Crucible, Inc. v. W.C.A.B. (Vinovich)

• Decision Date: 25 June 1998
• Parties: CRUCIBLE, INC., Petitioner, v. WORKERS' COMPENSATION APPEAL BOARD (VINOVICH), Respondent.
• Court: Pennsylvania Commonwealth Court

Page 749

713 A.2d 749

CRUCIBLE, INC., Petitioner, v. WORKERS' COMPENSATION APPEAL BOARD (VINOVICH), Respondent.

Commonwealth Court of Pennsylvania.

Submitted on Briefs May 22, 1998.

Decided June 25, 1998.

Daniel J. Iler, Washington, for petitioner.

John J. Petrush, Beaver, for respondent.

Before McGINLEY and LEADBETTER, JJ., and RODGERS, Senior Judge.

RODGERS, Senior Judge.

Crucible, Inc. (Employer) petitions for review of an order of the Workers' Compensation Appeal Board (Board) that affirmed a workers' compensation judge's (WCJ) decision granting William Vinovich's (Claimant) petition for penalties. We affirm.

Claimant filed a claim petition requesting specific loss of use benefits for the loss of hearing for all practical intents and purposes as of November 5, 1984. After several years of litigation, the WCJ awarded benefits on December 20, 1990. Employer filed a timely appeal to the Board and requested a supersedeas, which the Board granted on February 1, 1991. On September 30, 1991, the Board affirmed the WCJ's decision granting benefits to Claimant. ¹ Employer then filed a timely appeal to this Court and requested that both the Board and this Court grant a supersedeas. The Board denied the supersedeas request on November 18, 1991, and this Court denied the request on November 25, 1991.

Subsequent to the Board's decision on September 30, 1991, affirming the grant of benefits, Claimant's counsel wrote several letters to Employer's attorney concerning Employer's failure to begin payments to Claimant. When payments were not made, Claimant filed a penalty petition on November 4, 1991, alleging that Employer had violated the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501 - 2626, by failing to make timely payments of benefits due Claimant. The first hearing on the penalty petition was held on December 20, 1991, at which time Employer paid the specific loss benefits, medical expenses, attorney fees and costs as originally awarded by the WCJ and affirmed by the Board. Employer sent the statutory interest payment due on the compensation benefits to Claimant on February 28, 1992. ² On April 27, 1992, this Court issued an order dismissing Employer's appeal from the order granting the specific loss benefits for failure by Employer to file a brief and reproduced record. ³

At the December 20, 1991 hearing on Claimant's penalty petition, Claimant presented documentation evidencing the above noted procedural history of the litigation. The WCJ outlined the documentation in his findings of fact and further found that Employer "offered no valid excuse or explanation for failure to comply with payment of the compensation or statutory interest due Claimant in accordance with the ... Act ...." (WCJ's decision, September 26, 1995, p. 3). The WCJ concluded that: 1) Claimant had met his burden of proving Employer's violation of the Act, 2) Claimant was entitled to a ten-percent penalty on the specific loss benefits and accrued interest and 3) Claimant was entitled to a ten-percent penalty for Employer's unreasonable delay in making these payments. Employer appealed and the Board affirmed.

On appeal to this Court, ⁴ Employer argues that the WCJ erred in assessing a penalty on the sum paid for the specific loss benefits, medical expenses, attorney fees and costs because that sum was paid within thirty days of the order issued by this Court denying the petition for supersedeas and within ninety days of the Board's decision affirming the WCJ's decision. Employer also argues that a total penalty of twenty percent is excessive in this case because any delay was not unreasonable.

Employer recognizes that Section 435 of the Act, 77 P.S. § 991, confers the power on a WCJ to award a penalty for a violation of the Act and that Section 428 of the Act, 77 P.S. § 921, allows for the entry of judgment where an employer is in default of payment on an award by a WCJ for thirty days or more. However, Employer contends that these two sections are mutually exclusive, and that until the decision in Cunningham v. Workmen's Compensation Appeal Board (Inglis House), 156 Pa.Cmwlth. 241, 627 A.2d 218 (1993), the Act was not interpreted to create the thirty day measure of reasonableness in making payments. Thus, Employer argues that in 1991 when this case arose, Cunningham was not the law.

In response Claimant cites numerous sections of the Act and case law that belie Employer's assertion. Section 401.1 of the Act, 77 P.S. § 710, ⁵ requires the Department of Labor and Industry to enforce time standards and performance standards "for the prompt processing of injury cases and payment of compensation when due by employers and insurers both upon petition by a party or on its own motion." Section 431(b) of the Act, 77 P.S. § 971(b), states:

(b) Any 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 as provided in section 435 except in the case of payments terminated as provided in section 434.

Section 435(d) of the Act, 77 P.S. § 991(d), provides that:

(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 violation 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 twenty per centum in cases of unreasonable or excessive delays. Such penalty shall be payable to the same persons to whom the compensation is payable.

Claimant cites various cases to show that the law in Cunningham is not the change in the law that Employer asserts it is. In Moody v. Workmen's Compensation Appeal Board (Philadelphia Inquirer), 127 Pa.Cmwlth. 65, 560 A.2d 925 (1989), the court held that the employer was subject to penalties for unilaterally refusing to pay compensation when the referee's order directing payment was in effect and a supersedeas had been denied with respect to 80% of the compensation awarded. This was the holding of the court despite the employer's eventual success on remand where the benefits were suspended on the date following the day employer stopped paying compensation. The Moody court stated:

Employer's proper recourse is to pay as ordered, file for supersedeas, and if denied then to apply to the [Supersedeas] Fund for reimbursement if Employer is ultimately successful. The ... [Act] does not give the [e]mployer the right of self-help.

Id. 560 A.2d at 927. See also M.D.S. Laboratories v. Workmen's Compensation Appeal Board (Munchinski), 125 Pa.Cmwlth. 460, 558 A.2d 148 (1989) (despite delay by Board in denying supersedeas request, the employer should have regarded the request as a denial and honored its obligation to pay compensation thereby insuring its eligibility for a refund from the Supersedeas Fund upon ultimate success); Holy Spirit Hospital v. Workmen's Compensation Appeal Board, 46 Pa.Cmwlth. 372, 406 A.2d 583 (1979) (penalty proper when employer stops payment of compensation before a referee suspends benefits and for nonpayment after suspension is lifted by the Board); Lord v. Workmen's Compensation Appeal Board, 38 Pa.Cmwlth. 626, 395 A.2d 598 (1978) (penalties may be imposed for failure to make prompt payment of compensation or for improper suspension of benefits).

The holdings in the above cited cases show that Cunningham was not a change in the law, but is a rendition of what the law was at the time this case was litigated and still is today. Employer's obligation to pay arose when the Board affirmed the award of compensation on September 30, 1991, and Employer's failure to begin making payments within thirty days of that...