Opinion
No. 812 C.D. 2011 No. 902 C.D. 2011
10-12-2012
Monica Prebish, Petitioner v. Workers' Compensation Appeal Board (DPW/Western Center and CompServices, Inc.), Respondents Commonwealth of Pennsylvania/DPW and CompServices, Inc., Petitioners v. Workers' Compensation Appeal Board (Prebish), Respondent
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE SIMPSON
This case returns to us after remand in Prebish v. Workers' Compensation Appeal Board (DPW/Western Center), 954 A.2d 677 (Pa. Cmwlth. 2008) (en banc) (Prebish I). Specifically, Monica Prebish (Claimant) and the Department of Public Welfare/Western Center and CompServices, Inc. (collectively, Employer) cross-appeal from an order of the Workers' Compensation Appeal Board (Board) that affirmed a Workers' Compensation Judge's (WCJ) decision denying Employer's second termination petition. In her appeal, Claimant argues the WCJ erred in declining to award unreasonable contest attorney fees. In its cross-appeal, Employer asserts the WCJ erred in misapplying the burden of proof and incorrectly applying the principles set forth in our Supreme Court's decision in Lewis v. Workers' Compensation Appeal Board (Giles & Ransome, Inc.), 591 Pa. 490, 919 A.2d 922 (2007). Upon review, we affirm.
I. Background
The factual and procedural background to this case is set forth in detail in Prebish I. Briefly, Claimant worked for Employer as a residential service aide. In February 1993, she sustained a work injury. Employer issued a notice of compensation payable (NCP), accepting liability for a "right knee injury." Prebish I, 954 A.2d at 678 (quoting WCJ Op., 12/28/05, Finding of Fact (F.F.) No. 1). Claimant began receiving total disability benefits.
A. First WCJ Proceedings
In June 2000, Employer filed its first termination petition, alleging Claimant fully recovered from her work injury as of June 7, 2000.
In April 2002, a WCJ (First WCJ) issued a decision denying Employer's termination petition. Relevant here, First WCJ determined Employer did not prove Claimant fully recovered from her work-related right knee injury or that all disability from that injury ceased. First WCJ found that, because the NCP did not define Claimant's injury as a sprain, strain, contusion or otherwise limit the description of injury, Employer intended to accept broad and expansive liability for a right knee injury. The Board affirmed. No further appeal was taken.
B. Second WCJ Proceedings
In November 2004, Employer filed a second termination petition, alleging that as of September 28, 2004, the date Claimant underwent an independent medical examination (IME), Claimant fully recovered from the accepted work injury. Claimant denied the allegations, and asserted the doctrine of res judicata barred Employer from re-litigating the issue of whether she fully recovered because the IME did not establish a change in Claimant's physical condition since First WCJ's decision. Hearings ensued before a WCJ (Second WCJ).
In support of its termination petition, Employer presented the deposition testimony of Dr. Victor Thomas (Employer's Physician), who is board certified in orthopedic surgery. Based on Claimant's history, a review of pertinent medical records, including diagnostic studies, and the IME, Employer's Physician opined Claimant suffered a sprain/strain of the right knee from which she fully recovered. Employer's Physician also opined that at the time of his examination there was no evidence of any aggravation, Claimant's knee complaints were the same bilaterally, and the examination revealed the same results bilaterally.
Employer's Physician based his opinions on his examination, on Claimant's current complaints and on medical records and a diagnostic study that post-dated First WCJ's decision. Specifically, Employer's Physician reviewed numerous x-rays of both of Claimant's knees, including some taken in July 2004, physical therapy notes from April through August 2004, and a January 2005 report from Claimant's medical expert. Employer's Physician opined Claimant suffers patellofemoral arthritis in both knees, but this condition predated the work injury. He opined this pre-existing condition could explain the problems Claimant continues to experience in both knees.
In response, Claimant presented the testimony of Dr. David Stone, who is board certified in physical medicine and rehabilitation (Claimant's Physician). Based on his examination and treatment, Claimant's Physician opined Claimant suffers patellar subluxation of the right knee, which is related to the work injury. Claimant's Physician further opined Claimant has not fully recovered from her work injury, and she is unable to return to her pre-injury job without restrictions.
Ultimately, Second WCJ granted Employer's termination petition. Among other things, Second WCJ stated:
Like [First WCJ], I find that [Employer] did accept the broadly defined injury, that being the right knee injury. Therefore, [Employer] again must show that [C]laimant has fully recovered from that broadly defined work related injury. [Employer] can do so by showing that there is nothing wrong with the right knee now, or by showing any remaining symptomology is unrelated to the accepted work related injury.Prebish I, 954 A.2d at 681 (quoting Second WCJ Op., 12/28/05 at 4-5).
