Guiggey v. Great Northern Paper, Inc.

1997 ME 232, 704 A.2d 375, 1997 Me. LEXIS 235
CourtSupreme Judicial Court of Maine
DecidedDecember 17, 1997
StatusPublished
Cited by15 cases

This text of 1997 ME 232 (Guiggey v. Great Northern Paper, Inc.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guiggey v. Great Northern Paper, Inc., 1997 ME 232, 704 A.2d 375, 1997 Me. LEXIS 235 (Me. 1997).

Opinion

RUDMAN, Justice.

[¶ 1] Daniel Guiggey appeals from a decision of the Workers’ Compensation Board concluding that his employer is not required to pay him pre-decree interest pursuant to 39-A M.R.S.A. § 205(6) (Supp.1997). Because we agree with Guiggey that, pursuant to the plain language of subsection 205(6), employees are entitled to pre-decree interest accruing from the date that each payment would have been due if voluntarily and timely paid, we vacate the decision of the Board.

[¶ 2] Guiggey suffered a work-related injury on March 12, 1994, while employed by Great Northern. Great Northern contested liability, and Guiggey petitioned for an award of benefits. The Board granted Guiggey’s petition and awarded him continuing total incapacity benefits retroactive to the date of injury. Great Northern promptly paid Guig-gey his past due benefits in a lump sum without interest. Guiggey then filed a second petition seeking interest at the rate of 10% per annum from the date that each payment would have been due if timely paid, totalling approximately $900. 39-A M.R.S.A. § 205(6). The Board denied Guiggey’s petition for interest, and we granted his petition for appellate review pursuant to 39-A M.R.S.A. § 322 (Supp.1997).

[¶ 3] Two provisions of the Act require an employer to pay interest to an employee on an ■ award of benefits: 39-A M.R.S.A §§ 205(6) & (9)(F). Subsection 205(6), at issue in this appeal, provides:

When weekly compensation is paid pursuant to an award, interest on the compensation must be paid at the rate of 10% per annum from the date each payment was due, until paid.

39-A M.R.S.A. § 205(6) (emphasis added). Subsection 205(9)(F), relating to an employer’s right to terminate unilaterally or to discontinue benefits, provides:

If benefits have been discontinued or reduced pursuant to paragraph A or B and the board, after hearing, determines that benefits have been wrongfully withheld, the board shall order payment of all benefits withheld together with interest at the rate of 6% a year. The employer shall pay this amount within 10 days of the order.

39-A M.R.S.A. § 205(9)(F) (Supp.1997).

[¶ 4] The parties agree that, because Great Northern contested its initial liability for the injury and did not terminate benefits pursuant to subsection (9)(A) or (9)(B), the applicable provision is subsection 205(6), not 205(9)(F). The Board concluded, however, that because an employer is liable for 6% interest pursuant to subsection (9)(F) for withholding benefits after liability is established, interpreting subsection 205(6) as providing a higher interest rate (10%) on pre-decree interest when an employer disputes its initial liability in good faith would be incongruous. Accordingly, the Board concluded that the phrase “the date each payment was due ” in 39-A M.R.S.A. § 205(6) (emphasis added), is not triggered until there is a Board decree ordering payment of benefits.

[¶ 5] We do not agree with the Board’s interpretation of the plain language of the statute. Pursuant to subsection 205(2), payment of workers’ compensation benefits may be “due” without a Board decree. See 39-A M.R.S.A. § 205(2) (Supp. 1997) (“The first payment of compensation *377 for incapacity under section 212 or 213 is due and payable within 14 days after the employer has notice or knowledge of the injury or death, on which date all compensation then accrued must be paid”) (emphasis added). Our interpretation of the plain language is also supported by use of the past-tense “was” to modify the word “due.” Interest is required from the date that each payment was due, i.e., prior to the decree awarding benefits.

[¶ 6] As we have stated, our interpretation of a statute is controlled by the statute’s plain meaning, unless that plain meaning leads to “absurd results.” See Folsom v. New England Tel. & Tel. Co., 606 A.2d 1035, 1042 (Me.1992). Although the existence of different interest rates in subsection 205(6) and in subsection 205(9)(F) might appear illogical, we do not agree that the result is incongruous or absurd. Moreover, it does not necessarily follow, as Great Northern contends, that employers who, in good faith, fail to accept initial liability for an injury will pay more than employers who willfully violate the Act. Employers who willfully withhold benefits pursuant to either subsection 205(1) or 205(9) are subject to a penalty pursuant to 39-A M.R.S.A. § 324 (Supp.1997).

[¶7] Our reading of the plain language is entirely consistent with the legislative history of section 205(6) and with long established policy regarding prejudgment interest. Subsection 205(6) replaces former 39 M.R.S.A. § 72, which provided:

Upon each award of the Workers’ Compensation Commission, interest must be assessed from the date on which the petition is filed at a rate of 8% per year, except that if the prevailing party at any time requests and obtains a continuance for a period in excess of 30 days interest will be suspended for the duration of the continuance. From and after the date of the decree, interest is allowed at the rate of 15% per year. Payment of any interest allowed after the 10th day following the date of the decree is not an element of loss for the purpose of establishing rates for workers’ compensation insurance. This section must be enforced by the Workers’ Compensation Commission.

39 M.R.S.A. § 72 (Supp.1992), repealed and replaced by Maine Workers’ Compensation Act of 1992, P.L.1991, ch. 885, §§ A-7, A-8. We have stated that the assessment of prejudgment interest serves two purposes in the ordinary civil context: first, it “compensate[s] an injured party for the inability to use money rightfully belonging to that party between the date suit is filed and the date judgment is entered,” Osgood v. Osgood, 1997 ME 192, ¶ 10, 698 A.2d 1071, 1073-74; and second, it “ ‘encourages the defendant to conclude a pretrial settlement of clearly meritorious suits,’ ” Pierce v. Central Maine Power Co., 622 A.2d 80, 85 (Me.1993) (quoting Simpson v. Hanover Ins. Co., 588 A.2d 1183, 1185 (Me.1991)). Similarly, the assessment of pre-decree interest serves two purposes in the workers’ compensation context: (1) to compensate the employee for delay in the receipt of benefits; and (2) to discourage employers from contesting valid workers’ compensation claims.

[¶ 8] By virtue of the Board’s interpretation, the employee, who is often already financially strapped as a result of the injury, must not only wait months, or potentially years, for the litigation of a claim, but also will receive no recompense for the delay in payment. Moreover, aside from the legal expense, it would cost nothing for an employer, pursuant to the Board’s interpretation, to contest a claim for compensation. Therefore, there would be little disincentive for the employer to contest valid claims. Although we have recognized that a purpose for the enactment of title 39-A was to reduce costs in the workers’ compensation system, Ray v.

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Bluebook (online)
1997 ME 232, 704 A.2d 375, 1997 Me. LEXIS 235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guiggey-v-great-northern-paper-inc-me-1997.