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SUPREME COURT CASE:
PAYMENT OF AWARD MAY BE DELAYED UP TO 60 DAYS IF APPEAL FILED
In the case of Snizasik, widow of Randy Snizasik v. W.C.A.B. (Rox Coal Company), No. 36 WAP 2004, the Supreme Court addressed the issue of whether an employer violates the Act by failing to pay a workers’ compensation award within 30 days of a decision, when the employer filed an appeal from the decision and requested supersedeas in conjunction with the appeal.
The claimant was the widow of a worker who died in a motor vehicle accident. A WCJ denied a fatal claim petition finding that the decedent was not in the course and scope of his employment at the time of the accident. On October 21, 1999 the Appeal Board reversed and remanded to the WCJ for the computation of benefits. The employer petitioned for reconsideration with the Appeal Board. On June 13, 2000 the Appeal Board denied employer’s request for reconsideration and ordered the employer to pay the claimant and her children weekly compensation benefits.
On July 6, 2000 the employer appealed to Commonwealth Court and also filed an Application for Supersedeas with the Board, as is required by the Act. However, 30 days after the Appeal Board’s award of benefits, the claimant demanded payment. The employer responded that it was not required to make payment while its supersedeas request was pending. However, 42 days after the entry of the Appeal Board’s award, the employer did make payment. Six days later the employer’s Application for Supersedeas was officially denied. The employer then filed an Application for Supersedeas with the Commonwealth Court, and it too was denied.
The claimant filed a Penalty Petition alleging that the employer had failed to tender payment within 30 days of the Appeal Board’s June 13, 2000 Order and thus had violated the Act. The employer denied that its payment was late arguing that the Appeal Board’s regulations indicate that an employer’s obligation to make payment is stayed while an Application for Supersedeas is pending.
The WCJ awarded penalties of 10% and the WCJ also awarded attorney’s fees for an unreasonable contest. The employer appealed and the Appeal Board reversed, finding that the Act was not violated, because the employer had no obligation to pay while its supersedeas request was pending.
Commonwealth Court affirmed the Appeal Board and the claimant appealed to the Supreme Court.
The Supreme Court affirmed the Commonwealth Court. The Supreme Court held that an employer or insurer is entitled to seek a supersedeas with the filing of an appeal. The Supreme Court went on to state that the Appeal Board’s regulations contemplate that the entire procedure from the supersedeas request to a ruling on the request for supersedeas will take a maximum of 50 days in the case of an appeal from a WCJ to the Appeal Board or 60 days in the case of an appeal from the Appeal Board to the Commonwealth Court.
The Supreme Court determined that when the Act and the Appeal Board’s supersedeas regulations are read together, the only logical conclusion is that an employer can be deemed in default only if it fails to seek supersedeas while pursuing additional review or refuses to make compensation payment after the supersedeas request is denied.
COMMONWEALTH COURT CASES:
PETITION TO ADD INJURIES TO NCP MUST BE FILED WITHIN THREE YEARS OF DATE OF PAYMENT OF BENEFITS PURSUANT TO A COMMUTATION
In Baer v. W.C.A.B. (Butcher), No. 1770 C.D. 2005, the claimant’s benefits were commuted in October of 1996. Under the Commutation Agreement, the employer remained responsible for payment of causally related medical expenses.
In May of 2002 the employer filed a Termination Petition averring that the claimant had fully recovered from the work injury. Meanwhile, the claimant filed a Review Petition later amended to a Claim Petition, to include psychological injuries as part of the acknowledged work injury.
The WCJ denied the Termination Petition and granted the Review Petition expanding the description of the work injury to include a psychological component. The employer appealed to the Appeal Board, raising numerous issues, including an allegation that the Review Petition was time barred by the statute of limitations. The Appeal Board rejected all of the employer’s arguments.
