IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Transcription

1 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Bank of America, : Petitioner : : v. : No C.D : Submitted: December 5, 2014 Workers Compensation Appeal : Board (Petroziello), : Respondent : BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE BROBSON FILED: May 26, 2015 Bank of America (Employer) petitions for review of an order of the Workers Compensation Appeal Board (Board), which affirmed the decision of a Workers Compensation Judge (WCJ) awarding Michele Petroziello (Claimant) unreasonable contest attorney fees. The sole issue on appeal is whether the Board erred in concluding that Employer s contest of Claimant s Claim Petition was unreasonable. For the reasons set forth below, we now affirm the Board s order. On November 19, 2010, Claimant was injured at work when she was knocked over by a co-worker. (Reproduced Record (R.R.) at 4a.) Employer issued a medical-only Notice of Compensation Payable (NCP) on December 3, 2010, denying Claimant compensation for wage loss. (Id. at 3a.) On December 28, 2010, Claimant filed a Claim Petition and described her injuries as a coccyx sprain, chest pain, left shoulder, lumbar sprain, cervical sprain, [and]

2 post[-]traumatic stress disorder. (Id. at 4a.) A WCJ conducted a hearing on January 25, 2011, and the WCJ subsequently dismissed Claimant s Claim Petition without prejudice. (Id. at 10a.) It appears that the Claim Petition may have been dismissed as a result of an agreement or stipulation by the parties, but the record before this Court is unclear as to the mechanics or terms of any such agreement or stipulation. The next day, on January 26, 2011, Employer issued a Notice of Temporary Compensation Payable (NTCP), listing Claimant s injuries as a [l]umbar strain, chest wall contusion[,] and cervical strain. (Id. at 11a.) In addition to compensation for medical treatment, the NTCP also provided for indemnity benefits. (Id.) Approximately one week later, on February 3, 2011, Employer issued a Notice Stopping Temporary Compensation (NSTC), which stopped Claimant s temporary compensation as of January 30, provided: We have decided not to accept liability, and attached is a Notice of Workers Compensation Denial. If you believe you suffered a work-related injury, you will be required to file a Claim Petition with the Bureau of Workers Compensation in order to protect your future rights. (Id. at 12a (emphasis in original).) The NSTC On the attached Notice of Workers Compensation Denial (NCD), Employer provided two reasons for declining to pay benefits to Claimant: 4. Although an injury took place, the employee is not disabled as a result of this injury within the meaning of the Workers Compensation Act. 1 Claimant received temporary total disability for the time period she was out of work from November 23, 2010, to January 30,

3 Other good cause.... Claimant has been released to return to work without restrictions. Therefore, she is not entitled to additional indemnity benefits. The employer agrees to remain responsible for ongoing medical treatment related to her lumbar strain, cervical strain and chest wall contusion only. (Id. at 13a (emphasis added).) Claimant filed a second Claim Petition on February 4, 2011, in which she again listed her injuries as a coccyx sprain, chest pain, left shoulder, lumbar sprain, cervical sprain, [and] post[-]traumatic stress disorder. (Id. at 14a.) Employer filed an answer to the Claim Petition, denying that Claimant suffered any injuries other than a lumbar strain, cervical strain, and chest wall contusion. (Id. at 17a.) Employer also admitted that Claimant was out of work from November 23, 2010 until January 31, 2011, and that Claimant received temporary total disability benefits during that period of time and returned to work as of February 1, 2011, without wage loss. 2 (Id. at 18a.) Following a hearing, the WCJ issued a decision and order dated August 16, 2012, granting Claimant s Claim Petition. (Id. at 39a.) Based upon the evidence presented at the hearing, including Employer s acknowledgement that Claimant suffered a work related injury, admissions of the parties, and documents filed with the Bureau, the WCJ found that Claimant suffered a work related injury which resulted in a loss of earnings. (Id. (emphasis added.)) The WCJ also found that Claimant s injuries included only a lumbar strain, cervical strain, and chest wall contusion, all of which we note were previously accepted by Employer. (Id.) Although the WCJ acknowledged no additional injuries, he concluded that 2 Employer did not specifically admit or deny that Claimant was disabled as a result of her work injury. 3

