VISTA INTERN. HOTEL v. WCAB

• Decision Date: 23 December 1999
• Citation: 742 A.2d 649,560 Pa. 12
• Parties: VISTA INTERNATIONAL HOTEL, Appellant, v. WORKMEN'S COMPENSATION APPEAL BOARD (DANIELS), Appellee.
• Court: Pennsylvania Supreme Court

742 A.2d 649

560 Pa. 12

VISTA INTERNATIONAL HOTEL, Appellant, v. WORKMEN'S COMPENSATION APPEAL BOARD (DANIELS), Appellee.

Supreme Court of Pennsylvania.

Argued March 9, 1998.

Decided December 23, 1999.

Reargument Denied February 25, 2000.

James M. Poerio, Pittsburgh, for Vista Intern. Hotel.

David M. McCloskey, Pittsburgh, for Daniels.

No appearance for appellee.

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

OPINION

SAYLOR, Justice.

We allowed appeal to examine two issues: (1) whether the Workers' Compensation Appeal Board properly granted a rehearing to allow a claimant to defend a termination petition, although the record was closed after the claimant previously failed to appear; and, (2) whether and under what circumstances workers' compensation benefits may be terminated based upon a claimant's involuntary discharge from employment.

Appellee, Mary Daniels ("Claimant"), was employed in the housekeeping department of Appellant, Vista International Hotel ("Employer"), as a bathroom attendant. On February 21, 1989, she was struck on the head by a light fixture and suffered injury. She subsequently received workers' compensation benefits pursuant to a notice of compensation payable. In November of that year, however, Employer filed a petition seeking a termination or suspension of benefits, alleging that Claimant had returned to work at wages equal to or greater than her pre-injury wages, suffering no residual disability. The workmen's compensation referee scheduled a hearing for January 4, 1990, and notice was sent to Claimant's last-known address.¹ Although the notice was not returned by the Post Office, Claimant failed to appear at the hearing. Employer advised the WCJ that Claimant no longer resided at the listed address and provided Claimant's updated address. The WCJ scheduled a second hearing for February 1, 1990, and notice was sent to the new address. Again, the notice was not returned and Claimant failed to appear, nor did she contact the WCJ personally or through a representative. The WCJ heard Employer's evidence and subsequently entered a decision and order terminating Claimant's benefits.

Claimant appealed, alleging that she received only one notice but misread the hearing date.² On May 8, 1991, the Workmen's Compensation Appeal Board (the "Board") issued an order remanding the matter to the WCJ to permit Claimant to present her defenses to the termination petition. Although the Board issued an accompanying opinion, it did not state the basis for its decision, other than by way of general reference to its broad powers to grant a rehearing.

Meanwhile, on March 11, 1991, Claimant filed a new claim petition, alleging that, on February 5, 1991, during the course of her job with Employer, she was struck on the head by a bucket and suffered a second injury. Employer filed a timely answer denying the material allegations of the petition. Claimant also filed a petition seeking penalties against Employer for unilaterally refusing to pay medical expenses arising from the 1989 injury which were incurred after the grant of Employer's termination petition. Employer responded by filing a petition for review, challenging the reasonableness of further treatment or testing in relation to the 1989 work injury. The new claim petition, the miscellaneous petitions relating to the 1989 injury and the remanded termination petition were consolidated before the WCJ.

On March 25, 1992, prior to the conclusion of the hearings, Claimant injured her back during the course of her employment. Claimant was transported to the hospital, where she was examined and released, but she failed to report to work as scheduled for the next two days or to report the reason for her absence. Employer terminated her employment, concluding, in accordance with the employee handbook, that Claimant had voluntarily resigned by failing to report to work or call in sick for two consecutive days. Claimant asserted that she did not believe she was required to report her absence, as Employer was aware that she had been injured. Claimant received unemployment compensation benefits, the award of which was affirmed by the Unemployment Compensation Board of Review. In the unemployment compensation proceeding, the referee expressly found that Claimant's discharge was not a result of willful misconduct and that Claimant had not voluntarily resigned.

On remand, the WCJ found that Employer failed to meet its burden of establishing that all disability arising from the 1989 work injury had ceased and denied both the termination petition and Employer's petition for review of the reasonableness of medical expenses. The WCJ also denied Claimant's petition for penalties, concluding that Employer's contest was reasonable and its failure to pay medical expenses after the original termination order was not a violation of the Act.