The employer appealed to Commonwealth Court arguing that the claimant’s Review Petition was time barred. Relying upon the Supreme Court’s decision in Westinghouse Electrical Corporation/CBS v. W.C.A.B (Korach), 883 A.2d 579 (Pa. 2005), the Commonwealth Court agreed with the employer that the Review Petition was time barred. Specifically, Commonwealth Court noted that under Section 413 (a), 77 P.S. §772, an NCP cannot be reviewed or modified or reinstated unless a petition is filed within 3 years after the date of the most recent payment of compensation made prior to the filing of such petition. Furthermore, Section 306(f.1)(9), 77 P.S. §531(9), provides that payment by an employer for medical services after any statute of limitations has expired, shall not act to reopen or revive compensation rights. In light of the fact that the claimant’s Commutation was granted in 1996 and the Review Petition to add the psychological injury was not filed until 2002, the claimant was clearly beyond the 3 year statute of limitations set forth in the Act.
HEPATITIS C CONTRACTED BY FIREMAN WORK-RELATED EVEN THOUGH NO DISABILITY ASSOCIATED WITH EXPOSURE
In the case of City of Philadelphia v. W.C.A.B. (Cospelich), No. 1003 C.D. 2005 and No. 1004 C.D. 2005, Commonwealth Court addressed payment of medical bills associated with the claimant’s development of hepatitis C.
The claimant joined the fire department in 1985 and in July of 1999 he tested positive for hepatitis C. Immediately thereafter he wrote a letter to the fire commissioner advising of the diagnosis and his belief that the illness was contracted as a result of his employment as a firefighter/EMT. In August of 2002 the claimant filed a Claim Petition averring that he contracted hepatitis C in the course of his employment and he was seeking payment of medical bills and attorney’s fees for an unreasonable contest.
Before the WCJ, the claimant stated that as part of his duties he performed CPR and because of this he came into contact with blood and bodily fluids primarily with his hands but also with his arms and face.
The claimant’s medical expert acknowledged that the claimant had a history of alcohol problems, but his fifteen years of employment as a firefighter and first responder meant that he was exposed to blood and bodily fluids. The claimant’s medical expert concluded that the claimant acquired the virus through his occupational exposure to blood. Meanwhile, the City’s medical expert was of the opinion that the claimant’s hepatitis C was a result of his intravenous drug use as a young man.
The WCJ granted the Claim Petition finding that the claimant acquired hepatitis C as a result of his employment. The WCJ also concluded that the City’s contest was reasonable. Both parties appealed to the Appeal Board and the Appeal Board affirmed the WCJ in all respects.
Before Commonwealth Court, the City contended that the Appeal Board and the WCJ erred in granting the Claim Petition because at the time that the claimant was diagnosed with hepatitis C, the Act did not recognize hepatitis C as an occupational disease and firefighters were not included as a group at risk. The City further argued that the subsequent amendment to the Workers’ Compensation Act in 2001, recognizing hepatitis C as an occupational disease among firefighters, cannot be applied retroactively.
The Court noted that prior to 2001, the Act included “infectious hepatitis” in the definition of an occupational disease. In 2001 the Act was amended and an occupational disease was defined to include infectious hepatitis or hepatitis C for those involved in among other things, auxiliary services involving exposure to such diseases. Furthermore, the Act indicated that an occupational disease also included hepatitis C contracted by firefighters and EMT’s and when developed while working in those two occupations, there was a rebuttable presumption that the disease was an occupational disease.
The Court held that when the circumstances of the case were reviewed, there was no question that the claimant’s hepatitis C found to have been contracted while he was working as a fireman, constituted an occupational disease under the Act in effect prior to 2001 and also under the Act after its amendment in 2001.
Commonwealth Court also noted that the same issues had been raised in the recent case of City of Philadelphia v. WCAB (Sites), No. 1410 C.D. 2005 and were likewise rejected.
This did not stop the City, which also argued that the claim should have been denied because the claimant failed to prove a wage loss as a result of the hepatitis C. Specifically, the City argued that an injury is compensable as an occupational disease only if the claimant has sustained a loss of earnings. However, the Court rejected this argument on the basis that the Act requires the City to pay for work-related medical expenses whether or not there is a wage loss.
