Iacono v. W.C.A.B. (Chester Housing Authority)

• Decision Date: 23 April 1993
• Citation: 624 A.2d 814,155 Pa.Cmwlth. 234
• Parties: Daniel IACONO, Petitioner, v. WORKER'S COMPENSATION APPEAL BOARD (CHESTER HOUSING AUTHORITY and PMA Group), Respondents.
• Court: Pennsylvania Commonwealth Court

Page 814

624 A.2d 814

155 Pa.Cmwlth. 234

Daniel IACONO, Petitioner, v. WORKER'S COMPENSATION APPEAL BOARD (CHESTER HOUSING AUTHORITY and PMA Group), Respondents.

Commonwealth Court of Pennsylvania.

Submitted on Briefs Dec. 16, 1992.

Decided April 23, 1993.

Arthur G. Girton, for petitioner.

Mark R. Schmidt, for respondents.

Before CRAIG, President Judge, and DOYLE, COLINS, PALLADINO, McGINLEY, PELLEGRINI and FRIEDMAN, JJ.

FRIEDMAN, Judge.

Daniel Iacono appeals from an order of the Workmen's Compensation Appeal Board (WCAB) reversing a referee's denial of Chester Housing Authority's (Employer) termination petition. We reverse and reinstate the decision of the referee.

On March 16, 1989, Iacono, a carpenter, injured his lower back during the course of his employment with Employer and received benefits pursuant to a Notice of Compensation Payable. On October 11, 1989, Employer filed a termination petition, alleging that all of Iacono's disability resulting from his work-related injury had ceased as of September 5, 1989, and that Iacono was fully capable of returning to his pre-injury job without restrictions. Iacono denied this allegation and hearings were held before a referee.

In support of its termination petition, Employer presented the deposition testimony of Joseph Shatouhy, M.D., a board certified orthopedic surgeon. Dr. Shatouhy testified that he examined Iacono on August 17, 1989. Based on that examination, Dr. Shatouhy diagnosed Iacono as having sustained a recurrent lumbar sprain which had resolved and determined that Iacono could return to work in early September. (R.R. at 30.) ¹ When asked whether he would impose any work restrictions on Iacono, Dr. Shatouhy replied that no restrictions were required as a result of the injury Iacono sustained but that, because of Iacono's pre-existing arthritic and degenerative back conditions, he would impose limitations in order to avoid further injury. (R.R. at 33-34.) Again, on cross-examination, Dr. Shatouhy testified that Iacono's pre-existing condition made him more vulnerable to reinjury. (R.R. at 34-35.)

Claimant offered no expert medical testimony but countered Employer's evidence by testifying on his own behalf, stating that since the March 16, 1989 injury, he has continued to have pain in his lower back and down both legs which renders him incapable of returning to work. Iacono testified that because of the continuous pain, he was unable to walk, sit, drive or stand for any length of time and could not lift objects over 25-35 pounds or use carpentry tools. (R.R. at 44-47.)

After considering the evidence before him, the referee specifically found "[b]y the weight of the credible evidence ... that Claimant is unable to perform the physical requirements of his pre-injury job due to the effects of the 3/16/89 work-related injury." (Referee Finding of Fact No. 2.) Thus, the referee denied Employer's termination petition, concluding that Employer failed to meet its burden of proof and that Iacono remained totally disabled.

On appeal, the WCAB reversed the referee and granted Employer's termination petition, stating:

In the present matter, since [Employer] was the only party to present medical evidence in regard to its Petition for Termination, the capricious disregard standard applies rather than the substantial evidence test. The Referee in his Decision, however, found Claimant was unable to perform his physical requirements of his pre-injury job based on the credible evidence of record without giving any reason why Claimant was unable to perform his pre-injury job. Clearly, this is in violation of the minimal requirements necessary to uphold the Referee's decision under a capricious disregard standard. ²

Our review of the above stated testimony and the record as a whole leads us to conclude that the Referee erred in determining that Claimant had not recovered from his previous work-related injury. Dr. Shatouhy specifically found Claimant's pre-existing condition had resolved and that Claimant was able to return to work without restriction. We cannot find any evidence in Dr. Shatouhy's testimony indicating that Claimant continued to suffer a work-related disability.

(WCAB opinion at 5; R.R. at 60.)

The sole issue which Iacono raises on appeal is whether the WCAB erred by applying the capricious disregard standard rather than the substantial evidence test in conducting its review. Iacono argues that because both parties presented evidence before the referee, the WCAB and this court must employ the substantial evidence test on appellate review. Russell v. Workmen's Compensation Appeal Board (Volkswagen of America), 121 Pa.Commonwealth Ct. 436, 550 A.2d 1364 (1988). On the other hand, Employer, relying on Farquhar v. Workmen's Compensation Appeal Board (Corning Glass Works), 515 Pa. 315, 528 A.2d 580 (1987), contends that because Iacono failed to produce any medical evidence confirming an ongoing work-related disability, the capricious disregard standard applies. ³ We agree with Iacono.