In addition, the WCJ found that Claimant met her burden of proving that she suffered a compensable work-related injury on February 5, 1991, from which she continues to suffer a residual disability. Thus, the WCJ awarded total disability benefits for the period from February 5, 1991, until July 15, 1991, when Claimant returned to modified duty work, and partial disability benefits thereafter. The WCJ awarded total disability benefits beginning again as of April 2, 1992, the date Claimant's employment was terminated, on the ground that Claimant established a residual disability and the unavailability of suitable employment.

The Board affirmed, rejecting Employer's contention that Claimant was discharged for cause. It recognized that where a claimant's own misconduct after returning to work causes a loss of earnings, the employer is not required to resume payment of total disability benefits. The Board, however, cited the Commonwealth Court's decision in Hertz Penske Truck Leasing Co. v. Workmen's Compensation Appeal Bd. (Bowers), 168 Pa. Cmwlth. 657, 651 A.2d 1145 (1994), rev'd, 546 Pa. 257, 684 A.2d 547 (1996),³ for the proposition that "a reason which arguably is not the claimant's fault is clearly not a viable reason for a discharge."

The Commonwealth Court affirmed. See Vista Int'l Hotel v. Workmen's Compensation Appeal Bd. (Daniels), 683 A.2d 349 (Pa.Cmwlth.1996). Relying upon Joseph v. Workmen's Compensation Appeal Bd. (Delphi Co.), 522 Pa. 154, 560 A.2d 755 (1989), it held that the Board acted within its authority in remanding the case following the initial order terminating benefits. Regarding the termination of Claimant's benefits as of the date of her discharge from employment, the court cited its decision in Hertz Penske and stated:

It is now clear that "[a]n employer carries a heavy burden of proof where it seeks to terminate a claimant's benefits, and a claimant who has been separated from employment effectively enjoys a presumption that such separation occurred through no fault of his own even when the issue is suspension." For this reason, "in order to prevail [on a petition for suspension], Employer has an affirmative burden to prove either that Claimant's termination was voluntary, or that he was dismissed for good cause."

Accordingly, it is clear that to prevail on its termination/suspension petition Employer had to establish that Employer had good cause to terminate Claimant and, thus, Claimant's loss of earnings was due to her own willful misconduct. Accordingly, the WCJ did not err in so placing the burden on Employer.

Vista Int'l, 683 A.2d at 352-53 (citations omitted; emphasis in original).

In this appeal, Employer first contends that the Board exceeded its authority under Sections 423, 425 and 426 of the Act, 77 P.S. §§ 853, 856 and 871,⁴ by granting a rehearing after the WCJ terminated Claimant's benefits relating to the 1989 injury. Specifically, Employer contends that: Section 423 is inapplicable, since Claimant does not allege that any errors of law were committed or that findings of fact were unsupported by competent evidence; Section 425 of the Act is also inapposite, as Claimant never alleged that the WCJ's decision was capricious or the result of fraud, coercion, or other improper conduct; and Section 426 of the Act likewise fails to serve as authority for the Board's decision, since the Board did not take any additional evidence or act on the matter in any way prior to its grant of a rehearing.

As the Commonwealth Court correctly recognized, however, this Court's decisions in Cudo v. Hallstead Foundry, Inc., 517 Pa. 553, 539 A.2d 792 (1988), and Joseph, 522 Pa. at 154, 560 A.2d at 755, establish that the Board's authority to grant a rehearing is not strictly limited according to these enumerated statutory provisions. Rather, the Court has held that the Board has the ability to grant a rehearing in appropriate circumstances where the interests of justice require. See Cudo, 517 Pa. at 557, 559,

539 A.2d at 794-95; Joseph, 522 Pa. at 158-59,

560 A.2d at 756-57. Nevertheless, the Board's power is not limitless but must be exercised in a manner that is generally consistent with the policies and provisions of the Act. Additionally, in order to allow for appropriate review, the Board may not rest a decision to grant a rehearing solely upon the fact that it has broad powers to do so, but instead, must specify the basis for its determination.

With respect to the policies and provisions of the Act, both the Board and the Commonwealth Court overlooked Section 416, which provides, in relevant part, that:

[i]f a party fails to file an answer and/or fails to appear in person or by counsel at the hearing without adequate excuse, the workers' compensation judge hearing the petition shall decide the matter on the basis of the petition and evidence presented.

77 P.S. § 821. Thus, while the Act is remedial in nature and is to be liberally construed to effectuate its humanitarian objectives, see Lehigh County v. Workmen's Compensation Appeal Bd. (Wolfe), 539 Pa....