SUPREME COURT OF PENNSYLVANIA

Offset allowed for severance benefits received by a claimant also receiving workers’ compensation benefits.

Kramer v. WCAB (Rite-Aid Corporation), Nos. 51 and 52 MAP 2003 (September 28, 2005)

In this case, Rite-Aid and its workers’ compensation insurer sought an offset against the claimant’s workers’ compensation benefits in the amount of a severance payment paid by Rite-Aid. Rite-Aid sought the offset pursuant to Section 204(a) of the Workers’ Compensation Act, 77 P.S. §71(a). This section indicates that an offset is allowed for severance benefits paid by the employer directly liable for the payment of workers’ compensation benefits.

It was the claimant’s position that the severance offset only applied to self-insured employers because only self-insured employers would be “directly liable” for payment of workers’ compensation benefits. The claimant argued that Rite-Aid had a private insurer who paid the claimant’s workers’ compensation benefits, so Rite-Aid itself was not obligated to pay any workers’ compensation benefits. Since Rite-Aid did not pay any workers’ compensation benefits, Rite-Aid could not take the offset for the severance payment.

When addressing the issue, the Court needed to determine if an “employer” was synonymous with an “insurer”. The Court looked to decisions in the other cases that held that under some sections of the Act the employer and the insurer were synonymous. The Court followed the rationale of these other cases and determined that pursuant to Section 204(a) of the Act, 77 P.S. §71(a), an employer and its workers’ compensation insurer are one and the same. Since Rite-Aid and its insurer were one and the same, the Court held that Rite-Aid was entitled to the offset for the severance payment.

Claimant also argued that Section 204(a) of the Act, 77 P.S. §71(a) violated the equal protection clause of the Pennsylvania and U.S. Constitutions because it treated injured workers who received a severance differently than uninjured workers who received a severance. The Court rejected this argument and in so doing, the Court found that the severance offset ultimately reduced an employer’s workers’ compensation costs, so there was nothing irrational or arbitrary in allowing for the offset of severance payments for those receiving workers’ compensation benefits. The Court went on to hold that the permitting of the offset prevented the claimant from receiving duplicate benefits for the same loss of earnings.

The calculation of the AWW for claimant subject to past layoffs.

Reifsnyder v. WCAB (Dana Corporation), Nos. 4, 5, and 6 EAP 2004 (September 28, 2005)

In the case, the Supreme Court of Pennsylvania addressed the proper calculation of the AWW when the injured employee was subject to lay-offs for business/economic reasons in the relevant look-back period. The Reifsnyder claimants all worked for the Dana Corporation and were subject to periodic lay-offs during down turns in the production cycle. These lay-offs occurred in each of the four quarters immediately preceding the claimants’ work injuries.

In addressing the issue, the Court reviewed other cases that dealt with the calculation of the AWW and the Court observed that these cases suggested that a claimant’s past earnings’ history must be reviewed to provide an accurate measure of any future wage loss.

The Court noted that even during the lay-offs, the Reifsnyder claimants maintained a continuing employment relationship with the employer. During these lay-offs, the claimants retained significant rights/accoutrements of employment, such as plant seniority, health care and sick leave benefits, and employer contributions to their retirement accounts.

In holding that the periods of lay-offs during the relevant look back period should be included in the AWW calculation, the Court concluded that all of the claimants had long- term employment relationships with the employer so their history of earnings could be measured fairly. Also, the Court indicated that Section 309 of the Act, 77 P.S. §582, which addresses the AWW calculation, speaks about an “employment” relationship and is not limited to the continuity of the “work.” Ultimately, the Court decided that even though the claimants were not working for the employer during the lay-offs, the claimants were still employed with the employer so it was appropriate to include the lay-off periods in the AWW calculation.

The amendment of an NCP and the relevant statute of limitations.

Westinghouse Electric Corporation/CBS v. WCAB (Korach), No. 73 WAP 2003 (September 29, 2003).

