August 4, 2009

Digest of
Appellate Decisions
July 2009

Braz v. WCAB (Nicolet, Inc.), 2226 CD. 2008 (Pa. Cmwlth. 2009)

Lusby v. WCAB (Fischler Co. & Sparmon, Inc.), 804 C.D. 2008 (Pa. Cmwlth. 2009)

Rebeor v. WCAB (Eckerd), 2328 C.D. 2008 (Pa. Cmwlth. 2009)

Good Tire Service v. WCAB (Wolfe), 729 C.D. 2008 (Pa. Cmwlth. 2009)

Bentley v. WCAB (Pittsburgh Board of Education), 1560 C.D. 2008 (Pa. Cmwlth.  2009)
Community Service Group v. WCAB (Peiffer), 90 C.D. 2009 (Pa. Cmwlth. 2009)

Braz v. WCAB (Nicolet, Inc.),
2226 CD. 2008 (Pa. Cmwlth. 2009)

Employer need not present medical evidence of a change in Claimant’s condition if Claimant has relocated so far away that reemployment is impossible.

Commonwealth Court published its decision that had been issued in March, which affirmed the Board’s determination to reverse the WCJ’s denial of Employer’s suspension petition. Claimant had suffered a wrist fracture in 1986.  Claimant began receiving compensation payments. At some point thereafter, Claimant moved to Portugal. Ten years later, Employer petitioned to suspend benefits on the basis that Claimant was unavailable for employment due to his residence in Portugal.  The parties stipulated to the facts. The WCJ denied the petition because Employer failed to present any evidence of a change in Claimant’s medical condition. 

Employer appealed, and the Board reversed, reasoning that even if Employer had been able to establish a change in Claimant’s condition, it would have been futile to find jobs for him because of his residence in Portugal.  While the initial inquiry into a petition to modify payments is generally whether there is medical evidence of a change in a claimant’s condition, this requirement does not need to be addressed when the claimant has chosen to remove himself from the workforce by moving so far away that reemployment is not possible.  The Court relied on the Blong and Smith cases to rule that Claimant’s relocation to Portugal was a sufficient to excuse Employer from having to present medical evidence of a change in Claimant’s condition.

Lusby v. WCAB (Fischler Co. & Sparmon, Inc.),
804 C.D. 2008 (Pa. Cmwlth. 2009)

Claimant had sufficiently documented private insurer’s subrogation lien when the lien was requested in a specific amount one month prior to the execution of the parties’ C&R, and the order approving the C&R required payment of the lien.

Commonwealth Court, in an en banc decision reversed the decision of the Board and reinstated the WCJ’s decision to allow Claimant’s private insurer to recoup duplicate payments to Claimant’s medical providers.  Previously, Claimant and Employer had executed a C&R which called for Claimant to receive a lump sum payment and for Employer to remain liable for any related medical expenses incurred by Claimant up to the date of the hearing on the agreement in 2005.  Claimant further indicated that there was an actual or potential subrogation lien, and that Claimant’s attorney had a fee agreement with the private insurer. The WCJ directed Employer to issue payment for the medical expenses including private insurer’s lien to Claimant’s attorney.  Neither party appealed this order. 

A year later, Claimant’s attorney filed the instant penalty petition and claimed that Employer failed to pay the private insurer’s lien and the accompanying attorney’s fees.  At hearing, Employer countered that the medical bills were paid directly by Employer’s insurer, resulting in duplicate payment to the medical providers, but fulfilling Employer’s duty to pay for the medical expenses.  Employer also contended that Claimant’s counsel was advised of the duplicate payment, and was told to seek reimbursement from the medical providers.  However, the WCJ found that Claimant had not been advised of any duplicative payment until several months after the agreement was approved.  As a result of this delay, the WCJ granted the penalty petition and set the penalty amount at over $11,000.

Employer appealed and the Board held that the private insurer’s right to subrogation was not self-executing and needed to have been established by either contract or order of the WCJ.   Without further establishment of the lien, the Board found that the WCJ erred in concluding that failure to pay the lien was subject to penalty.  The Court disagreed, and relied on the unappealed order of the WCJ, which approved the C&R and directed Employer to reimburse the private insurer’s lien. 

