May 11, 2005 - Pennsylvania Workers' Compensation Update - 1st Quarter '05
William Colpetzer v. WCAB (Standard Steel), No. 63 MAP 2003 (Filed March 30, 2005) and David Zerby v. WCAB (Reading Anthracite Company), No. 194 MAP 2003 (Filed March 30, 2005).
ISSUE: Whether Section 309(d) of the Act mandates using the AWW of a prior injury rather than either the prior workers' compensation benefit rate or no earnings when calculating an AWW for a subsequent injury?
ANSWER: Yes.
ANALYSIS: In the companion cases of Colpetzer and Zerby, the Supreme Court addressed the proper calculation of the AWW where an injured worker earned no wages or reduced wages during a period because the worker suffered a previous work injury. In Colpetzer and Zerby, the Supreme Court confirmed that in making the calculation of the AWW for a subsequent injury under Section 309(d), the AWW already established for a previous work injury should be utilized. The Court first and foremost relied upon the humanitarian purposes of the Act which must be construed in the injured party's favor. Next, the Court cited the legislative intention that injured workers entitled to benefits should be paid a fair benefit rate based upon an accurate calculation of their actual history of earnings and earning capacity. Where there has already been a prior determination from within the workers' compensation system as to the claimant's AWW from a previous injury, using that AWW would avoid an unreasonable result in calculating claimant's AWW for a subsequent injury.
CONCLUSION: The majority of the PA Supreme Court applied the approach that Section 309(d) controlled and relevant periods of compensated work disability for a subsequent injury should be computed by using the AWW that was already established for a prior work injury. The goal is to reach an accurate computation of the claimant's AWW. Thus, any artificially depressed wages (or no wages at all) received because of a prior work injury cannot be included in the computation of the AWW for the second work injury under Section 309(d). Interestingly, Justice Eakin stresses in his dissenting opinion that the language of Section 309(d) is clear and unambiguous so the "judicial modification" of this language in the nature of fairness is a dangerous practice. The Supreme Court has clearly tried to fashion a fair and humanitarian result. However, it remains to be seen how the lower courts, Appeal Board and specific WCJs will handle calculations of AWWs for various employment situations with injured workers.
James Gillyard v. WCAB (Pennsylvania Liquor Control Board), No. 762 C.D. 2004 (Filed January 11, 2005).
ISSUE: Whether employer sustained its burden of proving that claimant was fully recovered from all of his work-related injuries when its doctor failed to testify concerning all of the claimant's accepted work injuries?
ANSWER: No.
ANALYSIS: On December 2, 1992, Claimant injured his back while in the course and scope of his employment as a store manager for the PA Liquor Control Board. An NCP was issued describing claimant's injury as a "lower back sprain and strain." As a result of additional litigation, claimant's work injury was expanded to include "chronic sciatica at the L5-S1 distribution on the right side with disc bulging at L4-5 and L5-S1 area." Employer had claimant re-examined and the physician opined that claimant was fully recovered from his low back sprains and strains. The WCJ concluded that employer met its burden of proving claimant was fully recovered from his work injuries. The WCAB affirmed. Claimant appealed to the Commonwealth Court, arguing that employer's medical expert did not opine that claimant was fully recovered from the chronic sciatica condition attributable to the work injury, so claimant was not fully recovered. Essentially, claimant argued that employer's medical expert opinion was not legally sufficient to support a termination of benefits because it failed to establish that claimant was fully recovered from all of his work-related injuries. The Court noted that caselaw requires employer's medical expert to determine whether claimant had fully recovered from the accepted work-related injuries. Because employer's medical expert never acknowledged that the claimant suffered from the chronic sciatica, the Court concluded that it was impossible for the medical expert's opinion to support a full recovery. Since employer's medical expert testified that claimant only suffered from sprains and strains, employer failed to establish that claimant was fully recovered from his established and accepted work-related injury.
CONCLUSION: When drafting IME letters to physicians, it is imperative to fully and completely describe the accepted work-related injury so that the medical expert can provide a comprehensive medical opinion concerning whether claimant has fully recovered from the work-related injuries.
James Croom v. WCAB (Pennsylvania Hospital), 1647 C.D. 2004 (Filed January 12, 2005).
