Mark v. W.C.A.B. (Mccurdy)

• Decision Date: 10 March 2006
• Citation: 894 A.2d 229
• Parties: Howard W. MARK and Cincinnati Insurance Company, Petitioners v. WORKERS' COMPENSATION APPEAL BOARD (McCURDY), Respondent.
• Court: Pennsylvania Commonwealth Court

894 A.2d 229

Howard W. MARK and Cincinnati Insurance Company, Petitioners v. WORKERS' COMPENSATION APPEAL BOARD (McCURDY), Respondent.

Commonwealth Court of Pennsylvania.

Argued February 1, 2006.

Decided March 10, 2006.

COPYRIGHT MATERIAL OMITTED

Leta Vell Pittman, Pittsburgh, for petitioner.

Thomas P. Howell, Harrisburg, for respondent, Bureau of Workers' Compensation.

Vincent J. Quatrini, Jr., Greensburg, for respondent, Lorraine McCurdy.

BEFORE: COLINS, President Judge, and McGINLEY, Judge, PELLEGRINI, Judge, FRIEDMAN, Judge, LEADBETTER, Judge, COHN JUBELIRER, Judge, and SIMPSON, Judge.

OPINION BY Judge SIMPSON.

In this workers' compensation case we address supersedeas fund reimbursement under the Workers' Compensation Act (Act).¹ In particular, we are asked to resolve an apparent split of authority. A recent case holds that reimbursement may be had for all payments actually made after supersedeas denial, including payment of benefits awarded retroactively for earlier periods of disability. Another line of cases holds that reimbursement can only be had for payments accruing after supersedeas was requested, which would exclude reimbursement for retroactive benefits attributable to disability before supersedeas was requested. The split of authority is mirrored in the split of opinion among workers' compensation authorities.

Employer, Howard W. Mark, a dentist, and his insurer, Cincinnati Insurance Company (together, Petitioners) seek reimbursement from the Workers' Compensation Supersedeas Fund (Fund)² for several years of compensation benefits paid to Lorraine McCurdy (Claimant). The requested reimbursement is for $43,768.40 (full amount).

In opposition, the Department of Labor and Industry, Bureau of Workers' Compensation (Bureau) asks us to affirm the order of the Workers' Compensation Appeal Board (Board) which allowed reimbursement of only $14,106.78 (allowed amount). This amount included benefits accruing after the supersedeas request, but excluded retroactive benefits paid for periods before the request.

I.

This matter began in October 1993 when Claimant filed a claim petition alleging she became ill with contact dermatitis on her hands during the time she worked as an office manager/dental assistant. The matter proceeded to a first Workers' Compensation Judge (WCJ).

During extended proceedings before the first WCJ, Petitioners contested the claim on the basis of causation, contending that any disability was related to a chronic non-work related problem. In addition, Petitioners challenged the length of any disability, contending Claimant fully recovered from any work-related condition.³ After years of proceedings, in May 1997, the first WCJ granted Claimant on-going benefits retroactive to early September 1993.⁴

Petitioners timely appealed, and they simultaneously filed a supersedeas request addressed to the Board. The Board denied the supersedeas request.⁵

However, in its subsequent decision on the merits, the Board affirmed in part, reversed in part and remanded. The Board affirmed that Claimant established a work-related aggravation of her preexisting dermatitis. The Board reversed the finding of on-going disability and remanded to determine when Claimant fully recovered.

On remand, a second WCJ found Claimant was fully recovered from an aggravation of her preexisting condition as of August 1995. The second WCJ terminated Claimant's benefits. This decision was effective August 1998. On appeal, the Board affirmed.

The significance of this second WCJ decision is that benefits initially awarded for disability from August 1995 until the August 1998 decision on termination were ultimately determined not to be payable. Those benefits were paid after the supersedeas request was denied. The benefits paid for disability from the August 1995 recovery date to the June 1997 supersedeas request are currently contested. All parties agree that reimbursement is appropriate for periods after the June 1997 supersedeas request.

In January 2003, Petitioners filed the application for Fund reimbursement now at issue. The Bureau determined Petitioners could be reimbursed only for amounts representing payments for disability after the June 1997 supersedeas request. A third WCJ similarly determined reimbursement could only be granted for payments attributable to disability periods occurring after the supersedeas request; here, the allowed amount. The Board affirmed. Petitioners appeal.⁶

II.

A.