Crediting Employer's Physician's testimony, Second WCJ determined the record established Claimant fully recovered from her work injury, and that any remaining symptomology was due to a pre-existing degenerative condition in her right knee, as well as the left knee, which was unrelated to the work injury. Second WCJ also rejected Claimant's argument that Employer's second termination petition was barred by the doctrine of res judicata. On Claimant's appeal, the Board affirmed.
C. Prebish I
On further appeal, this Court determined a remand was necessary in light of our Supreme Court's decision in Lewis, which was decided after Second WCJ and the Board issued their decisions on Employer's second termination petition. In Lewis, our Supreme Court, clarifying prior case law, held that an employer must show a change in a claimant's physical condition from the time of the last disability adjudication in order to prevail on a second termination petition. In determining a remand was necessary, we stated:
Here, Second WCJ credited Employer's Physician's testimony that Claimant fully recovered from her right knee injury and that any remaining symptomology was not work-related. However, it is unclear from Second WCJ's findings whether Employer's Physician's testimony satisfies the standard set forth in Lewis, i.e., whether Claimant's physical condition changed from the time of First WCJ's adjudication.
As noted above, Employer's Physician based his opinion in part on Claimant's current complaints of knee pain equal in both knees and on his examination which revealed identical findings in both knees. This may be contrasted with the testimony found credible by First WCJ of complaints and treatments predominating for the right knee. See First WCJ Op., 4/10/02, F.F. No. 12. Further, Employer's Physician based his opinion in part on medical records and a diagnostic study which post date First WCJ's decision.
A fact-finder could determine that Claimant's condition did not change materially since the time of First WCJ's decision; alternatively, a fact-finder could determine that Claimant's condition changed since First WCJ's decision,
returning to a baseline related solely to the preexisting arthritis present in both knees. Because Second WCJ lacked the benefit of Lewis, he made no finding as to whether Claimant's condition changed since First WCJ's decision. While it was not as clear prior to Lewis that such a factual finding was necessary in this context, it is now abundantly clear that such a finding is required. As such, a remand is necessary so that Second WCJ may reconsider the existing record in light of Lewis. ...Prebish I, 954 A.2d at 683-84 (emphasis added) (footnote omitted). Accordingly, we remanded for the necessary determination based on the existing record. In a footnote, we also explained that while Claimant sought unreasonable contest attorney fees, we would allow the WCJ to consider the issue in the first instance on remand.
D. Remand Proceedings
On remand, Second WCJ issued a decision denying Employer's termination petition. In so doing, Second WCJ made the following pertinent determinations (with emphasis added):
4. Taken as a whole, I find the evidence of record fails to establish a change in [C]laimant's physical condition since the prior termination petition was denied by [First WCJ]. I based this finding on the following considerations.
Although I found [Employer's Physician] to be credible in establishing that [Claimant] fully recovered from her work related injury, and any remaining impairment in her right knee was due to a preexisting degenerative condition, I find that his testimony fails to establish an actual change in her condition since the date the prior termination petition was denied by [First WCJ]. I note that nowhere during his testimony is the doctor specifically asked that question. Therefore, he offered no opinion as to any change. However, I do note that when he addressed the diagnostic studies, establishing the preexisting degenerative changes in the right knee, he noted that he saw no
change in those studies between July 23, 1993 and July 1, 2004. It was for this reason, that he found no evidence of any progression, and, therefore, no aggravation of that underlying condition as a result of [C]laimant's 1993 work related injury. Other than that, the record is just totally devoid of establishing any physical change in [C]laimant's condition since that date.WCJ Op., 3/30/09, F.F. No. 4, Concls. of Law Nos. 1, 2.
Therefore, based upon the above considerations, I find [Employer] failed to meet its burden of proving an actual change in [C]laimant's physical condition since the prior termination petition was denied.
* * * *
1. To establish entitlement to a termination of benefits, the defendant must establish that the claimant has fully recovered from her work related injury, or that any remaining impairment is totally unrelated to that work related injury. When the defendant had filed and lost on a prior termination petition, the defendant must show an actual change in the claimant's physical condition since that last denial, in order to pursue a second termination petition.
2. [Employer] failed to meet its burden of proving that [C]laimant's physical condition has changed since the prior termination petition was denied by [First WCJ]. Therefore, [Employer] is not entitled to a termination of benefits as of this date.