ISSUE: Whether employer was entitled to receive a credit for pension benefits if employer funded one hundred percent (100%) of the pension?
ANSWER: Yes.
ANALYSIS: Claimant suffered a work related lumbar strain on July 1, 1999 while employed with Pennsylvania Hospital. Employer issued a Notice of Compensation Benefit Offset to reduce claimant's benefits based upon his receipt of a pension. On the same day, employer filed a Modification Petition because employer was not credited even though claimant was receiving a pension. Claimant filed a Review Petition challenging the compensation benefit offset. During the litigation, the parties stipulated that employer funded one hundred percent of the pension. Evidence presented by employer confirmed that it was a self-insured entity for purposes of workers' compensation. The employer has a TPA for its workers' compensation files which made payments from funds supplied by the employer. The WCJ denied employer's Modification Petition, but granted claimant's Review Petition. Employer appealed, but the WCAB reversed and determined employer was entitled to a credit. Claimant filed an appeal to the Commonwealth Court contending the WCAB erred when in reversed the WCJ's denial of the pension offset. The Court affirmed and relied upon the reasoning in Kramer v. WCAB (RiteAid Corp.), 794 A.2d (Pa. Cmwlth. 2002. In Kramer, the Court explained that an employer is only entitled to an offset under Section 204(a) of the Act if the employer is directly liable for payments of workers' compensation benefits. In the instant case, the evidence revealed that employer was a self-insured entity for workers' compensation purposes and was directly liable for payment of workers' compensation benefits for injured employees.
CONCLUSION: Under Kramer, the Court found that employer was entitled to a credit for the time claimant commenced the receipt of pension payments. Since the employer was a self-insured employer for purposes of workers' compensation benefits, it was entitled to a credit from the time claimant commenced the receipt of pension payments.
Rita Farner v. WCAB (Rockwell International), No. 1793 C.D. 2004 (Filed February 9, 2005).
ISSUE: Whether claimant's unilateral mistake regarding her understanding of ongoing group health benefits provides a sufficient basis to set aside the C&R Agreement?
ANSWER: No.
ANALYSIS: Claimant suffered a work related injury to her left arm in 1988. Approximately eleven years later, the parties and their lawyers agreed to enter into a Compromise and Release Agreement. Employer agreed to resolve its Modification Petition and claimant agreed to accept $45,000.00. During the hearing, claimant testified that in addition to waiving all workers' compensation benefits, she resigned her employment and signed a voluntary resignation statement. The Judge determined that claimant fully understood the legal significance of the C&R Agreement and approved the Agreement. Neither party appealed. Nearly a year and a half later, claimant's new lawyer filed a petition alleging employer breached the C&R Agreement by failing to pay her medical insurance premiums. Apparently, claimant's former attorney assured her that she would continue to receive health care benefits through employer's plan. The WCJ granted claimant's Petition and set aside the C&R Agreement. The WCAB reversed. The claimant filed an appeal. The Commonwealth Court reviewed the doctrine of mistake to set aside C&R Agreements. Under Section 449 of the Act, the Court noted that a WCJ shall not approve any C&R Agreement unless it is determined that claimant understands the full legal significance of the agreement. The Court cited the common law standard that a C&R Agreement can only be set aside after approval upon a clear showing of fraud, deception, duress or mutual mistake. In the instant case, the Court found that claimant failed to prove that both parties were mistaken as to a material fact that existed at the time the agreement was executed. Since there was no provision in the C&R Agreement promising continued payment of medical insurance premiums and there was no finding that the employer breached the C&R Agreement, the Court rejected claimant's Petition for Review. In fact, there was no agreement to continue medical insurance coverage in the Voluntary Resignation Statement.
CONCLUSION: This case confirms the rule that in order to have a C&R Agreement which was judicially approved set aside, the party seeking this relief must show by clear evidence fraud, deception, duress or mutual mistake. Without such a showing, the Court is reluctant to grant relief and set aside the executed C&R Agreement.
Francis Swartz v. WCAB (Cheltenham York Road Nursing & Rehabilitation), No. 2135 C.D. 2004 (Filed February 24, 2005).
ISSUE: Whether "pre-approval" of a vocational expert is required prior to a vocational interview?
ANSWER: No.
