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Law Court upholds $140,000 penalty against insurer for late filing of Notice of Controversy

Matthew Doucette, a 29 year-old Sysco warehouse worker, injured his back in April 2004. He was on light duty for two weeks but lost no earnings as a result of the injury. Sysco terminated his employment for reasons unrelated to his injury in May 2004 and Doucette had no further problems with his back until 2008, when he reinjured it while working for a different employer. In January 2009, Doucette filed a petition seeking compensation from his April 2004 date of injury to the present and continuing. The hearing officer found that Doucette was entitled to the protection of the Act for the 2004 injury even though he lost no earnings because of it. Due to a procedural glitch, the insurance company failed to file the Notice of Controversy contesting the claim within the required 14 day time period. The insurance company filed the Notice on the morning of the 15th day. The hearing officer found that the insurance company had violated the “14 day rule” requiring insurance companies to pay or contest claims within 14 days and ordered the insurance company to pay total incapacity benefits from the original date of injury, April 2004, forward, even though Doucette lost no earnings as a result of that injury. The result was a $140,000 award to Doucette. The Court acknowledged that while the result may be unfair to the insurance company, it had no authority to void the penalty.