Opinion
No. 1298 C.D. 2011
03-01-2012
SEPTA and Comp Services, Inc., Petitioners v. Workers' Compensation Appeal Board (Moreland), Respondent
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE COVEY
SEPTA and its workers' compensation insurance administrator, Comp Services, Inc. (collectively, Employer), petition for review of the June 13, 2011 order of the Workers' Compensation Appeal Board (Board) affirming the decision of the Workers' Compensation Judge (WCJ) awarding Tyrone Moreland (Claimant) workers' compensation benefits, and Employer an offset for pension benefits paid to Claimant to the extent they were funded by Employer. The issues before this Court are: (1) whether the Board erred by concluding that Employer failed to meet its burden of proving the amount of its pension plan offset, and in refusing to remand this matter to the WCJ for complete findings of fact, conclusions of law and an order; and (2) whether the Board erred by concluding that Employer is not entitled to a credit for sick pay benefits Claimant received. We affirm.
The underlying facts of this case are not in dispute on appeal. After Claimant worked 35 years for Employer as a cleaner and general helper in various bus depots where he was exposed to high levels of diesel fumes, Claimant developed lung cancer that rendered him totally disabled as of May 15, 2008. After learning in February of 2009 about the connection between his cancer and his work, Claimant filed a claim petition on March 9, 2009 seeking workers' compensation benefits related to the lung cancer. Employer timely denied Claimant's claim. On May 19, 2010, the WCJ granted Claimant's claim petition, but ordered to the extent that Employer funded them, Employer was entitled to an offset against indemnity benefits for the pension benefits Claimant received. Both Employer and Claimant filed appeals with the Board.
Employer argued on appeal, inter alia, that the WCJ erred by failing to make sufficient findings concerning Employer's entitlement to a pension offset, and that Employer is entitled to a credit for sick pay benefits paid to Claimant. Claimant's appeal sought remand of the matter for presentation of a health insurance lien he received after the close of the WCJ's record. By decision issued on June 13, 2011, the Board affirmed the WCJ's decision, concluding that the WCJ did not err by failing to make more specific findings regarding the pension offset, and that Employer was not entitled to a credit for sick pay benefits paid to Claimant. The Board also held that because there was no evidence that a health insurance lien was presented during the pendency of Claimant's claim petition, the insurer's right to subrogation was waived. On July 18, 2011, Employer appealed the Board's decision to this Court.
Employer's appeal also included arguments that the WCJ's findings were not supported by substantial evidence, that Claimant's notice of injury was not timely, that the WCJ erred by relying on Claimant's testimony concerning his wages, and the WCJ erred by failing to award credit for Social Security disability benefits Claimant received. Although not relevant to the specific appeal to this Court, the Board held that the WCJ properly granted the claim petition and found that Claimant's notice to Employer was adequate under the circumstances of this case. The Board rejected Employer's arguments that the WCJ should have relied upon a statement of wages when there was no such document of record, and that credit is available for Social Security disability benefits where such credits are applicable to "old age" benefits.
This Court's review is limited to determining whether an error of law was committed, whether the findings of fact are supported by substantial evidence and whether there was a violation of constitutional rights. Sysco Food Servs. of Phila. v. Workers' Comp. Appeal Bd. (Sebastiano), 940 A.2d 1270 (Pa. Cmwlth. 2008).
On August 12, 2011, Employer filed a petition for supersedeas with the Board and this Court. Claimant filed a response. While the petition to the Board was pending, this Court denied the petition for failure to comply with Pa.R.A.P. 1781. On August 19, 2011, however, Employer filed a second petition for supersedeas with this Court. After oral argument and review of Claimant's response to Employer's original petition, this Court granted supersedeas on September 7, 2011.
Relative to its entitlement to a pension offset, Employer argues that although there was undisputed evidence in the record that Employer funded Claimant's pension, the WCJ concluded only that Employer was entitled to an offset without stating the exact amount, and that the Board improperly weighed evidence when it determined that the WCJ did not err by not making more specific findings. We disagree.
