Opinion
No. 1547 C.D. 2011
04-18-2013
Sheetz, Inc., Petitioner v. Workers' Compensation Appeal Board (Brown), Respondent
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE BROBSON
Petitioner Sheetz, Inc. (Employer) petitions for review of an order of the Workers' Compensation Appeal Board (Board). The only issue before the Court is whether the Workers' Compensation Judge (WCJ) in this matter erred by refusing to grant Employer a credit for payments that Shari Brown (Claimant) received from Hartford Insurance Company (Hartford) on Employer's behalf. We agree with the Board's decision that the WCJ did not err and, therefore, affirm.
Claimant is not participating in the instant appeal.
On November 3, 2008, Claimant filed a claim petition alleging that on October 8, 2007, she suffered a work injury. (Reproduced Record (R.R.) at 1a-2a.) Specifically, Claimant alleged that she injured her neck while lifting boxes of windshield fluid. (R.R. at 2a.) As a result of her injury, Claimant sought full disability benefits and counsel fees from the date of her injury. (Id.) Employer filed an answer denying Claimant's allegations. (Id. at 4a-5a.) Following hearings, on May 24, 2010, the WCJ issued a decision and order granting Claimant's claim petition. In particular, the WCJ awarded Claimant, inter alia, temporary total disability benefits and attorney's fees of twenty percent on the basis of partial unreasonable contest. (WCJ's decision at 11.) Also, in his decision, the WCJ found that "Employer's counsel asserted a credit but did not offer any evidence concerning the source, amount, or duration of Claimant's payments." (Id. at 4.) The WCJ, moreover, found "[because] Employer . . . [had not] offered . . . [any] competent, credible evidence, . . . it has waived any claim for a credit against compensation payable for payments made to Claimant by Hartford." (Id. at 10.) As a result, the WCJ denied Employer a credit against compensation benefits, reasoning that Employer had not met its burden. (Id. at 11.)
Employer appealed the WCJ's decision to the Board, which affirmed in part and modified in part the decision. In affirming the WCJ's decision, the Board concluded that Employer failed to establish its right to a credit for payments Claimant received from Hartford before the WCJ. (Board's opinion at 5.) Specifically, the Board reasoned that Employer did not exercise reasonable diligence in asserting its right to a credit because it did not provide sufficient evidentiary support. (Id.)
On appeal, Employer appears to advance three arguments. First, it argues that substantial evidence does not support the WCJ's finding that Employer failed to offer any competent, credible evidence in support of its claim for a credit against compensation benefits. Second, Employer argues that the WCJ capriciously disregarded Claimant's testimony concerning her receipt of payments from Hartford and, therefore, failed to accord her testimony proper evidentiary weight. Third, Employer argues that the WCJ and the Board erred as a matter of law in denying it credit for payments Claimant received from Hartford.
Our scope of review in a workers' compensation appeal is limited to determining whether an error of law was committed, whether constitutional rights were violated, or whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704. We acknowledge our Supreme Court's decision in Leon E. Wintermyer, Inc. v. Workers' Compensation Appeal Board (Marlowe), 571 Pa. 189, 812 A.2d 478 (2002), wherein the Court held that "review for capricious disregard of material, competent evidence is an appropriate component of appellate consideration in every case in which such question is properly brought before the court." Wintermyer, 571 Pa. at 203, 812 A.2d at 487.
