TRIAL COURT REVERSED CONCERNING METHOD FOR CREDITING EMPLOYER FOR TTD PAYMENTS AFTER MMI
Steam & Process Repairs v. Michael V. Cayton:
On October 2, 2009, the Alabama Court of Civil Appeals released this opinion wherein it reversed the trial court in its method of crediting the employer for TTD benefits made to an employee after MMI had been reached. The employer voluntarily paid the employee $513.54 a week in TTD benefits from May 22, 2004 to April 18, 2008, most of which time the matter was being litigated. The trial court determined that the employee sustained a 75% permanent partial disability and reached MMI on April 4, 2006. The trial court also found that the employer was entitled to a credit to the extent that benefits paid for TTD after the date of MMI exceeded benefits due for PPD.
Following the trial, the two parties were unable to agree on the amount of compensation owed the employee in light of the credit due to the employer. The employer argued that it was entitled to a credit in the form of a reduction in payment equal to the actual dollar amount it had overpaid the employee after he reached MMI. The employee, in turn, argued that the employer was entitled to credit in the form of a deduction of the number of weeks it had paid the employee TTD benefits from the total number of weeks the employee was entitled to receive PPD benefits. The trial court calculated the credit according to the method set forth by the employee. The trial court determined that the employer had paid the employee TTD benefits for 204 weeks and that the employee was entitled to receive PPD benefits for 300 weeks. The trial court then credited the employer for the number of weeks it had already paid benefits to the employee and ordered it to pay the $220 a week that the employee was entitled to receive in PPD benefits for the remaining 96 weeks. The employer appealed.
On review, the Court of Civil Appeals reversed the trial court’s judgment as it concerned the method of crediting payments made by the employer. The Court of Civil Appeals found that the credit to the employer should have been applied to the PPD benefits of $220 each week for the 96 weeks remaining of the total of 300 weeks the employee was entitled to compensation. Additionally, the Court found that, at a rate of $220 each week for 96 weeks, the employer owed the employee a total of $21,120 in PPD benefits. However, the Court found that, once the employer was credited with the $31,115.24 it had already overpaid the employee during the 106 weeks after the employee reached MMI, the employer should owe no further compensation. Further, the employer had paid $9,995.24 more than the employee was entitled to recover from the employer. The Court reversed the trial but did not rule as to whether or not the employer was entitled to actually recoup the amount overpaid because that issue was not before the Court.
Practice Pointer:In order to avoid an over payment situation, stop paying indeminty benefits as soon as the claimant has reached MMI.