In this case, the Supreme Court addressed the issue of the statute of limitations and the amendment of a NCP. The claimant sustained injuries in November of 1984. An NCP was issued, acknowledging a back sprain. The claimant’s benefits were commuted in February 1990 and as part of the commutation, the parties stipulated that the employer would remain responsible for payment of reasonable and necessary medical expenses related to the work injury.

In September of 1998, claimant filed a claim petition, alleging that he suffered from depression that was precipitated by the 1984 back injury. The employer asserted that the claim was barred because, among other things, the claimant failed file the claim petition within three years of the injury as required by Section 315 of the Act, 77 P.S. §602.

The WCJ granted the claim petition and rejected the argument that the petition was time-barred, finding that the defendants had paid some of the bills for claimant’s psychiatric treatments after the commutation had been entered into. According to the WCJ, these actions lulled the claimant into a false sense of security that the psychiatric treatments were related to the original injury. Ultimately, the WCJ found that the payment of the psychiatric bills constituted payments in lieu of compensation so the three year statute of limitations of Section 315 of the Act, 77 P.S. §602 had had been tolled and Claimant had three years from the last payment in which to file his petition.

As for the finding that Claimant had been lulled into a false sense of security, the Supreme Court observed that when the claimant testified in support of the commutation, he never indicated that he was lulled into believing that the defendants had accepted responsibility for the psychiatric treatments. Furthermore, the Court noted that there was nothing done by the defendants that would have prevented the claimant from filing a petition prior to September of 1998. Therefore, the Court determined that it was in error to find that the defendants’ payment of some of the psychiatric bills tolled the three year statute of limitations.

As for the proper method to add new injuries, the Supreme Court held that the claimant should have filed a petition to amend the NCP to include the psychiatric injuries, and not a claim petition. This was the Court’s position because the claimant was alleging that the psychiatric injuries arose as a direct result of the work-related back injury, and the claimant was not arguing that his psychiatric condition was a new injury.

Since it was determined that the claimant should have filed a petition to amend the NCP, the Court looked to Section 413(a) of the Act, 77 P.S. §772. This Section indicates that an NCP cannot be reviewed or modified by a WCJ unless a petition is filed within three years of the date of the most recent payment of compensation made prior to the filing of the petition.

With respect to Mr. Korach, the Court stated that the Order approving the commutation was circulated on February 28, 1990 and as such, the claimant should have filed his petition to amend the NCP within three years of February 28, 1990. The Court also considered Section 306(f.1)(9) of the Act, 77 P.S. §531(9), which indicates that payment by defendants of a claimant’s medical bills, after a statute of limitations has expired, does not open or revive the compensation rights. Because the payment of bills after the expiration of a statute of limitations does not revive the claim, the Court held that the defendants’ payment of the claimant’s psychiatric bills did not revive the three year statue of limitations.

Finally, the claimant argued that contract principles required defendants to pay for his psychiatric treatments. Meanwhile, the defendants argued that because a commutation substitutes one form of payment for another, there was no specific contract between the parties so there was no contract to violate. The Supreme Court agreed with the defendants, but did not rule out the application of contract principles in workers’ compensation proceedings.

A claimant injured in a company car may be entitled to benefits.

Wachs v. WCAB (American Office Systems and Donegal Mutual Insurance Company), No. 77 MAP 2004 (October 21, 2005)

In the case, the Supreme Court was asked to address the issue of whether the decedent, who was killed as a result of a motor vehicle accident in a company car, was in the course and scope of his employment at the time of his death.

Generally, an employer is not liable for injuries received off the employer’s premises while the employee is traveling to and from work. However, there are exceptions to this rule. One exception being that if the employment contract includes transportation to and from work, then the injuries may be within the course and scope of employment.

