MONTHLY SUMMARY OF SIGNIFICANT WORKERS’ COMPENSATION CASES FOR JANUARY 2005
SUPREME COURT CASES
There were no workers’ compensation cases decided by the High Court last month. However, the Court did accept the appeal filed in Rag (Cyprus) Emerald Resources, LP v. WCAB (Hopton), No. 345 WAL 2004. This is the case where the Commonwealth Court appeared to suggest that to claim compensation benefits for an aggravation of a pre-existing psychiatric condition, there must be some evidence that the employer has knowledge of the Claimant’s pre-existing condition and intentionally exposes him to conditions which cause the aggravation.
COMMONWEALTH COURT CASES
Apportionment
Guard Insurance Group v. WCAB (York), No. 1448 C.D. 2004 (January 10, 2005)
The Claimant sustained a low back injury during the course and scope of his employment on July 16, 1998, but returned to work on July 22, 1998. Thereafter, the Claimant performed his regular work duties and sometimes light duty work, but his pain continued and worsened with work activities until his physician removed him from work as of November 10, 2000.
Two Claim Petitions were filed on the Claimant’s behalf, each seeking total disability benefits beginning November 10, 2000. The first Claim Petition was filed against the employer and Eastguard alleging disability resulting from a low back injury sustained on July 16, 1998. A timely Answer was filed to said petition. The second Claim Petition, also alleging a low back injury, was filed against the employer and TIG, and listed a date of injury of November 10, 2000. An Answer was filed to this petition, but was untimely.
The WCJ found that the Claimant had sustained two separate and distinct injuries, each of which contributed substantially and materially to the Claimant’s total disability as of November 10, 2000. Based on this finding, the WCJ found that Eastguard was responsible for paying Claimant’s medical bills incurred between July 16, 1998 and November 9, 2000, and that such expenses incurred on and after November 10, 2000, would be shared equally between Eastguard and TIG, unless it could be determined whether the particular medical service was attributable solely to one of the two injuries. Finally, finding that both carriers presented unreasonable contests, the WCJ awarded counsel fees in quantum meruit and other litigation costs, to be apportioned equally between the insurance carriers.
On appeal, Eastguard argued that the WCJ erred in apportioning benefits between Eastguard and TIG. This argument was rejected by the Commonwealth Court. The Court reasoned that the WCJ had credited medical testimony which established that the Claimant suffered two separate and distinct injuries to different body parts; an L5-S1 herniated disc on July 16, 1998, and an L4-5 herniated disc after August 19, 2000. The WCJ further relied upon medical testimony which established that the Claimant’s separate and distinct work-related injuries each contributed substantially and materially to the Claimant’s total disability. The Court held that, as here, where a Claimant has suffered two work related injuries to different body parts, each a substantial contributing factor to his or her total disability and each covered by a separate insurance carrier, the Claimant’s benefits are appropriately paid by both insurers on a pro-rata basis. See Franklin Steel Company (Clark), 665 A.2d 1310 (Pa Cmwlth. 1995).
Eastguard further argued that TIG’s late Answer to the Claim Petition required a finding that the Claimant’s disability was due solely to an injury on November 10, 2000, thus absolving Eastguard from liability. Where an employer files an untimely Answer, every fact alleged in the Claimant’s Claim Petition shall be deemed admitted by the employer. Section 416 of the Pennsylvania Workers’ Compensation Act, 77 P.S. §821. The WCJ had found that, because TIG’s Answer was untimely, the well pled allegations in the Claimant’s Claim Petition were deemed admitted through March 22, 2003, the date on which the Answer was ultimately filed. The Commonwealth Court reasoned that these admitted allegations required the WCJ to find that the Claimant sustained an injury on November 10, 2000, but did not require the WCJ to find that the Claimant’s disability was due solely to that injury. Instead, the WCJ was free to find that another injury to a different body part, i.e. the Claimant’s July 16, 1998 L5-S1 herniated disc also contributed substantially and materially to the Claimant’s total disability.
Pension Offset
Croom v. WCAB (Pennsylvania Hospital), No. 1647 C.D. 2004 (January 12, 2005)
The Claimant suffered a work related lumbosacral strain on July 1, 1999, while in the employ of Pennsylvania Hospital. Pursuant to a Notice of Compensation Payable, the Claimant received weekly indemnity benefits at the rate of $392.12. Benefits were suspended as of December 27, 1999, but reinstated as of January 18, 2000.
On April 20, 2001, the employer issued a Notice of Pension Benefit Offset Form which indicated that beginning October 1, 2000, an offset in the amount of $115.16 would be deducted from the Claimant’s compensation benefits based on the Claimant’s receipt of a pension.
