Opinion
No. 1828 C.D. 2011
02-21-2013
Samuel Wright, Petitioner v. Workers' Compensation Appeal Board (Metro Staffing, Inc. and State Workers' Insurance Fund), Respondents
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
Background
Samuel Wright (Claimant) petitions for review of the August 30, 2011 order of the Workers' Compensation Appeal Board (Board) which vacated in part and affirmed in part a Workers' Compensation Judge's (WCJ) decision to deny and dismiss Claimant's January 8, 2010 penalty petition against Metro Staffing, Inc. (Metro) and the State Workers' Insurance Fund (SWIF). We reverse the Board's order and remand the case for further proceedings consistent with this opinion.
In Pennsylvania, Metro is also known by the fictitious name of "Performance Staffing."
In May 2002, Claimant sustained an injury to his right shoulder while working at Tasty Baking Company in the course and scope of his employment with Metro. Metro is a temporary employment agency with offices in Pennsylvania and Delaware. Metro hired Claimant in its Delaware office, but the Tasty plant where Claimant was working when he was injured is located in Pennsylvania.
Claimant filed claim and penalty petitions on October 21, 2002. SWIF, Metro's Pennsylvania insurer, denied responsibility for Claimant's work injury and filed a joinder petition against both Tasty and Metro's Delaware insurer, CNA. On May 9, 2005, WCJ Martin Burman granted Claimant's claim petition, found SWIF to be the liable insurer, ordered SWIF to pay benefits to Claimant, and dismissed Claimant's penalty petition. (Supp. R.R. at 42b-51b.) SWIF appealed to the Board. SWIF commenced making weekly payments to Claimant and continued to make payments until January 5, 2006, at which point SWIF ceased making the payments.
The record does not reveal why SWIF ceased making payments, but, according to Claimant, he:
found part time work and Claimant's counsel advised SWIF...leaving SWIF with remedies such as periodic Supplemental Agreements for partial or suspended weeks, depending [on] actual weekly earnings. Instead, SWIF stopped issuing indemnity payments, and refused to reinstate them when Claimant's wage loss recurred.(Claimant's brief at 13 n. 1.) Claimant further asserts that he has not received weekly payments since January 2006 and that he still has a "[m]ountain of unpaid medical bills." (Id.)
On April 10, 2006, the Board affirmed WCJ's Burman's decision to grant the claim petition, but reversed the WCJ's conclusion that SWIF was the responsible insurance carrier because Metro's insurance policy with SWIF did not list Tasty as one of the businesses where Metro sent employees. (Supp. R.R. at 54b-70b.) The Board remanded the matter to the WCJ for further findings. (Id.)
On remand, WCJ Burman, in a decision and order dated August 25, 2006, concluded that neither Metro's insurance policy with SWIF nor its policy with CNA covered Claimant's work injury; thus, Metro was uninsured for purposes of Claimant's injury and Metro was responsible for payments to Claimant. (Supp. R.R. at 71b-75b.) WCJ Burman further concluded that Metro "made a reasonable effort to obtain workers' compensation insurance for both the State of Delaware, (CNA) and the State of Pennsylvania (SWIF)." (Id. at 74b.) As a result, WCJ Burman concluded that Metro did not violate section 305 of the Workers' Compensation Act (Act) and declined to assess a penalty under section 435 of the Act. (Id.) In an order dated October 24, 2007, the Board affirmed WCJ Burman's determination that Metro was uninsured for Claimant's injury and further concluded that SWIF was entitled to reimbursement from Metro for payments SWIF made to Claimant. (Supp. R.R. at 80b-93b.)
The CNA insurance policy only covered accidents occurring in the state of Delaware. (Supp. R.R. at 67b.)
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §501. This section requires employers to obtain workers' compensation from SWIF or another insurer.
77 P.S. §991. Section 435 was added by the Act of February 8, 1972, P.L. 25. This provision authorizes the imposition of penalties against an employer or insurer for violations of the Act or its rules and regulations.