In Wachs, the Court looked to the reason the decedent was in a company car at the time of the accident. The Court observed that the employment contract contained language that the decedent would be provided a company car but there was no provision that provided for transportation to/from work. The Supreme Court then looked to the totality of the circumstances and determined that the unequivocal evidence accepted by the WCJ was that when the decedent originally started work with the employer, he indicated that the only way he would work for the employer, would be if he had a company car. Thus, the Court found that the decedent was provided the company car pursuant to his employment contract meaning this was exception to the “coming and going” rule so the decedent was in the course and scope of his employment at the time of the accident.

The defendants argued that when the Workers’ Compensation Act was amended in 1993, Section 301(c)(1) of the Act, 77 P.S. § 411 (1) was changed to eliminate the “employment contract” exception to the coming and going rule. The amended section states that the term injury shall not include an injury sustained while the employee is operating a motor vehicle provided by the employer if the employee is not otherwise in the course of employment at the time of the injury. The Supreme Court denied defendants’ argument, finding that the employment contract exception to the “coming and going” rule was still viable.

COMMONWEALTH COURT OF PENNSYLVANIA

Claim petition dismissed with prejudice for lack of prosecution.

Clayton v. WCAB (Carpentry Concepts, Inc.), No. 2744 C.D. 2004 (June 10, 2005).

The claimant filed a claim petition alleging a work related injury. The claimant attended the first hearing, but did not testify because his attorney had a scheduling conflict. Subsequently, claimant’s counsel wrote to the WCJ indicating that he would schedule two medical depositions. At a status conference, the claimant’s counsel informed the WCJ that the depositions had not yet been scheduled. The WCJ asked that the claim petition be withdrawn and then refiled when claimant’s counsel was ready to proceed. However, claimant’s counsel informed the WCJ that the claimant was ready to proceed. At a second hearing, the claimant did not testify and claimant’s counsel advised the WCJ that a deposition had been scheduled. At the third hearing, the claimant and his attorney did not appear. The WCJ then granted defendants’ motion to dismiss, and the claim petition was dismissed for failure to prosecute. The WCJ’s Order did not recite whether the claim petition was dismissed with or without prejudice. The claimant appealed to the WCAB.

The WCAB concluded that the WCJ properly dismissed the claim petition and the WCAB also concluded that the WCJ intended to do so with prejudice.

Commonwealth Court affirmed the WCAB. The Court determined that under the circumstances of the case, there was no error in the WCAB presuming that the WCJ intended to dismiss the claim petition with prejudice.

Award of Penalties not appropriate against the Pennsylvania Workers’ Compensation Security Fund

Luvine v. WCAB (Erisco Industries), No. 681 C.D. 2005 (August 23, 2005)

The claimant filed a claim petition that was initially denied by the WCJ. However the claimant appealed and Commonwealth Court eventually reversed the WCJ and the defendants were ordered to pay the claimant workers’ compensation benefits.

Before Commonwealth Court issued its decision reversing the WCJ, the employer’s workers’ compensation insurance carrier, as of the date of the work injury, was declared insolvent. Because of this, the Pennsylvania Workers’ Compensation Security Fund was substituted for the insolvent insurance carrier.

After Commonwealth Court reversed the WCJ and after the Security Fund was substituted for the insolvent insurance carrier, the claimant filed a penalty petition averring that he had not been paid benefits pursuant to Commonwealth Court’s award.

With respect to the penalty proceedings, the WCJ granted the penalty petition finding that the Security Fund violated the Act because it failed to pay benefits within 30 days of Commonwealth Court’s Order. The Security Fund appealed.

Commonwealth Court reversed the WCJ’s award of penalties. In so doing, the Court found that the Security Fund is a government entity. The Court held that government entities are not considered “insurers” under the Act. Because only “insurers” can be liable for penalties, and the Security Fund was not an insurer, the Security Fund could not be penalized for violations of the Act.

Claimant performing court-ordered community services not an employee of the county

Mooney v. WCAB (County of Schuylkill), No. 844 C.D. 2005 (September 2, 2005).

The claimant had been involved in a criminal proceeding, and as a result, he was placed on 12 months probation during which he was to perform 21 hours of community service. The claimant received no wages or other payments for this community service. While performing this community service, the claimant was injured.

