Opinion
No. 473 C.D. 2012
07-01-2013
Department of Labor and Industry, Bureau of Workers' Compensation, Petitioner v. Workers' Compensation Appeal Board (Dollar General Corporation, LLC), Respondent
BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
The Department of Labor & Industry, Bureau of Workers' Compensation (Bureau) petitions for review of the February 21, 2012 order of the Workers' Compensation Appeal Board (Board), which affirmed the decision of a workers' compensation judge (WCJ) granting the Application for Supersedeas Fund Reimbursement filed by Dollar General Corporation (Employer). We affirm.
By decision and order dated November 22, 2004, WCJ Charles Clark granted the claim petition filed by Lynn Wetzler (Claimant) and awarded benefits for a closed period from July 23, 2003 to October 11, 2003. Both parties appealed. Claimant argued that the WCJ erred in terminating benefits. Employer requested supersedeas and argued that the WCJ erred in awarding any compensation. The Board affirmed the award of benefits for the closed period of July 23, 2003, to October 11, 2003, but remanded the matter for the WCJ to clarify whether benefits were suspended or terminated after October 11, 2003.
Although the WCJ's order terminated benefits, his decision was internally inconsistent, stating in Finding of Fact No. 3 that benefits were suspended and stating in Conclusion of Law No. 3 that benefits were terminated.
In a remand decision and order dated October 31, 2006, WCJ Clark awarded benefits ongoing from October 12, 2003, the date he had previously ordered benefits terminated.
Employer appealed, arguing that WCJ Clark erred in granting benefits after October 11, 2003, because the Board's order limited the issue on remand to whether Claimant's benefits were suspended or terminated as of that date. Employer also requested supersedeas, which the Board denied by order dated December 19, 2006. On March 2, 2007, Claimant filed a penalty petition alleging that Employer had not paid benefits pursuant to WCJ Clark's October 2006 order. On April 4, 2007, Employer filed a suspension petition alleging that Claimant was discharged from her position with Employer in December 2004 and had secured full duty work for a different employer without restrictions or wage loss. On April 11, 2007, while the penalty and suspension petitions were pending, Claimant and Employer entered into a compromise and release agreement (C&R), which was approved by WCJ Francis Williamson on April 12, 2007. The C&R provided that Employer would pay outstanding medical bills for treatment rendered for Claimant's work injury through April 11, 2007; a lump sum of $39,474.63 for past due benefits, and a lump sum of $20,525.37 for future benefits. The parties stipulated that Claimant would withdraw her penalty petition and Employer would withdraw its suspension petition. In addition, the parties stipulated that the C&R would not affect Employer's pending appeal of WCJ Clark's 2006 order or Employer's right to reimbursement from the Supersedeas Fund. Employer made the payment outlined in the C&R to Claimant on or about May 7, 2007. (Bureau's brief at 6.)
Thereafter, on January 29, 2008, the Board reversed WCJ Clark's October 2006 order, concluding that the record did not support an award of ongoing benefits after October 11, 2003. The Board again remanded the matter for a determination as to whether Claimant's benefits were suspended or terminated as of that date. On January 10, 2009, WCJ Clark issued a decision and order both suspending and terminating Claimant's benefits as of October 11, 2003. Neither party appealed.
On November 16, 2009, Employer filed an application seeking reimbursement from the Supersedeas Fund of the $39,474.63 in benefits it paid to Claimant for the period from October 12, 2003 to April 11, 2007, the date of the C&R. WCJ Irving L. Bloom granted Employer's application. The Bureau appealed to the Board, which affirmed.
The Board first observed that where an employer has settled some or all of a claimant's benefits by way of an agreement, the availability of supersedeas reimbursement generally turns on: 1) whether the funds to be reimbursed were paid for past due or future benefits; 2) whether the employer paid them pursuant to the agreement; and 3) whether the agreement reserves the employer's right to seek future supersedeas reimbursement or to continue contesting liability for the benefits for which it seeks reimbursement. Department of Labor and Industry, Bureau of Workers' Compensation v. Workers' Compensation Appeal Board (Ethan-Allen Eldridge Division), 972 A.2d 1268 (Pa. Cmwlth. 2009). The Board also observed that, where, as here, the agreement specifically reserves the employer's right to continue litigation of a pending petition or appeal in order to establish that it is not liable for some past benefits, the agreement is not final and binding with respect to the benefits that remain in dispute. Id.; Coyne Textile v. Workers' Compensation Appeal Board (Voorhis), 840 A.2d 372 (Pa. Cmwlth. 2003).
