May 25, 2007

The Pennsylvania
Supreme Court’s
2006 Compensation
Playbook

With the Pennsylvania Supreme Court only reporting four published opinions dealing with workers’ compensation issues in 2006, it begs the question as to whether we are, heaven forbid, exhausting issues of first impression worthy of the Court’s appellate review.

Tackling tough issues with regard to the payment of compensation benefits following an employer filing for Supersedeas (Snizaski), the statute of limitations for reinstatement of compensation following a judge-ordered termination of compensation (Romaine), entitlement to fatal claim benefits (Brookhaven Baptist), and “bad faith” in the context of an employer-filed Suspension Petition alleging that the Claimant had sufficiently recovered from work-related surgery to be able to return to work in a job that earlier resulted in a judge-ordered suspension of compensation (Pitt Ohio), the Supreme Court clearly had a very light docket that yielded no decisions unbalancing the anxious scales of justice.

If we were “keeping score”, the four decisions by the Pennsylvania Supreme Court in 2006 would yield a final score of 4-0, in terms of decisions favorable to employers, and, conversely, unwelcome for Claimants and their well-coifed attorneys.

For the sake of a rear view retrospective, we will briefly review the decisions for their potential impact on your workers’ compensation practice and procedure.

Snizaski v. WCAB, (Rox Coal)
891 A. 2d 1267 (PA. 2006)

An employer that had filed a timely request for Supersedeas cannot be subject to penalties for failing to pay benefits during the pendency of its .

Snizaski answered the ageless and often-asked question of when must you pay workers’ compensation benefits after a workers’ compensation judge has awarded compensation with the granting of a claim petition, and you have filed a timely appeal accompanied by an application for Supersedeas, seeking to stay the payment of all judge-ordered benefits during the pendency of your appeal.

The short answer is 80 days from date of the issuance of the judge’s decision to payment of the compensation benefits, assuming the filing of a timely appeal and a timely application for Supersedeas.

Under Snizaski, you get 80 days to fend off counsel’s calls about the checks as follows:

1. 20 days from the issuance of the judge’s decision to file both your appeal and your application for Supersedeas;
2. Claimant then gets 10 days to respond;
3. the Appeal Board has 20 days to rule on Supersedeas; and,
4. assuming exhaustion of the 50 days for the Appeal Board to consider an employer’s Supersedeas request, and further assuming the all-too-unlikely denial of Supersedeas by the Appeal Board, you then have 30 days from the Board’s denial of Supersedeas to insure issuance of all compensation benefits awarded by the WCJ, and avoid an actual violation of the Act with the consequent ancillary entitlement, allowing the Claimant to seek chest-thumping penalties.

In Snizaski, the Supreme Court ruled that an employer that had filed a timely request for Supersedeas cannot be subject to an award of penalties for failing to pay the underlying benefits during the pendency of its Supersedeas request (50 days from WCJ-issued award to Supersedeas ruling requiring payment of compensation), with the employer then having 30 days from the denial of the Supersedeas to satisfy its compensation liability under the WCJ’s compensation award.

A dissent authored by former Madame Justice Newman, suggested a result contrary to the majority opinion authored by Justice Castille.

Romaine v. WCAB (Bryn Mawr Chateau)
901 A. 2d 447 (PA. 2006)

For statute of limitations purposes under Section 413 (a) of the Act, Justice Newman concluded that the only date relevant is the date on which the check is received,

In a heady ruling that lets us salute a serving of humble pie best served with the compliments of a claim-barring statute of limitations, the Supreme Court in Romaine denied a reinstatement petition, with the critical issue being whether the petition was filed within three years of the “most recent payment of compensation.”

In Romaine, the Claimant received workers’ compensation benefits for a low back injury. Four years later, the Claimant’s compensation benefits were terminated when a WCJ concluded that the Claimant had fully recovered from her work injury. No appeal of that termination was filed.

