PENNSYLVANIA WORKERS’ COMPENSATION
1/27/2023 – 2/28/2023
Jason Yoder v. McCarthy Constr. et al, v. Air Control Tech & RRR Contractors
Commonwealth Court of Pennsylvania – Published Opinion
Decided: January 31, 2023
Whether McCarthy Construction, Inc. (“McCarthy”) qualifies as Jason Yoder’s statutory employer under the Workers’ Compensation Act, such that it is immune from suit?
Appellant, McCarthy Construction, Inc. (“McCarthy”), appealed from a $5,590,650.69 judgment entered in favor of Appellee, Jason Yoder, and against McCarthy. The Norwood Public Library entered into a contract with McCarthy, a carpentry company. McCarthy, in turn, subcontracted with roofing company, RRR Contractors, Inc., for part of the roofing work. Mr. Yoder worked for RRR. Mr. Yoder sustained critical injuries after he fell through an uncovered hole in the roof of the library while working there as a roofer. Mr. Yoder suffered severe and permanent disabling injuries and will require pain management for the rest of his life because of his progressively debilitating injuries. Mr. Yoder filed a complaint against McCarthy contending McCarthy was negligent. McCarthy raised the argument that Mr. Yoder’s claims are barred or limited by the exclusivity provisions of the Pennsylvania Workers’ Compensation Act. The trial court denied McCarthy’s motion for summary judgment. Mr. Yoder sought to preclude McCarthy from raising the statutory-employer defense at trial because McCarthy had purportedly waived the defense by failing to timely plead it. The trial court determined that, although the statutory-employer defense is not waivable, McCarthy failed to meet any of the prongs of the test to establish that it was the statutory employer of Mr. Yoder. The jury returned a unanimous verdict in favor of Mr. Yoder in the amount of $5,000,000, based upon negligence. The trial court also issued an order granting Mr. Yoder delay damages in the amount of $590,650.69. In post-trial submissions the trial court held that McCarthy did not and cannot succeed with the non-waivable statutory employer defense because it fails to meet the fifth prong of the test established in McDonald, as he was an independent contractor for RRR.
In exchange for assuming secondary liability for the payment of workers’ compensation benefits, statutory employers under Section 302(b) have immunity in tort for work-related injuries sustained by subcontractor-employees. McCarthy’s failure to timely plead the statutory-employer defense does not result in waiver. Statutory-employer immunity may be raised at any time so long as the proceedings are still open. To establish this statutory- employer relationship the PA Supreme Court has held that the following five elements must be present: (1) An employer who is under contract with an owner or one in the position of an owner; (2) Premises occupied by or under the control of such employer; (3) A subcontract made by such employer; (4) Part of the employer’s regular business entrusted to such subcontractor; (5) An employee of such subcontractor. The Superior Court determined that McCarthy qualifies as Mr. Yoder’s statutory employer under the five-part McDonald test and is therefore entitled to tort immunity. Accordingly, they reversed the judgment entered in favor of Mr. Yoder and remanded for the entry of judgment in favor of McCarthy. An independent contractor can never be a statutory employee. Therefore, the elements of the McDonald test cannot be met where a contractor is an independent contractor. Pennsylvania does not have an established rule to determine whether a particular relationship can be classified as employer-employee or owner-independent contractor but instead promulgates certain guidelines or factors. With respect to the fifth McDonald element, Mr. Yoder was not an independent contractor of subcontractor, RRR, but instead an employee of RRR. Judicial estoppel applies here. Mr. Yoder sought and obtained workers’ compensation benefits from RRR, with his claim resolved in a “Compromise and Release Agreement by Stipulation. As part of the Compromise and Release Agreement, Mr. Yoder formally resigned his employment with RRR. Mr. Yoder’s demand for and receipt of workers’ compensation benefits conclusively established that he was an employee of RRR. Mr. Yoder represented in the Compromise and Release Agreement that he was an employee of RRR, not an independent contractor. He successfully maintained that position, as holding himself out as an employee of RRR enabled him to receive workers’ compensation benefits.” The Court noted that McCarthy meets the other four requirements as well. McCarthy was under contract with the Norwood Borough, the owner of the library where the accident occurred. McCarthy has met the first McDonald element, as it has a contract with the owner. While an employer satisfies the second prong by proving either occupancy or control and it is not required to prove both. McCarthy has established both. The third McDonald element calls for a subcontract made by McCarthy. McCarthy meets this requirement. The fourth McDonald element demands that McCarthy entrusted a part of its regular business to RRR. This element, as a general rule, is satisfied wherever the subcontracted work is an obligation assumed by a principal contractor under his contract with the owner. As such, all elements for a statutory-employer relationship are met.
YELLOW FREIGHT MOTIONS
Mark Davis v. Crothall Healthcare, Inc. (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 1, 2023
Whether the Board erred in affirming the WCJ’s termination of disability benefits when, pursuant to Yellow Freight, Claimant was entitled to a rebuttable presumption that his disability continued, which Employer’s equivocal and incompetent medical evidence failed to refute?
Claimant worked in Employer’s environmental services department. On December 3, 2019, Claimant filed a claim petition, alleging that he sustained a work injury on October 18, 2018 from cumulative trauma to his lower back and bilateral knees as a direct result of his job duties over the course of 14 years working for Employer, and that he notified Employer of his work injury in a written report dated January 21, 2019. The WCJ conducted a hearing on January 8, 2020, at which Employer neither appeared nor was represented by counsel. The WCJ noted that Employer had also failed to file an answer as of that date. Claimant requested relief pursuant to Yellow Freight. The WCJ issued an interlocutory order (Order) that deemed admitted all factual allegations contained in the claim petition. The Order also granted the claim petition and directed that Employer pay Claimant total disability benefits from October 19, 2018 until the last day Employer’s answer could have been timely filed. In a June 3, 2021 final decision, the WCJ found that Employer provided no adequate excuse for filing an untimely answer to the claim petition. However, the WCJ rejected Claimant’s testimony to the extent it suggested Claimant’s disability extended beyond May 27, 2020. Accordingly, the WCJ granted Claimant’s claim petition but concluded that Claimant failed to demonstrate he continued to suffer from a work-related disability after May 27, 2020, and Employer sustained its burden of proving that Claimant had fully recovered from his work injury as of that date. Both Claimant and Employer appealed to the Board.