Second WCJ also declined to grant Claimant unreasonable contest attorney fees. Both parties appealed, and the Board affirmed. Claimant and Employer then filed cross-petitions for review with this Court.
Our review is limited to determining whether the WCJ's findings of fact were supported by substantial evidence, whether an error of law was committed or whether constitutional rights were violated. Dep't of Transp. v. Workers' Comp. Appeal Bd. (Clippinger), 38 A.3d 1037 (Pa. Cmwlth. 2011).
II. Discussion
A. Issues
In her appeal, Claimant challenges Second WCJ's denial of unreasonable contest attorney fees. In its appeal, Employer maintains Second WCJ erred in denying its termination petition when he applied an incorrect burden of proof and misapplied the principles espoused in Lewis. Employer seeks a second remand for additional findings.
B. Claimant's Appeal
Claimant argues she is entitled to an award of unreasonable contest attorney fees where Employer, acting in bad faith, filed a frivolous termination petition. In particular, Claimant asserts that after First WCJ rejected Employer's medical evidence as not credible and denied Employer's first termination petition, Employer merely re-filed a nearly identical termination petition based on an identical medical opinion from a different physician.
Claimant contends Employer essentially attempted to obtain a reversal of First WCJ's decision denying its termination petition despite the fact that Employer did not appeal that decision. Claimant maintains such an attempt is barred by the doctrines of claim and issue preclusion. See Weney v. Workers' Comp. Appeal Bd. (Mac Sprinkler Sys.), 960 A.2d 949 (Pa. Cmwlth. 2008). Claimant also argues the practice of re-filing a termination petition in such circumstances was specifically denounced in Lewis as well as other cases that predate that decision. She further maintains this Court's decision in Wood v. Workers' Compensation Appeal Board (County Care Private Nursing), 915 A.2d 181 (Pa. Cmwlth. 2007) (en banc), supports an award of unreasonable contest attorney fees where, as here, an employer files a frivolous petition.
Pursuant to Section 440(a) of the Workers' Compensation Act, 77 P.S. §996, in any contested case where an insurer contests liability in whole or in part, a WCJ shall award counsel fees to an employee in whose favor the matter has been finally adjudicated unless the employer provides a reasonable basis for the contest. "Section 440 ... is intended to deter unreasonable contests of workers' claims and to ensure that successful claimants receive compensation undiminished by costs of litigation." Dep't of Transp. v. Workers' Comp. Appeal Bd. (Clippinger), 38 A.3d 1037, 1049 (Pa. Cmwlth. 2011).
Act of June 2, 1915, P.L. 736, as amended, added by the Act of February 8, 1972, P.L. 25.
The issue of whether an employer's contest is reasonable is a legal conclusion based on the WCJ's factual findings. Id. The reasonableness of an employer's contest depends on whether the contest was prompted to resolve a genuinely disputed issue or merely to harass the claimant. Id. Thus, a reasonable contest is established where the employer presents medical evidence that is contrary to the claimant's evidence and where it is evident the employer's contest is not frivolous or done to harass the claimant. Thompson v. Workers' Comp. Appeal Bd. (Cinema Ctr.), 981 A.2d 968 (Pa. Cmwlth. 2009).
A reviewing court must look at the totality of the circumstances as the reasonableness of the contest may not necessarily depend on a conflict in the evidence in and of itself. Id. The reasonableness of an employer's contest depends on whether the contest was prompted to resolve a genuinely disputed issue, which can be a legal or factual issue, or both. Id.
Further, existence of an unresolved legal issue or uncertainty as to the application of law to facts may constitute a reasonable contest. See Rogele, Inc. v. Workers' Comp. Appeal Bd. (Mattson), 969 A.2d 634 (Pa. Cmwlth. 2009) (Simpson, J., dissenting) (citing Chichester Sch. Dist. v. Workmen's Comp. Appeal Bd. (Fox), 592 A.2d 774 (Pa. Cmwlth. 1991)).
Here, in determining Employer established a reasonable contest, Second WCJ explained:
Taken as a whole, I find that the evidence of record establishes that [Employer] had a reasonable basis in contesting this matter. I base this finding on the following considerations.
As already noted, I initially found that [Employer] had met its burden of proving that [C]laimant had fully recovered. This was based upon a burden which I placed on them to show that the claimant was fully recovered from the work related injury, which was broadly described as an injury to the right knee. In order to do, [Employer] had to establish that any remaining disability was unrelated to the work injury of February 8, 1993.