Three years and two days after issuance of the WCJ’s termination decision on December 16, 1994, the Bureau received a Reinstatement Petition that the Claimant had mailed two days earlier, on December 16, 1997, exactly three years post-termination of compensation.

The WCJ found that the Claimant’s “most recent payment of compensation” was a compensation check dated December 14, 1994, with the check indicating that it covered benefits for the period from December 6, 1994 through December 19, 1994. No testimony was presented as to when the Claimant either received or cashed the check, although Claimant’s counsel suggested, in Claimant’s brief, that the check had been endorsed by the Claimant on December 19, 1994.

The WCJ concluded that the Claimant’s petition was not timely filed, with the Reinstatement Petition being denied. With both the Appeal Board and the Commonwealth Court affirming the WCJ’s decision, the Supreme Court granted allocatur, to determine a question that it characterized as “deceptively simple,” being what constitutes payment when benefit payments are made in the form of a check?

Reviewing the law of negotiable instruments, the Supreme Court, in a majority opinion authored by Madame Justice Newman, held that five dates are critical in the life of any check. The dates are the date the check is cut, the date it is mailed, the date it is received, the date it is cashed or deposited, and the date that it is either honored or dishonored.

For statute of limitations purposes under Section 413 (a) of the Act, Justice Newman concluded that the only date relevant for determination as to the applicable statute of limitations, is the date on which the check is received, as that date constitutes the “last payment of compensation”, notwithstanding the payment being conditioned on the check being honored. When the check is honored, the payment, under Romaine, relates back to the date that the check is received by the Claimant.

Since the Claimant had failed to present any evidence to the WCJ as to the date that she “received” the last payment of compensation, the Supreme Court concluded that she did not sustain her burden of proving that her Reinstatement Petition had been timely filed within the statute of limitations under Section 413 (a) of the Act.

No dissenting opinion accompanied Romaine.

Pitt Ohio Express v. WCAB (Wolff)
912 A. 2d 206 (PA. 2006)

The Court refused to burden an employer with re-proving its job offer when rejected in “bad faith” by a Claimant, since to do so would “reward bad faith conduct.”

Another employer-friendly ruling followed in Pitt Ohio.

Pitt Ohio validates an innate sense of fairness that should apply in compensation practice. It stands for the principle that absent a physical change in the Claimant’s work-related condition, the Claimant’s compensation entitlement remains static.

Years earlier, the Claimant’s compensation benefits had been suspended after a WCJ concluded that the Claimant had failed to accept a modified-duty position that had been offered to him by the employer. That suspension was never appealed.

Subsequently, the Claimant underwent back surgery for the work injury, with the parties agreeing to reinstate the Claimant’s compensation benefits as of the date of the surgery.

The next year, the employer filed a new suspension petition, claiming that the Claimant had sufficiently recovered post-surgically to perform the same modified-duty job which had been the subject of the WCJ’s prior decision suspending compensation on “bad faith” grounds.

After the Claimant testified that he was physically capable of performing the modified-duty position, the WCJ suspended the reinstated compensation benefits. However, the Appeal Board reversed the WCJ’s suspension, concluding that the compensation could not be suspended absent the employer proving that the modified-duty job was still available.

The Commonwealth Court reversed the Appeal Board, reinstating the WCJ-ordered suspension, with its holding that the employer did not have to re-prove job availability in light of the Claimant’s proven “bad faith” in rejecting available work; the Supreme Court granted allocatur to review the Commonwealth Court’s ruling.

The critical issue reviewed by the Supreme Court in Pitt Ohio was whether the employer had to re-prove the availability of the modified-duty position rejection by the Claimant, which formed the basis for the WCJ’s original suspension of compensation. Characterizing this issue as one of “first impression,” the Court, refused to burden an employer with re-proving its job offer when rejected in “bad faith” by a Claimant, since to do so would “reward bad faith conduct” and circumvent the purpose of the Worker’s Compensation Act.