For injuries occurring after August 23, 1996, we look to amended Section 204(a) of the Workers' Compensation Act (Act) to determine an employer's entitlement to pension offsets. See City of Phila. v. Workers' Comp. Appeal Bd. (Grevy), 968 A.2d 830 (Pa. Cmwlth. 2009). Section 204(a) of the Act states, in pertinent part:
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 71(a).
[T]he benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall . . . be credited against the amount of the award made under [section] . . . 306 [disability benefits] . . . .The law is clear that the employer seeking a pension benefit offset pursuant to Section 204(a) of the Act has the burden of proving that it is entitled to the offset. Gaughan v. Workers' Comp. Appeal Bd. (Pennsylvania State Police), 2 A.3d 785 (Pa. Cmwlth. 2010). Section 123.8(b) of the Regulations promulgated pursuant to the Act provides that "[t]he pension offset shall apply to amounts received from defined-benefit and defined-contribution plans." 34 Pa. Code § 123.8(b). The employer's burden of proof depends upon which type of plan is at issue.
A defined-contribution plan is a plan that provides for an individual account for each participant and for benefits based solely upon the amount of accumulated contributions and earnings in the participant's account. Because the account is individualized, employer contributions to the employee's pension are easily ascertained. A defined-benefit plan is a pension plan in which the benefit level is established at the commencement of the plan and actuarial calculations determine the varying contributions necessary to fund the benefit at an employee's retirement. Where there is a defined-benefit plan, an employer cannot meet its burden of establishing the amount of its offset absent actuarial testimony.City of Phila. v. Workers' Comp. Appeal Bd. (Andrews), 948 A.2d 221, 227 (Pa. Cmwlth. 2008) (citations omitted). "In either case, the employer bears the burden of proving the extent it funded the pension plan in question." Id.
Employer now seeks remand "to correct the incomplete findings." Employer Br. at 9. The alleged incomplete findings are due to Employer's failure to sustain its burden of proof. The Board correctly applied the law that "[w]here there is a defined-benefit plan, an employer cannot meet its burden of establishing the amount of its offset absent actuarial testimony." City of Phila., 948 A.2d at 227. The Board also correctly concluded that "[a] remand is not warranted when the findings of fact are clearly adequate for review and the record reveals that the party seeking the remand simply failed to sustain the burden of proof." Port Auth. of Allegheny Cnty. v. Workmen's Comp. Appeal Bd. (Hamilton), 505 A.2d 1372, 1374 (Pa. Cmwlth. 1986). Accordingly, the Board's decision relative to Employer's entitlement to a pension offset is affirmed.
The current case is different from the facts in School District of Philadelphia v. Workers' Compensation Appeal Board (Davis), ___ A.3d ___ (Pa. Cmwlth. No. 166 C.D. 2011, filed December 22, 2011) and Glaze v. Workers' Compensation Appeal Board (City of Pittsburgh), ___ A.3d ___ (Pa. Cmwlth. Nos. 1122-1124, 1153-1182, 1206-1210 C.D. 2010, filed March 1, 2012). In Davis, this Court ordered a remand "to the WCJ to issue an order directing Employer to take an appropriate offset based upon the credited actuarial evidence provided by Employer." Davis at 15. In Glaze, this Court ordered a remand "to the WCJ to reconsider evidence [including actuarial evidence], make additional findings of fact, and render a definitive determination of Employer's offset rights . . . ." Glaze at 34. In both Davis and Glaze, the employer presented actuarial testimony. Here, the employer presented no actuarial evidence and therefore failed to meet its prima facie burden of establishing the extent of its contribution by credible actuarial evidence. These cases are clearly distinguishable and, under the circumstances of the instant case, we will not similarly order a remand. --------
Employer also argues on appeal that the Board erred by concluding that it is not entitled to a credit for sick pay benefits under circumstances in which Claimant agreed to the credit. According to the record, in its answer to Claimant's claim petition, Employer noted as a defense that "[c]redit against compensation liability is requested by reason of payment of . . . sick pay . . . ." Certified Record (C.R.), Defendant's Answer to Claim Petition at 2. Claimant applied to receive his sick benefits from Employer on April 20, 2009. According to Claimant's testimony, he received sick benefits from May through October of 2008, then again for May of 2009. He retired on June 1, 2009. During Claimant's deposition, Employer's counsel requested a credit for the sick leave "as allowable by law," to which Claimant's counsel stated: "No objection." Reproduced Record (R.R.) at 50a. Claimant's counsel suggested, and Employer's counsel agreed, to attach Claimant's sick pay record as Exhibit D-Moreland-1. The WCJ, however, did not address sick leave benefits in his decision or order. In its appeal to the Board, Employer stated that the WCJ erred by "not awarding a credit/setoff for sick pay . . . ." R.R. at 94a. The Board rejected Employer's claim for a credit on the basis that Employer failed to establish that Claimant's sick leave benefits are of a type for which it is entitled to credit. We agree with the Board.