As a result of the injuries, the claimant was completely disabled from his regular, wage paying job.

The Court held that the county was not the claimant’s employer so the claimant was not entitled to an award of workers’ compensation benefits.

Notice of Ability to Return to Work must be issued even in a proceeding involving a claim petition.

Allegis Group (Onsite) and ITT Hartford v. WCAB (Henry), No. 2231 C.D. 2004 (May 16, 2005).

The claimant suffered a work injury of November of 2000. Two months later, the defendants issued a Notice of Temporary Compensation payable. A week later, the defendants issued a Notice of Denial, acknowledging that while the claimant suffered an injury, he was not disabled. Defendants did not issue a Notice Stopping Temporary Compensation.

The claimant then filed a claim petition. The claimant testified that he was totally disabled, while defendants’ medical expert opined that the claimant was able to perform light-duty work. The defendants then introduced evidence that light-duty work was offered to the claimant.

The WCJ found that the Notice of Temporary Compensation Payable had converted into a formal Notice of Compensation Payable because a Notice of Stopping had not been issued. The WCJ further found that the claimant sustained a work injury and that a light-duty position was offered to the claimant which he unreasonably refused. As a result, the claimant was awarded benefits as of the date of the injury and benefits were suspended as of the date of the job offer.

Commonwealth Court reversed the suspension of benefits, finding that there was no evidence that a Notice of Ability to Return to Work had been issued. The Court once again held that even in a claim proceeding, it was a prerequisite that a Notice of Ability to Return to Work be issued before a suspension/modification of benefits can be granted.

Unsigned Compromise and Release Agreement not enforceable.

Facchine, v. WCAB (Pure Carbon Company and PMA Group), No. 1022 C.D. 2005 (September 23, 2005).

The parties resolved the matter and agreed to seek approval of a Compromise and Release Agreement. In fact, the defendant’s attorney confirmed the agreement in two letters to the claimant’s counsel. In the meantime, the claimant’s attorney filed a Petition to Seek Approval of the Compromise and Release Agreement. However, before the hearing was held, the claimant died. Prior to his death, the claimant did not execute the Compromise and Release Agreement form.

The executrix of the deceased claimant’s estate appeared before a WCJ seeking approval of the Compromise and Release Agreement. The Executrix presented testimony from the deceased claimant’s relatives, who testified that the deceased claimant had expressed to them his desire to accept the proposed Compromise and Release. The WCJ found that the deceased claimant had intended to enter into the Compromise and Release Agreement, and the deceased claimant understood the full legal significance of the proposed Compromise and Release Agreement.

The WCJ did not approve the Compromise and Release Agreement finding that there was no evidence that the proposed Compromise and Release Agreement had been prepared prior to the claimant’s death and there was no evidence that the claimant had an opportunity to review the Agreement. The WCJ also noted that the Agreement was not signed and obviously, the WCJ found that the deceased claimant never testified concerning the Agreement.

Commonwealth Court upheld the WCJ and held that the proposed Compromise and Release Agreement was never memorialized in writing or signed by the deceased claimant before witnesses. In other words, Commonwealth Court held that there can be no verbal Compromise and Release Agreements.

Apportionment of liability between carriers

Safety National Casualty Corporation and Penn State University v. WCAB (Draper and PMA), No. 780 C.D. 2005, November 30, 2005.

The claimant was injured in 1990 while the employer was insured by PMA. The claimant returned to work and received partial disability benefits from PMA. While still receiving partial disability benefits, the claimant was injured on November 1, 1999. As of that date, Safety National was the workers’ compensation carrier.

The claimant filed a claim petition against Safety and the claimant filed a reinstatement petition against PMA for the November 1, 1999 injuries.

The WCJ issued a decision granting the claim petition against Safety and denied the reinstatement petition filed against PMA, finding that the claimant suffered disabling injuries on November 1, 1999, which injuries were related to the 1990 work injury and were also related to new injuries suffered on November 1, 1999. The WCJ concluded that PMA was entitled to a suspension of the claimant’s partial disability benefits as of November 1, 1990 but Safety was on the hook for benefits.

