January 24, 2006 - Pennsylvania Workers' Compensation Update - 4th Quarter '05
SUPREME COURT CASES
Judith Wachs, Widow of James Wachs, Deceased v. W.C.A.B. (American Office Systems and Donegal Mutual Insurance Company), No. 77MAP 2004 (Decided 10/21/05)
ISSUE: The essential issue in this case was whether the contract exception [claimant's employment contract includes transportation to and from work] is still viable in light of the Act 44 amendment to Section 301(c) (1) of the Act.
ANSWER: The contract exception to the going and coming rule is still viable, the claimant's contract of employment included transportation, and claimant was therefore entitled to benefits.
ANALYSIS: The decedent was driving a company vehicle on his way to work when he was involved in a fatal accident. The decedent had worked for American Office Systems (hereinafter AOS), left for other employment, and upon his return, conditioned his re-employment on being provided with a company vehicle. Decedent drove the provided vehicle from his first day of re-employment until the fatal accident. He took the vehicle home each night and drove it each morning to either AOS' office or to a scheduled appointment. At first upon re-employment, decedent's work required him to be out of the office 90% of the time. This remained constant until he was promoted to a supervisory position which kept him at the home office most of the time. On the day of death, decedent was traveling to AOS' home office to repair two fax machines a client had dropped off to be serviced.
The Workers' Compensation Judge denied the Fatal Claim Petition, holding that the decedent was no longer a roving technician but a supervisor who spent most of his time at AOS' headquarters, had no fixed place of employment, and was commuting to work at the time of his death. After some procedural issues, the W.C.A.B. ultimately affirmed. The Commonwealth Court reversed, however, concluding that claimant's widow had proven that the decedent obtained the company car as part of his employment contract and that therefore the employment contract exception to the going and coming rule entitled claimant to benefits as he was, under the exception, within the course and scope of his employment. The Supreme Court granted review.
The Supreme Court highlighted that commuting to and from work is not within the course and scope of employment unless one of the following four exceptions apply:
- Claimant's employment contract includes transportation to and from work;
- Claimant has no fixed place of work;
- Claimant is on a special mission for employer;
- Special circumstances are such that claimant was furthering the business of the employer.
The Supreme Court then explained that the issue to be decided was whether the contract of employment exception still remained when Act 44 of 1993 amended Section 301(c)(1) of the Act. In so amending, the legislature inserted language that injuries sustained while the employee is operating a motor vehicle provided by the employer are not compensable unless the claimant is otherwise in the course and scope of employment at the time of the injury.
Justice Eakin, writing for the majority, concluded that the contract of employment exception to the going and coming rule still does exist and claimant's employment contract in this instance included transportation. Therefore, the Supreme Court affirmed the Commonwealth Court's granting of benefits. Justice Saylor dissented, believing that the contract of employment exception had been abrogated by Act 44, and thus, claimant was only commuting to work and should not have received benefits.
CONCLUSION: The evidence in this case was clear concerning the fact that claimant's re-employment with AOS was contingent upon transportation being included in his employment contract. In most cases, the question is not so clear and any time a claimant is injured during a commute, the situation needs to be analyzed closely to ascertain whether the injury falls within or outside of the course and scope of employment.
Panyko v. WCAB (U.S. Airways), No. 37 WAP 2004 (Filed December 28, 2005)
ISSUE: Whether an employee must show abnormal working conditions when he suffers a purely physical injury, i.e. heart attack, due to an emotional reaction to a working condition?
ANSWER: When a Claimant suffers a purely physical injury, such as a heart attack, which was caused by an emotional reaction to working conditions, he does not need to show the injuries were the result of abnormal working conditions and must only show that he is suffering from an objectively verifiable physical injury and that the injury arose during the course of employment.
ANALYSIS: Claimant worked as a baggage handler for U.S. Airways for fifteen years. In July of 1995, he suffered a heart attack and underwent a triple bypass. Shortly after surgery, he returned to work and did not miss any additional work days until May of 1996, when he was out for two days due to chest pains. Six months later, in January of 1997, Claimant missed another two days because of chest pains. On February 5th, 1997, Claimant had a meeting with his attendance manager, Gene Egan and during that meeting, Claimant was told that if he incurred another occurrence for absenteeism, he would be placed on a Level I disciplinary status. Claimant was extremely upset about the meeting. The family leave plan was offered to Claimant by the employer, which would allow Claimant to incur absences due to the heart problems without disciplinary repercussions. After Claimant completed the paperwork, he felt back, neck and shoulder pain and was taken to the hospital where it was determined that he had a heart attack. Claimant offered into evidence a letter from his doctor opining that the confrontation between Mr. Egan and the Claimant on February 5th directly contributed to his heart attack. Mr. Egan testified that he routinely had initial discussions with employees when they accrued four absences. The Judge awarded Claimant benefits because Claimant established that his heart attack occurred in the course and scope of his employment.