4 Claimant s injuries resulted in a loss of earnings from November 23, 2010, to January 31, (Id.) In addition to granting the Claim Petition, the WCJ awarded Claimant litigation expenses in the amount of $2, Employer and Claimant both requested an amended decision to address more precisely the issue of attorney s fees. (Id. at 41a-45a.) The WCJ issued the amended decision, dated August 30, 2012, again concluding that Employer did not have a reasonable basis for contesting the Claim Petition. In so doing, the WCJ focused on the language of the NSTC, which the WCJ characterized as cautioning Claimant to file a Claim Petition if she believed she had suffered a work[-]related injury, and noted that Employer offered no evidence into the record disputing that a work injury had occurred or challenging the legality of its initial acceptance of the work injury. (Id. at 43a-44a.) The WCJ also found that the evidence of record... fails to establish a reasonable basis for [Employer s] contest. (Id. at 44a.) The WCJ awarded Claimant attorney s fees in the amount of $1, and litigation expenses in the amount of $ (Id. at 44a-45a.) Employer appealed to the Board, which initially affirmed in part and reversed in part the WCJ s order. (Id. at 48a-54a.) The Board characterized the main issue before the WCJ as whether [Employer] properly issued the NCD when it had already paid Claimant wage loss benefits in the past, as opposed to issuing an NCP and subsequent Notification of Suspension upon Claimant s return to work. (Id. at 52a.) The Board characterized the WCJ as having determined that [Employer] did not issue the correct bureau documents. (Id.) The Board concluded that unreasonable contest fees were inappropriate because Employer had a valid legal argument in disputing Claimant s Claim Petition, even though the [WCJ] ultimately ruled in Claimant s favor. (Id. at 53a.) Specifically, the 4

5 Board concluded that precedent supported Employer s use of the NCD to acknowledge an injury but dispute wage loss. (Id.) As a result, it reversed the award of attorney s fees based on unreasonable contest. Claimant filed a petition for rehearing, which the Board granted. (Id. at 62a.) The Board issued a new opinion and order, dated June 17, 2014, which vacated its prior opinion and order and affirmed the WCJ s order awarding Claimant unreasonable contest fees. (Id. at 63a-69a.) In so doing, the Board concluded that the precedent that Employer relied upon was distinguishable from the instant matter. The Board reasoned: [Employer] cites to past precedent, Armstrong v. Workers Compensation Appeal Board (Haines & Kibblehouse, Inc.), 931 A.2d 827 (Pa. Cmwlth. 2007), that states filing a medical-only NCD is proper when an employer is accepting only liability for a work injury, but not any wage loss. We agree that in a case with no wage loss [Employer] s actions in filing a medical-only NCD would have been proper, however, the distinction is there was wage loss in the instant case. Claimant was totally disabled from November 19, 2010 through January 30, [Employer] in fact acknowledged this wage loss and paid total disability benefits for that time period. Therefore, it was not permitted to issue a medical-only NCD alleging no wage loss when it already paid for wage loss related to Claimant s injury. By failing to acknowledge this past wage loss, Claimant was left with only a medical-only claim and was thus forced to file the instant Claim Petition to establish her rights to having sustained wage loss in the past related to this injury. This was a key distinction because without having past wage loss acknowledged, Claimant would have had a higher burden of proof in the future if she again began to experience additional wage loss as a result of her injury. See Morrison v. Workers Comp. Appeal Bd. (Rothman Inst.), 15 A.3d 93 (Pa. Cmwlth. 2010), appeal denied, 24 A.3d 364 (Pa. 2011). [Employer] should have properly filed an 5

