R. K. GROUNDS CARE, ET AL. v. KEVIN D. WILSON
No. 1452
IN THE COURT OF SPECIAL APPEALS OF MARYLAND
December 4, 2017
Eyler, Deborah S., Meredith, Arthur, JJ.
September Term, 2016; Circuit Court for Carroll County, Case No. 06-C-15-069437
HEADNOTE: R.K. Grounds Care v. Wilson, No. 1452, September 2016 Term.
WORKERS’ COMPENSATION COMMISSION — SUBJECT MATTER JURISDICTION — GARNISHMENT EXEMPTIONS.
Wilson and his employer and insurer entered into a settlement of his worker’s compensation claim, which was approved by the Commission. When the settlement funds were in the hands of the insurer, the insurer was notified of child support liens against Wilson and then was served with writs of garnishment. The child support judgments exceeded the amount of Wilson’s share of the settlement. The insurer answered the garnishment proceeding. Wilson did not file anything in the garnishment proceeding. The insurer paid Wilson’s share of the settlement to the local child support enforcement agency, which was the judgment creditor in the garnishment proceeding.
A few months later, Wilson filed “Issues” in the Commission, complaining that the insurer had not paid him his share of the settlement. The parties put before the Commission the question whether Wilson’s share was exempt from garnishment under
Held: Judgment of the circuit court reversed. The circuit court should have ruled that the Commission lacked subject matter jurisdiction to decide whether money that was in the hands of an insurer for settlement of a workers’ compensation claim was exempt from garnishment to pay a judgment in a child support action. Only a circuit court has subject matter jurisdiction over garnishments. In the child support garnishment proceeding, Wilson, as judgment debtor, was entitled to file a motion asking the court to find that his share of the settlement monies (or part of his share) was exempt from garnishment under
OPINION
Opinion by
Filed: December 4, 2017
In this appeal, we hold that the Workers’ Compensation Commission (“Commission“) does not have jurisdiction to decide whether money payable in an approved settlement of a claim is subject to garnishment.
FACTS AND PROCEEDINGS
After suffering an injury at work on December 14, 2012, Kevin D. Wilson, the appellee, brought a workers’ compensation claim against his employer, R.K. Grounds Care (“RK“), and RK’s insurer, Chesapeake Employers Insurance Company (“Chesapeake“), the appellants. On March 14, 2014, the parties agreed to settle the claim for $3,500, which included an attorneys’ fee and a medical evaluation fee. The settlement was memorialized in an “Agreement of Final Compromise and Settlement” (“Agreement“), which was submitted to the Commission for approval. On March 20, 2014, the Commission issued an order approving the settlement with one
At the time of all these events, three child support arrearage cases were pending against Wilson in the Circuit Court for Carroll County.1 On March 31, 2014, in that court, the Carroll County Bureau of Support Enforcement (“Bureau“) filed a “Notice of Child Support Lien” in each child support case, for a total of $ 6,691.69 in child support arrears. As we shall discuss, the child support liens operated as judgments. RK and Chesapeake were notified of the child support liens that same day.
On April 2, 2014, Chesapeake paid the attorneys’ fee and medical evaluation fee due under the Agreement. The $2,246.66 balance of the settlement money, i.e., Wilson’s share, was far less than his child support arrearage. Chesapeake advised Wilson’s lawyer by email that day that “claimant has a child support lien so his portion is not being sent out.” Two days later, it further advised Wilson’s lawyer that it was awaiting receipt of writs of garnishment and was planning to send all of Wilson’s share of the settlement to the Bureau. By email of May 6, 2014, Wilson’s counsel informed Chesapeake that, in his view, the Bureau was not entitled to receive the full amount of Wilson’s share of the settlement.
On July 2, 2014, the Circuit Court for Carroll County issued writs of garnishment in two of the child support cases, and, on July 8, 2014, it issued a writ of garnishment in the third case. The writs were served on Chesapeake as garnishee and mailed to Wilson as judgment debtor. Wilson did not file a motion (or any paper) in the garnishment proceedings. On August 5, 2014, Chesapeake issued three checks to the Bureau, judgment creditor, for sums totaling the full amount of Wilson’s share of the settlement.2
On August 14, 2014, Chesapeake filed answers in all three child support cases. Based on the payments made by Chesapeake, the judgments for child support arrearages in two cases were marked partially satisfied and the judgment in the third case was marked fully satisfied.
More than three months later, on November 26, 2014, Wilson filed an “Issues” form with the Commission stating, “COMMISSION APPROVED THE AGREEMENT OF FINAL COMPROMISE AND SETTLEMENT ON 3/18/14, BUT THE CLAIMANT IS STILL AWAITING RECEIPT OF HIS SHARE OF SETTLEMENT PROCEEDS.”
On April 29, 2015, the Commission held a hearing, which consisted of argument of counsel. Wilson took the position that his share of the settlement money was exempt from garnishment, under
On July 6, 2015, the Commission issued a final order finding that
Unhappy with that outcome, RK and Chesapeake filed a petition for judicial review of the Commission’s final order in the Circuit Court for Carroll County. The parties stipulated to the material facts and asked the court to render a decision based on the law.