The Board affirmed the Workers' Compensation Judge's Finding that Claimant was entitled to benefits. The Commonwealth Court affirmed the Board's conclusion on notice, but vacated and remanded the Board's conclusion that Claimant was entitled to benefits, citing Davis v. W.C.A.B. (Swarthmore Borough), 751 A.2d 168) (PA 2000). In Davis, the Supreme Court held that when a Claimant seeks benefits for a physical injury, such as a heart attack caused by a psychic reaction to a working condition, such as stress, the Claimant must prove not only that the psychic reaction caused the injury, but also that the working condition that caused the psychic reaction was abnormal.
On remand, the Workers' Compensation Judge in the instant matter entered a Decision denying and dismissing Claimant's Claim Petition since Claimant did not establish that Mr. Egan's actions during the February 5th, 1997 meeting were abnormal working conditions. The Board affirmed the Workers' Compensation Decision and the Commonwealth Court subsequently affirmed. On Appeal to the Supreme Court, the Claimant argued that the Commonwealth Court erroneously interpreted the Court's Decision in Davis. The Claimant argued that the Davis Court only held that a Claimant must satisfy the abnormal working conditions when a Claimant suffers from psychological disability with related physical symptoms. The Supreme Court agreed with Claimant's interpretation of Davis, indicating that it should be narrowly interpreted, and should not require Claimant to meet the restrictive abnormal working conditions standard in a situation where he suffers a purely physical injury such as a heart attack. The Supreme Court specifically limited Davis to the facts and indicated that it only stands for the proposition that when a Claimant suffers a psychological injury with attendant physical symptoms, the Claimant must meet the abnormal working conditions test. It found that Claimant, who suffered a heart attack as a result of an emotional reaction to work conditions, must only show that he was suffering from a purely physical injury that arose in the course and scope of his employment and was related thereto.
CONCLUSION: The Supreme Court repeatedly uses the term "purely physical" when discussing the burden of proof on this mental-physical claim. It remains uncertain whether this lessened burden of proof is now the law on all mental-physical claims or just those where the injury is "purely physical".
Gardner v. W.C.A.B. (Genesis Health Ventures), Nos. 14 EAP 2004, Wal-Mart Stores Inc. v W.C.A.B. (Leroy Rider), Nos. 103 MAP 204 (Filed December 28, 2005)
ISSUES:
- Whether the insured is required to request an employee submit to impairment rating (IRE) for the purpose of obtaining automatic reduction of benefits under the Workers' Compensation Act within 60 days of Claimant's receipt of 104 weeks of temporary total disability benefits?
- Whether filing an Appeal to a Judge's award of benefits tolls the 104 weeks period for requesting an IRE?
ANSWER:
- Pursuant to Section 306(a.2) of the Act, an employer is required to request an IRE within sixty days of the Claimant's receipt of 104 weeks of temporary total disability benefits to receive an automatic reduction in benefits pursuant to the Act. An employer can request an IRE after this time period and obtain a reduction in Claimant's benefits; however, it must be done by Petition rather than through the automatic provisions of the Act.
- The filing of an Appeal to a Decision granting benefits to a Claimant does not toll the running of the prescribed 104 week period for filing the IRE request.
ANALYSIS: This opinion consolidated two Appeals. In Gardner, Claimant sustained a compensable work injury on October 2nd, 1996. By October 2nd, 1998, she had received Total Temporary Disability for 104 weeks. On June 13th, 2001, Employer requested that she submit to an IRE. Gardner objected to the request as impermissible under Section 306(a.2) as it was not made within 60 days of receipt of 104 weeks of Temporary Total Disability Benefits. The employer filed a Petition to Compel Physical Examination on August 10th, 2001 requesting that the Judge order the Claimant to submit to the IRE. The Workers' Compensation Judge denied the Petition to Compel as untimely. The Workers' Compensation Appeal Board reversed and found that Section 306(a.2) was ambiguous and interpreted PA Code Section 123.102(f) not as a statute of limitations, but rather as a window in which insurer could ask for a retroactive adjustment of benefits to the date of 104 weeks of total disability benefits. Gardner appealed. The Commonwealth Court reversed, reinstated the Judge's decision and held that an employer must request an IRE within sixty days of the Claimant's receipt of 104 weeks of total disability benefits or forever be precluded from modifying Claimant's benefits from total to partial based on an IRE.
