"Yellow Freight" is the term use to describe the effect of a late answer by an Employer to a claim petition filing. It is a reference to a Commonwealth Court decision reported at Yellow Freight System, Inc. v. WCAB (Madara) 423 A.2d 1125 (Pa. Cmwlth. 1981).
The general rule is that when an Employer fails to file an answer within twenty (20) days after any claim petition has been served, without adequate excuse, every well-pleaded factual allegation in the claim petition is admitted as true and the employer is barred from presenting any affirmative defenses and is barred from challenging the factual allegations in the claim petition. See: Section 416, 77 P.S. 821 and Chik-Fil-A v. WCAB (Mollick) 792 A.2d 678 (Pa. Cmwlth. 2002).
If the employer's answer is found untimely, the employer may challenge only the legal sufficiency of the claimant's claim, elements of the claim that are not well pleaded and facts, such as continuing disability for time periods after the date the answer was due.
Q. What should an Employer, an Insurer and Defense Attorney do when confronted with the "late answer" problem?
A. Carefully examine the facts.
Washington v. WCAB (National Freight Industries, Inc.), No. 1070 C.D. 2014, is a reported decision of a panel of the Commonwealth Court of Pennsylvania, authored by Senior Judge Colins on March 4, 2015, which addressed the "Yellow Freight" issue and the successful rebuttal by Employer.
Procedural and Factual Background
The underlying facts of this claim petition are somewhat out of the ordinary.
Employee was a truck driver. In February 2009, he was involved in a non-work-related motor vehicle accident with his personal vehicle.He missed 7 days of work and returnee to full duty work. After his accident, he experienced pain in his shoulders, arms and hands, which worsened over time.
On February 13, 2011 (2 years later!) Employee stopped working due to his pain.
In the civil action arising from the non-work motor vehicle accident, Employee alleged he was no longer able to work, as a result of injuries from that accident.
On October 31, 2011, Employee filed a work comp claim petition, seeking total disability as of February 14, 2011 and payment of medical expenses.The alleged work injury was an aggravation of his neck, shoulders, arms, hands and bilateral carpal tunnel syndrome as a result of the repetitive motion, lifting and driving in his work duties with Employer.
The Claim petition listed Employer's address as "72 West Park Avenue, Vineland, NJ".
On November 3, 2011, the Bureau mailed the claim petition (and notice of assignment) to Employer at that address.
Employer's correct address is 71 West Park Avenue, Vineland NJ!
Employer answer was filed 43 days after the Bureau claim petition assignment.
- There was no evidence in the record as to when or how the Employer received the claim petition of notice of its filing.
At the WCJ hearing on September 20, 2012, Employee testified and trial deposition testimony of Employee and 2 medical witnesses was received.
At the close of this hearing the issue arose as to the Employer's ability to dispute the factual allegations of the claim, under Yellow Freight.
- No motion by Employee to bar Employer appears in the record.
- Employee asserted (on appeal) he raised this issue at an earlier hearing and this issue was not resolved.
- The Bureau mailed the claim petition to Employer on November 3, 2011 and it was not returned by the postal authorities.
- the parties stipulated that the address to which the claim petition was mailed was not Employer's address and was off by one number.
- Employee did not introduce any evidence as to what is located at 72 West Park Avenue.
- the WCJ gave the parties 60 days to brief the Yellow Freight issue ... but no briefs from either party appears in the record, nor was there any further evidence.
Claim Petition Denied.
Employee and Employee medical witness were found credible as to the symptoms and injuries as a result of the non-work-related motor vehicle accident.
They were found not credible that Employee's work duties contributed to his injuries.
Employer's medical witness was found credible that Employee's condition was caused solely by he non-work accident.
The WCJ did not discuss or rule upon Employee's contention that Employer's answer was filed late.
Employer's late answer was the sole basis for Employee's appeal.
WCAB affirmed WCJ.
Employee failed to show Employer's answer was late as it was not mailed to the correct address.
Remand request to submit additional evidence regarding the address was denied.
Commonwealth Court Appeal and Decision
Court rejected Employee argument that WCJ erred in permitting Employer to contest the injury was work-related, as Employer answer was filed late.
- Contrary to the Employee's contentions, Employee did not show that the Employer's answer was untimely!
- the 20 day period to file an answer begins to run when the Bureau serves the claim petition on the Employer.
- this records showed that the Bureau mailed the claim petition on November 3, 2011, BUT it was undisputed that the address used by the Bureau was not Employer's correct address.
The Court discussed the common law origin of the "mail box rule".
This rule indicates, proof of mailing raises a presumption that the mailed item was received only if it is shown that the item was mailed to the party's correct address.
This rule is included in the PA Workers' Compensation Act. Section 406, 77 P.S. 717 states:
"any notice or copy shall be deemed served on the date when mailed, properly stamped and addresses, and shall be presumed to have reached the party to be served; but any party may show by competent evidence that any notice or copy was not received, or that there was an unusual or unreasonable delay in its transmission through the mails".
Under the Workers' Compensation Act, ONLY a mailing to a party's CORRECT ADDRESS constitutes service on the date of mailing.
HERE, The claim petition was mailed to an incorrect address.
Section 416 does not bar Employer from contesting the claim petition absent other proof that the claim petition was received more than 20 days before the answer was filed.
Employee did not prove the Employer answer was filed more than 20 days after Employer actually received the claim petition. Remember, Employee did not submit any evidence on this point.
The WCJ correctly ruled on this issue and properly decided the claim petition, based on the merits of the evidence submitted.
Employee argued the address error should have been disregarded, as the 72 Park Avenue address is a property owned by Vineland Construction, a company that is allegedly an affiliate of this Employer.
ALSO Employee argued, a different letter sent to Employer at the 72 Park Avenue address - after the Employer filed its answer - WAS received by this Employer.
The Court rejected these two arguments.
- These arguments were raised for the first time on appeal to the WCAB.
- The WCAB has broad discretion to grant or deny a rehearing to permit introduction of previously available evidence.
- The WCAB is not required to permit a party to produce additional evidence to attempt to cure a failure to satisfy his burden of proof before the WCJ.
- Service of a document on an address owned by an affiliate of a corporation does not constitute service upon the corporation.
- The mere fact that one piece of mail sent to an erroneous address was successfully received does not support the inference that all mail sent to the erroneous address was promptly received by that party.
1. When confronted with a "late answer" issue, carefully review the documents, the dates and the correctness of information reflected on the Claim Petition and on the Bureau Notice of Assignment.
There was a recurring issue in the early days (months) of the WCAIS program regarding accuracy.
Addresses of many attorneys, employers and insurers were incorrectly stated.
Check this basic information.
2. In this case there was an issue of whether employee raised and preserved the late answer issue with the WCJ. The Court noted the WCJ directed the parties to submit briefs on this issue.
When a late answer issue is raised, advise the WCJ and Employee counsel of the available Employer evidence and testimony to be submitted on this point.
Many WCJ's will not allow the presentation of any evidence to controvert the allegations of the claim petition, until the Employer clears this threshold.
3. If a late answer has occurred, remember you may still controvert issues in the time frame after the date that the Employer answer was due.
4. Examine the Claim Petition.
Is each paragraph of the Claim petition- well pleaded?
Did Employee counsel complete each paragraph?
Pay particular attention to Paragraph 14.
Does the section for total disability include dates?
Does the section reflect any dates for partial disability?
Is payment of medical expenses demanded?
Is there a request for counsel fees, to be paid by employer?