Top 10 Pa. Workers' Comp Decisions Impacting the Defense Practice

Saturday, January 13, 2007 | 0

By Daniel V. DiLoretto

2006 has been marked with many developments, and as the year comes to an end, I would like to summarize 10 decisions that, I believe, had an impact on the defense practice. If I left out your favorite case, I apologize.

Supreme Court

The year began with several significant decisions from the Pennsylvania Supreme Court. In Gardner v. WCAB (Genesis Health Ventures) the Supreme Court held that requests for impairment rating evaluations (IREs) filed beyond 60 days after 104 weeks of temporary total disability were untimely within the meaning of section 306(a.2) of the Pennsylvania Workers' Compensation Act, but only to the extent that employers lost the right to an automatic change of disability status.

Accordingly, the court held that while untimely requests preclude an automatic change of disability status, employers and carriers still have the option of requesting IREs and seeking a change disability status within the "traditional administrative process, i.e. the filing of a modification petition."

In Panyko v. WCAB (US Airways), the Supreme Court broadened the scope of compensable injuries by removing the abnormal working condition from stress-related physical injuries, such as heart attacks. The court's holding in Panyko essentially reopens mental/physical injuries to claimants, but only in those situations where there is a "purely physical" injury arising from a work-related mental stimulus.

In Snizaski v. WCAB (Rox Coal Co.), the Supreme Court held that employers failing to pay compensation benefits within 30 days of a judge's decision were not subject to an assessment of penalties if there was a timely appeal and request for supersedeas pending appeal before the board. The court's holding was based upon the administrative regulations of the Workers' Compensation Appeal Board that allow that body 50 days from the supersedeas request to decide the motion, and 60 days in the case of appeals from the board to Commonwealth Court.

Accordingly, because of the inherent tension between the penalty provisions of the PAWCA and board's supersedeas regulations, the court held that an employer's obligation to pay benefits is triggered either at the expiration of the time limitations allowed within the regulations or upon an order denying supersedeas.

In Romaine v. WCAB (Bryn Mawr Chateau Nursing Home), the Supreme Court held that where a claimant receives his/her last payment by check, the period for determining the three-year statute of limitations in a reinstatement petition under section 413 of the PAWCA is the date the check was issued -- provided the check is tendered and honored in due course. The burden for establishing the date of last payment rests with the claimant.

I thought this decision was interesting because of the discussion related to negotiable instruments in Pennsylvania from 1798 to the present. From a practitioner's point of view, however, the Supreme Court's holding not only addresses the last date of payment, but the relative burden of proofs by both parties.

Commonwealth Court

The year was also a busy one for the Commonwealth Court of Pennsylvania. In Riggle v. WCAB (Precision Marshall Steel Co.), the Commonwealth Court held that an employer's payment of medical benefits arising from a work-related injury did not toll the statute of limitations under section 413 of the PAWCA where a claimant files a reinstatement petition more than three years from the last payment of wage loss benefits.

Relying upon the state Supreme Court's decision in Westinghouse Electric Corp./CBS v. WCAB (Korach), the court held that where the employer acknowledged liability of a compensable injury, medical benefits and wage loss benefits were to be considered separately.

Accordingly, the court held that the "date of last payment" under section413 meant payment of wage loss benefits as medical expenses did not constitute "compensation" as the term is used under that section.

In Fratta v. WCAB (Austin Truck Rental), the Commonwealth Court held that the death of an injured worker prior to the approval of a compromise and release agreement by a workers' compensation judge relieved the employer from any obligation contained within the agreement. The holding restated the principle that an employer's obligation to pay benefits ceases upon the death of a claimant due to reasons unrelated to the work injury.

This decision, however, did not address whether there was a continuing obligation by the employer to honor a compromise and release agreement where the benefits involves seeking specific loss benefits.

Because permanent partial disability benefits survive the claimant, it is conceivable that an employer may continue to be bound where the settlement is limited solely to such benefits. In these situations, it would be advisable for the defense practitioner to treat the settlement as a probated asset in the claimant's estate and assure that the person representing the estate has the proper documentation to enter into the agreement, such as letters of administration or testamentary.

In Mark v. WCAB (McCurdy), the Commonwealth Court settled the question of whether an employer is entitled to supersedeas fund reimbursement for retroactive payments of benefits made following a denial of a supersedeas request pending appeal.

Relying on a prior decision in Consolidated Freightways v. WCAB, the court held that the General Assembly never intended to foreclose reimbursement for benefits that have been wrongfully reinstated.

Accordingly, the court held that the retroactive payment of benefits arising from a denial of supersedeas under section 430 of the act, which were later determined not to be in fact payable allowed recovery of those payments from the Supersedeas Fund.

The Mark decision put to rest an ongoing battle between employers and the bureau over the eligibility of Supersedeas Fund recoveries arising from appeals to the board or Commonwealth Court.

In Pries v. WCAB (Verizon Pennsylvania), the Commonwealth Court held that injured workers collecting a pension had a continuing obligation to seek employment opportunities if they were to receive wage loss benefits.

In rendering this decision the court reiterated that the burden was upon the claimant to show through his/her efforts that they did not voluntarily remove themselves from the labor force. The decision also reaffirmed the court's holding in County of Allegheny (DPW) v. WCAB (Weis), which states that the claimant must not only establish that his work injury forced him out of his pre-injury job, but also the "entire labor market."

In Schachter v. WCAB (SPS Technologies), the Commonwealth Court held that impairment rating evaluations did not preclude employers from seeking a termination of benefits based upon medical evidence of full recovery. The court rejected the claimant's argument that impairment rating evaluations established permanent disabilities under the PAWCA.

Relying upon Hebden v. WCAB (Bethenergy Mines Inc.), the court held that the employer was free to show that an employee's disability is changeable and reversible at any time. Accordingly, absent of evidence that the claimant's impairment is irreversible, an employer cannot be precluded from filing a termination petition based upon full recovery simply because there was a prior whole body impairment under the AMA guidelines.

Finally, in Pennsylvania State University v. WCAB (Hensel), the court held that an employer meets its burden of proof toward an offset of pension payments under a defined benefit plan where expert testimony from an actuary is presented establishing the employer's contributions into the plan. Unlike other pension plans, it is not necessary for an employer participating in a defined benefit plan to establish actual contributions on behalf of individual members. Instead, it is only sufficient for employers to show contributions based upon the rate of return on investments within the plan.

Accordingly, where the rate of return on the plan's investment portfolio is high the lower the employer's contribution into the fund and the offset against compensation benefits. Conversely, where the rate of return on the investment portfolio, the greater the contribution by the employer to assure that the plan is adequately funded. Under such circumstances, the employer's offset would be proportionally higher.

Daniel V. Diloretto practices in the workers' compensation law practice area with Harvey Pennington in Philadelphia. He has developed extensive experience in the defense of workers' compensation litigation, as well as related employment issues such as the Americans with Disabilities Act, and the Family and Medical Leave Act. He can be contacted at ddiloretto@harvpenn.com .

This column first appeared on the Web site, http://www.law.com/.

----------------------------------------

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.