SUPREME COURT CASES

AWW AS OF DATE OF AMPUTATION, NOT INJURY DATE, USED TO CALCULATE BENEFITS OWED.

In J.G. Furniture Division/Burlington and Liberty Mutual Insurance Company v. W.C.A.B. Kneller, Appeal of Kemper Insurance Company, No. 149 MAP 2005, the claimant injured his left index finger in January of 1976. The finger was amputated in 1984. It was later stipulated that claimant was entitled to specific loss benefits for the entire finger. The issue was which AWW to use, the AWW from 1976, the date of the original injury, or 1984, the date of the amputation.

In addressing the issue, the Court noted that Section 582 of the Act indicates that “wages” are defined in terms of a claimant’s wages “at the time of the injury.” The Court reasoned that the amputation in 1984 constituted a separate compensable specific loss injury—meaning that the AWW was calculated based on the claimant’s wages in 1984.

Since the employer switched carriers between 1976 and 1984, Liberty Mutual, the carrier at the time of the original injury in 1976, did not have to pay the specific loss benefits, instead Kemper, the carrier in 1984, had to pay the specific loss benefits to the claimant.

WIDOW COULD NOT REFUSE FULL SHARE OF PROCEEDS OF WRONGFUL DEATH ACTION TO LIMIT THE WORKERS’ COMPENSATION INSURER’S SUBROGATION CLAIM

In Debbie Gillette, Ind. and as Administratrix of the Estate of John Gillette, Dec’d. v. Catherine Wurst, as Parent and Guardian of Andrew Wurst, a Minor and Catherine Wurst and J.J. Wurst Landscape Contractor, Inc., Appeal of Utica National Insurance Group and General McLane School District, No. 9 WAP 2006, John Gillette was a school teacher who was shot and killed by Andrew Wurst. Utica National Insurance was the workers’ compensation insurer for the General McLane District and paid fatal claim benefits to Debbie Gillette.

Debbie Gillette filed a wrongful death action against Andrew Wurst and his parents. The Wursts agreed to settle the matter and $288,000.00 was offered to Debbie Gillette and her three children. According to the Wrongful Death Statute, 42 Pa.C.S. §8301(a)-(b), Debbie Gillette was entitled to damages in the amount of $109,493.77 and the three children were each entitled to $26,497.93.

However, Debbie Gillette refused her share of the proceeds of settlement, except for $12,000.00 for the decedent’s funeral expenses. If the proceeds of the settlement were distributed as discussed, Utica National’s subrogation claim would have been limited to the $12,000.00—which was Mrs. Gillette’s share.

Mrs. Gillette petitioned the Court of Common Pleas of Erie County for approval of the proposed settlement and Utica National intervened in the proceedings to protect its subrogation rights under Section 671 of the Workers’ Compensation Act. Specifically, Utica National argued that under the Wrongful Death Statute, Mrs. Gillette was entitled to $30,000.00, plus ½ of the balance of the estate, so Utica sought a right to subrogate against that entire amount to which she was entitled and not just the $12,000.00 claimed by Mrs. Gillette.

The Court of Common Pleas of Erie determined that it did not have jurisdiction over matters involving the Workers’ Compensation Act so it could not resolve the Workers’ Compensation issue. As for the distribution of the settlement proceeds, the Court determined that there was nothing preventing beneficiaries from agreeing to a manner of distribution that was different than that set forth in the Wrongful Death Statute.

Utica National appealed to Superior Court which held that while a Workers’ Compensation insurer has an absolute right to subrogation from the proceeds of a settlement, that subrogation right only exists to the extent that the claimant has a legally enforceable interest in the proceeds of the third party recovery. The Court determined that Mrs. Gillette was free to disclaim her interest in the proceeds of the settlement, so Utica National’s right of subrogation was dramatically reduced.