Furthermore, the City argued that because he did not prove a wage loss, the claimant was not entitled to the presumption in the Act that his hepatitis C was contracted as a result of his employment as a firefighter. Here again, the Court rejected this argument on the basis that there is nothing in the Act requiring disability before an application of the aforementioned presumption. The Court went on to note that even if the claimant was not entitled to the presumption, the claimant proved that he worked under conditions under which he was exposed to the hazard of contracting hepatitis C.
Finally, the City argued that the claim petition was not timely because with occupational disease claims, they are forever barred if filed more than 3 years after the injury, which the Act defines as disability resulting from occupational disease. The Court suggested that the claimant filed his petition before he was even disabled, so the petition was certainly timely.
Meanwhile, the claimant argued that that the WCJ erred in denying his request for attorney’s fees for an unreasonable contest. The Court held that the City’s contest was reasonable in light of the fact that their medical expert opined that the claimant’s hepatitis C was caused by his past history of intravenous drug use. The Court noted that even though the medical expert’s opinion was rejected, the opinion proved that the City’s contest was not filed to merely harass the claimant. The Court also suggested that the City’s legal arguments had some merit, even though they were ultimately rejected.
CLAIMANT NOT ENTITLED TO BENEFITS DURING PLANT WIDE SHUTDOWN BASED ON TERMS OF COLLECTIVE BARGAINING AGREEMENT
In Osram Sylvania v. W.C.A.B. (Wilson), No. 1220 C.D. 2005, the issue before Commonwealth Court involved a claimant’s entitlement to workers’ compensation benefits during a plant wide shut down.
The claimant was injured in April of 1998 and eventually returned to modified duty. On January 9, 2002 the employer notified all employees of a plant-wide shutdown from June 27, 2002 through July 7, 2002. The Collective Bargaining Agreement covering the employees indicated that all employees were required to apply the first five days of their earned vacation days to the shut down period.
The WCJ concluded that the claimant’s wage loss was through no fault of her own, so the WCJ awarded benefits during the temporary plant shutdown. The Appeal Board affirmed.
Commonwealth Court suggested that the relevant inquiry was whether the claimant’s loss of earnings was the result of the work injury as the Act was not intended as a remedy where a claimant’s loss of earnings is due to factors other than the work related disability.
Commonwealth Court ultimately held that the claimant was not entitled to benefits during the shut down period. Specifically, the Court determined that the claimant failed to prove that her loss of earnings was due to the work injury. Instead, the Court determined that the loss of earnings was due to the claimant’s voluntary decision, pursuant to the CBA, to take her vacation with pay.
NO AGGRAVATION OF PRE-EXISTING KNEE PROBLEMS DUE TO WORK WHEN CLAIMANT ADVISED OF NEED FOR KNEE REPLACEMENTS PRIOR TO STARTING WITH EMPLOYER
In Dorsey v. W.C.A.B. (Crossing Construction Co.), No. 1937 C.D. 2005, the claimant had a history of knee problems and was told in August of 2000 that he would need bilateral knee replacements. The claimant started with the employer in February of 2001. The claimant reported knee problems to the employer in October of 2002 and eventually underwent bilateral knee replacements.
The claimant filed a claim petition alleging a work-related injury in the nature of an aggravation of a pre-existing arthritic condition in both knees. The claimant’s medical expert opined that the claimant’s physically demanding job with the employer put stress on the knees and aggravated the pre-existing knee condition. Meanwhile, the employer’s medical expert opined that the work duties did not substantially contribute to the arthritic condition.
The WCJ accepted the opinions of the employer’s medical expert and denied the claim petition. The claimant appealed on the basis that the WCJ did not issue a reasoned decision because the WCJ improperly rejected the opinions of the treating doctor on the basis that the treating doctor had opined that the claimant was going to need knee replacements even before the claimant started working with the employer. The claimant also argued that the WCJ erred in rejecting the opinion of the treating doctor on the basis that the treating doctor did not review the records from the claimant’s family doctor.
