In Jones v. City of St. Petersburg the claimant appealed an order denying penalties and interest on PTD and supplemental benefits where the employer paid the benefits retroactive to an earlier date.  In March 2009 the employer learned that the claimant was placed at MMI on March 29, 2009.  The adjuster testified that the employer received notice of a 34% PIR as of May 6, 2009 on May 13, 2009.  The employer received nothing else until July 23, 2009 which was the day the claimant was accepted as PTD retroactive to May 6, 2009.  No penalty or interest payments were included in the lump sum check mailed to the claimant.  A PFB was filed on September 1, 2009 seeking PTD and supplemental benefits from March 29, 2009, plus penalties and interest.  On September 15, 2009 the employer paid the PTD benefits retroactive to March 29, 2009.

Penalties on benefits payable without an award are due if the benefit is not paid within 7 days after it becomes due.  The penalty is 20% of the unpaid installment.  However, the statute provides that the "penalty shall not apply for late payments resulting from conditions over which the employer or carrier had no control."  In this case, the employer did not prove that the late payments were outside its control.  Rather, the JCC found that the employer did not have information that the claimant was PTD on the date of MMI because there was no information that the claimant was medically restricted from doing sedentary work.  However, the Court noted that the employer determined that the claimant was PTD as of May 6 because of information it had on May 13.  There was no explanation as to why the PTD status was not accepted until July 23.  Therefore, penalties were due on all payments owed from May 13 to July 23.  At oral argument the claimant admitted that the employer did not have enough information to determine that as of March 29 the claimant was PTD so penalties would not be due from that point to May 12.  The Court went on to reverse the denial of interest payments noting the fact that the statute does not allow any mechanism to avoid the payment by the employer.  Thus, interest was due for all late payments from March 29 to July 23.

No doubt, everyone responsible for payments in the workers' compensation system does their best to pay benefits in a timely fashion.  But, it is important to remember that there are circumstances outside the control of the employers, insurers, and servicing agents that result in some late compensation payments.  In these circumstances it may be entirely appropriate to deny the payment of penalties even though benefits are being paid late.  Documentation of the facts behind the late payment is imperative.  However, regardless of how valid the excuse for the late payment, there will be no escaping the payment of interest under the statute.

The attorneys at Massey, Coican, Schuster & King are experienced in defending  municipalities and identifing the application of law under Planning Level Functions and Operational Level Functions.  If you have any questions regarding this appellate opinion or any other issue regarding workers' comp defense, insurance liability defense or appellate law, call us at(954) 527-3919.

Massey, Coican, Schuster  & King