July 26, 2006 - Pennsylvania Workers' Compensation Update - 2nd Quarter '06
SUPREME COURT CASES
Gloria Romaine v. WCAB (Bryn Mawr Chateau Nursing Home), No. 62 EAP 2004 (Decided June 22, 2006).
ISSUES:
(A) Section 413(a) of the Act requires that a Petition be filed within three (3) years of the most recent payment of compensation. What date is to be utilized to determine the first day of the statute period?
(B) Who carries the burden of proof when the employer raises a statute of limitations defense?
ANSWERS:
(A) The date on which the check is received.
(B) The Claimant
ANALYSIS: The Pennsylvania Supreme Court was called upon to decide exactly when the statute of limitations contained in Section 413(a) of the Act begins to run. The facts were not in dispute: The claimant sustained a work related injury on July 5, 1990. On December 14, 1994, the WCJ found that the claimant had fully recovered from her work related injury as of August 6, 1991. The decision was affirmed by the WCAB and Commonwealth Court.
Subsequently, on December 16, 1997, the claimant filed a Petition to Reinstate Compensation Benefits as of that date. The WCJ considered all of the potentially relevant dates and found that the last check sent to the claimant was dated December 14, 1994. The check covered payment of benefits from December 6, 1994 through December 19, 1994. The claimant presented no testimony concerning when the check was received. The check appears to have been endorsed on December 19, 1994.
Section 413(a) states that "no notice of compensation payable, agreement or award shall be reviewed, or modified, or reinstated, unless a petition is filed with the department [of Labor and Industry] within three years after the date of the most recent payment of compensation made prior to the filing of such petition." What constitutes payment when benefits are made in the form of a check?
The Court first considered how negotiable instruments have been used historically and the implications of the date of the instrument when determining each party's obligations. The Court affirmed its position that when utilizing a check, payment is considered made upon receipt of the check, with a condition that it be honored. When the check is presented for payment, the condition to which the payment was subject is performed and, what was a conditional payment at the time of delivery of the check becomes an absolute payment. Payment then relates back to the date the check was delivered. Therefore, the date of payment for purposes of the obligation or the running of the statute of limitations becomes the date the check was delivered to the payee, not the date the check was cashed or the date funds were transferred from bank to bank. Furthermore, the Court flatly rejected claimant's contention that the first date should be the last date for which payment was made, i.e. December 19, 1994. In so doing, the Court distinguished Section 434, dealing with the setting aside of a final receipt. In support of its position, the Court noted the different language in Section 434 and indicated that the language from Section 434 and Section 413(a) cannot be used interchangeably.
The Court also addressed who carries the burden of proof. The Court found instruction in the Pennsylvania Rules of Appellate Procedure. The Court held that Section 413 operates as a bar to the right of action as well as a remedy in the same manner as non-waivable defenses under the Rules of Appellate Procedure. A jurisdictional determination is a threshold issue that must be resolved before proceeding to the merits. Accordingly, the burden is squarely on the shoulders of the claimant to prove that the WCJ has jurisdiction to adjudicate the matter. Here, the claimant failed to present evidence that the reinstatement petition was timely filed because she failed to provide testimony concerning when the check was received.
CONCLUSION: The statute of limitations begins to run on the date claimant receives the check. In order to accurately determine such dates, it would be prudent to utilize a certificate of mailing with a return receipt requested in situations where benefits are paid in a lump sum. So doing could avoid subsequent litigation.
COMMONWEALTH COURT CASES
Young v. WCAB (Zinc Corp. of America), 897 A.2d 530 (Pa. Cmwlth. 2006) (Decided April 5, 2006).
ISSUE: Whether claimant's long-time employer had exposed him to an asbestos hazard during his employment and whether claimant's death from asbestos related cancer occurred within 300 weeks of this exposure?
ANSWER: Yes.
