May 3, 2007

Digest of
Appellate Decisions
April 2007

Dowhower v. WCAB (Capco Contracting), 94 MAP 2006 (Pa. Supreme Ct. 2007)

The language of Section 511.2(1) is mandatory in that an IRE may not be requested before a Claimant has received total disability benefits for at least 104 weeks.

The Pennsylvania Supreme Court vacated and remanded the decisions of Commonwealth Court and the WCAB, which dismissed Claimant’s objection to Employer’s request for an IRE. Claimant had been receiving benefits since 1998. For a short period of time, Claimant had returned to work, but later returned to total disability status.

One year after benefits had been awarded, Employer filed a petition requesting an IRE. The request was granted and the appointed physician found that Claimant had an impairment rating of ten percent. Employer then sought to reduce Claimant’s benefits. Claimant countered that Employer had not timely filed its request for an IRE because the request was filed before the expiration of Claimant’s receipt of 104 weeks of total disability benefits. The WCJ concluded that that the IRE request was untimely and the IRE itself was invalid.

One year later, Employer filed a second request, which the Bureau denied. Employer filed the instant petition with the WCJ, which granted the petition and directed appointment of a physician. Claimant appealed to the Board, arguing that Employer was precluded from requesting a second IRE. Employer also filed a petition for physical examination, which was granted. Claimant appealed this decision to the Board as well, stating that he was not required to attend the second physical examination because a decision on the timeliness of the initial IRE request was still pending on appeal. Employer then filed a suspension petition, which was dismissed by the WCJ based on the pendency of the other appeals. This decision was also appealed.

The Board found that Claimant had waived his objection to the initial IRE when he submitted to the actual examination. This finding rendered the decisions on the second IRE request moot. The Board also concluded that Employer’s suspension petition was moot and dismissed Employer’s appeal. Commonwealth Court held instead that Claimant had not waived his right to object to the IRE, finding that Claimant was aggrieved only after the examination had been conducted. However, the Commonwealth Court went on to find that Claimant was not prejudiced by the exam because it took place more than 104 weeks after he had been receiving full benefits. The Court affirmed the decision of the Board without discussing any of the other appeal issues.

The Supreme Court granted Claimant’s petition for allowance of appeal in 2006 and reversed Commonwealth Court, but allowed Employer’s application for reconsideration and issued this opinion. The Court carefully reviewed section 511.2(1) and determined that its language was mandatory. Therefore, since Employer had requested the first IRE prior to the 104-week period, the request was premature and should not have been granted. Neither substantial compliance nor waiver could be relied upon in the face of the mandatory language of the Act. Since neither the Board nor Commonwealth Court addressed the issues that surrounded the second IRE request, the matter was remanded to Commonwealth Court to consider those issues. Justices Castille and Eakin authored their own dissents, agreeing with reasoning of the Board, that Claimant was either not prejudiced or had waived his objection to the first IRE.

Lewis v. WCAB (Giles & Ransome, Inc.), 6 EAP 2006 (Pa. Supreme Ct. 2007)

Employer was required to show a change in Claimant’s physical condition, not a reinterpretation of an earlier finding of disability before a petition to terminate benefits could go forward.

The Pennsylvania Supreme Court reversed the decisions of the Commonwealth Court, Board and WCJ, which granted Employer’s petition to terminate Claimant’s benefits. Claimant was collecting benefits as a result of an accident in 1988. Over the course of the years, Employer had filed three petitions to terminate the benefits, all of which had been denied. Employer filed the instant petition in 2002 and the WCJ accepted the medical testimony of Employer’s expert as more credible than that of Claimant’s expert. Employer’s expert testified that conditions that had previously been accepted as caused by the work injury were unrelated. The Board and Commonwealth Court rejected Claimant’s res judicata argument and affirmed the decision. On appeal, Claimant argued that Employer’s termination petition should not have been granted because it did not allege a change in Claimant’s physical condition. Instead, Claimant alleged that Employer’s expert merely offered an alternative theory to injuries that had already been determined to be work-related. The Court noted that benefits could be terminated only upon a showing of change of condition. Instantly, where Employer had filed four petitions to terminate benefits, Employer was required to demonstrate a change in physical condition since the disability determination. This requirement was necessary to prevent repeated attacks on what an Employer perceived was an erroneous determination by a WCJ. Even if an employer could show a change in a claimant’s condition, it still bore a high burden to prove that all disability related to a compensable injury had ceased.

