                     COURT OF APPEALS OF VIRGINIA


Present: Judges Coleman, Elder and Senior Judge Cole
Argued at Richmond, Virginia


TOWN OF ASHLAND, ET AL.
                                          MEMORANDUM OPINION * BY
v.          Record No. 0829-96-2           JUDGE LARRY G. ELDER
                                             NOVEMBER 26, 1996
ROBERT JOSEPH HENDRICK


          FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

            P. Dawn Bishop (Sands, Anderson, Marks &
            Miller, on briefs), for appellants.

            Gerald G. Lutkenhaus for appellee.



     The Town of Ashland and Virginia Mutual Group Self-Insurance

Association (appellants) appeal from a decision of the Workers'

Compensation Commission (commission) awarding benefits to

Robert J. Hendrick (appellee) and finding that his claim was not

barred by the statute of limitations.    Appellants contend that

the commission erred (1) when it let stand the conclusion of the

deputy commissioner that the Town of Ashland (Town) was subject

to the doctrine of estoppel and (2) when it held that the Town's

actions estopped it from asserting the statute of limitations as

a bar to appellee's claim.    For the reasons that follow, we

affirm.




     *
      Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
                                  I.

                               FACTS

     On February 13, 1985, appellee, then an equipment operator

for the Town of Ashland (Town), sustained a compensable injury to

his left foot and ankle.   Soon after the accident, Harold

Mitchell, who was both the Town's treasurer and contact person

for any workers' compensation claims made against it, told

appellee that if he needed anything "to come to him, and he would

take care of the paperwork."
     During the next two years the Town initiated all of the

paperwork signed by appellee regarding his workers' compensation

claim.   In 1985, the parties executed a Memorandum of Agreement

and an Agreed Statement of Fact regarding appellee's award of

benefits for the five months of work he missed following his

accident.   In 1988, the parties executed a Supplemental

Memorandum of Agreement and another Agreed Statement of Fact to

formalize another award of benefits for a month-long absence from

work that ended on January 18, 1987.      In addition, whenever

appellee received a check from the Town's insurance carrier he

would endorse it to the Town because the Town always paid him his

full salary during his absences.       Each agreement or check was

initially received by Mr. Mitchell from the Town's workers'

compensation insurance carrier.    Upon receipt, Mr. Mitchell would

call appellee in from where he was working and direct him to sign

each document as required.




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     Following his return to work in July, 1985, the Town also

established a simple procedure for appellee to receive his full

wage following an injury-related absence.    Appellee would report

any such absences to his supervisor, who indicated them on his

weekly timesheets by marking "WC."     This signified to the town

that the time missed was covered under workers' compensation and

should not be deducted from appellee's accrued sick leave or

vacation time.   Appellee was paid his full wage for every
injury-related absence he reported to his supervisor from 1985

until 1995.

     After the expiration of appellee's last formal award of

compensation on January 18, 1987, appellee continued to miss

substantial periods of work due to multiple surgeries related to

his injury.    However, Mr. Mitchell failed to communicate with the

Town's carrier regarding any of appellee's subsequent absences

until August, 1991, when he learned that the carrier would no

longer reimburse the Town for appellee's claim because it was

time-barred.   Despite the fact that Mr. Mitchell ceased asking

appellee to sign paperwork after 1988, appellee did not think

there was a problem with his claim because he continued reporting

his injury-related absences to his supervisor and receiving his

full wage for his lost time.   In addition, on at least one

occasion, appellee took a "problem" medical bill to Mr. Mitchell

who "took care of it" by calling the Town's carrier.

     In March, 1994, appellee's left great toe was amputated




                                 -3-
because of damage sustained when he was injured in 1985.    After

the surgery, appellee requested additional compensation for the

loss of his toe, and the Town's carrier denied his claim, stating

that it was time-barred under Code § 65.2-708(A).   The carrier

also sent appellee a copy of the commission's workers'

compensation guide, which was the first time appellee had seen

the guide.   In the spring or summer of 1994, appellee met with

Mr. Mitchell and the Town manager, who informed him that he would

not receive additional compensation from the Town for the

amputation of his toe because his claim was barred by the statute

of limitations.
     On October 31, 1994, appellee filed an application for

compensation with the commission that was subsequently denied by

a claims examiner.   Appellee appealed this decision, and the

commission reversed and remanded the case to a deputy

commissioner for a hearing to determine whether appellants were

estopped from asserting the statute of limitations as a bar.

After a hearing, the deputy commissioner awarded compensation to

appellee, holding that the doctrine of estoppel applied to

governmental entities and prevented appellants from asserting the

statute of limitations as a bar.   The Town appealed the decision

of the deputy, and the full commission affirmed.

                                II.

         DOCTRINE OF ESTOPPEL AND GOVERNMENTAL ENTITIES

     Appellants argue that the commission erred in ruling that




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the Town was estopped from raising the statute of limitations as

a bar because governmental entities are not subject to the

doctrine of estoppel.   We disagree.

     We hold that a governmental entity is subject to the

doctrine of estoppel when it asserts the statute of limitations

as a bar to a workers' compensation claim filed against it.      "[A]

municipal corporation has both governmental and proprietary

functions."   Bialk v. City of Hampton, 242 Va. 56, 58, 405 S.E.2d

619, 620 (1991).   It is well established that the doctrine of

estoppel does not apply to the state or its political

subdivisions in the discharge of their governmental functions but

that it does apply when the governmental entity is acting in its

proprietary capacity.   Monument Associates v. Arlington County

Board, 242 Va. 145, 151, 408 S.E.2d 889, 892 (1991) (citing

Westminster-Canterbury v. City of Virginia Beach, 238 Va. 493,

503, 385 S.E.2d 561, 566 (1989)).     An act by a governmental

entity is "governmental" if it is "done . . . for the common

good, without the element of corporate benefit or pecuniary

profit."   Bialk, 242 Va. at 59, 405 S.E.2d at 621 (citing Fenon

v. City of Norfolk, 203 Va. 551, 556, 125 S.E.2d 808, 812

(1962)).   In this case, the actions of the Town that appellee

asserts estop it from raising the statute of limitations were the

handling and processing of an employee's workers' compensation

claim by a Town officer following an accident.