Commonwealth Court noted that determining the credibility of witnesses is the “quintessential function” of a WCJ and the Court declined the claimant’s attempt to overturn the WCJ’s credibility determinations. Instead, the Court held that they were required to determine if the WCJ articulated an actual objective basis for discrediting the opinions of the treating doctor. In reviewing the findings, the Court held that the WCJ stated verifiable reasons for his credibility determinations so the decision was reasoned.
PERSONAL ANIMOSITY DEFENSE NOT APPLIED WHEN EMPLOYER FAILED TO PROVE THAT THERE WAS INTENT TO INJURE
In Edwards v. W.C.A.B. (Value-Plus, Inc), No. 1035 C.D. 2005, the claimant was injured when his supervisor slammed him on a table, grabbed his groin and lay on top of him. Before the WCJ, the employer argued that a work “injury” did not include an injury caused by an act of a third person intended to injure the employee for reasons personal to him and not directed against him as an employee or because of his employment.
A Claim Petition was filed and the WCJ found that the claimant was injured due to an incident that had nothing to do with his employment but instead was personal in nature. Furthermore, the WCJ found that the actions by the supervisor towards the claimant amounted to sexual harassment. When addressing the issue of the sexual harassment, the WCJ relied upon Commonwealth Court’s decision in Heath v. W.C.A.B. (Pennsylvania Board of Probation and Parole), (Heath I), 811 A.2d 90 (Pa. Cmwlth. 2002), vacated and remanded, 580 Pa. 174, 860 A.2d 25 (2004), wherein it was held that any sexual harassment would be personal and not work related or part of a proper employer/employee relationship so any injury resulting from the harassment was not work related. Ultimately, the WCJ in Edwards found that the “personal animosity” defense applied so the claim was denied. The Board affirmed on the basis that any sexual harassment would be personal in nature and not work-related.
Commonwealth Court reversed on the basis that the personal animosity defense was improperly applied. In so doing, the Court held that to rebut the presumption of coverage when one employee injures another; the employer must prove that the assailant had the intention to injure the other employee for reasons personal to the assailant. The Court concluded that there was no evidence to prove that the supervisor’s actions were intended to injure the claimant. In fact, the Court made note of the fact that the claimant testified that the day after the incident, the supervisor told the claimant that he did not mean to hurt the claimant.
SUPERSEDEAS FUND REIMBURSEMENT ALLOWED WHEN EMPLOYER PAYS RETROACTIVE BENEFITS FOLLOWING GRANTING OF CLAIM PETITION AND IT IS LATER DETERMINED THAT THE CLAIM SHOULD NOT HAVE BEEN GRANTED
On March 10, 2006 Commonwealth Court in the case of Howard W. Mark and Cincinnati Insurance Company v. W.C.A.B. (McCurdy), No. 2753 C.D. 2004, overturned its decision in Wausau, Ins. Co. v. W.C.A.B. (Commonwealth of Pa.), 826 A.2d 21 (Pa. Cmwlth. 2003)—a decision it issued three years earlier.
In Wausau, the employer was unsuccessful in a claim proceeding. An appeal was filed to the Appeal Board and along with the appeal the employer filed a petition for supersedeas. The supersedeas request was denied so the employer paid benefits to the claimant, including benefits for periods of disability prior to the filing of its petition for supersedeas to the Appeal Board. However, It was eventually determined that the employer was not obligated to pay all of the benefits to the claimant, including the retroactive benefits paid to the claimant.
The employer applied to the Supersedeas Fund for reimbursement of all of the money it paid to the claimant, including the money paid for periods of disability prior to its request for supersedeas.
The Supersedeas Fund refused to reimburse the employer for the money it paid for periods of disability prior to its request for supersedeas. Commonwealth Court agreed with Supersedeas Fund and refused to order reimbursement for the money paid for periods of disability prior to the employer’s request for supersedeas. In so holding, the Wausau Court noted that the money paid for retroactive benefits was attributable to a period of disability that predated the employer’s request for supersedeas.