The Court specifically overruled the earlier King decision as an anomaly to workers’ compensation law and decided not to be bound by it, since it was contrary to the body of the law. Instantly, it was not sufficient for Employer to merely challenge the diagnosis of Claimant’s injuries as determined by a prior proceeding. Employer’s expert presented no evidence that Claimant had recovered from his injuries; he merely re-characterized the injuries in a manner inconsistent with the previous adjudications. This testimony was not sufficient to show that Claimant’s physical condition had changed since the last adjudication. That standard not having been met, the decision below was vacated and the termination of Claimant’s benefits was reversed. Justice Baldwin filed a concurring opinion finding that the majority opinion was overbroad.

Sweigart v. WCAB (Burnham Corporation), 1714 C.D. 2006 (Pa. Cmwlth. 2007)

Failure of reviewing doctor to provide detailed explanation for his rejection of Claimant’s treatment as reasonable prompted granting of Claimant’s petition for review of the utilization review determination.

Commonwealth Court affirmed part of the decisions by the WCJ and the Board that denied Claimant’s petition for review of an earlier utilization review petition filed by Employer. Employer had filed its petition in 2003 seeking a review of the reasonableness of diagnostic testing, office visits, injections, medication and blood patches provided by Claimant’s doctor to treat his work-related back injury. The reviewing doctor determined that the care was not reasonable or necessary. At the hearing, the reviewing doctor testified that only three office visits took place during the time in question, and that there was no medical justification for the treatments that were prescribed. The WCJ accepted his testimony over the opinion of Claimant’s doctor, since the reviewing doctor based his opinion on journal articles dealing with Claimant’s medical condition. The Board affirmed the denial of Claimant’s petition.

Initially, the Court determined that Employer was not collaterally estopped from challenging the treatment because an earlier WCJ decision had determined that Claimant’s doctor’s care was reasonable and necessary. The earlier decision did not mention the treatments and medication that had been prescribed for Claimant for the purposes of the instant review. While the Court disagreed that the reviewing doctor had based his opinions on the quality of care Claimant received, it agreed that his report did not supply a detailed explanation of the reasons that supported his conclusions. The reviewing doctor had stated that the use of the prescribed medication was unnecessary because much safer medications were available that achieved the same end. However, the reviewing doctor did not detail his reasons for finding that the other treatments provided were unreasonable. Therefore, the Court affirmed the WCJ’s findings with regard to the prescribed medication, but reversed the denial of all other enumerated treatments because the reviewing doctor’s report did not provide sufficient basis for his conclusion.

Frank Bryan, Inc. and Zurich North America Insurance Company v. WCAB (Bryan, Dec’d), 984 C.D. 2006 (Pa. Cmwlth. 2006)

Employer was not entitled to an offset of fatal claim benefits due to widow’s receipt of Social Security retirement benefits.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which denied Employer’s petition seeking an offset of fatal claim benefits pursuant to Claimant’s receipt of Social Security retirement benefits. Decedent had been killed when he fell from a crane in 1998. Decedent was 68 at the time of his death and Claimant was 65. Neither was receiving Social Security at the time of the accident. Claimant was paid weekly benefits pursuant to an agreement and began receiving Social Security benefits four years later. Employer filed this petition seeking an offset of the death benefit in light of the receipt of Social Security. The WCJ dismissed the petition, determined a reasonable contest did not exist and awarded Claimant $1,700.00 in attorney’s fees. The WCJ held that Employer made no showing that offset was allowed for Social Security retirement benefits received against payments received under Section 307 of the Act. On appeal, Employer argued that the Legislature did not intend to have benefits act as a supplement to Social Security. The Court analyzed Section 204(a) and determined that the omission of death benefits was intentional, since the section specifically mentioned a number of sections of the Act when allowing for offset due to receipt of Social Security benefits. Further, the Court determined that exclusion of Social Security retirement benefits was so clear that there was no statutory basis for Employer’s challenge, thus supporting the WCJ’s decision to award Claimant attorney’s fees.