Section 443(a) of the Act allows reimbursement from the Fund if certain requirements are met. Those requirements are: 1) a supersedeas was requested; 2) the request for supersedeas was denied; 3) the request was made in a proceeding under Section 413⁷ or Section 430⁸ of the Act; 4) payments were continued because of the order denying supersedeas; and 5) in the final outcome of the proceedings, it was determined such compensation was not, in fact, payable. See Bureau of Workers' Comp. v. Workers' Comp. Appeal Bd. (Consol.Freightways, Inc.), 876 A.2d 1069 (Pa.Cmwlth.2005); Bureau of Workmen's Comp. v. Workmen's Comp. Appeal Bd. (Liberty Mut. Ins. Co.), 113 Pa.Cmwlth. 607, 538 A.2d 587 (1988).

Petitioners and the Board, as amicus curiae, argue all five requirements are met. Petitioners requested a supersedeas in June 1997, which was denied by the Board. Petitioners made the request to the Board pursuant to Section 430 of the Act. Petitioners made payments because of the supersedeas denial. In the final outcome, the compensation was determined not to be payable. Also, Petitioners argue the failure to grant reimbursement of the full amount requested violates their constitutional rights as a taking of property without hearing or redress, contradicts the policy of Section 443 of the Act, and is an error of law.

The Bureau contends it correctly denied full reimbursement since the retroactive benefits paid to Claimant were attributable to a period of disability that predated the supersedeas petition. In support, the Bureau cites the split decision in Wausau Ins. Co. v. Workers' Comp. Appeal Bd. (Commonwealth of Pa.), 826 A.2d 21 (Pa. Cmwlth.2003). In Wausau, a panel majority determined retroactive benefits accruing for periods before the petition for supersedeas could not be reimbursed.

Petitioners counter Wausau should not apply where the right to compensation was not established before the award from which the appeal was taken. Their contention reflects the rationale in a recent case, Consol. Freightways. In Consol. Freightways, a unanimous panel determined that reimbursement could be had for retroactive benefits paid after the petition for supersedeas was denied.

B.

Supersedeas and reimbursement from the Fund are topics with which this Court struggles. Judging from the adversarial positions of the Board and the Bureau, it appears that compensation authorities also share different views. We therefore seek guidance from the Act.

Fund reimbursement is available when requested in proceedings under Sections 413 or 430 of the Act. Confusion arises from this requirement and from this Court's imprecise application of it. Therefore, further analysis is appropriate.

Section 413

Section 413 of the Act governs changes to an existing compensation situation. 77 P.S. § 771-73. It allows a WCJ to change a notice or agreement for compensation if materially incorrect. 77 P.S. § 771. Id. Section 413 also allows a WCJ to modify, reinstate, suspend or terminate compensation where disability changes. 77 P.S. § 772; see also Jeanes Hosp. v. Workers' Comp. Appeal Bd. (Hass), 582 Pa. 405, 872 A.2d 159 (2005). More particularly, a supersedeas request under Section 413 is addressed to a WCJ to suspend a previously established payment liability, usually in conjunction with a petition to reduce compensation (suspension, modification or termination). This is the import of the statutory requirement that premises Fund reimbursement on a supersedeas request in proceedings under Section 413.

Not all cases under Section 413 involve retroactive benefits. Where retroactive benefits are at issue in petitions to reduce compensation, it is usually because an employer unilaterally stopped payments under a previously established liability. See Robb, Leonard and Mulvihill v. Workers' Comp. Appeal Bd. (Hooper), 746 A.2d 1175 (Pa.Cmwlth.2000); Westmoreland Casualty Co. v. Workmen's Comp. Appeal Bd., 32 Pa.Cmwlth. 492, 379 A.2d 1080 (1977).

Section 430

In contrast, Section 430 of the Act involves appeals from an adverse decision of a WCJ to the Board. This distinction was clearer before the Section was amended in 1978 to delete specific reference to the Board,⁹ but the distinction continues to be recognized by courts. Travelers Ins. Co. v. Gunson, 79 Pa.Cmwlth. 39, 468 A.2d 529 (1983), aff'd, 506 Pa. 334, 485 A.2d 390 (1984). A supersedeas request under Section 430 is addressed to the Board (or to this Court) to suspend a recent decision on appeal. This is the import of the statutory requirement that premises Fund reimbursement on a supersedeas request in proceedings under Section 430.

Supersedeas requests under Section 430, where there is no previously established compensation liability or where liability is reinstated or enlarged, typically involve significant retroactive benefits. See, e.g., Snizaski v. Workers' Comp. Appeal Bd. (Rox Coal Co.), ___ Pa. ___, 891 A.2d 1267 (2006); Wausau. These benefits accrue during the course of litigation and not from a unilateral cessation of payments under a previously established liability.

In summary, we evaluate the procedural stage at which the initial supersedeas request is made (requested from WCJ or requested on appeal from Board), and the recency of the liability (suspend previously established liability or suspend new decision) to determine whether a supersedeas has been requested and denied under the provisions of Section 413 or the provisions of Section 430 of the Act. The distinction is material...