I found that they had done so, particularly in light of King,[] and the opinion offered by [Employer's Physician]. This was affirmed by the [Board]. It was remanded by the Commonwealth Court in light of the subsequent opinion issued by the Supreme Court, Lewis. Therefore, based upon the above considerations, I find that [Employer] had a reasonable basis in contesting this matter.F.F. No. 5. We discern no error in Second WCJ's decision not to award unreasonable contest attorney fees under the facts presented here.
See King v. Workmen's Comp. Appeal Bd. (K-Mart) Corp., 549 Pa. 75, 700 A.2d 431 (1997). Our Supreme Court overruled King in Lewis v. Workers' Compensation Appeal Board (Giles & Ransome, Inc.), 591 Pa. 490, 919 A.2d 922 (2007).
To that end, prior to Lewis, which was decided well after Employer filed its second termination petition, it was not entirely clear that Employer was required to prove a change in Claimant's physical condition in order to prevail on its second termination petition. See Prebish I. Further, in Prebish I, we specifically indicated that, on remand, the medical evidence Employer presented "could" have satisfied Employer's burden on its second termination petition even in light of the standard clarified in Lewis. Prebish I, 954 A.2d at 683. As a result, we discern no error in Second WCJ's determination that Employer had a factual and legal basis for filing its second termination petition.
Moreover, contrary to Claimant's assertions, our decision in Wood does not compel a different result. Specifically, in Wood, this Court reversed a WCJ's decision denying unreasonable contest attorney fees where an employer presented no evidence in support of its defense of a claimant's reinstatement petition. This Court held the employer's failure to present any evidence either contrary to the claimant's medical evidence or from which a contrary inference could be drawn, rendered the employer's contest unreasonable.
Here, unlike in Wood, Employer presented medical evidence, which, if credited, could have satisfied Employer's burden on its second termination petition, including evidence that could have enabled Employer to prevail by proving a change in condition under the standard clarified in Lewis. As such, we reject Claimant's reliance on Wood.
Nor does this Court's decision in Weney support Claimant's contentions that she is entitled to unreasonable contest attorney fees. In Weney, we held a claimant's second petition to review an NCP was barred by technical res judicata. There, the claimant previously filed and prevailed on a review petition to amend the NCP, and, during the earlier litigation, the claimant could have litigated the compensability of the additional injuries alleged in the second review petition because he knew they existed when he filed his initial review petition.
Weney did not address a request for unreasonable contest attorney fees. As such, Weney does not compel the result Claimant seeks.
C. Employer's Appeal
In its cross-appeal, Employer argues that, on remand, Second WCJ incorrectly applied the burden of proof and misapplied the principles set forth in Lewis. Employer contends it is not necessary after Lewis for an employer to show an objective, measurable change in a claimant's condition in order to prevail on a termination petition where a prior termination petition was denied.
In particular, Employer asserts that in his 2002 decision, First WCJ found Claimant was not yet fully recovered from her work injury. However, Employer maintains, in his 2005 decision, Second WCJ found Claimant fully recovered. Because Claimant was not fully recovered as of 2002, but was found to be fully recovered in 2005, this necessarily established a change in Claimant's condition. Employer therefore contends Second WCJ erred in finding Employer did not establish a change in Claimant's condition since First WCJ's adjudication.
Further, Employer argues Second WCJ did not address an issue raised by this Court in Prebish I: whether Claimant's condition returned to a "baseline related solely to the preexisting arthritis present in both [Claimant's] knees." Prebish I, 954 A.2d at 683. Employer asserts these errors require a second remand.
In Delaware County v. Workers' Compensation Appeal Board (Browne), 964 A.2d 29, 35-36 (Pa. Cmwlth. 2008), which was decided after Lewis and Prebish I, we rejected an argument similar to that presented by Employer here. Specifically, we stated (with emphasis added):
[W]e first address the Board's determination that the decision in Lewis does not simply allow a change in condition to be satisfied by a medical opinion of full recovery but instead requires proof that the claimant's condition was different since the time of the last disability adjudication. As pointed out in Lewis, '[i]n order to terminate benefits on the theory that a claimant's disability has reduced or ceased due to an improvement of physical ability, it is first necessary that the employer's petition be based upon medical proof of a change in the claimant's physical condition." Id. at 497, 919 A.2d at 926. The Court in Lewis defined 'change of condition' as 'any change in the claimant's physical well being that affects his ability to work.' Id. The Court stated further that "[i]t can be the total recovery from an illness or merely that the symptoms subside." Id.