Wyoming Valley Health Care v. WCAB (Kalwaytis), 2109 C.D. 2006 (Pa. Cmwlth. 2007)

Mother was found to be dependent of deceased daughter for the purposes of the payment of death benefits because the daughter provided money to meet the household expenses beyond room and board.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which determined that Claimant was a partial dependent of her daughter, the decedent, and therefore entitled to death benefits under the Act. Decedent was killed in a car accident during the course of her employment. She had been residing with her mother who herself had been employed, but in the years preceding decedent’s death, had had a decrease in earnings that caused her to be partially dependent on decedent. Claimant testified that Decedent paid $400.00 per month in rent and approximately $250.00 per month for other expenses. The WCJ found Claimant’s testimony to be credible and concluded that she was a partial dependent of Decedent’s. Employer was directed to pay $185.40 per week in death benefits and $3,000.00 in funeral costs. The Board affirmed this decision.

On appeal, Employer argued that Decedent did not provide support to Claimant, but merely paid her room and board. Further, Employer argued, the Claimant’s credit card debt that was considered by the WCJ when determining Claimant’s need did not represent an ordinary necessity of Claimant’s life, and should not have figured in the determination of Claimant’s dependency. The Court relied on previous case law that required it to determine whether the existing expense was a financial reality of the parties’ lives at the time of death. Claimant had testified that her credit card balance had accrued over the years and was a result of expenses she had incurred raising decedent. Since the balance was not the result of a single, large purchase, the Court held that the WCJ did not err by including the debt when calculating Claimant’s expenses. Further, because Decedent contributed to the household beyond room and board, and since there was a deficit between Claimant’s normal reasonable monthly expenses and her normal monthly income, the finding of her dependency on Decedent was not error and the award was affirmed.

Babich v. WCAB (CPA Department of Corrections), 1472 C.D. 2006 (Pa. Cmwlth. 2007)

Prison nurse failed to prove that his working conditions, although severe, were abnormal or the cause of his psychological injuries.

Commonwealth Court, in an en banc decision, affirmed the decisions of the WCJ and the Board, which denied Claimant’s claim petition because he failed to show that he suffered either a psychological or physical injury as a result of an abnormal working condition. Claimant worked in a prison as a nurse and filed his claim two years after he began employment, alleging post-traumatic stress disorder (PTSD) as a result of numerous traumatic incidents involving inmates. Claimant left his job after a shouting match with an inmate in which Employer reprimanded him and told him not to report back to work until he sought psychiatric care. Claimant returned to work a few months later at different employment. Claimant’s medical experts testified that he suffered from PTSD that was caused by that the incidents experienced at the workplace and rendered him unable to perform the most menial duties of his position. However, the experts could not indicate that the conditions experienced by Claimant were abnormal for that particular workplace.

The WCJ accepted Claimant’s testimony as credible with regard to the severity of the working conditions. However, the WCJ ruled that Claimant failed to prove that the conditions were abnormal for a prison and that he had suffered either psychological or physical injury. The WCJ relied on the testimony of Claimant’s supervisors who testified to similar conditions when they held the same position as Claimant.

The Board agreed that Claimant failed to prove a physical injury and had not met his burden in proving abnormal working conditions. Further, the Board denied Claimant’s allegation that his due process rights were violated in having to prove abnormal working conditions in order to recover. The Court dismissed this argument, noting that Claimant bore the burden of proving all elements necessary to establish a claim. For this particular claim, proving abnormal working conditions was an element. Additionally, the WCJ’s finding was consistent: while “horrid” working conditions existed on the job, testimony from Claimant’s co-workers and Claimant himself fully supported the finding that such conditions were normal for that particular workplace. Finally, the Court ruled that Claimant failed to meet his burden even under the physical/mental standard, since no evidence indicated that having urine and feces thrown at him had caused his psychological condition. Accordingly, the petition was properly denied. Judges McGinley and Smith-Ribner dissented, stating that the Claimant had established a physical/mental injury warranting benefits. Judge Friedman reasoned that Claimant had been exposed to abnormal working conditions.

Brady v. WCAB (Morgan Drive Away, Inc. and U.S. Specialty Ins. Co.), 1713 C.D. 2006 (Pa. Cmwlth. 2007)

Insurer was liable to pay benefits, where it had been served with a copy of claim petition and failed to appear at two hearings before the WCJ.

