August 4, 2008

Digest of
Appellate Decisions
July 2008

Gorman v. WCAB (Kirkwood Construction),
1926 C.D. 2007 (Pa. Cmwlth. 2008)

Failure to raise issue of subrogation in C&R when no third party action was contemplated at the time of settlement did not act as a waiver of subrogation by Employer in settlement of third party action filed after the C&R.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which awarded Employer $71,191 for its subrogation lien. Claimant suffered an eye injury in 2000. Employer accepted liability and Claimant began receiving benefits. Benefits were suspended nearly a year later when Claimant returned to work. Thereafter, Claimant filed a claim petition seeking compensation for the loss of his right eye and disfigurement of his head and neck. At hearing, the parties entered a C&R into evidence that did not indicate that there was any potential for a lien for subrogation. The C&R was approved for $90,000.

Employer filed the instant petition for review in 2005, alleging that it was not informed of the third party action until 2004. Claimant testified that at the time he entered into the C&R he had not retained counsel to represent him in a third party action. He claimed that he did not consider it until he spoke with an attorney who was a family friend in 2000. Claimant was contacted by an attorney in 2002 and a lawsuit was filed that resulted in a $100,000 settlement against one of the defendants. The case against the other defendants remained pending. Employer’s witnesses testified credibly that they were unaware of any third party action until after the settlement.

The WCJ determined that there had been a mutual mistake of fact as to the substantial issue of the existence of a potential subrogation lien. Therefore, the C&R was set aside and Employer was awarded a credit based upon the amount paid pursuant to the C&R, to be enforced as a subrogation lien against the third party action proceeds.

The Board ruled that the WCJ erred in setting aside the C&R, as the mistake was not in existence at the time the agreement was executed. The matter was remanded for recalculation of the amount of the award. The WCJ took additional evidence and determined that Employer was to be paid over $71,000. The Board affirmed this decision and Claimant filed this appeal.

The Court confirmed that an employer was able to waive its right to subrogation under the Act. However, the Court ruled that the evidence failed to establish that Employer had waived its rights. Since a third party action was not contemplated at the time of settlement, Employer could not be said to have bargained away its rights. The fact that Employer stated in the C&R that there was no lien did not indicate a waiver of a right to subrogation; rather, it indicated Employer’s belief at the time that no such action existed. Accordingly, the order was affirmed.

UPS and Liberty Mutual Insurance Co.,
1596 WDA 2007 (Pa. Super. 2007)

Employer could enforce unpaid subrogation lien by filing a praecipe for judgment with the common pleas court.

Superior Court reversed the decision of the Westmoreland County court, which granted Claimant’s motion to strike the judgment entered against him. That judgment was based on an order issued by a WCJ directing Claimant to pay Employer over $67,000 in satisfaction of Employer’s subrogation lien. Claimant had been injured in 1999, received benefits from Employer on account of the injury and filed a third party action as well. The parties had stipulated that Employer was entitled to the sum as a result of the $95,000 settlement Claimant entered into with the third party. Claimant received the proceeds without notifying Employer. Employer had paid over $243,000 in disability and medical benefits as a result of Claimant’s injury. As a result of the stipulation, the WCJ entered an order requiring Claimant to pay Employer. No appeal was taken from this order.

When Claimant failed to make payment, Employer filed a praecipe with the trial court requesting that the prothonotary enter judgment in favor of Employer. After the judgment was entered, Claimant filed this motion to strike. The lower court granted the motion, ruling that the procedure used by Employer was only available to claimants under the Act. Initially, the Court ruled that the order was appealable, despite P.R.A.P. 311(a)(1), which held that an order granting a motion to strike a judgment was interlocutory and unappealable. The Court held that since granting the motion ended the litigation as to all parties and claims, the order was a final order as defined by P.R.A.P. 341(a).

Regarding the merits of the appeal, while the Court agreed that section 428 did not provide statutory authority for an employer to obtain a lien against a claimant who had refused to pay an employer’s subrogation lien, failure to allow Employer’s action would render the WCJ’s order a nullity. The subrogation determination by the WCJ was a final order that required judicial recognition. To require Employer to file another action with a civil court to determine an issue that had been finally determined by the WCJ was judicially inefficient. Since the trial could not undo what the WCJ had done, it did not make sense to require Employer to file a new action. Accordingly, the order was reversed. Judge Klein dissented and agreed with the trial court decision requiring the filing of a separate law suit.

Prebish v. WCAB (DPW/Western Center),
319 C.D. 2007 (Pa. Cmwlth. 2008)

WCJ was required to determine if Claimant’s condition had changed since adjudication of first termination petition before granting a later filed termination petition.

