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MCCABE INSPECTION SERV. v. WILLARD

July 23, 1956

McCABE INSPECTION SERVICE, Inc., Employer Plaintiff Appellant, and The State Insurance Fund, Insurance Carrier Plaintiff Appellant,
v.
John A. WILLARD, Deputy Commissioner for the Second Compensation District of the United States Department of Labor, Bureau of Employees' Compensation, Defendant-Appellee. and William Barefield, Employee Defendant-Appellee



The opinion of the court was delivered by: LEVET

This matter involves the interpretation of Title 33 U.S.C.A. § 914(k), hereinafter set forth. Both plaintiffs and the Government in behalf of the Deputy Commissioner have moved for summary judgment. The issue depends upon whether or not certain payments made by an employer to its employee during the period of disability are to be credited under the terms of the aforesaid section as 'advance payments of compensation' as against an allowance of partial permanent disability made by the Deputy Commissioner.

The plaintiffs herein are the employer and The State Insurance Fund, who seek and The State Insurance Fund, who seek to reverse an order of the Deputy Commissioner of the Bureau of Employees' Compensation, named herein as a defendant. The employee is also named as a party defendant, although he does not contest the Deputy Commissioner's order.

The facts, in substance, are as follows: William Barefiled, an employee of McCabe Inspection Service, Inc., was injured on August 19, 1954, in the course of his duty as an inspector on a railroad car float lying off Pier 21, North River, New York, N.Y. The employer, McCabe Inspection Service, Inc., was subject to the provisions of the Longshoremen's and Harbor Workers' Compensation Act of March 4, 1927, 44 Stat. 1424, 33 U.S.C.A. § 901 et seq. The liability of said McCabe Inspection Service, Inc. under this Act was insured by the New York State Insurance Fund. The employee, William Barefield, was disabled for 12 1/7 weeks as a result of the injury. Since he was receiving in excess of $ 52.50 per week, he was entitled under the Longshoremen's and Harbor Workers' Compensation Act to receive for such temporary total disability the sum of $ 35 per week, or $ 425. Barefield also was entitled to 37.2 weeks' compensation at $ 35 per week, or $ 1,302, since he had sustained a permanent partial disability equivalent to 15% loss of use of the right leg. The allowance for temporary total disability of $ 425, plus the total permanent partial disability equivalent to 15% loss of use of the right leg in the amount of $ 1,302, totals $ 1,727. This sum constitutes the total amount due to the employee.

 It is contended by the plaintiffs here that the employer, McCabe Inspection Service, Inc., paid to the employee as and for compensation, the employee's full wage of $ 84 per week for 11 1/7 weeks, amounting to $ 936. Plaintiffs, therefore, contend that credit for the full amount of such payments, that is, $ 936, should be allowed to them as reimbursement against the compensation awarded to the claimant. On the other hand, the Deputy Commissioner allowed credit for only $ 420, which is based upon $ 35 per week during the period of the total disability. Thus, the plaintiffs contend that the amount due to the claimant-employee is only $ 791 and that they are entitled to a credit in the amount of $ 936, whereas the Commissioner claims the amount due is $ 1,307. Therefore, the amount involved in this proceeding is $ 516.

 The specific finding involved is:

 '* * * The employer and insurance carrier having heretofore paid the employee $ 420.00 as compensation, there is due and payable $ 1,307.00 which amount the employer and insurance carrier are directed to pay forthwith to the employee, whereupon the case will be closed.'

 The Federal statutes involved herein are set out in the margin. *fn1"

 For the purposes of comparison, similar statutes in the New York State Workmen's Compensation Law, McK.Consol.Laws, c. 67, are also quoted in the margin. *fn2"

 Although the Deputy Commissioner concedes that the plaintiffs are entitled to a credit or $ 35 per week against the amount due the claimant, the Deputy Commissioner contends that this total of $ 420 is all that is allowable. The position so taken by the Deputy Commissioner apparently is based upon the following argument: That the sums paid by McCabe Inspection Service, Inc., employer, were not advance payments of compensation; that the amount of the credit cannot exceed the weekly amount of the compensation for the temporary total disability of $ 35 per week allowable to the employee, since credit is not allowable against the loss of use of a leg because this is a so-called 'schedule' loss.

 The Deputy Commissioner argues that the $ 84 paid weekly constituted wages and not compensation as defined in Section 902(12) of Title 33 U.S.C.A. and, hence, is not encompassed within the term 'advance payments of compensation for which reimbursement is provided under Section 914(k).'

 The money paid by the employer to the employee, in my opinion, was intended as compensation. It was (a) regularly paid; (b) by a corporate employer; (c) during the period of disability when the employee was not at work. The circumstances under which the employer paid the sum of $ 84 per week, rather than any terminology used, very definitely tend to support this conclusion and make any other hypothesis incredible. See Lawson v. Standard Dredging Co., 5 Cir., 1943, 134 F.2d 771, 772; Larson, The Law of Workmen's Compensation, Vol 2, pp. 18 and 19.

 Whether the payments were made as 'advance compensation' within the meaning of the terms of the Compensation Act must ordinarily be determined from the circumstances. Here, the Deputy Commissioner has already determined that the employer paid to the employee $ 420 as compensation. The sum of $ 420 is part of the total amount paid by the employer. If the $ 420 is paid as compensation, then to earmark this amount as compensation and to exclude the balance as not compensation appears to disregard the plainest of realities and to undermine the unambiguous meaning of the words of the statute.

 By reason of the fact that the federal reimbursement statute, Section 914(k), does not contain the words 'or has made payments to an employee in like manner as wages', used in the New York State Workmen's Compensation Law, Section 25, the Deputy Commissioner argues that no reimbursement is intended here. He also claims that Section 915(b) and Section 916 invalidate any agreement to waive compensation or any assignment, release or commutation of compensation benefits.

 Awards for permanent partial disability (so-called 'schedule' awards), however, are in effect compensation for loss in earning power. 'In compensation, unlike tort, the only injuries compensated for are those which produce disability and thereby presumably affect earning power.' Larson, Workmen's ...


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