Commonwealth Court reversed the decision of the Board and reinstated the WCJ’s decision, which held U.S. Specialty Insurance Company liable. Claimant suffered an injury during the course of his employment and served his claim petition on Employer and its Insurer. Neither party filed an answer, nor did they appear at the hearing. Claimant’s counsel agreed to continue the matter and determine the identity of Insurer. At the second hearing, only Claimant appeared and his counsel presented two letters from Insurer, one denying coverage, and the other admitting liability. The WCJ continued the matter again, directing counsel to contact the Bureau to ascertain the carrier information. A few months later, the WCJ dismissed the petition without prejudice. Claimant appealed to the Board. Insurer filed a brief with exhibits before the Board. The Board quashed the exhibits, as they were not introduced at the hearing, and vacated the decision, finding that the WCJ failed to make a reasoned decision. On remand, the WCJ concluded that Claimant pleaded sufficient facts to grant the claim petition and ordered Employer or its carrier to pay benefits, attorney’s fees and costs. The Board reversed as to the liability of Insurer, finding that the letter presented by Claimant showing Insurer’s liability was uncorroborated and contrary to the Bureau’s records. On appeal, Claimant contended that he presented competent evidence and that the Board considered evidence not on the record. The Court found that Insurer had been served with a copy of the petition and did not appear at any of the scheduled hearings. The Court would not allow Insurer to complain about evidence presented at a hearing at which they did not attend. Since the evidence supported the WCJ’s decision, the Board erred in reversing the decision. Accordingly, the decision of the Board was reversed.

Insurer was entitled to subrogation rights over third party settlement of Claimants where Insurer had assumed liability from previously self-insured Employer.

Commonwealth Court affirmed the decisions of the WCJ and Board, which awarded Employer’s insurer a subrogation interest in Claimants’ third party tort settlement. Claimants were injured in a motor vehicle accident in 1999. Employer, who was self-insured, began benefits shortly after the accident. One year later, Insurer entered into an agreement with Employer, wherein it agreed to assume liability for Employer’s workers’ compensation claims, including those of Claimants. Insurer paid Claimants medical benefits. Claimants filed a third party lawsuit and an agreement was reached to settle all claims.

As the successor in interest to Employer by virtue of its agreement, Insurer filed review petitions requesting subrogation of its payments to Claimants as a result of the settlement. The WCJ granted the petitions and determined the amount of the subrogation interests. As to Claimant Pennypacker, the WCJ also determined that she failed to prove that certain medical treatment paid for by Eastern Alliance or PMA was treatment unrelated to her work injury. On appeal, Claimants argued that a self-insured employer could not transfer its liability and subrogation rights to a third party which never paid benefits under the Act. The Court first noted that the WCJ found that Insurer did make payments to both Claimants. Secondly, while the Act did not specifically authorize the sale of subrogation rights, it did not prohibit such an action. Since the Act allowed for the transfer of liability to a workers’ compensation carrier, it necessarily followed that the right of subrogation also transferred. Additionally, the Court agreed that Insurer was properly reimbursed for medical expenses incurred by Claimants. Section 319 of the Act provided for subrogation rights to be absolute and Insurer adequately presented evidence of compensation paid to both Claimants. Claimants bore the burden of showing that the treatment in question was not related to the work injury, particularly when the payment had been requested from Employer and made in good faith by Insurer. Finally, the Court upheld the WCJ’s findings as to the medical and insurance records submitted after the close of the record, as they were presented upon the request of the WCJ in accordance with section 420.

3D Trucking Company, Inc. v. WCAB (Fine and Anthony Holdings International), 1844 C.D. 2006 (Pa. Cmwlth. 2007)