Commonwealth Court in an en banc decision reversed the decisions of the WCJ and the Board, which granted Employer’s petition to terminate benefits. Claimant was injured in 1993 with a right knee injury as described in the NCP. Employer sought to terminate benefits in 2000 and Claimant filed a review petition seeking to amend the NCP to include a right ankle injury. Both petitions were denied and the Board affirmed. The WCJ found that the NCP did not define the type of knee injury, and therefore the WCJ inferred that Employer intended to accept broad and expansive liability for a right knee injury.

Employer filed a second termination petition in 2004, alleging that Claimant had recovered, based on the results of an IME. Claimant responded that Employer was barred by res judicata from relitigating the issue because the IME did not establish a change in Claimant’s physical condition since the first WCJ decision. Employer’s petition was granted and the Board affirmed.

On appeal, Claimant argued that Employer was relitigating the first petition, and had not produced any evidence that Claimant had recovered from the condition found to exist in the first termination proceeding. Employer countered that it was not prevented from filing another petition, if it could prove that Claimant fully recovered or that any disability was due to causes other than the work injury since the time of the resolution of the first petition. Claimant countered in her reply brief that the Supreme Court’s decision in Lewis required Employer to prove a change in her condition after the denial of the first petition, and, such proof was not provided. The Court agreed that Lewis stood for the proposition that subsequent termination petitions were required to show a change in a claimant’s physical condition from the time of an earlier adjudication. The Court found that the WCJ herein did not clearly determine whether Employer’s doctor found that Claimant’s physical condition had changed since the first adjudication. Since the WCJ lacked the benefit of the Lewis decision, the matter was remanded for determination of any change in Claimant’s condition.

HCR Manor Care v. WCAB (Bollman),
2320 C.D. 2007 (Pa. Cmwlth. 2008)

WCJ had jurisdiction to determine whether records request was proper after Employer’s utilization review request.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which reassigned Employer’s utilization review request to a URO. Claimant sustained her injury in 2001 and treated with her doctor. Employer filed a UR request for all office visits, treatments, prescriptions, operative procedures and diagnostic tests provided by the doctor from August 31, 2005. The doctor forwarded the records, but did not sign a verification form. As a result, the records could not be reviewed and the treatment was deemed neither reasonable nor necessary. Claimant filed a petition for review of this determination and submitted testimony from the UR Coordinator who testified that she wrongly advised Claimant’s doctor of the time frame within which to submit his records. Claimant also presented a letter sent from her doctor’s office that indicated the verification page was never received with the records request. As a result, the WCJ ordered another utilization review. Both parties appealed and the Board affirmed.

On appeal, Employer argued that the WCJ had no jurisdiction to order a reassignment because verified medical records were not submitted. The Court reviewed the case in light of the Gazzola decision and held that, while the WCJ did not have jurisdiction to decide the merits of the UR petition, jurisdiction did exist to decide issues of the adequacy of the URO’s pursuit of the records need for review. Since the WCJ based the decision on whether the records were properly requested, not the merits, jurisdiction existed for the decision. While the findings were somewhat convoluted, they were sufficient for the Court to conduct a review and were sound enough to affirm.

Allegheny Power Service Corporation
and Acordia Employer Service, Inc.
v. WCAB (Cockroft),
242 C.D. 2007 (Pa. Cmwlth. 2008)

Bilateral loss claimant could continue to receive total disability benefits even after his return to work.

Commonwealth Court in an en banc decision, affirmed the decisions of the Board and the WCJ, which dismissed Employer’s petition to modify benefits. Claimant was burned on the job in 1995. As a result, Claimant’s right arm was amputated below the elbow. Fingers on the left hand of Claimant were amputated as well. Claimant received full benefits for two years until he returned to restricted duty in 1997. Employer unilaterally terminated benefits. Claimant filed a penalty petition and relied on section 306(c)(23), which created a statutory presumption of total disability for workers who had suffered bilateral losses unless otherwise determined by the Board. The WCJ concluded that this section obligated Employer to continue payment until there was a formal determination. The WCJ reinstated the benefits and awarded penalties and fees.

Employer then filed a modification petition. Employer’s medical and employment experts testified that Claimant had lost more that ninety percent use of his left hand, but was still a highly skilled worker who could perform a number of job functions. Claimant’s medical expert testified that Claimant had a very limited ability to perform work so as to render him unemployable. Claimant was only able to work for Employer because a special position had been created for him in a workplace where he was familiar. The WCJ accepted the testimony of Claimant’s experts, found that Claimant was totally disabled and that Employer was not entitled to a credit. The Board affirmed.

