Sunday, December 28, 2014

2015 Pennsylvania Maximum State Wide Average Weekly Wage is Announced.

The 2015 Pennsylvania Statewide Maximum Average Weekly Wage was announced by the Department of Labor & Industry as $951.00, for injuries occurring on and after January 1, 2015.

For purposes of calculating the update to payments for medical treatments, which are provided on and after January 1, 2015, the percentage increase in the Statewide Average Weekly wage is 2%.

Thursday, December 11, 2014

Work Break + Dog Bite = $ Compensation

In the review and assessment of workers' compensation disability claims, we often look to appellate case law decisions  for their precedential value and guidance in providing instruction to our clients.
At times we believe we can "draw a line in the sand" and proclaim the boundaries of reason.
At times it seems we cannot ...

We know that the Pennsylvania Workers compensation Act provides for the payment of wage loss benefits and medical expense reimbursements to the employee who sustains a work injury, "in the course of employment and ... related thereto".

An injury arises in the course of one's employment, when:
   i.    the employee is actually engaged in the furtherance of the employer's business,
        (whether on the premises or not)
   ii.  the employee is injured by a condition of the premises,
   iii. the employee is injured on the premises, where his/her presence is required by one's
[ See Section 301(c)(1); 77 P.S. 411(1).].

Small temporary departures, "breaks" from work to administer to personal comforts, do not remove one from the course of employment.

It is often said "Whether an employee is acting within the scope of employment at the time of injury is a question of law, which must be based on the findings of fact made by the Workers' Compensation Judge".

In the review and assessment of workers' compensation disability claims, we often look to appellate case law decisions  for their precedential value and guidance in providing instruction to our clients.
At times we believe we can "draw a line in the sand" and proclaim the boundaries of reason.
At times it seems we cannot ...

1912 Hoover House Restaurant v WCAB (Soverns,) No. 309 C.D. 2014 is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Jubelirer on November 10, 2014. This decision affirms an award of benefits for a dog bite which occurred during employee's smoke break.

Factual and Procedural Background. 

Employee primarily worked full-time in the paint department of a manufacturer.
He worked one night per  week as a cook with this Employer and earned $31.00 per week.
His concurrent Average Weekly wage was $931.00. (TTD $620.67).

While working as a cook, he went outside, in a designated area for a cigarette break.
While outside the father of a co-worker arrived with her dog.
Employee was told the dog had a tendency to "snap" (bite) at people.
He asked permission to pet the dog ... to see if it was receptive (to what?).
He then let the dog lick his face.
The dog growled and bit Employee's lower lip. (duh)

The WCJ award was for facial disfigurement of 63 weeks x $620.67 = $39,102.21.

Commonwealth Court Reasoning

Employee smoking break was allowed by Employer.
Employee was in a designated area, ie work premises.
He was injured in an area, under the employer's control.

Employer argued the WCJ decision was not a "reasoned decision".
This argument was rejected.

Employer argued this was not a temporary departure,as there was no element of furthering the business interests of Employer.

We know that in Pennsylvania Workers' Compensation, it is not a temporary departure from one's employment as a delivery driver, to run, jump, attempt to touch the rim of a basketball hoop near a customer delivery... and fail, causing a traumatic brain injury. See: The Baby's Room v. WCAB (Stairs) 860 A.2d 200 (Pa. Cmwlth. 2004). 

Similarly, engaging in a little dog affection, cannot be said to be a departure from one's employment.

One disturbing aspect of the reasoning employed by the WCJ and recited by the Court is the reference to fact that "there was no employee handbook or posted list of rules notifying employees what is required or expected of them". (while on breaks).

Undoubtedly this will lead to a new list of work rules including,  "No kissing dogs on smoke break".

Practice Pointers:

1. One cannot plan for every type of circumstance that may arise  ... which could be considered a part of the work day. I do not advocate an attempt to enumerate all of the activities that are not permitted on work breaks. You will probably miss a few activities. 

Yet, perhaps, that is the only remedy to attempt to reduce exposure to this type of liability, as the Court seems reluctant to make a common-sense rule.

2. Here, Employer presented testimony,  if adopted by the WCJ, would have supported a denial of this claim. However, we know the WCJ is free to assess the credibility and accept the testimony of any witness, in whole or in part. 

3. It seems to me that there MUST be a line, a reasonable boundary ... where the voluntary deliberate activities of the employee remove them from the scope of employment and Employer liability, for foolish acts. 

I understand the concept of Employer liability, where an employee is injured as a result of a condition of the work premises OR as a result of being in an area required for work. 

BUT, when here is a voluntary act by an employee, which is removed, not associated with the workplace, there should be no liability upon the Employer. 

Let the worker pursue a civil remedy against the dog-owner.

Tuesday, October 28, 2014

Pension Offset is available to the Post-Merger Corporation

Section 204(a) Offsets to Pension, Severance and "Old Age" Social Security benefits.

In 1996 the Pennsylvania Workers' Compensation Act was amended to allow an Employer to offset its workers' compensation benefit payment liability by the amount of pension benefits paid to the injured Employee.  There were several requirements.

The Pension offset was available, to the extent the pension was funded by the Employer.
This is the Employer directly responsible for work comp benefit payments.
The Employer can be insured or self-insured.
The Employee must receive the pension benefits, not just be entitled to receive them.

The vast majority of appellate litigation of pension offset issues address the pension funding question.
In Governmental body defined benefit plans, the question is: What is the amount funded by the employer, where amounts are paid into the plan on a "group" basis.

When a Corporation is bought/sold/merged, similar pension funding issues arise.

Stepp v. WCAB (FairPoint Communications, Inc.) No. 2270 C.D. 2013, a published panel decision of the Commonwealth Court of Pennsylvania, authored by Judge Leavitt on September 10, 2014, addressed this pension funding issue.

Factual and Procedural Background

Employee began work with Marianna Scenery Hill Telephone Company in 1973.
In 2000 FairPoint Communications Inc. acquired Marianna,
Employee sustained a back injury in 2008 and received total disability benefits via Notice of Compensation Payable (LIBC 495).

October 2010,Employee began receiving pension benefits.
January 2011, FairPoint filed a Notice of Workers' Compensation Benefit Offset (LIBC-761).
Employee filed a Petition for Review of the Pension Offset.

[Employer also filed a Petition for Suspension/Modification in July 2010 based upon medical examination and work availability. The WCJ accepted this evidence and modified total disability of $733.67 per week to a partial disability benefit rate of $123.01 per week.

This decision does not directly impact the pension funding issue, as a pension offset is available against total or partial disability benefits.].

WCJ Decision

Employee Petition for Review was denied.
FairPoint was entitled to the pension offset against the workers' compensation benefits paid.

WCJ found Marianna and FairPoint were the same entity for the purpose of determining whether Employee's work comp benefits were subject to an offset.
WCJ (mis-) calculated a net Employee work comp benefit rate as $310.40 per week.

WCAB Appeal by Employee

WCAB affirmed WCJ conclusion FairPoint was entitled to a pension offset.
WCAB "corrected" WCJ calculations.

Pension offset of $423.27 per week, applied against Employee modified indemnity wage loss benefit of $123.01 per week, resulted in $0 due and a suspension of work comp benefit payments.

Commonwealth Court Appeal of Employee

Employee argued FairPoint was not entitled to a pension offset as his pension plan was funded by Marianna, a different, still existing corporation.

Court referred to its prior statement of the legislative intent of the Section 204(a) amendment, in Pennsylvania State University v. WCAB (Hensal), 911 A.2d 225 (Pa. Cmwlth. 2006).

"In 1996, the legislature, attempting to combat the increasing costs of workers' compensation in Pennsylvania, amended Section 204(a) of the Act to allow employers an offset against workers' compensation benefits for social security, severance and pension benefits simultaneously received by an employee. 
...Amended Section 204(a) serves the legislative intent of reducing the cost of workers' compensation by allowing an employer to avoid paying duplicate benefits for the same loss of earnings. Similarly, Section 204(a) implicitly recognizes that public policy bars an employer from utilizing an employee's own retirement funds to satisfy its workers' compensation obligation."

In a Petition for Review of a Pension Offset, the burden of proof remains upon the Employer, as it is the party seeking to change the benefit status of the employee.The employer bears the burden to prove the extent to which it funded the pension plan.

In Stepp, the percentage of funding by Marianna was not challenged by Employee.
Employee asserted error in allowing FairPoint any offset for the amounts funded by Marianna.

Court cited LTV Steel Corporation Inc. v WCAB (Mozena) 754 A.2d 666 (Pa. 2000) for the proposition, when corporations merge " the surviving corporation succeeds to both the rights and liabilities of the constituent corporation".

Mozena were hearing loss claim,s where the Supreme Court decision allowed consideration of all time periods and occupational noise exposure, in assessing the liability of LTV. This was based upon the authority of the Business Corporation Law of 1988, Section 1929.
"The mergers acquisitions or other changes in corporate structure from 1974 to 1984 did not constitute the creation of a new employer for determining the amount of hearing loss caused by any one employer.  The totality of circumstances reflected that the new owner was a successor-in-interest and not a new employer.

The facts in Stepp bear repeating, as they made be important to assess their significance when discussing this decision, in regards to its application to other "merger" circumstances.

