Wednesday, February 13, 2013

Late Answer - Unreasonable Contest- Employer Rebuttal Evidence

An Answer to a Claim Petition must be filed within 20 days of the date of assignment to the Workers' Compensation Judge.  The effect of failure to file a timely answer is to admit all well-pled factual allegations. [ See: Guard Insurance Group, 864 A.2d 1285 (Pa. Cmwlth. 2005)].

The failure to file a timely answer may also prompt:
1.   a Petition for Penalties (for violation of Section 416 requiring a timely answer) AND
2.    a Request for the Imposition of Attorney Fees, paid by the Employer/Insurer for an Unreasonable
       Contest of the Claim Petition.

Boyer v. WCAB (Johnstone Supply) an unreported panel decision of the Pa. Commonwealth Court, authored by Judge Simpson at No. 1258 C.D. 2012 on February 7, 2013, addressed these issues.

Procedural & Factual Background

October 28, 2009 Employee Motor Vehicle Accident while traveling as Outside Sales Rep.
October 28, 2009 AM hours, Employer allege Employee was removed from Outside sale rep position.
November 19, 2009 Employee return-to-work with another Employer, with no loss of earnings.
November 25, 2009 Claim Petition and Penalty Petitions filed.
December 30, 2009 Employer Answers filed, beyond 20 day time period.

WCJ admitted all factual allegations in petition. Both parties presented evidence on the issue of whether employee was within course of employment at time of MVA. Employer evidence was that employee was removed from outside sales position and offered an inside position, which she did not immediately accept.

WCJ Decision:
WCJ rejected this evidence as it conflicted with the admitted facts. WCJ rejected suggestion that Employee was fired and not employed at time of MVA.
WCJ grant Claim and Penalty. Total disability awarded through return to work date.
Penalties of 50% awarded.
Attorney fees of $5,000 awarded ( $7,759.50 requested for 32.1 hours [$241.73/hour?]).

WCAB Cross Appeals:
Employee wants full attorney fee including supplemental request up to $12,249.50.
 [ 47.0 hours = $260.63/hour]
Employer challenged all aspects of WCJ decision.

WCAB Decision:
Reversed award of attorney fees, there was a reasonable basis to contest claim, reasoning, an admission of facts does not equate to a default judgment to Employee.
 Employer may present evidence to contest issues of law.

Commonwealth Court Decision:

Employee appealed reversal of attorney fee award and amount previously awarded.

Attorney fees are required, ( Section 440) unless the Employer establishes a reasonable basis for the contest of the claim petition. Reasonableness of the contest is a question of law.
A contest is reasonable if there is a genuinely disputed issue.

HERE, the analysis is "complicated" by the "Late Answer".
All of the facts pled by Employee are admitted.
Employee pled that she was an employee, working as an outside sales rep at the time of the accident.
Court notes, Employee has burden to prove injury arose in course of employment... which is a question of law... which is reviewable and not waived by failure to file a timely answer (slip opinion p. 8).

The Employee's well pled facts sufficiently establish she was acting in the course of her employment.
These facts supported the conclusion of law that she was an employee in the course of her employment at the time of injury.

Employer offered evidence ("facts") contrary to Employee's allegations. They alleged she was removed from outside sales position before the accident.
BUT because of the late answer, the Employer was not allowed to challenge Employee's well-pled  "facts".
"Under the facts admitted, there is no genuinely disputed issue regarding the course of employment".
(slip opinion p.9)
Therefore the WCAB erred in reversal of the atttorney fee award.
Case was remanded for WCJ re-consideration of an appropriate amount of attorney fee.

My Thoughts:
The status of an individual as an "employee" is a legal conclusion.
The status of an individual as acting "within the course of employment" is a legal conclusion.
IMO the Employer is allowed to submit evidence on whether or not the employee meets the burden of proof of these legal issues. You may lose these issues but you should be able to contest there legal issues.
That is exactly what the employer did in the Bensing case cited by Court!
Bensing appealed a denial of a claim petition, where there was a late answer by employer. The WCJ found the employer's evidence was credible regarding claimant's activities on the day of injury.
Claim was denied.
OK. So here the Employer submits evidence and the WCJ does not assign it credibility. So Employer loses... but why is there an unreasonable contest? The WCJ could have adopted Employer's evidence and found claimant was not with in the course of employment and denied the claim, just like in Bensing.
IMO you may lose the case on those credibility issues andbut you may avoid attorney fees, as the contest was reasonable, as it was brought to resolve a genuinely disputed legal issue.
I would have litigated this one, especially because of the amount of the attorney fee request.

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