The Supreme Court first held that the trial court did have jurisdiction over the subrogation claim as a Workers’ Compensation Judge would not be able to address the Wrongful Death suit. The Supreme Court then looked to Section 671 of the Workers” Compensation Act which suggests that the insurer is subrogated to the right of the employee or his representative against the third party. The Court concluded that because Mrs. Gillette had a “right” to the entire settlement amount, she could not disavow the entire settlement to limit a subrogation claim.

The Court sent the matter back to the trial court to issue an Order to distribute the settlement proceeds in a manner consistent with its Opinion.

COMMONWEALTH COURT CASES

UR DETERMINATION AS TO ONE PROVIDER CANNOT BE USED TO DENY PAYMENT OF BILLS FROM PROVIDER PROVIDING SAME OR SIMILAR TREATMENTS.

The issue in Schenck v. W.C.A.B. (Ford Electronics), No. 1011 C.D. 2007, was whether the insurer could deny payment for treatment by a provider when a UR had found the treatments by a similar provider unreasonable and unnecessary.

A UR Determination found the orthopedic treatments of Dr. Zaslow to be unreasonable and unnecessary as of September 25, 1996. In 2004, the claimant returned to Dr. Zaslow’s office but the doctor was no longer at that location so the claimant began treating with Dr. Yarus. The insurer denied payment of Dr. Yarus’ bills on the basis that his treatments were essentially the same as those provided by Dr. Zaslow.

The claimant filed a penalty petition. The WCJ denied the petition, on the basis that Dr. Yarus’ treatments were the same as or similar to those provided by Dr. Zaslow and those treatments had been found unreasonable and unnecessary. The Appeal Board affirmed.

Commonwealth Court reversed. In so doing, the Court noted that Section 306(f.1)(6)(ii) of the Act and Section 127.452(d) of the Bureau’s Rules and Regulations, only allow for the review of a single medical provider. Because the insurer only filed a UR request as to the treatments of Dr. Zaslow, the insurer could not use that UR Determination to deny payment of the bills of Dr. Yarus. The Court remanded the matter to the WCJ for the calculation of the penalty.

NOT UNREASONABLE FOR INSURER TO ISSUE NOTICE ACKNOWLEDGING WORK INJURY BUT DENYING DISABILITY IN LIGHT OF MEDICAL EVIDENCE IN INSURER’S POSSESSION AT THE TIME THAT DENIAL WAS ISSUED.

The insurer in Gumm v. W.C.A.B. (J. Allan Steel), No. 599 C.D. 2007, acknowledged the claimant’s right ankle injury by way of a NTCP. An IME was performed and the doctor opined that while there had been a work injury, the claimant had recovered from it as of the date of the examination. Immediately thereafter, the insurer timely issued a Notice Stopping the NTCP and also issued a Notice of Denial, checking Denial # 4—meaning that an injury was acknowledged but it was denied that claimant was disabled due to the injury.

The claimant filed a claim petition and a penalty petition for the original injury date alleging that the insurer violated the Act by improperly filing a Notice of Denial instead of a Notice of Compensation Payable when the evidence showed that there was a compensable injury. (The claimant also filed a claim petition for a second injury date alleging a repetitive and cumulative trauma injury to the right ankle).

The WCJ granted both claim petitions, granted the penalty petition and also awarded attorneys’ fees for an unreasonable contest due to the insurer’s failure to recognize the injury. The Appeal Board affirmed the granting of the claim petitions, but reversed as to the award of attorney’s fees and penalties.

The Court upheld the Board’s determination that the contest was reasonable because there was a genuine dispute as to the nature of the work injury and there was a dispute as to the severity of the injury as well as to the extent of the disability. In that regard, the Court noted that the insurer’s medical expert opined that the injury was merely an ankle sprain, along with a temporary aggravation of a pre-existing condition, with a complete recovery as of the date of the IME. Meanwhile, the claimant’s medical expert opined that the injury was a chronic ankle sprain which disabled the claimant from his time of injury position. Under the circumstances, the Court noted that even if the insurer issued a NCP accepting an ankle sprain, the claimant would still have had to litigate the claim for a more severe injury as alleged. The Court concluded that the insurer’s contest was reasonable as to the nature of the claimant’s injury.

