Diehl v. W.C.A.B. (I.A. Const.)

• Decision Date: 29 September 2010
• Citation: 5 A.3d 230
• Parties: Timothy DIEHL, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (I.A. CONSTRUCTION and Liberty Mutual Insurance), Appellees.
• Court: Pennsylvania Supreme Court

5 A.3d 230

Timothy DIEHL, Appellant

v.WORKERS' COMPENSATION APPEAL BOARD (I.A. CONSTRUCTION and Liberty Mutual Insurance), Appellees.

Supreme Court of Pennsylvania.

Argued April 13, 2010.

Decided Sept. 29, 2010.

Daniel K. Bricmont, Caroselli, Beachler, McTiernan & Conboy, L.L.C., Pittsburgh, David J. Selingo, Selingo Guagliardo, L.L.C., Kingston, for Appellant.

Thomas Patrick Cummings, Dougherty, Leventhal & Price, L.L.P., Moosic, Paul Mark Fires, Weber Gallagher Simpson & Stapleton, Philadelphia, Peter J. Weber, for IA Construction and Liberty Mutual Insurance, Appellee.

Richard C. Lengler, Harrisburg, PA, for Workers' Compensation Appeal Board.

BEFORE: CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.

OPINION OF THE COURT

Chief Justice CASTILLE.

This appeal presents us with an opportunity to consider whether an employer, seeking to change a claimant's workers' compensation disability status from total disability to partial disability under 77 P.S. § 511.2, but not to change the amount of compensation, must present evidence of job availability or earning power in order to support the status change. For the reasons that follow, we affirm the Commonwealth Court's decision that an employer who seeks to change disability status under Section 511.2 while not disturbing the compensation amount need not establish job availability or earning power.

The undisputed facts giving rise to this appeal are as follows. On May 24, 1999, appellant, Timothy Diehl, sustained an injury in the course and scope of his employment, consisting of a right mid-foot fracture and calcaneus fracture. Appellee, I.A. Construction, issued a notice of compensation payable on June 7, 1999, acknowledging the injury. On April 4, 2002, appellee filed a request for designation of a physician to perform an Impaired Rating Evaluation (IRE). Michael Wolk, M.D., conducted the IRE of appellant on November 8, 2002, and issued a report on December 3, 2002, concluding that appellant's impairment rating was 28 percent.

Based upon the IRE, on January 9, 2003, appellee issued a Notice of Change of Workers' Compensation Disability Status, indicating that as of November 8,2002, appellant's status changed from total disability to partial disability. On February 4, 2003, appellant filed a Petition to Review Medical Treatment and/or Billing, Modify Compensation Benefits and Reinstate Compensation Benefits. Appellee withdrew its notice of status change, and appellant withdrew his petitions. The Workers' Compensation Judge ("WCJ") also dismissed appellant's petitions on April 24, 2003.

On February 1, 2006, appellee filed a modification petition seeking to modify appellant's disability benefits status from total to partial disability, relying on Dr. Wolk's November 8, 2002 IRE. On October 24, 2006, the WCJ circulated a Decision and Order denying and dismissing the modification petition, concluding that, even though appellee met its burden of establishing that appellant had an impairment rating of 28 percent, appellee had failed to establish that it was entitled to a modification of appellant's status based on the IRE without a showing of the availability of suitable employment within the physical limitations appellant suffered as a result of his work-related injury. Appellee appealed to the Workers' Compensation Appeal Board ("WCAB").

On appeal to the WCAB, appellee argued that the WCJ erred in denying its modification petition and that it was entitled to modify appellant's benefit status from total to partial disability based upon Dr. Wolk's November 8, 2002 IRE. The parties stipulated that Dr. Wolk's November 8, 2002 IRE indicated that appellant had an impairment rating of 28 percent and that the WCJ determined that appellee met its burden of establishing appellant's impairment rating based upon the IRE. The WCAB reviewed the record and, on August 3, 2007, concluded that the WCJ erred by denying appellee's modification petition.

