Eaton v. SD Warren

Insurance Company

Liberty Mutual

Date Decided

March 15, 2019

Panel Members

Timothy Collier

Tom Pelletier

Mike Stovall




Multiple Injuries AWW Maximum Rate Ambiguity Multiple Awards

File Size

179 KB


Summary from the Troubh Heisler Attorneys

Ms. Eaton filed petitions on multiple injuries, including in 1983 and 1998. In a 2000 decree, former Hearing Officer McCurry granted the petitions and ordered S.D. Warren to pay incapacity benefits based on the 1998 average weekly wage in the amount of $458.83 per week (the maximum rate then applicable to the 1998 injury). In response to a motion for findings, HO McCurry issued an amended decree in 2001 stating that the initial decree "stands unless specifically contradicted" by the new order. The 2001 decree did not change the specific payment mandate contained in the 2000 decree, but included an unintelligible sentence fragment that recited the 1983 average weekly wage and adjusted compensation rate. S.D. Warren continued to pay benefits based on the original 2000 order.

S.D. Warren adjusted its compensation payment annually as the maximum rate increased. In 2005 S.D. Warren realized that the maximum rate had exceeded the full compensation rate for the 1998 injury, and unilaterally reduced its payment to the full 1998 compensation rate as ordered by the 2000 decree.

In 2008 Eaton filed a petition for forfeiture and penalties asserting that S.D. Warren was incorrectly paying benefits based on the 1998 wage, rather than inflation-adjusted benefits based on the 1983 wage, and that S.D. Warren was not permitted to reduce benefits unilaterally in 2005 when it discovered its overpayment. The penalties petition languished in the Board's Abuse Investigation Unit for nearly 8 years, until it was referred to an ALJ for decision in 2016. In a 2016 decision, Judge Jerome denied the petition, ruling that the 2001 decree was ambiguous. Judge Jerome found that the 2000 decree's payment order was not "specifically contradicted" by the 2001 decree, despite the "indecipherable and ungrammatical" sentence fragment reciting the 1983 wage and compensation rate. Judge Jerome also ruled that S.D. Warren properly acted to correct its payment to comply with the 2000 payment order after its overpayment was discovered. Eaton appealed.

The Appellate Division panel's majority (Judges Collier and Pelletier) affirmed, holding (1) the question of whether a decision is ambiguous is a question of law, reviewable de novo on appeal; (2) the ALJ's interpretation of an ambiguity is reviewable for abuse of discretion; (3) the 2001 decree was ambiguous on its face; (4) it was reasonable for Judge Jerome to conclude that

S.D. Warren was still required to pay according to the 2000 decree's mandate, which was not "specifically contradicted" by the 2001 decree; and (5) S.D. Warren acted properly by unilaterally reducing its compensation rate to the 1998 injury's full compensation rate when it discovered it had been overpaying for several years. Judge Stovall dissented, stating that in his opinion the 2001 decree contained an unambiguous order to pay benefits based on the adjusted 1983 average weekly wage.

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