February 2, 2010

Digest of
Appellate Decisions
January 2010

Ashman v. WCAB (Help Mates, Inc. and State Workers’ Insurance Fund, 1429 C.D. 2009 (Pa. Cmwlth. 2010)

Department of Labor and Industry, Bureau of Workers’ Compensation v. WCAB (Excelsior Insurance), 2012 C.D. 2008 (Pa. Cmwlth. 2010)

Bereznicki v. WCAB (Eat ‘N Park Hospitality Group), 1047 C.D. 2009 (Pa. Cmwlth. 2009)

Duferco Farrell Corporation and American Zurich Insurance Company v. WCAB (Zuhosky), 1304 C.D. 2009 (Pa. Cmwlth. 2009)

Ashman v. WCAB (Help Mates, Inc. and State Workers’ Insurance Fund,
1429 C.D. 2009 (Pa. Cmwlth. 2010)

Slight modifications to light duty work, such as increasing weight limits, did not require Employer to provide Claimant with a “Notice of Ability to Return to Work” when the actual light duty job assignment did not change.

Commonwealth Court affirmed the decision of the WCJ and the Board, which granted Claimant’s claim petition, but awarded her only one week of total disability after finding that Employer made light duty work available to her. Claimant was employed as a home health aide and sprained her back in the course of employment on June 21, 2006. Claimant reported the injury five days later and began treating with Employer’s physician, who released Claimant to light duty work on July 5, 2006. Claimant requested total and partial disability benefits, and on July 27, 2006, filed a penalty petition, alleging that Employer failed to properly investigate her claim.

Claimant’s light duty work consisted mostly of sedentary office work. During the course of her light duty, Employer’s doctor’s released Claimant to perform additional duties and lift up to 20 pounds. Claimant maintained her office job. In addition to being seen by Employer’s doctors, Claimant also treated with her own doctors, who recommended Claimant stay out of work when she experienced pain during her light duty job.

At the WCJ hearing, testimony revealed that Claimant had undergone back surgery prior to the work injury. Employer’s doctor testified that, in his opinion, it was unusual for a person who had had back surgery to delay treatment of an acute back strain for four days. The doctor reasoned that Claimant’s current condition was not a result of a work injury, but was related to her previous back problems. The WCJ granted the claim petition, but dismissed the penalty petition. The WCJ believed Claimant’s testimony regarding her symptoms, but could not believe that they were as severe as testified to by Claimant. The WCJ ruled that Employer had given Claimant appropriate light duty employment upon her release by their doctor, and that the light duty employment was properly within the restrictions given by not only Employer’s doctor, but Claimant’s physicians as well.

After a remand for a determination of penalty and fees, Claimant appealed. Before the Court, Claimant contended that the WCJ had erred in the original order by allowing modified benefits when no “Notice of Ability to Return to Work” had been provided to Claimant or entered into evidence at trial. The Court ruled that the WCJ had not erred since the modifications to Claimant’s light duty position were so slight and did not serve to change Claimant’s actual duties in that position, no notification was required each time a change was made. Finally, since the finding Claimant was able to work light duty shortly after reporting her injury was supported by the evidence, the decisions below were affirmed.

Department of Labor and Industry, Bureau of Workers’ Compensation v. WCAB (Excelsior Insurance),
2012 C.D. 2008 (Pa. Cmwlth. 2010)

Payments made to Claimant after third-party settlement by Insurer during “grace period” which represented Insurer’s pro-rata share of attorney’s fees from the settlement were subject to Supersedeas Fund reimbursement since the payments were made only because Claimant was entitled to full disability benefits during that time period.

Commonwealth Court affirmed the decision of the Board, which had modified the WCJ’s decision to grant Insurer’s request for reimbursement from the Supersedeas Fund for payments made to Claimant due to the recovery costs associated with obtaining a third-party settlement. Claimant was injured in 2003 and Insurer began paying him benefits at that time. Three years later, Insurer requested modification and supersedeas, alleging that work was available within Claimant’s restriction. The supersedeas petition was denied, and while the modification was pending, Claimant entered into a third-party agreement that paid him over $300,000. Insurer recovered its share of the award, minus the costs of litigation. Since the award was greater than the amount of Insurer’s accrued lien, Insurer was entitled to a grace period, wherein Claimant’s benefits were reduced and Insurer essentially paid the amount of the grace period benefits which were attributable to Insurer’s attorney’s fees.

The parties then entered into a C&R calling for a payment of $40,000 to Claimant. Both agreed that the C&R did not resolve the pending modification petition or the issue as to whether Claimant was entitled to receive benefits after August 2005. Insurer paid benefits until October 2006.

The WCJ ultimately granted the modification petition and suspended Claimant’s benefits as of August 2005. Insurer sought supersedeas reimbursement for the unreimbursed balance of benefits from the date Insurer first sought supersedeas until the date it last made payment in 2006. The WCJ granted Insurer’s request in full and noted that the Supersedeas Fund had benefited from the third-party settlement because Insurer was able to have a grace period deduction from the benefits paid after the settlement. Without the settlement, the Fund would have had to reimburse Insurer for the full amount of disability benefits. The Board affirmed the decision, reasoning that the payments Insurer sought reimbursement for were compensation under section 443(a).

