Post-Protz Commonwealth Court decision reinstates total disability status as of the Petition filing date, not as of the unconstitutional IRE date, rejecting the "void ab initio" argument.

Commonwealth Court Reinstates Worker's Total Disability benefit status as of the Petition filing date, not as of the date of the prior unconstitutional IRE, thus rejecting the "void ab initio" argument. 

Ellison v. WCAB (SEPTA), No. 1080 C.D. 2020 MEMORANDUM OPINION;   August 20, 2021

Another appellate decision addresses the date of reinstatement of total disability status following the PA Supreme Court decision in Protz. The Commonwealth Court has consistently held that the date of reinstatement is the date of the filing of the Worker's Petition to Reinstate. Arguments for Reinstatement as of the date of the unconstitutional IRE have been rejected. In Ellison, the Court rejects an argument based upon the "void ab initio" doctrine.

Factual & Procedural Background 

Claimant appealed a WCAB order which affirmed a WCJ decision to grant Claimant’s petition to reinstate disability benefits, in part, and reinstated benefits as of July 18, 2017, which is the filing date of Claimant's petition. 

Claimant sustained a work related injury on February 11, 1998. Employer issued a NTCP which accepted a work-related injury of a “lumbar strain/sprain.” A 2007 WCJ decision granted Claimant’s Petition to Review the injury description to include two lumbar surgeries.

A 2009 IRE resulted in a whole person impairment of 29%.  Employer issued a Notice of Change of Workers’ Compensation Disability Status and Claimant benefits status was changed effective September 24, 2009,  Claimant did not appeal the change of his disability status.

In 2017 Claimant filed a Petition to Reinstate Compensation Benefits. The 500-week period of partial disability benefits had expired on July 11, 2015, before Claimant filed the Reinstatement Petition.

Following an initial WCJ decision denying the Reinstatement Petition, and a remand by the Board, following further hearings, the WCJ issued a new decision granting the Reinstatement Petition in part, and directing Employer “to reinstate Claimant’s workers’ compensation benefits to total disability status as of July 18, 2017.

Claimant appealed the WCJ’s decision to the Board, arguing that under Protz II, the IRE provisions of former Section 306 (a.2) of the Act were determined to be void ab initio, so his disability benefits should have been reinstated as of September 24, 2009, the date of his unconstitutional IRE and not as of July 18, 2017, the date that he filed his Reinstatement Petition. The Board rejected this claim citing Whitfield.

In his Commonwealth Court appeal, Claimant argued the Board erred in affirming the WCJ’s decision as the Board erroneously applied the Whitfield decision - which Claimant argued was effectively overruled by Commonwealth v. McIntyre (Pa. 2020)

In McIntyre, the PA Supreme Court, applied the void ab initio doctrine in a criminal proceeding, which challenged a purportedly invalid judgment of sentence. Claimant argued, his disability benefits should have been reinstated as of the date of the unconstitutional IRE, i.e., September 24, 2009, and not the date of his filing of the Reinstatement Petition, July 18, 2017.

The Commonwealth Court rejected this argument, noting that in Weidenhammer, they considered the application of the void ab initio doctrine in Glen-Gery (a Pa. 2006 case), and applied it to the reinstatement of disability benefits under Protz II, explaining, in relevant part:

The right to disability benefits for a work injury was created by the Act. The Act has imposed limits and conditions on an injured workers right to benefits. A WCJ may reinstate, suspend or terminate compensation "at any time".

Section 413 (a) acts as a statute of repose. A claimant whose benefits were suspended may seek reinstatement within three (3) years of the last benefit payment or the 500 weeks allowed for partial disability, which ever is later. 

In Weidenhammer the claimant’s statutory right to total disability compensation had been extinguished at the point in time that she filed her reinstatement petition. To allow claimant to resuscitate her right to disability compensation would violate Section 413(a) of the Act, 77 P.S. §772. Claimant may be correct that Protz II rendered former Section 306(a.2) of the Act, formerly 77 P.S. §511.2(1), void ab initio, but it does not follow that the Pennsylvania Supreme Court intended its ruling in Protz II to be given a fully retroactive effect or to nullify the statute of repose in Section 413(a) of the Act.

Importantly, this Court also noted the distinction between applying the void ab initio doctrine in a criminal matter, as in McIntyre, and applying it in proceedings under the Act, observing - "full retroactive effect is generally reserved for criminal cases where life or liberty is at stake. Citing: Weidenhammer, 232 A.3d at 995 n.12.

Based upon it's analysis, the Commonwealth Court stated -  it is clear that Claimant’s assertion that the Supreme Court’s opinion in McIntyre effectively overruled this Court’s holding in Whitfield is patently without merit. 

To the contrary, like the claimant in Weidenhammer, Claimant’s statutory right to total disability compensation had been extinguished at the point in time that he filed his reinstatement petition. To allow Claimant to resuscitate his right to disability compensation would violate Section 413(a) of the Act.

Recommendations:

We anticipate continued appeals of IRE reinstatement petition decisions, until the PA Supreme Court rules on these issues and arguments.

IMO, it is noteworthy that the PA Supreme Court denied a claimant's application for allowance of appeal in the Pierson v. WCAB (Consol Coal Co.) 59 WAL 2021 (08/17/2021). (04/26/2021 order for publication of CW CT decision).

In Pierson, Claimant raised several constitutional issues for review: 

- Act 111 should not apply to injury dates before its enactment; 

- credit should not be given for pre-Act 111 TTD weeks for the 104 week threshold; 

- Act 111 language does not have clear language to have a retroactive effect; 

- as prior IRE procedures were unconstitutional, they should not be applied to calculation of compensation; 

- Act 111 interferes with vested benefit rights.