The Board determined that the language of the C&R supported WCJ Bloom's finding that the payment of the lump sum for past due benefits only satisfied Employer's obligation to pay the past due benefits while the matter continued on appeal with the Board. The Board next concluded that, while the pending penalty petition may have contributed to Employer's decision to enter into the C&R, neither that pending petition nor the C&R created any legal obligation for Employer to pay the past due benefits at issue. Accordingly, the Board rejected the Bureau's argument that the payment for which Employer was seeking reimbursement was not made "as a result of" the Board's denial of supersedeas.
The Board also acknowledged our holdings in Henkels & McCoy, Inc. v. Workers' Compensation Appeal Board (Barner), 972 A.2d 82 (Pa. Cmwlth. 2009), and Robb, Leonard, and Mulvihill v. Workers' Compensation Appeal Board (Hooper), 746 A.2d 1175 (Pa. Cmwlth. 2000), disallowing reimbursement to employers who wrongfully ceased paying benefits or could have requested supersedeas at an earlier time. The Board distinguished Barner and Hooper on the basis that the employers in both of those cases were found to have violated the Workers' Compensation Act (Act), whereas here, the WCJ made no such finding. The Board further noted that Claimant withdrew her penalty petition, which would have raised that issue before WCJ Bloom.
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2708.
The Board stated that it shared the Bureau's concern regarding the prompt payment of benefits to claimants; the Board also noted that the Act provides for penalties should an employer fail to promptly pay, and that Claimant chose not to pursue that course of action as a condition of the C&R that ultimately resulted in the receipt of benefits. The Board concluded that "under the unique facts of the present case," Employer's lump sum payment of retroactive benefits later determined to be not payable is eligible for supersedeas reimbursement. (Board's decision at 13.)
On appeal to this Court, the Bureau argues that the Board erred in holding that Employer is entitled to reimbursement from the Supersedeas Fund. Under section 443(a) of the Act, an employer who has been denied supersedeas may be reimbursed from the Supersedeas Fund if it is later determined that the compensation paid was not, in fact, payable. Specifically, this section provides as follows:
Our scope of review is limited to determining whether constitutional rights were violated, an error of law was committed, a practice or procedure of the Board was not followed or whether the findings of fact are not supported by substantial evidence in the record. Henkels & McCoy, Inc. v. Workers' Compensation Appeal Board (Barner), 972 A.2d 82 (Pa. Cmwlth. 2009).
Added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. §999(a).
(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.77 P.S. §999(a) (emphasis added). Supersedeas may be had for all payments actually made after a supersedeas request is denied, including payments of benefits awarded retroactively for earlier periods of disability. Mark v. Workers' Compensation Appeal Board (McCurdy), 894 A.2d 229 (Pa. Cmwlth. 2006).
Section 413 of the Act, 77 P.S. §772, provides that a workers' compensation judge may, at any time, modify, reinstate, suspend, or terminate a notice of compensation payable, agreement, or award, upon a petition filed by either party, upon proof that the disability of the injured employee has increased, decreased, recurred, or temporarily or finally ceased.
Relying on Barner, the Bureau argues that Employer is not entitled to reimbursement in this case because Employer's lump sum payment of compensation was not made as a result of the order denying supersedeas. The Bureau contends that the passage of time (from December 19, 2006, the date supersedeas was denied, to May 7, 2007, the date on which payment was made pursuant to the April 11, 2007 C&R) and the occurrence of intervening events (the filing of Claimant's penalty petition and the execution and approval of the C&R) have so attenuated the relationship between the denial of supersedeas and Employer's payment of compensation that the payment cannot be said to be the "result of" the denial of supersedes as required by section 443(a) of the Act.
In Barner, the employer was under the mistaken belief that the claimant had signed a supplemental agreement and suspended the claimant's benefits as of September 11, 2001. On March 8, 2005, the claimant filed a penalty petition, and the employer voluntarily resumed weekly benefits on April 5, 2005. The employer subsequently filed a suspension petition and a supersedeas request. Supersedeas was denied on July 15, 2005, and, on August 23, 2005, the employer made a lump sum payment of benefits due for the period from September 13, 2001 through April 12, 2005, the date benefits were reinstated.