After a hearing, the court issued a memorandum opinion ruling that workers’ compensation settlements are subject to garnishment under
RK and Chesapeake noted this timely appeal, presenting three questions for review, which we have consolidated and reworded:
- Did the circuit court err by ruling that
CJP section 11-504(b)(2) applied to Wilson’s share of the settlement? - If not, did the circuit court err by ruling that under
CJP section 11-504(i) , 25% of Wilson’s share of the settlement was subject to garnishment for unpaid child support?4
We shall not address either question because, as stated above, we conclude that the Commission lacked subject matter jurisdiction to decide whether Wilson’s share of the settlement money (or any part of that share) was exempt from garnishment. For that reason, we shall reverse the judgment of the circuit court.
DISCUSSION
Before delving into the jurisdictional problem that we see as dispositive, we shall summarize the primary issues the parties present in their briefs, for context. They concern the proper interpretation of three interrelated statutes and statutory schemes that serve varying policy purposes. First,
Except as provided in Title 10 of the Family Law Article , before the issuance and delivery of a check or draft for any money payable under this title, the money may not be assigned, charged, or taken in attachment or execution.
(Emphasis added.) Thus, as a general rule, money payable pursuant to the
Second, subtitle 1 of
Finally,
(b) The following items are exempt from execution on a judgment:
. . .
(2) Except as provided in subsection (i) of this section, money payable in the event of sickness, accident, injury, or death of any person, including compensation for loss of future earnings. This exemption includes but is not limited to money payable on account of judgments, arbitrations, compromises, insurance, benefits, compensation, and relief.
(Emphasis added.) The referenced exception states, in relevant part: “[t]wenty-five percent of the net recovery by the debtor on a claim for personal injury is subject to execution on a judgment for a child support arrearage.”
As the parties see it, the central issue on appeal is whether Wilson’s share of his workers’ compensation settlement money, which was in the hands of Chesapeake and was payable to him, was fully exempt, partially exempt, or not exempt from garnishment by the Bureau. RK and Chesapeake
These arguments are well thought-out and present difficult legal questions. As we shall explain, however, only a circuit court has subject matter jurisdiction over garnishment proceedings, including the power to decide whether property is exempt from garnishment. Wilson did not raise the exemption question before the circuit court in the garnishment proceeding in the child support cases when he had the opportunity to do so. He raised it before the Commission, which had no power to decide it.
“A writ of garnishment is a means of enforcing a judgment. It allows a judgment creditor to recover property owned by the debtor but held by a third party.” Parkville Fed. Sav. Bank v. Maryland Nat‘l Bank, 343 Md. 412, 413 (1996). In a garnishment proceeding to enforce a judgment, the judgment creditor “steps into the shoes of the [judgment] debtor and ordinarily can only recover to the same extent as could the [judgment] debtor.” Bragunier Masonry, Inc. v. Catholic Univ. of America, 368 Md. 608, 624 (2002). Therefore, “garnishment proceedings are not designed or intended ‘to place the garnishee in a worse position, in reference to the rights and credits attached, than if he had been sued by the defendant [judgment debtor].‘” Med. Mut. Liab. Ins. Soc. of Maryland v. Davis, 389 Md. 95, 103 (2005) (quoting Bragunier, 368 Md. at 624). In this case, with respect to the settlement money payable to Wilson but in the hands of Chesapeake, the Bureau, as a judgment creditor of Wilson, stood in the same shoes as Wilson.
The procedure governing garnishment of property generally is set forth in
“Attachment and garnishment is the exercise of a special and limited statutory power, the requisites of which are jurisdictional.” Cole v. Randall Park Holding Co., 201 Md. 616, 623 (1953). See also Davis, 389 Md. at 101 (same); Belcher v. Gov‘t Emp. Ins. Co., 282 Md. 718, 720 (1978) (“[T]he court’s authority in attachment proceedings is derived from a ‘special and limited statutory power[.]‘” (quoting Cole, supra)). As relevant here, the court’s special power derives from
By contrast to the circuit courts (or any Maryland court), the Commission is not a court at all. It is an independent unit of state government created by the General Assembly in the exercise of its police power. Solvuca v. Ryan & Reilly Co., 131 Md. 265, 284 (1917) (stating that by creating the Commission, “the Legislature never intended to constitute the Commission a Court, or to confer upon it the judicial power of the State within the meaning of the constitutional provisions [governing the creation of courts]“);
The Act permits parties to a claim before the Commission to enter into “an agreement for the final compromise and settlement of any current or future claim.”
