Romaine v. Workers' Compensation Appeal Board

• Decision Date: 22 June 2006
• Citation: 901 A.2d 477
• Parties: Gloria ROMAINE, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (BRYN MAWR CHATEAU NURSING HOME), Appellees.
• Court: Pennsylvania Supreme Court

Page 477

901 A.2d 477

Gloria ROMAINE, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (BRYN MAWR CHATEAU NURSING HOME), Appellees.

Supreme Court of Pennsylvania.

Submitted March 28, 2005.

Decided June 22, 2006.

Michael Lloyd Brint, for Gloria Romaine, appellant.

Amber Marie Kenger, Richard C. Lengler, Harrisburg, for W.C.A.B., appellee.

Victoria L. Rees-Fogal, for Bryn Mawr Chateau Nursing Home, appellee.

Before: CAPPY, C.J., CASTILLE, NEWMAN, SAYLOR, EAKIN, BAER and BALDWIN, JJ.

OPINION

Justice NEWMAN.

Gloria Romaine (Claimant) appeals by allowance from an Order of the Commonwealth Court affirming an Order of the Workers' Compensation Appeal Board (Board) that affirmed the decision of a Workers' Compensation Judge (WCJ) dismissing as untimely filed, her Petition to Reinstate Terminated Benefits. Section 413(a) of the Workers' Compensation Act (Act)¹ requires that a Petition to Reinstate Terminated Benefits be filed within three years of the most recent payment of compensation. The issue we must resolve is when the most recent payment of compensation occurred in this case. For the reasons that follow, we affirm the Order of the Commonwealth Court determining that Claimant's Petition to Reinstate Compensation Benefits must be denied, although on different grounds.

FACTS and PROCEDURAL HISTORY

Pursuant to a Notice of Compensation Payable, Bryn Mawr Chateau Nursing Home (Employer) began paying compensation benefits to Claimant for a work-related lumbar strain that occurred on July 5, 1990. Thereafter, on December 16, 1994, WCJ Sarah Makin issued a decision in which she found that Claimant had fully recovered from her work injury effective August 6, 1991. The WCJ terminated Claimant's benefits as of August 6, 1991. By Order dated December 15, 1995, the Board affirmed the decision of the WCJ and, on September 6, 1996, the Commonwealth Court affirmed the decision of the Board. There is no indication that Claimant sought allowance of appeal.

Subsequently, on December 16, 1997, Claimant mailed a Petition to Reinstate Compensation Benefits alleging that, as of that date, she experienced a worsening of her ongoing back problems. The Bureau of Workers' Compensation received the Petition on December 18, 1997. Employer filed a timely Answer denying the allegations of the Petition.

The matter was assigned to WCJ Alan Gilbert, who carefully considered all the potentially significant dates in this case and found that Claimant's most recent payment of compensation was a check from Employer dated December 14, 1994, which indicated that it covered payment of benefits for the period from December 6, 1994 through December 19, 1994. He remarked that no testimony was presented as to when Claimant either received or cashed the check. The WCJ observed that, in a post-hearing submission, counsel for Claimant stated in a letter dated January 20, 1999, that Claimant had endorsed the check on December 19, 1994. The WCJ noted that this was not entirely clear from the back of the check.

The WCJ accorded Claimant the benefit of the doubt and assumed that Claimant cashed or deposited the check no earlier than the December 19, 1994 date on the back of the check. He concluded that Claimant mailed the Petition to Reinstate Terminated Benefits more than three years after the date on the last check, exactly three years from the date of the earlier WCJ's decision, and less than three years after Claimant cashed or deposited the check. The WCJ resolved the date of the most recent payment as the date on the Employer's check, relying on Urick Foundry Co. v. Workmen's Compensation Appeal Board (Aarnio), 91 Pa.Cmwlth. 24, 496 A.2d 883, 885 n. 2 (1985).

In Urick Foundry, the claimant sustained a compensable injury, the employer issued a notice of compensation payable, and the claimant received benefits. Subsequently, the claimant signed a final receipt acknowledging full recovery. He sought to set aside the final receipt approximately three years later. The WCJ dismissed the Petition because it was not filed within three years "from the date to which payments had been made." See 77 P.S. § 1001. The Board reversed, finding that the Petition was timely because it was filed within three years of the date on which Claimant cashed the benefits check, some sixteen days following its receipt, and remanded to the WCJ for consideration of the merits. On appeal, the Commonwealth Court declined to reach the substantive issue in the matter because the Order of the Board was interlocutory. However, the court observed in dictum that, when compensation payments are made by check, absent any fraud or intentional delay in transmittal, the three-year statute of limitations period begins to run as of the date of the check. Urick Foundry, 496 A.2d at 885 n. 2. This was the only authority relied upon by the Commonwealth Court in the instant matter. Unfortunately, it did not consider the precedent established by this Court.