On appeal, Employer argued that section 306(c)(23) did not mandate an award of total disability without regard to evidence of post-injury earnings after an award under section 306(a). The Court noted that section 306(c) provided for the exclusive determination of benefits for a claimant who had been adjudged eligible for benefits under that section. The right to compensation under this section was measured by the extent of the injury, regardless of the degree of disability. For this reason, any reliance by Employer of section 306(a) was misplaced. The mention of section 306(a) in section 306(c)(23) indicated that the legislature presumed that bilateral losses resulted in total disability and wanted to give only the Board the ability to limit compensation in such cases. Even then, limitation of the awards was not mandatory, but within the Board’s discretion. Since the Court could not find that the Board abused its discretion, the order was affirmed. Judge Cohn Jubelirer dissented contending that Claimant’s earnings should serve to limit his total disability benefits.

Repash v. WCAB (City of Philadelphia),
114 C.D. 2008 (Pa. Cmwlth. 2008)

WCJ’s finding that firefighter’s presumption applied to claim of disability based on coronary artery disease was supported by the evidence, even though WCJ had previously determined that no disability existed in an earlier proceeding.

Commonwealth Court reversed the decisions of the Board and the WCJ, which denied Claimant’s claim petition. Claimant had been employed as a firefighter by Employer for 39 years. Claimant began to experience chest pains in 2001 upon exertion. When he suffered the pains on the job, he saw his family doctor and underwent an angioplasty. Two years later, Claimant filed this claim averring occupational disease occurring in the course of his employment. Claimant’s medical expert testified that experiencing chest pains on the job was the triggering event that precipitated receiving medical care. Employer’s medical expert testified that work as a firefighter did not precipitate his coronary artery disease, since there was no evidence to suggest that firefighters suffered coronary artery disease at any greater rate than non-firefighters. The WCJ denied Claimant’s petition, finding that Claimant had failed to establish either a work related or occupational injury. The Board remanded the matter back upon appeal, and directed the WCJ to apply the rebuttable presumption of work-relatedness under section 301(e).

On remand, the WCJ applied the firefighter’s presumption to conclude that Claimant met his burden. The WCJ accepted the testimony of Claimant and his medical expert and rejected the previously accepted testimony of Employer’s medical expert. Employer appealed and the Board determined that it had erred in ordering the previous remand. The Board reinstated the first decision of the WCJ and reversed the decision granting the claim petition. Claimant took this appeal and argued that the Board erred as a matter of law by ignoring the WCJ’s second set of findings that Claimant had satisfied the requirements of the firefighter’s presumption.

The Court concluded that the Board had erred in ignoring the finding that Claimant’s heart disease disabled him from firefighting. The WCJ in the first decision made no decision as to whether Claimant was disabled from firefighting; instead, the WCJ accepted the opinion of Employer’s medical expert as to the causation of Claimant’s heart disease. Since the WCJ’s remand decision carried out the task assigned on remand, and the conclusions were supported by the evidence, the Court could find no error. Accordingly, the Court reinstated the WCJ’s remand decision granting Claimant’s claim petition and remanded the matter for an award of benefits.

Campbell v. WCAB (Pittsburgh Post Gazette),
38 C.D. 2008 (Pa. Cmwlth. 2008)

WCJ’s finding that medical experts’ testimony did not credibly connect Claimant’s psychological injury and his physical injury was an issue for the trier of fact and was not subject to appellate review.

Commonwealth Court affirmed the decision of the Board, which modified the WCJ’s decision that denied Claimant’s claim and review petitions. Claimant injured his back in 1994. Employer acknowledged a back strain in the NCP that was later amended to include a herniated disc in 2000. Employer filed a modification petition in 2003, alleging that Claimant failed to look in good faith for employment within his physical restrictions. In response, Claimant filed a claim petition that alleged that he had developed severe depression, anxiety and panic attacks that prevented him from returning to any type of employment as a result of his injuries. At hearing, Claimant testified and presented the testimony of several medical and psychological experts who testified that Claimant’s psychological problems were a result of his physical injury. The WCJ concluded that Claimant’s petition was time-barred and that Claimant failed to give Employer notice of his injuries.

On the merits, the WCJ found that Claimant had failed to prove that his psychological condition arose from his physical injury. The Board did not support the WCJ’s determination on the grounds of timeliness and notice, but nonetheless did support the determination on the merits. The Board determined that the WCJ’s credibility assessment of Claimant’s experts was not subject to review therefore no error could be found in the WCJ’s conclusion.

On appeal, Claimant argued that the WCJ found the experts’ opinions to be equivocal and whether the opinions were equivocal or unequivocal was a matter of law and subject to review. The Court reviewed the WCJ’s findings of fact and concluded that the WCJ had rejected the experts’ testimony as to the causation of Claimant’s psychological condition. At no point did the WCJ suggest the experts were less than positive in their opinions as to causation or that their opinions were based on possibilities, only that the experts did not clearly analyze why Claimant’s psychological conditions were attributable to his original back injury. Since all the WCJ’s findings were supported by substantial evidence, the decision was affirmed.

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