When an employer fails, without adequate excuse, to file a timely answer to the claim petition, the employer is deemed to have admitted the factual allegations in the claim petition. The employer is thus barred from presenting any affirmative defenses or challenges thereto. However, an employer’s failure to timely file an answer is not the equivalent of a default judgment as the claimant must still present evidence regarding any facts that were not well-plead in the claim petition, and an employer may rebut such evidence. Furthermore, the claimant is only entitled to a presumption of ongoing disability “up to the last day the answer could have been timely filed.” The employer is permitted to offer evidence to rebut this presumption. The WCJ, and the Board, erred in assigning claimant the burden of proof to demonstrate ongoing injuries and disability after May 27, 2020, and in only granting Claimant benefits through the date of Employer’s answer, January 8, 2019. By virtue of Employer’s late answer, and the deemed admissions set forth in the claim petition, Claimant sustained cumulative trauma to his lower back and bilateral knees as a direct result of his job duties in the environmental services department for Employer over the course of 14 years. Having admitted to the truth of these allegations, Employer was barred from presenting any evidence to rebut them. Employer’s expert did not believe that cumulative trauma caused Claimant’s lumbar strain and sprain, and he utterly rejected the notion that Claimant sustained a work injury to his knees and, in fact, denied that Claimant sustained any work injury, despite his earlier acknowledgement that Claimant suffered a lumbar strain and sprain. In refusing to acknowledge the full extent of Claimant’s work injury, Employer’s expert could not provide an opinion regarding Claimant’s recovery from all aspects of his work injury. Consequently, Claimant remained entitled to a rebuttable presumption that his disability continued after December 23, 2019, the last date upon which Employer could have filed a timely answer to the claim petition. Because Employer’s medical evidence was insufficient to support a conclusion that Claimant had fully recovered from his work injury, the WCJ erred in terminating Claimant’s benefits, effective May 27, 2020.
Judge Leavitt issued a dissenting opinion noting that, it is well established that a medical expert need not believe that a work injury occurred in order to opine on a claimant’s recovery. The medical expert’s opinion is competent if he assumes the presence of an injury and finds it to be resolved by the time of the Independent Medical Examination. Employer’s expert opined that Claimant was fully recovered from his work injuries; able to perform his time of injury position without restriction; and was no longer in need of medical treatment of any kind, as of his examination on May 27, 2020.
IMPAIRMENT RATING EVALUATIONS
Ronald Bainbridge v. Commonwealth of Pennsylvania (WCAB) Commonwealth
Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 3, 2023
Whether receipt of Act 534 benefits constitutes the receipt of total disability WC benefits under Section 306(a) and (a.3) of the WC Act?
Claimant suffered a work-related injury relating to a resident assault during his employment at the North Central Secure Treatment Unit facility, for the Employer. Employer acknowledged the injury and noted that Claimant was receiving salary continuation through Act 534 benefits in lieu of WC benefits. In 2020, Employer filed the Modification Petition alleging that Claimant has a whole-person impairment of 16% under the Sixth Edition of the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (Guides), which is less than the 35% threshold under Act 111 after attending an Impairment Rating Evaluation (IRE). A hearing on Employer’s Modification Petition ensued. The WCJ issued a Decision and Order in which she granted Employer’s Modification Petition, and modified Claimant’s benefit status from total disability to partial disability effective the date of the IRE. Claimant appealed the WCJ’s Decision and Order to the Board, arguing that the WCJ erred in granting the Modification Petition because he did not receive total disability WC benefits for the required 104 weeks because he had received Act 534 benefits for that period of time. The Board rejected Claimant’s assertion.
The Court had already previously decided this issue, in an earlier case, and held that receipt of Act 534 benefits constitutes the receipt of total disability WC benefits under Section 306(a) and (a.3) of the WC Act, thereby triggering the IRE process under which Employer could seek the modification of his WC benefits.
Kenneth Elliott v. City of Pittsburgh (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 6, 2023
Whether the Claimant’s Protz-IRE reinstatement, from partial disability benefits to total disability benefits, should have been effective as of the original 2012 modification date, or as of the date the Reinstatement Petition was filed?
Claimant sustained a back injury in the course and scope of his employment with the City of Pittsburgh (Employer). In December 2012, he underwent an impairment rating evaluation (IRE) provided for in former Section 306(a.2) of the Pennsylvania Workers’ Compensation Act (Act), which resulted in an impairment rating of less than 50%.
Employer then filed a modification petition, and in a 2014 decision and order, a WCJ modified Claimant’s disability status from total to partial as of the December 2012 IRE date. In April 2021, Claimant filed a reinstatement petition seeking a return to total disability status based on the Pennsylvania Supreme Court’s decision in Protz. A WCJ granted the petition and reinstated Claimant to total disability status. The WCJ ordered the reinstatement to be effective as of the date of Claimant’s reinstatement petition.
Claimant appealed to the Board, arguing that his reinstatement should have been effective as of the 2012 modification date. The Board affirmed the WCJ’s decision and order.
Claimant’s arguments were similar to those raised and rejected numerous times by the Court. The claimant’s arguments were, therefore, rejected. Employer was entitled to credit for partial disability payments to Claimant between the date of the 2012 IRE and the date of Claimant’s reinstatement petition, and the WCJ properly used the filing date of the Reinstatement Petition as the reinstatement date.