In pertinent part, Section 306(a.2) of the Workers' Compensation Act, 77 P.S. § 511.2, authorizes an automatic change of status from total to partial disability when an employer requests an IRE within 60 days after a claimant has received 104 weeks of total disability benefits and the IRE reveals that the claimant's impairment is less than 50 percent:

(1) When an employe has received total disability compensation pursuant to clause (a) for a period of one hundred four weeks, unless otherwise agreed to, the employe shall be required to submit to a medical examination which shall be requested by the insurer within sixty days upon the expiration of the one hundred four weeks to determine the degree of impairment due to the compensable injury, if any. The degree of impairment shall be determined based upon an evaluation by a physician who is licensed in this Commonwealth, who is certified by an American Board of Medical Specialties approved board or its osteopathic equivalent and who is active in clinical practice for at least twenty hours per week, chosen by agreement of the parties, or as designated by the department, pursuant to the most recent edition of the American Medical Association "Guides to the Evaluation of Permanent Impairment."

(2) If such determination results in an impairment rating that meets a threshold impairment rating that is equal to or greater than fifty per centum impairment under the most recent edition of the American Medical Association "Guides to the Evaluation of Permanent Impairment," the employe shall be presumed to be totally disabled and shall continue to receive total disability compensation benefits under clause (a). If such determination results in an impairment rating less than fifty per centumimpairment under the most recent edition of the American Medical Association "Guides to the Evaluation of Permanent Impairment," the employe shall then receive partial disability benefits under clause (b): Provided, however, That no reduction shall be made until sixty days' notice of modification is given.

77 P.S. § 511.2 (footnotes omitted).

There is no dispute that appellant received in excess of 104 weeks of total disability benefits and that appellee did not request an IRE within 60 days of the expiration of the 104 weeks. Thus, the WCAB concluded that appellee could not take advantage of the self-executing change of disability status permitted by Section 306(a.2). The WCAB stated that nothing precluded appellee from requesting an IRE beyond the 60-day period, but that any change in appellant's disability status based on the IRE could only be achieved through the traditional administrative process by filing a modification petition. The WCAB found that neither the Act nor Gardner v. W.C.A.B. (Genesis Health Ventures), 585 Pa.366, 888 A.2d 758 (2005), imposed any burden beyond the filing of a modification petition on appellee. As to what appellee was required to demonstrate to prevail on its modification petition, the WCAB determined that, because pursuant to Section 306(a.2)(3) the amount of compensation is not affected by a change in disability status,¹ an employer need not meet the standard of proof set forth in Kachinski v. W.C.A.B. (Vepco Constr. Co.), 516 Pa. 240, 532 A.2d 374 (1987), which requires that the employer demonstrate either job availability or the claimant's earning capacity. Because the WCJ determined that appellee met its burden of proving that appellant had a 28 percent impairment rating, the WCAB found that appellee had sustained its burden on the modification petition, and appellant's disability status should change to partial disability as of the November 8, 2002 IRE.

Appellant appealed to the Commonwealth Court and, on April 28, 2008, a three-member panel of that court reversed the WCAB's decision. The panel majority agreed with the WCJ's conclusion that, in the context of a non-self-executing change in disability status, once the employer has met its burden of showing a change in the claimant's physical condition, the employer then has the burden of establishing job availability within the claimant's work-injury-related physical limitations. According to the majority, the WCJ's approach comported with Gardner, where this court held that an employer who requests an IRE beyond the 60 days established in Section 306(a.2) must file a modification petition and follow the "traditional administrative process." Gardner, 888 A.2d at 766. The panel majority stated that this Court's decision in Gardner provides no guidance regarding what constitutes the "traditional administrative process" for non-self-executing disability status changes under the Act.² Based upon its"cursory examination" of this Court's reasoning in Gardner, the panel majority concluded that the mere filing of a modification petition based on the results of an IRE does not meet the requirements of the traditional administrative process. Instead, the majority held that a Kachinski analysis must be undertaken to satisfy the requirements of the traditional process. Kachinski, 532 A.2d at 380 (to establish claimant is able to return to work, employer must establish change in claimant's medical condition and "produce evidence of a referral (or referrals) to a then open job (or jobs), which fits in the occupational category for which the claimant has been given medical clearance"). Otherwise, the majority held, an employer who requests an IRE beyond the 60-day deadline would be required only to file the necessary paperwork—a modification petition—along with a perfunctory appearance before a WCJ in order to accomplish the same result as if the employer had requested the IRE in time for an automatic disability status change. The court concluded that, although this process would require the additional paperwork/appearance step, "it is just as automatic in practical effect as is the self-executing process." Slip. Op. at 9. The majority found that such an automatic result would be in conflict with Gardner, where this Court...