To begin, Employer argues that substantial evidence does not exist to support the WCJ's finding that Employer failed to offer sufficient evidence in support of its claim for a credit. Substantial evidence is defined as relevant evidence upon which a reasonable mind could base a conclusion. Johnson v. Unemployment Comp. Bd. of Review, 502 A.2d 738, 740 (Pa. Cmwlth. 1986). In determining whether there is substantial evidence to support the WCJ's findings, this Court must examine the testimony in the light most favorable to the prevailing party, giving that party the benefit of any inferences that can logically and reasonably be drawn from the evidence. Id. A determination as to whether substantial evidence exists to support a finding of fact can only be made upon examination of the record as a whole. Taylor v. Unemployment Comp. Bd. of Review, 474 Pa. 351, 355, 378 A.2d 829, 831 (1977). The WCJ's findings of fact are conclusive on appeal only so long as the record taken as a whole contains substantial evidence to support them. Penflex Inc. v. Bryson, 506 Pa. 274, 286, 485 A.2d 359, 365 (1984). "The fact that [a party] may have produced witnesses who gave a different version of the events, or that [the party] might view the testimony differently than the WCJ is not grounds for reversal if substantial evidence supports the WCJ's findings." Tapco, Inc. v. Unemployment Comp. Bd. of Review, 650 A.2d 1106, 1108-09 (Pa. Cmwlth. 1994). Similarly, even if evidence exists in the record that could reasonably support a contrary conclusion, it does not follow that the findings of fact are not supported by substantial evidence. Johnson v. Unemployment Comp. Bd. of Review, 504 A.2d 989, 990 (Pa. Cmwlth. 1986).
Here, our review of the entire record demonstrates that Employer did not submit any evidence showing why it was entitled to a credit against compensation payable. The only evidence on Employer's behalf was supplied by its attorney in the nature of a statement regarding the applicability of the credit. This occurred during the following exchange among the WCJ and counsel for Claimant and Employer.
[WCJ]:
Now, the money that Claimant gets from Hartford, are we looking at a subrogation lien by Hartford for that or does Hartford pay it only as an administrator on behalf of [Employer] in which case Employer would get a credit?
[Claimant's attorney:]
Hartford has not asked me to enforce a subrogation lien.
[WCJ]:
Okay, [Employer's attorney], do you know what the status is between [Employer] and Hartford?(R.R. at 94a-95a (emphasis added).) We, therefore, conclude that, when viewed in a light most favorable to Claimant, substantial evidence supports the WCJ's finding that Employer failed to adduce sufficient evidence to establish entitlement to a credit.
[Employer's attorney:]
I do not, Your Honor. But if there is a credit to be had I assume that [Employer] will want to assert it.
[WCJ]:
Even so they should be prepared to assert it today if they're the ones --- because see if Hartford is paying it based on an insurance policy with Hartford, then Hartford is entitled to a subrogation lien. The only way that Employer would have a credit is if it is responsible to pay and Hartford was merely a pass[-]through administrator. The Employer cannot take the benefit of an insurance policy for which some other entity is responsible.
[Employer's attorney:]
Unfortunately, I can't tell from the limited materials I have today what the status is of that Hartford policy.
Next, Employer argues that the WCJ capriciously disregarded Claimant's testimony regarding her receipt of the payments from Hartford. We disagree. We previously have held that a capricious disregard only occurs when the WCJ deliberately ignores relevant, competent evidence. Capasso v. Workers' Comp. Appeal Bd. (RACS Assocs., Inc.), 851 A.2d 997, 1002 (Pa. Cmwlth. 2004). Capricious disregard of evidence "is a deliberate and baseless disregard of apparently trustworthy evidence." Williams v. Workers' Comp. Appeal Bd. (USX Corp.-Fairless Works), 862 A.2d 137, 144 (Pa. Cmwlth. 2004). In Leon E. Wintermyer, Inc. v. Workers' Compensation Appeal Board (Marlowe), 571 Pa. 189, 812 A.2d 478 (2002), our Supreme Court noted that "[w]here substantial evidence supports an agency's findings, and the findings in turn support the conclusions, it should remain a rare instance where an appellate court disturbs an adjudication based on capricious disregard." Wintermyer, 571 Pa. at 203-04 n.14, 812 A.2d at 487-88 n.14 (emphasis added).
Here, the WCJ duly noted and considered Claimant's testimony on the issue of credit. Indeed, the WCJ specifically found:
4. . . . . [Claimant] received (apparently short-term disability) benefits from Hartford Insurance.(WCJ's decision at 3-4.) The findings of fact aptly illustrate that the WCJ did not capriciously disregard or otherwise ignore Claimant's testimony regarding her receipt of payments from Hartford. As a result, we cannot conclude that the WCJ capriciously disregarded Claimant's testimony on this matter.
. . .