Metro filed a timely petition for review with this Court and requested supersedeas. This Court concluded that Metro "is most likely to prevail on merits of its claim" that SWIF was responsible for Claimant's benefits. Metro Staffing, Inc. v. Workers' Compensation Appeal Board (Wright, State Workers' Insurance Fund and Continental Casualty Company) (Pa. Cmwlth., No. 2145 C.D. 2007, filed February 25, 2008, slip op. at 3). (Supp. R.R. at 96b.) Accordingly, we granted Metro's application for supersedeas "to the extent that the [Board] affirmed the WCJ's decision that [Metro] is the responsible party for payment of [Claimant's] workers' compensation benefits, rather than [SWIF]." Id. (Supp. R.R. at 98b-99b.) The order did not go so far as to order SWIF to re-commence making payments to Claimant.
Claimant filed a penalty petition against Metro and SWIF on June 13, 2008, alleging that Metro and SWIF had unilaterally suspended Claimant's benefits as of January 6, 2006. WCJ Lorine issued an interlocutory order on August 12, 2008, ordering SWIF to pay weekly workers' compensation benefits to Claimant at the rate of $139.06 "beginning January 6, 2006 and continuing until otherwise modified, suspended or terminated by agreement, order or by operation of law." (Supp. R.R. at 106b.) Although WCJ Lorine's order was interlocutory in nature and therefore non-appealable, SWIF did not comply with the order and instead filed an appeal with the Board.
On September 5, 2008, twenty-three days after WCJ Lorine's interlocutory order directing SWIF to begin making payments to Claimant, this Court's final decision on the merits concluded that the Board was correct that Metro, not SWIF, was responsible for paying Claimant's benefits. Metro Staffing, Inc. v. Workers' Compensation Appeal Board (Wright, State Workers' Insurance Fund and Continental Casualty Company) (Pa. Cmwlth., No. 2145 C.D. 2007, filed September 5, 2008). (Supp. R.R. at 107b-18b.) Metro did not appeal this decision.
On January 13, 2009, the Board vacated WCJ Lorine's interlocutory order of August 12, 2008. (Supp. R.R. at 127b-31b.) Claimant appealed to this Court, contending that the Board did not have authority to vacate WCJ Lorine's order. This Court issued its decision on Claimant's appeal of the Board's January 13, 2009 order on November 16, 2009. Wright v. Workers' Compensation Appeal Board (Metro Staffing, Inc. and State Workers' Insurance Fund) (Pa. Cmwlth., No. 225 C.D. 2009, filed November 16, 2009). (Supp. R.R. at 137b-43b.) Therein, we vacated the Board's order on the basis that the Board did not have jurisdiction to enter the order. We noted that WCJ Lorine's order directing SWIF to reinstate Claimant's weekly compensation was interlocutory in nature and that only final orders are appealable. Moreover, we noted that, contrary to SWIF's assertions, WCJ Lorine's interlocutory order was neither improper nor inconsistent with this Court's order of February 25, 2008.
See, e.g., Benjamin v. Workmen's Compensation Appeal Board (Furlong Manufacturing Co.), 672 A.2d 364 (Pa. Cmwlth. 1996).
At the time WCJ Lorine entered the August 12, 2008 order, this Court had not yet addressed the merits of Metro's petition for review. Thus, at the time it was issued, WCJ Lorine's order was in accord with this Court's supersedeas order of February 25, 2008, stating that Metro was likely to prevail in its argument that the Board erred in concluding that SWIF was not the responsible insurer.
While Claimant's appeal of the Board's January 13, 2009 order was pending before this Court, WCJ Lorine entered another order on January 28, 2009, dismissing SWIF as a defendant and granting Claimant's June 13, 2008 penalty petition in the amount of 20% against Metro. (Supp. R.R. at 136b.) On December 2, 2009, the Board affirmed that portion of WCJ Lorine's January 28, 2009 order granting the 20% penalty against Metro and dismissing all claims against SWIF, and remanded the matter to WCJ Lorine for additional findings for an award of counsel fees for unreasonable contest against Metro. (Supp. R.R. at 146b-52b.) The matter is still pending before WCJ Lorine at this time.
