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The Month in Workers' Compensation: April - May 2017 At A Glance

Mitchell I. Golding, Esq. on 6/13/2017

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COLLATERAL ESTOPPEL/ HEART AND LUNG ACT

  • An arbitrator's award of Heart and Lung benefits did not collaterally estop the WCJ from making her own determination as to Claimant's disability because Employer did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action.

  • To employ the precept of collateral estoppel in a workers' compensation proceeding following a Heart and Lung determination, there must be a two-part inquiry into the amount at risk and the governing procedure.

    The amount at risk – The amount at risk in a Heart and Lung claim differs from what is at risk in a workers' compensation claim, because Heart and Lung benefits cease when the claimant's disability is determined to be permanent. The absence of a specified time limit does not transform the temporary nature of Heart and Lung benefits into lifetime benefits. Consequently, benefits under the Heart and Lung Act are temporary, i.e., until the claimant returns to work or is found to be permanently disabled, but benefits under the Workers' Compensation Act may last a claimant's lifetime.

    The temporary nature of Heart and Lung benefits, as opposed to potential lifetime benefits under the Workers' Compensation Act, renders the amount in controversy between the two schemes incomparable.

    Governing procedure- The governing procedure in a Heart and Lung case differs from the governing procedure in a workers' compensation case. The Heart and Lung Act requires an arbitration proceeding that is more ad hoc and informal when compared to a proceeding governed by the Workers' Compensation Act. This is most notable with regard to the standards for the admission of medical evidence and the level of detail required in a WCJ's decision.

  • Collateral estoppel, also known as issue preclusion, prevents the litigation of questions of law or issues of fact that have already been litigated in a court of competent jurisdiction. The doctrine of collateral estoppel is based on the policy that a losing litigant does not deserve a rematch after fairly suffering a loss in adversarial proceedings on an issue identical in substance to the one he subsequently seeks to raise.

    Collateral estoppel will foreclose re-litigation of issues of fact or law in subsequent actions where the following criteria are met: (1) the issue in the prior adjudication is identical to the one presented in the later action; (2) there was a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; (4) the party against whom collateral estoppel is asserted has had a full and fair opportunity to litigate the issue in the prior action; and (5) the determination in the prior proceeding was essential to the judgment in that action.

Merrell v. WCAB (Commonwealth of Pennsylvania Department of Corrections) No. 493 C.D. 2016 (Decision by Judge Leavitt, April 3, 2017) 4/17

ATTORNEY FEES/ MEDICAL BILLS/PENALTY

  • The employer improperly denied medical bills resulting in the imposition of penalties and unreasonable contest attorney fees where (1) its denial was premised upon its belief that the entity billing for the physical therapy was different than the entity performing the physical therapy and (2) it failed to submit any evidence contrary to billing entity's position that the treatment was rendered by that entity in connection with a joint venture that was entered into between it and another physical therapy group, which was the basis for the Employer denying the bills.

    In this matter PTI, who was the billing entity, leased space and employees from a physical therapy group for PTI's Workers' Compensation business and PTI then paid a flat rate to the group for use of the facility and use of their employees. The leased employees were employees of the group, but were independent contractors with respect to PTI under a staffing lease agreement.

    There was no information from CMS, the Bureau or any state or federal law enforcement agency indicating that the arrangement between PTI and the physical therapy group was unlawful or fraudulent.

  • Pursuant to Section 440(a) of the Act in any contested case where an insurer contests liability in whole or in part, a WCJ shall award counsel fees to an employee in whose favor the matter has been finally adjudicated unless the employer provides a reasonable basis for the contest. Section 440 is intended to deter unreasonable contests of workers' compensation claims and to ensure that successful claimants receive compensation undiminished by costs of litigation.

    The issue of whether an employer's contest is reasonable is a legal conclusion based on the WCJ's findings of fact.

    In this matter, Employer's failure to provide any evidence that establishes the alleged illegality of the joint venture or PTI's status as a health care provider, supported the WCJ's finding that Employer engaged in an unreasonable contest and the award of attorney's fees was proper.