Safety appealed to the WCAB. The WCAB reversed the WCJ’s suspension of benefits as to PMA and remanded to the WCJ for a recalculation of the claimant’s AWW and for an apportionment of liability between PMA and Safety. The claimant filed a Petition for Review to Commonwealth Court. Commonwealth Court remanded the matter to the WCJ for more specific findings regarding the 1990 injury.

Upon remand, the WCJ concluded that the 1990 injury substantially, materially and equally contributed to the claimant’s disability in the wake of the 1999 injuries. The WCJ further concluded that PMA was to continue to pay partial disability benefits with respect to the 1990 injury and the WCJ ordered PMA and Safety to equally share the payment of total disability benefits from November 1, 1999 onward.

PMA appealed to the WCAB which found that the WCJ erred in determining that PMA was responsible for anything other than ongoing partial disability benefits. According to the WCAB, PMA was to continue to pay partial disability benefits while Safety was to pay benefits based on the claimant’s average weekly wage as of the November 1, 1999 work injury—up the maximum allowable rate.

The Commonwealth Court affirmed the WCAB, concluding that PMA was only responsible to pay the partial disability benefits at the rate they were paying as of November 1, 1999 while Safety was responsible for payment of benefits based on the claimant’s average weekly wage as of November 1, 1999—up to the maximum allowable rate.

SUPERIOR COURT OF PENNSYLVANIA

Doctor not in violation of doctor-patient confidentiality when disclosing certain information to injured worker’s employer.

Grimminger v. Shuba Maitra M.D. and Blair Surgical Associates, P.C., No. 470 WDA 2005 (November 4, 2005).

The claimant was an employee of the U.S. Postal Service who suffered a work injury and was treated by Dr. Maitra for a left arm injury. Because the doctor knew that the claimant’s work was physical in nature, the doctor wrote a letter addressed to “Whom it may concern”, setting forth the doctor’s recommendation that the claimant refrain from any strenuous activity with the left arm. Dr. Maitra’s letter also included a statement that, “if you require additional information with regards to this patient, please does not hesitate to contact this office.”

After receiving this letter, the postal service requested a completed physical restriction form. The claimant scheduled an appointment with Dr. Maitra to review the form, and Dr. Maitra completed the form indicating that the claimant was to not lift in excess of five pounds with the left hand.

Approximately a year and a half after the claimant’s last visit with Dr. Maitra, postal inspectors visited Dr. Maitra. As part of this visit, Dr. Maitra reviewed a surveillance film to determine whether the claimant was acting outside the work restrictions that the doctor had previously established. Dr. Maita also answered questions set forth by the postal inspectors and agreed to give his opinion without the claimant’s authorization because he had been previously asked to provide information to the post office. The postal inspector then issued a report summarizing the work limitations and Dr. Maitra’s revised opinion.

Grimminger filed a compliant in civil court against Dr. Maitra and his group alleging breach of a confidential relationship, breach of contract and slander. The trial court granted Dr. Maitra’s motion for summary judgment and the claimant appealed to the Superior Court.

In his appeal to Superior Court, the claimant alleged that Dr. Maitra and his group had breached the doctor-patient privilege when the doctor talked to the postal inspectors so the trial court erred in granting summary judgment.

Superior Court observed that the statute addressing the doctor-patient privilege indicates that a physician shall not be allowed to disclose any information which was acquired in attending to the patient in a professional capacity and which was necessary to enable the doctor to act in that capacity, which shall tend to blacken the character of the patient, without the consent of the patient.

In affirming the granting of the summary judgment, Superior Court declined to find that Dr. Maitra’s statements breached the doctor-patient privilege. In so finding, the Superior Court determined that none of Dr. Maitra’s statements to the postal inspectors disclosed confidential information that blackened Claimant’s character.