On January 8, 2010, Claimant filed the penalty petition now before this Court. The penalty petition was assigned to WCJ Joseph Hagan. Claimant requested that the penalty petition be reassigned to WCJ Lorine, who issued the order Claimant alleges SWIF has violated. Although SWIF did not object to Claimant's request, WCJ Hagan denied the request to reassign the case, and made the following conclusions of law:
1. SWIF had no legal justification to stop payments unilaterally in January 2006.(Supp. R.R. at 17b.) Accordingly, WCJ Hagan denied and dismissed Claimant's penalty petition.
2. Having considered the entire history of this case, I exercise my discretion and decline to assess a penalty.
Both Claimant and SWIF appealed to the Board. Claimant argued that WCJ Hagan abused his discretion by: (1) denying his request to have the matter reassigned to WCJ Lorine; and (2) failing to award a penalty against SWIF, given that WCJ Hagan concluded that SWIF had no justification for stopping payment of Claimant's benefits in January 2006. SWIF, on the other hand, argued that WCJ Hagan erred in concluding that SWIF had no legal justification to stop paying benefits to Claimant. The Board rejected both of Claimant's arguments but vacated WCJ Hagan's conclusion that SWIF had no legal justification to unilaterally stop paying Claimant's benefits. (Supp. R.R. at 37b.)
Discussion
On appeal to this Court, Claimant argues that: (1) the Board erred in vacating WCJ Hagan's conclusion that SWIF had no legal justification to stop paying benefits to Claimant in January 2006; and (2) WCJ Hagan and the Board erred in failing to grant Claimant's penalty petition.
Our scope of review is limited to determining whether findings of fact are supported by substantial evidence, whether an error of law has been committed, or whether constitutional rights have been violated. Section 704 of the Administrative Agency Law, 2 Pa. C.S. §704.
Claimant also argues that WCJ abused his discretion in failing to transfer Claimant's penalty petition to WCJ Lorine. Although it might have been advisable for him to do so for the sake of judicial economy, we need not address this issue because of our disposition of Claimant's other arguments.
We agree with Claimant that the Board erred in vacating WCJ Hagan's conclusion that SWIF had no legal justification to unilaterally stop paying Claimant's benefits. The Board's reasoning was that, as of January 2006, WCJ Burman had not yet granted the claim petition and there was no order in place at that time directing SWIF to pay benefits to Claimant. (Supp. R.R. at 36b.) However, this is contrary to the record, which indicates that WCJ Burman granted the claim petition and ordered SWIF to commence making payments to Claimant on May 9, 2005. In fact, pursuant to WCJ Burman's order, SWIF immediately began making payments to Claimant but unilaterally stopped making those payments in January 2006. The Board did not reverse WCJ Burman's conclusion that SWIF was the responsible carrier until April 10, 2006. Thus WCJ Burman's May 9, 2005 order was still in effect in January 2006 when SWIF suspended Claimant's weekly payments, and SWIF was in violation of the Act from January 6, 2006 until April 10, 2006. There is nothing in the record demonstrating justification for SWIF's violation of the May 2005 order.
The law is well-established that without a supersedeas the employer (or, in this case, the insurer) must continue paying benefits during the litigation period. Section 430(b) of the Act, 77 P.S. §971(b); Graves v. Workmen's Compensation Appeal Board (LaFrance Corporation and The Travelers Insurance Co.), 680 A.2d 49 (Pa. Cmwlth. 1996) (holding that the employer was responsible for the difference between partial disability and total disability for the time period during which the employer failed to comply with a WCJ's interlocutory order reinstating total disability benefits even though the WCJ later granted the employer's termination petition retroactive to a date well before the WCJ's interlocutory order). It does not matter that SWIF eventually won on the merits and was found not liable to Claimant. This Court has consistently rejected arguments made by employers/insurers that their unilateral cessation of benefits should not be considered a violation of the Act in instances where they ultimately succeed in litigation. See Graves; Moody v. Workmen's Compensation Appeal Board (Philadelphia Inquirer), 560 A.2d 925 (Pa. Cmwlth. 1989).