RATIONALE: In Young, the claimant worked for 45 years as a bricklayer. For the ten years prior to his retirement, claimant worked for employer Zinc Corp. In the preceding 35 years, claimant worked for four different employers. While working for Zinc Corp. claimant preformed asbestos removal. After retirement, claimant was diagnosed with mesothelioma, a cancer generally caused by asbestos exposure. Claimant died before his Claim Petition could be decided. However, his widow continued a fatal Claim Petition. The WCJ denied fatal claim benefits and found the employer's medical expert more credible that only exposure prior to claimant's employment with Zinc Corp. could have caused claimant's cancer. The WCJ also denied the Claim Petition since claimant's retirement caused his disability, not the cancer. The WCAB affirmed. However, the Commonwealth Court reversed on both issues. First, the Court found that a specific "hit" date of injury was not required. The Court explained that in occupational disease cases, the WCJ must look back 300 weeks to determine the employer that exposed claimant to the disease hazard for at least one year - and if none exists, which exposed claimant the longest. In the case, the Court cited Section 301(c) (2) of the Act which establishes a right to benefits for disability or death from occupational disease occurring within 300 weeks after the last date of employment in an occupation or industry to which claimant was exposed to the hazards of such disease. The Court found that Zinc Corp. was the liable employer since Zinc was the only company that employed claimant during the 300 week manifestation period. Interestingly, the evidence showed that claimant only had exposure during asbestos removal activities and that exposure amounted to a total of only 21 hours.
CONCLUSION: The Court noted that the legislature enacted as a matter of policy a scheme of liability that was supposedly designed to equitably spread liability for occupational disease within the industry. Accordingly, the Court found Zinc Corp. was the liable employer for earnings loss and medical expenses, because it was claimant's only employer during the 300 week time period. It is noteworthy that the Court held, pursuant to the Act, that if an employee is employed in any occupation or industry in which the occupational disease is a hazard, then it shall be presumed that the employee's occupational disease arose out of and in the course of his employment, but this presumption shall not be conclusive. Zinc Corp. did not rebut this presumption before the Judge so it had to be the responsible entity as a matter of law.
City of Philadelphia v. WCAB (Fluek), 898 A.2d 15 (Pa. Cmwlth. 2006) (Decided April 6, 2006).
ISSUE: Whether an employer seeking to terminate benefits for a knee injury must prove that claimant had no disability from his back?
ANSWER: No
ANALYSIS: In Fluek, claimant injured his knee in 1986 and a NCP was filed that accepted the left knee injury. Nine years passed and employer had claimant examined. As a result, a Termination Petition was filed alleging that claimant was fully recovered from the work related knee injury. Claimant then filed a Review Petition seeking to amend the NCP to include a low back injury. The WCJ ruled in employer's favor, granting the Termination and denying the Review Petition. The WCAB reversed and remanded. The WCJ made different factual and credibility findings, changed his ruling and granted claimant's Petition to Review the NCP. Employer appealed. The WCAB again affirmed. The employer filed a Petition for Review. The Commonwealth Court vacated the WCAB's Order and reinstated the WCJ's first ruling granting the Termination Petition. The Court cited the Supreme Court case of Commercial Credit which held that the claimant, not the employer, bore the burden of establishing a causal connection between a work-related physical injury and a subsequently alleged psychiatric injury. The Court explained that when an employer files to terminate benefits, it must show that all problems afflicting the body part specified in the NCP have resolved. Here, the claimant was alleging an injury pertinent to the back, a different body part from the left knee accepted on the NCP. In such situations, the Court held, that where the new injury complained of is "distinct in kind," the claimant must file a Review Petition and sustain his burden of proof that the back injury caused disability.
CONCLUSION: Simply stated, where the subsequently alleged injury is not so obviously connected or of the same body part, the burden of proof rests on the claimant to show continuing disability related to the work injury before an employer will bear the burden of disproving any continuing disability related to that subsequently alleged condition. This case needs to be analyzed in conjunction with Marx v. WCAB, a case decided on May 8, 2006 and included within this update.
Keystone Coal Mining Corp. v. WCAB (Fink), 896 A.2d. 691 (Pa. Cmwlth. 2006) (Decided April 13, 2006).
