De Mayo v. Rensselaer Polytechnic Institute, 74 N.Y.2d 459 (1989)

The Special Fund for Reopened Cases, responsible for workers’ compensation payments after a certain time has elapsed, is subject to the same statutory penalties as an employer or insurance carrier for failing to make timely payments.

Summary

Thomas De Mayo, an employee of Rensselaer Polytechnic Institute, received a workers’ compensation award. After the case was reopened several years later, liability shifted to the Special Fund for Reopened Cases. De Mayo sought a 20% penalty under Workers’ Compensation Law § 25(3) because the Special Fund did not pay the award within ten days of the decision. The court addressed whether the Special Fund is subject to this penalty. The Court of Appeals held that the Special Fund is indeed subject to the penalty, reasoning that the Fund steps into the shoes of the original insurer and must ensure prompt payment to injured workers.

Facts

Thomas De Mayo injured his ankle and knee in 1974 while working for Rensselaer Polytechnic Institute. He received workers’ compensation benefits, and the case was closed in 1982. In 1983, the case was reopened based on a medical report. In 1985, De Mayo was awarded a 30% schedule loss of use of his right leg. Because the case was reopened more than seven years after the injury and more than three years after the last compensation payment, the employer’s insurance carrier was discharged, and liability shifted to the Special Fund for Reopened Cases. Claimant received the award 18 days after the Workers’ Compensation Board’s decision was filed.

Procedural History

The Workers’ Compensation Law Judge determined the Special Fund was liable for the 20% penalty for late payment. A panel of the Workers’ Compensation Board affirmed this. The full Board initially rescinded this decision but then the panel again upheld the penalty. The Appellate Division affirmed, holding that the Special Fund was obligated to make timely payments.

Issue(s)

Whether the Special Fund for Reopened Cases is subject to the 20% penalty provision under Workers’ Compensation Law § 25(3) (former [c]) for failing to pay a workers’ compensation award within ten days of the decision.

Holding

Yes, because once liability shifts to the Special Fund, it succeeds to the responsibilities of the insurance carrier, including the obligation to make timely payments, and the purpose of the Workers’ Compensation Law is to ensure prompt payment to injured workers.

Court’s Reasoning

The Court of Appeals held that the Special Fund is subject to the penalty. The court reasoned that once the conditions of Workers’ Compensation Law § 25-a(1) are met, the Special Fund steps into the shoes of the insurance carrier, assuming its rights and responsibilities. It would be illogical to hold that the Special Fund only succeeds to the duty to pay, but not to the timing requirements associated with the payment. “It is illogical to suppose that the Special Fund succeeds only to the carrier’s duty to pay an award and not to the statutory requirements that relate to the timing of such payment.” The court also pointed to § 25-a(2), which preserves procedural rights to claimants when the Special Fund is involved, including the right to request assessment of the late penalty. The court emphasized the policy of ensuring prompt compensation payments to injured workers, citing Workers’ Compensation Law § 25(1). The penalty incentivizes responsible entities to make timely payments. The court noted the practice of liberally construing the Workers’ Compensation Law to advance its economic and humanitarian purposes. The court distinguished this case from situations requiring agency expertise, stating that this case involved a “question * * * of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent.” Therefore, deference to the Board’s interpretation was not required, although the Appellate Division still reached the correct conclusion.