In the recent decision of Krushauskas v. Workers' Compensation Appeal Board (General Motors), 56 A.3d 64 (Pa. Cmwlth. 2012), this Court again recognized the distinction between a violation of the Act due to the unilateral cessation of benefit payments by an employer and the ultimate success of the employer in litigation to terminate benefits. In that case, no penalty for the employer's violation of the Act could be computed because no benefits were due to the claimant as he had been voluntarily retired when the payment of benefits ceased.
In Moody, a referee awarded benefits to the claimant. The employer appealed to the Board, requesting supersedeas and a remand to present newly discovered evidence that the claimant had suffered a non-work-related injury and sued an auto supply store for damages. The Board denied supersedeas as to 80% of the claimant's benefits and remanded the case for further proceedings. The employer paid the claimant 80% of the compensation due until the date of the claimant's alleged non-work-related injury but unilaterally refused to pay any compensation after that date. The referee eventually suspended the claimant's benefits as of that same date. On appeal, this Court held that the employer's failure to pay benefits pending litigation warranted an award of penalties and attorney fees even though the employer prevailed on remand and had the claimant's benefits suspended as of the very date after which the employer refused to pay benefits. We rejected the employer's argument that its failure to pay benefits until the conclusion of litigation should be excused because it eventually prevailed, noting that:
Prior to 1996, WCJs were known as "referees."
Hindsight is always twenty-twenty. Employer could have stopped payment if it had prevailed in its supersedeas request before the Board but it did not. Employer simply took the position that it would prevail on remand and therefore would not pay.Id. at 927 (emphasis added) (citations omitted).
The referee did not issue his second order suspending benefits...until January 5, 1987. The referee by backdating the suspension to April 9, 1983 cannot turn back the clock to wipe out Employer's obligation to pay benefits for a two year period of time during which supersedeas had been refused. This is the very purpose for which the Supersedeas Fund exists. Employer's proper recourse is to pay as ordered, file for supersedeas, and if denied then to apply to the Fund for reimbursement if Employer is ultimately successful. The [Act] does not give the Employer the right of self-help.
The same rationale applies here. The fact that the Board subsequently determined that SWIF was not the responsible insurance carrier on April 10, 2006 does not excuse SWIF's failure to make the required payments up until that date. As in Moody, the proper course of action for SWIF would have been to apply for supersedeas. If supersedeas were denied, SWIF should have paid Claimant's benefits, and then applied to the supersedeas fund for reimbursement when the Board determined that SWIF was not the responsible insurance carrier. We therefore hold that WCJ Hagan's conclusion that SWIF had no legal justification to unilaterally stop paying Claimant's benefits was correct and that the Board erred in vacating this conclusion.
We turn now to Claimant's assertion that WCJ Hagan and the Board erred in failing to award Claimant's penalty petition against SWIF, given that SWIF violated the Act. SWIF, for its part, argues that it was "not a party subject to penalty" by virtue of the fact that Claimant filed the instant penalty petition in January 2010, well after it had been determined that SWIF was not the responsible insurance carrier. (SWIF's Brief at 9-10.) However, the date on which a penalty petition alleging a violation of the Act is filed has no bearing on whether the Act was violated. Section 430(b) of the Act provides that "[a]ny insurer or employer who terminates, decreases or refuses to make any payment provided for in the decision without filing a petition and being granted a supersedeas shall be subject to a penalty...." 77 P.S. §971(b). (Emphasis added). Thus, the relevant date is not when Claimant filed his penalty petition; rather, the date SWIF suspended Claimant's benefits, January 6, 2006, without filing a petition and being granted a supersedeas.