ISSUE: Whether an employer is responsible for medical bills after employer's liability for payment of partial disability benefits has been exhausted?
ANSWER: Yes.
ANALYSIS: In Fink, the claimant suffered a herniated disc in his low back on January 8, 1987. On August 2, 1989, claimant returned to work at a new employer. A supplemental Agreement was signed and claimant began receiving partial disability benefits. Claimant exhausted his 500 weeks of partial disability benefits by September 28, 1998. In July 2004, claimant filed a Petition to Review medical treatment alleging that employer failed to pay reasonable and necessary medical expenses incurred to treat the work injury. Employer argued that because the 500 weeks of partial disability benefits had been exhausted, the claim was in a "termination status." The Judge rejected employer argument and granted the Petition to Review, assessed unreasonable contest fees but did not award penalties. Employer appealed and the WCAB affirmed. The Employer filed a Petition for Review. On appeal, the Employer argued that expiration of 500 week period to pay partial disability wage loss benefits under Section 306(b)(1) also extinguished its obligation to pay medical expenses under Section 306(f.1)(1)(i). The employer focused on the term "compensation" to support its argument that medical expenses are "compensation" and should be extinguished. The Court rejected this argument. First, the Court held that exhaustion of 500 weeks of partial disability benefits is not tantamount to a termination of benefits. Rather, the employer remains liable for claimant's medical expenses in this situation. Second, the Court reasoned that Section 306(f.1)(1)(i) does not set forth a specific time limit for payment of medical bills.
CONCLUSION: The Court has clarified that the mere expiration of the 500 week period for partial disability benefits does not establish that the work injury has ceased. The Court stressed that an employer must continue to pay for a claimant's medical expenses even when no indemnity payments are being made in accordance with Section 306(f.1)(1)(i).
Craftex Mills, Inc. of Pa. v. WCAB (Markowicz), No. 1758 C.D. 2005, (Decided April 26, 2006).
ISSUE: What type of evidence is required for claimant to sustain his burden of proving a causal connection between a Section 108(n) occupational disease and the claimant's employment?
ANSWER: A claimant seeking benefits of a Section 108(n) occupational disease is required to present unequivocal medical opinion that the occupational disease is causally related to the work place. Such opinion can be based on the expert's elimination of all other likely sources other than claimant's work.
ANALYSIS: Claimant's work involved cleaning an air conditioning system. It required claimant to enter into a tank with about three inches of "muck". The tank had a "swampy" smell that increased over time. Around the year 2000, Claimant began to have breathing problems. He left work on October 5, 2000 and alleged that he suffered an occupational disease on that day.
The claimant presented the testimony of his treating doctor who diagnosed claimant with hypersensitivity pneumonitis and asthmatic bronchitis as a result of exposure to thermophilic actinomyces in the air conditioning unit. He opined that the condition was causally related to claimant's work, because after speaking with claimant, he eliminated all other possible causes. Benefits were awarded and the employer appealed arguing that the judge utilized the wrong burden of proof.
The disease afflicting claimant is not an identified disease under Section 108 of the Act. Accordingly, claimant has a three-prong burden of proof; (1) that he was exposed to a disease by virtue of his employment; (2) there was a causal relationship between the disease and the employment and (3) that the incidence of the disease is substantially greater in claimant's occupation than in the general population. By contrast, if claimant's disease were one enumerated under Section 108, he would be entitled to a presumption that the disease arose in the course of employment.
The Court upheld the WCJ's decision. It found that claimant's expert did not need hard evidence of the presence of illness-causing spores in order to render a competent opinion concerning the causal relationship between claimant work and his illness. His testimony that he had eliminated all other likely sources of illness-causing spores was sufficient to carry claimant's burden of proof.
CONCLUSION: Occupational disease cases are very complicated. Expert witness testimony must be reviewed very carefully determine whether or not it satisfies the burden of proof concerning causation. Experts need not have first hand knowledge of actual exposure to illness-bearing contaminants.