Meanwhile, in Howard W. Mark and Cincinnati Insurance Company, the claimant filed a claim petition seeking benefits for an injury suffered in September of 1993. In 1997 the WCJ granted the claim petition and benefits were awarded retroactive to September of 1993. In June of 1997, the employer appealed to the Appeal Board and requested supersedeas. Supersedeas was denied and the employer paid the claimant benefits, including the retroactive benefits dating back to 1993. The Appeal Board remanded and a second WCJ found that the claimant’s disability had ceased as of August of 1995.
The employer sought reimbursement from the Supersedeas Fund, including reimbursement for those benefits paid between August 1995 and the date that the employer requested supersedeas. The Supersedeas Fund denied reimbursement for the benefits paid between August of 1995 and the date of the supersedeas request on the basis that these benefits were paid for periods of disability prior to the employer’s request for supersedeas. The Fund’s position was that the retroactive benefits were paid because of the employer’s failure to prevail on the claim petition—not because of the denial of the employer’s request for supersedeas.
The WCJ agreed with the Fund as did the Appeal Board. Commonwealth Court reversed and in so doing the Court specifically rejected the Fund’s position that the benefits were paid due to the employer’s failure to prevail on the initial claim petition. Instead, the Court held that until the WCJ issued the initial decision, there was no determination of liability so it was not until that first decision that the employer had an obligation to the pay the retroactive benefits. The Court noted it was this initial award that the employer tried to stay with the filing of its supersedeas request and when its supersedeas request was denied it paid benefits. The Court held that this chronology satisfied the Act’s requirements.
The Court suggested that the Fund’s position would preclude reimbursement of mistakenly awarded retroactive benefits in all cases. The Court ultimately held that if the Legislature intended to preclude Fund reimbursement for all retroactive benefits, it could have done so.
NCP AMENDED TO INCLUDE ADDITIONAL BODY PARTS EVEN THOUGH NO ACTUAL DIAGNOSES MADE WITH RESPECT TO THE NATURE OF THE INJURIES TO THOSE BODY PARTS
In Meadow Lake Apartments v. W.C.A.B. (Spencer), No. 350 C.D. 2005, the employer issued an NCP acknowledging a work injury in the nature of a medial meniscus tear of the right knee. On a subsequent supplemental agreement, the injury was further described as Grade II chondromalacia. The claimant filed a Review Petition alleging that the NCP was incorrect and the injury description should be expanded to include medial meniscal tear right knee, right foot, right hip, low back and left knee.
The WCJ accepted the claimant’s evidence as credible and determined that the accepted right knee injury resulted in pain in the left knee, low back and hip area. Furthermore, the WCJ found that the treating physician opined that the claimant had pain in these areas but the treating doctor did not sufficiently define this pain nor did the treating doctor offer any medical diagnoses for these areas. Ultimately, the WCJ found that while the claimant’s symptoms of pain were related to the work injury, the claimant did not establish an injury because the symptoms did not constitute a new injury. Thus, the Review Petition was denied.
The claimant appealed and the Appeal Board determined that the claimant proved there were additional injuries and amended the NCP to include “overuse” injuries.
The employer appealed to the Commonwealth Court on the basis that the claimant’s medical expert made no specific diagnoses as to the additional injuries and did not prescribe a course of treatment for the injuries. Furthermore, the employer argued that overuse syndrome was not raised before the WCJ so it was waived.
Commonwealth Court affirmed the Appeal Board to the extent that the Board found that the claimant proved additional injuries. In finding that the claimant was successful in proving additional work injuries, the Court noted that there was no requirement that an injury had to carry a “professional” diagnosis or a descriptive tag. Additionally, the Court noted that pain itself, as long as it is related to the employment, may be compensable under the Act. Thus, even though the accepted medical evidence only showed that the claimant was experiencing symptoms in these additional body parts, this was enough to allow the NCP to be expanded to include these body parts. The Court did hold that the Appeal Board erred in concluding that the injuries were due to overuse, instead, the Court found that the NCP should be expanded to include what was found by the WCJ—“pain in the left knee, low back and hip area.”