SWIF also argues that it is not an "insurer" in this matter as it was "clearly determined and held that SWIF did not provide workers' compensation insurance coverage to Metro...at the time of Claimant's work-related injury." (SWIF's Brief at 10.) However, this is essentially the same argument that we rejected in Moody and Graves, that a violation of the Act is excused where the employer or insurer ultimately wins on the merits.
Section 435(d) of the Act provides:
(d) The department, the board, or any court which may hear any proceedings brought under this act shall have the power to impose penalties as provided herein for violations of the provisions of this act or such rules and regulations or rules of procedure:
(i) Employers and insurers may be penalized a sum not exceeding ten per centum of the amount awarded and interest accrued and payable: Provided, however, That such penalty may be increased to fifty per centum in
77 P.S. §991(d) (emphasis added).cases of unreasonable or excessive delays. Such penalty shall be payable to the same persons to whom the compensation is payable.
(ii) Any penalty or interest provided for anywhere in this act shall not be considered as compensation for the purposes of any limitation on the total amount of compensation payable which is set forth in this act.
(iii) Claimants shall forfeit any interest that would normally be payable to them with respect to any period of unexcused delay which they have caused.
A plain reading of section 435(d) indicates that a WCJ, the Board, or any court has discretion in determining whether to impose penalties, and that this Court has discretion to impose a penalty where the WCJ and Board have declined to do so. See Graves, 680 A.2d at 52 n.4. However, as a rule, this Court has been reluctant to disturb a WCJ's decision regarding penalties absent an abuse of discretion. See, e.g., City of Philadelphia v. Workers' Compensation Appeal Board (Andrews), 948 A.2d 221 (Pa. Cmwlth. 2008). A WCJ's discretion on penalty petitions is not entirely unfettered, however. Croman v. Workers' Compensation Appeal Board (Township of Marple), 706 A.2d 408 (Pa. Cmwlth. 1998). In Croman, the WCJ concluded that the employer had not violated the Act even though it was clear that the employer failed to issue a notice of compensation denial within the prescribed period and did not commence payments until three months after receiving notice of the claimant's injury. The Board affirmed on the basis that it could not interfere with the WCJ's decision not to impose penalties. This Court vacated the Board's decision, concluding that the WCJ abused his discretion in refusing to assess penalties under the circumstances.
Here, as in Croman, there was clearly a violation of the Act; SWIF unilaterally ceased paying Claimant's benefits on January 6, 2006 without applying for or being granted a supersedeas. Contrary to WCJ Hagan's December 29, 2010 order indicating it is not possible to ascertain at what point, if any, SWIF's actions violated the Act "to a degree that would warrant imposition of penalties," (Supp. R.R. at 16b), the record belies this statement. Although the procedural posture of this case is lengthy, it is nonetheless clear from the record that at the time SWIF unilaterally stopped making payments to Claimant, WCJ Burman's May 9, 2005 order was still in effect. Thus, SWIF was in violation of the Act from that date (January 6, 2006) until April 10, 2006, when the Board determined that SWIF was not responsible for paying Claimant's benefits. SWIF's ultimate success on the merits does not excuse its violation of the Act. Graves; Moody. Because the record establishes SWIF's clear obligation to pay benefits pursuant to WCJ Burman's order and its unilateral, blatant cessation of payments without legal justification, we conclude that the WCJ erred in finding that it was not possible to ascertain the period of SWIF's violation so as to impose penalties.
We also find that WCJ Hagan abused his discretion in failing to award penalties in this instance by not properly applying the mandatory provisions of the Act. Although WCJ Hagan determined that SWIF "had no legal justification to stop payments unilaterally," he nonetheless declined to assess a penalty after "having considered the entire history of the case." This rationalization by the WCJ, however, is directly contrary to his determination that SWIF ceased making paying benefits without any legal justification. The record confirms the WCJ's determination that SWIF ceased making payments without justification and that it blatantly disregarded WCJ Burman's order. That there has been an extended history in the case is clearly of no moment because the WCJ determined there was no justification for SWIF to disregard the payment of benefits order, and, as we noted above, the record is clear as to the time period during which SWIF violated the Act. The WCJ's failure to apply section 430(b) of the Act, which mandates that an insurer "who terminates, decreases or refuses to make payment provided in the decision ... shall be subject to a penalty," 77 P.S. §971(b) (emphasis added), is an abuse of discretion.
