October 1, 2007

Digest of
Appellate Decisions
September 2007

Pa. Department of Labor & Industry, Bureau of Workers’ Compensation v. WCAB (U.S. Food Service),
2001 C.D 2006 (Pa. Cmwlth. 2007)

Supersedeas fund reimbursement cannot be allowed after the parties have settled all matters and resolved liability through C&R.

Commonwealth Court reversed the decision of the Board and the WCJ, which granted Employer’s application for supersedeas fund reimbursement. Claimant was injured in 2001 and Employer began paying weekly benefits. Employer filed a termination petition in 2003, as well as a supersedeas request pending the litigation. The request for supersedeas was denied and Claimant was awarded counsel fees. While the termination petition was pending, the parties entered into a C&R that paid Claimant a lump sum of $65,000.00. Two weeks after the agreement was approved, the WCJ circulated a decision that granted Employer’s petition. Employer then filed the instant application requesting reimbursement, and a second WCJ granted it, relying on the Optimax v. WCAB rationale. The Board affirmed this decision.

On appeal, the Board contended that the agreement terminated the litigation and resolved all issues. The outstanding petition should have been dismissed as moot and therefore, ruling on the termination petition and the supersedeas application were error. The Court reviewed the language that provided for supersedeas procedure in the Act. Clearly, the C&R resolved the issues of Claimant’s disability and all litigation on the petition. Any subsequent decision on the petition thereafter was moot and improper for the purposes of reimbursement from the supersedeas fund. Since the agreement preserved no issue for future litigation, all outstanding issues were resolved and the WCJ erred when a decision on the termination petition was rendered and when supersedeas reimbursement was allowed.

Cinram Manufacturing, Inc. and PMA Group v. WCAB (Hill),
158 C.D. 2007 (Pa. Cmwlth. 2007)

WCJ has authority to amend NCP sua sponte absent filing of petition for review if it is determined at hearing that the NCP is materially incorrect or if claimant’s disability status is changed.

Commonwealth Court affirmed the decision of the Board and WCJ, which denied Employer’s petition to terminate benefits due to Claimant’s failure to recover. Claimant suffered an injury in 2004 for which Employer issued an NCP describing the injury as a lumbar strain/sprain. Four months later, Employer filed a termination petition, alleging that Claimant recovered from his injuries after returning to light duty. Claimant denied that he had recovered. At hearing, Claimant testified that he began working for Employer in 1988 and suffered a back injury in 2002, which caused him to be out of work for three months. Claimant presented his doctor’s testimony that Claimant sustained a herniated lumbar disc as a result of the March 2004 injury and that he was not capable of performing his job. The WCJ credited this testimony and amended the NCP to include the herniated disc. Employer appealed and the Board affirmed on the grounds that Claimant had presented credible testimony through his expert that the NCP was materially incorrect because it did not include Claimant’s herniated lumbar disc as a work injury.

Before the Court, Employer argued that the WCJ exceeded his authority by sua sponte amending the NCP. Further, Employer contended that Claimant failed to present credible evidence to support the finding that the work incident caused Claimant’s herniated disc. In affirming the previous decisions, the Court held that the WCJ had the authority to amend the NCP pursuant to the first paragraph of section 413(a) of the Act. The Court agreed that the record contained sufficient competent evidence to support the WCJ’s findings. Claimant’s doctor testified that he observed a significant change in Claimant’s imaging study and symptoms after the 2004 incident. The doctor went on to testify that Claimant did not suffer from a pre-existing condition prior to 2004 because MRI and myelogram results confirmed a new injury in 2004. Accordingly, the dismissal was affirmed. Judge Pellegrini dissented, stating that the WCJ was without authority to amend the NCP unless a petition for review had first been filed.

Bittinger v. WCAB (Lobar Associates, Inc.),
1927 C.D. 2006 (Pa. Cmwlth. 2007)

Attorneys’ fees award for unreasonable contest was limited after Insurer’s unreasonable contest ended when it agreed to an interlocutory order to pay benefits.

Commonwealth Court affirmed the decisions of the WCJ and Board, which granted Claimant’s petitions to review benefits, claim petition, petition to review medical payments and a penalty petition. Specifically, Claimant objected to the amount of the awards. Claimant had suffered an injury in 1996 for which he had received benefits, even after his return to light duty in 1999. Claimant was disabled again in 2003 for a one-month period and incurred medical expenses due to an injury to his right knee, which he contended was a result of the 1996 injury. Claimant filed petitions to have the knee injury recognized as part of the earlier injury. The WCJ issued an interlocutory order mandating the payment of past compensation and medical expenses for the 2004 disability. After consideration of all Claimant’s petitions, the WCJ issued an order that awarded Claimant total disability benefits for the one month in 2003; found Insurer liable for payment of all medical bills related to the knee injury; assessed a penalty of ten percent of the medical bills; awarded Claimant’s attorney a 20% fee; and, awarded an additional $5,700 in attorneys’ fees for unreasonable contest.

Both parties appealed and the Board affirmed the decision, but remanded for the sole purpose of addressing the distribution and rationale regard the award of attorneys’ fees. The WCJ amended the earlier order by capping attorneys’ fees at $5,700. Claimant again appealed and the Board affirmed. Initially, the Court supported the ten percent penalty on medical expenses, since Claimant had alleged an injury that did not appear in the original NCP and was required to prove the injury before his entitlement to indemnity benefits. Further, with regard to unreasonable contest, the Court again affirmed the WCJ’s decision, since it was Claimant who had raised a question as to which Insurer was properly liable, and since the unreasonable contest ended with an agreement to an interlocutory order to pay benefits. Finally, the Court dismissed Claimant’s objection to the failure to award attorneys’ fees for Employer’s frivolous appeal to the Board. The Court dismissed this objection without discussion of the merits, since Claimant failed to raise it before the Board.

Stafford v. WCAB (Advanced Placement Services),
542 C.D. 2007 (Pa. Cmwlth. 2007)

Claimant had no right to appeal utilization review, when Claimant’s provider failed to supply medical records to the URO.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which determined that the WCJ lacked jurisdiction to hear Claimant’s appeal of a utilization review determination where Claimant’s provider failed to supply medical records to a URO. Claimant had been injured in 2001, after falling and suffering multiple injuries. Employer filed a request for utilization review of treatment Claimant received for a cervical spine injury. The URO was unable to obtain the doctor’s medical records, but assigned the request to a reviewing physician nonetheless. The reviewer issued a report that stated that no meaningful review could be conducted due to the absence of the records, and finding all treatments unreasonable and not necessary.

Claimant petitioned for review and the WCJ concluded that he lacked subject matter jurisdiction based on established case law. The Board affirmed. Claimant sought to distinguish the case by noting that the reviewing doctor had filed a report, unlike earlier cases. The Court agreed with the decisions below, and dismissed the value of the report, since it was unable to evaluate the reasonableness of the treatment due to the absence of the records. The Court also dismissed Claimant’s contention that he was left without recourse for payment of his treatment. The Court was not able to change the clear directives of the Act. Further, Claimant was able to seek treatment from another doctor who would be more cooperative with the URO. Finally, the Court determined that Claimant’s due process rights were not violated because he was unable to have the determination review because the Court had earlier concluded that a claimant did not have a protected property interest in medical benefits not yet determined to be reasonable and necessary. Accordingly, the decisions were affirmed.

Muretic v. WCAB (Department of Labor and Industry),
787 C.D. 2007 (Pa. Cmwlth. 2007)

Claimant’s earlier failure to take a position offered because of her incarceration amounted to bad faith and Employer was not obligated to offer other jobs when Claimant was released from prison.

Commonwealth Court affirmed the decision of the Board that affirmed the WCJ’s decision to grant her reinstatement petition and deny her review petition. Claimant injured her foot in 1994 walking up a flight of stairs. She was cleared for light duty two years later and was offered her pre-injury job in 1997. Unbeknownst to Employer, Claimant was incarcerated during this time. Employer filed a suspension petition five months after offering her the position. The WCJ granted the petition and suspended benefits. Claimant was released from prison in 2000. She believed that her condition grew worse during her time in jail, and sought medical treatment upon her release. Claimant filed a reinstatement petition that was denied by the WCJ, who found that Claimant’s condition did not worsen to the point that she could no longer perform sedentary duty.

Four years later, Claimant filed the instant reinstatement petition, alleging her injury again caused a decrease in her earning power. Claimant also sought to amend her injury description to include a low back injury and a psychological injury. The WCJ determined that Claimant was eligible for the reinstatement of benefits for the period of 14 months when she recovered from elbow surgery. Since it was determined that Claimant in bad faith had rejected the offer of her job in 1997, Employer was not obligated to reestablish a job availability and Claimant’s review petition was denied.