MEDICAL FEE REVIEWS
Philadelphia Surgery Center v. Excalibur Ins. Mgmt. Serv., (Bureau of Workers’ Compensation Fee Review Hearing Office)
Commonwealth Court of Pennsylvania – Published Opinion
Decided: January 27, 2023
Whether the Hearing Officer had the statutory authority to impose the remedy of reimbursement for overpayment of medical services?
Claimant sustained a work injury in the course of her employment with Employer, Luzerne County. Provider performed a spinal cord stimulator implant on Claimant for her work injury and submitted bills to Insurer in the amount of $134,016.13 for nine services. Insurer issued an explanation of reimbursement form pursuant to which it paid Provider $54,231.88 and provided reason codes as to why it calculated the payment due as less than the submitted amount. Provider filed an application for fee review pursuant to Section 306(f.1)(5) of the Workers’ Compensation Act (Act). The Fee Review Section determined that the amount of reimbursement allowed to Provider pursuant to the fee schedule was $14,393.83. However, the Fee Review Section failed to acknowledge Insurer’s prior payment to Provider notwithstanding Insurer’s uploaded response to the Fee Review Section’s Letter of Investigation. The Hearing Officer determined that the record established that the Provider neither supplied proper documentation to the Fee Review Section to support its billing, nor provided notations in its Application for Fee Review consistent with the notations it made in its actual uploaded billing. The Hearing Officer concluded that Insurer proved by a preponderance of the evidence that it properly reimbursed Provider, but that Insurer had made an overpayment in the amount of $39,838.05. Accordingly, the Hearing Officer issued an adjudication affirming as modified the Fee Review Section’s administrative decision and directed Provider to reimburse Insurer in the amount of the found overpayment ($39,838.05), plus statutory interest.
The fee review process only permits providers to challenge underpayments or denials of payment. It does not permit insurers to use the fee review process to obtain reimbursement of an overpayment. In the administrative decision at issue, the Fee Review Section did not opine one way or the other on whether the amount it determined to be due had already been paid. Consequently, any overpayment was the result of Insurer’s error at the billing stage, not that of any order of the Fee Review Section. The net result is that an insurer is simply stuck with its own improvidence when it pays too much in the first instance during the billing process. Regulations must be construed in accordance with the statute that authorized them. The fee review process is limited to the amount and/or timeliness of the payment from the employer or insurer. Consequently, the regulations promulgated thereunder must be interpreted with that limitation in mind. In a utilization review case, the remedies under the Act are limited to those created by the General Assembly and courts are precluded from engrafting remedies in the absence of statutory support. While the Fee Review Section and the Hearing Officer properly determined the fact and amount of the overpayment, in the absence of legislative authority permitting the Bureau to direct a provider to reimburse an insurer for an overpayment of fees for medical services, neither the Hearing Officer nor this Court may create such authority in contravention of the Act.
SUFFICIENCY OF THE WCJ’S FINDINGS AND CONCLUSIONS
The Pennsylvania State University v. John Ward (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 22, 2023
Whether Claimant was acting in the course of his employment when he monitored his fiancée’s custody exchange, the personal animus doctrine applies and should the Board have remanded to have the WCJ justify the findings that both fact witnesses testified credibly?
Penn State employed both claimant as a maintenance worker, and his fiancée, who was divorced. Claimant’s fiancée typically met her ex-husband in a Penn State parking lot to exchange custody of their minor child. Claimant was at Penn State when he witnessed his fiancée’s ex-husband kill her and then commit suicide. Claimant filed a claim petition requesting temporary total disability benefits. The parties stipulated that Claimant witnessed the murder/suicide and consequently suffered post-traumatic stress disorder.
Before the WCJ, Claimant testified that he was leaving the dorm and was on his way to the dining hall office to check his mailbox for maintenance requests when he saw his fiancée killed. In contrast, per Employer’s witness, Claimant was not on his way to the office, but was watching the custody exchange from the second floor when the shooting occurred, which prompted Claimant to run downstairs as fast as he could. The WCJ denied the petition because Claimant failed to establish that he was injured during an activity that furthered the interests of Penn State. The WCJ held that Claimant “failed to establish that his monitoring of, and involvement with, the custody exchange giving rise to this claim has been related to his employment, and that this activity advanced Penn State’s interests” and that Claimant failed to establish that his actions fell within the scope of the personal comfort doctrine, and that Penn State successfully invoked the personal animus defense because the ex-husband targeted Claimant. The Board reversed, reasoning that Claimant properly invoked the personal comfort doctrine and that Penn State failed to establish the affirmative defense of personal animus.
Under section 422(a) of the Act, the WCJ must issue a “reasoned decision” so that this Court does not have to ‘imagine’ the reasons why a WCJ finds that the conflicting testimony of one witness was more credible than the testimony of another witness. The WCJ had to reconcile conflicting testimony, regarding Employer’s witness’ deposition testimony and Claimant’s in-person testimony. If the WCJ credited the former, then Claimant’s action was unrelated to his employment. But if the WCJ credited the latter, then the WCJ presumably would have held that Claimant was acting in the course of his employment, and not monitoring the custody exchange, when he witnessed his fiancée’s shooting, and the WCJ would have granted the claim petition. Because of the WCJ’s conflicting credibility findings and failure to detail which testimony the WCJ found credible, the Board should have remanded to the WCJ for clarification. Absent the WCJ’s clarification, the Court could not reconcile the WCJ’s credibility determinations with the WCJ’s denial of relief. The Court vacated the Board’s decisions and remanded to the Board with instructions to vacate the WCJ’s decisions and remand to the WCJ to draft a new, reasoned, decision.
Vacated and Remanded.
Nancy Wiggins v. Urban Outfitters, Inc. (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 22, 2023
Whether the Employer’s medical evidence constituted substantial evidence to support the Termination Petition and whether a factual misstatement and a missing finding of fact require a remand?
Claimant petitioned the Court for review of the Workers’ Compensation Appeal Board’s (Board) Order affirming the WC Judge’s (WCJ) decision that granted in part and denied in part Claimant’s Review Petition and granted Employer’s Termination Petition.
