modify the allocations of proceeds in a third-party settlement, there must be express statutory authority to do so. See id.

The County argues that the Commission has jurisdiction to reallocate the proceeds of the third-party settlement in the Sunbelt Case. The County claims that because the Act directs how a settlement related to a workers' compensation injury is disbursed (which requires repayment of a lien to an employer), the Commission has jurisdiction to reallocate the proceeds in a third-party claim to effectuate that outcome. Van Leer argues that the Commission has not been granted any explicit authority by the Legislature to reallocate the third-party settlement award. Van Leer further contends that the appropriate remedy would be to credit the County for any portion of the settlement that would prejudice the County, so long as the County can show such prejudice. We agree with Van Leer.

In the Act, the Maryland Legislature provided the Commission with "jurisdiction to hear only those claims brought by a 'covered employee' as that term is employed in the Workers' Compensation Act." Pro-Football, Inc. v. McCants, 428 Md. 270, 280 (2012); see Md. Code (1991, 2016 Repl. Vol., 2020 Suppl.), § 9-709 through § 9-711 of the Labor and Employment Article ("L&E"). A "covered employee" is "[a]n individual, including a minor . . . in the service of an employer under an express or implied contract of apprenticeship or hire." Md. Code (1991, 2016 Repl. Vol.), § 9-202 of L&E. Therefore, by definition, only Van Leer is a covered employee in this case, not any of the defendants in the Sunbelt Case, nor Mrs. Van Leer. See id.

The Court of Appeals has discussed the possibility that a settlement between a covered employee and a tortfeasor could prejudice an employer's subrogation interest. Franch v. Ankney, 341 Md. 350, 360-61 (1996). Critically, the Court held that the mere...