MARX VS. WCAB (DANA CORPORATION), No. 1863 C.D. 2005 (Decided May 8, 2006).
ISSUE: Whether an employer has the same burden of disproving the causation of conditions that are similar to, and involve the same body parts, as those conditions accepted as compensable under an agreement for compensation, as the employer has when the injuries are accepted under a Notice of Compensation Payable (NCP)?
ANSWER: Employer has the same burden of disproving causation of conditions that are similar to and involve the same body parts as those conditions accepted as compensable under an agreement for compensation, as the employer has when the injuries are accepted under an NCP.
ANALYSIS: In this case, the Employer and the Claimant entered into an Agreement for Compensation which described Claimant's injury as a lumbosacral sprain and strain. Ultimately, Employer filed a Termination Petition alleging that Claimant fully recovered from the work injury, while at the same time Claimant filed a Review Petition, which was amended to a Claim Petition, requesting his injury be expanded to include herniated discs at L3-4 and L5-S1 and Grade 1 spondylolisthesis at L3-L4 and L4-L5. Employer's medical expert concluded that Claimant's pain complaints were the result of a degenerative condition, unrelated to the work injury. Additionally, Employer's medical expert opined that Claimant fully recovered from the accepted work injury. Employer's medical expert also opined that Claimant could not return to his full duty job, as he was disabled from the degenerative disc disease. The WCJ found Employer's medical expert credible, denied Claimant's Claim Petition and granted Employer's Termination Petition. More specifically, the WCJ concluded that Claimant failed to prove his work injury included additional injuries, other than the lumbar sprain and strain and that Employer established that Claimant fully recovered from the lumbar sprain/strain.
Claimant appealed the matter to the WCAB, which affirmed the WCJ's Decision. The WCAB held the WCJ did not err by placing the burden on Claimant to prove that his disc herniation and symptoms were related to the work injury, as he had executed an agreement for compensation, that identified claimant's injury on a lumbosacral sprain and strain.
Claimant appealed the matter to the Commonwealth Court and argued that the burden should have been placed on Employer to prove a lack of objective medical findings to substantiate Claimant's complaints and to prove that his continued disability was not causally related to the work injury. Claimant also argued that the Board's rationale for placing the burden of proof on the Claimant regarding the relationship between his continuing symptoms and the work injury was improper. More specifically, Claimant argued that the Board, without case law or statutory authority, made a distinction between work injuries that are accepted under a signed agreement for compensation, and those work injuries that are accepted through an NCP.
The Commonwealth Court held that in a termination proceeding, an employer must prove that all disability related to claimant's work injury has ceased. The employer must also establish that there are no objective medical findings which either substantiate claimant's complaints of pain or connect them in any way to the work injury. In this case, the Court noted Employer's medical expert opined Claimant could not perform his time of injury job, due to his degenerative condition and symptoms of pain, but that he had fully recovered from the work injury. However, the Court noted that Employer's medical expert was unable to explain how Claimant's symptoms of pain were unrelated to the work injury.
The Court concluded that both the WCJ and WCAB placed the burden on the Claimant, in error, to establish that symptoms of pain stemming from the same body part as the accepted work injury were related to the work incident, as opposed to placing the burden on the Employer to establish that Claimant's symptoms of pain at the same body part as the accepted work injury were not related to the work incident. In reaching this Decision, the Commonwealth Court held that there is no distinction between an Agreement for Compensation and an NCP that would allow the burden to switch from the employer to the claimant in such a case.
CONCLUSION: In this case of first impression, the Commonwealth Court has declared that in all cases involving a Termination Petition, the burden is on the employer to establish that claimant's symptoms of pain or objective findings are unrelated to the accepted work injury when the symptoms of pain or objective findings are located at the same body part as the accepted work injury. Careful defense counsel should make sure this issue is covered at the doctor's deposition and advise the client immediately if this burden of proof cannot be met.