Claimant sustained a left shoulder injury while stacking heavy boxes at work. Employer accepted Claimant’s injury. Claimant filed a Review Petition alleging that she injured other areas while receiving physical therapy for her work-related injury. Employer filed the Termination Petition alleging that, based on the IME, Claimant had fully recovered from her work injury. The WCJ granted Claimant’s Review Petition in part, as well as granting Employer’s Termination Petition. Claimant appealed to the Board and the Board affirmed the WCJ’s decision.
For purposes of appellate review, it is irrelevant whether there is evidence to support contrary findings; if substantial evidence supports the WCJ’s necessary findings, those findings will not be disturbed on appeal. As required, the WCJ outlined the evidence considered, stated the credible evidence relied upon, and established the reasons underlying the ultimate decision. Consistent with his authority as the ultimate finder of fact and the sole authority for determining the weight and credibility of evidence, the WCJ evaluated witness credibility and, where it conflicted, credited the testimony that Claimant was fully recovered. Substantial medical evidence supports the WCJ’s decision with respect to Employer’s Termination Petition. Reviewing the record as whole, the WCJ’s incorrect inclusion of a certain record in the list of causally-related medical treatment was undoubtedly a mistake. Therefore, the Court declined to remand for further explanation by the WCJ. Further, despite the fact that there was no Finding of Fact No. 8, the factual findings necessary to support the WCJ’s decision are not missing. The omitted Finding of Fact No. 8 was simply a typographical error, and the Board did not err by affirming the WCJ’s decision without remanding to the WCJ for clarification.
Philadelphia Eagles, Inc. v. Emmanuel Acho (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 3, 2023
Whether the evidence relied upon by the WCJ to award benefits for various periods was insufficient arbitrary and capricious? Whether the medical testimony of Claimant’s expert was competent, credible, or unequivocal in establishing a compensable injury after August 23, 2015?
Claimant is a 28-year-old former linebacker for Employer. He played for Employer in 2013 and 2014 and again was on Employer’s roster in 2015. On August 11, 2015, while practicing, Claimant injured his thumb. On August 23, 2022, Claimant fractured the same thumb during practice. Claimant could not participate in any physical activity for approximately three weeks after the surgery. Claimant was released from Employer’s roster immediately after his surgery. Pursuant to an injury settlement agreement executed according to the applicable collective bargaining agreement, Claimant received three weeks of pay. After physical rehabilitation, Claimant was cleared to play football. Claimant re-signed with Employer on November 9 or 10, 2015. Claimant’s thumb remained symptomatic, however, and he did not play in any games in 2015. He was released by Employer approximately 16 days after being re-signed. Claimant thereafter attempted to try out for other teams but found that he could not play at his pre-injury level. He was not offered any positions on any other team and has not played professional football again. Claimant believes that his thumb injury made him physically unable to play football at a high level, which is why he was never signed by any team after Employer released him in 2015. He did not receive any specific treatment for his injury until 2018, when he saw a physician’s assistant at a federal workers’ compensation facility. He nevertheless had not received any formal medical treatment for his thumb from 2015, until 2019, when he came under the care of his medical expert. On August 20, 2018, Claimant filed a Claim Petition related to his August 23, 2015 injury. He also filed a Petition to Reinstate and Review Benefits related to the August 11, 2015 injury.
Employer in turn filed Petitions to Terminate benefits with regard to both injuries. The WCJ credited Claimant’s and his medical expert’s testimony to the extent that he found that Claimant’s thumb injury rendered him unable to perform his pre-injury linebacker job until he was found by employer’s medical expert to be fully recovered as of September 12, 2019, based upon an IME. The WCJ further credited claimant’s expert’s testimony that Claimant’s injury would interfere with Claimant’s ability to perform his linebacker job to a degree that would make it difficult to play at the level required in the NFL. The WCJ accordingly granted Claimant partial disability benefits until September 12, 2019, and granted Employer a three-week credit for the injury settlement reached in 2015. The WCJ granted Employer’s termination petition as of September 12, 2019.
Substantial evidence supports an award of total disability benefits for the period between August 23, 2015, and November 10, 2015. Further, the WCJ’s award of benefits from November 10, 2015 through September 12, 2019 was not based on an arbitrary and capricious finding that Claimant’s injury was compensable during that period. There is substantial evidence in the record that Claimant was released from Employer’s roster in August 2015 because of his injury. Claimant testified that he experienced ongoing pain, tenderness, and related limitations in his ability to play. Although he tried out with other teams, none hired him. When he was re-signed with Employer on November 9 or 10, 2015, he practiced with a brace and wrapping on his right hand, and his participation was limited to special teams and scouting. He again was released by Employer 16 days later and did not secure employment with any other NFL teams. It was not necessary to assume that other teams were disinterested in Claimant due to his injury. The evidence of his success and ranking as a professional linebacker and/or special teams player was not meaningfully controverted by Employer, and the WCJ was free to find that Claimant played at a high, exceptional level prior to August 23, 2015. Any detraction from that level of play due to injury could and apparently did tarnish and ultimately eliminate Claimant’s prospects to play as a high-performance linebacker in the NFL. Claimant’s medical testimony noted that the condition of Claimant’s thumb since the injury was consistent with his complaints of pain and tenderness, which would cause limitations in his ability to engage in physical activity. Finally, Claimant’s expert’s testimony was not incompetent, noncredible, or equivocal. He testified that he reviewed Claimant’s medical records, including the records from Dr. Culp and the MRI images and based on those records and his own evaluation of Claimant, he identified the displacement and post- traumatic arthritis in Claimant’s thumb, both of which he attributed to the August 23, 2015 injury. He further opined that those conditions would interfere with Claimant’s ability to tackle and perform at the professional level. Also, Claimant’s expert’s opinions were not equivocal as they were not based only upon possibilities, vague, or left any doubt. His testimony was consistent with all of Claimant’s medical records and Claimant’s testimony. He unequivocally supports the award of benefits in this matter.