6 NCP acknowledging both that a work injury and wage loss occurred, and [then] a Notification of Suspension as a result of Claimant returning to work. (Bd. Op. dated June 17, 2014, at 3-4 (emphasis added).) Employer petitioned this Court for review and applied for supersedeas pending appeal. Quigley granted the application for supersedeas. (R.R. at 70a-71a.) Senior Judge On appeal, 3 the sole issue is whether the Board erred in concluding that Claimant was entitled to unreasonable contest attorney fees. Section 440(a) of the Workers Compensation Act 4 (Act) provides that a successful claimant shall be awarded attorney s fees unless the employer proves that it had a reasonable basis for the contest. Whether an [e]mployer s contest of liability is reasonable is a question of law reviewable by this Court. Capper v. Workers Comp. Appeal Bd. (ABF Freight Systems, Inc.), 826 A.2d 46, (Pa. Cmwlth. 2003). Whether an employer had a reasonable basis for contesting a claimant s award of benefits depends upon both the facts and the legal issues involved in each case. Poli v. Workmen s Comp. Appeal Bd., 384 A.2d 596, 598 (Pa. Cmwlth. 1978). [T]he reasonableness of an employer s contest depends upon whether the contest was prompted to resolve a genuinely disputed issue or merely to harass the claimant. Capper, 826 A.2d at 51. The employer bears the burden of proving the reasonableness of its contest but, in doing so, need not prove that its evidence is 3 This Court s standard of review is limited to determining whether constitutional rights were violated, whether an error of law was committed, or whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S Act of June 2, 1915, P.L. 736, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. 996(a). 6

7 legally sufficient in order to establish reasonableness. Id. Instead, [a] reasonable contest is established where the evidence is conflicting or subject to contrary inferences. Lemansky v. Workers Comp. Appeal Bd. (Hagan Ice Cream Co.), 738 A.2d 498, 501 (Pa. Cmwlth. 1999), appeal denied, 759 A.2d 389 (Pa. 2000). In determining the reasonableness of a contest, the appellate court must look to the totality of the circumstances surrounding the contest. Eidell v. Workmen s Comp. Appeal Bd. (Dana Corp.), 624 A.2d 824, 826 (Pa. Cmwlth. 1993). Employer first argues that it did not contest the entirety of Claimant s Claim Petition. Rather, it only contested its liability for additional injuries identified in the Claim Petition for which Employer had not previously agreed to accept liability. 5 Specifically, Employer contested its liability for Claimant s coccyx sprain, left shoulder injury, and post-traumatic stress disorder. With respect to the acknowledgement of these additional injuries by the WCJ, Claimant was not successful and, thus, Employer contends that unreasonable contest attorney s fees should not have been awarded. We agree that Employer had a reasonable basis for contesting those injuries for which it had not previously agreed to accept liability. Claimant has the burden to prove all the elements of the claim. Morrison v. Workers Comp. Appeal Bd. (Rothman Inst.), 15 A.3d 93, (Pa. Cmwlth. 2010), appeal denied, 24 A.3d 364 (Pa. 2011). Claimant bore the burden to prove the existence of injuries over and above those previously acknowledged by Employer and the WCJ. It was not unreasonable for Employer to contest the existence of these injuries 5 In the NCD, Employer accepted liability for the ongoing medical treatment of Claimant s lumbar strain, cervical strain, and chest wall contusion. (R.R. at 13a.) 7

8 because a genuine dispute existed as to the new injuries identified by Claimant in her Claim Petition. Thus, Employer had a reasonable basis for contesting those injuries for which it had not previously agreed to accept liability. Employer argues that its use of the NSTC and NCD was wholly consistent with the Act. Claimant counters that Employer violated the Act by issuing a NSTC and NCD instead of a Notice of Suspension Return to Work. In her brief, Claimant states that Employer filed a [NTCP] admitting to a loss of earnings. (Respondent s Br. at 2.) Essentially, Claimant is arguing that because Employer has already paid indemnity benefits, it has accepted liability for those benefits. As a result, Claimant contends that unreasonable contest attorney s fees were warranted because Employer s violation of the Act caused Claimant to engage the services of an attorney to establish the existence of an injury and disability for which Employer had already admitted liability. Payment of compensation pursuant to a NTCP is not evidence that an employer has accepted liability. See Section 406.1(d)(1) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(1) ( In any instance where an employer is uncertain whether a claim is compensable under this act or is uncertain of the extent of its liability under this act, the employer may initiate compensation payments without prejudice and without admitting liability pursuant to a [NTCP].... ). 6 Thus, in the case now before the Court, the issuance of a NTCP did not function as an acceptance of liability for Claimant s wage loss. 6 [T]he payment of temporary compensation entitles the claimant to a maximum of ninety (90) days of compensation[.] Section 406.1(d)(2)(ii) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(2)(ii). 8

