June 2, 2010

Digest of
Appellate Decisions
May 2010

Department of Public Welfare v. WCAB (Harvey), 14 EAP 2009 (Pa. Sup. Ct. 2010)

Scranton School District v. WCAB (Carden), 1567 C.D. 2009 (Pa. Cmwlth. 2009)

Milner v. WCAB (Main Line Endoscopy Center, 2331 C.D. 2009 (Pa. Cmwlth. 2009)

Black v. Labor Ready, Inc., Williamsport Steel Container Corp. and Rheem Manufacturing Company, Inc., 312 MDA 2009 (Pa. Superior Ct. 2010)

Moberg v. WCAB (Twining Village), 1767 C.D. 2009 (Pa. Cmwlth. 2010)

ICT Group v. WCAB (Churchray-Woytunick), 2315 C.D. 2009 (Pa. Cmwlth. 2010)

Forbes Road CTC v. WCAB (Consla); Consla v. WCAB (Forbes Road CTC), 919 and 920 C.D. 2009 (Pa. Cmwlth. 2010)

Department of Public Welfare v. WCAB (Harvey),
14 EAP 2009 (Pa. Sup. Ct. 2010)

Actuarial assumptions and calculations may form the basis for a reasoned determination of the employer-funded component of a defined-benefit pension when determining what amount should be offset from a claimant’s compensation benefits.

The Pennsylvania Supreme Court affirmed the decision of the Commonwealth Court, which reinstated the WCJ’s decision to allow a pension offset against Claimant’s benefits.  Claimant began receiving benefits in 2001.  The next year he also started receiving disability retirement benefits administered through SERS.  Three years later, Employer implemented an offset of $359 per week against the benefits on account of Claimant’s pension receipt.  This amount represented the employer-funded share of Claimant’s pension.  Claimant’s compensation benefit was reduced to $81 per week. 

Claimant filed a review petition and at issue was an actuarial assumption of 8.5 percent investment return used by SERS in its calculation.  Claimant countered that section 204(a) did not permit the use of assumptions in determining employer funding, and required the identification of actual dollars supplied by Employer when calculating an offset. 

At a hearing before the WCJ, Employer presented the testimony of SERS’ director of benefits determination and a consulting actuary.  Claimant presented no evidence.  The WCJ credited Employer’s testimony and denied Claimant’s review petition.  The WCJ noted that the unrefuted testimony was nearly identical to evidence deemed sufficient in an earlier successful case in which a pension offset was validated. 

Claimant appealed and the Board remanded for additional findings, and suggested that the WCJ appoint an impartial expert.  Employer appealed and Commonwealth Court reversed the Board’s decision and reinstated the WCJ’s order.  Claimant filed this appeal, which was allowed on the limited basis to consider the ability to use an actuarially assumed rate of return under section 204(a). 

Claimant argued that permitting abstract actuarial estimates to control violated the requirement of substantial, competent evidence to support a WCJ’s findings.  To the extent that pension-specific employer contributions could not be identified, Claimant contended that Employer was without remedy.  Claimant further argued that a contrary approach could result in using a claimant’s own pension contributions when calculating an offset.  Employer’s arguments could be summed up by the contention that past, present, and future contributions combined to fund ongoing pension obligations, exceeding the amounts derived from employee preretirement contributions. 

Initially, the Court reviewed the language of section 204(a) and noted that, while the legislature provided for a credit to employers, nowhere in the statute was a formula for calculating that credit specified.  The Court found that the purpose of the section was to foster cost containment.  This prevented the Court from accepting Claimant’s argument that Employer was to be without a remedy in certain instances.  The use of the actuarial assumptions seemed to provide the most reasonable approach for quantifying employer funding, thus it was deemed a method that would have been approved by the legislature to carry out its intent under 204(a). 