The WCJ’s decision is free of errors and supported by substantial evidence and did not arbitrarily or capriciously disregard any competent evidence.
Diana Snyder v. Co. of Allegheny and UPMC Benefit Mgmt. Serv. (WCAB)
Commonwealth Court of Pennsylvania – Unpublished Memorandum Opinion
Decided: February 3, 2023
Whether the WCAB erred in affirming the WCJ’s denial of the claimant’s claim petition?
Claimant filed a Claim Petition asserting that on March 4, 2020, she sustained a disabling work-related injury when reaching overhead into a patient’s closet to obtain a piece of clothing for the patient. Employer issued a Notice of Compensation Denial on March 11, 2020, asserting that Claimant had not sustained a work-related injury, and this litigation ensued. The WCJ credited Claimant’s testimony of the incident and her symptoms. However, the WCJ rejected as non-credible claimant’s expert’s testimony that the incident caused Claimant’s symptoms and ultimate need for two surgeries. The WCJ specifically pointed to her expert’s opinion that Claimant’s condition was caused by a twisting motion of her neck during the incident even though Claimant testified expressly that she had not twisted her neck. By contrast, the WCJ credited employer’s expert’s testimony as supported by and consistent with the medical records and Claimant’s testimony. The WCJ therefore concluded that Claimant had failed to establish a causal relation between the work incident and her injury and disability and denied her claim petition. The Board affirmed.
A claimant has the burden of proving all necessary elements to support an award in a claim petition proceeding. The WCJ has exclusive province over questions of credibility and a reviewing court is not to reweigh the evidence or review the credibility of witnesses. If a medical expert’s opinion depends on false or incorrect information or an assumption contrary to the facts and evidence, such as a mistaken understanding of the work incident, it can be deemed incompetent. However, if the medical expert’s opinion is based on an incomplete (rather than false or inaccurate) grasp of the facts, the defect will go to the WCJ’s evaluation of the weight of the expert’s testimony, which may not be disturbed on appeal. The WCJ found that claimant’s expert’s testimony was undermined by a fatally incomplete understanding of the mechanism of injury in this case. The WCJ found this expert’s subsequent opinion was also inconsistent with Claimant’s credible and specific testimony. The WCJ therefore rejected as non-credible the opinion that Claimant’s injury was caused by the incident. The WCJ therefore concluded that Claimant had not established a causal relationship between the incident as she described it and her subsequent disability. This is properly characterized as a lack of competence in the testimony. If a physician bases his opinion of causation in part on the temporal proximity of an event, his opinion will be deemed competent if he provides other factors to support his position. Here, however, the only other aspect of Claimant’s expert’s causation testimony was his misunderstanding of the incident and mechanism of injury. Therefore, his causation opinion could not be rehabilitated. The WCJ was within his discretion to give this testimony little or even no weight and credibility.
SUBROGATION – THE RIGHT TO INTERVENE
Michele Loftus and Richard Loftus, Her Husband v. Katrina Decker
Superior Court of Pennsylvania – Published Opinion
Decided: February 1, 2023
Whether the trial court abused its discretion and committed an error of law when it denied Appellant’s petition to intervene without a hearing?
Appellant Eastern Alliance Insurance Group appeals from the order denying its petition to intervene in an action initiated by Michelle and Richard Loftus (collectively, the Loftuses) in a praecipe for writ of summons against Katrina Decker (Decker). On September 25, 2020, the Loftuses filed a praecipe for writ of summons naming Decker as the defendant. On February 25, 2021, Appellant filed a petition to intervene. In its petition, Appellant asserted that Michelle Loftus (Loftus) was employed as a bus driver for Appellant’s insured, and that Loftus had sustained injuries in a work-related auto accident caused by Decker. Loftus previously sought and received workers’ compensation benefits from Appellant, which it claimed has a statutory lien against any damages Loftus may recover from Decker. It is undisputed that the Loftuses have not filed a complaint. Appellant asserts that intervention is necessary to protect its workers’ compensation lien because the Loftuses refuse to accept Decker’s insurance carrier’s offer to settle the case, and are prepared to abandon litigation and not seek recovery against Decker, unless Appellant agrees to compromise its statutory lien rights. Appellant contends that it is necessary for it to intervene to prosecute this matter and protect its statutory lien rights, which are not adequately represented by the Loftuses or Decker.The trial court denied Appellant’s petition to intervene. Appellant filed the instant appeal.
Appellant did not yet have a legal interest or important right to protect. Therefore, Appellant’s petition to intervene does not meet the second prong of the test for an appealable collateral order. With respect to Appellant’s claim concerning its subrogation rights, Section 319 of the Workers’ Compensation Act, does not bestow upon any party, directly or indirectly, the right to take any action against a third-party tortfeasor. Instead, the PA Supreme Court has held that Section 319 provides that only the employee can pursue damages from the tortfeasor, and the insurer has no right to seek a recovery or compel an employee to seek recovery to satisfy a statutory lien under the Workers’ Compensation Act. Under Section 319, an insurance carrier has no independent cause of action for indemnification/contribution from the negligent party who caused the insurance carrier to pay the injured employee benefits. The right of recovery flows exclusively through the employee’s decision alone, that a claim must be brought with the employee’s participation, and that there is no authority, statutory or otherwise, permitting an insurer to pursue employee’s cause of action against a tortfeasor without the employee’s voluntary participation as a party plaintiff or the contractual assignment of her claim. Appellant cannot intervene and file a complaint under the guise that it is not independently seeking to recover its lien. Further, it only seeks to intervene in the action commenced by the Loftuses’ praecipe for writ of summons. There is no complaint, there are no specific claims, facts, or prayers for relief. To the extent Appellant attempts to define and maintain a tort action on behalf of the Loftuses in an effort to protect its own rights, it is precluded from doing so. Appellant does not have a legally enforceable interest to file suit on its own behalf or to compel the Loftuses to file a complaint against Decker to protect Appellant’s subrogation lien. Accordingly, Appellant has no legally enforceable interest and no right that needs to be protected. The order underlying this appeal was not an appealable collateral order.