9 If Employer had issued a Notice of Compensation Payable (NCP) or the NTCP had converted to a NCP due to the passage of time, 7 then we would conclude that Employer had accepted liability for the injuries and did not dispute disability related thereto. Instead, however, Employer chose to deny liability by subsequently issuing the NSTC and NCD. 8 Furthermore, [a]n employer may properly file [a] NCD when, although it acknowledges that a work-related injury has occurred, there is a dispute regarding the claimant s disability. Armstrong v. Workers Comp. Appeal Bd. (Haines & Kibblehouse, Inc.), 931 A.2d 827, (Pa. Cmwlth. 2007). The NCD form specifically provides an employer with the option to acknowledge the injury while disputing the issue of disability. 9 Potere v. Workers Comp. Appeal Bd. (Kemcorp), 21 A.3d 684, 692 (Pa. Cmwlth. 2011). In Armstrong, we 7 Section 406.1(d)(6) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(6), provides: If the employer does not file a [NSTC] within the ninety-day period during which temporary compensation is paid or payable, the employer shall be deemed to have admitted liability and the notice of temporary compensation payable shall be converted to a notice of compensation payable. 8 Section 406.1(d)(5)(i) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(5)(i), provides that [i]f the employer ceases making payments pursuant to a [NTCP], a notice in the form prescribed by the department shall be sent to the claimant. This notice shall advise the claimant that, if the employer is ceasing payment of temporary compensation, that the payment of temporary compensation was not an admission of liability... and the employe must file a claim to establish the liability of the employer. Section 406.1(d)(5)(ii) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(5)(ii). 9 On June 20, 2011, the NCD was revised to provide: Do not use this form to accept a medical-only claim. BUREAU OF WORKERS COMP., PA. DEP T OF LABOR & INDUS., LIBC-496 (2013); see also PA. BAR INST., PA. WORKERS COMP. PRACTICE & PROCEDURE (2014). This revision, however, occurred after Employer had filed the NCD and, thus, is not applicable for purposes of evaluating the propriety of using a NCD in this manner prior to June 20,

10 concluded that an employer acted properly when, after issuing a NTCP, it issued a NSTC and NCD which indicate[d] that the [e]mployer was disputing the length and extent of the disability, i.e. loss of earning power, not the occurrence or the nature of the actual injury. Armstrong, 931 A.2d at Armstrong suggests, therefore, that the use of a NTCP, NSTC, and NCD in the instant matter could be appropriate if Employer were disputing that Claimant suffered a disability as a result of the injuries, including those already accepted. [W]here an employer properly issues an NCD to deny liability, a violation of the Act does not occur. Gumm v. Workers Comp. Appeal Bd. (Steel), 942 A.2d 222, 233 (Pa. Cmwlth. 2008) Claimant contends that Armstrong is factually distinguishable from the instant matter because there was no wage loss in Armstrong. The term disability, however, is synonymous with loss of earning power. Armstrong, 931 A.2d at 830. Thus, Armstrong provides that an employer may utilize a NTCP followed by a NSTC and NCD to dispute the length and extent of a claimant s loss of earning power (i.e., wage loss). 11 Claimant also appears to argue that unreasonable contest fees are warranted due to Employer s failure to file an NCD in response to Claimant s initial Claim Petition. While it is true that failing to file an NCD is a violation of the Act that can result in an award of unreasonable contest fees, an employer may also file an NCP to satisfy the Act, which Employer did here. See Waldameer Park, Inc. v. Workers Comp. Appeal Bd. (Morrison), 819 A.2d 164, (Pa. Cmlwth. 2003) (concluding that it would have been proper for employer to issue medical-only NCP in case with wage loss). Further, an award of unreasonable contest fees is within the discretion of the WCJ. Orenich v. Workers Comp. Appeal Bd., 863 A.2d 165, 170 (Pa. Cmwlth. 2004), appeal denied, 880 A.2d 1242 (Pa. 2005). Here, the WCJ did not assess unreasonable contest fees against Employer for its failure to issue an NCD twenty-one days after notice of the Claimant s injury; rather, the WCJ appeared to impose unreasonable contest fees because of Employer s use of an NCD to end benefits other than medical expenses for the three accepted injuries. Thus, it would be improper to award Claimant unreasonable contest fees solely due to Employer s failure to file an NCD in response to Claimant s initial claim petition. 10