Moreover, the case law of this Commonwealth has long held that an abuse of discretion is not limited to instances where the law is misapplied in reaching a conclusion, but that it occurs for other reasons, including instances where the judgment exercised is manifestly unreasonable as shown by the evidence. See Commonwealth v. Rucci, 543 Pa. 261, 285, 670 A.2d 1129, 1139 (1996) (citing Melzer v. Witsberger, 505 Pa. 462, 475, 480 A.2d 991, 997 (1984), and Commonwealth v. Long, 553 Pa. 388, 625 A.2d 630 (1993)). The evidence of record shows SWIF acted in blatant disregard of a WCJ's order and did so without justification. The failure to impose a penalty in light thereof is manifestly unreasonable and hence an abuse of discretion by the WCJ. The WCJ's rationalization of this failure on the basis of the "history of the case" is contradicted by his own determination of no justification and this court has previously held that conclusory statements of this nature by a WCJ to rationalize the failure to assess a penalty after making a specific finding that an employer has intentionally violated the Act are abuses of discretion. Graves; Croman; Moody.
The dissent cites Westinghouse Electric Corporation v. Workers' Compensation Appeal Board (Weaver), 823 A.2d 209, 213-14 (Pa. Cmwlth. 2003), for the proposition that an abuse of discretion is not merely an error of judgment but occurs when the law is misapplied in reaching a conclusion and maintains that because the WCJ "did correctly recognize and hold, that SWIF had no legal justification to stop payments when it did," that he did not misapply the law. Accordingly, because the WCJ did not misapply the law, he did not abuse his discretion in declining to impose a penalty. However, the dissent overlooks the WCJ's misapplication of the Act by not complying with the clear mandate that insurers in these instances "shall" be subject to a penalty. Moreover, the dissent's view of what constitutes an abuse of discretion is too constrained, for as both Melzer and Long have held, there are other bases for an abuse of discretion including, as noted above, when a judgment is manifestly unreasonable as shown by the evidence. Coincidentally, the passage taken by the dissent from the Westinghouse decision cites as authority Candito v. Workers' Compensation Appeal Board (City of Philadelphia), 785 A.2d 1106 (Pa. Cmwlth. 2001). The Candito decision, however, correctly states that a misapplication is "among other reasons" for an abuse of discretion, and cites Rucci, which we note above.
Accordingly, we reverse the Board's order and remand the case to the Board with instructions to remand the matter to the WCJ for an order assessing penalties against SWIF.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 21st day of February, 2013, the August 30, 2011 order of the Workers' Compensation Appeal Board (Board) is hereby reversed. The case is remanded to the Board for further remand to the WCJ to issue an award of penalties against SWIF for its violation of the Act for the time period of January 6, 2006 until April 10, 2006.
Jurisdiction relinquished.