Judge Murray filed a dissent arguing that the facts alleged in Appellant’s petition meet the requirements for a collateral appeal under Pennsylvania Rule of Appellate Procedure 313.
EXCLUSIVITY – LATENT OCCUPATIONAL DISEASES
Brad Lee Herold, as Exec. Of the Est. of William L. Herold v. University Of Pittsburgh, et al.
Commonwealth Court of Pennsylvania – Published Opinion
Decided: February 16, 2023
Whether the common law claims of William L. Herold (decedent), which relate to his workplace exposure to asbestos and development of mesothelioma, fall within the purview of The Pennsylvania Occupational Disease Act (ODA), thus requiring that he file his claims with the Workers’ Compensation Board (Board)?
Decedent was employed by the University from 1976 until he retired in 2015, as a stationary engineer. During his employment, Decedent was exposed to asbestos until 2004. In April 2019, approximately 15 years after his last exposure to asbestos, he was diagnosed with mesothelioma, a cancer in the lining of the lung. Expert evidence attributed the cause of Decedent’s mesothelioma to his asbestos exposures. In October 2019, Decedent commenced this action in the trial court to recover damages arising from his development of mesothelioma. The University sought summary judgment based on Section 303 of the ODA, 77 P.S. §1403. Section 303 is an “exclusivity provision,” which purports to limit compensation for an occupational disease as provided under the ODA, which is administered solely by the Board. The trial court denied the University summary judgment, reasoning: (1) the ODA defines an occupational disease as one that occurs within 4 years of last exposure to the hazards of such disease; (2) Herold’s last exposure to asbestos occurred 15 years prior to his diagnosis, far longer than the 4-year limitations period defined in the ODA; and (3) an ODA “savings clause,” which provides additional relief beyond the 4-year period for certain enumerated diseases, was inapplicable. Thus, the trial court concluded, “the ODA does not apply,” and Herold could pursue a civil claim.
The WCA and ODA together provide a comprehensive, no-fault system of compensation for employees injured in the course of their employment. However, under either statutory regime, these limitations periods operate as a de facto exclusion of coverage for certain occupational diseases that are prone to latency. Therefore, Herold’s civil claims were not subject to the ODA exclusivity provision. Absent compensable disability or death as defined by the ODA, an injured employee has not surrendered the rights to pursue compensation in a manner of their choosing. The exclusivity provision does not apply to Herold’s claims, and the Board lacks exclusive jurisdiction to adjudicate these claims. The legislature did not intend for employees suffering from an occupational disease that manifests outside the ODA’s 4-year limitations period to surrender their rights as indicated in the ODA’s exclusivity provision. Further, the Doctrine of Primary Jurisdiction is Inapplicable. Herold is not required to present his claims to the Board in the first instance. Where the matter is not one peculiarly within the agency’s area of expertise but is one which the courts or jury are equally well-suited to determine, the court must not abdicate its responsibility. Thus, the Court recognized an exception to the exclusive jurisdiction of the Board to adjudicate claims asserted by an employee diagnosed with an occupational disease more than 4 years after the employee’s last workplace exposure to the hazards of that disease. Also, because the issues relevant to the latency of an employee’s occupational disease are not peculiarly within the Board’s expertise, the employee was permitted to commence civil proceedings in an appropriate court of original jurisdiction.
Affirmed. Case remanded to the trial court.
PETITION FOR ALLOWANCE OF APPEAL FROM THE ORDER OF THE COMMONWEALTH COURT
Vincent Sicilia v. API Roofers Advantage Program (WCAB)
Supreme Court of Pennsylvania – Order GRANTING Allowance of Appeal.
Decided: February 15, 2023
The PA Supreme Court granted the Petition for Allowance of Appeal of Employer, API Roofers Advantage Program.
Issues to be decided:
(1) Did the Commonwealth Court impermissibly expand the holdings in Duffey v. WCAB (Trola-Dyne, Inc.), so as to usurp the authority of the Workers’ Compensation Judge to determine the nature and extent of the compensable injury?
(2) Did the Commonwealth Court err in reversing the Workers’ Compensation Appeal Board by substituting its assessment of the credible testimony for that of the fact finder?
NEW JERSEY WORKERS’ COMPENSATION
01/31/2023 – 02/28/2023
SUBSTANTIAL CONTRIBUTING FACTOR STANDARD
Lois Simpson v. Board of Trustees, Public Employees’ Retirement System
Superior Court of New Jersey, Appellate Division
No. A-3728-20; 2023 WL 1489674
On September 27, 2017, Simpson applied for ADR benefits, asserting that on December 1, 2015 she tripped over a student’s foot and injured her back at work. She had since had three surgeries and lived in “constant pain.” In July 2018, the Board denied the application for accidental disability, but granted her ordinary disability benefits. The Board determined that her disability was the result of a pre-existing condition or a pre- existing condition that was aggravated or accelerated by the work incident. Simpson challenged, and an ALJ had hearings in November 2020.
Simpson testified at the hearings, and acknowledged that prior to the 2015 injury, she experienced back pain when she fell at work in 2012 but returned to her job and was able to do it with no problems. Dr. Arthur Becan, an orthopedic surgeon, testified on her behalf. He opined that her disability was the direct result of her 2015 injury and subsequent complications from surgery. He explained that Simpson was diagnosed with a lumbar sprain and radiculopathy after her fall and developed a herniated disc. Dr. Becan referred to a 2016 MRI showing a herniated disc, and a 2013 MRI showed mild to moderate spinal stenosis but no disc injury.