Conversely, the Commission’s limited powers do not include the power to enforce an award it has granted. This was established long ago in Mattare, supra, in which the Court of Appeals was addressing whether a circuit court action by the beneficiary of a workers’ compensation award that the decedent worker’s employer failed to pay was barred by the statute of limitations. The Court noted that “[t]here is no provision in the Workmen’s Compensation Law empowering the Commission to enforce its awards[.]” Mattare, 148 Md. at 314. Observing that the award was not a judgment, as it was not issued by a court, the Court held that the award was a debt in the nature of a specialty, upon which the beneficiary had twelve years to bring suit in the circuit court. See also Dyson v. Pen Mar Co., 195 Md. 107, 112 (1950) (same).
From the Act’s inception in 1914, the Commission has had continuing jurisdiction and power over the cases that come before it, including the power to make modifications. In the original version of the Act, these powers were set forth at section 54, which in its entirety read as follows:
The powers and jurisdiction of the Commission over each case shall be continuing and it may from time to time make such modifications or change with respect to former findings or orders with respect thereto as in its opinion may be justified.
That provision, with minor language changes, now appears at
Continuing powers and jurisdiction; modification. – (1) The Commission has continuing powers and jurisdiction over each claim under this title. (2) Subject to paragraph (3) of this subsection [regarding time limitations], the Commission may modify any finding or order as the Commission considers justified.7
Given that this power and jurisdiction existed in 1925, when Mattare was decided, it is clear that the provision governing the Commission’s continuing jurisdiction over its findings and orders has never embodied the power to enforce an award it has issued.
In Dyson, the Court of Appeals considered the effect of this provision in the context of a settlement agreement, not an award. The injured employee and his employer entered into a settlement of the employee’s workers’ compensation claim, with the payments to be made in installments. The Commission approved the settlement. After the employer made all the payments, the employee filed a motion before the Commission to set aside the settlement agreement on the ground that there had been a mutual mistake of fact about the extent of his injuries. The employer opposed the motion, in part on the ground that the Commission lacked the power to decide that issue. The Commission held a hearing and issued an order denying the motion, finding that the parties had not been operating under a mutual
The employee appealed to the Court of Appeals, which considered the threshold question whether the Commission had the power to decide the mutual mistake of fact issue. The Court observed that a settlement of a workers’ compensation claim, which must be approved by the Commission to be effective, is similar to an award by the Commission. Dyson, 195 Md. at 112 (“The filing and approval of a final settlement agreement has many of the aspects of an award.“). For that reason, the Court analyzed the power and jurisdiction of the Commission post-settlement by application of what is now
The underlying question as to the compensation to be paid for the injury, by agreement rather than by the determination of a contested issue, was presented and decided [by the Commission in approving the settlement agreement]. The petition to reopen is not predicated upon a subsequent change of condition, but involves an inquiry into the justice of the approval in light of conditions existing at the time of the settlement.
Id. at 114 (emphasis added). The Court concluded that the Commission had the power to reconsider whether its approval of the settlement of the employee’s claim was just because, allegedly, there had been a mutual mistake of fact concerning the nature of his injury at the time of approval. (On the merits, the court upheld the decision against the employee.)
We return to the case at bar, which, in our view, differs significantly from Dyson. When Wilson filed his “Issues,” he was not seeking to have the Commission reconsider its approval of the parties’ settlement of his claim. Rather, he was seeking to have the Commission enforce the settlement agreement as approved. As he presented the issue, Chesapeake had failed to abide by the terms of the approved settlement agreement because it had not paid him his share. Unlike the employee in Dyson (or the employee’s decedent in Stevenson), he was not complaining that the settlement amount (or award) was not a fair monetary resolution of his claim, given the nature of his injury and his wage history. He simply wanted his share of the settlement money. There was nothing about its approval of the settlement agreement that the Commission was being asked to reconsider. Accordingly, the continuing jurisdiction of the Commission under
What was implicated by Wilson’s “Issues,” however, were powers outside the jurisdiction of the Commission to exercise. Just as the Commission does not have the power to enforce its awards, it does not have the power to enforce its approved settlement agreements, which, as the Court of Appeals has explained, are similar to awards. Even more important, the Commission does not have the power to decide whether settlement money in the hands of a workers’ compensation insurer is exempt from garnishment for a judgment for child
Subject matter jurisdiction may be raised at any time, by a party or by the Court. Cty. Council of Prince George’s Cty. v. Zimmer Development Co., 217 Md. App. 310, 319 (2014) (quoting Cty. Council of Prince George’s Cty. v. Dutcher, 365 Md. 399, 405 (2001)). Whether the Commission had subject matter jurisdiction to decide the garnishment exemption issue the parties focus upon is a threshold matter. For the reasons given, the Commission lacked jurisdiction to decide that issue. On judicial review, the circuit court should have vacated the Commission’s order for lack of subject matter jurisdiction. Accordingly, we shall reverse the judgment of the circuit court.
JUDGMENT OF THE CIRCUIT COURT FOR CARROLL COUNTY REVERSED. CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO VACATE THE ORDER OF THE WORKERS’ COMPENSATION COMMISSION. COSTS TO BE DIVIDED EQUALLY BETWEEN THE APPELLANTS AND THE APPELLEE.