Various petitions were filed by the respective parties. Before the WCJ, the parties stipulated that the employer funded 100% of the pension and that the credit offset began in April, 2001. The parties also stipulated that receipt of the pension commenced on October 1, 2000. The WCJ reinstated Claimant’s weekly compensation in the amount of the offset retroactive to April 1, 2001, plus interest on the amount of compensation due and owing.
An employer is only entitled to an offset under Section 204(a) of the Pennsylvania Workers’ Compensation Act if the employer is directly liable for payment of workers’ compensation benefits. See Kramer v. WCAB (Rite Aid Corp.), 794 A.2d 953 (Pa. Cmwlth. 2002), petition for allowance of appeal granted, 573 Pa. 32, 820 A.2d 700 (2003). Here, the WCJ determined that the employer was a self-insured employer for purposes of workers’ compensation benefits and was directly responsible for the payment of workers’ compensation benefits to its injured employees. The WCJ reached this conclusion based on the testimony of William M. Gorenstein, an assistant vice-president of finance for the University of Pennsylvania Health System, the employer’s parent company, who explained that while a third party administrator issued payments, the employer actually paid the benefits. The employer also introduced the self-insurance permit from the Department of Labor and Industry, which listed the employer as an approved self-insured. In short, the employer was self-insured for purposes of workers’ compensation and was directly liable for the workers’ compensation benefits. Therefore, a credit was appropriate from the time the Claimant began receipt of his pension payments.
Penalty
Johnstown Housing Authority v. WCAB (Lewis), No. 1980 C.D. 2004 (January 12, 2005)
The Claimant sustained an injury during the course and scope of his employment on July 31, 2002. The Claimant returned to a modified duty position after three days. After the issue of surgery proceeding was raised, the employer filed a Petition for Physical Examination, which was granted by the WCJ. Thereafter, the employer filed a Petition to Terminate. At a hearing held on February 18, 2003, counsel for the employer indicated for the first time that the employer filed a Notice of Denial on August 20, 2002. Said Denial indicated that an injury took place, but was not disabling. The employer’s Petition to Terminate was then withdrawn as premature, and the Claimant subsequently filed a Claim Petition. The latter petition was ultimately granted, and as part of the award, the Judge assessed a 50% penalty against the employer.
On appeal, the employer contended that it did not violate the Workers’ Compensation Act because it issued a Notice of Denial and agreed to pay the Claimant’s medical benefits within 21 days of the date of receiving notice of the Claimant’s injury. The employer contended that the issuance of the Notice of Denial was in compliance with Section 406.1 of the Act, 77 P.S. §717.1. See Darrall v. WCAB (H.J. Heinz Company), 792 A.2d 706 (Pa. Cmwlth. 2002). The Commonwealth Court disagreed, reasoning that, unlike in Darrall, it was undisputed that the employer failed to provide notice to the Claimant, as required under Section 406.1 of the Act. This reality was said to be critical. Without notice to the Claimant, the Denial did not serve its purpose, which was to put the Claimant on notice that his claim was being denied and the reasons for the denial. As a result, the employer’s Notice of Denial was invalid. Absent some form of acceptance, such as a Notice of Compensation Payable, the employer failed to either accept or deny responsibility for the claim in a timely fashion as it was statutorily required to do so. In short, it was not sufficient to simply issue a Notice of Denial if the Claimant is not provided a copy of the document.
Termination
Temple University Hospital v. WCAB (Sinnott), No. 1395 C.D. 2004 (January 14, 2005)
In 1993, the Claimant filed a Claim Petition alleging injuries resulting from exposure to radioactive materials in the work place. In 1995, the WCJ awarded total disability benefits, based on findings that the Claimant’s exposure to radioactive chemicals resulted in a cognitive dysfunction injury. In granting the Claim Petition, the WCJ expressly found that other conditions suffered by the Claimant at that time, including obesity, diabetes and depression, were not causally related to the Claimant’s employment.
On May 21, 2001, the employer filed a Petition to Terminate alleging that, as of August 24, 2000, the Claimant did not have any cognitive, physical or emotional problems and had fully recovered from the work injury identified as “cognitive dysfunction”. The WCJ concluded that the employer failed to meet its burden of proof of proving that the Claimant had fully recovered from his work injury and denied the Petition to Terminate. The employer raised three issues on appeal.