Dr. Hutter testified for the Board. He opined that Simpson was totally and permanently disabled from her job as a result of a progression of degenerative changes and the 2015 injury was not the primary cause of her disability. His March and May 2018 reports indicated that a note from Dr. Shamash stated that the 2016 MRI demonstrated a disc herniation at L5-S1 with some pressure on the S1 nerve root and stenosis at L4-5. The ALJ filed an initial decision concluding that Simpson had met her burden in demonstrating that she was eligible for accidental disability benefits and that her disability was substantially caused by the 2015 accident and rejected the Board’s denial of ADR benefits.
The Board rejected the ALJ’s decision and concluded that the objective medical evidence established that her stenosis was the significant or substantial contributing cause of Simpson’s disability, not the 2015 incident. The Board also rejected the view that her stenosis was asymptomatic before 2015, pointing to the treatment she received following the 2012 injury. The Board asserted that when a person’s underlying condition is aggravated by a traumatic event, that person is only eligible for ordinary retirement benefits. The Board rejected the ALJ’s initial decision and denied her ADR benefits. This appeal followed.
The Superior Court acknowledged that its ADR jurisprudence needed a course correction because its prior rulings led to a series of inconsistent decisions regarding the traumatic event standard. The Court organized its prior decisions into two strands. The first strand reaffirmed that a traumatic event can occur during usual work effort, but combined with pre-existing disease cannot be the traumatic event. The second strand narrowed what qualifies as a traumatic event to only the cases involving an extreme amount of force or violence. The Court concluded that the first strand represented the correct interpretation of legislative intent.
The Board’s finding that Simpson’s stenosis was symptomatic before her 2015 injury was essential to its determination that the Petrucelli case did not apply, and her disability was not the “direct result” of her 2015 fall. This court concluded that that finding is not supported by the record. This court held that the Board’s findings in this regard were contradicted by the record, and that in light of Dr. Hutter’s testimony that Simpson may never have needed surgery absent the fall, the Board’s decision to deny her ADR benefits “lacks fair support in the record.”
The court reversed the Board’s decision denying Simpson ADR benefits because, the “direct result” test was legally satisfied by Simpson. The court held that the Board’s finding that Simpson’s stenosis was symptomatic before her fall in 2015 is not supported by the record and the Board erroneously rejected Dr. Becan’s testimony based on the incorrect assumption that he relied only on the subjective complaints of Simpson.
John Caldwell v. Board of Trustees, Public employees’ Retirement System
Superior Court of New Jersey, Appellate Division No. A-3353-20; 2023 WL 2147296
Petitioner was a corrections officer at Bayside State Prison. In November 2016, petitioner slipped and hit his knee on a steel bench at work. He went to the infirmary and returned to work, he later had an MRI, then two months later had an arthroscopy, after which he returned to work with no restrictions, then in July 2018, had a partial knee replacement.
Petitioner applied for Accidental Disability Pension in October 2018. The Board found petitioner’s disability was an aggravation of a pre-existing condition and denied the application. Petitioner appealed and the matter was heard by an ALJ in August 2020. Dr. David Weiss testified for the petitioner, and Dr. Andrew Hutter testified for the Board.
The ALJ determined that petitioner’s permanent and total disability was caused by pre- existing osteoarthritis present in his left knee at the time of his injury. The ALJ also concluded that the November 2016 fall resulted in the aggravation of a pre-existing condition. The ALJ finally concluded that petitioner failed to sustain his burden of proof showing he was entitled to accidental disability benefits. The Board adopted the ALJ’s findings and concluded that petitioner was not entitled to accidental disability benefits, only ordinary disability benefits. In his appeal, petitioner argues that the Board erred by admitting the expert testimony of Dr. Hutter because it was a net opinion, and disregarding is testimony, he sustained the burden of proof.
With regard to the “net opinion” argument, cases have held that expert opinion may be based on the expert’s personal observations, or evidence admitted at the trial, or data relied on by the expert which is the type of data normally relied on by experts in forming opinions on the same subject. The court held that the Board adopted the findings of the ALJ, who found Dr. Hutter was an expert in orthopedic surgery, personally examined the petitioner, reviewed petitioner’s medical records, including the MRI. Therefore, there is ample evidence in the record to conclude that Dr. Hutter’s testimony was supported by facts obtained from his personal observations, evidence admitted at trial, and data normally relied upon by experts.
Petitioner also argued that the 2016 fall caused his non-symptomatic pre-existing condition to morph into a total disability. This court stated that the crux of the inquiry is whether, during the regular performance of his job, an unexpected happening, which was not the result of pre-existing disease alone or in combination with the work, has occurred and directly resulted in the petitioner’s permanent and total disability. The court held that the petitioner in this matter had significant pre-existing osteoarthritis in his knee at the time of the fall, and both experts agreed that this occurred over time and was not a result of the accident.
This court held that the injury was not the substantial contributing cause of his disability, and instead it was a combination of the significant degeneration that was already present in the knee, plus the injury. Therefore, the court held that petitioner failed to meet his burden proving that the Board’s final decision was unreasonable, as their conclusions are supported by sufficient and credible evidence.
ALLOCATION OF FAULT
Liberty Insurance Corp. and LM Insurance Group v. Techdan, LLC, Exterior Erecting Services, Inc., Daniel Fisher, Robert Dunlap, and Carol Junz
Supreme Court of New Jersey
A-52 September Term 2021; 2023 WL 1999560
Techdan and Exterior were New Jersey entities who engaged in the construction of exterior walls. Dunlap and Fisher were LLC members of Techdan, and Dunlap was an officer and sole shareholder of Exterior. Fisher held himself out as part owner of Exterior, and Junz controlled both entities and was responsible for securing workers’ compensation insurance on their behalf. Liberty issued workers’ compensation policies to Techdan between March 12, 2004 AND March 12, 2007 and alleges that defendants misrepresented the relationship between Techdan and Exterior, as well as the ownership structure of the two entities, and provided Liberty’s auditors with fraudulent payroll records to reduce the premiums charged by Liberty.
