October 4, 2006

Digest of
Appellate Decisions
September 2006

Kidd-Parker v. WCAB
(Philadelphia School District),
2122 C.D. 2005 (Pa. Cmwlth. 2006)

Employer was entitled to subrogation against Claimant’s third party action, even though Employer had received reimbursement from the Fund.

Commonwealth Court, in a decision issued in April, but not published until September, affirmed the decisions of the Board and the WCJ, which granted Employer subrogation against Claimant’s recovery from a third party tortfeasor, even though Employer had already recovered a substantial portion of its payment to Claimant from the Supersedeas Fund.

Claimant was injured and began receiving benefits in 1996. The benefits were terminated in 1999, retroactive to 1997. At the same time, Claimant settled an action against the third party and recovered nearly $185,000.00. After appeals, Employer applied to the Supersedeas Fund and was reimbursed over $93,000.00. Employer did not disclose Claimant’s receipt of the settlement. Employer then filed to modify benefits and asserted a subrogation lien. The Bureau also sought to recoup monies collected by Employer from the lien. The WCJ determined that Employer’s subrogation was not affected by the Supersedeas Fund payment and directed Claimant to pay Employer and Employer to reimburse the Fund. The Board affirmed. The Court reviewed sections 319 and 443 of the Act and determined that an employer’s right to subrogation was absolute; the purpose of the Supersedeas Fund was to promote fairness to employers who were required to pay benefits during periods of appeal.

The Court disagreed with Claimant, who argued that Employer was only entitled to the benefits made prior to termination, which had been determined after appeal. The Court held that there was no authority for Claimant’s argument. Employer had paid six times the amount of benefits ultimately ordered by the time the appeal was finally decided. Since the Act required Employer to continue to make these payments, all of the payments were “compensation payable” under the Act and were eligible for the subrogation claim. Further, reimbursement from the Supersedeas Fund in no way served as a satisfaction of Employer’s claim, as the two were unrelated and the Fund did not serve to satisfy the third party’s obligations. Finally, the Court agreed that the Board was within its authority to order Employer to reimburse the Fund, since Employer had petitioned the Board to calculate its recovery in light of the subrogation lien and the supersedeas recovery.

SPS Technologies v.
WCAB (Marko),
2486 C.D. 2005 (Pa. Cmwlth. 2006)

Employer’s error in mailing appeal to the Board rather than Commonwealth Court was fatal, when it was not discovered within the time period allowed for appeal.

Commonwealth Court granted Claimant’s motion to quash Employer’s petition for nunc pro tunc review of the WCJ and Board’s decisions to grant Claimant’s petition to review compensation benefits. Employer had filed its appeal with the Board, when it was more properly filed with the Court. By the time the error was discovered, the appeal period had expired. Employer then filed the instant petition to preserve the filing date. Employer argued that the Board was a tribunal under the law with sufficient power to transfer the appeal to the Court, but the Court rejected this argument, based on precedent that held that the Board did not have such power. Lastly, the error of a party’s attorney was not sufficient basis to grant an appeal nunc pro tunc, thus rendering the appeal untimely and requiring its dismissal.

Constructo Temps, Inc. and
Workers’ Compensation Security Fund
v. WCAB (Tennant),
1562 C.D. 2065 (Pa. Cmwlth. 2006)

Security Fund was not subject to penalty for Claimant’s unpaid medical bills, nor was Employer subject to penalty for non-payment of medical bills by the Fund.

Comonwealth Court reversed the decision of the Board, which affirmed and modified the WCJ’s order assessing a 20% penalty against petitioners for failure to pay some of Claimant’s medical bills. Claimant suffered a knee injury in 2000 and started to receive benefits. The WCJ heard several consolidated petitions: Employer’s request for termination, and Claimant’s petitions alleging that medical treatment had not been paid for. The WCJ denied the termination petition and assessed the penalty for Employer/Insurer’s failure to pay medical bills in a timely fashion. The Board agreed and noted that although Insurer was a successor to the original insurer, it was still liable for non-payment because at some point a decision had been made to deny payment. Insurer argued that the Security Fund was not created to be liable for penalties. The Court briefly reviewed those parts of the Act creating the Security Fund, and noted that under the Act penalties were not considered compensation payable. Further, penalties did not serve to make a claimant whole, but were to be used as a means to bring a party into compliance. The Court went on to find that the Security Fund was not an insurer under the Act because SWIF was the only governmental fund identified as an insurer. Using statutory construction principles, the exclusion of the Security Fund as an insurer was mandated since it was not mentioned in the Act. Additionally, Employer was not subject to any penalty, since it had insured its liability through an outside carrier and was not shown to have engaged in any avoidable wrongful conduct. Accordingly, the Board’s order was reversed. Judge Friedman dissented from that part of the opinion that declined to penalize Employer.

Agnello v. WCAB
(Owens-Illinois),
629 C.D. 2006 (Pa. Cmwlth. 2006)

Claimant was entitled to permanent disfigurement award because her disfigurement without the dentures she regularly wore was unsightly.