The employer first argued that the testimony of the Claimant’s medical expert, Dr. Gomberg, was legally incompetent because his diagnoses of chemically induced persisting dementia, organic mood disorder and psychiatric disturbance did not address and/or contradict the description of injury as found in the original claims proceeding. That is, of cognitive dysfunction. However, the Commonwealth Court reasoned that Dr. Gomberg’s testimony adequately addressed the work injury as found by the WCJ in the original Claim Petition and could see no contradiction between the doctor’s diagnosis and the original finding that the Claimant’s exposure to radioactive chemicals resulted in a cognitive dysfunction injury. Therefore, it followed that Dr. Gomberg’s testimony was competent.
The second argument raised by the employer was that the WCJ’s finding that the Claimant suffered from organic mood disorder and psychiatric disturbance as a result of his work injury conflicted with the WCJ’s original adjudication identifying the Claimant’s work injury, and was therefore barred by the doctrines of res judicata and/or collateral estoppel. In short, the argument was advanced that the Claimant was barred from re-litigating the nature of his injury. This argument was rejected on two grounds. First, the issues raised in the Employer’s Petition to Terminate concerned the Claimant’s condition as of August 24, 2000, and thus were different from those issues decided in 1995, which related to the Claimant’s condition of January 16, 1992. Dr. Gomberg’s description of “organic mood disorder” reflected that this diagnosis was distinct from that of “depression”. The diagnosis of “organic mood disorder” included mood swings and bipolar disorder and thus was not synonymous with the diagnosis of “depression” addressed in the prior proceeding. Therefore, as the employer’s Petition to Terminate raised issues distinct from those decided in the earlier proceeding, including the nature of the diagnoses and the Claimant’s condition as of a particular date, the principles of res judicata and/or collateral estoppel did not apply.
The final argument raised on appeal by the employer was the WCJ’s authority to modify the 1995 description of the work injury to include organic mood disorder and psychiatric disturbance, where the Claimant did not file a Claim Petition or Petition to Review. A Claimant seeking benefits for disability that are related to, but distinct from, a recognized injury must file a Claim Petition. Jeanes Hospital v. WCAB (Hass), 819 A.2d 131 (Pa. Cmwlth.), appeal granted in part, 831 A.2d 1159 (Pa. 2003). The only exception to this general rule is where the Claimant’s disability arises as a natural consequence of the work-related injury. Id.; Campbell v. WCAB (Antietam Valley Animal Hospital), 705 A.2d 503 (Pa. Cmwlth. 1998). To the extent that Dr. Gomberg’s testimony indicated that the Claimant’s organic mood disorder and/or psychiatric disturbance were natural consequences of the established work injury, the Claimant would be permitted to amend the description of injury pursuant to Section 413(a) of the Pennsylvania Workers’ Compensation Act, rather than be required to file a Claim Petition under Section 315 of the Act. However, because the WCJ did not find that the description of the NCP was materially incorrect at the time it was issued, the Court agreed with the employer that the WCJ erred in issuing findings that effectively modified the employer’s liability as established by the 1995 award. The Judge was found to have erred in issuing findings concerning the Claimant’s organic mood disorder and psychiatric disturbance, which were irrelevant to the WCJ’s determination as to whether the Claimant had fully recovered from the adjudicated work injury. However, based upon Dr. Gomberg’s competent testimony that the Claimant continued to suffer a cognitive dysfunction injury, the WCJ properly concluded that the employer failed to properly meet its burden of proof in the Petition to Terminate. See City of Philadelphia v. WCAB (Smith), 860 A.2d 215 (Pa. Cmwlth. 2004); Commercial Credit Claims v. WCAB (Lancaster), 728 A.2d. 902 (Pa. 1999).
Subrogation
Gillette v. Wurst, No. 355 WDA 2004. (January 24, 2005) [1].
The insurer paid death benefits after the decedent was killed in the course of his employment. The decedent was a teacher, who was shot by a student at a school dance. The decedent died intestate. Under the distribution scheme in 42. Pa.Cons. Stat. §§8301(b) and 2102(3), the wife would have received her spousal share of the settlement proceeds from the third party action with the remainder divided between her three children. However, the distribution plan called for the wife to disclaim her spousal intestate share in favor of her children. The insurer intervened because the plan would have interfered with its subrogation rights to the settlement proceeds. All of the children had reached majority. Finding nothing in the Wrongful Death Act or the Decedent’s Estate and Fiduciaries Code (DEF Code), that would preclude the disclaimer, the trial court approved the plan. The Superior Court affirmed, holding first that judicial review of the plan was proper. Further, while distribution of sums recovered in wrongful death actions, were to be made to estate beneficiaries “in cases of intestacy”, nothing in the language of the Act, The DEF Code, or the Workers’ Compensation Act precluded disclaimer of the wife’s share of the settlement. Rather, 20 Pa.Cons. Stat. §6201 specifically allowed a disclaimer of an intestate share.
[1] This is a Superior Court Case.