***

We recommend continued use of the IRE remedy as an effective means to limit the duration of future wage loss benefit liability.

PA Work Comp benefits paid pursuant to A Notice of Temporary Compensation Payable may be changed via a timely Medical Only NCP document

 

Changing the benefit status of a PA Work Comp injured worker, who is compensated via a Notice of Temporary Compensation Payable (NTCP) LIBC-501 document is now less cumbersome.

An Employer may file a “Medical Only” Notice of Compensation Payable (MO-NCP) to change the benefit status of the injured worker, when the MO- NCP  is filed within the ninety-day temporary compensation payable period. In this circumstance, the Employer is not required to also file a Notice Stopping Temporary Compensation Payable (NSTCP) and a Notice of Compensation Denial (NOCP). This case was successfully argued by Chartwell Law founding partner Andrew Greenberg.

See: Raymour & Flanigan v. WCAB (Obeid);  No. 371 C.D. 2020 Filed: August 16, 2021.

The Commonwealth Court reversed a decision of the PA Workers’ Compensation Appeal Board, noting this was an issue of first impression. The Board decision reinstated ongoing indemnity wage loss benefits payable to Claimant, back to the date the Employer stopped those indemnity payments  pursuant to the filing of the MO-NCP. The Board concluded the Employer violated the Act as the NTCP “converted” to a NCP after 90 days - by operation of law – in the absence of the filing of the Notice Stopping Benefits and Notice of Compensation Denial.

Factual & Procedural Background

This litigation commenced when the injured worked file a Petition for Penalties and requested reinstatement of indemnity wage loss benefits. Initially, after the report of a work-related injury,  the Employer commenced work comp benefits to the injured worker via NTCP an injury described as inflammation of her coccyx/sacrum . Sixteen days later the Employer issued a MO-NCP.

The WCJ found that under Section 121.17(d) of the workers’ compensation regulations, 34 Pa. Code § 121.17(d), there was no requirement to file a Notice Stopping Temporary Compensation Payable if, during the 90 day temporary compensation payable period, the employer decided to issue a notice of compensation payable The WCJ  concluded that Claimant failed to prove that Employer violated the Act and dismissed the penalty petition.

The Appeal Board concluded that under its interpretation of Section 406.1(d)(5)-(6) of the Act and Section 121.17(d) of the regulations, that the Employer had violated the Act and the Board ordered reinstatement of indemnity benefits as of the date as indemnity payments were stopped and further ordered continuing benefits.  Employer appealed this ruling.

The Commonwealth Court reviewed the statutory language at Section 406.1, which addresses the requirements for commencement of work comp benefits via NCP or NTCP. The Court noted that an employer may initiate compensation payments without prejudice and without admitting liability pursuant to a notice of temporary compensation payable.

If an employer decides to stop making payments pursuant to a NTCP the employer must provide notice to the injured worker via, a form prescribed by the Bureau.

If the employer does not file a notice within the ninety-day period during which temporary compensation is paid, then the employer is deemed to have admitted liability and the notice of temporary compensation payable is converted to a notice of compensation payable.

Reasoning & Holding

The Commonwealth Court reviewed Section 121.17(d) of the Bureau’s regulations. This regulation states that if temporary payments are stopped, an employer must do one of the following:

-          file both a notice stopping temporary compensation, Form LIBC-502, and a notice of compensation denial, Form LIBC-496;

or

-          file a notice of compensation payable, Form LIBC-495;

or

-           file an agreement for compensation for disability or permanent injury, Form LIBC-336

In the instant case – the Employer filed a version of the NCP the “Medical Only” version. The NCP form LIBC-495 included a check box – which was checked by the Employer – stating “Check only if compensation for medical treatment (medical only, no loss of wages) will be paid subject to the Act.” The Court concluded -  by filing a NCP, albeit a “Medical Only” the Employer clearly complied with the regulation. The NCP was sufficient notice to the injured worker that their work comp benefit status had changed.

Employer arguments relied upon the prior decisions at City of Philadelphia v. WCAB (Brown) and Waldameer Park v. WCAB (Morrison) for the proposition that the acknowledgement of compensability, accomplished by filing a Medical Only NCP, is sufficient to meet the Employer’s obligations under Section 406.1. The Court agreed.

Practice Pointers & Recommendations

1.      A work-related injury may be recognized via: a Notice of Compensation Payable LIBC-495; A Notice of Temporary Compensation Payable LIBC-501; an Agreement for Compensation for Disability of Permanent Injury LIBC- 336.

The NTCP provides the Employer and Insurer with a period of 90 days for review and possible revocation.

2.      A NTCP may be revised and/or corrected via an Amended NTCP during the 90 day temporary compensation benefit period.

3.      A NCP may be “amended” to expand the description of injury and/or to increase the benefit rate.

4.      Consistent with this Commonwealth Court decision – a NTCP may be followed by a Medical Only NCP, to change the benefit status of an injured worker from indemnity/medical liability to medical only liability.

5.      A NTCP may be followed by a Notice Stopping Temporary Compensation Payable LIBC-502 and a Notice of Compensation Denial LIBC-496 – IF the Employer and Insurer wish to totally deny liability for the alleged work-related injury.

6.      As the Workers’ Compensation Judge may assess attorney fees for an unreasonable contest of the claim – one must be judicious when making the claim acceptance/denial decision.

As always … when you have questions regarding the proper LIBC document to be issued in a specific factual situation … contact your workers compensation attorney to discuss your options. As a matter of strategy, one form may provide more appropriate handling options that you wish to pursue.