The Court also upheld the Appeal Board’s reversal of the WCJ’s award of penalties. In upholding the Board, the Court concluded that the insurer did not violate the Act by issuing a Notice of Denial, checking Denial #4. The Court concluded that the insurer’s use of this document was consistent with its position that as of the date of the issuance of the Notice of Denial, any ongoing disability was not related to the work injury. The Court also noted that there was no evidence that the claimant’s medical treatment had been denied or delayed due to the issuance of the Notice of Denial so this was further evidence that no penalty was warranted.

IRE FINDING OF 50% IMPAIRMENT DID NOT PRECLUDE AN INSURER’S SUBSEQUENT MODIFICATION PETITION

The claimant in Sign Innovation v. W.C.A.B. (Ayers), No. 681 C.D. 2007, underwent an IRE and was found to have a 50% whole body impairment. Thereafter, the insurer performed a labor market survey and earning power assessment and then filed a modification petition. The claimant defended on the basis that the insurer could not proceed with the modification petition in light of an IRE finding him 50% impaired. The claimant argued that the 50% impairment meant that he was presumed to be totally disabled as a matter of law.

The WCJ agreed with the claimant and dismissed the modification petition. The Appeal Board affirmed.

Commonwealth Court reversed concluding that impairment under an IRE is not the same as disability. Thus, the insurer was permitted to proceed with its modification petition and the Court remanded the matter to the WCJ to issue a decision on the merits of the employer’s modification petition.

REMAND NECESSARY TO DETERMINE IF INJURY DESCRIPTION SHOULD BE EXPANDED.

The insurer in Sears Logistic Services v. W.C.A.B. (Preston), No. 631 C.D. 2007, filed a termination petition which was denied by the WCJ and in so doing, the WCJ expanded the nature of the work injury.

The claimant’s accepted injury was “bruised knees” and the insurer’s medical expert opined that claimant had recovered from the injury. The claimant’s medical expert agreed that claimant had recovered from the bruised knees but he also opined that the work injury should include meniscus tears, from which the claimant had not recovered.

The WCJ found that both medical experts opined that the claimant had recovered from the “bruised knees” but the WCJ went on to find that the claimant was suffering from a torn medial meniscus and arthritis. Thus, the termination petition was denied. The Appeal Board affirmed.

Before Commonwealth Court, the insurer argued that the WCJ erred in denying the termination petition and that the WCJ erred in amending the description of the work injury.

As for the expansion of the work injury, the Court noted that Section 413(a) of the Act indicates that a WCJ may, at any time, review or modify a NCP or supplemental agreement if it is shown that the NCP or agreement was materially incorrect. The Court also noted that an NCP or agreement can be modified, even when the only petition pending is an insurer’s request for a termination. However, the Court indicated that Section 413(a) comes into play only when the condition existed at the time that the NCP was issued. Commonwealth Court determined that the claimant’s medical evidence revealed that the meniscal tears existed at the time that the NCP was issued, but the Court remanded to the WCJ for findings as to whether or not the claimant met his burden of proving that the NCP was incorrect.

WCJ DID NOT IMPROPERLY EXPAND NATURE OF WORK INJURY EVEN THOUGH ONLY MATTER PENDING WAS INSURER’S TERMINATION PETITION.

The claimant in Visteon Systems v. W.C.A.B. (Steglik), No. 1179 C.D. 2007, suffered injuries in the nature of chronic cervical sprain/strain, cervical spondylosis and a tendonopathy of the paraspinal tendon of the left shoulder. The insurer filed a termination petition based on a complete recovery from the injuries. Meanwhile, the claimant’s treating doctor opined that the claimant had not recovered from the work injuries and was continuing to suffer from supraspinatus tendonitis and shoulder strain, a paracervical injury with involvement of the brachial plexus nerve, a long thoracic nerve injury, repetitive strains in both right and/or left upper extremities, posterior occipital neuralgia, radial neuropathy and ulnar neuritis of both elbows—all related to the work duties. The WCJ denied the termination petition and the Appeal Board affirmed.

