Westinghouse Elec. v. WCAB (KORACH)

• Decision Date: 29 September 2005
• Citation: 584 Pa. 411,883 A.2d 579
• Parties: WESTINGHOUSE ELECTRIC CORPORATION/CBS, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (KORACH), Appellee.
• Court: Pennsylvania Supreme Court

883 A.2d 579

584 Pa. 411

WESTINGHOUSE ELECTRIC CORPORATION/CBS, Appellant v. WORKERS' COMPENSATION APPEAL BOARD (KORACH), Appellee.

Supreme Court of Pennsylvania.

Argued May 12, 2004.

Decided September 29, 2005.

Joseph A. Fricker, Jr., for Westinghouse Electric Corporation/CBS

Amber Marie Kenger, for Workers' Compensation Appeal Board.

Anthony W. DeBernardo, for William C. Korach.

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

OPINION

Justice NEWMAN.

By Notice of Compensation Payable (NCP), Westinghouse Electric Corporation/CBS (Employer) accepted an injury sustained by William Korach (Claimant) on November 14, 1984, in the nature of a back sprain. In this, the most recent litigation, Employer appeals by allowance from an Order of the Commonwealth Court affirming an Order of the Workers' Compensation Appeal Board (Board) that affirmed in part and reversed in part the July 31, 2001 decision of a Workers' Compensation Judge (WCJ). Based on the following rationale, we reverse the Order of the Commonwealth Court.

FACTS AND PROCEDURAL HISTORY

Claimant worked in various positions for Employer from 1970 until 1984, notably as a shearman, coil former pull, fitter, material handler, and coil processor. On November 14, 1984, Claimant sustained a work related injury in the nature of a "back sprain." At the time of his injury, Claimant was employed as a coil processor; he sprained his back lifting a coil weighing in excess of one hundred pounds out of the presses.¹ On December 4, 1984, Employer issued an NCP acknowledging the specific work injury. In 1988, an independent medical examiner approved Claimant for sedentary or modified light-duty work. In 1989, another independent medical examiner noted inconsistencies between the complaints of Claimant and his physical examination, and recommended that Claimant return to work without restriction. Pursuant to a Supplemental Agreement, Claimant's benefits were reduced to partial disability effective November 16, 1989, as work was available to him within his physical capabilities. Also on that date, Claimant and Employer executed the appropriate documents so that Claimant could petition the Board for a commutation of his wage loss benefits. Claimant preferred to accept partial disability rather than an offer of employment because he had other means of support. Accordingly, his partial disability compensation of $154.00 for 500 weeks was commuted to a lump sum payment of $77,000.00, by Order dated February 28, 1990. As part of the commutation proceeding, the parties stipulated that Employer would "remain responsible for payment of reasonable and necessary medical expenses related to Claimant's work injuries...." (Original Record, Stipulation: Proposed Findings of Fact; Conclusions of Law and Proposed Order, dated 24 January 1990, page 3.)

Between November 14, 1984 and mid-1989, Claimant alleged that he underwent a gradual personality change and that he became depressed, ignored his personal hygiene, and took little interest in his home, his wife, or his child. After nearly five years of disability and increasing levels of depression, Claimant's wife insisted that he see a psychiatrist and made the first appointment with Gerald Lisowitz, M.D. (Dr. Lisowitz). Critically, this occurred at approximately the same time that the commutation was being negotiated. Claimant saw Dr. Lisowitz from late 1989, some five years after the original injury, through sometime in 1999, when Dr. Lisowitz suffered severe heart problems and Claimant came under the care of Jonathan M. Himmelhoch, M.D. (Dr. Himmelhoch), his current treating psychiatrist. Although neither the Supplemental Agreement nor the Stipulation specifically referenced a psychiatric component to Claimant's 1984 work injury, Employer paid all of the bills arising out of Claimant's psychiatric care through August of 1998. Following a personnel change within Employer's risk insurer and subsequent internal review, Employer refused to continue these payments on the basis that they were not work related. Claimant then filed a Claim Petition on September 25, 1998, alleging that he suffered a psychiatric injury in the nature of depression that was precipitated by his 1984 back injury; the Petition sought payment of related medical bills as well as counsel fees, but did not request that the NCP be amended to reflect additional injuries. In its answer to the Claim Petition, Employer admitted only that Claimant suffered a work-related low back sprain on November 14, 1984, for which compensation was commuted in early 1990. Employer asserted that Claimant's claim of psychic injury was barred by Section 311, 77 P.S. § 631,² and the statute of limitations contained in Sections 315 and 413(a) of the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 602,³ 772.⁴ Furthermore, Employer complained that the Claim Petition should be treated as a Petition to Review Notice of Compensation Payable, also barred by Sections 311, 315, and 413(a).

