Com. Bureau of Workers' Compensation v. W.C.A.B. (Liberty Mut. Ins. Co.)

Decision Date22 February 1988
Citation538 A.2d 587,113 Pa.Cmwlth. 607
PartiesCOMMONWEALTH of Pennsylvania BUREAU OF WORKERS' COMPENSATION, Petitioner, v. WORKMEN'S COMPENSATION APPEAL BOARD (LIBERTY MUTUAL INSURANCE COMPANY), Respondents.
CourtPennsylvania Commonwealth Court

Merri Jo Gillette-Meadows, Asst. Counsel, Paul E. Baker, Deputy Chief Counsel, Richard T. Kelley, Asst. Counsel, Bureau of Workers' Compensation, Harrisburg, for petitioner.

John J. Duffy, Clarence Robinson, Lawrence L. Robinson, Philadelphia, for respondents.

Before CRAIG and PALLADINO, JJ., and NARICK, Senior Judge.

NARICK, Senior Judge.

The Commonwealth of Pennsylvania, Bureau of Workers' Compensation of the Department of Labor and Industry (Petitioner) is before this Court in its capacity as conservator and maintainer of the Workmen's Compensation Supersedeas Fund (Fund) under Section 443 of The Pennsylvania Workmen's Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 999, seeking review of an order of the Workmen's Compensation Appeal Board (Board). That order affirmed a referee's decision to allow reimbursement from the Fund to Liberty Mutual Insurance Company (Respondent) for overpayments of compensation made to Ethel Hamilton (Claimant).

The pertinent facts may be briefly summarized as follows. Claimant sustained a work-related injury to her right elbow in 1971 and was paid workmen's compensation benefits of $60.00 per week from December 17, 1971. On September 29, 1978, her employer's insurer, Respondent, filed a modification petition, alleging that Claimant was able to perform light work which was available to her. At that time, Respondent requested a supersedeas, which was denied. The Referee granted the modification petition in a decision dated September 7, 1982, reducing Claimant's weekly benefit from $60.00 to $40.85. That decision was not appealed. Respondent subsequently filed an application for reimbursement from the Fund for overpayments of $19.15 per week it made to Claimant from September 19, 1980, until September 7, 1982, and the referee granted reimbursement. Following a Board-ordered remand, the referee reaffirmed his decision, the Board affirmed and Petitioner took this appeal.

The precise issue before us is whether the Petitioner, as conservator of the Fund, may challenge the validity of what it terms the "underlying case," here, the referee's decision granting the modification petition. Citing a lack of substantial evidence in support of the referee's grant of that petition, Petitioner argues that Claimant's benefits should not have been reduced, and, therefore, that Respondent is not eligible for reimbursement from the Fund.

As sole authority for its position, Petitioner cites our recent cases of Department of Labor and Industry v. Workmen's Compensation Appeal Board (Commercial Union Insurance Co.), 97 Pa. Commonwealth Ct. 520, 510 A.2d 373 (1986) (Commercial Union ) and Bureau of Workers' Compensation v. Workmen's Compensation Appeal Board (Insurance Company of North America), 101 Pa. Commonwealth Ct. 552, 516 A.2d 1318 (1986) (INA ). It contends that these cases stand for the proposition that, as a matter of law, it may, as conservator of the Fund, challenge the facts of the underlying case when it believes that reimbursement has been erroneously granted. We do not read those cases so broadly. In both Commercial Union and INA, the parties to a workers' compensation case concluded agreements to terminate the proceedings, which were adopted by a referee, and ultimately served as the basis for his grant of reimbursement from the Fund. In neither instance did the facts of record comport with those upon which the parties had agreed, allowing both insurers to receive reimbursements to which we determined they were not entitled. The reasoning of these opinions focused upon Section 443(a) of the Act, which provides that:

If, in any case in which a supersedeas has been requested and denied under the provisions of section 413 or section 430, payments of compensation are made as a result thereof and upon the final outcome of the proceedings, it is determined that such compensation was not, in fact, payable, the insurer who has made such payments shall be reimbursed therefor. (Emphasis added).

Because the referees in those cases had not made a determination that compensation was not payable, we held that "at the very least the Department as conservator of the Fund is entitled as the basis for reimbursement to have an arms length or adversary type determination, rather than agreement with or without a referee's approval on which the Insurer bases its claim, that the 'compensation was not, in fact, payable.' " Commercial Union, 97 Pa. Commonwealth Ct. at 529, 510 A.2d at 376-77 (footnote omitted), quoted with approval in INA, 101 Pa. Commonwealth Ct. at 559, 516 A.2d at...

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