Mitchell v. WCAB

• Citation: 572 Pa. 380,815 A.2d 620
• Parties: Andrew M. MITCHELL, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (STEVE'S PRINCE OF STEAKS), Appellee.
• Decision Date: 21 January 2003
• Court: United States State Supreme Court of Pennsylvania

815 A.2d 620

572 Pa. 380

Andrew M. MITCHELL, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (STEVE'S PRINCE OF STEAKS), Appellee.

Supreme Court of Pennsylvania.

Argued January 29, 2001.

Decided January 21, 2003.

Brian R. Steiner, Philadelphia, for Andrew M. Mitchell, Appellant.

James A. Holzman, Harrisburg, Amber M. Kenger, Mechanicsburg, for W.C.A.B., Appellee.

Anthony J. Bilotti, Media, for Steve's Prince of Steaks, Appellee.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO and SAYLOR, JJ.

OPINION

Justice CASTILLE.

In this workers' compensation appeal, we must determine the application of this Court's decision in Kachinski v. Workmen's Compensation Appeal Bd. (Vepco Construction Co.), 516 Pa. 240, 532 A.2d 374 (1987), in a situation where appellant, the Claimant below, failed to respond to his former employer's job referrals because he was incarcerated.¹ A divided Commonwealth Court panel held that appellant's failure to pursue job referrals while incarcerated was bad faith under Kachinski, thus warranting termination of his compensation benefits. For the reasons set forth below, we reverse.

On May 12, 1986, appellant was injured in the course and scope of his employment as a maintenance man with Steve's Prince of Steaks (Employer) in Philadelphia, when he was burned by a container of hot oil. Employer accepted liability for the injury and issued a notice of compensation payable. Appellant received $173.50 per week in total disability benefits based upon his average weekly wage of $200.00. In October 1991, while still receiving disability payments, appellant was incarcerated pursuant to a criminal conviction. He was paroled in March 1995, but was recommitted to prison in July 1995 for a parole violation.

On October 27, 1995, Employer filed a petition to terminate, suspend or modify appellant's compensation benefits. In response, appellant conceded that Employer was entitled to a suspension of benefits for the period during which he was incarcerated, but argued that he was entitled to a reinstatement of those benefits upon his release from prison.

The Workers' Compensation Judge (WCJ) made the following relevant findings: In November of 1995, while appellant was still incarcerated, Employer sent appellant's workers' compensation counsel referrals for three jobs, all in Philadelphia, which fit within appellant's physical restrictions. Based upon the credited deposition testimony of Employer's medical expert, appellant had sufficiently recovered from his work injury to be able to physically perform the referred jobs. Appellant did not follow through on the Philadelphia job referrals due to his incarceration in Somerset County, Pennsylvania. On November 18, 1996, appellant was paroled and, upon his release, he notified Employer of his willingness to pursue job referrals. Employer did not respond. Appellant sought gainful employment on his own, but to no avail.

Based upon these findings, the WCJ concluded that: (1) Employer was entitled to a suspension of benefits from July 30, 1995 through November 17, 1996, due to appellant's incarceration;² and (2) Employer was entitled to an outright suspension of benefits as of November 1995—i.e., the point where Employer forwarded job referrals to appellant—based upon appellant having an earning capacity of $200.00 per week as of that date. With respect to the second conclusion, the WCJ reasoned that appellant's "incarceration is not a valid justification for failing to respond to the job notices," and thus appellant had acted in bad faith for purposes of Kachinski. The WCJ also rejected appellant's argument that the job referrals were inappropriate because they were for positions located in Philadelphia while he was incarcerated in western Pennsylvania.

Appellant appealed to the Workers' Compensation Appeal Board (Board), which affirmed the WCJ, employing similar reasoning. Upon appellant's further appeal, the Commonwealth Court affirmed in a published opinion. Mitchell v. Workers' Compensation Appeal Bd. (Steve's Prince of Steaks), 734 A.2d 945 (Pa. Cmwlth.1999). In that appeal, appellant argued, as he had below, that he was entitled to a reinstatement of benefits upon his release from prison because Kachinski's requirement that a claimant follow-up in good faith on job referrals should not apply when a claimant is unable to pursue the referrals due to his incarceration. The Commonwealth Court panel majority rejected appellant's argument, holding that "incarceration is not a valid justification for failing to respond to job notices." The panel majority also found that Employer had complied with "all the requirements set forth in Kachinski," there was nothing in the case law to say that an Employer cannot invoke the Kachinski model while a claimant is incarcerated and, since appellant had failed to respond to the offered positions, he was not entitled to reinstatement of his benefits. 734 A.2d at 946-47.