Employer presented the deposition of its benefits manager, J. Coan.
FairPoint's acquisition of Marianna was described as a "merger and fast purchase".
FairPoint held the stock of Marianna.
Marianna became a wholly owned second tier subsidiary of FairPoint in 2001.
Fairpoint acquired and maintains all human resources and employee benefit books and records of Marianna, including those before 2001.
After 2001 Marianna remained an active Company and all Marianna employees continued as Marianna employees, even though the had a new Parent Company and were part of the FairPoint family of subsidiaries.

The Court noted in Stepp, all employees in the FairPoint "family of subsidiaries" were covered by the same workers compensation plan. (slip opinion page 2).

Employee argues the "merger" of Mariana and FairPoint was not a true merger of the type described in the Section 1929 of the BCL of 1988.
On this point, the Commonwealth Court seems to return to its review of the legislation intent of the 1996 Amendments, in concluding, that Employee's position would effectively erase consideration of Marianna's pension plan contributions and result in a windfall to Employee.

Practice Pointers:

1. Employers should be diligent in review and monitoring the pension status of all employees receiving workers compensation benefits. 

2. The availability and application of the benefit offset provisions may be significant.
 In the above case, the work comp liability for partial disability was reduced from $123.01 per week to "0".

3. Equally significant is the Employer's success in reducing its total disability benefit from $733.67 per week to a partial rate of $123.01 per week. 

This significant change in benefit liability was based upon the "old fashion" remedy of medical examination and establishing work available within the employee's limitations!

Kudo's, to Employer for the foresight to pursue of 2 different remedies for reduction of work comp liability, as available by the Act. 

Friday, October 24, 2014

Work Injury AFTER a Voluntary Quit ... Work Comp or Civil Liability?

Is the Injured Employee always limited to the Workers Compensation Remedy?
Can an Employee sue the Employer?
If he/she sues ... is the work comp act a "defense" to the civil action?
... is that an Admission in a work comp claim?
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

It has been said that remedies of the Workers' Compensation Act may be considered a "shield" or protection to the Employer from the financial exposure of Civil Litigation. In Workers' Compensation claims, an injured employee has a "limited" remedy against the Employer for wage loss and medical expense. There is no payment for "pain and suffering" or the "loss of consortium" of one's spouse.

At times the injured employee may attempt a civil action remedy. In one reported instance, the employee was on a sidewalk, when a trip and fall injury occurred. The employee desires the civil action remedy available to "a member of the general public". The employer wants the "protection" of the workers compensation act, with the avoidance of additional damages.
See: Gertz v. Temple University, 661 A.2d 13 (Pa. Super. 1995), where the sidewalk was considered part of the Employer's business premises and Employer avoided civil action damages. 

Does the Employer assertion of factual and legal arguments in that civil action, bind the Employer in the subsequent work comp claim?

... They may.

Marazas v. WCAB (Vitas Healthcare Corporation), No. 337 C.D. 2014, a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Simpson on August 11, 2014 addressed these issues. 

Factual and Procedural Background

Employee filed a civil action, seeking damages for injuries sustained when he was on the Employer business premises, allegedly as a "business invitee".

Employee worked with Vitas as a driver technician.
He delivered and picked up medical equipment and furniture.
He quit his job as a driver technician.

After he told his boss "he quit", his manager told him to remove his personal belongings from the work truck. His manager escorted him, as per company policy.
After removing his personal items, he tripped over a pallet jack.
Injuries involved the upper, middle and lower back, with the left ankle and knee.
His manager observed this trip and fall.

In the civil action, Employer asserted plaintiff was in the scope of his employment at the time of his injury. The Work Comp Act was his exclusive remedy.

Employee withdrew the civil action and filed a Work Comp Claim Petition!

WCJ Decision

WCJ awarded Employee temporary total disability benefits for a closed period.

WCAB Appeal of Employer

Employer argued Employee terminated the employment relationship prior to his injury, such that his injury was not covered by the Work Comp Act.

WCAB vacated and remanded, to assess whether Employee was within the scope of his employment at the time of his injury.

WCJ Remand Decision

WCJ admitted additional documents, including the Court of Common Pleas civil action documents.
In these pleadings, employer denied Plaintiff was a business invitee and admitted Plaintiff was its employee. 

WCJ found Employee quit before his injury BUT he remained in the scope of employment as he was "furthering Employer's business interests". He was injured where his employer directed him to go, to perform the requested task, when he was removing his personal belongings.

WCAB Remand Decision
Reversed WCJ award.

WCAB relied upon Little v. WCAB (B&L Ford/Chevrolet) 23 A.3d 637 (Pa. Cmwlth. 2011).
Employee quit before his injury. Injury occurred as a consequence of the final act of employment, therefore it was not compensable.

Commonwealth Court Arguments and Decision

1. Employer admitted Employee status in civil action pleadings. 
Employer is estopped from denying that fact in work comp proceedings. 
Did Employee waive this argument?

WCJ did not err in admission of civil action documents on remand. WCAB remand order did not preclude acceptance of additional evidence. This evidence was relevant to determining the remand topic - employment status.

Court rejected Employer argument that Employee waived estoppel argument by not raising it before the WCJ and WCAB in the first instance...
"we discern no merit in the waiver argument" slip opinion page 7.
[hmmm... so its OK to raise argument for the first time after remand].

The Court explained the doctrine of judicial estoppel:

"as a general rule, a party to an action is estopped from assuming a position inconsistent with his or her assertion in a previous action, if his or her contention was successfully maintained. Accordingly, judicial estoppel is properly applied only if the court concludes the following: (1) that the appellant assumed an inconsistent position in an earlier action; and (2) that the appellant's contention was "successfully maintained" in that action."
 citing Canot v. City of Easton, 37 A.3d 53, 60 (Pa. Cmwlth. 2012).

As for the first element, the Court believed Employer position in civil action pleadings was inconsistent with work comp litigation. In the civil action proceedings, Employer admitted plaintiff was an employee "within the course and scope of employment" at the time of his injury.

Is there the second element of Judicial Estoppel, a "successfully maintained" position, where the civil action was withdrawn?
No. This element looks to the action of the decision-maker, not the action of the parties.  A statement of a prior inconsistent statement, in an adjudicated matter is not sufficient.
Judicial Estoppel did not apply to Employer's arguments.

2. Scope of Employment Arguments
Scope of Employment is a legal conclusion, to be made based upon a WCJ's factual determinations.

Here, the WCJ found Employee quit before his injury.
It was undisputed he remained on Employer's premises.
Employee was acting at Employer's direction, when he performed the removal of his personal belongings.

The term "arising in the course of employment" is a necessary element of the Employee proof of a compensable work injury.
This term has been construed to include injury:
- sustained in the furtherance of the business or affairs of the employer,
- sustained on premises occupied or controlled by Employer.

The act of going to or leaving the employee's work station is a necessary part of one's employment, thus furthering the employers interest. citing: Allegheny Ludlum Corp. v. WCAB (Hines), 913 A.2d 345 (Pa. Cmwlth. 2006).

The Court noted, more important than the temporal proximity of the injury to the claimant's shift, is the claimant's purpose or activity at the time of injury. citing: Ace Wire Spring & Form Co. v. WCAB (Walshesky) (Pa. Cmwlth. June 10, 2014).

Employer argued that Employee cannot be considered to be "within the scope of employment" after that employment has ended! [remember that voluntary quit thing...].

The Court distinguished the denial of benefits in Little v. WCAB (B&L Ford/Chevrolet), where a claimant had a heart attack at his residence, days after his last day of work.

Practice Pointers:

A.   This case highlights the necessity of the Employer team determining a litigation plan. Do we want to defend a civil action or a work comp claim? Can we defend both?

B.   Is claimant an "employee", who is no longer within the scope of any employment?

Logically I have difficulty with the concept that this Employee voluntarily quit, he terminated the employment relationship, BUT it furthers the Employer interest for him to remove his personal belongings? 

No, it is for the convenience of the former employee that he was allowed to collect his belongings and not wait to receive them later!

The fact that claimant sustained his injury in temporal proximity to the end of his work shift, is equally unpersuasive. Those cases deal with an individual who maintains a work relationship, not terminates a work relationship, at the end of the work shift. 

C.   ... in the end, if you do not want the individual to pursue a civil action remedy ... you are stuck in the work comp process ... I just have difficulty with the twisting, bending, contorting case precedents to justify the conclusion reached in this case. I guess I envision future claims of terminated workers alleging injury and pointing to this decision.

D.    EMPLOYER'S NEW RULE ... when an employer QUITS or is terminated ... immediately escort them from the building ... send their stuff to them in a box! 

Monday, September 29, 2014

Malingering and Modification of Total Disability via LMS/EPA

Malingering and the Employer Remedy for Modification of alleged Total Disability via a Vocational Expert Labor Market Survey and Earning Power Assessment.

An Employer may limit the time duration of total disability indemnity wage loss payments via an Impairment Rating Evaluation. (IRE) A successful IRE results in a limitation of Partial Disability Indemnity wage loss benefits for a duration of 500 weeks, albeit at the total disability compensation benefit rate.

An Employer may limit the amount and duration of indemnity wage loss benefits via a Petition for Modification/Suspension based upon:
 (i)    medical expert evidence of a post-injury physical capacity for a category of work;
(ii)    vocational expert evidence of a post-injury earning capacity via a Labor Market
        Survey (LMS)  and an Earning Power Assessment (EPA);
(iii)   compliance of the employer job offer obligations.