ANALYSIS: Claimant suffered a work related injury in 2002. An NCP was filed and claimant began receiving benefits. Employer had claimant examined and sought a vocational interview. Claimant refused. Employer filed Petition for Expert Interview. The WCJ granted the Petition without making findings of fact and conclusions of law. Claimant appealed the Decision. The WCAB affirmed. Claimant appealed. The Commonwealth Court noted that under Section 306(b) of the Act, insurer may require employee to submit to an interview by a vocational expert who is selected by the insurer and meets minimum qualifications established by the Department through regulations. The Court also cited the Supreme Court's holding in Caso v. WCAB (School District of Philadelphia), 839 A.2d 219 (Pa. 2003), that pre-approval of the vocational expert is not needed before a claimant attends a vocational interview. Essentially, the WCJ can decide the matter based solely on employer's Petition for Expert Interview. Claimant has the right to challenge the competency of an expert once a petition for suspension or modification is filed.
CONCLUSION: The Court has consistently maintained since Caso that pre-approval of a vocational expert is not required. Now, the Court has clarified that claimant must attend a vocational interview because the interview does not present a real risk of his benefits, and rights are not affected until the WCJ rules on a Suspension or Modification Petition. The safeguard for claimant is that if an insurer chooses a vocational expert to conduct an interview who does not meet the minimum qualifications of the bureau regulations, then the WCJ has the power to impose penalties under the Act.
Frank Wright v. WCAB (Larpat Muffler, Inc.), No. 1584 C.D. 2004 (Filed March 1, 2005).
ISSUE: Whether claimant's injuries occurred within the course and scope of his employment when he was struck crossing a five lane highway in front of employer's business while retrieving personal items from his vehicle?
ANSWER: No.
ANALYSIS: Claimant was employed as a mechanic. Employer's business is located along a five-lane highway. Claimant was instructed to park in a lot across the highway. Claimant has already crossed the highway and punched in at work. However, he decided to retrieve some auto parts from his personal vehicle that he wished to exchange. Claimant was struck walking back across the highway. Employer denied liability. Claimant filed a Claim Petition. The WCJ denied the Claim Petition on the grounds that claimant was not within the course and scope of employment because he was pursuing personal affairs at the time of the accident. The WCAB affirmed. Claimant appealed. The Court likewise affirmed noting that claimant was injured while crossing the highway for a purely person reason at the time he was struck. Claimant should have been working in employer's shop, not crossing the highway.
CONCLUSION: This is an important decision because the Court recognizes that claimant was on a mission personal to himself, not required by the nature of his employment or in the furtherance of employer's business. Therefore, this injury was not compensable under the Pennsylvania Workers' Compensation Act.
James J. McIlnay v. WCAB (Standard Steel), No. 1048 C.D. 2004 (Filed March 11, 2005).
ISSUE: Whether claimant's right to equal protection is violated because his claim for hearing loss injury is not allowed to benefit from the discovery rule?
ANSWER: No.
ANALYSIS: Claimant stopped working for the employer on July 31, 1994. He filed a Claim Petition almost nine years later on May 15, 2003, alleging that he sustained hearing loss due to his exposure while working for employer. Employer denied these allegations. The WCJ denied the Claim Petition because it was not filed within three years of his last exposure to occupational noise as required by Section306(c)(8)(viii) of the Act. Claimant filed an appeal and the WCAB affirmed. Claimant appealed to the Commonwealth Court, alleging a violation of his Equal Protection rights under the Pennsylvania and U.S. Constitutions. The Court noted that prior to passage of Act 1 of 1995, the discovery rule applied to hearing loss cases. However, Section 306(c)(8)(viii) now provides that a petition must be filed within three years after the date of last exposure to hazardous occupational noise, else the petition shall be barred. The Court has consistently held that the "discovery rule" does not apply to hearing loss cases. The Court determined that this standard was supported by a rational basis and should not be disturbed. Finally, the Court determined that this provision does not violate claimant's equal protection.
CONCLUSION: The Court noted that because the injury to the ear stops with the last day of exposure to hazardous noise, the Legislature's three year rule is reasonable and a sufficient time to give claimant an opportunity to assert a claim for hearing loss. The Court further noted that other factors in the nine years after claimant's last day of work could have caused or contributed to his hearing loss. The Court explained that it would be unfair to employer to permit such untimely assertions for hearing loss benefits.