On September 20, 2005, a WCJ granted the penalty petition and imposed a 50% penalty as well as attorney's fees. The Board remanded the penalty petition for the WCJ to amend it to a penalty for compromise and release. The parties entered into a C&R agreement for a lump-sum payment to cover all future benefits; a WCJ approved the C&R finding that it disposed of all issues related to the penalty petition. Ultimately, by order dated August 18, 2006, the employer's suspension petition was granted effective September 11, 2001, after it was determined the claimant had returned to work at wages equal to or greater than his pre-injury wage on September 11, 2001, and was discharged two days later for failing a drug test.
The employer sought reimbursement from the Supersedeas Fund of $95,453.64 in disability benefits paid from the date supersedeas was requested on June 30, 2005, to the grant of the suspension petition on August 18, 2006. This sum included retroactive payments made on August 23, 2005, to cover the period of benefits due from September 13, 2001, through April 12, 2005. The Bureau offered reimbursement of $26,248.59, which included benefits paid from the date supersedeas was requested until suspension was granted but excluded the retroactive payments. The matter was brought before WCJ Bloom, who found that the employer had stopped paying benefits to the claimant without filing a supplemental agreement or a petition for suspension/termination of benefits and did not resume benefits until ordered to do so. Relying on Hooper, WCJ Bloom held in Barner that the retroactive payment made after the employer was found to be in violation of the Act was not reimbursable from the Supersedeas Fund. The Board affirmed.
On further appeal, we specifically noted that the employer "halted benefits without an agreement or order in place in direct violation of the Act" and that "[t]he lump-sum payment therefore was not made in response to a denial of supersedeas but rather was made as a result of . . . wrongful withholding of benefits in violation of the Act." Barner, 972 A.2d at 86. We held in Barner that the employer was not entitled to reimbursement for the payments at issue because it had halted the claimant's benefits in violation of the Act.
The Bureau argues that our holding in Barner is applicable here. The Bureau asserts that if payment had been made because supersedeas was denied, the record would reflect a payment by Employer within 30 days after the December 16, 2006 decision. Instead, the Bureau contends, Employer made the payment in order to avoid additional costs from a penalty award. In making this argument, the Bureau also cites cases involving penalty petitions and reflecting the principle that an employer's delay in making payments is a violation of the Act that may result in the imposition of penalties. See, e.g., Mercer Lime & Stone Co. v. Workers' Compensation Appeal Board (McGallis), 923 A.2d 1251, 1256 (Pa. Cmwlth. 2007) (holding that where "the delay in payment was not due to the pursuit of an appeal and request for supersedeas, or for any other justifiable cause," the employer's refusal to make payment was in violation of the Act and the award of penalties was proper); Thomas v. Workers' Compensation Appeal Board (Delaware County), 746 A.2d 1202, 1206 (Pa. Cmwlth. 2000) ("Employer's numerous violations of the Act, with no arguably valid rationale, lead the Court to conclude that Employer's contest of the penalty petition was unreasonable."); Hooper, 746 A.2d 1175 (Pa. Cmwlth. 2000) (holding that an employer's obligation to pay benefits continues during the period in which a supersedeas is not in effect).
Employer's May 7, 2007 payment was within 30 days of the execution and approval of the C&R. --------
In this case, however, the question of whether the evidence supports an award of penalties has not been decided. As previously observed, Claimant's execution of the C&R and her withdrawal of the penalty petition pursuant to the C&R precluded a determination on that issue, and thus there was no prior finding of a violation of the Act to be considered by WCJ Bloom in deciding Employer's supersedeas request. Accordingly, the cases upon which the Bureau relies are not dispositive here. Moreover, we are not persuaded by the Bureau's argument that, because Employer's delay in payment could have been found to be a violation of the Act, and could have resulted in an award of penalties, the denial of supersedeas was of no moment. Finally, we reject the Bureau's additional assertion that the passage of time alone is sufficient to establish that Employer's payment was not made "as a result" of the Board's denial of supersedeas as an impermissible request to reweigh the evidence.
Our review of the record confirms that Employer requested and was denied supersedeas when it appealed what the Board later described as the WCJ's "errant order granting the benefits in question" and that Employer reserved its rights to pursue the pending appeal under the C&R when it made the lump sum payment of benefits as directed by the WCJ's 2006 order. We discern no error or abuse of discretion in the Board's conclusion that Employer is not ineligible for supersedeas reimbursement with respect to those benefits.
Accordingly, we affirm.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 1st day of July, 2013, the order of the Workers' Compensation Appeal Board, dated February 21, 2012, is affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge