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COURT OF APPEALS OF VIRGINIA
Present:   Judges Benton, Elder and Senior Judge Hodges
Argued at Richmond, Virginia
LAWRENCE E. McFADDEN
                                                                                                                        OPINION BY
v.                                                                                               Record No. 1614-03-2   JUDGE LARRY G. ELDER
JANUARY 20, 2004
THE CARPET HOUSE AND
VIRGINIA COMMERCE GROUP
SELF-INSURANCE ASSOCIATION
FROM THE VIRGINIA WORKERS’ COMPENSATION COMISSION
Leila H. Kilgore (Benjamin M. Smith, Jr.; Kilgore & Smith, on
brief), for appellant.
Kathryn Spruill Lingle (Theisen & Lingle, P.C., on brief), for
appellees.
Lawrence E. McFadden (claimant) appeals a decision of the Workers’ Compensation
Commission holding that the Carpet House and the Virginia Commerce Group Self-Insurance
Association (employer) were entitled to a credit for temporary total disability payments they
made to claimant pursuant to an outstanding award after he returned to his pre-injury
employment.  On appeal, claimant contends employer’s payments were not voluntary payments
within the meaning of Code § 65.2-520 and, thus, that employer was not entitled to credit.  We
hold the express provisions of Code §§ 65.2-708 and -712 governing the termination of an award
based on a change in condition control and that the commission erred in construing Code
§ 65.2-520 to allow the requested credit.  Thus, we vacate the commission’s order granting the
requested credit and remand for further proceedings consistent with this opinion.




I.
BACKGROUND
On August 2, 2000, claimant sustained a compensable injury to his right knee while
working for employer.  By order entered October 26, 2000, he was awarded temporary total
disability benefits of $606 per week from August 9, 2000, and continuing.  Claimant returned to
light-duty work for employer on December 6, 2000, at a wage lower than his pre-injury wage.
The commission entered an award for temporary partial disability benefits of $606 per week
from that date and continuing.1
Claimant was released for full-duty work for employer on December 21, 2000, and
received his full pre-injury wage.2  However, employer continued to pay him temporary partial
disability benefits of $606 per week through September 13, 2001.
On September 13, 2001, employer filed an application for a hearing seeking to terminate
the outstanding award based on claimant’s release to return to pre-injury employment on
December 21, 2000.  Employer also sought a credit for the overpayment of compensation
benefits from December 21, 2000, through September 13, 2001.
The parties resolved the termination question by executing and submitting to the
commission a Termination of Wage Loss Award form confirming claimant’s December 21, 2000
return to pre-injury employment.  Employer’s request for credit for the overpayment remained
unresolved.  The commission did not refer it to the hearing docket because employer failed to
submit documentation to support its request for credit.
1                                                                                                 $606 per week was the maximum weekly compensation benefit to which claimant was
entitled under the Act.  Claimant’s pre-injury average weekly wage was $1,412.37.  Code
§ 65.2-500 limits a claimant’s benefits by the average weekly wage of the Commonwealth, as
defined therein, a figure calculated annually.
2 It appears claimant subsequently left employer’s employ, but no issues related to that
departure are involved in this appeal.
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On January 10, 2002, employer filed an application again seeking credit for the
overpayments.  However, employer withdrew that application, which was dismissed by order of
February 19, 2002.
On August 14, 2002, employer filed an application alleging claimant returned to work for
employer on December 4, 2000, and was released to return to his pre-injury work on December
21, 2000, but was paid through September 13, 2001.  Employer again sought credit for the
approximately $23,000 in overpayments made between claimant’s return to pre-injury work on
December 22, 2000, and September 13, 2001, the date on which employer terminated payments.
At a hearing before the deputy commissioner on October 3, 2002, the parties stipulated
that appellant returned to work for employer on December 3, 2000 and that appellant’s physician
released him to “full duty work” as of December 21, 2000.  They agreed that both the Carpet
House and “the carrier, Comp Management,” were aware of claimant’s return to work in
December 2000, that the Carpet House “did produce the wage information to Comp
Management,” and that employer/carrier continued claimant’s temporary partial disability
payments in error.  The parties framed the issue as whether employer was entitled to a credit for
the overpayment.  Claimant’s defense was that both the employer and the insurer knew of his
return to work.
By opinion of October 9, 2002, the deputy commissioner awarded employer the
requested credit.  The deputy concluded that a voluntary payment for which an employer is
entitled to credit under Code § 65.2-520 is “any type of payment not required under the Act,”
including “an overpayment as a result of a mistake by the employer.”  The deputy held that
granting employer the requested credit was proper because denying a credit would unjustly
enrich the claimant.
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Claimant requested review by the commission.  The commission unanimously concluded
the payments were voluntary payments for which employer was entitled to credit.
Claimant noted his appeal to this Court.
II.
ANALYSIS
Claimant contends the commission erroneously awarded employer credit for temporary
disability compensation it paid pursuant to an outstanding award for the period after claimant
returned to work for employer and before employer filed an application for a change in condition
to terminate the award.  We hold the commission’s award of credit under Code § 65.2-520 was
error, and we vacate the award.
Code § 65.2-520 provides as follows:
Any payments made by the employer to the injured employee
during the period of his disability, . . . which by the terms of this
title were not due and payable when made, may, subject to the
approval of the Commission, be deducted from the amount to be
paid as compensation provided that, in the case of disability, such
deductions shall be made by reducing the amount of the weekly
payment in an amount not to exceed one-fourth of the amount of
the weekly payment for as long as is necessary for the employer to
recover his voluntary payment.
Code § 65.2-520 (emphases added).3  In order to determine whether payments made by an
employer pursuant to an outstanding award after it receives notice that an employee has returned
to work may ever constitute voluntary payments under Code § 65.2-520, we examine the
3 Both employer and the commission rely on the decision of Dodson v. Newport News
Shipbuilding & Dry Dock Co., No. 0278-99-1, 1999 WL 1133301 (Va. Ct. App. Aug. 10, 1999),
in which a panel of this Court interpreted the term “voluntary payments” as used in Code
§ 65.2-520.  Dodson, a memorandum decision, lacks precedential value in this Court, see, e.g.,
Fairfax County Sch. Bd. v. Rose, 29 Va. App. 32, 39 n.3, 509 S.E.2d 525, 528 n.3 (1999) (en
banc), and in any event is factually distinguishable, see Dodson, 1999 WL at **1-2 (decided in
the context of an employer’s request for credit for payments made pursuant to federal workers’
compensation statute).
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mechanism by which an employer seeks to terminate temporary disability payments due under
an outstanding award.
Code § 65.2-708 provides that where an employer seeks to terminate or modify an
outstanding award based on a change in the claimant’s condition, “[n]o such review shall affect
such award as regards any moneys paid except pursuant to [§] 65.2-712 . . .                       .”4  Under Code
§ 65.2-712, an employer shall not be entitled to credit for sums already paid except where a
claimant has committed fraud or misrepresentation or has failed to meet his duty to report a
return to work or change in earnings.5  See Collins v. Dep’t of Alcoholic Beverage Control, 21
Va. App. 671, 676-77, 467 S.E.2d 279, 281-82 (citing Bristol Door & Lumber Co. v. Hinkle, 157
Va. 474, 161 S.E. 902 (1932)), aff’d on reh’g en banc, 22 Va. App. 625, 472 S.E.2d 287 (1996).
4 Code § 65.2-708(A) provides more fully as follows:
Upon its own motion or upon the application of any party
in interest, on the ground of a change in condition, the Commission
may review any award and on such review may make an award
ending, diminishing or increasing the compensation previously
awarded, subject to the maximum or minimum provided in this
title, and shall immediately send to the parties a copy of the
award. . .                                                                                        .  No such review shall affect such award as regards any
moneys paid except pursuant to [§] 65.2-712 . . .
5 Code § 65.2-712 provides more fully as follows:
So long as an employee . . . receives payment of compensation
under this title, any such person shall have a duty immediately to
disclose to the employer, when the employer is self-insured, or
insurer in all other cases, any . . . return to employment [or]
increase in his earnings . . .                                                                    .  Any payment to a claimant by an
employer or insurer which is later determined by the Commission
to have been procured by the employee . . . by fraud,
misrepresentation, or failure to report any . . . return to
employment [or] increase in earnings, . . . may be recovered from
the claimant . . . by the employer or insurer either by way of credit
against future compensation payments due the claimant . . . or by
action at law against the claimant . . .
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Here, employer conceded that both the Carpet House and the Virginia Commerce Group
Self-Insurance Association had timely notice of claimant’s return to work at his pre-injury wage.
See Wash. Metro. Area Transit Auth. v. Rogers, 17 Va. App. 657, 440 S.E.2d 142 (1994) (in
case of self-insured employer, holding claimant’s return to work for same employer constituted
notice of return to employment required by Code § 65.2-712).  Whether employer or carrier had
notice is not in issue.
We discussed the interplay between Code §§ 65.2-708 and 65.2-712 on the one hand and
Code § 65.2-520 on the other in Collins.  Collins involved an incorrect calculation of the
claimant’s average weekly wage, upon which an award was entered.   21 Va. App. at 673, 467
S.E.2d at 280.  We expressly held in Collins that temporary disability payments made pursuant to
an award based on a memorandum of agreement were not “voluntary payments” within the
meaning of Code § 65.2-520.  Id. at 675-76, 467 S.E.2d at 281; see also Dep’t of Corr. v. Brown,
259 Va. 697, 706, 529 S.E.2d 96, 101 (2000) (noting principle of statutory construction that
where general and specific statutes conflict, “the more specific statute prevails”).  Nevertheless,
we acknowledged an exception to the statutory rule that an award may be altered only
prospectively.  Collins, 21 Va. App. at 678-81, 467 S.E.2d at 282-84.  We upheld the
commission’s application of the doctrine of imposition to amend the award to reflect the
corrected average weekly wage based on mutual mistake and its award to employer of a credit
for the resulting overpayment.  Id.
