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					VIRGINIA:                                                              08/13/2001

ARCHIE M. DAIL (Deceased), Employee
JOYCE O. DAIL (Widow), Claimant
                                                                Opinion by DUDLEY
v.                  VWC File No. 161-83-22


Gary R. West, Esquire
Patten, Wornom, Hatten and Diamondstein, L.C.
12350 Jefferson Avenue
Suite 360
Newport News, VA 23602
for the Claimant.

Richard B. Donaldson, Jr., Esquire
Jones, Blechman, Woltz and Kelly, P.C.
P.O. Box 12888
Newport News, VA 23612-2888
for the Defendants.

    REVIEW on the record by Commissioner Tarr, Commissioner Diamond, and
Commissioner Dudley at Richmond, Virginia.

      This case is before the Commission on the claimant‟s request for Review of the

Deputy Commissioner‟s February 14, 2001, Opinion finding that the employer did not

owe a penalty on late payments made pursuant to the Commission‟s Opinion of

February 12, 1997. For the reasons set forth, we affirm.

      On February 2, 1993, the employee filed a claim alleging occupational diseases,

asbestosis and mesothelioma, and seeking temporary total disability benefits from

September 10, 1992, through August 8, 1993, and from April 8, 1994, through
                                                                  VWC File No. 161-83-22

November 4, 1995. He died on November 6, 1995. Prior to his death, the employee

entered into third party settlements totaling $25,483. On February 8, 1996, his widow

and dependant child filed a claim for death benefits, widow‟s benefits, and dependent

child‟s benefits.     After the employee‟s death, the claimants entered into third party

settlements totaling $310,000.1         In a February 12, 1997, Opinion, the Commission

entered the following award:

                 The employer shall pay to the claimant her pro rata share of
                 attorney‟s fees for disability benefits, death benefits, and
                 burial expenses in the amount of $25,766.79, calculated at
                 the settlement/cost ratio of 33.26%, which represents
                 payment through December 27, 1996. [33.26% times
                 ($49,605.41 [disability benefits]) ($22,865.41 [death
                 benefits]) ($5,000.00 [burial expenses]).] Thereafter, the
                 employer shall remit to the claimant on a quarterly basis
                 those amounts due as her pro rata attorney‟s fee pursuant to
                 Va. Code Ann. § 65.2-313, until such time as she has been
                 reimbursed in full for those fees.

                        . . . . (Op. at 4)

       In an April 14, 1997, letter to claimant‟s counsel, employer‟s counsel forwarded

$25,766.79 to the claimant, as well as the first quarterly payment of $1,651.69.

Employer‟s counsel further stated that additional checks in the amount of $1,651.69

would be paid quarterly until all funds due were paid.

           Third party settlements total $335,483.
                                                                   VWC File No. 161-83-22

       On October 16, 2000, the claimant filed a letter claim seeking a penalty for

two late quarterly payments pursuant to the February 12, 1997, Opinion.2 She contends

that   the   payments     constitute    “compensation      entitlement”   as     defined   by

Virginia Code § 65.2-313.

       The employer does not dispute that these payments were late. However, the

employer contends that assessment of a penalty is not appropriate because the

payments were for reimbursement of attorney‟s fees and costs, not “compensation.”

       Code § 65.2-313 states:

              In any action or claim for damages by an employee, his
              personal representative or other person against any person
              other than the employer under § 65.2-310, or in any action
              brought, or claim asserted, by the employer under his right of
              subrogation provided for in § 65.2-309, if a recovery is
              effected, the employer shall pay to the employee a
              percentage of each further entitlement as it is submitted
              equal to the ratio the total attorney's fees and costs bear to
              the total third-party recovery until such time as the accrued
              post-recovery entitlement equals that sum which is the
              difference between the gross recovery and the employer's
              compensation lien. In ordering payments under this section,
              the Commission shall take into account any apportionment
              made pursuant to § 65.2-311.

                     For the purposes of this section, „entitlement’ means
              compensation and expenses for medical, surgical and
              hospital attention and funeral expenses to which the
              claimant is entitled under the provisions of this title, which
              entitlements are related to the injury for which the third-party
              recovery was effected.

         The claimant seeks a penalty for the quarterly payment due for the following periods:
June 28 to September 28, 1999, and June 28 to September 27, 2000.
                                                                    VWC File No. 161-83-22

       The claimant‟s argument that the quarterly payments referenced in the

Commission‟s February 12, 1997, Opinion are compensation “entitlements” is

misplaced. The first payment in the amount of $25,766.69 for disability benefits, death

benefits, and burial expenses, is an “entitlement” pursuant to § 65.2-313, which

constitutes compensation. However, the subsequent quarterly payments represent the

employer‟s pro rata share of attorney‟s fees due the claimant, which the employer is

required to pay pursuant to Virginia Code § 65.2-311.           See also Wood v. Caudle-

Hyatt Inc., 18 Va. App. 391, 444 S.E.2d 3 (1994); Circuit City Stores, Inc. v. Bower, 243

Va. 183, 186, 413 S.E.2d 55, 56 (1992).           Code § 65.2-313 specifically references

§ 65.2-311.

       The employer‟s responsibility for the claimant‟s entitlement and for her attorney‟s

fees has been reduced pro rata. Had the employer paid the entitlement portion of the

award late, a penalty may have been appropriate. However, the late payment was

limited to that portion of the Opinion that ordered the employer to pay its pro rata share

of the claimant‟s attorney‟s fees. The law does not support the assessment of a penalty

on the late payment of attorney‟s fees.3

       Accordingly, the Deputy Commissioner‟s Opinion is AFFIRMED.

       This matter is hereby removed from the Review docket.

         We reiterate the Deputy Commissioner‟s suggestion that if this practice continues, the
claimant seek a Show Cause Order from the Commission requiring the employer to show cause
why payments are not being made in a timely manner.
                                                               VWC File No. 161-83-22


      This Opinion shall be final unless appealed to the Virginia Court of Appeals within

30 days of receipt.

cc:   Ms. Joyce O. Dail
      7501 River Road
      Apartment 16-A
      Newport News, VA 23607

      Amoco Oil Refinery
      2201 Goodwin Neck Road
      Seaford, VA 23692

      BP Amoco Corporation
      200 East Randolph Drive
      Chicago, Il 60601