What is the medical evidence requirement for Modification/Suspension?

The Supreme Court of Pennsylvania stated that the employer must demonstrate, with medical evidence, that the claimant's current physical condition has changed since the time of the last disability adjudication. See: Lewis v. WCAB (Giles & Ransome, Inc.), 919 A.2d 922 (Pa. 2007). 

The necessary change in condition has been defined as "any change in the claimant's physical well-being that affects his ability to work. Lewis 919 A.2d at 926. [...not very helpful].

"... it can be the total recovery from an illness or merely the symptoms [have] subsided."
919 A.2d at 926.

Where a modification is based upon earning capacity, it is not necessary to demonstrate that a claimant's diagnoses have changed since the last proceeding, but only that his symptoms have improved to the point where he is capable of gainful employment. 

See: Simmons v. WCAB (Powertrack International), No. 2168 C.D. 2013, a decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Leadbetter on July 24, 2014.

Factual and Procedural Background

Employee received total disability benefits for a 2001 work injury described as a closed head injury resulting in post-concussive syndrome.
Employer was unsuccessful in 2 prior Termination Petitions.

The WCJ did not make specific findings regarding Employee's condition in denial of the 2nd Termination petition He found employee credible that his subjective complaints remained the same as at the time of the 1st Termination petition proceedings.

In the 1st Termination petition the WCJ credited Dr. Taylor and Employee that  he suffered from depressive disorder, cognitive disorder, post-concussive syndrome.
Symptoms were: headaches, unsteadiness, memory problems, reduced activity, reduced social interaction, depression.

Employee medical evidence (credited by the WCJ) found the symptoms consistent with the diagnoses; there were no signs of symptom magnification or malingering; Employee was not capable of returning to work.

Employer Modification Petition Medical Evidence

Eric Fishman, Ph.D, a neuropsychologist, evaluated Employee in February 2008, administered neuropsych testing and review prior medical records and test results.
His diagnosis was probable malingered neuro-cognitive dysfunction.
He opined Employee was capable of returning to full-time employment.
He reviewed and approved the jobs which were include in the LMS/EPA vocational expert report.

[NOTE: Employee alleged ongoing symptoms, limited activity and disability. His use of a computer was disputed. However, Public website postings included on-line greetings, comments on photos, and other communications. Surveillance documented travel and attendance at auto races].

WCJ Decision

The WCJ made specific findings regarding Employee's activities and the inconsistency with his assertions of total disability!

WCJ granted Employer's petition for Modification.
WCAB Affirmed WCJ decision.
Employee appealed to Commonwealth Court.

Employee Appellate Argument:
The Employee argued Employer failed to demonstrate his condition had changed since the last termination petition proceeding. The Commonwealth Court rejected this argument.

Commonwealth Court Reasoning

"Contrary to Claimant's position, a diagnosis of malingering can be a sufficient change in condition as a matter of law to support a modification of benefits, if it leads the medical expert to conclude that the claimant's disability or ability to work has changed". slip opinion page 10.

Here, the Employer medical expert opinion was supported by evidence of Employee's activities and the WCJ observation of Employee at several hearings, which suggested Employee's subjective complaints were not as severe as he described or had improved since the last proceeding.

The fact that other medical experts found valid test performance and no signs of malingering five (5) years earlier did not preclude a current diagnosis of malingering.


1. This appellate decision provides an additional basis for modification. We know we need to establish a "change" in Employee medical condition. There is some debate as to what "change" is required to establish Employer's burden to proof. 

We know from Folmer v. WCAB (Swift Transportation) (Pa. Cmwlth. 2008) that a "change" in the evaluation of the credibility of claimant's "pain complaints"  can be a sufficient change of condition.  Simmons adds to that line of thinking. 

2. As Employer can never be certain that the WCJ will find claimant "no longer credible", it is prudent to attempt to establish a change of claimant's status via medical expert evidence of:
 (i) a change of physical capabilities; 
(ii) a change of physical exam findings; 
(iii) a change of reported symptoms.

3. Simmons also demonstrates the value of investigation of claimant activities, as a means to challenge claimant's credibility. Examination of public information from social media may document discrepancies from the claimant's professed status. This preliminary (low-cost) type of review, may also form the basis for a more in-depth investigation and surveillance of activities. 

Thursday, September 4, 2014

Work-Related Medical Expenses - Who is entitled to Payment?

In the event of a compensible work injury, Employers and their workers' compensation Insurers are responsible for the payment of indemnity wage loss benefits and the payment of medical expenses which are reasonable, necessary and related to the work injury.

At times, during the delay associated with the litigation of a claim petition, the medical expenses may be paid by another public or private insurer. When this occurs, the parties must determine which entity is entitled to receive payment/reimbursement for any work-related medical expenses, which are awarded by the WCJ.

The simple question of medical expense payments may become complicated.

Evans v. WCAB (Highway Equipment and Supply Company), is a recent decision of a panel of the Commonwealth Court of Pennsylvania at No. 2252 C.D. 2013, authored by Judge McCullough on June 30, 2014, which addresses these medical expense reimbursement issues.

Factual and Procedural background

On January 20, 2009, Employee was awarded ongoing total disability indemnity wage loss benefits and medical expenses for a work injury which occurred in April 2007.

On February 16, 2009, Employee counsel informed Employer of the amount owed to Claimant and submitted a subrogation lien of Highmark Blue Shield for medical expenses paid in the amount of $29,995.59.

On February 27, 2009, Employee counsel filed a Penalty Petition for Employer's failure to timely pay the January 2009 award.

Employee evidence included: (1) Healthcare Recoveries (Highmark vendor) October 8, 2008 letter and statement for medical expenses of $29k paid by Highmark to Geisinger Medical Center; (2) Healthcare letter for agreement for payment of 20% of amount, paid as an attorney fee to Claimant counsel.

WCJ Penalty Petition Decision

WCJ Concluded Employer violated the Act.
Directed Employer to pay $29k to the health care provider, less the 20% attorney fee.

Employee Appealed to WCAB

Employee argued the $29k should be paid directly to employee, with statutory interest, minus the 20% attorney fee.

WCAB Remanded

WCJ Remand Decision

Submission of the October 8, 2008 Healthcare Recoveries letter proved that a subrogation lien had been established before the WCJ January 2009 decision.
(really? wasn't the lien letter presented on Feb 16, after the Jan 20 decision?).

On this basis, payment was not to Employee, rather payment was to Healthcare Recoveries.
No interest was payable.

[WCJ would not allow Employer to take evidence that the Highmark lien was moot because Geisinger repaid the $29k medical expenses to Highmark.]

Employee WCAB Appeal II

WCAB Decision II

WCAB affirmed WCJ remand decision.
Subrogation lien had been established before WCJ Decision,
Lien was properly preserved in accord with Boeing Helicopters v. WCAB (Cobb), (Pa. Cmwlth. 1998). 

WCAB held Frymiare v. WCAB (D. Pileggi & Sons), (Pa. Cmwlth. 1987) did not compel medical expense payment directly to Employee.
Here, (unlike Frymiare)  Healthcare Recoveries had protected the Highmark Blue Shield subrogation interest.
As Employer evidence of Highmark-Geisinger repayment was beyond the scope of WCAB remand, the WCJ properly declined to accept this evidence.

Commonwealth Court Appeal - Employee arguments

(1).  WCJ erred in failing to order medical expense payments directly to Employee.
(2).  WCJ erred in failing to award interest.
(3).  WCJ erred in determining that Highmark's subrogation lien had not been waived.

Commonwealth Court Decision

(1).  The second paragraph of section 319 provides a health care insurer with a right of subrogation.
These subrogation rights are not automatic or self-executing.
The party asserting these rights must exercise reasonable diligence.
This has been interpreted as asserting one's subrogation rights during the pendency of the claim proceedings.
[See: Independence Blue Cross v. WCAB (Frankford Hospital), 820 A.2d 868, 872 (Pa. Cmwlth. 2003.].

The Court concluded, medical expenses were not directly payable to Employee in this case, as Employee submitted into evidence the October 8, 2008 Healthcare Recoveries letter stating the Highmark Blue Shield subrogation lien.

This letter established that an agreement* for the subrogation lien was in place before the WCJ initial claim petition decision. Therefore the Frymiare decision does not compel a medical expense payment to this Employee!

*[note: this agreement was between employee counsel and Healthcare/Highmark] .

(2).  Interest was not payable to employee on the unpaid medical expenses as employee was not entitled to this payment.

(3). Highmark preserved and did not waive its subrogation lien.

The Commonwealth Court decision in Frymiare warrants further discussion regarding this medical expense payment issue. 

In Frymiare,  the claimant was awarded work comp indemnity wage loss benefits and reimbursement of his personal payments of medical expenses.
The claimant's private health insurer made some medical expense payments, but it did not seek subrogation in the claim petition proceedings. Claimant was not awarded these amounts.

The Commonwealth Court held that the claimant was entitled to payment of the medical expenses.
Employer/Insurer may not avoid their responsibility to pay for work-related medical expenses, on the basis that some other source may have initially defrayed theses medical costs.
In the absence of the assertion of a subrogation lien from his health insurer, claimant was entitled to payment for these medical expenses. (presumably, by contract, claimant would be responsible to repay his health insurer.)


1. Employers and Insurers must determine if there are any payments of work-related medical expenses by any private health insurer plan, whether it be employer-funded or employee funded.