Varghese vs. WCAB (Ridgecrest Nursing Home, Consolidated Risk Services), No. 28 C.D. 2006 (Decided May 12, 2006).
ISSUE: Does an Application for Supersedeas to the Commonwealth Court or Supreme Court, as opposed to the WCAB, stay an employer's obligation to pay on an order?
ANSWER: An Application for Supersedeas to the Commonwealth Court, or Supreme Court, as opposed to the WCAB, does not stay an employer's obligation to pay on an order.
ANALYSIS: In this case, the WCJ granted the Employer's Termination Petition, but the WCAB reversed. The Employer appealed to the Commonwealth Court and filed a timely Application for Supersedeas with the WCAB. The WCAB denied the Application for Supersedeas on February 18, 2004. The Employer subsequently filed an Application for Supersedeas with the Commonwealth Court, which was denied on March 26, 2004. On April 23, 2004, 28 days after the denial of its Application for Supersedeas by the Commonwealth Court, and 60 days after the denial of its Application for Supersedeas by the WCAB, Employer paid the benefits due and owing Claimant. Claimant filed a Penalty Petition alleging the Employer violated the Act by failing to pay benefits within 30 days of the WCAB's Order. The WCJ denied the Penalty Petition and the WCAB affirmed.
Claimant appealed to the Commonwealth Court arguing there is no "safe harbor" while a Supersedeas Request is pending before the Commonwealth Court. In addressing this issue the Court referred to Snizaski vs. WCAB, 891 A.2d 1267 (Pa. 2006) in which the Supreme Court held that the WCAB's regulations temporarily grant a supersedeas request; thus, removing an employer's obligation to pay until the Board can provide a decision on the request, making the award of penalties for non-payment of compensation inappropriate. The Court in Varghese noted that there are no such regulations with respect to requests for supersedeas to the Commonwealth Court or the Supreme Court. Accordingly, the Court held that the Snizaski ruling only applies to situations involving a request for supersedeas made to the WCAB.
In its holding, the Court agreed with Claimant that there is no "safe harbor" while a supersedeas request is pending before the Commonwealth Court or Supreme Court. Additionally, the Court went on to note that an employer places itself in a position of peril when requesting supersedeas from the Commonwealth Court or Supreme Court by gambling on the outcome of the supersedeas ruling. If the supersedeas is ultimately granted, the employer will not have to pay benefits and penalties will not be assessed; however, if supersedeas is denied, the employer risks the imposition of penalties for failure to pay within thirty days of the order from the lower court.
CONCLUSION: This case places employers in a tough position. On the one hand, if an employer pays on an order and does not request supersedeas on appeal to the Commonwealth Court or Supreme Court, and is ultimately successful, it will not be reimbursed from the Supersedeas Fund for monies paid. However, if it does file a request for supersedeas, and it is ultimately denied by the Commonwealth Court or the Supreme Court, the employer risks the imposition of penalties.
Verizon Pennsylvania, Inc. vs. WCAB (Alston), No. 1804 C.D. 2005 (Decided May 31, 2006).
ISSUE: Is an employee working at an "at home office" that has gone upstairs to get a drink and falls down the stairs while returning to her home office, in the course and scope of employment at the time of the injury?
ANSWER: A Claimant injured during her normal working hours at her "at home" work site, which was approved by Employer, who is injured during the brief period of time she departed her workstation to attend to personal comfort, is within the course and scope of employment.
ANALYSIS: Claimant worked three days a week at the Employer's premises, but worked at home in a basement office two days per week. Employer approved Claimant's work at home two days per week. While working at home, Claimant received a work related telephone call from her supervisor while she was upstairs drinking a glass of juice. Assuming the work issue needed immediate attention, Claimant began descending the steps to return to her home office. While descending the steps, Claimant fell, suffering an injury to her head and neck. At the WCJ level, Employer argued that Claimant did not suffer an injury during the course and scope of her employment. The WCJ rejected this defense and awarded benefits. Employer appealed to the WCAB, which affirmed the WCJ's Decision. Ultimately, the matter was appealed to the Commonwealth Court where Employer argued the Judge and WCAB committed an error of law by finding Claimant's injury occurred within the course and scope of her employment.