11 Pursuant to Section 306(b)(3) of the Act, as amended, 77 P.S. 512(3), however, [i]f the insurer receives medical evidence that the claimant is able to return to work in any capacity, then the insurer must provide prompt written notice, on a form prescribed by the department, to the claimant. The prescribed form is the LIBC-757 notice of ability to return to work form. Allegis Group (Onsite) v. Workers Comp. Appeal Bd. (Henry), 882 A.2d 1, 4 (Pa. Cmwlth. 2005). The crux of the problem in this case is that we do not know the basis for Employer s actions. First, we note that the WCJ dismissed Claimant s initial Claim Petition without prejudice. There appears to be some suggestion that the parties reached a stipulation or agreement of some type that formed a basis for the dismissal of the initial Claim Petition. The details are not known to this Court, except that Employer issued a NTCP the following day. We are unable to discern whether Employer issued the NTCP because: (1) Employer accepted the initial injuries but was investigating whether those accepted injuries resulted in disability; (2) Employer accepted the initial injuries and acknowledged disability relating to those injuries, but was investigating whether to accept the additional injuries; or (3) Employer accepted the initial injuries and determined that those injuries did not result in disability but was investigating whether additional injuries were work related and resulted in disability. 12 The distinction between Employer s possible reasons for issuance of the NTCP is important, because if Employer had acknowledged disability related 12 In fact, we are unable to discern if Employer s use of a NTCP was proper or whether Employer should have issued a NCP. 11

12 to any of the accepted injuries, then Employer s subsequent use of the NSTC to cease paying disability benefits would be inconsistent with that prior acceptance. This inconsistency would arise because, when issuing a NSTC, an employer must notify the claimant that the payment of temporary compensation was not an admission of liability... and the employe must file a claim to establish the liability of the employer. Section 406.1(d)(5)(ii) of the Act, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S (d)(5)(ii). To the contrary, if Employer had consistently denied that Claimant suffered disability as a result of the accepted and additional injuries and, after investigation, continued to hold that belief, then use of the NSTC would be proper. See Armstrong, 931 A.2d at 830. Moreover, we agree with the Board that the issuance of a NSTC (as opposed to a Notice of Return to Work) was significant, because without having past wage loss acknowledged, Claimant would have had a higher burden of proof in the future if she again began to experience additional wage loss as a result of her injury. (Bd. Op. dated June 17, 2014, at 4.) An examination of the NSTC reveals, however, that Employer decided not to accept liability as described in the attached NCD. Employer s NCD, however, is internally inconsistent as to the reason for its issuance. Employer offers two explanations: (1) [a]lthough an injury took place, [Claimant] is not disabled as a result of this injury, and (2) Claimant has been released to return to work without restrictions. Therefore, she is not entitled to additional indemnity benefits. (R.R. at 13a.) The first explanation appears to dispute that any disability ever existed, and the second explanation appears to accept that Claimant had been entitled to indemnity benefits i.e., was disabled but that she no longer was disabled because she had returned to work. Under the 12

13 first scenario, had Employer continuously disputed liability, use of a NSTC would have been proper. Under the second scenario, however, Employer would have been required to issue Notice of Suspension Return to Work, rather than a NCD. It appears to the Court that Employer s actions were inconsistent throughout this litigation, and Employer offers no clear explanation to the Court as to the bases for its action. Employer bears the burden to prove a reasonable contest. Capper, 826 A.2d at 51. Under these circumstances, we agree with the Board that Employer failed to establish a reasonable contest. The Board, therefore, did not err in assessing unreasonable contest fees against Employer. Accordingly, we affirm the Board s order. P. KEVIN BROBSON, Judge 13

14 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Bank of America, : Petitioner : : v. : No C.D : Workers' Compensation Appeal : Board (Petroziello), : Respondent : O R D E R AND NOW, this 26th day of May, 2015, the order of the Workers Compensation Appeal Board is hereby AFFIRMED. P. KEVIN BROBSON, Judge