In Rider, the Claimant sustained an injury to his neck on July 31st, 1998. Claimant stopped working on October 21st, 1998. He filed a Claim Petition on November 1st, 1998, alleging total disability from October 21st, 1998 forward. On December 16th, 1999, the Workers' Compensation Judge found Rider's injuries to be work related and ordered Total Temporary Disability benefits. Employer appealed and requested supersedeas on January 12th, 2000. The Appeal Board granted supersedeas only as to the payment of attorney's fees for unreasonable contest and for disfiguring scarring. It was denied in all other respects. On remand, the Workers' Compensation Judge on November 20th, 2001, found for Rider again awarding him total disability benefits. That Decision was not appealed. On December 10th, 2001, 163 weeks after the date when disability first began and within 60 days of the final adjudication of Rider's claim, Wal-Mart requested Rider submit to an IRE. Rider's disability was found under 50% and therefore, the employer used the automatic provisions of the Act to change Claimant's status from total to partial disability. Rider filed a Petition to Reinstate his total disability status, alleging that the IRE was untimely. The Judge agreed and granted the Reinstatement Petition, finding that the Employer only had until December 20th, 2000 to request that Rider submit to an IRE. The Workers' Compensation Appeal Board affirmed. The Commonwealth Court reversed, holding that since Claimant did not receive 104 weeks of total disability benefits until the Workers' Compensation Judge rendered his opinion on November 21st, 2001, the IRE request was made within 60 days after the final Order and was timely. The Commonwealth Court distinguished Rider from Gardner on the grounds that in this case the employer disputed Rider's entitlement to benefits.
Gardner: The Supreme Court held that in order to receive automatic relief, pursuant to Section 306(a.2), the employer must request an IRE within sixty days of the Claimant's receipt of 104 weeks of total disability benefits. However, the Court further found that an employer can still request an IRE after the prescribed time, but it cannot take advantage of the automatic modification provisions and must reduce Claimant's benefits by filing a Petition.
Rider: The Supreme Court held that the 104 plus 60 day period is not tolled by Claimant's Appeal of the underlying Workers' Compensation Decision, but begins to run when Claimant acquires or comes into possession of 104 weeks of total disability benefits, and therefore, it reversed the Commonwealth Court's Decision. The Court further held that if the window for obtaining the automatic provision relief has been missed, the Defendant can still request an IRE, but must file a petition to change Claimant's disability status from total to partial.
CONCLUSION: These cases reiterate the importance of properly diarying files for claimant's receipt of 104 weeks of total disability benefits. Fortunately, the highest court in Pennsylvania has now spoken and even if you miss the 104 week plus 60 day window, you can still potentially obtain a change from total disability to partial disability status via IRE. This is a major victory for the employer/insurance community.
COMMONWEALTH COURT CASES
Department of Public Welfare/Polk Center v. W.C.A.B. (King), No. 163 C.D. 2005 (Originally decided 7/25/05 and designated as a reported opinion 10/5/05)
ISSUE: What type of evidence does an employer need to present to establish its entitlement to a pension offset if the unilateral taking of the offset is challenged via Petition for Review?
ANSWER: Because it is the employer's burden to establish the offset, concrete evidence of what the employer actually contributed is required. Even though it is claimant's Petition to Review Offset, the burden remains on the employer to present the above evidence.
ANALYSIS: After being out of work for a year, claimant was awarded disability retirement benefits, retroactive to his date of injury. Employer issued a Notice of Workers' Compensation Offset, suspending benefits until the appropriate credit was taken and then advising it would offset further into the future. Claimant challenged via Petition for Review.
The only witness called to testify regarding the pension calculations was the Director of Benefits Determination, Division of the State Employees Retirement System. This witness did not testify that the employer paid any money into the pension plan which then in turn funded the disability retirement pension that the claimant was receiving. In light of the fact that the employer did not present specific information concerning the amount of the employer's contribution compared to the overall contribution, the Judge denied the employer's entitlement to an offset and granted claimant's Petition for Review. Employer appealed to the Board which affirmed. The employer filed a Petition to Review.
The Commonwealth Court cited Section 204(a) of the Act along with the Regulations. The Commonwealth Court agreed and further stressed that it was the employer's obligation to prove the entitlement to an offset, even though claimant had filed the Petition for Review. Because the employer did not present evidence to show the extent to which it funded the pension plan, it was not entitled to a credit.
CONCLUSION: This case is important as it outlines the employer's burden of proof regarding an entitlement to a pension offset (presumably other offsets as well) if the offset is challenged by the claimant. Specific testimony will be required from either a fund actuary or some other individual with knowledge in the event claimant challenges an offset.
Safety Nat'l Cas. Corp. v. W.C.A.B. (Draper and PMA Inc.), No. 780 C.D. 2005 (Filed November 30, 2005)
ISSUE: What is an insurer's liability for indemnity benefits where a claimant is receiving partial disability benefits for a work injury and then while back to work, suffers a new work injury under a different insurance carrier which results in full disability?