The Court then determined that the testimony and evidence received by the WCJ was properly credited, and further held that actuarial assumptions and calculations may form the basis for a reasoned determination of the employer-funded component of a defined-benefit pension.  Therefore, since the WCJ’s decision was supported by competent evidence, the decision of Commonwealth Court was affirmed.    

Scranton School District v. WCAB (Carden),
1567 C.D. 2009 (Pa. Cmwlth. 2009)

Employer was not entitled to withhold payment for treatment once a URO had determined the treatment was reasonable; filing a petition for UR review did not allow for additional delay in payment.

Commonwealth Court, in this previously unpublished opinion, affirmed the decision of the WCJ and the Board, which denied Employer’s UR review petition and granted Claimant’s penalty petition.  Claimant was injured in 1995.  Employer filed a UR request in June 2007 about treatment received after May 15, 2007.  The treatments were determined to be reasonable in August 2007.  Employer filed the review petition thereafter.  Six weeks later, Claimant filed the penalty petition, alleging that Employer had failed to pay the medical bills that had been deemed reasonable and necessary. 

On appeal, Employer noted that section 306(f.1)(5) specifically suspended payment to providers if an employer disputed the reasonableness of the treatment.  Employer argued that the UR review petition was part of the dispute process that allowed continued suspension of payment.  The Court denied this argument and relied on section 127.708(g) of the regulations, which specifically stated that the filing of a petition for review before a WCJ did not further suspend the obligation to pay for treatment once there had been a determination that the treatment was reasonable. 

The Court further dismissed Employer’s contention that the regulation was in conflict with the Act, ruling instead that the regulation was consistent with the language of the statute, and that it was entitled to deference as it was promulgated by the Bureau.

Milner v. WCAB (Main Line Endoscopy Center),

Upon filing a claim petition, Claimant was obligated to prove not only her disability but her failure to recover from the disability; testimony from her doctor that her condition was irreversible did not shift the burden to Employer to prove that Claimant had recovered.

Commonwealth Court affirmed the decision of the WCJ and the Board, which granted Claimant’s claim petition for a ten-month closed period only.  In May 2007, Claimant filed a claim petition alleging that she sustained a repetitive use injury to her left middle finger on December 27, 2006 in performing her duties as a technician.  Claimant testified to increasing pain beginning in 2003.  Claimant left work in December to have surgery on the finger.  Claimant alleged that she could not return to her prior duties because she could not bend her middle finger completely and the finger still swelled after use.  Claimant’s doctor testified that Claimant’s condition had not improved and that she could not return to her pre-injury job as her condition was irreversible.  Employer’s doctor disagreed:  although Claimant could not perform her work duties before surgery, the doctor found that after the treatment, Claimant could return to her duties.  The WCJ credited the testimony of Claimant and her doctor as to Claimant’s inability to work prior to and directly after surgery, but found Employer’s doctor to be more credible on the issue of Claimant’s recovery. 

On appeal, Claimant argued that the WCJ had erred in finding the testimony of Employer’s doctor as sufficient, when the testimony of Claimant’s doctor had been accepted, including his diagnosis that Claimant’s condition was irreversible.  Using the Hebden case, Claimant contended that Employer was required to rebut the irreversible diagnosis and failed to do so.  The Court quickly distinguished Hebden in that it was an occupational disease case, as well as a case where the claimant had already been awarded benefits and the employer was seeking to terminate them.  Instantly, the matter involved Claimant’s claim petition in which the burden of proof was on her to not only prove the injury, but to prove that it continued to disable her.  The WCJ acted within her authority to accept the testimony of both experts.  The accepted testimony was properly supported evidence and the WCJ’s conclusion was not error.

Black v. Labor Ready, Inc., Williamsport Steel Container Corp. and Rheem Manufacturing Company, Inc.,
312 MDA 2009 (Pa. Superior Ct. 2010)

Business that asserted successful defense that it was not Claimant’s employer in Workers’ Compensation action was judicially estopped from asserting employer-immunity defense in subsequent personal injury action.