/s/_________
PATRICIA A. McCULLOUGH, Judge BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
DISSENTING OPINION BY JUDGE COHN JUBELIRER
I respectfully dissent and would affirm the Order of the Board. This Court has consistently held that "imposition of a penalty under the [Workers' Compensation] Act [Act] is at the discretion of the WCJ and is not required, even if a violation is apparent on the record." Curren v. Workers' Compensation Appeal Board (City of Chester), 863 A.2d 624, 630 (Pa. Cmwlth. 2004). Moreover, "[a]n abuse of discretion is not merely an error of judgment but occurs, inter alia, when the law is misapplied in reaching a conclusion." Westinghouse Electric Corporation v. Workers' Compensation Appeal Board (Weaver), 823 A.2d 209, 213-14 (Pa. Cmwlth. 2003). Likewise, I do not believe that Section 430(b) of the Act, 77 P.S. § 971(b), removes the discretion of a WCJ in the case of any violation. Section 430(b) states that if an employer decreases or stops benefit payments without filing for and being granted supersedeas, then it "shall be subject to a penalty as provided in [S]ection 435." 77 P.S. § 971(b) (emphasis added). This Court has held that the assessment of penalties under Section 435 of the Act, added by Section 3 of the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. § 991, is discretionary. Candito v. Workers' Compensation Appeal Board (City of Philadelphia), 785 A.2d 1106, 1109 (Pa. Cmwlth. 2001). The WCJ's decision not to award penalties in this case was, I believe, an exercise of discretion and not a misapplication of the law.
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1 - 1041.4, 2501 - 2708. --------
The WCJ did correctly recognize, and hold, that SWIF had no legal justification to stop payments when it did. (WCJ Decision, Conclusions of Law (COL) ¶ 1.) However, upon considering "the entire history of the case," the WCJ concluded that penalties were not warranted. (COL ¶ 2.) I do not believe the WCJ's holding in this regard is manifestly an abuse of discretion such that this Court should overturn it. The majority focuses on the following language in the WCJ's opinion: "It would take a Solomon to determine at what point, if any, SWIF's actions violated the Act to a degree that would warrant imposition of penalties." (WCJ Decision at 2, S.R.R. at 16b.) Given the WCJ's Conclusions of Law, I believe this represents the WCJ's assessment of the entirety of the circumstances, not a misapprehension of the fact that SWIF violated the Act. Therefore, I would not disrupt the WCJ's discretion in this regard.
This case can be distinguished from Croman v. Workers' Compensation Appeal Board (Township of Marple), 706 A.2d 408 (Pa. Cmwlth. 1998), Graves v. Workmen's Compensation Appeal Board (LaFrance Corporation and The Travelers Insurance Co.), 680 A.2d 49 (Pa. Cmwlth. 1996), and Moody v. Workmen's Compensation Appeal Board (Philadelphia Inquirer), 560 A.2d 925 (Pa. Cmwlth. 1989). In Croman, this Court noted that the Board held that the WCJ in that case "erred as a matter of law in concluding that [the employer] had not violated the Act." Croman, 706 A.2d at 410. Given that the WCJ in Croman had found facts that showed a violation of the Act, but refused "to assess penalties or otherwise say why penalties were unwarranted," this Court held that the WCJ abused his discretion. Id. at 410-11 (emphasis added). In Graves, the WCJ ordered the employer to pay total disability benefits to the claimant, the employer refused to pay, and the WCJ subsequently granted the employer's termination petition retroactive to a date prior to his initial order. Graves, 680 A.2d at 50. The WCJ denied the claimant's penalty petitions and, as in Croman, did not appear to give any rationale for doing so. Id. Similarly, in Moody, the Referee and the Board apparently gave no rationale for denying the claimant's penalty petition; the only factor that might have mitigated in the employer's favor below was that its petition for suspension was granted retroactively. Moody, 560 A.2d at 927.
Reading Sections 430 and 435 together, I believe the Act and this Court's case law requires a WCJ to recognize that an employer has violated the law and that a penalty could be awarded, but allows the WCJ to take into consideration the circumstances of the case in determining whether, ultimately, to award such a penalty. If this Court reverses the decision of the WCJ simply because we believe it was incorrect, rather than contrary to the law, we abrogate the discretion granted to WCJs. In this case, by contrast, the WCJ made no error of law and explained his reasons for not awarding penalties. As the WCJ recognized, this case had a tangled history before the WCJ and the Board, with gaps in Employer's WC coverage and a number of appeals during the pendency of this matter.
Because the law was not misapplied, and there was no abuse of discretion by the WCJ, I would affirm the Order of the Board.
/s/ _________
RENÉE COHN JUBELIRER, Judge