6. . . . . [Claimant] continued to receive $944 per month gross benefits from Hartford Insurance through [Employer]. Claimant's counsel represented that Hartford had not requested him to assert a subrogation lien on its behalf. Employer's counsel asserted a credit but did not offer any evidence concerning the source, amount, or duration of Claimant's payments.
To the extent that Employer challenges the WCJ's determinations on evidentiary weight, we hold that such challenge is without merit. It is well established that determinations as to weight and credibility are solely for the WCJ as fact-finder. Cittrich v. Workmen's Comp. Appeal Bd. (Laurel Living Ctr.), 688 A.2d 1258, 1259 (Pa. Cmwlth. 1997).
Finally, Employer argues that the WCJ and the Board erred in denying Employer credit because Claimant's testimony should have been sufficient in and of itself to establish Employer's burden of proving that it is entitled to a credit. In particular, Employer contends that Claimant's testimony that she received $944 per month from Hartford on Employer's behalf was sufficient evidence. We disagree.
The concept of credit against compensation payable is rooted in common law. Indeed, in Humphery v. Workmen's Compensation Appeal Board (Supermarket Service), 514 A.2d 246 (Pa. Cmwlth. 1986), we noted that "although the concepts of subrogation and credit have many similiarities [sic], they are distinguishable because a credit does not have its genesis in a [workers'] compensation setting in Section 319 of the [Workers' Compensation Act (Act)]." Humphery, 514 A.2d at 248 (emphasis added). Section 319 of the Act, relating in part to subrogation of employer or insurer to amount paid before award, provides in part:
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671.
Where an employe has received payments for the disability or medical expense resulting from an injury in the course of his employment paid by the employer or an insurance company on the basis that the injury and disability were not compensable under this act in the event of an agreement or award for that injury the employer or insurance company who made the payments shall be subrogated out of the agreement or award to the amount so paid, if the right to subrogation is agreed to by the parties or is established at the time of hearing before the referee or the board.77 P.S. § 671 (emphasis added). Similarly, we have permitted a credit "where payments are (1) made by an employer or its insurer, (2) for an injury and/or subsequent disability arising in the course of employment, where (3) the payments are not wages for employment." Humphery, 514 A.2d at 249. Payments that claimants receive "in relief of their incapacity to labor" may be subject to credit so long as the claim to the credit is timely raised. See id. at 250. "[A]n employer must present to the [WCJ] any credit that it may have during the initial claim petition proceeding." Toy v. Workmen's Comp. Appeal Bd. (Alltel Pa., Inc.), 651 A.2d 701, 703 (Pa. Cmwlth. 1994) (reasoning that requiring employers to raise a credit "at the earliest possible stage will prevent greater injustices than it may create"). Claimants must have the opportunity to contest the amount of a credit claimed by their employers and to have a hearing where there is a disagreement on the amount. Costa v. Workers' Comp. Appeal Bd. (Carlisle Corp.), 958 A.2d 596, 600 (Pa. Cmwlth. 2008).
We see similarities between a claim for a credit and assertion of a subrogation lien. A right of subrogation is "not self-executing, and a party asserting a right of subrogation must exercise reasonable diligence to protect his or her interest." Boeing Helicopters v. Workers' Comp. Appeal Board (Cobb), 713 A.2d 1181, 1186 (Pa. Cmwlth. 1998) (emphasis added) (noting that insurance company failed to establish facts concerning amount and terms of repayment). The Board appears to suggest that an employer must likewise exercise reasonable diligence in asserting a credit. We agree. Consistent with our decisions in Humphery and Toy, the analytical framework for credits and Section 319 subrogation liens is similar.
Here, although the WCJ found that Employer asserted a right to credit against compensation payable, Employer failed to introduce any evidence establishing that right. In fact, our review of the hearing transcript reveals that, on cross-examination, Employer did not even seek to elicit from Claimant any meaningful testimony on this issue. Specifically, Claimant testified on cross-examination:
We agree with the Board's observation that Employer "never specifically requested a credit, as its attorney only stated she assumed [Employer] would assert a credit if there was one." (Board's Opinion at 5.)