Before Commonwealth Court, the insurer argued that the WCJ erred in accepting the testimony of the claimant’s treating doctor because the doctor opined that the claimant was suffering from numerous conditions that were not recognized as being work-related.

The Court acknowledged that in defending against a termination petition, when a claimant alleges a new and distinct physical injury/condition not listed in the original NCP or agreement, the burden rests with the claimant to prove that the new injury/condition is work-related. However, in this case, the Court noted that the claimant’s medical expert opined that the claimant had not recovered from the accepted work injuries and also opined that that the new injuries/conditions related back to the original work injuries. Therefore, the Court concluded that the WCJ did not improperly expand the injury description. Thus, the Court upheld the denial of the termination petition.

DECEDENT IN COURSE AND SCOPE OF EMPLOYMENT AT THE TIME OF A MOTOR VEHICLE ACCIDENT

In Clear Channel Broadcasting v. W.C.A.B. (Marie Perry, Widow of Dewayne Perry, Decedent), No. 179 C.D. 2007 a fatal claim petition was granted and the employer filed a Petition for Review with Commonwealth Court on the basis that the claimant was not in the course and scope of employment at the time of his death and on the basis that the WCJ erred in crediting the testimony of the claimant’s expert that there was no credible evidence that claimant was intoxicated at the time of his accident.

The decedent was the employer’s Director of Marketing and the employer provided him a car to use 24-hours per day. The decedent was killed in an automobile accident at 5:00 a.m. after attending a live radio broadcast at a bar.

Commonwealth Court acknowledged that Section 306(c)(1) of the Act suggests that compensable injuries do not include injuries sustained while the employee is operating a vehicle provided by the employer unless the employee was otherwise in the course of employment at the time of the injury. The Court did note that there are exceptions to this general rule. However, the employer argued that the claimant’s death did not fall with any of the four recognized exceptions to the rule. The four exceptions are: 1) the employment contract included transportation to/from work; 2) the claimant had no fixed place of employment; 3) the claimant was on a special mission; 4) special circumstances suggested that the claimant was furthering the business of the employer.

As for the decedent, the Court noted that the employer admitted that he was provided a vehicle as part of his employment package. Thus, the Court concluded that the decedent fell into the employment contract exception. The Court then said that the evidence showed that the decedent was in the course of his employment at the time of the accident as it occurred less than an hour after he was seen leaving a work-related function. Therefore, it was held that the decedent’s injuries resulting from the automobile accident were suffered while decedent was in the course and scope of his employment.

As for the employer’s position that the decedent was intoxicated at the time of the accident and thereby not entitled to benefits, the Court looked to Section 301(a) of the Act which holds, among other things that where the injury is caused by intoxication, no compensation is payable if the injury or death would not have occurred but for the employee’s intoxication. The Court did note that the burden of proof of such fact was upon the employer. The Court suggested that past case law indicated that an employer asserting intoxication as an affirmative defense, must prove that the intoxication was the “cause in fact” of the injuries.

The Court noted that the WCJ credited the testimony of claimant’s expert who opined that the blood-alcohol level in the toxicological report was not reliable because there was no evidence as to where the blood sample was taken, because he testified that the blood should be taken from different parts of the body during an autopsy to get a reliable reading as to blood alcohol level. The expert also testified that the time of death was important because the body would still be metabolizing and absorbing alcohol if the decedent was alive 1-2 hours after the accident, but if he died instantly, the decedent would have had to have consumed 12-13 drinks in a very short time in order to reach the blood alcohol level seen in the toxicology report.