WEEKLY WAGE OF EMT FOUND TO BE EQUAL TO STATEWIDE AVERAGE WEEKLY WAGE
In Borough of Heidelberg and Inservco v. W.C.A.B. (Selva), No. 1627 C.D. 2005 Commonwealth Court addressed the weekly wage of a volunteer EMT. The parties stipulated that the claimant was an employee of the Borough and the parties stipulated that the claimant suffered a disabling right heel injury. Furthermore, there was no question that the claimant was unemployed at the time of the injury. Finally, the parties agreed that only issue was whether or not the claimant was entitled to wage loss benefits.
Before the WCJ, the claimant testified that she had volunteered as an EMT but it had been 32 years since she held a job that paid wages. At the time of the injury, the claimant was receiving old-age social security benefits but she testified that she did not consider herself removed from the work force. Finally, the claimant admitted that she did not have any intention to work anywhere for wages.
In spite of this testimony from the claimant, the WCJ determined that Section 601(b) of the Act, 77 P.S. §1031, required him to find that the claimant was entitled to a presumption that her wages were at least equal to the statewide average weekly wage. The Appeal Board affirmed.
The employer argued before Commonwealth Court that the WCJ erred in imposing the burden of proof on them with respect to whether the claimant voluntarily removed herself from the work force and the employer also argued that the WCJ misconstrued Section 601(b), 77 P.S. §1031, as entitling a volunteer to compensation when that volunteer has not worked nor considered working.
Commonwealth Court held that that the WCJ’s decision supported the finding the claimant had not removed herself from the work force. In light of this finding, the Court concluded that the WCJ did not place the burden of proof on the employer but instead placed the burden of proof upon the claimant and the claimant proved that she did not remove herself from the workforce.
Also, the Court held that Section 601(b), 77 P.S. §1031 contains an irrebuttable presumption that the claimant’s wages were at least equal to the statewide average weekly wage, because as a matter of public policy the Legislature meant to compensate volunteer emergency workers for injuries they suffered while performing their duties without regard to their actual earnings. In other words, the Court held that it was in the public interest to provide a financial safeguard to those willing to volunteer their time and effort if they should suffer an injury.
CLAIMANT REQUIRED TO ATTEND SECOND VOCATIONAL INTERVIEW
In Linton v. W.C.A.B. (Amcast Industrial Corp.), No. 1915 C.D. 2005, the claimant refused to attend a second vocational interview on the basis that the Act does not require a claimant to submit to more than one vocational interview and the Act and/regulations do not permit multiple vocational interviews. In light of the claimant’s failure to submit to a vocational interview, the employer filed a Petition for an Expert Interview.
The WCJ granted the Petition and directed the claimant to submit to a vocational interview. The claimant appealed to the Appeal Board and with its appeal the claimant filed a request for supersedeas. The Board granted the request for supersedeas pending oral argument and after the oral argument the Board revoked its prior order and denied supersedeas. As for the appeal itself, the Board affirmed the WCJ and held that the employer was entitled to an additional vocational interview.
Before the Commonwealth Court, the claimant argued that the Board’s denial of his supersedeas put him in the position of having to choose between his right to appeal and his right to receive benefits. According to the claimant, if he submitted to the interview his appeal would be rendered moot and if he did not attend the interview, then his benefits would be subject to suspension.
Commonwealth Court held that the Board did not err in refusing to grant the supersedeas because the claimant failed to prove that he would suffer irreparable harm if supersedeas were denied. The Court suggested that if the claimant’s benefits were suspended for failure to attend the interview and he ultimately prevailed, then the claimant would receive his retroactive benefits.
As for the issue regarding the vocational interview, Commonwealth Court held that Section 314(a) of the Act, 77 P.S. § 651(a), requires an employee to submit to a physical exam or an expert interview. The Court indicated that the plain language of the Section and the Bureau regulations, leads to the conclusion that multiple interviews by a vocational expert are allowed.