The Pennsylvania Superior Court reversed the decision of the Lycoming County court, which granted appellee summary judgment as to Claimant’s personal injury complaint.  Claimant was employed by Employer-temporary agency and sent to work at Appellee’s manufacturing site.  While there, Claimant was injured by machinery, which resulted in amputation of her right hand.  Employer issued a NTCP and Claimant filed a review of benefits.  A week later, Claimant filed a claim petition against Appellee, identifying it as her employer.  Appellee specifically denied this relationship.  At the WCJ hearing, an agreement was reached off-the-record.  The stipulation presented to the WCJ and issued in the decision was that Claimant was to be paid benefits by Employer and the claim against Appellee would be withdrawn.  

Claimant then filed the instant complaint with the lower court against Appellee and Employer, seeking damages.  In response, Appellee reserved all defenses available under the Workers’ Compensation Act.  Appellee further asserted that it had been Claimant’s employer at the time of injury and therefore the personal injury suit against it was barred. 

Both Appellee and Employer moved for summary judgment.  The trial court ruled that Claimant was a borrowed employee, which resulted in Appellee being afforded the protections of the Act.  The lower court ruled that Appellee was not estopped from asserting this defense by virtue of the WCJ’s earlier adjudication of Employer as Claimant’s employer. 

On appeal, Claimant asserted that Appellee was barred by its assertions in the workers’ compensation litigation that Employer was Claimant’s employer, particularly since Appellee had benefited from this position.  Superior Court listed the answers to Claimant’s claim petition wherein Appellee specifically stated that Employer was Claimant’s employer at the time of the accident and that Claimant was not in the scope of employment of Appellee at that same time.  Further, the Court noted that Appellee fully participated in the workers’ compensation litigation and were a party to the discussions that ultimately brought about a settlement to the case and a withdrawal of the action against Appellee.  Based on these arguments and actions, the Court concluded that Appellee was judicially estopped in the personal injury action from claiming that it was Claimant’s employer.  The decision below was reversed and the matter was remanded for further hearings.

Moberg v. WCAB (Twining Village),
1767 C.D. 2009 (Pa. Cmwlth. 2010)

Claimant could not receive compensation for injury sustained while undergoing required medical testing prior to employment, despite the fact that Claimant was hired a short time later.  

Commonwealth Court affirmed the decisions of the WCJ and the Board, which denied Claimant’s claim petition.  Claimant alleged that she sustained an injury in 2006 as a result of an adverse reaction she had to a tuberculin test.  Because the test was a condition of employment, Claimant sought payment of the resulting medical expenses.  Claimant had fainted after the test and struck her head.  The treatment that she received included a CAT scan.  Claimant was hired by Employer one month after the test, but was not employed by Employer at the time the test was administered.  Employer’s executive director testified that an individual was not considered to be hired until the required medical testing had been completed.  While only candidates who were anticipated to be hired were tested, the WCJ reasoned that Claimant was not an employee at the time of her injury because she had not completed all the prerequisites for hiring, and received no salary for work performed on that date.  The Board affirmed the decision and deferred to the fact finding made by the WCJ. 

Before the Court, Claimant contended that she had been hired for all intents and purposes prior to the date of the test and the test was only a formality before she could begin actual work.  Although the Court noted inconsistencies in the testimony of both Claimant and Employer’s witnesses, the Court was bound by the credibility determinations of the WCJ.  Even though the record supported the contentions of Claimant, the Court ruled that the record also supported the conclusions reached by the WCJ.  Therefore, the decision of the WCJ must be affirmed. 

As a matter of law, the Court could not agree that an employer-employee relationship between the parties existed.  The fact that Claimant was not paid at the time of the injury was not necessarily controlling.  Had Claimant failed to meet Employer’s other requirements for hiring that had remained outstanding at the time of injury, she would not have ultimately been hired.  Therefore, the Court could not conclude that an employer-employee relationship existed at the time of injury, and Claimant could not pursue her request for reimbursement of medical expenses. 