Q. Okay. I think you previously testified that you were considering making an application for Social Security benefits. Have you done that?(R.R. at 90a-91a.) As the WCJ found, the only evidence offered was that Claimant received $944 per month from Hartford on Employer's behalf. Thus, based on the entire record, we agree with the WCJ in that Employer did not proffer evidence demonstrating the total amount of the credit sought, or the length of time Claimant received payments from Hartford. Consistent with Toy and Costa, because evidence regarding the amount of the credit sought was absent, Claimant did not have an opportunity to adequately contest Employer's claim for credit. Consequently, in accordance with our case law on subrogation liens, we conclude that Employer did not use reasonable diligence in protecting its right to credit against compensation payable.
A. Yes, I have applied. Hartford had encouraged me to do so.
. . .
Q. Are you receiving any form of income presently?
A. Just from Hartford Insurance.
Q. Okay.
A. And that's through Sheetz.
Q. How much is that?
A. It's $944 a month.
To further support its position, Employer cites to Peoples Natural Gas Company v. Workmen's Compensation Appeal Board (Keith), 441 A.2d 1364 (Pa. Cmwlth. 1982). In Peoples Natural Gas, we reversed the Board's decision which reversed a Referee's order granting an employer credit against compensation benefits. Peoples Natural Gas, 441 A.2d at 1367. The issue in Peoples Natural Gas was whether sickness or accident benefits that an employer paid to its employees could be credited against compensation benefits. In addressing this issue, we first noted that "in its answer to the claim petition, [the employer] denied that [the claimant's] heart attack was work-related and averred further that [the] 'claimant received certain sickness benefits, including medical and hospital services, under the collective bargaining agreement between ([the employer]) and its employees for disabilities unrelated to employment."' Id. We then recited the following portions of the claimant's testimony regarding the nature of the benefits paid:
Peoples Natural Gas predates Humphery, Toy, Boeing Helicopters, and Costa, which are seminal cases on the issue of credit against compensation payable. --------
Q. Did you get any pay or anything while you were off?Id. (emphasis added). Based on the claimant's testimony, we concluded that "the payments were in the nature of sickness or accident benefits rather than sick leave." Id. Accordingly, the employer was entitled to a credit. Id.
A. Definitely I did. That's a contractural (sic) agreement that we have with the company. Full pay for . . . well, it depends on your length of service. You get full pay. I think mine was 18 weeks and then after 18 weeks why then you go to half pay for the rest of the 52 weeks.
. . .
Q. And, these payments you received from the gas company from and after November 19, 1977, you clearly understood that those were health and accident benefits; didn't you?
A. That's right.
Here, Employer's reliance on Peoples Natural Gas is misplaced because, unlike the issue in the instant case, the issue in Peoples Natural Gas was not whether an employer asserted its right to a credit with due diligence before a WCJ. Regardless, in Peoples Natural Gas, we were not only able to rule on the issue of whether sickness or accident benefits were subject to credit, but we were also able to determine the amount of the credit based on the evidentiary record. Specifically, the claimant had testified about the amount, duration, and nature of the benefits he had received pursuant to the agreement. (Id.)
We reiterate that to successfully assert a claim for credit, an employer must prove that payments are (1) made by an employer or its insurer, (2) for an injury and/or subsequent disability arising in the course of employment, and (3) that the payments are not wages for employment. Humphery, 514 A.2d at 249. An employer must also prove the amount of the credit to which it may be entitled. In the matter now before the Court, the relevant evidence only indicates that Claimant received $944 per month. There is no evidence that the nature of the payments meet the criteria that would entitle Employer to a credit, and there is no evidence of the duration of the payments. Without more, we cannot determine whether Employer is entitled to a credit, and, if so, the amount of the credit. We conclude, therefore, that the WCJ and the Board did not err in denying Employer a credit.
Accordingly, we affirm the Board's decision.
/s/_________
P. KEVIN BROBSON, Judge ORDER
AND NOW, this 18th day of April, 2013, the order of the Workers' Compensation Appeal Board is hereby AFFIRMED.
/s/_________
P. KEVIN BROBSON, Judge