Judge Doyle dissented, noting that the majority's decision held, in effect, "that an employer may permanently terminate all future benefits of a claimant because he is in prison." Id. at 947 (Doyle, J., dissenting). The dissent also noted that the majority had gone beyond previous decisions of this Court and the Commonwealth Court, which had recognized only that an employer is entitled to a suspension of benefits during a period of incarceration, but did not suggest that a permanent suspension of benefits was an appropriate consequence of incarceration under the Kachinski test. Indeed, the dissent noted, this Court in Banic v. Workmen's Compensation Appeal Bd. (Trans-Bridge Lines, Inc.), 550 Pa.276, 705 A.2d 432 (1997), while phrasing the issue from the opposite perspective, had specifically noted that it was an open question: "`the issue of whether a claimant's release from prison automatically entitles the claimant to a reinstatement of benefits is left for another day.'" 734 A.2d at 948 (Doyle, J., dissenting), quoting Banic, 705 A.2d at 437 n. 8

(emphasis by Judge Doyle).

Turning to the question of whether an inability to follow through on job referrals due to incarceration should require a permanent cessation of benefits, Judge Doyle stated that he did not believe that such was the intent of the General Assembly. Noting the conclusiveness of a modification resulting from a finding of Kachinski bad faith under existing Commonwealth Court authority,³ the dissent was concerned that "many employers who discover that a claimant has been incarcerated will simply `create' a job and offer it to the incarcerated claimant, knowing full well when it is offered that the claimant cannot possibly appear for an interview, or physical examination, because he or she is in jail." Id. at 948, 532 A.2d 374. By such a tactic, the dissent noted, the employer may obtain a permanent suspension of benefits based upon mere imputed bad faith by a claimant, which in fact is not bad faith at all since, "unless the claimant escapes from jail to present himself for a job interview... he may not `cure' his bad faith...." The dissent concluded that "[s]uch a scenario not only flies in the face of the humanitarian purpose and policies behind the Workers' Compensation Act, it is, in my view, unconscionable." Id.

This Court granted appellant's Petition for Allowance of Appeal. In workers' compensation matters, our standard of review is well-settled: this Court must affirm the adjudication below unless we find that an error of law was committed, that constitutional rights were violated, that a practice or procedure of a Commonwealth agency was not followed, or that a necessary finding of fact is not supported by substantial evidence. 2 Pa.C.S. § 704; Reinforced Earth Co. v. Workers' Compensation Appeal Bd. (Astudillo), 810 A.2d 99, 104 (Pa.2002) (plurality opinion); United Cerebral Palsy v. Workers' Compensation Appeal Bd. (Emph), 543 Pa.544, 673 A.2d 882, 886 n.10 (1996). The question for this Court is whether the tribunals below committed an error of law in their conclusion concerning the effect of appellant's incarceration, and the role of Kachinski, in this scenario. Our review of questions of law, of course, is plenary.

The Act recognizes that a claimant's disability may change over time and, to that end, permits the modification, reinstatement, suspension, or termination of a claimant's benefits based upon the degree of change in the claimant's disability. Banic, 705 A.2d at 435. Thus, Section 413 of the Act provides, in relevant part:

A workers' compensation judge designated by the department may, at any time, modify, reinstate, suspend, or terminate a notice of compensation payable, an original or supplemental agreement or an award of the department or its workers' compensation judge, upon petition filed by either party with the department, upon proof that the disability of an injured employe has increased, decreased, recurred, or has temporarily or finally ceased, or that the status of any dependent has changed. Such modification, reinstatement, suspension, or termination shall be made as of the date upon which it is shown that the disability of the injured employe has increased, decreased, recurred, or has temporarily or finally ceased, or upon which it is shown that the status of any dependent has changed....

77 P.S. § 772. "Disability" for purposes of the Act "has long been synonymous with the loss of earning power" attributable to the work-related injury. Banic, 705 A.2d at 435; Dillon v. Workmen's Compensation Appeal Bd. (Greenwich Collieries), 536 Pa.490, 640 A.2d 386, 391 (1994) (collecting cases); accord Reinforced Earth, 810 A.2d at 108

. Of course, "[b]oth capacity to work and availability of work affect the extent of an injured employee's disability (loss of earning power)." Dillon, 640 A.2d at 392; accord Reinforced Earth, supra. Moreover, we have held that "availability" of appropriate work means "actual availability." Kachinski, 532 A.2d at 379....