CITY OF DANVILLE v. TATE (2015)

The majority today affirms the ruling of the circuit court dismissing the City of Danville's suit against Ryland Tate on alternative grounds. While I would likewise affirm the ruling of the circuit court, I would hold, as did the circuit court, that it lacked jurisdiction because exclusive jurisdiction lies with the Virginia Workers' Compensation Commission.

I am in agreement as to the relevant facts, and that the relevant Code section is § 65.2–520 of the Virginia Workers' Compensation Act, Code § 65.2–100 et seq. (the “Act”). The Code section, entitled “Voluntary payment by employer,” states, in pertinent part:

Any payments made by the employer to the injured employee during the period of his disability, or to his dependents, which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation․

Id. Based on the plain meaning of this statutory language, recovery of voluntary payments must be made “subject to the approval of the Commission.” Thus, the central issue is whether the sick leave payments constitute voluntary payments under Code § 65.2–520 such that recovery of these payments falls under this section. If the disputed monies are indeed voluntary payments under Code § 65.2–520, both Virginia jurisprudence and the statutory mandates of Code § 65.2–520 and Code § 65.2–700 squarely place exclusive jurisdiction for such disputes under the purview of the Commission.

The City argues that its payments were not voluntary because the payments for sick leave were made according to City ordinances. The City further argues that the payments were not voluntary because, had Tate not received sick benefits in violation of City policy, Tate had a right to sue the City in circuit court. In effect, the City contends that we must interpret “voluntary” to mean only benevolent payments not required by a statute, regulation, ordinance, or other legal mandate.

Code § 65.2–520 defines by its terms the types of payment considered to be “voluntary” under the Act, however. It states, in pertinent part, that “[a]ny payments made by an employer to the injured employee ․ which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation.” (Emphasis added.) Sick leave benefits utilized after an accident are, clearly, “payments made by an employer to the injured employee.” Code § 65.2–520. Regardless of whether a municipal ordinance, personnel policy, or other regulation requires payment of sick leave, sick leave is not mandated “by the terms of this title,” i.e., the Virginia Workers' Compensation Act.Code § 65.2–520. It is, therefore, a voluntary payment for the purposes of the Act.

This question came before the Court of Appeals in Dodson v. Newport News Shipbuilding & Dry Dock Co., Record No. 0278–99–1, 1999 Va.App. LEXIS 493, at *6 (Aug. 10, 1999) (unpublished). In Dodson, the Court of Appeals found:

Code § 65.2–520 does not distinguish between types of “voluntary payments.” The statute states that any payment is voluntary which “by the terms of this title were not due and payable when made.” ․ We, therefore, hold that the definition of “voluntary payments” includes any type of payment not required under the Act, whether the payment is an overpayment as a result of a mistake by the employer or a payment of benefits pursuant to another statute.

Id.

As a “voluntary payment,” employers are entitled to seek a credit for sick leave under Code § 65.2–520 when an employee receives a Workers' Compensation award, once leave is reinstated. Augusta County School Board v. Humphreys, 53 Va.App. 355, 362–63, 672 S.E.2d 117, 120–21 (2009). By its explicit language, the statute requires that credit for such voluntary payments be repaid to employers “subject to the approval of the Commission,” that is, under the exclusive jurisdiction of the Commission. Code § 65.2520.

The majority concludes that “where the employer does not request a credit under Code § 65.2–520, the statute is simply not implicated and, accordingly, no authority of the Commission relative to sick leave pay is triggered.” (Emphasis added.) The majority's reliance on the fact that the employer in this case did not request a credit as a basis for its position that the Act does not apply is misplaced. The employer does not have the option to circumvent the statute. If the employer is going to seek a credit in any fashion from the employee, it must do so under Code § 65.2520. Whether recovery is sought in the form of signing over a portion of a compensation check or via direct reimbursement from the employee, it is nonetheless a deduction from compensation: the recovery would not be sought had the employee not been compensated. Thus, an employer's attempt to recover compensation funds following an employee's award, even if not a formal request of “credit,” still substantively falls under this Code section.

