May 4, 2009

Digest of
Appellate Decisions
April 2009

Ford Motor/Visteon Systems v. WCAB (Gerlach), 1944 C.D. 2008 (Pa. Cmwlth. 2009)

Rogele, Inc. v. WCAB (Mattson), 1206 C.D. 2008 (Pa. Cmwlth. 2009)

Henkels & McCoy, Inc. and Liberty Mutual Insurance Company v. WCAB (Barner), 1396 C.D. 2008 (Pa. Cmwlth. 2009)

Diehl v. WCAB (IA Construction and Liberty Mutual Insurance), 1507 C.D. 2007 (Pa. Cmwlth. 2009)

Alessandro v. WCAB (Precision Metal Crafters, LLC), 2209 C.D. 2008 (Pa. Cmwlth. 2009)

Ford Motor/Visteon Systems v. WCAB (Gerlach),
1944 C.D. 2008 (Pa. Cmwlth. 2009)

Modification of benefits based on impairment rating of less than 50% may take place effective the date of the evaluation of the IRE physician, even if the IRE was not requested under the automatic process of section 306(a.2).

Commonwealth Court reversed the decision of the Board and reinstated the WCJ’s decision to grant Employer’s modification petition effective August 24, 2006. Claimant was injured in 2001 and Employer filed the instant petition in 2006 seeking to convert Claimant’s benefit status from total disability to partial disability based on a 19% impairment rating calculated after a physical exam. The WCJ granted the petition, since it was unchallenged and modified Claimant’s disability status effective the date of the examination. The Board affirmed the finding, but amended the effective date to the date of decision, reasoning that since an IRE was not requested upon Claimant’s receipt of 104 weeks of disability, Claimant’s changed status did not officially exist until it was determined by the WCJ. Therefore, the later effective date was proper.

Employer appealed and argued that the WCJ had properly reasoned the decision. The Court ruled that Employer was not barred from having the benefits modified simply because the change in Claimant’s impairment was not realized through the automatic process of section 306(a.2) of the Act. This modification proceeded under sections 306(a.2)(5) and (6) of the Act. Section 123.102 of the Act 57 Regulations allowed an effective date for a change in a claimant’s disability status based on an impairment rating of less than 50% as the date of the evaluation made by the IRE physician. Accordingly, the WCJ did not err and the effective date in that decision was restored.

Rogele, Inc. v. WCAB (Mattson),
1206 C.D. 2008 (Pa. Cmwlth. 2009)

Employer could not terminate Claimant’s benefits due to his incarceration until after Claimant had been convicted of the charges brought against him.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which ordered Employer to pay partial disability benefits to Claimant from the date he allegedly committed murder until the date of his conviction, as well as attorney’s fees and a fifty percent penalty. Claimant injured his wrist in his employment as a laborer in July, 2003. Employer paid partial benefits while Claimant performed light duty until he was laid off nearly a year later. Shortly thereafter, Claimant began substitute teaching and received total benefits. A petition to terminate benefits was unsuccessful. During this time, Employer filed the instant petition to suspend benefits when Claimant withdrew from the workforce after he solicited the murder of his wife. Claimant pleaded guilty to the charges, and three years after the injury, he was sentenced to four to eight years of imprisonment. The WCJ ordered Employer to pay partial disability benefits until Claimant’s conviction because section 306(a.1) of the Act called for suspension of benefits due to an incarceration after a conviction. Since Claimant was not convicted until after he had pleaded guilty, the plain language of the Act did not allow for termination of his benefits before that time. The Board affirmed this determination.

On appeal, the Court rejected Employer’s arguments advanced in favor of other interpretations of the Act’s language. The Act clearly limited termination of benefits due to incarceration after conviction. While Employer argued that any claimant whose loss of earning power is caused by any period of incarceration rather than a work injury should not receive benefits, that proposition could not be supported by the language in the Act. Therefore, the decisions below were affirmed. Judge Simpson dissented, and contended that the language in the statute was not clear and the word “conviction” was an ambiguous one.

Henkels & McCoy, Inc. and Liberty Mutual Insurance Company v. WCAB (Barner),
1396 C.D. 2008 (Pa. Cmwlth. 2009)

Insurer was not entitled to reimbursement from Supersedeas Fund for unilateral cessation of benefits, even though Claimant had returned to work at the same rate of pay and was fired two days later for cause.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which limited reimbursement to Employer and Insurer from the Supersedeas Fund. Claimant suffered a fractured foot in 2001 and began receiving total disability. Seven months later he returned to work and his benefits were suspended, since Insurer believed that Claimant had signed a supplemental agreement. Four years later, Claimant filed a petition for penalties alleging that benefits were illegally suspended and that he had been laid off by Employer two days after he had returned to work in 2001.

Insurer voluntarily resumed paying benefits until it was learned that Claimant had been fired in 2001 for failing a drug test. A petition to suspend benefits was filed and a request for supersedeas was made based on Claimant’s discharge for cause. The WCJ declined to consolidate the petitions and denied supersedeas. Insurer paid the retroactive benefits. Ultimately, the parties reached an agreement that granted the suspension petition. Employer and Insurer then filed the instant request for reimbursement for repayment of retroactive and other benefits. The Bureau offered payment of approximately one-quarter of the amount requested, omitting payment for the retroactive benefits. The WCJ denied the petition because Insurer had unilaterally decided to suspend the benefits without securing a supplemental agreement. The Board affirmed this decision.