The claimant further argued that the mere passage of time should not justify a second vocational interview and that only factors such as employment experience, education or change in skills or traits should be the basis for a second vocational interview. However, the Court held that the Act protects the claimant from harassment because a WCJ must deem a subsequent interview reasonable and necessary, so again, because the WCJ found that that it was reasonable that the claimant attend the second vocational interview, then the claimant should attend the interview.
AVERAGE WEEKLY WAGE OF LABORER WORKING ON AS NEEDED BASIS CALCULATED BY TAKING TOTAL WAGES AND DIVIDING BY TOTAL NUMBER OF WEEKS WORKED
In Burkhart Refractory Installation v. W.C.A.B. (Christ), No. 2274 C.D. 2005 addressed the AWW calculation of a laborer who worked on an as needed basis on some occasions and worked on a more regular basis on other occasions.
The claimant was hired as a laborer. The president of Burkhart testified that the claimant’s hours, like all other laborers for the company, varied due to the nature of the business. The president stated that work schedules were posted for one job only and that subsequent postings would be for a different job. The president stated that most of the time the workers were on-call.
It was determined that claimant was employed by Burkhart for a total of 16 weeks but only earned wages during 12 of those weeks. When calculating the AWW, the employer took claimant’s total wages earned for the 16 weeks and divided by 16, the number of weeks that the claimant was employed, and came up with an AWW of $311.82. The WCJ accepted this calculation.
Claimant appealed t and the Appeal Board looked to Section 309(d.2), 77 P.S. § 582 (d.2) for guidance. This Section indicates that when an employee is employed less than 13 weeks at the time of the injury and does not have a fixed weekly wage, the AWW is calculated by multiplying the hourly rate by the number of hours the employee was expected to work per week according to the terms of employment. The Appeal Board determined that the claimant did not have an expected number of hours so a strict application of the Act did not reflect the claimant’s economic reality. Therefore, the Appeal Board took the claimant’s total wages and divided by the total number of weeks that he actually worked, 12 weeks, and came up with an AWW of $454.17. In so doing, the Board relied upon the Supreme Court’s decision in Hannaberry HVAC v. W.C.A.B. (Snyder, Jr.), 576 Pa. 66, 834 A.2d 524 (2004) wherein it was held that Section 309(d.2), 77 P.S. § 582 (d.2) does not apply when the use of the subsection would lead to a grossly inaccurate measure of a worker’s AWW.
Commonwealth Court affirmed the Appeal Board and likewise held that Section 309 (d.2), 77 P.S. § 582 (d.2) did not apply because the claimant had no specific number of work hours. Ultimately, the Court held that the Board’s approach, taking the total wages and dividing by the number of weeks worked, was a fair compromise.
SUPERIOR COURT CASE:
AUTO CARRIER NOT REQUIRED TO DEFEND EMPLOYEE WHO WAS DRINKING BEFORE AN AUTOMOBILE ACCIDENT THAT INJURED CO-EMPLOYEE
In Atlantic States Insurance Company v. Northeast Networking Systems, Inc. and Boyd and Fornicoia, No. 1742 WDA 2004, Superior Court issued a decision regarding the applicability of a business auto policy to a work injury.
Boyd and Fornicoia, both employees of Northeast Networking Systems, were in Virginia for business. After going to dinner, where both employees drank alcohol, there was an automobile accident. Boyd was driving at the time of the accident.
During workers’ compensation proceedings, it was determined that Fornicoia was in the course and scope of his employment at the time of the accident—even though he had had a few drinks immediately before the incident. However, a different referee found that Boyd was not in the course and scope of his employment at the time of the accident because he had consumed alcohol prior to driving which was a violation of the employment policy.
Fornicoia moved to Florida after the accident and brought a civil suit in Florida against Northeast Networking and Boyd. In Florida, Northeast Networking undertook Boyd’s defense, subject to a reservation of rights and also subject to the outcome of the declaratory judgment action in Pennsylvania.