ICT Group v. WCAB (Churchray-Woytunick),
2315 C.D. 2009 (Pa. Cmwlth. 2010)

Parking lot in front of Employer’s building was considered to be Employer’s premises for the purposes of awarding benefits since it was ten feet from the workplace and Claimant was there on Employer-scheduled unpaid lunch break.

The Court affirmed the decisions of the WCJ and the Board, which granted Claimant’s claim petition.  Claimant had been injured in a fall on Employer’s premises during her unpaid lunch break.  The WCJ determined that Claimant and her witnesses were credible and that the injury occurred during the scope of Claimant’s employment under the “personal comfort doctrine.” 

On review, the Court dismissed Employer’s first contention that the parking lot in which the injury occurred was not Employer’s premises because Employer neither leased nor owned the lot.  The Court determined that the lot was so connected with Employer’s business that it formed an integral part of the business since it was a reasonable means of access to the workplace.  Claimant was required to take her lunch break at a time predetermined by Employer.  Since she was permitted to leave the workplace and the parking lot where the injury occurred was ten feet from the workplace, Claimant’s presence on the premises remained so connected to the employment relationship that it was required by the nature of her employment.  The Court did agree with Employer that the WCJ had not clearly identified Claimant’s injuries other than stating that injury occurred to her back, neck and legs.  To the extent that the injury finding lacked specificity, the WCJ failed to issue a reasoned decision.  This failure did not require vacation of the entire decision, only a remand to the WCJ to determine what specific injuries Claimant sustained.  The decision was affirmed in all other respects.

Forbes Road CTC v. WCAB (Consla); Consla v. WCAB (Forbes Road CTC),
919 and 920 C.D. 2009 (Pa. Cmwlth. 2010)

Employer did not violate the Act by issuing a Notice of Compensation Denial when it only wanted to acknowledge Claimant’s work injury and dispute the alleged disability.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which granted Claimant’s claim petition, suspended benefits, granted Claimant’s penalty petition and demand for unreasonable contest fees in part.  On appeal, Claimant contended that the WCJ had erred in finding that Employer properly issued a notice of compensation denial to accept Claimant’s injury for medical purposes only.  Employer appealed the assessment of penalties.  Claimant had sustained an injury in 2007 while working as a teacher.  Shortly thereafter, Employer issued an NCD indicating that an investigation was ongoing.  Later, the NCD was modified by acknowledging the injury, but denying any disability.  Claimant later filed this petition seeking medical payment and unreasonable contest fees. 

A hearing was held and the WCJ issued an interlocutory order stating that the claim, on an interim basis, was awarded and immediately suspended.  Employer then issued a medical only NCP.  The parties subsequently signed an agreement for compensation.  Ultimately the WCJ ruled that Employer did not violate the Act by issuing a qualified NCD and the medical only NCP.  However, Employer was ordered to pay a penalty based on the delay after the WCJ’s interim order.  Employer was determined to have made a reasonable contest to the claim petition, but not the penalty petition.  The Board affirmed this order. 

Before the Court, Claimant argued that the NCD should have only been issued in a “medical only” case when the injury is contested, and then the specific objection must be stated.  In dismissing this argument, the Court relied on case law that allowed an Employer to file an NCD in order to acknowledge a work-related injury when the claimant’s disability is disputed. Therefore, the WCJ did not err in concluding that the contest of Employer was only partially unreasonable. 

Finally, the Court dismissed Employer’s appeal of the penalty assessment.  Employer alleged that the WCJ had failed to specifically designate the portion of the Act violated.  The Court disagreed and pointed out where the section had appeared in the WCJ’s conclusions.  Further, the penalty had clearly been assessed when Employer failed to make prompt payment after the WCJ’s interlocutory order.

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