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Chesapeake Haven Land Corporation v. Litzenberg11/30/2001
Commission on April 7, 2000, however, the Commission refused to consider the issues of nature and extent or credit due the insurer until the parties submitted a statement outlining their position on the issues raised. Thereafter, the Commission held that the insurer was entitled to a credit from the third-party proceeds "in the amount of $41,273.05 in satisfaction of its lien, and employer and insurer's credit against future benefits per LE 9-903 is $60,285.22." The claim was subject to further consideration as to permanent partial disability, if any, upon request of the parties.
Conclusion
The Commission provided no rationale for establishing appellant's credit against future compensation payments as being $60,285.22. We conclude that the Commission adopted the following compensation suggested by appellee:
The jury award of $213,000 for future lost earnings was 60% of the total jury verdict, in the amount of $349,400. Thus, the appellant's interest extends to only 40% of the overall recovery. The overall recovery, including interest, totaled $398,549.82. Forty percent of the recovery amounts to $159,419.93. From that figure is deducted the reduced costs and attorney fees involved in the recovery of the award, amounting to $52,460.98 counsel fees, $5,374.81 costs, and $41,298.92 appellant's lien. The total expenses are $99,134.71. Subtracted from the total, $159,419.93, appellee's recovery is $60,285.22, which is the full credit due appellant.
In our view, the legislative intent in the adoption of LE §§ 9-901 through 903 is best expressed by Professor Larsen in Vol. 2, sec. 71.20, Worker's Compensation Commission, stating:
It is equally elementary that the claimant should not be allowed to keep the entire amount both of his award and his common law damage recovery. The obvious disposition of the matter is to give the employer so much of the negligence recovery as necessary to reimburse him for his compensation outlay, and give the employee the excess. This is fair to everyone concerned: the employer, who, in a fault sense, is neutral, comes out even . . . .
When sections 9-902 and 9-903 of Md. Code LE Art. are read together, the legislative intent is clear. The employer and insurer are reimbursed fully for the benefits and medical services provided and the third-party claimant may keep the balance. The reimbursement requirement precludes "double dipping" by the claimant and preserves his right to reopen his case after the third-party recovery is depleted.
Although Professor Larsen was discussing the "lien" aspect of a third-party recovery, we conclude that the "credit" concept should be resolved in like fashion. Specifically, the employer/insurer credit should be calculated from that portion of the third-party recovery attributable to benefits paid or payable by the employer/insurer.
Benefits for either permanent disability (§ 9-602(a)) or temporary total disability (§ 9-621) include only those earnings in the job in which the injury occurred, except for several concurrent work situations not relevant here. See Buckler v. Willett Construction Co., 345 Md. 350, 360 (1997); Crounder v. Baltimore Butchers Ass'n, 226 Md. 606, 611 (1961). When, as here, an injured worker's earnings in self-employment are excluded from the calculation of benefits to be paid by the compensation insurer, third-party recoveries for those losses cannot be considered as part of the insurer's subrogation interest. The insurer can never be required to pay any benefits to the claimant based on his recovery for damages to his secondary employment. Neither can the insurer receive a credit against future benefits based solely on the third-party r
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