The Pennsylvania Supreme Court has stated that sick leave is something to which a claimant would have been entitled whether or not he sustained a work injury, because sick leave is an entitlement for services performed, rather than payment in lieu of compensation. Temple v. Pennsylvania Dep't of Highways, 445 Pa. 539, 285 A.2d 137 (1971). Because the Act's intention is for the employer to bear the cost of work-related injuries, an employer cannot pay for a work-related disability with the employee's sick pay. Kelly v. Workers' Comp. Appeal Bd. (U.S. Airways Grp., Inc.), 605 Pa. 568, 992 A.2d 845 (2010). Accordingly, this Court has held that an employer is not automatically entitled to a credit as a matter of law for sick leave payments made to an employee. Bartholetti v. Workers' Comp. Appeal Bd. (Sch. Dist. of Phila.), 927 A.2d 743 (Pa. Cmwlth. 2007).
Credits for sick leave pay have, therefore, been allowed only in limited circumstances. See Marsh v. Workmen's Comp. Appeal Bd. (Prudential Ins. Co.), 673 A.2d 33 (Pa. Cmwlth. 1996) (where an employer pays a disabled employee out of sick benefits in relief of the employee's incapacity); Donegal Sch. Dist. v. Workers' Comp. Appeal Bd. (Haggerty), 798 A.2d 857 (Pa. Cmwlth. 2002) (where sick leave is restored pursuant to the terms of a collective bargaining agreement). Such credits are not authorized if an "injured employee is required to deplete exhaustible benefits to which he would be entitled if he suffered from a non-compensable injury." Marsh, 673 A.2d at 35.
In this case, Employer argues that Claimant agreed that Employer is entitled to a credit for sick leave payments it made to Claimant, and that such agreement was a stipulation. Employer's argument is without merit. Although we acknowledge that a stipulation of facts agreed to by the parties is generally binding on this Court, in order to be controlling, it must be clear and unambiguous on its face. Prof'l Ins. Agents Ass'n of Pennsylvania, Maryland & Delaware, Inc. v. Koken, 777 A.2d 1179 (Pa. Cmwlth. 2001). Despite Employer's representations, it is not clear the parties agreed that Employer was entitled to the credit. What is clear on the face of the record is that the parties agreed to attach the record of Claimant's sick leave payments to Claimant's transcript, and that Claimant's counsel had no objection to Employer's "request" for any credit "as allowable by law." R.R. at 50a. Because the law does not generally allow credits for sick leave payments without proof of entitlement, and there was no proof provided that Employer was entitled to such credit, the Board did not err in concluding that Employer is not entitled to a credit for sick pay benefits paid to Claimant.
Based upon the foregoing, the Board's order is affirmed.
/s/_________
ANNE E. COVEY, Judge
ORDER
AND NOW, this 1st day of March, 2012, the June 13, 2011 order of the Workers' Compensation Appeal Board is affirmed.
/s/_________
ANNE E. COVEY, Judge