The Court held that because the WCJ rejected the opinions of the employer’s expert and credited the testimony of the claimant’s expert witness, and the determinations were supported by the evidence, the Court could not overturn the WCJ’s granting of the petition.

FATAL CLAIM PETITION DENIED AS NOT BEING TIMELY FILED

The decedent in Marie Ingram, deceased, and Marc A. Hicks, Sr. parent and natural guardian of minor dependent, claimant, Marc A. Hicks, Jr. v. W.C.A.B. (Ford Electronics), No. 491 C.D. 2007, 492 C.D. 2007 and 493 C.D. 2007, entered into a Compromise and Release in 1998 resolving a work-related carpal tunnel injury and also resolving a claim for an alleged work-related occupational disease claim.

More than 300 weeks after her last day of work, the decedent died from lung cancer. The claimant, the decedent’s adoptive grandson, filed a fatal claim petition. The insurer moved to dismiss under Section 301(c)(2) of the Act, because decedent failed to establish a compensable injury during the 300-week period following her last hazardous exposure.

The WCJ concluded that by entering into the C&R, the decedent gave up her right to pursue a lifetime claim for an occupational disease. The WCJ also concluded that there never was a determination that the decedent’s occupational disease was compensable and the WCJ found that the insurer never accepted liability for an occupational disease. Lastly, the WCJ concluded that the claimant filed the fatal claim petition within 3 years of the decedent’s death but the death was 337 weeks after the last date of exposure. Thus, the insurer’s motion to dismiss was granted. The Appeal Board affirmed.

Before Commonwealth Court, the claimant argued that the decedent’s lifetime occupational disease claim filed within 4 months of her last exposure and his fatal claim petition filed within 3 years of the decedent’s death were timely filed. The claimant also argued that the C&R, which released the insurer from the lifetime claim, could not bar the claimant’s fatal claim petition which was different from and independent from the decedent’s lifetime claim. According to the claimant, the decedent could not bargain away, via the C&R, his right to file his fatal claim petition.

The Court concluded that prior case law suggests that an employee’s death from an occupational disease must occur within 300 weeks after the last exposure if the employee did not file a lifetime claim but if the employee filed a lifetime claim, death benefits may be awarded even if the death occurs beyond the 300 weeks because the fatal claim is viewed as a continuation of the original claim. In this case, the Court concluded that the decedent extinguished the original occupational disease claim via the C&R. The Court then stated that at the time of the death, which was more than 300 weeks after the last exposure, the occupational disease claim had not been deemed compensable.

Based on this, the Court upheld the dismissal of the fatal claim petition.

WAGES FROM CONCURRENT EMPLOYMENT NOT INCLUDED IN CALCULATION OF AWW FOR VOLUNTEER FIREFIGHTER.

The issue in Ballerino v. W.C.A.B. (Dabry Borough), No. 1113 C.D. 2007, was the proper calculation of the AWW of a volunteer firefighter. At the time of the injury suffered during the performance of his volunteer firefighting duties, the claimant also worked as truck driver. The insurer calculated the AWW according to Section 601(b) of the Act, which indicates that there is an irrebuttable presumption that the AWW of a volunteer firefighter injured while actively engaged as a fireman, is at least equal to the Statewide AWW. Meanwhile, the claimant wanted the wages from his truck driving position added into the AWW calculation to thereby increase his disability benefits.

The Court held that Section 601 of the Act ensures that a volunteer fireman injured in the line of duty would receive a minimum amount of compensation, regardless of the actual earnings. The Court indicated that even if a volunteer fireman was not working at the time of the injury, he/she would be paid disability benefits based on the Statewide AWW. Based on its interpretation of Section 601, the Court held that the claimant’s wages from his trucking driving position could not be included in the AWW calculation as Section 601 is quite clear as to how the AWW is to be calculated.

PAYMENT OF SPECIFIC LOSS BENEFITS DID NOT EXTEND 3 YEAR STATUTE OF LIMITATIONS OF SECTION 413.