On appeal, the Fund argued that Insurer was not paying benefits, but was paying its share of the attorney’s fees from Claimant’s third party action. As such, the payments were not compensation and should not be reimbursed. The Court rejected this argument, since Insurer, at the time of payment of the benefits, was liable for payment of full wage loss and medical benefits. The fact that Insurer received some reimbursement from the third-party action did not change its obligation to pay full benefits or its right to receive reimbursement.

The Court went on to rule that section 319, which required Insurer to share in the costs of third-party litigation from which it had benefited, did not indicate that Insurer was require to share such costs when there had been a determination that compensation was not payable. The result suggested by the Fund allowed a benefit only to the Fund, as it would escape payment in a case where, absent the settlement, it would have been liable for reimbursement of all of the overpaid compensation.

Finally, the Court determined that the grace period payments were not in addition to the compensation then owed Claimant, those payments were the compensation properly owed Claimant at the time they were paid. Therefore, the orders were affirmed. Judge Pellegrini dissented, contending that the grace period payments were not compensation.

Bereznicki v. WCAB (Eat ‘N Park Hospitality Group),
1047 C.D. 2009 (Pa. Cmwlth. 2009)

Claimant’s benefits were suspended when she refused to enter into a detox program offered by Employer.

Commonwealth Court published a decision it rendered in October 2009, which affirmed the decision of the WCJ and the Board granting Employer’s petition to suspend benefits due to Claimant’s refusal of medical treatment.

Claimant sustained a low back strain in 1996. Ten years later, Employer filed a termination petition, alleging that Claimant had fully recovered from her injury. Claimant filed a UR review petition that challenged a UR determination that the medications Claimant was receiving from her doctor were not reasonable or necessary. The WCJ denied Employer’s petition, finding that Claimant was a member of a small group of individuals who could not fully recover from lumbar strains due to congenital defects in the lumbar spine.

The WCJ also decided that the medications Claimant was taking were not reasonable or necessary. The WCJ went on to reason that Claimant would need a detox program to wean her off her present medications, and found that the detox program would be a reasonable and necessary treatment. Employer then offered Claimant treatment in a detox program. Claimant’s counsel responded that his interpretation of the WCJ’s decision did not require Claimant to participate in such a program. Claimant refused to enroll in any detox program.

Employer filed the instant suspension petition alleging that Claimant refused reasonable medical treatment. Employer presented the deposition and prior testimony of its medical expert from the hearing on Claimant’s UR review petition, which detailed the number and amount of opioid drugs Claimant was taking. The WCJ agreed and held that, while treatment would not allow Claimant to return to her previous job, it would make it possible for Claimant to work. The Board agreed with this decision.

On appeal, Claimant argued that Employer’s medical expert did not clearly testify that a detox program would increase Claimant’s capacity to work. The Court first determined detox treatment was reasonable because it would cure Claimant’s health problem-the toxic levels of medication in her system-and enhance her prospects for gainful employment. Further, Employer was not collaterally estopped from offering the expert’s testimony despite the fact that it had been previously been rejected for its contention that Claimant had recovered from her work injury. Estoppel did not apply because the issue of recovery from a back injury was not identical to the issue of detoxing Claimant from her medication. Therefore, the decisions below were affirmed.

Duferco Farrell Corporation and American Zurich Insurance Company v. WCAB (Zuhosky),
1304 C.D. 2009 (Pa. Cmwlth. 2009)

Receipt of a union retirement pension and failure to look for any other job in the workforce, triggered the presumption that Claimant had voluntarily withdrawn from the workforce and placed a burden on him to show that he had not withdrawn and intended to continue working.

Commonwealth Court reversed the decisions of the Board and the WCJ, which granted Claimant’s reinstatement petition and awarded unreasonable contest fees. Claimant suffered a knee injury in 2003 and began receiving benefits. Benefits were suspended two years later when he returned to work at modified duty. In 2007, Claimant stopped working and underwent knee replacement surgery. Claimant then filed the instant reinstatement petition. His doctor testified that Claimant’s pre-existing arthritis was aggravated by injury and hastened the need for the knee replacement. Employer presented no evidence at the hearing, but questioned Claimant as to his plans to retire. Claimant was receiving Social Security benefits and a union pension, but maintained that he would return to work in a job that he was able to do. Claimant testified that he had looked for no other work.

The WCJ rejected the argument that Claimant had voluntarily removed himself from the workforce. Absent Employer’s unequivocal showing that Claimant intended to voluntarily remove himself, the petition was denied and Employer’s contest was deemed unreasonable. The Board affirmed this decision.

On appeal, the Court noted that the question whether Claimant’s receipt of a pension from a source other than Employer triggered the presumption that Claimant had voluntarily removed himself from the workforce was one of first impression. The Court agreed with Employer that, once Claimant accepted a pension, he was presumed to have withdrawn from the workforce, and the burden was on him to show that he had not. In order to rebut the presumption, Claimant was required to show that he was engaged in a good faith job search or that the work-related injury made him incapable of working any job in the entire labor market.

The Court reasoned that to require Employer to prove that Claimant had no intention of working further would be overly burdensome, when it was not burdensome to require Claimant to show that he intends to continue working. Claimant needed only show that he was applying for jobs within his physical restrictions. Since Claimant had begun receiving pensions and had not presented any evidence to show that he was looking for any type of employment, the decision was reversed.

Judge Freidman dissented, reasoning that Claimant took retirement benefits only after he had been refused Workers’ Compensation benefits and that Claimant made an unsuccessful attempt to return to his job after the surgery. Based on these facts, Judge Friedman contended, the presumption should not have been triggered.

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