ANSWER: Insurer for the first work injury is liable for payment of partial disability benefits based upon 2/3 of the difference between claimant's average weekly wage from the first injury and the average weekly wage of the second injury while the insurer for the second injury is liable for payment of total temporary disability benefits based upon the average weekly wage for the second injury. Collectively, the total and partial disability cannot exceed the statewide maximum rate
ANALYSIS: Here, the Commonwealth Court applied the rule of law established in Trenton China Pottery v. W.C.A.B. (Mensch) 773 A.2d 1265 (PA Cmwlth 2001), noting that "The partial disability award for the first injury is intended to make up the difference between pre-injury earning power and post-injury earning power. The total disability award for the second injury only accounts for the loss of earning power caused by the second injury, which was already reduced because of the partial disability." Here, the Court further reiterated that "the receipt of concurrent partial and total disability benefits, limited by the maximum allowable rate under the Act, is logically sound due to the fact that, but for the claimant's initial partial disability, he would have been receiving a higher wage at the time of the subsequent total disability."
CONCLUSION: This ruling reaffirms and further solidifies the black letter law as established in Trenton China Pottery.
United States Steel Corp. v. W.C.A.B. (Luczki), No. 235 C.D. 2004 (Filed December 2, 2005)
ISSUE: Whether a contest to a Utilization Review Petition is unreasonable when the employer filed an Appeal to the Utilization Review Decision without a medical opinion that Claimant's treatment was unreasonable and unnecessary?
ANSWER: When an employer appeals an adverse Utilization Review Decision, it must have a medical opinion or medical evidence at the time it files the Appeal to establish that the underlying medical treatment was not reasonable or necessary; otherwise, it will be subject to an unreasonable contest.
ANALYSIS: Claimant sustained an injury on March 2, 2000 to his low back when he fell after breaking through a step to a remote crane that Claimant operated. Following the injury, on June 2, 2000, Claimant began receiving chiropractor treatment from Robert Homonai. On August 29th, 2000, the employer filed a Utilization Review Request pursuant to Section 306(f.1)(6) of the Workers' Compensation Act. The UR request was assigned to Louis Camilli, who issued a UR determination on October 4, 2000, finding that the treatment of Dr. Homonai was reasonable and necessary. The employer filed a Petition to Review UR Determination. The employer obtained an IME report on February 15, 2001, three months after the employer filed the Petition. The Workers' Compensation Judge found that Claimant's medical expert was more credible than employer's, concluding that the treatment was reasonable and necessary. The Workers' Compensation Judge also found that since employer did not have a medical opinion that the treatment was unreasonable and unnecessary at the time of the filing of a Review Petition, quantum merit attorney's fees were assessed. The Appeal Board affirmed the Decision, and the employer petitioned the Commonwealth Court for review.
It was the employer's argument that while it did not have a medical opinion on which to base its contest at the time it filed the UR Review Petition, the Act mandated that the Petition be filed within thirty days. It also argued that the Act does not expressly state that the UR Petition must be based upon medical evidence at the time of filing. The Commonwealth Court was confronted with the issue of whether Section 440(a) of the Act, which permits counsel fees for unreasonable contest, applies to Utilization Review determinations. The Commonwealth Court found that Section 440 of the Act does not apply to the initial Utilization Review request because that determination is performed by an impartial third party. However, it found that when an employer files a Petition to Review Utilization Review Determination, Section 440 of the Act applies and the employer is subject to unreasonable contest if it does not have a reasonable basis to contest the Petition at the time of filing. The Court found that despite only having a thirty day window to Appeal the Utilization Review Decision, the employer had sufficient time to pursue medical evidence, other than an IME, to support its decision to continue to challenge the UR determination.
The Commonwealth Court found that since the employer did not have medical evidence at the time of filing the Utilization Review Petition that the contest was unreasonable. However, since this case was a matter of first impression, it denied Claimant's request for attorney's fees.
It should be noted that the employer scheduled the IME within the 30-day appeal period, but Claimant failed to attend the initial IME.
CONCLUSION: This case is important because we now, prior to filing a Utilization Review Petition, must have a medical opinion or medical evidence to support our assertion that Claimant's treatment was not reasonable or necessary to avoid counsel fees. We don't necessarily need an IME; all we need is something that supports the unreasonableness of the treatment. This could be in the form of a report already in the file or a promptly obtained records review. In addition, if the records review or IME is obtained post the filing of a Petition to Review UR, prior case law should render any unreasonable contest only unreasonable from the date of the filing of the Petition to Review until the medical opinion is obtained.