Meanwhile, Atlantic States filed a declaratory judgment action in Pennsylvania seeking a determination that it did not have to defend or indemnify Boyd.
The trial court in Pennsylvania denied all of Atlantic States’ arguments and an appeal to Superior Court followed. The first issue addressed by Superior Court was one made by Northeast Networking and Fornicoia that Atlantic States was bound by the findings of the workers’ compensation referee and the Florida trial court that Boyd was not in the course of his employment at the time of the accident. Superior Court rejected this argument on that basis that the issue in those two matters was different than the issue involved in the declaratory judgment action. Specifically, in the declaratory judgment action the issue was whether or not Boyd was a “permissive user” and thereby covered under the automobile policy—not whether or not Boyd was in the course and scope of his employment at the time of the injury.
Superior Court then addressed Atlantic States’ argument that a workers’ compensation exclusion in the policy precludes coverage. Specifically, this exclusion suggested that the auto policy did not apply to any obligation for which the insured or the insured’s insurer may be held liable under any workers’ compensation law.
The trial court had determined that because Boyd was not in the course and scope of employment at the time of the motor vehicle accident, then Boyd was liable to Fornicoia under tort law and not under workers’ compensation laws. Superior Court affirmed the trial court and in so doing held that because Boyd was denied workers’ compensation benefits and Fornicoia was suing Boyd in tort, Boyd cannot be liable for any obligation under workers’ compensation law. Thus, Boyd cannot be excluded from coverage under this provision of the policy.
The policy also had an exclusion that there was no coverage for “bodily injury” to an employee of the insured arising out of or in the course of employment by the insured. The trial court found and Superior Court agreed that this exclusion did not apply because it dealt with Northeast Networking’s direct liability to Fornicoia not Boyd’s liability to Fornicoia.
Superior Court did not address Atlantic States’ argument that Boyd was not a “permissive user” under the policy because he knowingly violated a company policy by driving a company car after consuming alcohol because this argument was not included in Atlantic States’ appeal to the Court. Therefore, the issue was waived.
Additionally, Atlantic States argued that 75 Pa. C.S.A. §1724 did not apply to this matter. According to this Section, insurance may not be denied on the basis that the driver of the vehicle was determined to be under the influence of alcohol and the Section also indicates that any provisions of an insurance policy that excludes benefits if the insured causes an accident while under the influence of alcohol was void.
Atlantic States’ argument was that Section 1724 applied to insurance benefits and not coverage. This argument was rejected by the trial court and also by Superior Court because it was held that the public policy of Pennsylvania was for owners of vehicles to maintain insurance coverage so that the victims will have recourse. Atlantic States also argued that Section 1724 did not apply because the policy in question did not contain a specific provision negating coverage for drinking and driving. However, Superior Court noted that if this argument were adopted by the Court then Fornicoia would be denied benefits and this is what Section 1724 was trying to avoid.
Finally, Superior Court addressed Atlantic States’ argument that its policy excluded coverage for bodily injury to any employee arising out of the course of the fellow employee’s employment. The exclusion states that coverage does not apply for bodily injury to any fellow employee of the insured arising out of and in the course of the fellow employee’s employment.
The trial court had found that because Boyd was not within the course of his employment, Boyd was not a “fellow employee” at the time of the accident so the exclusion did not apply.
However, Superior Court determined that the fact that Boyd was not within the course of his employment at the time of the accident did not negate the fact that Boyd was an insured under the policy. Superior Court then stated that the facts of the case demonstrated that Fornicoia suffered bodily injury and was a fellow employee of the “insured”, which was Boyd. Since Fornicoia was in the course and scope of his employment at the time of the accident and his injuries were caused by the insured (Boyd), the fellow employee exclusion of the policy barred coverage of Boyd by Atlantic States.
Ultimately, Superior Court determined that Atlantic States was not responsible for defending Boyd in Florida and Atlantic States was not responsible for paying any verdict in favor of Fornicoia and against Boyd.