Pennsylvania Workers' Compensation Update - 2nd Quarter '11

07.28.11

Category: Pennsylvania

COMMONWEALTH COURT CASES

Securitas Security Services, USA, Inc. v WCAB (Schuh), No. 349 C.D. 2010 (Filed April 4, 2011)

Issue: Whether an employer is collaterally estopped from denying expansion of a work injury description by not appealing a Utilization Review determination which found treatment for that proposed expanded injury to be reasonable and necessary?

Answer: No

Analysis: Claimant injured her back when she fell off of a stool at work on November 30, 2004. Employer accepted Claimant's injury as a lower back strain, via Notice of Temporary Compensation Payable (TNCP) which subsequently converted. In October 2005, Dr. Berger diagnosed Claimant with major depressive disorder and began psychotherapy and medication. Employer filed a Utilization Review (UR) request as to all future treatment provided by Dr. Berger. The UR determination found the treatment reasonable and necessary. Employer did not appeal. Claimant filed a Review Petition seeking to amend the description of injury to include depression and anxiety. Claimant did not testify or submit any medical evidence in support of her Petition but argued Employer was estopped from denying liability for the psychological injuries because it did not appeal the UR determination. The WCJ agreed and expanded Claimant's injury description to include depression and anxiety. The WCJ stated by availing itself of the UR process, employer effectively acknowledged that Claimant's psychological treatment was related to her work injury.  Employer appealed.

The Board concluded all elements of collateral estoppel were met and affirmed. The Board also noted an employer must acknowledge a work injury before UR may be requested and found that Employer effectively acknowledged liability by paying for medical expenses and seeking the UR. Employer appealed.

Commonwealth Court reversed, finding collateral estoppel does not apply in this case. The Court noted a judgment in a prior action operates as estoppel in a second action only to issues that (1) are identical; (2) were actually litigated; (3) were essential to the judgment; and (4) were material to the adjudication. In Claimant's Review Petition the issue is whether Claimant's depression and anxiety are causally related to the 2004 work-related back injury. Because this issue was not identical, litigated, essential or even relevant to the UR determination, collateral estoppel does not apply. The Court cited to 34 Pa. code §127.406 (a) and (b)(1) which expressly provide that the URO is to determine reasonableness and necessity of treatment only and may not decide the causal relationship between the treatment and the work injury.

The Court further noted that the mere payment of medical bills does not constitute an acknowledgment of liability for the condition for which treatment has been rendered.

Conclusion: Utilization review determines the reasonableness and necessity of treatment, not whether the treatment is related to the work injury nor whether the condition for which the treatment is being provided is work related. Therefore, seeking utilization review of treatment does not collaterally estop employer from challenging the relatedness of the condition for which the treatment was rendered just as paying for said treatment is not an acknowledgement of relatedness.

Interestingly, the court cites to 34 Pa. Code §127.402 (in a medical only case where the employer has not acknowledged an injury the employer may seek a UR of treatment) as evidencing a distinction between paying for medical care and accepting liability for a medical condition. However, the Court notes this provision specifically provides that the employer is obligated to pay for the treatment found to be reasonable and necessary in an uncontested UR determination. This could be broadly read as establishing the seeking a UR for treatment of a condition that has not been formally acknowledged does serve as a form of estoppels from denying payment on the basis of relatedness; however, the Court does not apply such a reading.

Keene v. WCAB (Ogden Corp.), 1421 C.D. 2011, (filed May 19, 2011).

Issue: Whether an employee who is not collecting a pension but was on SSD and had been actively looking for work except for a two year period after her initial failure to obtain new work was considered voluntarily retired.

Answer: No.

Analysis: Claimant suffered a work injury in 1989, has undergone a total knee replacement and has reached maximum medical improvement with sedentary duty restrictions. She has looked for work in the newspaper and on a job website and has submitted multiple applications. She does not receive a pension but does receive SSD. In 2007 Employer filed a suspension petition alleging that Claimant had retired and voluntarily removed herself form the labor market. The WCJ rejected this argument finding that Claimant was actively looking for work. Employer appealed.

The WCAB reversed relying upon Claimant's testimony that for a two year period she had not looked for work. Claimant appealed.

