The Georgia Court of Appeals recently issued an opinion on August 19, 2021 which addressed important evidentiary issues for proving when a payment was made for purposes of commencing the two year statute of limitations in change of condition cases under O.C.G.A. §34-9-104(b). Further, while the Court declined to overrule the “mailbox rule” for determining when a payment is considered made under the change of condition statute, it found the rule to be problematic in practice and urged the Georgia General Assembly to consider the issue.
The case, decided by a panel of the Court, is Sunbelt Plastic Extrusions, Inc. v. Paguia (Case number A21A0867). In this case, the claimant, Paguia, sustained a left-hand injury on March 31, 2009 and was awarded temporary total disability benefits for 400 weeks through November 29, 2016.
On November 20, 2018, Paguia filed a request for catastrophic designation. Sunbelt objected, arguing that Paguia’s request was barred by the two-year statute of limitations contained in O.C.G.A. §34-9-104(b) for filing a change of condition claim. After an evidentiary hearing, the administrative law judge rejected the statute of limitations defense and found Paguia’s injury to be catastrophic.
The Appellate Division of the State Board adopted the findings of the administrative law judge and added additional findings of fact and conclusions of law on the statute of limitations issue. The superior court affirmed the decision and the Court of Appeals granted Sunbelt’s application for discretionary appeal.
The Court of Appeals cited its’ prior case law interpreting the statutory language of O.C.G.A. §34-9-104(b), which allows a claimant to seek additional temporary total (TTD) or temporary partial (TPD) disability benefits provided that not more than two years have elapsed since the date the last payment of income benefits was actually made.
The Court noted that it had previously “deferred” to the Appellate Division’s determination that a payment is considered “actually made” under O.C.G.A. §34-9-104(b) when it is placed in the mail to the recipient, citing the whole court decision in Lane v. Williams Plant Svcs., 330 Ga. App. 416, 766 SE2d 482 (2014).
In Paguia, the Court of Appeals initially reviewed the evidence presented at hearing by Sunbelt to meet its’ burden of proof on the statute of limitations issue. The claims adjuster assigned to the claim testified that she completed a claims payment authorization for her assistant to issue a check for Paguia’s last two weeks of TTD benefits. The form was then sent to the assistant to create a check in the computer system and a check is printed in their office. She added that the post office comes every day and picks the checks up and they’re sent out some time between 3:30 p.m. and 4:30 p.m.
The claim representative admitted she did not know when the assistant created the check for Paguia or when it was placed in the location where the post office picked it up. However, she expressed her opinion that the check was mailed on November 15, 2016, the date printed on the check.
The Appellate Division of the Board found that the claim representative completed the authorization form on November 14, 2016, a check was printed, and it was picked up for mailing. However, it found that Sunbelt presented no evidence about the amount of time that elapsed between the various steps. Therefore, the Appellate Division concluded there was insufficient evidence to determine when the check was mailed other than some time after November 14th.
Thus, the Appellate Division held that Sunbelt failed to meet its’ burden of proof to prove the statute of limitations defense under O.C.G.A. §34-9-104(b). Finding some evidence to support the Appellate Division’s decision, the Court of Appeals accepted the findings of the Appellate Division.
In its’ opinion, the Court of Appeals pointed out that evidence of an insurance company’s routine practice regarding the issuance and mailing of checks can be used to prove how and when a specific check was mailed under O.C.G.A. §24-4-406. However, it affirmed the finding of the Appellate Division that Sunbelt failed to meet its’ burden by not presenting evidence of the time between each step of its’ routine practice creating and mailing payments.
The Court of Appeals also noted that an amicus brief had been submitted by the Georgia Legal Foundation. The amicus brief, as did Paguia, argued that the Court’s prior holding in Lane that a payment is ‘actually made” under O.C.G.A. §34-9-104(b) when it is mailed should be overruled.
Paguia argued that the date a payment was “actually made” should instead begin to run from the date benefits are suspended as shown on the W-2 rather than when the payment is mailed. It was argued that the Court’s interpretation in Lane was unconstitutional because it deprived claimants of proper notice in violation of the equal protection and due process clauses of the Georgia and United States Constitutions. It was also argued that Lane allowed the employer control over the statute of limitations since it only begins to run when the employer has mailed the last payment of benefits.
The Court of Appeals expressed sympathy for the arguments against the holding in Lane and wrote that they were worth consideration in a proper case. The Court’s opinion noted the rule in Lane was problematic in practice as there is no way for an employee to determine with certainty when a payment was mailed.
The Court’s opinion further states that the purposes of the statute of limitations are ill-served when the date a limitation period begins to run becomes an extensively litigated question of fact, as in the Paguia case. The Court also expressed concern that the rule was subject to manipulation.
The Court noted that the Appellate Division of the Board might have reconsidered its’ prior determination deferred to by the Court of Appeals in Lane, but the Appellate Division was now bound by the Court’s Lane decision. However, exercising judicial restraint, the Court declined to overrule Lane since it decided Paguia on narrower grounds.
The Court, however, concluded its’ discussion of the Lane case by urging the General Assembly to consider what it called the substantial statutory construction arguments raised by Paguia and the amicus brief.
Paguia certainly shows the importance of an employer/insurer clearly presenting evidence to show when a check was mailed for statute of limitations purposes under O.C.G.A. §34-9-104(b). Since the change of condition claim was found not to be barred by the statute of limitations, the Board’s designation of the claim as catastrophic potentially provides the claimant with lifetime TTD benefits. If the statute of limitations had applied, the claimant would have been barred from receiving any further TTD or TPD benefits.
This opinion is also significant as it shows there is an effort by some to overrule the mailbox rule for change of condition claims under O.C.G.A. §34-9-104(b), either judicially or legislatively. The Court’s opinion shows that it may reconsider the issue in a proper case. Whether the General Assembly will act on the Court’s invitation to consider the issue will need to be monitored during the next legislative session.