Code § 65.2–700 states that the Commission “shall” determine “all questions arising under [The Workers' Compensation Act].” (Emphasis added.) But for the fact that a workers' compensation award was given and the City is seeking recompense for its sick leave, the City would have no basis to allege a violation of the ordinance prohibiting “double dipping,” i.e., receipt of both workers' compensation benefits and sick leave payment for the same period of injury. Recompense for voluntary payments such as sick leave is directly addressed by Code § 65.2–520. The question of recompense clearly “arises” under the title.

The misapprehension of this jurisdictional line is illustrated by the majority's selective use of language from Hartford Fire Ins. Co. v. Tucker, 3 Va.App. 116, 348 S.E.2d 416 (1986), apparently to stand for the proposition that the Commission's jurisdiction is too limited to encompass this case. Quoted more fully, the Court of Appeals stated:

The purpose and effect of the Workers' Compensation Act (Act) are to control and regulate the relations between the employer and the employee.Fauver v. Bell, 192 Va. 518, 521, 65 S.E.2d 575, 577 (1951). While the ․ Commission has jurisdiction “to do full and complete justice in each case,” ․ its jurisdiction does not extend to the litigation and resolution of issues between two insurance carriers which do not affect an award of the Commission. Generally, the Commission's jurisdiction is limited to those issues which are directly or necessarily related to the right of an employee to compensation for a work-related injury.

Id. at 120, 348 S.E.2d at 418 (emphasis in original). The full quote reveals that the Court of Appeals in Hartford was not stating that jurisdiction of the Commission is limited to causes of action by employees, but rather that its jurisdiction addresses relations between employers and employees as opposed to between two non-employee entities (insurance carriers). Where, as here, the dispute remains between employer and employee and the effectual ultimate award amount, jurisdiction properly remains with the Commission under Code § 65.2–700.

This Court has cited with approval the further statement by the Court of Appeals in Hartford that “[w]hen the rights of the claimant are not at stake, the Act clearly leaves the litigants to their common law remedies.” Bogle Dev. Co. v. Buie, 250 Va. 431, 434, 463 S.E.2d 467, 468 (1995) (quoting Hartford, 3 Va.App. at 121, 348 S.E.2d at 419). Conversely, where, as here, the claimants rights are at stake, the Act requires litigants seek remedy before the Commission under Code § 65.2–700.

The larger damage to our statutory integrity that should concern this Court is that, despite the City's limited reason for seeking jurisdiction in the circuit court in this instance, there is no rational reason to limit this holding to retirees. Today's majority is an invitation for employers to skirt the long-respected jurisdictional boundaries created in the Virginia Workers' Compensation Act.Code § 65.2–520 is wholly ineffectual if it pertains merely to requests that employees endorse over a portion of their workers' compensation awards and not also to pursuits for monetary recovery of those same funds. The statutory scheme was clearly designed so that these disputes, which affect the rights of the employee, would be adjudicated before the Commission.

Today's holding is all the more disquieting due to the City's candid admission at oral argument that its reasons for seeking jurisdiction in the circuit court stem from its belief that, based on precedent, the City would not be successful in a suit before the Workers' Compensation Commission. The fact that the City lacks confidence that it would prevail under current precedent is an issue for the City to take up with the Commission or raise on appeal after bringing the issue before the Commission. Doubt in the merits of one's claim hardly forms a valid basis to bring a cause of action where jurisdiction does not lie.

Finally, even if a cognizable cause of action did exist today, the Virginia Code clearly takes precedence over any municipal ordinance. The Code grants the Commission exclusive jurisdiction over repayment of non-workers' compensation payments made by employers to injured parties during the period of their injury.

For the foregoing reasons, I respectfully disagree with the majority and would affirm the rationale of the trial court below, dismissing for lack of subject matter jurisdiction.