Commonwealth Court reversed. The Court held that the Employer could not rely upon Claimant's failure to seek work to establish retirement as the Claimant only had the burden to seek work once Employer had met its burden of showing Claimant has voluntarily retired. The Court, applying the totality of the circumstances test in City of Pittsburgh v. WCAB (Robinson) 4 A3d. 1130, 1134 PA Cmwlth. 2010, appeal granted __ Pa. __, ___A3d. __, (Pa. No. 564 WAL 2010, filed April 6, 2011), found that the Employer had not met its burden of proving Claimant had voluntarily retired from the work force and therefore Claimant was not obligated to establish that she was looking for work. The Court noted that Claimant had not admitted retirement, taken a pension or refused suitable work.

Conclusion: Whether a Claimant has retired and thereby withdrawn from the labor market is to be determined by looking at the totality of the circumstances. Voluntary retirement may be shown by Claimant acknowledging retirement; claimant accepting a retirement pension; or claimant refusing suitable employment while receiving a pension. Once Employer has shown voluntary retirement, Claimant must show either that he is looking for work or was forced into retirement by the work injury in order to continue receiving benefits.

Potere v. WCAB (Kemcorp), No. 1349 C.D. 2011, (filed May 20, 2011).

Issue: Whether the use of a Notice of Denial in accepting payment of medical bills but denying wage loss as a result of the work injury is appropriate.

Answer: Yes

Analysis: Following a motor vehicle accident, Employer issued a Temporary Notice of Compensation Payable for both medical and indemnity. Claimant underwent an IME which found him capable of returning to work and a job offer was made which Claimant declined. Employer issued a Notice Stopping Compensation and a Notice of Denial acknowledging the occurrence of a work injury but denying ongoing disability. Claimant filed a claim petition seeking a closed period of TTD. There were a series of decisions, appeals and remands all relating to the legal sufficiency of Employer's medical evidence. However, Claimant also alleged that the Employer's issuance of a Notice of Denial while acknowledging the occurrence of the injury constituted an illegal supersedeas. Commonwealth Court disagreed.

The Court held that the Employer properly issued the Notice of Denial in conjunction with the Notice Stopping Temporary Compensation as it acknowledged a work injury and listed good cause for denial of disability including lack of medical evidence, the IME results and the job offer rejected by Claimant.

Conclusion: This case involved the use of the OLD NCD. Since the revised NOD (LIBC-496 REV 03-11) is now required (as of 6/19/11), we do not recommend use of the new block 4 denial since the NTCP does not formally accept the injury once revoked.  Instead we recommend checking off block 6 and stating the wage loss due to the injury is denied or alternatively, issuing a Medical Only NCP.    We also caution that the new NOD form raises many questions regarding its proper use and under what circumstances the new block 4 should be used.

Pike v. WCAB (Veseley Brothers Moving), 1227 C.D. 2011 (filed May 23, 2011).

Issue:  Whether when the claimant has a much higher average weekly wage in the last quarter before the work injury, only that quarter is to be used to calculate average weekly wage?

Whether claimant is bound by his income tax business expense deductions in calculating average weekly wage?

Answer:  No.

             Yes.

Analysis:  Claimant worked for employer for 1 year prior to his work injury. In the quarter immediately prior to his work injury he received a promotion resulting in considerably higher pay during that quarter. However, during this quarter claimant also had business expenses including depreciation on a vehicle and use of a home office that he claimed on his tax returns. Employer calculated his average weekly wage using his wages for the prior four quarters worked and deducting his claimed business expenses.

Claimant filed a review petition seeking to have his average weekly wage calculated using only the quarter immediately preceding his work injury and limiting his business expenses to only those actually paid (i.e. eliminate the expenses for depreciation). Claimant argued that Hannaberry HVAC v. WCAB (Snyder Jr.), 575 PA 66, 834 A.2d 524 (2003) which held that a claimant who had transitioned from part-time, while a student, to full time employment upon graduation was entitled to a calculation of his average weekly wage based solely upon his fulltime employment as that provided the most accurate reflection of his anticipated future earnings, should be applied to his case. The WCJ rejected claimant's argument and calculated his average weekly wage using all four quarters and deducting from his last quarter his claimed business expenses. Claimant appealed and the WCAB affirmed the WCJ.

Commonwealth Court affirmed. Hannaberry was not controlling in this matter as claimant had not transitioned from a part-time employee to a full-time employee but merely changed positioned to one that, at least for one quarter, paid a higher wage. The Court noted however, that there had been no finding that the one quarter earnings for Claimant at his new position were reflective of what he could expect to earn in the future at that position. The Court also rejected Claimant's argument that certain business expenses, depreciation and use of the home office, should not be deducted from his average weekly wage. The Court accepted the WCJ"s position that because Claimant had reported such deductions, and not filed an amended tax return disavowing such deductions, he was bound by his tax return concerning business expenses.