Affirming the Commonwealth Court, the majority opinion authored by Justice Eakin held that “an employer will not be forced to prove job availability following a period of total disability after an employer has made a bad faith rejection of an available modified-position.”

A dissenting opinion authored by Justice Baer cited the teary-eyed humanitarian and remedial purpose of the Act as its bulwark.

Brookhaven Baptist Church v. WCAB (Halvorson)
912 A. 2d 770 (PA. 2006)

The Court reversed the Commonwealth Court, Appeal Board, and WCJ, ruling that the Decedent was acting as a Church Trustee, and not as an employee, when fatally injured.

In Brookhaven, the Court granted allocatur to determine whether the Decedent was an employee when fatally injured in 1991.

Although the Court determined that the Decedent was an employee when fatally injured, it ultimately determined that the Decedent’s injuries did not occur within the course and scope of his employment, resulting in the denial of his surviving wife’s Fatal Claim Petition.

The Decedent had been a member of the church congregation, later becoming appointed as a Church Trustee. As a Trustee, Decedent preformed maintenance duties for the Church, including cutting the Church lawn for $25 per week.

One day in 1991, the Decedent was fatally burned after he had set fire to a pile of shrub clippings that he gathered as he trimmed church hedges.

The Decedent’s wife filed a Claim Petition, alleging that her husband had died as a result of work-related injuries that he sustained in the course and scope of his employment with the Church. A third party personal injury action was also filed against the Church. No information was ever provided as to the outcome of the third party action.

After several evidentiary hearings, at which the Decedent’s wife and employer witnesses testified, the workers’ compensation judge granted the Fatal Claim Petition, finding that the Decedent had been employed to cut the grass, that the Church had provided all the materials necessary for the Decedent to perform his work duties, and that trimming the bushes was “incidental and necessary” for the Decedent to complete his grass-cutting duties.

The WCJ’s fatal claim award was affirmed by the Appeal Board, which concluded that Decedent’s weekly renumeration was dispositive, with the Commonwealth Court affirming the Appeal Board’s opinion.

Where by the grace of God we go, with the Supreme Court ruling, in an opinion worthy of several reads, that although the Decedent had been “employed” to cut the grass on a regular basis, the fatal injuries that he sustained while burning shrub clippings, were not injuries that occurred while the Decedent was engaged in activities “incidental” to the church’s regular business activity, which need not be objectively limited to prayerful genuflection, with the “proper question,” in the Supreme Court’s opinion, being “whether the activity” causing injury to the Decedent was part of the employment arrangement, and not rather, as characterized by the WCJ, Appeal Board, and the Commonwealth Court, that it was “incidental” to the Decedent’s grass-cutting agreement.

The decedent was twice burned, once at his own hand, and then by the Supreme Court, as the Court reversed the Commonwealth Court, Appeal Board, and WCJ, finding that the trimming and edging of bushes and shrubs and picking up and burning of shrub clipping, were never activities that were part of the Decedent’s financial arrangement with the Church, whereby he was paid $25 per week to simply mow the Church grass.

So holding, the Supreme Court ruled that the Decedent was acting as a Church Trustee, and not as an employee, when fatally injured as he attempted to burn shrub clippings. Concluding that his injuries did not occur in the course and scope of his employment, the Supreme Court reversed the orders granting the Fatal Claim Petition.

No dissenting opinion was issued in Brookhaven.

Summation

In closing, 2006 was an excellent year for employers appearing before the Supreme Court, with employers sweeping all four reported opinions. Less importantly, the rulings in Snizaski, Romaine, Brookhaven Baptist, and Pitt Ohio involved only one reversal of a Commonwealth Court opinion, with the other three opinions being affirmed.

Let’s hope 2007 is equally sweeping and satisfying.

Questions

Questions concerning this decision, or any questions involving workers’ compensation practice and procedures, can be directed to our workers’ compensation attorneys.

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