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Urrutia v. Interstate Brands International

Supreme Court of Maine

February 8, 2018


          Argued: September 13, 2017

          Stephen W. Moriarty, Esq. (orally), Norman, Hanson & DeTroy, Portland, for appellants Interstate Brands International and Ace American Insurance Company

          James J. MacAdam, Esq., Nathan A. Jury, Esq. (orally), and Donald M. Murphy, Esq., MacAdam Jury, P.A., Freeport, for appellee Victor S. Urrutia

          Benjamin K. Grant, Esq., McTeague Higbee, Topsham, for amicus curiae Maine AFL-CIO Richard D. Tucker, Esq., Tucker Law Group, Bangor, for amicus curiae Catalyst Paper Corporation

          Thomas E. Getchell, Esq., and Daniel F. Gilligan, Esq., Troubh Heisler, Portland, for amicus curiae S.D. Warren Company


          Majority: SAUFLEY, C.J., and MEAD, GORMAN, HJELM, and HUMPHREY, JJ.

          HJELM, J.

         [¶1] After sustaining injuries in an industrial workplace accident, Victor S. Urrutia was paid total incapacity workers' compensation benefits by his employer, Interstate Brands International. For more than three years, he received the full amount of those benefits while also collecting Social Security retirement benefits. When Interstate learned that Urrutia was receiving Social Security benefits, it sought a credit, by way of a payment holiday, against ongoing incapacity payments pursuant to a statutory provision that reduces the amount of incapacity benefit payments by half of the amount of retirement benefits the employee is also receiving. See 39-A M.R.S. § 221 (2017).

         [¶2] A hearing officer [Stovall, HO)[1] ordered that Interstate was entitled to a credit of $24, 131.38, but the Workers' Compensation Appellate Division decided the issue differently, determining that section 221 does not allow a reduction based on incapacity overpayments made in the past. On this appeal by Interstate and ACE American Insurance Company (collectively, Interstate), we conclude that section 221 entitles an employer to a credit for workers' compensation benefits previously paid for the same liability period when the employee also was receiving Social Security retirement benefits. We therefore vacate the decision of the Appellate Division.

         I. BACKGROUND

         [¶3] The following facts are undisputed by the parties and established by the record.

         [¶4] In 2001, Victor Urrutia began working for Interstate as a production mechanic. In July 2009, when he was 62 years old, Urrutia slipped on a catwalk in the workplace and grabbed a railing to catch himself, resulting in injuries to his spine and extremities.

         [¶5] Interstate began paying Urrutia total incapacity workers' compensation benefits in December 2010. Unbeknownst to Interstate, however, Urrutia had started receiving Social Security retirement benefits in August 2010.[2] In May 2013, Interstate sent Urrutia a Certificate Authorizing Release of Benefit Information for him to sign so that Interstate could obtain his Social Security records. In August 2013, Interstate was informed by Urrutia that he had been and was currently receiving Social Security retirement benefits.

         [¶6] In a petition filed with the Workers' Compensation Board, Interstate sought a determination that pursuant to section 221 it was entitled to reduce Urrutia's ongoing workers' compensation benefits by half of the amount of his Social Security retirement benefits-a reduction that Urrutia ultimately did not contest. Interstate also sought a credit pursuant to section 221, by way of a payment holiday, for amounts it had overpaid Urrutia before learning that he had been receiving retirement benefits.

         [¶7] After a contested hearing held on the latter issue in April 2014, a hearing officer granted Interstate's petition, concluding that section 221 entitled Interstate to "a credit for all periods for which the employee received old-age [S]ocial [S]ecurity benefits and workers' compensation benefits." For that reason, the hearing officer ordered that Interstate "may cease lost wage benefits payment until such time as it exhausts its credit of $24, 141.38" that accrued between December 2010 and November 2013-the period when Urrutia was receiving both Social Security retirement benefits and the full amount of incapacity benefits.

         [¶8] Urrutia appealed the hearing officer's decree to the Appellate Division, see 39-A M.R.S. § 321-B (2017), which vacated the decree, concluding that the plain language of section 221 does not permit a credit for incapacity overpayments already made to the employee when the employee was also receiving Social Security benefits, and that the section 221 credit may be applied only against ongoing incapacity benefits that are being paid for the "same time period" as the Social Security retirement benefits. The Appellate Division concluded that Interstate therefore was not entitled to a credit based on Urrutia's past receipt of retirement benefits. Interstate filed a timely petition for appellate review, which we granted. See 39-A M.R.S. § 322 (2017); M.R. App. P. 23 (Tower 2016).[3]


         [¶9] This case calls for us to address an issue we have not previously had occasion to consider: whether the "coordination of benefits" statute in the Workers' Compensation Act, 39-A M.R.S. § 221(1), entitles an employer to a credit against ongoing incapacity benefit payments for overpayments made in the past while the employee was also receiving "old-age" Social Security benefit payments (i.e., retirement benefit payments).

         [¶10] Section 221(1) provides for an adjustment of the amount of workers' compensation benefits when

either weekly or lump sum payments are made to an employee as a result of liability pursuant to section 212 or 213 with respect to the same time period for which the employee is also receiving or has received payments for:
A. Old-age insurance benefit payments under the United States Social Security Act, 42 United States Code, ...

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