Our formulations of these review standards are clear-cut. Where the party with the burden of proof is the only party to present evidence and yet loses before the factfinder, the appropriate standard of review is the "capricious disregard" test. Russell. A capricious disregard of evidence will be found when there is a willful and deliberate disregard of competent testimony and relevant evidence which one of ordinary intelligence could not possibly have avoided in reaching a result. Arena v. Packaging Systems Corp., 510 Pa. 34, 507 A.2d 18 (1986). ⁴

However, when both parties present evidence before the factfinder, however limited, our scope of review is limited to a determination of whether constitutional rights have been violated, an error of law committed, or whether any necessary finding of fact is unsupported by substantial evidence. Lautek Corp. v. Unemployment Compensation Board of Review, 138 Pa.Commonwealth Ct. 547, 588 A.2d 1007 (1991). Substantial evidence is that quantum of relevant evidence which a reasonable mind would deem adequate to support a conclusion. Czap v. Workmen's Compensation Appeal Board (Gunton Corp.), 137 Pa.Commonwealth Ct. 612, 587 A.2d 49 (1991), appeal denied, 527 Pa. 654, 593 A.2d 425 (1991). Contrary to the belief of Employer and the WCAB, there is no requirement that this "evidence" include medical testimony. Lautek.

In this case, both parties have presented evidence. Employer offered the deposition testimony of Dr. Shatouhy that Iacono's lumbar sprain had resolved and he could return to work. Dr. Shatouhy also testified that any remaining disability or restrictions put on Iacono were due to his pre-existing arthritic and degenerative conditions rather than his March 16, 1989 work injury. Iacono, clearly competent to testify on the subject, presented his own testimony regarding his continuing pain. Thus, review under the substantial evidence standard is appropriate.

Having established the proper standard of review, we conclude that the referee's finding of residual disability is supported by substantial evidence and that the referee properly concluded that Employer did not meet his burden of proof.

Under section 413 of The Pennsylvania Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 772, a referee may terminate a claimant's workmen's compensation benefits at any time, upon a finding supported by substantial evidence, that a claimant's work-related disability has ceased entirely. Rogers Motor Lines v. Workmen's Compensation Appeal Board (Baker), 144 Pa.Commonwealth Ct. 493, 601 A.2d 934 (1992). Therefore, an employer seeking to terminate workmen's compensation benefits bears the burden of proving either that the employee's disability has ceased, or that any current disability arises from a cause unrelated to the employee's work injury. McGee v. L.F. Grammes & Sons, 477 Pa. 143, 383 A.2d 864 (1978); Central Pennsylvania Community Action, Inc. v. Workmen's Compensation Appeal Board (Probeck), 103 Pa.Commonwealth Ct. 278, 520 A.2d 112 (1987); McGinley v. Workmen's Compensation Appeal Board (Acme Markets, Inc.), 77 Pa.Commonwealth Ct. 214, 465 A.2d 147 (1983). "This burden is considerable, for disability is presumed to continue until demonstrated otherwise." Olivetti Corp. v. Workmen's Compensation Appeal Board (Robinson), 75 Pa.Commonwealth Ct. 584, 586, 462 A.2d 934, 936 (1983), quoting Workmen's Compensation Board ex rel. Mialka v. F.W. Woolworth Co., 19 Pa.Commonwealth Ct. 413, 415, 338 A.2d 784, 785 (1975). Thus, once a claimant establishes his right to benefits, those benefits remain in effect unless and until the employer satisfies its burden of proving entitlement to termination. Olivetti. There is no burden on the claimant to prove anything at all. Probeck. In essence, in order to prevail in a termination action, the employer must disprove the claimant's existing, continuing right to benefits, in support of which the claimant has already established that his injury arose in the course of his employment and was causally related thereto. See Halaski v. Hilton Hotel, 487 Pa. 313, 409 A.2d 367 (1979).

Having considered the burden faced by a party seeking to terminate benefits, we must recognize that two questions may, but do not necessarily, arise in any termination petition proceedings. An employer may seek to terminate benefits by proving that the claimant has lost entitlement to compensation because he has fully recovered and is no longer disabled. Failing this, an employer may nevertheless terminate benefits by establishing an unrelated source for the claimant's current disability. The fact that Iacono, as a lay person, is not competent to offer medical testimony on causation, is irrelevant in a termination proceeding. ⁵ In fact, competent evidence exists regarding the cause of his continuing pain. As stated, the causal connection between Iacono's disability and his work injury...