We again upheld the commission’s exercise of its equitable powers in the more recent
case of Lam v. Kawneer Co., 38 Va. App. 515, 566 S.E.2d 874 (2002).  In Lam, a claimant
sought more than three years of temporary disability compensation past-due under an existing
award, as well as a penalty for untimely payment.  Id. at 518, 566 S.E.2d at 875.  Lam had
notified Kawneer of his return to work for a different employer but then failed to respond to
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Kawneer’s requests for information concerning his date of employment and new earnings.  Id. at
517, 566 S.E.2d at 875.  Kawneer ceased paying benefits under the award as of the date of its
receipt of Lam’s letter but remained unable to obtain the specific information it needed to file a
change-in-condition application to terminate the award.  Id. at 518, 566 S.E.2d at 875.  We
upheld the commission’s application of the doctrine of imposition to deny Lam’s claim for
benefits and a penalty based on the fact that he had suffered no wage loss and would be unjustly
enriched if allowed to recover under the outstanding award.  Id. at 518-20, 566 S.E.2d at 875-86.
Here, employer, not claimant, filed the application.  Claimant had returned to work for
the same employer, and employer’s failure to request termination of the award on an earlier date
did not result from any non-cooperation on the part of claimant.  Finally, despite employer’s
request that it do so, the commission did not purport to exercise its equitable powers to relieve
employer from the consequences of failing to act more promptly to terminate the temporary
partial disability award based on claimant’s return to his pre-injury employment.6  Instead,
without expressly citing Code § 65.2-520, the commission interpreted the “voluntary payments”
language of that statute so broadly as to nullify the provisions of Code §§ 65.2-708 and 65.2-712
in contravention to our holding in Collins.  As set out above, those code sections provide that,
except in certain limited circumstances not applicable here, an employer seeking to terminate an
outstanding award may affect that award only prospectively.7
6 Thus, we do not consider whether the commission might properly have awarded
employer a credit based on the doctrine of imposition or some other equitable power.  Cf.
Overhead Door Co. of  Norfolk v. Lewis, 29 Va. App. 52, 61, 509 S.E.2d 535, 539 (1999)
(noting, in context of an employer’s request for credit for overpayment based on its subrogation
rights, that “[w]e are unaware of any Virginia appellate cases applying the doctrine of imposition
to permit the commission to exercise jurisdiction or to grant a form of relief never authorized by
the Act under any circumstances, and we are unwilling to give the doctrine such an interpretation
under the facts of this case”).
7 Employer acknowledges the general principle that an employer seeking to terminate an
award based on a change in condition must pay compensation due pursuant to the award through
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Permitting the commission to interpret Code § 65.2-520 to routinely grant credit for
moneys an employer has paid pursuant to an award prior to requesting termination of the award
would contravene clear legislative intent in Code §§ 65.2-708 and 65.2-712.  See Brown, 259
Va. at 706, 529 S.E.2d at 101 (“[A] specific statute cannot be controlled or nullified by a statute
of general application unless the legislature clearly intended such a result.”).  Although our
holding that the commission lacked authority to grant the requested credit under Code § 65.2-520
will enrich claimant, the legislature’s enactment of Code §§ 65.2-708 and 65.2-712 indicates its
determination that this is an acceptable result in order to protect the integrity of the commission’s
awards and the individuals who often rely heavily on the compensation benefits paid pursuant to
those awards.  See Manchester Bd. & Paper Co. v. Parker, 201 Va. 328, 330-32, 111 S.E.2d 453,
455-56 (1959) (discussing purpose of statutory requirement that award modifications under Code
§ 65-95, predecessor to present Code § 65.2-708, may be prospective only).
III.
For these reasons, we hold the express provisions of Code §§ 65.2-708 and -712
governing the termination of an award based on a change in condition control and that the
commission erred in construing Code § 65.2-520 to allow the requested credit.  Thus, we vacate
the date of filing of the application.  See, e.g., Manchester Bd. & Paper Co. v. Parker, 201 Va.
328, 330-32, 111 S.E.2d 453, 455-56 (1959) (discussing commission’s promulgation of rule to
give effect to terms of predecessor to Code § 65.2-708 prohibiting retroactive modification of
awards).  However, it points to Rule 1.4(C) of the Workers’ Compensation Commission, which
provides exceptions to this principle and permits termination of payments under an award as of
the date of a claimant’s return to work.  It argues that Rule 1.4(C) supports its request for a
credit.
Assuming without deciding that the exceptions contained in Rule 1.4(C) do not
contravene the express language of Code § 65.2-708, we note the commission rejected a nearly
identical argument made under the predecessor to present Rule 1.4(C).  Williams v. Richfood,
Inc., No. 146-94-52 (Va. Workers’ Comp. Comm’n Sept. 24, 1992) (holding former Rule 13
“makes no provision for a credit” when employer is permitted by rule to terminate payments
upon happening of certain condition, refusal of employment or medical attention, but instead
pays compensation through date of filing of change-in-condition application).
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the commission’s order granting the requested credit and remand to the commission for further
proceedings consistent with this opinion.
Vacated and remanded.
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