The WCJ recognized the lack of precedential authority of the Commonwealth Court's comments in Urick Foundry, but opined that the reasoning was sound and adopted the date of the check as the definitive date of final payment. The WCJ believed that he could not disregard the footnote in Urick Foundry, especially in the absence of clear authority to the contrary and, thus, concluded that Claimant's Petition was not timely filed within three years of the most recent payment of compensation, dismissing her Petition as untimely. The Board affirmed, also relying on Urick Foundry.

The Commonwealth Court affirmed in a published Opinion. Romaine v. Workers' Comp. Appeal Bd. (Bryn Mawr Chateau Nursing Home), 856 A.2d 308 (Pa.Cmwlth. 2004). It recognized that its discussion concerning what is "the most recent payment" in Urick Foundry was dictum, but opined that reliance on it produced the right result. We granted allowance of appeal to address Claimant's sole issue as to when, for purposes of the Act, a payment has been made.

The deceptively simple question presented is, what constitutes payment when benefit payments are made in the form of a check? Claimant asserts that the Board erred in affirming the dismissal of her petition on timeliness grounds when it measured the beginning date of the applicable three-year limitation period from the date printed on her last benefits check rather than from either 1) the date on which she negotiated the check or 2) the time period for which the benefits check applied. Section 413 of the Act requires that a Petition to Reinstate Terminated Benefits must be filed within three years from "the date of the most recent payment of compensation made prior to the filing of such petition." 77 P.S. § 772.² The precise question here is what event is used to determine the commencement date of the three-year limitations period.

DISCUSSION

We first considered the status of negotiable instruments that functioned in the same manner as a check in Plankinhorn v. Cave, 2 Yeates 370, 1798 WL 539 (Pa. 1798). There, we observed that a note is payable "like so much money paid to whomsoever the note is given." Id. at *3. We also remarked that "the acceptance of a negotiable instrument for and on account of a debt must be taken prima facie to be in satisfaction of that debt, unless it appeared that the note still remained unpaid in the possession of the party, without any laches by them." Id. We reinforced the principal that a negotiable instrument is not payment until the proceeds are received in McGinn v. Holmes, 2 Watts 121 (Pa.1833) (holding that bills or notes taken for a precedent debt, without special agreement to the contrary, do not constitute payment before the proceeds are received). Accord McLughan v. Bovard, 4 Watts 308 (Pa.1835); Bayard v. Shunk, 1 Watts & Serg. 92 (Pa.1841). This principal was generally adopted universally. See, e.g., Marreco v. Richardson, 2 K.B. 584, 593, 1 British Ruling Cases 485 (House of Lords 1908) (Farwell, L.J.) (indicating, "[The] giving of a cheque for a debt is payment conditional on the cheque being met, that is, subject to a condition subsequent, and if the cheque is met it is an actual payment ab initio and not a conditional one.");³ Thus, for many years the rule was that receipt of a check was insufficient to discharge a debt; the proceeds must be received. However, when the proceeds were received, the check was valid. Further, the courts held that the recipient of the check could not tarry, but must cash or deposit the check as soon as practicable. Failure to do so could render the debt paid without receipt of the proceeds. See, e.g., Nat'l Newark Banking Co. v. Second Nat'l Bank, 63 Pa. 404 (1869); Kilpatrick v. Home Bldg. & Loan Ass'n, 119 Pa. 30, 12 A. 754 (1888); Loux v. Fox, 171 Pa. 68, 33 A. 190 (1895). The significant number of bank failures occurring in the mid to late 1800s drove this policy.

We revisited the issue of when a check is considered payment in Briggs v. Holmes, 118 Pa. 283, 12 A. 355 (1888). There, Briggs & Drum sold livestock on commission for Alexander & Co. (Alexander). N. Holmes & Sons (Holmes) consigned livestock to Alexander, which Briggs & Drum sold. Holmes always insisted that he be paid with a cashier's check rather than a Briggs company check. Briggs gave Holmes a cashier's check for the proceeds of the livestock sale on Saturday, drawn on the Penn Bank. Unfortunately, the Penn Bank closed its doors forever on the following Monday. Holmes sued Briggs contending that payment by cashier's check is only conditional until receipt of the money. Briggs argued that, based on the course of dealing between the parties, Holmes had been paid when he accepted the cashier's check. This Court concluded that a course of dealing whereby checks were accepted as absolute payment could rebut the presumption that the payment was conditional, a fact for jury determination, and remanded for a new trial. Pursuant to the particular facts of the case, then, a check could be...