The claimant in Stock v. W.C.A.B. (Food Chek Shopping Bag), No. 1296 C.D. 2007, commuted his right to ongoing indemnity benefits in 1997. In 1999 the claimant filed a review petition seeking specific loss benefits for scarring and disfigurement and in February of 2004, the insurer paid these benefits.

Shortly after the specific loss benefits were paid, the claimant filed a petition to reinstate benefits as of March 1, 1999. The claimant then filed a review petition to add a psychological injury to the NCP. The WCJ dismissed the petitions, as not being filed within 3 years after the most recent payment of compensation made prior to the filing of such petitions as required by Section 413 of the Act.

The Court agreed with the WCJ, holding that the payment of the specific loss benefits did not toll the 3 year statute of limitation of Section 413. Instead, the court concluded that specific loss benefits were not paid to claimant due to his disability status as the claimant did not have to establish any disability in order to receive the specific loss benefits. Because the specific loss benefits were not “disability” benefits, the payment of the same, did not extend the 3 year statute of limitation of Section 413.

WCJ COULD NOT GRANT REINSTATEMENT PETITION AND THEN IMMEDIATELY SUSPEND BENEFITS FOR CLAIMANT ALREADY RECEIVING BENEFITS FOR ANOTHER INJURY.

The claimant in Kane v. W.C.A.B. (Glenshaw Glass Company), No. 1081 C.D. 2007, sustained an accepted injury in 1991. The claimant suffered a second injury in December of 1995 with his benefits eventually being suspended for that injury. The claimant then filed a claim petition for a June 2, 1999 work injury and the claimant filed a reinstatement petition for the 1991 injury.

A WCJ issued a Decision finding that claimant suffered a new injury in June of 1999 and benefits were awarded for a closed period with a suspension of benefits effective August 2, 1999. The claimant continued working at a modified position until such time that the employer closed its plant. The insurer and the claimant entered into a supplemental agreement reinstating benefits for the December of 1995 injury.

The claimant then filed a reinstatement petition for the 1999 injury. The WCJ denied the petition because the claimant was receiving benefits for the 1995 injury and the reinstatement request was nothing more than the claimant’s attempt to have his benefit status changed to total, with the payment of benefits “stayed” because he was already receiving benefits for the 1995 injury. The WCJ concluded that the claimant was trying to do this to avoid the effects of having the weeks he was on a suspension status for the 1999 injury counted against his total of 500 weeks of benefits. The WCJ concluded that there was nothing in the Act allowing for a “stay” as to the payment of benefits.

Commonwealth Court agreed with the WCJ holding that at the time that claimant filed his reinstatement petition, benefits for the 1999 injury were already in a suspension status. Thus, even if the WCJ had reinstated the claimant’s benefits for the 1999 injury, they would have been immediately suspended. The Court determined that the WCJ’s denial of the reinstatement petition was not erroneous.

COMPROMISE AND RELEASE AGREEMENT COULD NOT GO FORWARD WHEN CLAIMANT DIED BEFORE AGREEMENT APPROVED BY A WCJ AND BEFORE PARTIES DETERMINED IF CMS APPROVAL NEEDED.

The parties in Miller v. W.C.A.B. (Electrolux), No. 552 C.D. 2007, agreed to resolve the workers’ compensation claim for $25,000.00. The offer was confirmed by the insurer and in its letter; the insurer indicated that it believed that the claimant was a Medicare recipient so Medicare approval was needed. The insurer requested information as to whether or not the claimant was indeed a Medicare recipient. The claimant died 19 months later and at the time of the death, a C&R had not been executed by the parties nor had it been submitted to a WCJ for approval.

The claimant’s widow filed a claim petition seeking to enforce the C&R agreement. The WCJ denied the petition because the C&R had not been signed and a hearing had not been held before to confirm that the claimant understood the legal effect of entering into the agreement. The widow appealed and the Appeal Board affirmed.