Therefore, if an employer comes forward with credible medical evidence that the claimant's current physical condition is different than it was at the time of the last disability adjudication due to a total recovery from the recognized work-
injury, such medical evidence would satisfy the employer's burden of proving a change in the claimant's physical condition. In other words, by accepting the employer's medical evidence of a full recovery as credible, a WCJ could properly make a finding that the employer has met the standard set forth in Lewis by demonstrating a change in [the] [c]laimant's condition. However, as this Court recently held in [Prebish I], the WCJ must make that factual finding. ...
Accordingly, the Board's determination was correct. A simple finding of full recovery is not sufficient—there must be a factual finding that a claimant's physical condition changed from the time of the last disability adjudication.
As we explained in Prebish I, on remand in this case, "[a] fact-finder could determine that Claimant's condition did not change materially since the time of First WCJ's decision; alternatively, a fact-finder could determine that Claimant's condition changed since First WCJ's decision returning to a baseline related solely to the preexisting arthritis present in both knees." Id. at 683 (emphasis added).
On remand here, Second WCJ credited Employer's Physician's opinion that Claimant fully recovered from her work injury. However, Second WCJ expressly declined to make a finding that Claimant's physical condition changed from the time of First WCJ's decision, and he concluded Employer did not meet its burden of proving Claimant's physical condition changed. See F.F. No. 4, Concls. of Law Nos. 1, 2. These determinations are supported by the record.
More specifically, in denying Employer's first termination petition in 2002, First WCJ determined Employer did not prove Claimant fully recovered from the "broadly defined work related injury" or that all disability from that injury ceased. Prebish I, 954 A.2d at 681. Employer filed a second termination petition in 2004. In that proceeding, Employer's Physician based his opinion, in part, on diagnostic studies and medical records that post-dated First WCJ's decision. Despite opining Claimant fully recovered from her work injury, Employer's Physician did not specifically opine that Claimant's physical condition changed after First WCJ's decision, and, more importantly, Second WCJ declined to draw that inference from his testimony.
This is not surprising given that in this second termination proceeding Employer's Physician characterized Claimant's work injury as a "contusion/sprain" of the right knee, from which she fully recovered. Certified Record, Deposition of Victor J. Thomas, M.D., 2/15/05, at 14, 16-17, 19. However, in the prior adjudication denying Employer's first termination petition, First WCJ found (with emphasis added):
[E]mployer acknowledged that [C]laimant sustained a right knee injury on February 8, 1993. That [NCP] did not define the injury as a sprain, strain[,] contusion or otherwise limit the description of injury. Therefore, I infer that [E]mployer intended to accept broad and expansive liability for a right knee injury.Prebish I, 954 A.2d at 679 (quoting WCJ Op., 4/10/02, F.F. No. 16(a)). Because Employer's Physician's opinion did not specifically acknowledge this prior adjudicated fact concerning the nature and extent of the accepted work injury, we discern no error in Second WCJ's determination that Employer did not prove a change in condition as required by Lewis. See Folmer v. Workers' Comp. Appeal Bd. (Swift Transp.), 958 A.2d 1137, 1143-44 (Pa. Cmwlth. 2008) ("Faced with an employer that filed serial termination petitions, the Supreme Court in Lewis was concerned that such an employer would recharacterize or disregard the prior adjudicated facts in these serial petitions to realize a favorable outcome. ... [An] [e]mployer's case ha[s] to begin with the adjudicated facts found by the WCJ and work forward in time to show the required change [in condition].") Further, we cannot disturb Second WCJ's factual determinations, which are amply supported by the record. See Bentley v. Workers' Comp. Appeal Bd. (Pittsburgh Bd. of Educ.), 987 A.2d 1223 (Pa. Cmwlth. 2009) (WCJ's findings may not be disturbed unless they are not supported by substantial evidence; WCJ is permitted to draw reasonable inferences from the evidence).
Moreover, contrary to Employer's assertions, because, on remand, Second WCJ adequately resolved the factual issue identified by this Court in Prebish I, a second remand is unnecessary. Indeed, although in Prebish I, we recognized that on remand Second WCJ "could determine that Claimant's condition changed since First WCJ's decision returning to a baseline related solely to the preexisting arthritis present in both knees." Id. at 683 (emphasis added), Second WCJ was not required to make such a finding. Employer is not entitled to a second remand for Second WCJ to reconsider his factual determination on this point.
For all the foregoing reasons, we affirm.
/s/_________
ROBERT SIMPSON, Judge ORDER
AND NOW, this 12th day of October, 2012, the order of the Workers' Compensation Appeal Board is AFFIRMED.
/s/_________
ROBERT SIMPSON, Judge