In order to avoid these time consuming and costly post-claim decision issues, it behooves the parties to document the rights/responsibilities regarding all outstanding work-related medical expenses.

This review includes the right of reimbursement to Medicare/Medicad for any conditional payments

2. Attorneys - determine if you can reach a stipulation with Employee counsel as to the identity and amount any medical expense liens and which entity is entitled to reimbursement, in the event of a WCJ award. 

3. Employer/Insurers, do not spend 20% of the amount due!
Do not ask the claimant attorney to represent the interests of an employer-funded plan. 
Have your legal counsel submit any necessary documentation of the subrogation interest. 

Tuesday, August 19, 2014

Injury of the "Early Arrival" Employee and Scope of Employment

The Scope of the "Work Day"

The definition of a compensable work injury is specifically stated, yet broadly worded, so as to be subject to interpretation and meaning.

The Workers' Compensation Act definition of injury,  includes the requirement that the employee is injured "in the course of his employment". See: Section 301 (a).
 An "injury" is to be construed as one ..."arising in the course of employment and related thereto...".
See: Section 301 (c)(1).

From a non-lawyer point-of-view, one may believe the "work day" begins and ends with the "punching" of one's time card. Review of many workers' compensation appellate case decisions would quickly dispel that notion of simplicity. As often stated, "these cases are very fact-sensitive".

The case of the early arriving employee poses a question as to "When does the work day begin?"

This question was addressed in a recent decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Covey on June 10, 2014 at: Ace Wire Spring and Form Company v. WCAB (Walshesky), No 1916 C.D. 2014.

Factual and Procedural Background

WCJ awarded total disability benefits for the head injury resulting from a slip and fall on ice in the Employer's parking lot. On appeal, Employer argued that:
(1) Employee was not in the course and scope of his employment;
(2) Employee was not  furthering the Employer's business interests.

Note: this Employer did not question the parking lot as a part of the business premises.

Employee testimony reflects;
He arrived at the employer parking lot at 6:30 am for his 8:00 am work shift.
He arrived early to avoid traffic.
He went into the building. He retrieved clean uniforms and took them out to his car.
(so he would not forget them).
As he returned to the building, he slipped and fell on ice in the parking lot.
He went into the building, reported this incident to his general manager (Froehlich).
He stated Froehlich insisted he go and wash up.
He stated he believes he passed out in the bathroom.
He awoke in a nursing home, paralyzed on his left side.

Employer testimony from Froehlich reflects;
He arrived about 6:30 am and unlocked the doors between the office and plant.
Employee appeared with dry blood on his head. He said he fell, but could not remember where.
He advised employee he would take him to the hospital when the plant manager (Margo) arrived.
He did not tell employee to "clean up" nor did employee leave him to go to the bathroom.
Employee was lucid and did not have difficulty talking or walking.
He stated the incident could not have occurred as employee stated, as employee did not have a key to enter the plant portion of the building (before Frohlich unlocked the building).

Inventory manager Ellich stated;
He arrived about 6:30 am and employee was sitting in his car holding his head.
Employee said he fell. He observed dry blood. He walked employee into the building.
 He did not see employee thereafter.

Employee changed his prior testimony.
Now he stated he arrived at 7:30 am, not 6:30 am.
He recalled seeing the car of a co-worker (Larkin)..
He did not see Ellick.
The building was unlocked when he arrived.
Froehlich told him to go wash up.

Co-Worker Larkin testified he punched in at 7:47 am.
He was not in the parking lot at 7:30am.
He parked behind the building, it was not his car that employee described.

Employer testimony reflected Ellick punched in at 6:37 am.
Larkin punched in 7:47 am.
It appeared Ellick was the first to arrive and unlock the building.

Plant manager Margo stated when he arrived employee was sitting in the lunchroom.
He drove employee to the hospital. Employee was lucid and able to walk.

WCJ Decision- award of benefits

The WCJ is the fact-finder and rules on questions of credibility and weight assigned to the evidence.

The WCJ resolved the conflicting factual reports.

Th WCJ found Employee testimony to be more credible and convincing.
 (acknowledging employee may have faulty memory due to his injuries)

The WCJ found employee was furthering the business of Employer when he was injured.

WCAB Affirmed WCJ Award

Commonwealth Court Decision

Substantial evidence supported the WCJ finding employee arrived between 6:30 and 730 am.

As a general rule,once on the premises, getting to or leaving the work station is a necessary part of ones employment.

Even though not actually engaged in the employers work, an employee will be considered in the course of employment if injured a reasonable time before or after the work period.
citing: Allegheny Ludlum Corp. v. WCAB (Hines), 913 A.2d 345 (Pa. Cmwlth. 2006).
 THIS is the issue.

There is no bright-line test for assessing how long before commencement of the scheduled work day is a reasonable time for an employee to be furthering the employer's interests. slip opinion page 13.

In analyzing the past cases the Court noted it seems the exact amount of time does not appear to be as important as the claimant's purpose or activities during that time. (Agreed!).

The WCJ found employee arrived between 6:30 am [90 minutes before] through 7:30 am [30 minutes before] his work shift. There was evidence in support of this finding.
Employer did not conclusively establish employee arrived 90 minutes before.

Court: the employer did not establish employee arrived an unreasonable amount of time before his work shift.(... but I thought employee's activities were the important consideration?)

... there was no credible evidence that employee abandoned his employment
... engaged in something entirely foreign to his employment
... or acted contrary to any positive work orders ...

***The fact that employee collected his employer-provided uniforms and put them in his car ... does not place him outside the scope of his employment.

Employer argued the WCJ did not author a "reasoned decision" as all of the evidence supports a finding employee arrived 6:30 am.
No, the WCJ  resolved this conflicting point ... in employee's favor.
The WCJ decision adequately explained the WCJ reasons for this finding.

The reasoned decision requirement is simply that the WCJ must articulate some objective reasoning to facilitate appellate review. citing: Green v. WCAB (US Airways), 28 A.3d 936 (Pa. Cmwlth. 2011).
This was accomplished.


1. This decision illustrates the lengths to which simple rules of law can be altered by a "act-sensitive" analysis of scope of employment and premises issues.
The appellate record reflects a great deal of factual information
... sometime it seems that we deal in minutia, which has a disproportionate impact upon the result.

2. I agree with the premise that it is more appropriate to examine the purpose or activity of the claimant in the early arrival injury claim.

3. The exact amount of time of the early arrival, should not be as significant of a factor for a course of employment analysis ...
BUT logically, at some point in time, the claimant will be so early or so late, that it is difficult to make a reasonable argument that the claimant's presence has anything to do with the remote start or remote end of a work-shift ...  and has more to do with the personal decisions of the claimant ... WHY is he/she there?

4.  Once again we emphasize ...Employers get your workers' compensation professionals involved in the early part of the injury claim investigation.
The identification of witnesses ... the identification of undisputed facts ... and the identification of claimant's version of events, are all necessary components of a successful workers compensation defense.

Question: where his uniforms in his car? ... there always seems to be one more question ...

Wednesday, July 23, 2014

Pennsylvania "Extra-Territorial" Jurisdiction - Where is the Employment "Principally Localized"?

Interpretation of the Pennsylvania Workers' Compensation "Extra-Territorial" provisions for the possible extension of Jurisdiction and Coverage.

 The Pennsylvania Workers Compensation Act applies to all injuries occurring within the Commonwealth. Section 101, 77 P.S. 1.

Application of the PA Workers' Compensation Act is extended by the "Extra-Territorial" provisions at Section 305.2, 77 P.S. 411.2.

(a) If an employee, while working outside the territorial limits of this state, suffers an injury ... (for which he would have received benefits if the injury occurred with the state)... he shall be entitled to benefits provided by this act, provided that at the time of such injury:

(1)   his employment is principally localized in this state, or

(2)   he is working under a contract of hire made in this state, in employment not principally localized in any state, or

(3)   he is working under a contract of hire made in this state, in employment localized in another state, whose workmen's compensation law is not applicable to his employer...

(4)   A person's employment is principally localized in this or another state when,

(i)   his employer has a regular place of business in this or such other state and

   he regularly works at or from such place of business, or

 (ii)   having worked at or from such place of business, his duties have required him to go outside of the state not over one year, or

(iii)   if clauses (1) and (2) are not applicable, he is domiciled and spends a substantial part of his working time in the service of his employer in this or such other state.

What does this mean in a real world application?

Greenawalt v. WCAB (Bristol Environmental, Inc.), No. 1894 C.D. 2013, a published opinion of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Simpson on May 12, 2014, offered a recent review of the application of these "extra-territorial' provisions.

Factual Background

Employee was a union laborer, receiving limited duration work assignments, with different employers, followed by layoff. He accepted an assignment with Bristol in New York. Bristol obtained lodging in an apartment complex for employees. He would return home to PA on weekends.

One morning, Employee slipped and fell on ice outside the apartment, as he walked to warm his automobile before leaving for the job site. He proceeded to the job site. He notified his foreman. Due to his symptoms, he was instructed to perform light duty work. He continued in light duty for several weeks, until his layoff.

Employee filed a Claim Petition alleging disability from this back injury.
Bristol denied the claim, asserting (1) PA lacked jurisdiction as the injury occurred in New York and (2) the injury did not occur in the course and scope of his employment

WCJ Decision 

Claim Petition  DENIED.
Employee worked under a contract of hire, made in Pennsylvania, for employment principally localized in New York. Although Employee worked in the past, for Bristol in New York, he did not have a continuous employment relationship, for purposes of determining where his employment was principally localized.

Employee Commonwealth Court Arguments

Employee argued his employment was principally localized in Pennsylvania, and jurisdiction was proper under 305.2 (a) (1).
Employee was hired in PA
He was trained in PA.
He completed over 30 assignments for Bristol in PA.
His New York job was expected to last less than one year (and it did).

Employee also argued in the alternative,
He as hired in PA.
His employment was not localized in any state.
Jurisdiction was proper under 305.2(a)(2).

Employee also argued in the alternative,
The WCJ did not determine if New York law would apply.
A remand was necessary to determine in there was jurisdiction pursuant to 305.2(a)(3).

Commonwealth Court Decision 

Claim Petition Denial was AFFIRMED.

Commonwealth Court Reasoning

The claimant has the burden of proof to establish jurisdiction in Pennsylvania for his workers compensation claim.slip opinion page 7 citing Williams v. WCAB (POHL Transp.) 4 A.3d 742 (Pa. Cmwlth. 2010).

Here, the review of the record and the WCJ findings support a conclusion that this Employee's employment was principally localized in New York, not in Pennsylvania.

Employee worked exclusively in Rochester, New York for Bristol after one week of training in Pennsylvania. He worked at that location, "as a rule and not as an exception". (citing Williams 4 A.3d at 746.

There was no continuous employment relationship with Bristol, as Employee worked with Global Insulation and LVI Environmental during that same year. In light of this break of employment with Bristol, for several months, the WCJ correctly determined there was no continuous employment relationship.

The "continuous employment relationship" argument is an important element in determining if a series of individual per-job assignments should be considered one continuous employment for the purpose of determining where the employment is principally localized. Here the evidence did not support Employee's argument.

Similarly, Employee's argument that his employment was not principally localized in any state, was properly rejected, as the evidence showed his employment was principally localized in New York.

Employee argued that subsections (i) to (iii) of 305.2 (d) (4) were not met to support the conclusion that his employment was principally localized in New York. However, the record reflects that Employer operated its business at the Rochester, New York location. Employee regularly worked 40 hours from that location.
Subsection (iii) requires Employee to be domiciled in New York and he testified he remained domiciled in Pennsylvania.

The Commonwealth Court rejected Employee's argument that the case should be remanded for a finding as to the applicability of New York workers compensation laws to this Employer.
Employee had the burden of proof to establish jurisdiction over his claim. As he admittedly presented no proof on this point, the WCJ did not err in failing to make a finding on this point.


1.   Reading this decision should alert the Employer and Workers Compensation claims professionals as to the complexity of these extra-territorial provisions.

One must carefully assemble evidence in support of each element of the "principally located" argument. Testimony and documentation will be necessary to establish Employer's position and rebut Employee's contentions.

Involve your workers' compensation defense counsel at an early stage of the claim investigation.

2.   As the issue of "jurisdiction" is significant in determining the success of the Employee claim and the existence or extent of liability for the Employer. It behooves the parties to thoroughly investigate and document these facts. At the inception of the claim, one should devote the "extra time" to  this issue.

3.   Often, jurisdiction is not disputed. However, when it is an "out-of-state" injury claim, the topic of jurisdiction becomes an essential element of the claim investigation and preparation.

Tuesday, June 17, 2014

The Employer's Impairment Rating Evaluation (IRE) Remedy ... STILL the best remedy

The 1996 Amendments to the Pennsylvania Workers' Compensation Act, provided Employers and Insurers with a remedy to limit the "lifetime" duration of indemnity wage loss benefit payments.

The Impairment Rating Evaluation (IRE)provisions allowed the limitation of the duration of wage loss benefits to a period of 500 weeks. There were several requirements to obtain a successful review.

Employees have argued each point, in their attempts to prevent or limit this remedy.

One criteria, the Employee must reach "Maximum Medical Improvement" before the IRE may be conducted. This is a "term of art" which is defined by the AMA Guides to the Evaluation of Permanent Impairment. 

Arvilla Oilfield Services Inc. v. WCAB (Carlson), No. 1578 C.D. 2013, a reported panel decision of the Commonwealth Court of Pennsylvania, authored by Judge Leavitt on May 20, 2014, recently reviewed these IRE issues.

Factual and Procedural Background

[NOTE: This case has an interesting inter-play in the filing of successive, concurrently pending petitions and the corresponding proofs. A good argument for NOT consolidating petitions ... a discussion for another day.
Here, we will keep it a "simple" IRE case]

Employee injured his right hip, right shoulder and low back in July 2004.
NCP accepted liability and described theses injuries as labral tear of the right hip, with strains/contusions of the right shoulder and low back.

Employee had subsequent right hip surgeries: 2004 arthroscopy ; 2005 total hip replacement; which were were found to be work related [WCJ decision 2007].

Employer filed a 2009 Modification petition [not a Termination petition] in December 2009, asserting Employee fully recovered from the low back and right shoulder injuries ... but not the hip injury.
(Dr. Levy October 2009 IME).
( a good strategy for limiting future medical expense disputes).

Employee medical expert Dominic M. Sciamanda, D.O. testified the post-injury abnormal gait caused the pre-existing lumbar degenerative disc disease to become symptomatic. Also, he attributed some of the back pain to the hip condition. He attributed the lumbar radiculopathy to the work injury.

The goal of Dr. Sciamanda's treatments was to reduce pain, increase mobility, range of motion and function.
He had not released employee to any type of work.
 "He certainly has setbacks at times, where we have to kind of back track and move forward. Again, however, overall he seems to be making progress".

Based upon this medical testimony ...
Employee filed a Petition to Review Compensation Benefits and "add" lumbar radiculopathy and lumbar spondylosis to the NCP. A worsening of employee's condition was alleged.
[a recurring employee strategy, to change/expand the description of the work injury].

Employer medical expert, Jon A. Levy, M.D. testified employee had a significant pre-existing lumbar degenerative disc disease, which resulted in significant pre-injury pain complaints.
Based upon comparison of 2004 and 2006 MRI's he found not evidence the work injury changed the pre-existing changes. He related the ongoing lumbar symptoms to the pre-existing medical condition.
Dr. Levy opined employee recovered from the work related strains to the shoulder and low back.
Dr. Levy also opined employee reached MMI regarding the hip condition.

An IRE was conducted on June 3, 2010, during the pendency of Employer's Modification petition and Employee's Review petition. Jefferey M. Moldovan, D.O., found a 10% whole person impairment rating.

A Petition for Modification of employee disability status from total to partial was filed.
This 2nd Modification was consolidated with the pending petitions.

Dr. Moldovan testified employee was at MMI.
He demonstrated an altered gait and reported right hip discomfort.
Employee expressed no symptoms regarding the right shoulder or low back.That physical exam was normal.

Employee presented NO medical evidence in opposition to the IRE report.

WCJ Decision

1.Employee was fully recovered from the right shoulder stain. Dr. Levy was credible on this point.

2. Employee did not fully recover from the low back strain, as Dr. Levy did not address the effect of the hip injury and altered gait, upon the low back condition.

3. Employee's Review Petition was denied. The work related condition was not expanded to include lumbar radiculopathy and lumbar spondylosis (degeneration). Dr. Sciamanda was rejected.

4. WCJ rejected Dr. Moldovan's opinion employee had reached MMI and denied this Modification petition.

WCJ Reasoning

" According to Dr. Sciamanda's testimony, the claimant is continuing to make progress and he continues to have setbacks at times. Dr. Moldovan's opinion that the claimant is at MMI because [he] is "as good as he is going to get" is not supported by the treatment records". 

Commonwealth Court Reversal 

Employer appealed the denial of the IRE Modification petition.

Employer argued:

a. There was not substantial medical evidence in support of the finding that employee had failed to reach MMI at the time of the IRE (June 2010).

b. The one phrase by Dr. Sciamanda was speculative and taken out of context.

c. Dr Sciamanda DID NOT opine whether or not employee had reached MMI ... his most recent exam was months before the IRE was performed.

d. Dr. Sciamanda only testified in the defense to the employer argument for recovery and in support of employee's argument to expand the work injury description.

Employee argued, the WCJ assessment of the medical evidence was a credibility determination for the WCJ to decide.

Commonwealth Court Reasoning -

 "... Dr. Sciamanda did not testify on the issue of MMI.
Further, it cannot be inferred from Dr Sciamanda's deposition that employee had not reached MMI on the day Dr. Moldovan examined him". slip opinion page 10.

MMI is a term of art.
The AMA Guides definition was reviewed.
MMI is not the same as "full recovery".

The testimony of Dr. Sciamanda, cited by the WCJ, does not support any finding regarding MMI.
Dr. S last examined employee in February 2010. The IRE was June 2010.

Dr. S was providing palliative care to manage employee's symptoms.
Palliative measures are consistent with a finding of MMI.

Dr. S was treating employee for conditions which the WCJ did not add to the injury description!
Only impairment from the work injury is included in the assessment of MMI and impairment rating.

Dr. Moldovan's exam and testimony were compatible with the AMA Guides description of the MMI term.
Dr. Moldovan presented the only legally competant medical opinion regarding the presence or absence of MMI.

A WCJ may reject controverted competent evidence.
However the WCJ " must identify that evidence and explain adequately the reasons for its rejection.
See: Section 422(a)

For this reason, the order of the WCAB was vacated and the case was remanded back to the WCJ for further findings on this critical issue.  If Dr. Moldovan is to be rejected, there must be an adequate explanation.


1. When dealing with multiple petitions, with different burdens of proof, take care to outline your litigation plan and identify the evidence which supports each element of your burden of proof. 

2. Similarly, when reviewing your defense to each employee petition. assess the evidence offered in support of each employee petitions and your evidence/argument in opposition. 

3. An essential element in the IRE burden of proof is the employee status as "MMI". We see frequent attacks upon the IRE Modification Petition Remedy, based upon the argument that employee is not at MMI, as his/her condition may improve ... or his/her condition may decline.

4. Have your medical expert testify and explain the MMI definition and provide specific reasons why the claimant is at MMI. 

5. Challenge any employee medical expert evidence offered in "defense" to the IRE Medical expert, which did not conduct an examination in accord with the AMA Guides. 

Friday, May 9, 2014

... Are the correct Parties "Joined" to the Litigation? Joinder Practice in PA Work Comp

A Lesson on "Joinder" Practice in Workers' Compensation Litigation

An Employer is responsible to an injured employee for the payment of wage loss benefits and medical expense reimbursement for a compensable injury, occurring within the course of ones employment.

At times, a question may arise as to the identity of the "employer" for purposes of liability for workers' compensation benefit payments. In Construction-Site injuries, the disputed facts may include: the identity of the "employer;  the existence of an employer-employer relationship;  and/or the existence of a statutory employer relationship.

In these circumstances, it is essential to have all of the necessary parties joined in the claim petition litigation.
What happens when all of the necessary parties are not present? ...

Pennsylvania Uninsured Employers Guaranty Fund v. WCAB (Dudkiewicz, deceased, Builders Prime Window and TH Properties) a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge McCullough on April 7, 2014 addressed the legal issues raised by an improper joinder.

Factual and Procedural Background
The multiple parties named in this construction-site injury can give rise to some confusion.
Dudkiewicz is the injured employee.
He was employed by Rossini Construction, when he fell from a 2nd story roof.
Builders Prime contracted with Rossini.
THP was the owner of the construction site.
Apparently Rossini did not have workers compensation insurance, therefore the claim was filed against the Uninsured Employers Guaranty Fund (UEGF).

UEGF denied the averments of the claim petition and denied the existence of a Rossini -  Dudkiewicz, employer-employee relationship.

The chronology of events, bears emphasis as the Workers Compensation Judge stressed the importance of adhering to established deadlines throughout this litigation ... and non-compliance may lead to an adverse result!

October 9, 2009 date of injury

February 9, 2010 First Hearing  Employee appeared and testified
  • The Parties requested bifurcation of the claim litigation, to first determine the employment relationship issue, however, employee testified as to the entire case
  • WCJ would set case for a 2nd hearing 
  • WCJ set October 1, 2010 as a deadline for presentation of all evidence on the employment relationship issue

March 30, 2010 Second Hearing, scheduled for testimony on the employment relationship issue
  •  No evidence was presented regarding the employment relationship, 
  •  Rossini had not secured legal counsel, separate from UEGF counsel
  • Case was continued, Deadline for evidence was extended to October 15, 2010.
April 29, 2010 Third Hearing, postponed by WCJ

May 18, 2010 Fourth Hearing rescheduled to May 20, Employer Rossini appeared and testified
  • Rossini stated he worked as a subcontractor for Builders Prime.
  • Rossini said THP was owner of the construction site.
  • UEGF said they would join Builders Prime and SWIF as a necessary party
  • WCJ advised a prompt joinder was necessary ... as he would be issuing a decision on the employment issue that could nullify the Joinder!
  • had the WCJ heard enough to decide?
  • Did WCJ believe there was no merit to the Joinder?
May 27, 2010 UEGF filed joinder of Builders Prime (BP) as an additional employer.
No Reason was provided in the joinder petition. 
BP filed a motion to strike the joinder as it did not state a sufficient case against BP.

August 24, 2010 Fifth Hearing, BP announced it would not join THP.

September 3, 2010, UEGF filed a 2nd joinder petition of THP as an additional employer.
THP was alleged to be the general contractor on the construction site where the injury occurred. 
Recall, Rossini said THP was the owner of the site ... This raises a question of Statutory Employer status.

WCJ Interlocutory Order
September 28, 2010, WCJ issued a decision and interlocutory order dismissing both joinder petitions, as untimely and in the alternative, the BP joinder was not in compliance with the regulations. 
  • Employee was questioned about BP at February 9 hearing.
  • A subpoena of BP records was provided February 25.
  • UEGF did not file a joinder within 20 days of the February 9 hearing.
  • UEGF did not request an extension of time to file a joinder.
  • UEGF joinder document did not set forth the rationale for the petition , as required by the regulations
  • UEGF joinder of THP on September 3, was not timely filed, as the last hearing where any party presented evidence on the employment issues was May 20.
WCJ Final Decision of Claim Petition
February 15, 2011 WCJ decision and order found Claimant was an Employee of Rossini. 
Employee was awarded total disability benefits.

No Employer Rossini Appeal. Recall Rossini was an uninsured employer.

UEGF Appeal dismissal of Joinder Petitions
Dismissal of Joinder petitions denied UEGF the opportunity to: (1) establish Builders Prime as an employer or (2) establish THP as a statutory employer.

Commonwealth Court AFFIRMS WCJ

The Practice and Procedure governing Petitions for Joinder are set forth at 34 Pa. Code 131.36, more commonly known as "Special Rules of Administrative Practice and Procedure before Workers' Compensation Judges".

Regulation 136.36 requires a Petition for Joinder,
  • set forth the reasons for the proposed joinder of a particular employer or insurer,
  • be filed no later than 20 days after the first hearing at which evidence is received regarding the reason for which joinder is sought,
  • unless this time is extended by the WCJ, for good cause shown! 131.36(d).
The Commonwealth Court reviewed the above requirements for a joinder petition and further noted that the grant/denial of a joinder is within the discretion of the WCJ. 
Citing: Stratton Homes, Inc. v. WCAB Hollis, (Pa. Cmwlth. 1993). (slip opinion page 8).

UEGF argued the "deadline" for filing the joinder did not begin to run until the May 20 hearing. 
BUT, Rossini testified regarding his "subcontractor" role with Builders Prime at the February 9 hearing. 
As noted by the Court, this line of questioning was initiated by UEGF. 

UEGF argued the February 9 hearing testimony (recited in the opinion)  was not "substantial evidence" on the issue of the employer or statutory employer issues.
The Court disagreed. It would not apply a "substantial" evidence" requirement on the Joinder requirements.
The February 9 hearing testimony was sufficient to alert UEGF as to the existence of other parties, who may have been in a contractual relationship with Rossini.

The WCJ did not abuse his discretion in denial of the Builders Prime joinder and determination that the February 9 hearing testimony constituted "evidence ... regarding the reason for which joinder is sought".

UEGF argued the THP joinder was delayed as it was anticipated that BP would joining THP.
When BP announced at the August 24, 2010 hearing that it would not be joining THP as a party, UEGF acted promptly and filed to join THP only 6 days layer! 
The Court noted this joinder was more than 90 days after the May 20 hearing. The dismissal of this joinder was proper.

Practice Pointers:
1.   The lesson learned is that the WCJ has significant discretion in grant/denial of a Joinder Petition. To my review of this decision, there are a few "judgment calls" presented. Bottom line, err on the side of "action". 

2.   The  "anticipated" joinder of THP by Builders Prime counsel is a reasonable expectation.
However, we learn that one cannot (should not) rely upon the expected actions of other counsel.  

BP may have an unrelated "business reason" for not joining THP. BP may not want to "point the finger" at another party. BP may believe that is the role of claimant, not defendant counsel, to file a petition. Lesson learned, if you believe another party must be involved, to protect the interests of your client, then file for any available joinder. 

3.   In my past experience, I do not recall stringent application of the 20 day joinder time requirement. Often, in the early stages of claim petition litigation, there is insufficient evidence available to support the filing of a joinder ... or more precisely, a well-plead  joinder with "specific facts and the legal basis" for the joinder. 

This lack of information can be readily apparent to the parties and to the WCJ. In these circumstances the time for joinder may be extended by the WCJ ... if requested in a timely fashion.

This is one of those judgement calls. Lesson learned ... file a written request for an extension of the joinder time limit, and state the reasons in support of your position.

4.   This is another example of the Defense Attorney mantra, "File it", you can always reconsider your position as the evidence develops. You want to avoid the circumstance where your available remedies become limited. 

[ Yes, unfortunately, there are times when measured, thoughtful reflection and consideration may actually work against you and  limit your remedies].


Thursday, May 1, 2014

The "Absolute Right" of Pennsylvania Workers' Compensation Subrogation Recovery

The Pennsylvania Workers' Compensation applies to all injuries occurring within the Commonwealth. See: (Section 101).

Additionally, pursuant to the extra-territorial provisions,  the WCA applies if an employee suffers an injury, while working outside of the territorial boundaries of the Commonwealth, if:

          (1) the employment is principally localized in Pennsylvania, or;

          (2) he/she is working under a contract of hire made in Pennsylvania, in employment not principally localized in any state, or;

          (3) he/she is working under a contract of hire made in Pennsylvania, in employment principally localized in another state, whose work comp law is not applicable, or;

          (4) he/she is working under a contract of hire made in Pennsylvania, for employment outside the USA or Canada.

(See: Section 305.2)

When a Pennsylvania resident is injured in a motor vehicle accident in Delaware, while in the course of her employment, She is entitled to PA Workers' Compensation benefit payments and the Employer is entitled to assert a subrogation right against any civil action recovery from the third party responsible for the accident.

... but what happens when the Employee civil action recovery is limited by Delaware law? ... does the Pennsylvania Act still provide the Employer with an absolute right of recovery?

Young v. WCAB (Chubb Corporation and Federal Insurance Company), No. 1432 C.D. 2013,
 a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Cohn-Jubelirer on March 10, 2014, addressed these issues.

Factual and Procedural Background

Employer accepted responsibility for the December 2003 motor vehicle accident and commenced payment of indemnity wage loss benefits and medical expense reimbursement via a Notice of Compensation Payable (LIBC-495).

In the course of subsequent litigation of petitions for Suspension, Termination and Utilization Review, the parties negotiated a settlement via a Compromise & Release Stipulation (LIBC-755). In May 2006, Employee settled future work comp benefits for a lump sum of $85,000. The Employer maintained it's right of subrogation, as per paragraph 11 of the LIBC form.

Employee subsequently settled her third-party action against the Delaware driver for $160,000.
There was no indication in the record, that Employee or her legal counsel advised Employer of this third-party settlement. There was no indication that Employee asked Employer to compromise its lien. (slip opinion page 3).
Employee counsel placed 1/3 of the settlement ($53,333) in an escrow account to "resolve" Employer's work comp lien. Counsel indicated this was the "customary" way of handling a work comp lien.
 [... maybe in Delaware].

Employer filed a Petition for Review to assert the work comp subrogation lien, as Employee settled the third-party action without adequately protecting the Employer's lien. The Employer's lien totaled $219,101.
Employer asserted is was entitled to recover a net lien of $101,381.

WCJ Decision in Employer Review Petition

Employer was entitled to a subrogation lien recovery.
Employer did not agree to compromise its lien.
PA law applied, not Delaware law.
Employee and Employee counsel were not jointly and severally liable for repayment to Employer.

WCAB affirmed and denied Employee appeal.

Commonwealth Court affirmed and denied employee appeal.

Commonwealth Court Reasoning:

1. Pennsylvania law applies to determine the Employer subrogation rights ... which apply to the Delaware civil action recovery.

Employee argued Delaware law should apply to the assessment of the subrogation lien of Employer. They argued in Delaware they could not include certain expenses in the third-party action, but these items were included in the subrogation lien. Delaware law precluded employers from being reimbursed for expenses that were precluded from evidence at trial.

Employee argued a "Conflict of Laws" analysis would show that Delaware had more significant contacts to this litigation than Pennsylvania,  therefore Delaware law should apply.

This argument was rejected. Just as in the Allstate Insurance Co. v. McFadden (Pa. Super. 1991),
Pennsylvania has a significant interest in this litigation,as this Employer made payments under the PA WCA and this employer has a right to monies paid to its employee by a third party.

Similarly in Byard F. Brogan Inc. v. WCAB (Morrissey) (Pa. Cmwlth. 1994), after a conflicts of law analysis Pennsylvania law applied, which had the effect to preclude a subrogation recovery  (at that time the Motor Vehicle Insurance law did not provide a right of subrogation). [an earlier MDS appellate case].

In the instant case, the substantial contacts of Pennsylvania to the Delaware civil  ligation were that:
 the employee was a Pennsylvania resident; she availed herself of benefits pursuant to the PA WCA; the employer was a NJ corporation, doing business in Pa;  under a PA insurance policy.
When Employee entered into the Compromise and Release Settlement, she affirmed the Employer's subrogation lien. [slip opinion page 10].

2. Employee argument that it was inequitable for Employer to be fully reimbursed for its subrogation lien ... this argument was rejected by the Court.
The Court explained, the statutory language at Section 319 has been interpreted to provide a right of subrogation to the Employer which is "statutorily absolute and can be abrogated only by choice".

Employee's equity arguments are contrary to established case law holding that there are no equitable exceptions to subrogation. citing Thompson v. WCAB (USF&G) (Pa. 2001).

3. Employer satisfied its burden of proof to establish its entitlement to subrogation and the amount of its lien. The WCJ accepted Employers documentation of payments made to employee. The WCJ appropriately subtracted duplicate entries and items not subject of recovery. The WCJ appropriately included the prior underlying 20%  attorney fee payments. The Employer payment detail evidence supported the WCJ findings of fact on his point.

Practice Pointers:

1. Cudos to Attorney Lee Fiederer of Chartwell Law Offices for a successful result. 

2. Too often, the Employer's right of subrogation lien recovery comes under attack, with the same old arguments. Some sort of "equity"is alleged in the denial of  reimbursement to the Employer for the vast amounts of wage loss and medical expense advanced to an injured employee ... where a third party is actually responsible for creating this obligation upon the Employer.

 When the Employer seeks reimbursement of its advanced payments ..."its not fair".
As often noted in appellate decisions, the injured employee has no right to a double recovery for wage loss and medical expense. 

3. In this instance the underlying third-party civil litigation in Delaware was concluded . When the third-party litigation is concluded in Pennsylvania, I believe it is a best practice to file a Workers Compensation Petition to assert one's subrogation rights, in lieu of pursuing a remedy in the Court of Common Pleas. 
WCJ are familiar with the "absolute" right of subrogation and the calculation of the Employer's net lien recovery.

4.  When the civil action is pending, I believe it is essential for the Employer to assert its right to subrogation lien recovery via intervention and participation in the civil action OR protect the Employer's rights via written agreement with the Plaintiff-Employee counsel. 

5. I believe it is a conflict of interest for the Plaintiff-Employee to "represent" the subrogation rights of the Employer and simultaneously represent the rights of the injured Employee. One attorney cannot serve Two divergent interests ... particularly when there is a finite amount of Settlement dollars... the interests of the parties must be compromised ...
who is compromised in this scenario?
Retain separate, experienced Work Comp Defense Counsel.


Friday, April 18, 2014

Preserving your Supersedeas Fund Recovery Rights in C&R Settlements

Settling the PA Work Comp case and Preserving Any Right to Supersedeas Fund Recovery.

The settlement of a workers' compensation case can provide a final resolution of disputed issues regarding indemnity wage loss benefits and liability for medical expense reimbursements. The parties may negotiate a final resolution of all disputed issues or just a portion of the issues presented.

At times, the parties will reach a negotiated settlement of wage loss benefits and keep "open" the responsibility for future medical expense reimbursement.

In one scenario, Employers and Insurers may settle several issues and also request a Workers' Compensation Judge decision regarding a pending Termination/Suspension/Modification petition. The intention is to preserve a right to a Supersedeas Fund Reimbursement, in the event of a successful decision.
As a point of explanation, the Supersedeas Fund exists to reimburse benefits paid by Employers/Insurer's, when it is later determined that those benefits were not payable.

 Reimbursement is available from the date of the filing of the petition. The Bureau of Workers' Compensation is the "conservator" of the fund. They may administratively review and voluntarily approve the reimbursement request. They may dispute the request and require litigation of this issue before the Workers' Compensation Judge.

One obstacle to pursuit of a Supersedeas Fund recovery, is the use of imprecise language in the Compromise and Release settlement documents.If you pay a lump sum to settle ALL of the issues regarding past and future work comp benefits ... there may be no remaining right to Supersedeas Fund reimbursement.

H.A. Harper Sons, Inc. v WCAB (Sweigart and BWC Legal Division), No. 86 CD 2013,  a published decision of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Brobson on January 3, 2014, addressed a Supersedeas Reimbursement issue.

Factual and Procedural Background
Claim Petition
Employee was injured, filed a Claim petition and was successful before the Workers' Compensation Judge (WCJ). However, the Employer/Insurer disputed the correctness of the WCJ determination of the Employee Average Weekly Wage (AWW) at the time of the injury.

Employer appealed the grant of the claim and also the AWW calculation.
On appeal to the Pennsylvania Workers' Compensation Appeal Board (WCAB) the Employer requested a Supersedeas of benefit payments during the appeal. This request was denied.

Termination Petition
While the WCAB appeal was pending, Employer had Employee examined by a medical expert and based upon those findings, Employer filed a petition for Termination of benefit payment.
During the Termination petition litigation, the parties reached a settlement agreement as to future benefit liability. The pending petition was amended to a Petition to Seek Approval of a Compromise and Release Agreement.

Compromise and Release Decision
The WCJ issued an order to approve the C&R Agreement. "Upon payment of the specified benefits to ...Claimant and his attorney, [Employer] shall be released from liability for Claimant's work injury to the extent set forth in the [C&R] Agreement". (emphasis supplied) slip opinion page 2.

WCAB Decision
The Employer appeal of the AWW calculation was granted. The WCJ was reversed only on this point, the balance of the WCJ decision was affirmed. Accordingly the TTD compensation rate was corrected from $389.50 to $204.28 per week.

This AWW rate change did not have any impact upon the C&R settlement amount, rather it "created" a right to Supersedeas Fund Reimbursement.