On appeal, Claimant argued that there was no basis for the finding of bad faith. The Court disagreed and ruled that even if the term “bad faith” was not used by the WCJ in the earlier suspension petition, the finding amounted to such a conclusion and was properly interpreted as such by the WCJ in the instant case. Employer was not required to reestablish job availability following a period of temporary total disability when Claimant originally refused a job offer in bad faith. Finally, the Court agreed with the WCJ’s conclusion that Employer had presented sufficient evidence, through the testimony of its medical expert, to establish that Claimant had the physical ability to perform the job that had been offered. Accordingly, the decisions below were affirmed.

Galizia v. WCAB (Woodloch Pines, Inc),
96 C.D. 2007 (Pa. Cmwlth. 2007)

Date for tolling the 90-day time period of temporary compensation starts with the date Claimant was determined to have been disabled, even if that date is earlier than the date of actual payment.

Commonwealth Court reversed the WCJ and Board’s denial of Claimant’s reinstatement and review petitions. Claimant alleged a knee injury in 2002, but continued to work for several weeks until Employer issued a temporary NCP. Shortly thereafter, Employer stopped the payments when Claimant’s treating physician failed to respond to causality questions. Claimant then filed petitions seeking penalties, reinstatement and review. Claimant argued that Insurer had issued its notice of denial beyond the 90-day time period allowable, rendering the notice invalid by law. The WCJ disagreed that the 90-day period began to run from the retroactive date from which payments were due, but the later date on which Employer had issued the temporary NCP. The Board affirmed this decision. The Court initially vacated this order and remanded with instructions to the Board to remand to establish a trigger date when temporary compensation was payable. The WCJ conducted a second hearing and heard additional evidence that included proof that Insurer had issued a check to cover the earlier disability period that Claimant had alleged. The WCJ then concluded that, even though Claimant had stopped working at an earlier date, the stipulation in the temporary NCP set out a later date as the one when payment of benefits were to begin. Since the benefits were stopped within 90 days of that later date, Employer acted appropriately.

The Board disagreed with this finding and ruled that the plain language of the Act called for conversion of the temporary compensation 90 days from the date that benefits were paid or payable. Clearly, benefits were payable from the time Claimant was determined to have been disabled, that being the earlier date. Employer was obligated to issue a termination within 90 days from the date of disability, and when it did not, the temporary NCP converted to an NCP. To accept Employer’s interpretation was to allow temporary compensation to be paid for a period of more than 90 days, which was not the intent of the Act. Despite this, the Court found that Employer’s contest was reasonable under the circumstances, since it was an issue of first impression. However, because Employer had violated the Act, Claimant was entitled to determination of whether a penalty award was appropriate. Accordingly, the matter was remanded for the WCJ to consider a penalty award.

Enterprise Rent-A-Car v. WCAB (Clabaugh),
863 C.D. 2007 (Pa. Cmwlth. 2007)

WCJ was without jurisdiction to award penalty to Claimant due to Employer’s failure to pay builder who modified Claimant’s home. Only the Bureau had jurisdiction to hear fee review disputes.

Commonwealth Court reversed the decisions of the WCJ and the Board, which granted Claimant’s penalty petition. Claimant had been injured in 2002 and was left a quadriplegic as a result. Claimant filed a utilization review request regarding prospective modifications to his home and received approval in 2004. Claimant filed a penalty petition a year later, alleging that Employer had failed to pay timely bills in connection with the modification. The WCJ found that although the costs actually charged were greater than the projected costs, it was reasonable that actual costs exceeded proposed costs in the field of construction. Employer was to be charged with paying 80 per cent of the overage, in addition to the payments it had already paid. Due to the novelty of the issues presented, the WCJ did not award attorneys’ fees, but did assess a ten per cent penalty. The Board affirmed.

Employer appealed the penalty portion of the order, and argued that it had already paid costs in excess of the amount approved by the review officer. Further, it alleged that the WCJ erred in finding that Employer should have filed a retrospective UR request, since only the necessity of medical treatment was subject to a reasonableness review. The Court determined that the appropriate procedure was for the builder to have filed an application for fee review with the Bureau. Claimant’s filing of a penalty petition was an attempt to confer jurisdiction on the WCJ for a fee review in addition to a penalty. Jurisdiction for fee reviews did not lie with the WCJ, but with the Bureau. Because the WCJ lacked jurisdiction to resolve the fee dispute, it was error to grant the penalty petition. Since the builder had not filed for fee review, Employer’s failure to pay the additional sums could not be seen as a violation of the Act, and the penalty petition should not have been granted. Accordingly, the decisions below were vacated.

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