WCJ properly joined related company to claim petition when unrebutted evidence showed that company paid Claimant and issued a W-2 form to him for the year in which the injury occurred.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which joined second Employer, 3D Trucking, and imposed liability on them prior to the final decision as to the liability of the first Employer, AHI. Claimant’s injury was not at issue. Claimant worked for several related trucking entities as a driver. After his injury, Claimant was paid sporadic benefits from a Florida-based leasing firm called Cura. In 2004, Claimant filed a petition to review medical treatment and a modification petition, naming AHI as his employer. At hearing, Employer’s counsel disclosed that AHI was a collaboration of corporations that were separate entities. Not all of the corporations had the same insurer. Some of the corporations were in bankruptcy. AHI and 3D were two of the corporations. Claimant had filled out an application for one of the corporations when he applied for work, was hired by another of the corporations, and had been transferred to yet another corporation at the time of the accident. At all times, Claimant had the same supervisor. Claimant had paychecks issued by different corporations, not always corresponding to the times for which he worked for a particular corporation. At a January 2005 hearing, Cura agreed to pay benefits on an interim basis, pending litigation. Thereafter, AHI filed a joinder petition against 3D, citing the fact that 3D paid Claimant at the time of the accident. The WCJ entered an interim order assessing 100% liability for Cura. Several more hearings were conducted, and 3D never appeared in person or by counsel. Cura went into bankruptcy. After further hearing, the WCJ found that AHI and its various affiliates were potential employers of Claimant, and that 3D, AHI and Cura and their affiliates/subsidiaries were joint employers of Claimant and were jointly and severally liable. The Board affirmed this decision. On appeal, the Court initially determined that the joinder order was a final, appealable order, subject to appellate review. The rules required courts to treat a joinder petition as a new claim petition filed on behalf of a claimant against a putative employer. Since the WCJ’s decision resolved all issues raised by the joinder petition, it was a final order and able to be reviewed. The Court went on to find that 3D failed to preserve any issues for appeal, since it did not participate at trial. The issue of substantial evidence was preserved, since it was a requirement of the proceedings before the WCJ. However, even on this ground, 3D could not prevail. Claimant had been instructed to apply for employment with 3D. Once he began working for 3D, payments from all other companies ceased. When the other companies ceased operations, they leased their trucks to 3D. Claimant had received a W-2 form from 3D and had been told to report his injury to them. Any absence of rebuttal evidence stemmed from 3D’s failure to provide it, not any failing of the WCJ. Accordingly, the joinder was affirmed.

PIAD Precision Casing and AIG Claims Services v. WCAB (Bosco), 379 C.D. 2006 (Pa. Cmwlth. 2007)

Employer’s failure to file an answer to claim petition for hearing loss resulted in award of benefits for Claimant, where credible medical testimony supported allegation of hearing loss.

Commonwealth Court affirmed the decision of the Board, which reversed the WCJ’s decision to grant Claimant’s claim petition and award him 260 weeks of benefits for permanent hearing loss. Claimant began experiencing symptoms in 1999 and after treatment and surgery, filed his petition in 2003. Employer failed to file a timely answer. Testimony from his doctor and audiogram results indicated that Claimant had a 99.4 percent binaural hearing loss. Claimant’s doctor conceded that he could not determine how much of the noise Claimant was exposed to at work contributed to his hearing loss. Employer’s expert testified that, based on a review of medical records, while Claimant did have a severe loss of hearing, it was not as a result of workplace noise. The WCJ agreed with Employer’s expert and denied the claim petition. On appeal, Claimant alleged that the WCJ erred by not accepting Claimant’s allegations in his petition as true, since Employer had not filed an answer. The WCJ reasoned that the facts as pleading in the petition did not adequately present sufficient basis upon which benefits could be granted. The Board reversed this decision, holding that because Claimant’s expert credibly testified that Claimant suffered a hearing impairment of 99.4 percent, Claimant’s hearing loss was total and Claimant was entitled to benefits for 260 weeks. Employer’s failure to file an answer to the claim petition precluded it from raising the affirmative defense upon which the WCJ based the initial decision. On appeal, Employer argued that the Board erred in finding that Claimant did not have the burden of proving that he suffered a compensable hearing loss. Employer also pointed out that Claimant’s petition failed to allege a percentage of hearing loss or whether the loss was caused by long-term exposure to hazardous occupational noise. Claimant countered that he met his burden of proof when the testimony of his expert was presented as credible. The Court relied on section 416 which called for the admission of all factual allegations in the claim petition as true. Further, Employer was precluded from presenting any evidence in rebuttal or as an affirmative defense with respect to those alleged facts. While Claimant’s burden of proof was not automatically satisfied, Claimant’s allegation of permanent hearing loss due to exposure to high levels of noise without adequate ear protection, in addition to the credible testimony of his doctor, was sufficient basis upon which to award benefits.

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