The Commonwealth Court noted that the issue of workers' compensation coverage for employees who work at an "at home office" is an issue of first impression. In situations where injuries occur somewhere other than the Employer's premises, the courts have generally evaluated these claims by distinguishing between stationary and traveling employees. In this particular case, the Court held that Claimant was not a traveling employee, as she was working at her home office, a fixed location approved by Employer as her secondary work premises.
In situations involving a stationary employee, if the employee leaves the employer's premises during authorized breaks for personal reasons, unrelated to her acquired job duties, the employee is considered to have abandoned her employment and the employee is not within the course of her employment. However, the Court held that there is a well established personal comfort doctrine under which an employee who sustains an injury during an inconsequential departure from work during regular working hours such as going to the bathroom, is nonetheless, considered to have sustained an injury in furtherance of the Employer's business.
The Court held in this particular case, Claimant was engaged in furthering the business of her Employer because, at the time of her injury, she was speaking with her supervisor on the telephone and descending the stairs in order to address a work matter that her supervisor had called to discuss with her. Although the reason for Claimant's necessity to walk down the stairs was due to the fact she retrieved a drink from her kitchen, she did not "abandon her employment", but rather was attending to personal comfort. Because Claimant was engaged in the furtherance of her Employer's business and had not abandoned her employment, but was merely attending to personal comfort, the Commonwealth Court concluded that Claimant was within the course and scope of her employment.
CONCLUSION: In this case of first impression, the Court has held employees who work at an "at home" site, will be viewed as stationary employees. Accordingly, the same rules with regard to course and scope of employment that apply to employees who work at an employer's premises will also apply to employees working at a home work site approved by employer.
Penn Beverage Distributing Company v. WCAB (Rebich), No. 1698 C.D. 2004 (Decided June 27, 2006)
ISSUE: When determining whether or not the statute of limitations has run, when does Section 315 apply versus Section 413(a)?
ANSWER: Section 315 is a statute of repose which bars the filing of a new claim. Section 413(a) is a statute of limitations which acts to bar amendments/additions to previously filed claims.
ANALYSIS: Claimant sustained injuries in a motor vehicle accident on August 19, 1985. Employer issued an NCP. On October 28, 1985, claimant underwent brain surgery and on January 26, 1993, claimant underwent cervical surgery leaving claimant with scarring on his head and neck. Claimant continued to receive benefits. On December 6, 1999, claimant filed a claim petition for facial disfigurement related to his head and neck scars. Employer denied the claim asserting that the claim was barred by the statute of limitations.
There are two sections of the Act that deal with the statute of limitations: Section 315 bars all claims for compensation unless filed within 3 years of the date of injury. By contrast, Section 413(a) states that "no notice of compensation payable, agreement or award shall be reviewed, or modified, or reinstated, unless a petition is filed . . . within three years of the date of the most recent payment of compensation . . ."
The Court clarified the distinction between Section 315 of the Act and Section 413(a) of the Act. The Court determined that the statute of repose found in Section 315 only applies where an employer's liability has not yet ripened (i.e. there is no cognizable claim). By contrast, the statute of limitations found in Section 413(a) applies when an employer's liability has been established and the statute of limitations only extinguished the right to a remedy.
Utilizing these principles, the Court held that the claimant's claim for disfigurement is not a new claim, but one that arose as a result of his already-established work injury. Because the claim petition was filed within 3 years of the date of his last receipt of benefits, the claim petition was timely under Section 413(a) of the Act.
CONCLUSION: Many claims professionals and attorneys believe that any claim petition filed more than 3 years after the date of injury is barred by the statue of repose found in Section 315 of the Act. This is incorrect. Once a claim in cognizable, either by NCP or agreement or award, the statue of limitations does not begin to run until the date of the most recent payment of compensation. Claimant then has three years to file a claim.