     We hold that the Town acted in a proprietary capacity when




                                -5-
it handled and processed an employee's claim.   By setting up

procedures for appellee to report his injury-related absences and

handling paperwork related to appellee's work-related injury, the

Town was attempting to provide appellee with the benefits to

which he was entitled under the Act and to limit its litigation

costs.   The record shows that Mr. Mitchell, the Town's treasurer

and contact person for workers' compensation claims, told

appellee that he would take care of appellee's claim, initiated

two Memoranda of Agreement with appellee, communicated with the

Town's insurance carrier and approved the payment of appellee's

full wage for injury-related absences for ten years.     Mr.

Mitchell's actions indicate that they were intended to benefit

both the Town and appellee and not the general public.   In

addition, by attempting to limit litigation costs by executing

agreements with appellee and by seeking reimbursement from the

Town's carrier, Mr. Mitchell's actions contained the element of

corporate benefit.   VEPCO v. Hampton Redevelopment and Housing
Authority, 217 Va. 30, 36, 225 S.E.2d 364, 369 (1976) (holding

that Housing Authority acts in proprietary capacity when it

operates a housing project because the service "inures to the

benefit of a few rather than to 'the common good of all'");     City

of Richmond v. Virginia Bonded Warehouse Corp., 148 Va. 60,

72-73, 138 S.E. 503, 507 (1927) (holding that city acts in

proprietary capacity when it installs sprinkler system in private

building because such systems are installed "for the private




                                -6-
benefit and interest of the owner of the building").     We hold

that Mr. Mitchell's actions were proprietary in nature and that

the Town, as a governmental entity, is subject to the doctrine of

estoppel when it asserts that appellee's workers' compensation

claim is barred by the statute of limitations.

                                III.

               APPLICATION OF THE DOCTRINE OF ESTOPPEL

     Appellants contend that the commission erred in concluding

that estoppel applies to them in this case because appellee

failed to prove that the Town engaged in a deliberate, fraudulent

effort to prejudice his right to file a claim within the

limitation period.   We disagree.
     As a preliminary matter, we note that appellants set forth

an incorrect legal test for the application of equitable

estoppel.   While appellants correctly assert that the doctrine of

estoppel applies to those situations where a claimant shows that

an employer deliberately intended to cause prejudice through acts

of fraud or concealment, these are not the only bases that will

estop an employer from asserting a statute of limitations

defense.    The doctrine of estoppel does not require a claimant to

prove either that an employer's representation was false or that

the employer made the representation with the intent to induce

reliance.    Cibula v. Allied Fibers & Plastics, 14 Va. App. 319,

325, 416 S.E.2d 708, 711 (1992), aff'd, 245 Va. 337, 428 S.E.2d

905 (1993) (applying Stuart Circle Hosp. v. Alderson, 223 Va.



                                 -7-
205, 208, 288 S.E.2d 445, 446-47 (1982)).    Instead, a claimant

makes a case for estoppel if he proves by clear, precise and

unequivocal evidence that the employer made a representation or

committed any act that did in fact induce the claimant to refrain

from filing a claim within the limitations period.     Id.    Under

this theory of estoppel, the essential elements are "a

representation, reliance, a change of position, and detriment."

T . . . v. T . . ., 216 Va. 867, 873, 224 S.E.2d 148, 152 (1976).
     We hold that the commission did not err in concluding that

appellants are estopped from asserting the statute of limitations

in this case.   The record clearly shows that the Town made

representations and committed acts that induced appellee to fail

to file his claim before the limitations period of Code

§ 65.2-708(A) had expired.   After appellee's injury, Mr. Mitchell

told appellee to come to him if he needed anything and that he

would take care of the paperwork.     Although this general

representation may not have been sufficient to relieve appellee

of his responsibility to file a claim in order to protect his

rights, for almost three years after the injury, Mr. Mitchell

prepared and submitted to the carrier necessary paperwork

required to formalize appellee's entitlement to benefits,

including the execution of two Memoranda of Agreement and two

Agreed Statements of Fact.   In each instance, Mr. Mitchell called

appellee in from the field and "lay [the document] on his desk

with a pen where [appellee] needed to sign."    In addition, the



                                -8-
Town established a system whereby appellee would report his

injury-related absences to his supervisor and receive his full

wage.    Following the last payment of compensation pursuant to the

Supplemental Memorandum of Agreement in 1987, Mr. Mitchell

continued to approve the full payment of wages for appellee's

injury-related absences until 1995.     Appellee stated that he

believed that his workers' compensation claim was being paid

because of Mr. Mitchell's representations and acts:
     I was trusting Harold Mitchell. I mean, he brought me
     all the other forms and I was waiting for him to bring
     me the rest of them and he didn't, and I didn't know
     that there was any to be brought to me.

The record shows that appellee did not receive a workers'

compensation guide until after the amputation of his great toe in

1994.    Because the Town made representations and committed acts

that induced appellee to refrain from filing a timely claim,

appellants are estopped from raising the statute of limitations

as a bar to appellee's claim.

        In light of the foregoing reasons, we affirm the decision of

the commission.

                                                           Affirmed.




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