Additionally, the Court found that Claimant’s attorney had asked for payment of the lien two months prior to the approval of the C&R.  This document, as well as the order approving the C&R was sufficient to establish the lien’s existence and enforceability.  Claimant’s attorney had established an exact amount of the lien, prior to the entry of the agreement, so there could be no mutual mistake of fact, as claimed by Employer.  Since the decision of the WCJ was support by the facts and the law, the Board’s decision was reversed, and the WCJ’s decision was reinstated.

Rebeor v. WCAB (Eckerd),
2328 C.D. 2008 (Pa. Cmwlth. 2009)

Employer was not obligated to conduct an employment survey near Claimant’s new home, when that home was in South Carolina, and was outside Claimant’s usual employment area.

Commonwealth Court affirmed the decisions of the WCJ and the Board, which granted Employer’s modification petition.  Employer successfully contended that gainful employment was generally available to Claimant, and he had declined to avail himself of it.  Claimant had been injured in 2002, and received benefits until 2003 when he returned to a light duty position.  Claimant continued to work in that position for nearly three years until he was laid off by Employer.  Seven months after the lay off, Employer served Claimant with a notice of ability to return to work based on the conclusion of Employer’s medical expert that Claimant was able to perform light duty work.  When Claimant failed to become employed, Employer filed this petition. 

At hearing, Claimant’s doctor testified to Claimant’s physical abilities and a vocational report was submitted showing available jobs for Claimant in the county where he had previously worked.  Claimant testified that he had relocated to South Carolina and had not been offered a position in one of Employer’s stores in that state.  Claimant had not sought any treatment after his move, and provided no medical testimony at hearing.  The WCJ concluded that the testimony of Employer’s medical and vocational experts was credible.  Further, the WCJ rejected Claimant’s contention that the vocational expert was required to look for available work in Claimant’s South Carolina location.  The Board affirmed, and added that Employer was only required to find that work was generally available for Claimant in his usual employment area.

On appeal, Claimant argued that Employer had not acted in good faith in conducting the vocational review, inasmuch as Claimant had advised Employer of his plan to relocate.  Therefore, although the jobs listed by the expert existed in theory, they were not reasonably available to Claimant because he had moved.  The Court relied on section 306(b)(2) of the Act, which defined Claimant’s usual employment area as the area in the Commonwealth where Claimant lived, or, if he did not live there, the usual employment area where the injury occurred should be used to determine if there is available employment.  Therefore, under the Act, South Carolina was not Claimant’s usual employment area.  The Court distinguished cases that dealt with employment surveys performed outside the usual employment area; those cases allowed employment surveys in areas outside the usual employment area, but in the location where a claimant lived, but they did not compel employment surveys in those areas.  Requiring Employer to conduct a search in South Carolina was not only contrary to the language of the Act, but would place an unreasonable burden on Employer.    

Good Tire Service v. WCAB (Wolfe),
729 C.D. 2008 (Pa. Cmwlth. 2009)

Claimant’s counsel was entitled to offset Employer’s subrogation lien only in the amount of fees actually paid by Claimant, regardless of the amount negotiated in the fee agreement.

Commonwealth Court, sitting en banc, reversed the decision of the Board, and reinstated the WCJ’s decision granting Employer’s petition to review benefit offset.  At issue was the question whether an employer’s pro rata share of attorney’s fees from a third party settlement arising out of a work injury should be calculated based on the original fee agreement with the claimant or the actual amount ultimately paid to counsel.  Claimant was injured in an automobile accident during the course of employment.  Claimant received benefits from Employer and sued the other party involved in the accident.  Ultimately, Claimant settled the personal injury case for $75,000.  Employer had a subrogation lien of nearly $50,000.  Although Claimant’s attorney had originally negotiated a forty percent contingent fee, he remitted one-third of that fee back to Claimant so that Claimant would not receive less money from that suit than his attorney.  Counsel then took the position that the forty percent contingent fee should be offset from the amount to be recovered by Employer, since it was the original contracted fee.  Employer argued that the offset was limited to the actual amount of attorney’s fees paid.  The WCJ sided with Employer and reasoned that the waived fee was not a reasonable attorney fee incurred in obtaining the recovery from the third party.  The Board reversed, and characterized the waived fee as a gratuity. 