  • The WCJ did not err by awarding a penalty of 50%. Section 435(d) (i) of the Act gives a WCJ discretion to impose a penalty which may be increased to fifty per centum in cases of unreasonable or excessive delays.

    Here, the WCJ did not abuse its discretion in imposing a 50 percent penalty where Employer persisted in denying PTI's bills and, as the WCJ found, then failed to submit any evidence or credible testimony to refute PTI's status as the provider or demonstrate that there was anything illegal or improper about the leasing arrangements between PTI and the physical therapy group.

Derry Township Supervisors and Selective Insurance Company of America v. WCAB (Reed), No. 751 C.D. 2016 (Decision by Judge Pellegrini, January 30, 2017)4/17

SUBROGATION

  • Pa. Supreme Court grants employer's Petition for Allowance of Appeal and agrees to address the following issues:

    1. Is compensation payable pursuant to Article III of the Pennsylvania Workers' Compensation Act, when the Claimant suffers a work related injury and is concurrently entitled to benefits under the Pennsylvania Workers' Compensation Act and the Heart and Lung Act?

    2. Did the Commonwealth Court err in its determination that a self-insured municipality is not entitled to subrogation, to the extent of the compensation payable pursuant to Article III of the Pennsylvania Workers' Compensation [Act], when it has concurrent obligations to an injured State Trooper under the Pennsylvania Workers' Compensation Act and the Heart and Lung Act?

  • It will be recalled that the Commonwealth Court had held that the employer was not entitled to subrogation against the claimant's third party recovery resulting from a motor vehicle accident although the claimant stipulated to such right where Claimant was a public safety employee and his benefits fell under the Heart and Lung Act.

    Pursuant to Section 1722 of the MVFRL, a claimant is precluded from recovering the amount of benefits paid under the Heart and Lung Act from the responsible tortfeasors. There can be no subrogation out of an award that does not include these benefits.

Pennsylvania State Police v. WCAB (Bushta), No. 483 WAL 2016, (Decision by PER CURIAM, April 18, 2017) 4/17

OCCUPATIONAL DISEASE/ STATUTE OF REPOSE/MEDICAL TESTIMONY/DEATH CLAIM

  • A claimant can establish a right to benefits for an 'injury' in the nature of a work-related disease as an injury claim under Section 301(c)(1) of the Act. This would include a repetitive/cumulative death claim that alleges exposure to carcinogenic agents in the workplace over an extended period of time resulted in decedent's bladder cancer and death.

    This is consistent with the law that provides that for aninjury to be compensable under the Act, it is not required that the injury resultedfrom any sudden occurrence or accident; it may be due to daily trauma.

    In order for a fatal claim to be compensable under Section 301(c) (1) of the Act, an employee's death must occur within three hundred weeks after the injury. For a fatal disease as injury claim to be compensable under Section 301(c) of the Act, the employee's hazardous exposure is the injury from which the 300 week look-back period must be calculated.

    A claimant who litigates a death claim resulting from exposure to chemicals as an injury claim under Section 301(c)(1) of the Act must prove the death of decent occurred within 300 weeks of the last date of injurious exposure to the agent causing the disease, whether or not such last exposure was disabling.

    Therefore, where decedent died on June 23, 2006 the claimant had the burden to prove that decent was exposed to chemicals at work resulting in his bladder cancer up to 300 weeks prior to the date or up to September 22, 2000.

  • Whether a hazard exists is a question of fact for the WCJ to determine. Since claimant's exposure is a factual question, the claimant need not present scientific evidence or expert testimony to prove the existence of the hazard in the workplace. The WCJ may rely solely on the testimony of the claimant or other witnesses to prove the existence of and exposure to the hazard.

    Lay testimony of first-hand knowledge of a hazard gained from practical experience can be sufficient to prove the existence of and exposure thereto. However, the testimony of a lay person appears to require testimony of personal experience with the illness-causing element and personal knowledge.

  • In the case of a Fatal Claim Petition, the surviving family member has the burden to prove that the injury or disease was a substantial contributing cause in bringing about the death of the employee. If the causal connection is not obvious, the connection must be established by unequivocal medical testimony.

    Medical testimony is unequivocal if a medical expert testifies, after providing foundation for the testimony, that, in his professional opinion, he believes or thinks a fact exists.