 Remember, the Employer challenged the correctness of the AWW rate in the appeal to the WCAB. The WCAB denied Employer's request for a supersedeas of benefit payment during the appeal process. Therefore, by that order, Employer was compelled to initiate benefit payments ... at a rate which was in excess of Employee's actual benefit entitlement. As Employer was compelled to pay these benefits,  which Employee was not entitled to receive, a right to reimbursement was created when Employer prevailed on appeal.

Supersdeas Fund Reimbursement Application
Employer filed an application for reimbursement from the Supersedeas Fund, for the overpayment which resulted from the WCJ  award of the higher AWW rate. The reimbursement request was from the date of the filing of the supersedeas request to the WCAB to the date the case was approved for settlement (the C&R decision).

WCJ granted the $20k+ Supersedeas Reimbursement.
WCAB reversed this decision.
WCAB relied upon past Commonwealth Court decisions which denied a Supersedeas Fund Reimbursement request, where the C&R documents reflect a final outcome of all issues raised  in the WCJ proceedings.
[See: Stroehmann Bakeries (2001); Bethlehem Structural Products (2001); Department of Labor (2007) ; Coyne Textile (2008).].

Commonwealth Court Appeal
Employer argued that the WCAB erred when it reversed the WCJ grant of the Reimbursement Application, as the C&R Agreement approved by the (first) WCJ order did not resolve or settle the AWW issue. The AWW issue was pending on appeal to the WCAB.
The WCAB appeal proceeded and was not withdrawn as a condition of the C&;R settlement.
Accordingly, there was not a final outcome of the proceedings, on the AWW issue.

Section 443(a) allows a Supersedeas Fund Reimbursement where:
          "(a) If, in any case in which a supersedeas has been requested and denied under the provisions of
                section 413 or section 430, payments of compensation are made as a result thereof and upon
                the final outcome of the proceedings, it is determined that such compensation was not, in fact,
                payable, the insurer who has made such payments shall be reimbursed therefor."

In Stroehmann Bakeries v. WCAB (Plouse) 768 A.2d 1193 (Pa. Cmwlth. 2001) the parties entered into a Compromise and Release Agreement which rendered as moot,  the pending employer's termination petition.

The Stroehmann settlement document was for the issues involved in this claim - whether the claimant's disability from the work injury has ceased. This language would include the pending issue of termination. As such, there was no remaining issue of termination, which could form the basis for a post-C&;R decision by the WCJ to"grant" a termination and create a corresponding Supersedeas Fund Reimbursement Right.

Conversely in Bethlehem Structural Products v. WCAB (Vernon) 789 A.2d 767 (Pa. Cmwlth. 2001) the employer filed a Review Petition, challenging the accuracy of the AWW calculation. While a WCAB appeal was pending on this AWW issue, the parties entered into a Compromise and Release Settlement. Those settlement documents stated the employer  "will not withdraw its appeal to the Board on the issue of the correct calculation of the [claimant's AWW], so that its right to supersedeas fund reimbursement for previously paid benefits will be unimpaired". 789 A.2d at 770.

The Commonwealth Court held that employer in Stroehmann's effectively preserved its right to Supersedeas Fund Reimbursement.

In the instant case, the Compromise and Release Agreement stated the settlement was for all  future wage benefits, not past benefits.The WCAB appeal, pending at the time of C&R settlement, involved the correct calculation of past and future wage loss benefits. The C&R Agreement settled all issues regarding future benefits. The Employer Supersedeas Fund Reimbursement request was for past benefit payments, up to the date of the C&R approval.

The issue of whether the Employer overpaid past wage loss benefits due, to the incorrect AWW calculation was not explicitly settled by the C&R Agreement. As the C&R Agreement did not settle the exact issue raised by Employer in its WCAB appeal, this issue was not rendered mooted by the C&R Agreement language or by the WCJ C&R approval.

1. This decision highlights the importance of proper drafting of settlement agreements.

My preference is to specifically identify the issues resolved... but more importantly to specifically identify the issues which are not resolved by a Compromise and Release Settlement Agreement. 

2. Over the nearly 18 years of drafting Compromise and Release Agreements, we have approached each case as a unique agreement. The defense counsel must identify the issues pending, the issues resolved and any remaining issues.

 It is incumbent upon legal counsel to discuss all of these issues with the client. At times, the client has directly negotiated a settlement"figure" with claimant counsel and leaves it up to legal counsel to "sort out" the details. This practice can lead to disagreements regarding specific settlement terms. 

3. It may seem pedantic, but a best practice is to review each known issue and discuss potential issues that may exist or may arise subsequently, such as subrogation interests.

4. Another best practice is to avoid "last minute" settlements, which may cause the client and  legal counsel, in their haste, to overlook details and potential issues. The vast majority of Judges (if not all Judges) will allow a continuance, to allow for review and resolution of pending issues.

Friday, April 4, 2014

PA Supreme Court reverses $1.2 million Jury Verdict based on Statutory Employer Immunity

In construction related injury cases, the concept of the "Statutory Employer" status of the general contractor can be decisive of liability issues.

The General Rule (no pun intended) is that a General Contractor has secondary liability for worker compensation benefit payments to the injured employee of it's subcontractors. If the subcontractor does not have work comp insurance coverage for its employees, then the General Contractor is responsible for benefit payments. The Legislative purpose for imposing this responsibility upon General Contractors was remedial, they wanted to ensure payment of work comp benefits to injured workers, in the event of a default by the subcontractor, who should have been primarily responsible. See: Section 302(b), 77 P.S. 462.
Qualp v. James Stewart Co,. 109 A. 780 (Pa. 1920) [cited by Patton at slip opinion page 2].

The Statutory Employer enjoys the same immunity (as a traditional employer would) from liability in tort, related to the work injury. The Workers' Compensation Act is the exclusive remedy of the injured worker against one's employer. This immunity will apply, even where the Statutory Employer has not been required to make any actual benefit payments.
 See: Fonner v. Shandon, Inc., 724 A.2d 903 (Pa. 1999). 

What are the limits, if any, of this Statutory Employer Doctrine?

Patton v. Worthington Associates Inc., No. 32 MAP 2013, a recent opinion of the Supreme Court of Pennsylvania authored by Mr. Justice Saylor on March 26, 2014 addressed this question.

Factual and Procedural Background
The facts in Patton are rather straightforward.
Patton fell and injured his back while working at a construction site in October 26, 2001.
Nearly 12 1/2 years later, we have a final decision in this litigation.

Patton was the sole employee (and principal) of Patton Construction Inc.
Patton Construction Inc. entered into a standard subcontract agreement with Worthington Associates, Inc., to perform carpentry work at a Levittown Church. Worthington was the general contractor at this job.

Patton filed civil action against Worthington asserting that they failed to maintain safe conditions at this jobsite. At trial, Worthington moved for Summary Judgment on the basis that is was Patton's statutory employer and was immune from civil suit. This Motion was denied, as were subsequent motions.

Trial court identified the issue in controversy and determined that a general contractor is not a statutory employer, relative to employees of an independent contractor.

Question: was Patton an independent contractor or employee with respect to Worthington?
This  interrogatory was submitted to the jury. The jury returned a verdict in the amount of $1.5 million. (also finding Patton 20% comparatively negligent).

Superior Court affirmed in a divided opinion.

Supreme Court Reversal of Superior Court affirmation of Trial Court. 

The Supreme Court opinion "paused to observe" that:
  •  Worthington contracted with Patton Construction Inc, not Patton in his personal capacity.
  • Patton, himself had no contract with Worthington and accordingly he could not be considered an independent contractor, or even a contractor for purposes of Sections 203 or 302(b) of the Workers' Compensation Act.
  • Patton was not a common law employee of Worthington, he was an employee of Patton Construction Inc.

The Supreme Court noted that the Trial Court set up an errant dichotomy for the jurors, by requesting their response to the "independent contractor versus employee" question.

In terms of Patton's relationship with Worthington, as an individual, Patton was not in either category!

As correctly stated by Worthington in its appeal, the only accurate answer is that: 
Patton is an employee of Patton Construction Inc.
Patton Construction Inc. stands as a subcontractor in its relationship to Worthington. 

The Supreme Court opinion reviewed the historical interpretation of the Statutory Employer concept.
Conventional subcontractors are dependent contractors, not independent contractors, for purposes of the Workers' Compensation Act, Sections 203 and 302(b). 

Their employees are not contractors at all, nor, at least in the absence of special circumstances, are they employees of the general contractor. Patton, slip opinion page 9.
Patton's status as the principle owner of Patton Construction Inc. does not alter the analysis or outcome. 

The jury verdict was reversed as Worthington has statutory employer status under these facts.
Worthington has immunity from the civil tort action of Patton.

Practice Pointers:

1. This case discusses legal concepts, which are difficult for the non-workers compensation professionals. The Statutory Employer concept and liability issues must be reviewed by legal counsel, experienced in workers' compensation matters. The issue of  immunity for civil litigation is significant. In this case it was decisive.

2. When addressing a construction related injury, it is prudent to interview the parties and review the contracts to develop a correct outline and analysis of the relationship of each party to the other. 

3. Cudos to Worthington for persevering and confirming the correct method of analysis of this Statutory Employer issue. Mr Justice Saylor has authored an opinion that provides clear legal reasoning for our future assessment of this issue.