Foley v. Verizon, et al.

Background:
Verizon voluntarily paid Kevin Foley total incapacity benefits following an April 26, 2003 work injury. The following year Foley retired from Verizon. He accepted a severance/pension package and received a one time, lump sum payment. Verizon took an offset pursuant to 39-A M.R.S.A. §221 (2006) and because the offset was greater than the employee’s compensation rate, Verizon unilaterally stopped paying the employee’s weekly workers’ compensation benefits.

The employee contacted the claims adjuster after his benefits were discontinued. Employee counsel sent two letters to Verizon on August 5th and September 23, 2004 contesting the discontinuance. Verizon filed a Notice of Controversy on October 7th. Foley filed a Petition for Award contesting the coordination of benefits. He also argued that Verizon had violated the 14-day rule because Verizon did not controvert the claim within 14 days of his telephone call to the adjuster or the August 5, 2004 letter from his attorney. Finally, he argued Verizon was not entitled to suspend his benefits without filing a petition or a 21-day discontinuance under 39-A M.R.S.A. §221(2006).

The Hearing Officer found there was no violation of the 14-day rule, finding the employee’s telephone call to the adjuster, checking on the status of his claim, was not an “outright assertion of a claim for benefits” and the copy of the August 5, 2004 letter submitted into evidence was unreadable. The Hearing Officer also found that 39-A M.R.S.A. §221 entitles the employer to an immediate coordination of workers’ compensation benefits without needing to file a petition or 21-day discontinuance. Finally, the Hearing Officer treated the lump sum pension benefit as though it were being received in weekly installments and allowed Verizon to offset those amounts against Foley’s weekly benefits. The employee appealed all three determinations.

Court ruling:

The Law Court upheld all aspects of the Hearing Officer’s decision. The Hearing Officer’s findings that the employee’s telephone call to the claims adjuster did not constitute an assertion of a claim for benefits and that the August 5, 2004 letter did not constitute an assertion of a claim because it was unreadable are factual findings that the Law Court will not disturb on appeal. The Law Court also reaffirmed that the coordination of benefits section is an exception to the general rule under Section 205(9)(B)(1) that payments made pursuant to an award or compensation payment scheme may only be reduced or suspended through the filing of a petition or a 21-day discontinuance.

The parties did not dispute that Verizon was entitled to an offset for the employee’s retirement/pension benefits. The disagreement was over the method to be used in determining the amount of the offset. The employee contended that either Verizon was entitled to an offset only in the week in which the lump sum was received or that the lump sum should be spread out over his remaining life expectancy. The employer argued that the pension/ retirement lump sum payment should be treated the same as a recovery under a third-party settlement, which entitles the employer to a holiday on the payment of weekly benefits until such time as the benefits that would have been received equal the amount of the settlement amount. The Law Court agreed with the Hearing Officer that these methods were not consistent with the intent or language of the Act. The Court agreed with the Hearing Officer’s method of using the monthly pension amount the employee would have received under the plan but for his election to take a one time lump sum payment.

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