On appeal, Insurer argued that the cessation of benefits was made in the mistaken belief that an agreement had been signed, after Claimant returned to work without a decrease in earnings. In dismissing this argument, the Court relied on the Hooper case and focused on Employer’s unilateral termination of benefits. Even if the termination was unintentional, the Act did not allow for employer-self-help, and such action was in direct violation of the Act. Had Insurer followed the proper procedure, and filed a petition to modify, the retroactive payment could not have been entered. Therefore the lump sum payment was not made because of the denial of supersedeas but rather because Insurer wrongfully withheld the benefits in the first place.

Diehl v. WCAB (IA Construction and Liberty Mutual Insurance),
1507 C.D. 2007 (Pa. Cmwlth. 2009)

Employer need not present proof of available employment when seeking to modify the disability status of a Claimant more than 60 days after Claimant’s receipt of 104 weeks of disability benefits; such proof is required only when seeking to modify the amount of the benefit.

Commonwealth Court, in an en banc decision, affirmed the decision of the WCJ and the Board, which changed Claimant’s disability status from total to partial disability. Claimant sustained an injury to his foot in 1999. Employer requested an IRE more than 60 days after Claimant had received 104 weeks of disability benefits. The IRE was performed nearly 18 months after the 104 week-period ended. The doctor rated Claimant’s disability at 28%. Employer filed a modification petition and while the WCJ agreed with the 28% impairment rating, ruled that Employer was required to prove the availability of employment suitable for Claimant. Employer appealed and the Board reversed, reasoning that because Employer sought a change in disability status, not a change in compensation, it did not have to present evidence of job availability.

Claimant filed this appeal and contended that the Act required Employer to present job availability, and the Board’s decision rendered the relevant section of the Act meaningless. The Court laid out in detail the methods available for modifying both disability status and disability payments under the Act. Employer was obligated to not only file a petition for modification, but a hearing was required to be conducted with the taking of evidence and determinations of credibility.

Although the administrative process was required to be followed in a modification procedure that was not self-executing, the Court could not agree that Employer was required to prove Claimant’s earning power under the circumstances of this case. The Court analyzed the words in section 306(a.2)(5) and ruled that the section gave Employer an option to prove that Claimant had gained an earning capacity or that Claimant’s condition had improved to an impairment rating that was less than 50%. Since Employer did not seek to reduce Claimant’s benefits, but only the amount of disability so that Claimant’s benefits would be capped at 500 weeks, it would make no sense if Employer had to prove earning power in order to change Claimant’s status. If the opposite were required, there would be no reason for Employer to obtain an IRE, since earning power proof would always be required. Accordingly, the Board’s order was affirmed. Judge Smith-Ribner dissented, and agreed with Claimant’s argument.

Alessandro v. WCAB (Precision Metal Crafters, LLC),
2209 C.D. 2008 (Pa. Cmwlth. 2009)

WCJ did not err in rejecting the testimony of Claimant’s witnesses and accepting Employer’s evidence that Claimant had other employment, even though that evidence contained hearsay testimony and video surveillance.

Commonwealth Court affirmed the decisions of the Board and the WCJ that granted Employer’s petition to suspend his benefits. Claimant injured his spine in 2005 and began receiving benefits. Eighteen months later, Employer filed a suspension petition, alleging that Claimant refused to return to the work made available to him within his restrictions. Employer then amended the petition to include an allegation that Claimant had been earning income on another job and had failed to report that income. At hearing, Claimant testified that he had performed painting on automobiles, but could not continue in this part-time employment after his injury. An investigator for Employer testified at hearing that the owner of the dealership stated that Claimant was performing painting jobs for him. Additionally, Employer’s doctor testified that Claimant presented with calluses and ground in dirt on his right hand, indicating that he had been using the hand for functional purposes. The WCJ concluded that although Employer had failed to offer Claimant work when he was released for light duty, sufficient evidence established that Claimant had earned the additional alleged income. Claimant’s benefits were suspended until such time that he provided information regarding his earnings with the car dealership, beginning with the first day Claimant was observed on surveillance video picking up a vehicle for painting. The Board affirmed the ruling.

On appeal, Claimant argued that there was no substantial, competent evidence to establish that he was engaged in any type of employment after his injury, and that the WCJ erred in rejecting his testimony, as well as the testimony of his witnesses on this issue. Initially, the Court noted the assumed unreliability of both the admitted hearsay and the surveillance video. In particular, the video failed to show Claimant actually performing any of the work that he was alleged to have done. The Court chose to focus on an affidavit filed by Claimant that he had earned less part-time income after the accident than he had prior to its occurrence. This admission against his interest could be used as substantial evidence against Claimant. Further, the admission properly served as corroboration for the hearsay testimony of Claimant’s part-time employer. The WCJ provided detailed explanations for her rejection of the testimony of Claimant’s witnesses as required by law, so that the Court was prevented from re-weighing the evidence and accepting Claimant’s allegations.

While the Court acknowledged that the decision was a close one, it was bound by the conclusions of the WCJ who heard the testimony and saw the witnesses. The Court also rejected Claimant’s argument that his benefits were permanently suspended, since he will be unable to produce evidence of his secondary earnings. The finding of employment by the WCJ was supported by the evidence therefore the Court could not accept Claimant’s contention. Alternatively, Claimant could present evidence that his medical condition had changed to the point where a reinstatement of benefits was available. Accordingly, the decisions were affirmed.

(Back to top)