  • In this matter, the WCJ issued a reasoned decision supported by substantial evidence where she found that the claimant fulfilled her burden of proof by presenting credible fact witnesses who worked in the same environment as the claimant and who testified credibly based on their first-hand knowledge of chemical and environmental hazards that the decedent was exposed to within 300 weeks of his death.

    The claimant's medical expert testified credibly that the environment in which the claimant worked played a substantial contributing factor toward development of the bladder cancer that resulted in his death.

Kimberly Clark Corporation v. WCAB (Bromley), No. 656 C.D. 2016 (Decision by Judge Covey, May 4, 2017) 5/17

INDEPENDENT CONTRACTOR/ CONSTRUCTION WORKPLACE MISCLASSIFICATION ACT/ LATE ANSWER

  • Employment status is a critical threshold determination for liability. Independent contractors are not eligible for workers' compensation. The nature of a working relationship is a question of law based on the facts presented in each case. It is the claimant's burden to prove the existence of an employer-employee relationship.

    The WCJ did not commit an error of law by determining that the claimant was an independent contractor consistent with the Misclassification Act that sets forth the criteria for determining whether a construction worker is an independent contractor or an employee for purposes of workers' compensation and unemployment compensation where:

    1. The individual has a written contract to perform such services.

    2. The individual is free from control or direction over performance of such services both under the contract of service and in fact.

    3. As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.

    In this matter the defendant satisfied all three elements where the evidence reflected:

    • First, there was a written contract between the clamant and defendant to perform work as a roofer. It was not that the contract was of indefinite duration. The Misclassification Act does not require a contract of specified duration; it requires only a written contract.

      The court further disagreed that it is impossible for contracts of indefinite duration to have a defined scope of work, as required by Section 3(b) (2), of the Misclassification Act.

      The court also disagreed that is "impossible" to maintain liability insurance during the term of a contract with indefinite duration, as required by Section 3(b) (6). The court pointed out the absence of a fixed contract period is irrelevant to maintenance of a liability insurance policy. Insurance is governed by a totally separate contract and may change from time to time for reasons having nothing to do with the agreement between construction contractors.

    • Second, the WCJ did not err where she concluded the claimant was free from control or direction over performance of the roofing services. Control exists where the putative employer possesses the right to select the employee; the right and power to discharge the employee.

      Here, though the defendant expected the clamant to be present to do his work, they did not direct the manner in which Claimant did the work. This is a critical feature of the master-servant relationship.

      Per the court, "Expecting an independent contractor to meet quality standards as a condition of being compensated is the mark of prudence by any person who engages a contractor to do construction work."

    • Third, the WCJ did not err by determining claimant was customarily engaged in an independently established trade.

      The fact defendant allowed Claimant to use his tools did not negate the fact that Claimant brought necessary tools to the job. Claimant also had to fix any mistakes in his work at his own expense pursuant to the January 2012 contract, which stated that "Kriner's Quality Roofing Services shall not pay for mistakes made by hired Contractors. Contractors will fix mistakes at own expense and recover materials or property if necessary."

      The record also established that Claimant performed the same or similar services for two other roofing companies. Moreover, Claimant's Facebook page stated that he was an independent roofing contractor.

  • The defendant was not barred by the filing of a late answer to the claimant's Claim Petition from raising the defense that the clamant was not an employee but rather an independent contractor.

    This is because conclusions of law are not deemed admitted by a late answer to the claim petition. It is well settled that the existence of an employer-employee relationship is a question of law based on the facts presented in each case.

    Accordingly, although Claimant filed a claim petition identifying defendant as his employer, defendant's failure to file a timely answer to the petition did not constitute an admission on this point and did not obviate Claimant's burden of establishing an employer/employee relationship.

    The question of whether the claimant was an employee or an independent contractor is a question of law that is to be decided by a tribunal.

Hawbaker v. WCAB(Kriner's Quality Roofing , Services and Uninsured Employer Guaranty Fund), No. 224 C.D. 2016 (Decided by Judge Leavitt, Filed February 13, 2017, Ordered reported May 10, 2017) 5/17

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