Conclusion: Hannaberry does not apply to every situation in which Claimant has received a substantial increase in wages within the four quarters preceding a work injury and the Court seems to be limiting its application to situations in which Claimant has transitioned from part-time to full-time employment. If Claimant has worked for the time of injury employer for four quarters preceding his work injury then average weekly wage if to be calculated using the three highest wage periods except in the most unusual circumstances.

Claimant is bound by business expense deductions taken on his tax returns in calculating average weekly wage.

Vaughn v. WCAB (Carrara Steel Erectors), 1790 C.D. 2010 (Filed March 11, 2011, as a Memorandum Opinion and designated as Opinion June 3, 2011)

Issue: Whether an employer must specifically outline the job duties to a claimant when offering the claimant his time-of-injury position and advising that any restrictions will be accommodated.

Answer:    No.

Analysis:   Claimant suffered a July 23, 2005, back injury and received benefits upon a WCJ granting his Claim Petition. A January 3, 2008, IME determined that Claimant was able to return to modified, medium-duty work. Employer advised Claimant by letter that he was released to return to work, directed Claimant to report to work on a specific day and time to perform his pre-injury position, that any work restrictions would be accommodated, and advised Claimant that he would be paid his regular rate of pay. Claimant did not return to work and Employer filed a Suspension Petition. The WCJ granted the Suspension Petition and the WCAB affirmed.

When offering a claimant a specific job, an employer must follow the guidelines set forth in Kachinski v. W.C.A.B. (Vepco Construction Co.), 532 A.2d 374 (Pa. 1987), which requires an employer to present medical evidence of a change in the claimant's condition and notifying the claimant of a job. When the job offered is one that the claimant has previously performed, no specific job duties are required in the notice provided by the employer as it is presumed that the claimant is familiar with the requirements of the position. Eidem v. WCAB (Gnaden-Huetten Mem'l Hosp.), 746 A.2d 101 (Pa. 2000). Otherwise, the employer must outline the specific job duties and classification so the claimant can make an informed decision regarding the offered position. Id. Only after an employer meets these requirements does the burden shift to the claimant to demonstrate a good faith effort to follow through on the job referral. Kachinski, supra.

In the instant case, the Commonwealth Court affirmed the suspension of benefits, holding that Claimant's prior employment with Employer should have made him aware of what portions of his job he was capable of performing within the outlined restrictions.

Conclusion:    When a claimant has been offered a modified-duty job with the time-of-injury employer, the claimant must be notified as to what job he will perform. If the claimant has previously performed the job, specific job duties are not required to be explained. If the claimant has not previously performed the offered job, then a description of the job duties must be provided.

Horner v. W.C.A.B. (Liquor Control Board), 2155 C.D. 2010 (Filed June 14, 2011)

Issue:  Whether actuarial testimony is a sufficient basis for an employer to establish its entitlement to an offset as a result of a claimant receiving benefits from a defined benefit pension concurrently with indemnity benefits.

Answer:    Yes.

Analysis:   Claimant worked for the LCB since 1974, continually paying into the pension system administered by the State Employees Retirement System (SERS). As the result of a January 16, 2003, work injury and was entitled to receive $675.00 per week in indemnity benefits. Claimant elected to receive a disability pension in the amount of $2,906.31 per month. In April 2005, the LCB noticed Claimant that it would claim an offset of $433.60 per week, reducing Claimant's indemnity benefits down to $241.40 per week. Claimant challenged the LCB's offset.

In defending the offset, the LCB presented the testimony of the director of SERS for benefit determination, who credibly explained the various contributions made by the LCB over the years, the method in calculating Claimant's monthly pension amount, and the method in calculating the offset. The LCB also presented the testimony of an actuary, who credibly testified that an actuarial determination is necessary to determine the amount the LCB had to contribute to adequately fund the pension plan. The actuary further testified the formula for determining the LCB's yearly contributions. The WCJ denied Claimant's offset challenge and the WCAB affirmed.

