Significant Pennsylvania Case Summaries
IF A CLAIMANT MOVES OUT OF STATE AFTER THE LABOR MARKET SURVEY IS CONDUCTED, THE USUAL EMPLOYMENT AREA IS WHERE THE INJURY OCCURRED, NOT THE AREA OF CLAIMANT’S RESIDENCE IN THE NEW STATE
Rebeor v. W.C.A.B. (Eckerd), No. 2328 C.D. 2008 (Pa. Cmwlth. March 13, 2009)
The claimant was injured on August 28, 2002, in the course and scope of his employment. The injury was accepted via Notice of Compensation Payable as “dislocated left hip L1/femoral” and “head fx mva”. Claimant eventually returned to light duty work for the employer in March 2003, however, Claimant’s light-duty position was subsequently eliminated in December 2005. On December 11, 2006, the employer filed a Modification Petition that alleged work was generally available for the claimant based upon a Labor Market Survey that was conducted on or around July 2006. Pursuant to an IME, it had been determined that claimant was capable of light duty work. The Labor Market Survey identified positions that were available for the claimant in the labor market that he was residing (Lawrence County, Pa) at the time it was conducted. Claimant had informed the vocational expert that he planned to move to South Carolina. In September of 2006 the claimant did in fact move to South Carolina and he testified before the Workers’ Compensation Judge that he had moved to another state. The claimant did not put on any medical testimony or vocational testimony in opposition to the medical and vocational experts that were presented by the employer.
The WCJ found that as of October 18, 2006, work was generally available to the claimant in his labor market within his restrictions. The WCJ noted that the claimant had argued that work was not available to him because the vocational search was performed in Lawrence County, Pennsylvania where he previously resided and not in South Carolina where he currently resided. The WCJ determined that the employer is not required to find work generally available to the claimant in his current area of residence, but instead, in the claimant’s pre-injury economy. The claimant appealed this Decision, which was affirmed by the Board. The Claimant appealed to the Commonwealth Court and argued that the employer did not act reasonably or in good faith because it performed a vocational rehabilitation evaluation in Lawrence County, Pennsylvania when the employer knew the claimant would be moving to South Carolina. The Commonwealth Court upheld the Decision of the WCJ and in doing so, looked at the definition of “usual employment area” as defined by Section 306(b)(2) of the Act. Section 306(b)(2) defines “usual employment area” as the area “in which the employe lives within this Commonwealth [and i]f the employe does not live in this Commonwealth, then the usual employment area where the injury occurred shall apply.” 306(b)(2) WCA. The Court noted that at the time the claimant’s injury occurred and at the time the labor market survey was conducted the claimant was a resident of the Commonwealth. The Court went one step further and stated that even assuming the Claimant did not live in the Commonwealth at the time the vocational assessment and labor market survey were performed, the injury occurred in Western Pennsylvania, not South Carolina. Therefore, the claimant’s “usual employment area” as defined by the Act was not South Carolina.
Any questions regarding this case can be directed to Carrie E. Smyth at (717) 441-7068 or csmyth@tthlaw.com.
EMPLOYER RESPONSIBLE TO PAY PENALTY ON UNPAID SUBROGATION LIEN THAT WAS ASSERTED BY HIGHMARK PRIOR TO THE COMPROMISE AND RELEASE AGREEMENT HEARING EVEN THOUGH THE WORKERS’ COMPENSATION INSURER MISTAKENLY DUPLICATED PAYMENT TO THE HEALTH CARE PROVIDER
Lusby v. W.C.A.B. (Fischler Co. & Sparmon, Inc.), No. 804 C.D. 2008 (Pa. Cmwlth. July 9, 2009)
The parties entered in a Compromise and Release Agreement to resolve the claimant’s low back injury that he suffered in 2002 while working for the employer. During the life of the workers’ compensation claim, some of the claimant’s work related medical bills were paid by his private health care insurer, Highmark. On August 8, 2005, the parties entered into a Compromise and Release Agreement that did not identify the subrogation lien of Highmark in paragraph 11 of the Agreement where it asks if there are actual or the potential for a subrogation lien under Section 319. However, claimant’s counsel attached two separate fee agreements, one which he had with the claimant, and the other which he had with Highmark. The fee agreement with Highmark was very clear that claimant’s counsel was to be compensated 20% of any recovery that he made on Highmark’s contractual subrogation claim. The WCJ circulated a Decision and Order on August 9, 2005 and an Amended Order on September 1, 2005. The Amended Order specifically referenced the fact that the employer, through its insurer was to issue payment of medical expenses as referenced in the Agreement, “inclusive of the reimbursement of the Highmark lien” as referenced in the Agreement as well as the fee agreement attached to the Agreement. Neither party appealed the Decision, Order or Amended Order of the WCJ.
In May 2006, claimant’s counsel filed a penalty petition alleging that the employer failed to pay the Highmark subrogation lien of $22,154.71 as well as the 20% attorneys’ fees on that lien. In defense of the penalty petition, the employer indicated that the payment for the medical expenses at issue had been made, but the payment went to the actual medical providers and that there was now a double payment made by both Highmark and the workers’ compensation carrier. The employer argued that in light of the double payment, the claimant bore the burden of seeking recovery of the payments issued by Highmark to the medical providers. The WCJ declined to entertain the employer’s argument and granted the penalty petition and awarded a maximum penalty of 50% in the amount of $11,077.36 (50% of $22,154.71).
The employer appealed to the Board. The Board overturned the Decision of the WCJ because the actual C&R Agreement did not reflect that the parties agreed there was an actual lien as paragraph 11 did not indicate there was any actual lien. The Board also held that the Amended Order did not establish Highmark’s lien. The claimant appealed to the Commonwealth Court who determined that the WCJ made the correct decision in awarding a penalty. The Court found that the claimant had established there was an enforceable lien pursuant to Section 319 of the Act. The Court specifically looked at one of the Exhibits submitted by claimant at a hearing on the penalty petition. The Exhibit contained a letter dated July 8, 2005 to the workers’ compensation insurer from claimant’s counsel and it listed the amount of Highmark’s subrogation lien. This letter established that prior to the C&R hearing, the workers’ compensation insurer was notified of the lien and also that the employer’s workers’ compensation insurer drafted the C&R Agreement. Therefore, any ambiguity in the terms of the C&R Agreement had to be resolved against the party who drafted it. The Court held that Highmark’s lien was sufficiently established in prior proceedings because it was referenced in the C&R Agreement and the workers’ compensation insurer knew the exact amount of the subrogation lien prior to the C&R hearing. The Court rejected the employer’s argument of mutual mistake because of the duplicate payments made and stated that underestimating damages or entering into a settlement before damages are adequately assessed is not a mutual mistake of fact.
Any questions regarding this case can be directed to Carrie E. Smyth at (717) 441-7068 or csmyth@tthlaw.com.