Liberty filed this action, asserting fraud against all defendants under the IFPA, as well as workers’ compensation fraud and common-law fraud, breach of contract against Techdan and Exterior, and aiding and abetting and civil conspiracy against Dunlap, Fisher, and Junz. Liberty asked for compensatory damages, treble damages pursuant to the IFPA, attorney’s fees and costs, and punitive damages. After discovery, Liberty moved for summary judgment. Partial summary judgment was granted as to the IFPA claim for insurance fraud against Techdan, Exterior, Dunlap, and Fisher. Partial summary judgment was also granted as to the workers’ compensation fraud claim against all defendants, as well as to the breach of contract claim against Techdan and Exterior.
The jury found Liberty proved insurance fraud under the IFPA against Exterior and Junz; that Techdan, Exterior, Dunlap, and Junz (but not Fisher) had engaged in a pattern of insurance fraud under N.J.S.A 17:33A-7(b); that Liberty had proven its workers’ compensation fraud claim against Exterior, Dunlap, and Junz; Liberty had proven common-law fraud against all defendants; its claim for aiding and abetting against Dunlap, Fisher, and Junz; its claim for civil conspiracy against Dunlap and Junz; and its claim that Dunlap should be found personally liable.
In motions for reconsideration and a new trial, defendants asserted that the trial court should have charged the jury to allocate fault under the CNA and should have given an “ultimate outcome” charge explaining the consequences of findings that defendants committed fraud under the IFPA. The trial court held that it was not required to give these charges, as there was no evidence Liberty was at fault and defendants did not file crossclaims for contribution or indemnification, and denied the motion for reconsideration and a new trial.
Defendants appealed. The Appellate Division held that the trial court erred when it imposed joint and several liability on defendants rather than directing the jury to allocate percentages of fault in accordance with the CNA. The Appellate Division also held that the trial court should have given the jury an ultimate outcome charge, and although defendants did not raise the CNA or ultimate outcome issues until their motion for reconsideration, the trial court’s cumulative errors gave rise to a miscarriage of justice and remanded the matter for a new trial. Defendants filed petitions for certification, and Liberty filed a cross-petition for certification. Defendants’ petitions were denied, but Liberty’s cross-petition was granted.
Liberty argued that the Appellate Division improperly held that all claims in this matter were subject to the CNA. Liberty further asserts that there was no reason for the trial court to direct the jury to allocate fault under the CNA because defendants did not seek crossclaims or an allocation of a percentage of fault against each other. Defendants contend that the Appellate Division’s judgment should be affirmed, and the appellate court properly found that the CNA directs all claims asserted in this matter.
The court explained that the CNA codifies the principle of comparative negligence, and provides the framework for allocation of fault when multiple parties are alleged to have contributed to a plaintiff’s harm. The court held that defendants do not need to file crossclaims against each other for the court to allocate fault, and plain language supports that the Legislature’s intent was that in actions covered by the statute, the factfinder’s allocation of fault and the court’s molding of the verdict are mandatory. The court discusses the history of the CNA, its amendment in 1995, and the applicable case law, and concluded that the CNA governs a broad range of civil causes of action, including statutory and common-law claims based on intentional conduct as well as negligence.
The court then turns to an analysis and brief explanation of the IFPA, and concludes that a successful claimant in a civil action under the IFPA “shall recover treble damages” if the court determines that there was a pattern of violating the statute by the defendants.
Finally, the court focused on what they considered the main question raised on appeal, which is whether Liberty’s IFPA and WCA workers’ compensation fraud claims are subject to the CNA’s apportionment procedure. The court held that the IFPA claim in this matter is a statutory fraud claim premised on intentional conduct, which falls under the Legislature’s broad definition of “negligence actions.” This court also held that Liberty’s claim for workers’ compensation fraud falls under the category of intentional torts that case law has held is encompassed by the CNA. The court stated that nothing in the IFPA or WCA’s fraud provision implies that the Legislature intended to exempt statutory fraud claims from the CNA or modify the statute’s allocation-of-fault procedure in such cases. This court therefore agrees with the Appellate Division that the trial court erred when it imposed joint and several liability on defendants instead of instructing the jury based on N.J.S.A. 2A:15-5.2(a) and molding the judgment based on the jury’s findings.
This court also held that based on case law, they disagree with the Appellate Division’s view that the trial court committed reversible error when it declined to give the jury an “ultimate outcome” charge, and it was within the discretion of the trial court to give the ultimate outcome charge or decline to do so. Therefore, the trial court’s decision to not give the ultimate outcome charge was not plain error.
This court agreed with the Appellate Division that this matter should be remanded for a new trial, however, disagrees with the scope of the new trial. This court believes the appropriate remedy to be a retrial where the trial court will instruct the jury to allocate a percentage of fault under N.J.S.A. 2A:15-5.2(a)(2) and there is no need to revisit the determination made regarding liability and the finding of a pattern of insurance fraud, as the jury found the elements of the claims to be established under the burden of proof.
This court also stated that the trial court should not instruct the jury on remand to redetermine the total amount of compensatory damages and should not disclose the total amount of compensatory damages awarded by the first jury, and the new jury will not be bound by or informed of the first jury’s decision not to impose compensatory damages on Dunlap, Fisher, and Junz. Finally, this court stated that on remand, the trial court should instruct the jury to determine for each defendant the percentage of the total fault allocated to that defendant, with the total fault adding up to 100%, and the court should then mold the judgment based on the jury’s findings, trebling any part of the compensatory damage award that the jury allocates to Techdan, Exterior, Dunlap, and Junz who engaged in a pattern of insurance fraud under the IFPA. The trial court should also address Liberty’s claim for an award of counsel fees and costs.
Affirmed in part, Reversed in part.