Pension benefits administered by SERS are governed by the State Employee's Retirement code, which requires both employees and employers to contribute to the pension fund. 77 Pa.C.S. §§ 5501, 5507. An employer is entitled to receive an offset for pension benefits received by an employee, but only to the extent the employer directly liable for payment of workers' compensation benefits directly funds the pension. 77 P.S. § 71, 34 Pa. Code. §§ 123.1, 123.8(b). The burden is on the employer to prove an entitlement and amount of any offset. Gaughan v. W.C.A.B. (Pennsylvania State Police), 2 A.3d 785 (Pa. Cmwlth. 2010), appeal denied, __ A.3d __ (No. 60-7 MAL 2010, filed Feb. 9, 2011). No requirement exists mandating that the employer prove the actual dollar amounts contributed but can instead rely on expert actuarial testimony for the portion of the pension attributable to the employer's contributions. Dept. of Public Welfare v. W.C.A.B. (Harvey), 993 A.2d 270 (Pa. 2010); Dept. of Public Welfare v. W.C.A.B. (Cato), 911 A.2d 241 (Pa. Cmwlth. 2006), appeal denied, 929 A.2d 1163 (Pa. 2007); Pennsylvania State University v. W.C.A.B. (Hensal), 911 A.2d 225 (Pa. Cmwlth. 2006), appeal denied, 929 A.2d 1163 (Pa. 2007).

In the instant case, the Commonwealth Court held that the factual scenario is similar to the cases in Harvey, Hensal, and Cato. In each case the same actuary testified as to the contributions attributable to the employer, which evidence is sufficient to establish the offset amount an employer is entitled to claim when a claimant is receiving a defined benefit pension.

Conclusion:    This case further supports the recent decisions of both the Pennsylvania Supreme Court and Commonwealth Court with respect to offsets for receipt of defined benefit pensions.  When seeking an offset as a result of a claimant receiving a defined benefit pension, it is necessary for the employer to present actuarial testimony establishing the amount of the pension benefit that is attributable to the employer's contribution.

Upper Darby Township v. W.C.A.B. (Nicastro), 1285 C.D. 2010 (Filed March 17, 2011, as a Memorandum Opinion and designated as Opinion June 21, 2011)

Issue:  Whether a claimant is bound by stipulated facts when attempting to reinstate workers' compensation benefits that were suspended based upon a stipulation of facts that was adopted by a WCJ.

Answer:    Yes.

Analysis:   Claimant worked as a sanitation worker for Employer, walking behind a garbage truck and emptying some 200 trash cans into the truck during a shift. The average trash can weighed 40 pounds. Claimant injured his low back on April 23, 2002, and returned to work with no restrictions on March 22, 2004.

A second work injury occurred on June 8, 2004, which parties resolved via stipulation that was adopted by the WCJ on May 31, 2006. The stipulation stated that Claimant experienced a work-related low back injury with a closed period of disability from June 8, 2004, through October 7, 2004. Claimant returned to his regular job without restrictions on October 8, 2004. The parties further stipulated that any time lost after October 8, 2004, through December 5, 2004, when Claimant voluntarily left his employment with Employer for "injuries unrelated to his back," was unrelated to his June 8, 2004 work injury. In January 2008, Claimant filed a Reinstatement Petition attempting to reinstate benefits as of December 5, 2004. The WCJ granted the Reinstatement Petition and the WCAB affirmed.

When seeking to reinstate suspended benefits, the burden is on the claimant to prove that the basis for the suspension no longer exists. This burden generally requires the claimant to prove that his earning power is once again adversely affected by his work injury and that this disability is related to a prior work injury. Bufford v. WCAB (North American Telecom), 2 A.3d 548, 558 (Pa. 2010). When work-related and non-work-related injuries exist, the claimant must prove that it is the work-related injury causing the disability and not the non-work-related injury. Pucci v. WCAB (Woodville State Hospital), 707 A.2d 646, 648 (Pa. Cmwlth. 1998).

The Commonwealth Court reversed the award of benefits for several reasons. First, the stipulation adopted on May 31, 2006, conclusively established that Claimant left his employment with Employer for injuries unrelated to his employment. Claimant therefore had to prove that his non-work-related injuries no longer prevented him from his performing his regular job duties before his workers' compensation benefits could be reinstated. Claimant offered no evidence whatsoever that his non-work-related injuries had resolved to the point that he could perform his regular job duties. Second, the opinions of Claimant's medical expert were legally incompetent because her opinions were explicitly contradicted by the May 31, 2006, stipulation, Claimant's own testimony, and were also based on incorrect information.

Conclusion:    A claimant is bound by the facts established in a stipulation adopted by a WCJ that suspends workers' compensation benefits and the claimant must prove that the stipulated facts no longer provide a basis for the suspension of benefits.

 

Editor
David G. Greene, Esq.

Co-Editor
Renee M. Porada, Esq.

Contributing Authors
Ross J. Ventri II, Esq.

Media Contacts

Lexi Burchmore
267.295.3377
lburchmore@wglaw.com

back to top