Commonwealth Court reversed the decisions of the WCJ and the Board, which had denied Claimant’s claim petition seeking an award for permanent disfigurement. Claimant had suffered a fall and sustained injuries to her neck, jaw and teeth. Claimant had suffered a broken lower jaw that required removal of three teeth. Thereafter, Claimant had her remaining lower teeth removed for non-work related reasons and replaced with full lower dentures. The WCJ who observed Claimant was unable to find that Claimant had a serious and permanent disfigurement as a result of the work injury. The Board affirmed without viewing Claimant. On review, the Court held that the standard for reviewing disfigurement cases required the WCJ to evaluate a claimant without his or her prosthesis, in this case, dentures, in order to get a true idea of the damage that has been done and the unsightly appearance that a claimant must face on a daily basis when not wearing it. Because Claimant had no teeth when she removed her dentures, she proved that her disfigurement was serious and permanent and resulted in an unsightly appearance. Thus, she was entitled to an award. Judge McCloskey dissented, believing instead that the appearance of Claimant as viewed by the WCJ should be controlling.

McElheney v. WCAB
(Kvaerner Philadelphia Shipyard),
806 C.D. 2006 (Pa. Cmwlth. 2006)

Claimant was eligible to receive benefits under the Act for the injury he suffered on a ship in dry dock, since the ship was on actual dry land at the time of injury.

Commonwealth Court reversed the decisions of the WCJ and the Board, which held that Claimant was not entitled to benefits under the Act as a matter of law. Claimant was working on a ship at the time of injury and had been paid benefits under the Longshore and Harbor Workers Compensation Act (LHWCA). When those benefits ended, Claimant filed a claim petition. Employer denied the allegations and argued that the Act did not apply because working on a ship in dry dock, as Claimant was, was a maritime activity for which the LHWCA was the exclusive remedy. The Court went over the history of decisions regarding applicability of the LHWCA versus state workers’ compensation acts. The Court determined that while in dry dock, the applicability of either act was dependent of the ship’s actual presence on land. If a ship was held in a floating dry dock, the LHWCA applied since the ship was afloat. If a ship was on a marine railway dry dock where it had been dragged out of water, either act applied. The instant injury occurred in a graven dry dock, where the vessel floated into dock and rested on dry land after the water had been pumped out. The Court held that the focus of the inquiry was the fact that the ship was physically on dry land when the injury occurred. Accordingly, Claimant was eligible to pursue benefits under the Workers’ Compensation Act. The Court remanded the matter for a determination of the merits of Claimant’s claim.

Sharon Tube Company
v. WCAB (Buzard),
2354 C.D. 2005 (Pa. Cmwlth. 2006)

Employer could not later petition to terminate benefits after it had executed an agreement with Claimant that acknowledged that Claimant was totally disabled, and no modification to that agreement had taken place.

Commonwealth Court affirmed the decision of the Board, which reversed the WCJ’s decision to deny Claimant’s reinstatement petition. The Court originally issued its decision in June as a memorandum decision, but decide to publish the opinion in September. Claimant was injured in 1995 and received benefits. Claimant returned to work in 2003 with a loss of wages. Claimant’s benefits were modified to reflect his earned wages. A week after returning to work Claimant’s doctor found him unable to continue. A Supplemental Agreement was executed acknowledging a recurrence of Claimant’s total disability. Several months later, Employer filed a modification petition, alleging that Claimant had an earning capacity. Claimant argued that the Supplemental Agreement barred the petition because Employer agreed that Claimant was totally disabled. Employer’s medical expert testified that Claimant was able to perform sedentary work. Claimant’s expert testified to his total disability. The WCJ granted Employer’s petition, finding Employer’s medical expert to be more credible.

The Board reversed, finding the Supplemental Agreement was binding, because no other document had been executed amending it. In order for Employer to prevail, Employer would have to prove that Claimant regained some of his ability to work after the Agreement had been signed. On review, the Court relied on section 407 of the Act, which calls for agreements for compensation to be binding unless modified. At no time during the entry of the Agreement did Employer indicate that it intended to contest Claimant’s entitlement to total disability benefits. Since the Agreement was binding, the reinstatement petition was affirmed.

Chiro-Med Review Company v.
Bureau of Workers’ Compensation,
2478 and 2570 C.D. 2005 (Pa. Cmwlth. 2006)

Sovereign immunity prevented the Bureau from ordering additional authorization for utilization reviews sought as a remedy for wrongful revocation of URO’s original authorization.

Commonwealth Court denied petitioner-URO’s appeal of the hearing officer’s denial of an award of lost fees for the wrongful revocation of petitioner’s authorization to conduct utilization reviews. The Bureau had suspended, then revoked, petitioner’s authorization in 2003 on the grounds petitioner violated several of the Bureau’s regulations. On appeal, petitioner prevailed and its authorization was reinstated for the remaining period of time on its previous authorization. Petitioner appealed, seeking additional authorization to compensate it for income lost during the period of revocation. The Bureau responded alleging the issues of jurisdiction, standing and sovereign immunity.

Initially, the Court determined that it had subject jurisdiction to hear the appeal because it enjoyed exclusive jurisdiction to hear appeals from governmental agency decisions, regardless of whether it had the authority to grant a remedy. Further, even though petitioner prevailed before the hearing officer, it had standing before the Court because the hearing officer ignored its request for relief. However, the Court did find that the relief requested by petition was barred by sovereign immunity. Petitioner did not allege negligence on the part of the Bureau, nor was the claim within the exceptions to sovereign immunity, and no waiver to sovereign immunity was contained in the Act. Even though the request for relief was for additional utilization reviews rather than monetary damages, the result was no different.

Finally, the Court found that the hearing officer had the power to alter the remedy (revocation) recommended by the Bureau because it was the first pronouncement of facts and conclusions resulting from an evidentiary hearing. Accordingly, the order was affirmed. Judge Smith-Ribner dissented and argued that the hearing officer had no authority to alter the remedy.

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