On appeal, while the Court commended the professionalism of Claimant’s attorney, it could find no support in the Act to allow for an offset for anything other than the actual amount of attorney’s fees paid.  Not only was there no language to allow such a result, the Court feared that endorsement of this action would allow for the entry of sham fee agreements, specifically calculated to avoid the law regarding employers’ subrogation rights.  Accordingly, the order of the WCJ was reinstated.  Judge Smith-Ribner dissented and reasoned that once counsel had been paid the fee, it became the property of counsel and he was free to make a gift of it to Claimant, without impacting on the fee owed by Employer.

Bentley v. WCAB (Pittsburgh Board of Education),

Although a specific date for sending Notice of Ability to Return to Work could not be fixed, Claimant failed to show that notice was not sent at time alleged by Employer or that he had been prejudiced by the manner in which the notice had been sent.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which granted Employer’s modification petition.  Claimant had sustained a shoulder injury in 2001.  Employer issued an NTCP and began paying total benefits.  The NTCP was then converted to a Notice of Compensation Payable.  Claimant’s doctor released him to perform light duty work in 2003.  Claimant then met with Employer’s vocational expert who found ten light duty jobs within 25 miles of Claimant’s home.  The expert also determined that Claimant had an earning capacity $200 less than the amount of the benefits that he had been receiving.  Employer filed a petition under section 306(b), seeking to modify Claimant’s benefits to partial disability as of the date he was reexamined by his doctor.  At hearing, Claimant challenged Employer’s assertion that it had no positions appropriate for Claimant.  Employer’s workers compensation adjuster testified that Claimant was sent a Notice of Ability to Return to Work shortly after she received the doctor’s report.  The WCJ credited the testimony of Claimant’s doctor and Employer’s witnesses, and granted the petition, reducing Claimant’s benefits.

On appeal, Claimant argued that Employer failed to prove that it provided Claimant with the Notice of Ability to Return to Work in a timely manner, an issue not raised in his original answer.  The Board remanded for findings on this issue and the WCJ found that the notice was timely.  The Board affirmed this decision, modifying only the effective date from the date the physical examination was performed to the date Employer’s vocational expert testified that light duty jobs were available for Claimant.  Initially, the Court agreed that the testimony of the adjuster and the vocational expert supported a finding that Employer had sent a timely notice to Claimant. Further, the Court noted that Claimant had not alleged that he had been prejudiced in any way by the timing of the notice.  Additionally, the Court found that the vocational expert had conducted her search within a proper geographic area.  Finally, Claimant was not entitled to litigation costs as a result of the amended effective date since that issue had not been contested before the Board, and was merely a correction of a technical error.   

Community Service Group v. WCAB (Peiffer),
90 C.D. 2009 (Pa. Cmwlth. 2009)

Agreed-upon specific loss payments could not be paid to Claimant concurrent with her partial disability payments because the disfigurement arose from the same work injury.

Commonwealth Court, in a decision that had been previously issued, but not published until July, reversed the decisions of the Board and the WCJ, which granted Employer’s modification petition and granted specific loss benefits and ongoing partial disability payments to Claimant.  Claimant had sustained her injury in 2002 which was characterized as sprains to her arms, neck, knees and low back, as well as a temporary exacerbation of a pre-existing neck fusion.  After several agreements between them, the parties agreed in 2005 to resolve the neck injury claim as a disfigurement claim with a payment to Claimant of 57.5 weeks, due to the scarring left after surgery.  In 2006 another agreement identified the injury as a cervical fusion and reinstated full benefits.  In 2007, Employer filed a modification petition in which it sought to modify Claimant’s benefit status to temporary partial disability.  At the hearing, Claimant’s doctor testified that Claimant had herniated discs as a result of her back injury and had reached her maximum medical improvement, with a whole person impairment rating of 28 per cent.  The WCJ accepted this testimony as credible, and held that partial disability payment could be made in addition to the disfigurement benefits.  Employer appealed and contended that it was error for specific loss payments to be ordered concurrent with ongoing partial disability.  The Board affirmed the WCJ. 

On appeal, the Court noted that concurrent payment was allowed if the specific loss payment arose from an injury other than the work related injury.  Herein, the scarring that occurred was a result of surgery that had attempted to resolve the work injury.  While the specific loss did not occur at the time of the work injury, it did occur as a result of the work injury.  Therefore, the specific loss payments were not due Claimant until after her disability payments had ceased.

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