SIGNIFICANT CASE SUMMARIES

Maryland Case Summary

Zukowski, et al v. Anne Arundel County
Supreme Court of Maryland
2025 Md. LEXIS 141

Decided: April 24, 2025

The Court interpreted the terms “benefits” in Md. Code Ann., Lab. & Empl. § 9-610 and “compensation” in Md. Code Ann., Lab. & Empl. § 9-731 to be interchangeable, referring to monetary benefits awarded to the injured employee. Therefore, the statutory offset under § 9-610(a)(1) must be applied before calculating the attorney’s fee.

Background

Appellants are County police officers who had unrelated, but compensable work injuries and shared the same claimants’ attorney before the WCC. In both claims, the WCC awarded Claimants permanence (PPD) benefits, and confirmed that each officer had received disability retirement benefits (ADR benefits) per their Employers’ disability pension program, related to the same date of injury. Labor and Employment 9-610 provides that an offset is to be applied to PPD for the same injury to prevent ‘double dipping.’ The 9-610 offset was applied to the PPD benefits, and the attorney’s fee was calculated based on the offset (reduced) amount of PPD payable to Claimants.

After application of the offset, there was a much-reduced attorney’s fee, as compared to what the attorney’s fee would have been if the attorney’s fee was deducted from the PPD ‘award amount’ and then the offset was applied to the PPD ‘award amount.’ For example: if Claimant receives a 20K Award, the ADR offset is 18K. The WCC decided that the attorney’s fee was equal to the scheduled percent attorney fee based on $2,000. Claimants argue that the Claimant’s attorney should receive the scheduled percent attorney fee based on $20,000, and then the offset should be applied to the balance of the PPD Award owed to Claimant. The WCC Awards and payments of fees were appealed to the Circuit Court by Appellants. The Circuit Court and the Appellate Court of Maryland affirmed. The Supreme Court issued a writ of certiorari to answer this question:” Is an attorney’s fee under L&E 9-731 calculated before or after applying the statutory offset under L&E 9-610(a)(1)?

Holding

The Supreme Court finds that an attorney’s fee is calculated after applying the offset and affirmed the judgment of the lower courts in a strongly worded opinion. The Court finds the WCC must assess PPD and determine if any ADR offset applies. The attorney’s fee, per 9-731, must be equal to the scheduled percentage of the compensation that is payable to Claimant after the offset has been applied. It holds that finding otherwise would result in nonsensical and untenable outcomes. If Claimant is barred from double dipping by the enactment of the 9-610 offset, why then would Claimant’s attorney be allowed to collect a fee larger than Claimant’s own recovery? Also, the attorney’s fee is a lien on the Claimant’s PPD recovery and so if the attorney’s fee is taken out before the application of the offset, from what monies is the attorney paid? The Court finds the attorney’s fee is a lien on the actual recovery by the Claimant, and therefore the offset must be calculated before the attorney’s fee is calculated.

Takeaway

The Court finds that application of the offset under 9-610 to the Claimant’s PPD recovery must precede calculation of an attorney’s fee related to the Claimant’s recovery and that this sequence of application is constitutional, consistent with statutory interpretation of 9-610 and 9-731, and avoids blatantly illogical and unfair outcomes to claimants, employers, and insurers.

Questions about this case can be directed to Ruth Jacobs at (443) 641-0573 or rjacobs@tthlaw.com.