The widow argued to Commonwealth Court that the C&R should be approved, because the failure to have it approved was due to the insurer’s mistaken belief that Medicare approval of the C&R was needed. The Court disagreed, noting that the settlement was for future indemnity and medical benefits. The Court agreed with the insurer that Medicare approval of the C&R was a legitimate condition of the C&R and it was a condition upon which the parties failed to agree. The Court concluded that for a valid C&R, the parties must agree to all of the terms. Because the parties did not agree that Medicare approval was needed; the C&R was never finalized and there was never a C&R for a WCJ to approve.

JOB DEVELOPMENT TO TAKE PLACE IN AREA WHERE CLAIMANT RESIDING NOT IN LOCATION OF INJURY.

In Riddle v. W.C.A.B. (Allegheny City Electric, Inc.), No. 1390 C.D. 2007, the insurer performed an earning power assessment wherein it was determined that the claimant had an earning power of $301.45 based on available positions in Wheeling, WV, Washington, PA and Ohio. The WCJ granted a modification of benefits and the Appeal Board affirmed.

The claimant argued to Commonwealth Court that the vocational expert failed to prove job availability in the correct geographical area. Specifically, the claimant argued that because he did not live in Pennsylvania (he lived in Wheeling, WV), the Act required the insurer to prove job availability in the location of the injury, which was Pittsburgh. The Court rejected this argument, holding that because the claimant was living in Wheeling at the time of the job search, the insurer was not precluded from finding positions in that area as well as nearby locations in Pennsylvania and Ohio.

OFFSET ALLOWED FOR CLAIMANT’S OLD AGE BENEFITS EVEN THOUGH CLAIMANT BEGAN RECEIVING BENEFITS AS A MATTER OF LAW.

The employer in Ropoch v. W.C.A.B. (Commonwealth of DPW/PA), No. 1638 C.D. 2007, filed a Notice of Benefit Offset due to the claimant’s receipt of Social Security old age benefits. The claimant challenged this request for an offset.

The claimant was injured in 1997 and he began receiving Social Security disability benefits. By operation of the Social Security Act, the claimant’s disability benefits automatically converted to old age benefits when he turned 65-½ years old. Once the conversion took place, the employer looked to Section 204(a) of the Act, which holds, among other things, that 50% of old age benefits under the Social Security Act shall be credited against the workers’ compensation benefits received, provided that the old age benefits were not being received at the time of the injury.

The WCJ allowed the employer to take the credit, finding that when the claimant applied for Social Security disability benefits he was well aware that those disability benefits would convert to old age benefits when he reached 65 and 6 months years old. The Appeal Board affirmed.

The claimant argued to Commonwealth Court that the employer should not get the credit for the old age benefits, merely because his disability benefits automatically converted to old age benefits. The claimant argued that he did nothing to voluntarily change the disability benefits to old age benefits so he should not be punished by allowing the employer to take a credit. Meanwhile, the employer pointed out that the Act is clear that a credit is allowed when a claimant receives old age benefits with no exceptions.

The Court agreed with the employer and allowed the employer to take the credit.

PERSONAL ANIMUS DEFENSE DENIED FOR CLAIMANT INJURED AS A RESULT OF A PHYSICAL AND VERBAL ASSAULT BY A HOTEL GUEST.

The claimant in M&B Inn Partners v. W.C.A.B. (Petriga), No. 1201 C.D. 2007, filed a claim for benefits due to a psychological injury sustained as a result of being physically and verbally assaulted by a hotel guest.

The insurer denied the claim on the basis of a personal animus defense. More specifically, the insurer argued that if there was an assault, it was for reasons personal to the assailant and had nothing to do with the claimant’s employment. This defense was denied by the WCJ and the claimant was awarded benefits. The insurer appealed and the Appeal Board affirmed.

