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Bauder v. Alaska Airlines8/2/2002
insurer has frivolously or unfairly controverted compensation due under this chapter. After receiving notice from the board, the division of insurance shall determine if the insurer has committed an unfair claim settlement practice under AS 21.36.125.
The Board considered three arguments supporting the administrator's position that the controversions were not frivolous but only two arguments involve the July 1, 1997 controversion. One of those arguments, that Mr. Bauder committed fraud, was sharply rejected by the Board. The Board found very little evidence of fraud and found that the evidence presented about that investigation was hearsay.
But the Board did find that at the time of the controversion, Mr. Bauder was being considered for "reemployment benefits." According to the Board, during this evaluation and determination phase for reemployment benefits, an employee is not entitled to receive a lump sum impairment award.
Furthermore, the July 1, 1997 controversion did not contest the payment of permanent partial impairment benefits; it just contested a lump sum payment. Therefore, the Board's conclusion that the July 1, 1997 controversion was not frivolous or unfair because it did not deny Mr. Bauder any "compensation due" under AS 23.30.155(o) is supported by substantial evidence.
IX. PENALTIES, INTEREST, ATTORNEY'S FEES AND COSTS
In its July 6, 1997 decision, the Board denied and dismissed Mr. Bauder's claim for penalties and his claim for interest, but awarded him $3,125 in attorney's fees and $1,168.92 in costs under AS 23.30.145(b).
In his opening brief, Mr. Bauder requested that the maximum statutory penalties be assessed against the employer, due to the substantial and egregious underpayment, the refusal to pay amounts clearly and undisputedly due, and the failure of the employer to come forward with any substantial evidence to support its controversion or its failure to pay the proper amount of compensation which was due.
Indeed, had the employer properly considered Bauder's eligibility under the alternative method of computation of his TTD rate, the problems that are now presented by the lack of detailed records as to the number of days or hours which he worked would not be present.
Furthermore, substantial and intentional violations of the statutes and regulations applicable to compensation proceedings have occurred in this case. Therefore, all unpaid amounts should have interest assessed, and all attorney's fees incurred by the employee should be awarded.
Mr. Bauder's arguments for penalties, interest, attorney's fees, and costs are dependent on his successful overturning of the Board's decision on the other issues raised in his appeal. Because the court has upheld the Board's decision, there is substantial evidence supporting the Board's conclusions regarding penalties, interest, attorney's fees, and costs.
X. CONCLUSION
For the foregoing reasons, the decision of the Alaska Workers' Compensation Board is affirmed. The Board reserved the issue concerning the overpayment of temporary total disability benefits until after the decision on appeal. The case is therefore remanded to the Board to resolve this final issue.
Dated at Wrangell, Alaska, this 29 day of August, 2000.
Larry C. Zervos, Superior Court Judge
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