By decision dated September 5, 2000, the WCJ granted the Claim Petition of Claimant, crediting the testimony of his treating psychiatrist, Dr. Himmelhoch, over that of Employer's medical expert. The WCJ also credited the testimony of Claimant and his wife, and rejected the argument of Employer that the Claim Petition was time barred. The WCJ concluded that payment of Claimant's psychiatric bills by Employer constituted payments in lieu of compensation that tolled the limitations period of Section 315, rendering the Claim Petition timely. The WCJ believed that the payment of medical bills for such a long period of time lulled Claimant into a false sense of security that this was reasonable medical care related to his work injury. Further, the WCJ ordered Employer to pay for Claimant's psychiatric care from 1998 into the future or until such time as that care was found to be unreasonable and unnecessary. Finally, Employer was ordered to pay the attorney's fees of Claimant, based upon an unreasonable contest.

The Board affirmed in part, vacated in part, and remanded the decision to the WCJ. It affirmed the finding of the WCJ that Claimant's Claim Petition was timely filed. The Board based this decision upon the tolling provision of Section 315, 77 P.S. § 602, due to payment by the Employer of Claimant's psychiatric expenses until mid-1998, relying on Levine v. Workers' Compensation Appeal Bd. (Newell Corp.) 760 A.2d 1209 (Pa.Cmwlth.2000), petition for allowance of appeal granted and remanded, 568 Pa. 594, 798 A.2d 1273 (2002). However, it vacated the award of attorney's fees and remanded the matter to the WCJ to render findings regarding the reasonableness of Employer's contest.

On remand, the WCJ held one hearing at which time counsel for Claimant testified and offered a statement of counsel fees. The WCJ reviewed the charges individually and, by decision dated July 31, 2001, the WCJ again awarded attorney's fees based upon an unreasonable contest. The WCJ noted that a report dated October 29, 1990, from Anne S. Valko, M.D., who examined Claimant on his behalf, indicated that Claimant was receiving psychiatric care from Dr. Lisowitz, and that such treatment should be continued. This led the WCJ to conclude that Employer's contest was unreasonable because Employer terminated payment of Claimant's psychiatric treatment without receiving a medical opinion supporting denial of payment. Pursuant to the terms of the commutation, the parties stipulated that Employer would "remain responsible for payment of reasonable and necessary medical expenses related to Claimant's work injuries...."

The Board, in an Order dated August 15, 2002, affirmed that portion of the WCJ's decision granting the Claim Petition, but reversed that portion of the decision awarding attorney's fees. The Board agreed with Employer that its contest was reasonable as there was a definite statute of limitations issue raised in response to the filing of Claimant's Claim Petition.

In a published Opinion, a panel of the Commonwealth Court affirmed the Order of the Board. Westinghouse Electric Co./CBS v. Workers' Comp. Appeal Bd. (Korach), 829 A.2d 387 (Pa.Cmwlth.2003). The court indicated that, in its decision in AT & T v. Workmen's Comp. Appeal Bd. (Hernandez), 707 A.2d 649 (Pa.Cmwlth. 1998), which it reaffirmed in Jeanes Hospital v. Workers' Comp. Appeal Bd. (Haas), 819 A.2d 131 (Pa.Cmwlth.2003) (hereinafter Jeanes Hospital I), it had warned claimants that they should file a Claim Petition, rather than a Review Petition, when seeking to amend an NCP to reflect conditions for which liability had not been accepted by the employer. The court reasoned that there was nothing in the Workers' Compensation Act (Act)⁵ that permitted a claimant to challenge the denial of an NCP nor did it provide authority for any entity to add to the employer's admission. AT & T, 707 A.2d at 650 n. 2. The court acknowledged that the decisional law in this area is murky, noting a perceived dichotomy between AT & T and Jeanes Hospital I and the existing decisions in Commercial Credit Claims v. Workmen's Comp. Appeal Bd. (Lancaster), 556 Pa.325, 728 A.2d 902 (1999), and Guthrie v. Workers' Comp. Appeal Bd. (Keystone Coal Co.), 767 A.2d 634 (Pa.Cmwlth.2001). However, the court declined to address any perceived conflicts in the decisional law in favor of applying contract principles to resolve this dispute. The court reasoned that a commutation is an agreement between the parties terminating compensation liability on the part of the employer. In the present matter, the court agreed with the WCJ that Employer lulled Claimant into a false sense of security after the commutation by tendering payment of Claimant's psychiatric bills. Based on this conclusion, the court held that Employer was estopped from raising a statute of limitations defense. According to the court, it was immaterial whether a Claim Petition or...