Commonwealth Court held that for the personal animus defense to apply, the insurer must prove that there was some intention on the part of the assailant to cause the injury for personal reasons. The Court held that the insurer had to prove that the assailant had a pre-existing relationship with the claimant or had a pre-existing animosity against the claimant. Finally, the Court held that if the claimant was an innocent victim of an attack, then the injury is compensable.

The Court noted that the WCJ had found that the assailant did not intend to harm the claimant and the Court noted that the insurer failed to prove that the assailant had a pre-existing relationship with the claimant. Under the circumstances, the Court held that the WCJ was correct in denying the insurer’s use of the personal animus defense and the Court held that the WCJ did not err in granting the claim.

NO VIOLATION OF A POSITIVE WORK ORDER SO CLAIM GRANTED.

The insurer in Sysco Food Services of Philadelphia v. W.C.A.B. (Sebastiano), No. 817 C.D. 2007, denied a claim petition on the basis that the claimant had violated a positive work order so the claimant was not entitled to benefits. The WCJ rejected this argument and benefits were awarded. The Appeal Board affirmed.

The evidence showed that at the time of the injury, the claimant was walking at work when a co-worker grabbed him and dragged him across the plant floor. Eventually, the co-worker fell on top of the claimant with the claimant suffering his injuries. The claimant acknowledged that “horseplay” was prohibited by the employer and the claimant acknowledged that “horseplay” was a punishable offense. While the claimant acknowledged these things, he also stated that he was not a participant in the horseplay.

Before Commonwealth Court, the insurer argued that the WCJ erred in not concluding that the claimant’s injury was due to the violation of a positive work order. The insurer suggested that the simple standard to be applied is whether the claimant was aware of the positive work order and whether the injury was caused by the violation of that positive work order.

Meanwhile, the Court indicated that the denial of an injury on the basis that it was caused by the violation of a positive work order is a rare exception to the general rule that injuries suffered in the course of employment are work-related. The Court also noted that for the rule to apply, the claimant must have been involved in an activity that was so disconnected from the regular duties to the extent that the claimant could be considered a “trespasser” or “stranger” with respect to the employer.

Under the circumstances of this case, the Court held that while there was no question that the claimant was injured as the result of horseplay, the fact remained that he was walking in the plant before the horseplay and this activity was not so foreign from his regular work duties so as to make him a trespasser/stranger with respect to the employer. Thus, the award of benefits was upheld.

SUPERIOR COURT CASE

PLAINTIFF COULD NOT INCLUDE AMOUNT OF WORKERS’ COMPENSATION INSURER’S SUBROGATION LIEN IN THIRD PARTY CLAIM FOR DAMAGES WHEN PLAINTIFF AGREED THAT THIS AMOUNT WOULD NOT BE CLAIMED IN THIRD PARTY ACTION

In Burke v. Erie Insurance Exchange, No. 17 MDA 2007, Burke suffered a work injury while driving a company car. He was paid workers’ compensation benefits by Erie Insurance. Burke sued the driver who hit him and received a $15,000.00 settlement. Burke then entered into a C&R with Erie in the total amount of $95,000.00 and as part of the agreement, Erie waived its statutory subrogation lien, which was $237,021.14.

Burke then sought recovery of underinsured benefits from his employer’s automobile insurance carrier—also Erie Insurance.

An arbitration panel awarded Burke $850,000.00 but excluded the $237,021.14 as an item of damages.

Superior Court noted that because Erie was the employer’s workers’ compensation carrier and its vehicle insurance carrier, Erie agreed to forego its workers’ compensation lien, with the understanding that the amount of the lien would not be an item of damages that Burke could recover in the arbitration proceeding. The Court concluded that Burke’s attempt to include it as part of his damages in the arbitration proceeding was nothing more than an attempt to avoid the agreement that was entered into when the workers’ compensation case was settled.

Ultimately, the Court held that the arbitration panel did not err in excluding the $237,021.14 from its award.