Erie Ins. Co. v. Workers' Comp. Appeal Bd.
Erie Ins. Co. v. Workers' Comp. Appeal Bd.
Opinion of the Court
Petitioners Erie Insurance Company and Powell Mechanical, Inc. (collectively, Employer) petition for review of an order of the Workers' Compensation Appeal Board (Board), dated December 6, 2017. The Board reversed an order of Workers' Compensation Judge Eric Jones (WCJ Jones), which granted Employer's Application for Supersedeas Fund Reimbursement (Application). We now affirm.
Robert Braithwaite (Claimant) worked for Employer as a Steam Fitter. (Reproduced Record (R.R.) at 20a.) On April 11, 2003, Claimant was injured in a vehicular accident while allegedly on his way home from delivering equipment for Employer. (Id. at 22a.) Employer accepted liability for Claimant's work-related injury by issuing a notice of temporary compensation payable, which was subsequently converted to a notice of compensation payable by operation of law. (Id. ) Employer, however, unilaterally stopped paying for Claimant's medical expenses "sometime around September of 2003" after Employer became aware that Claimant may have been intoxicated at the time of the vehicular accident. (Id. at 23a.) Specifically, Employer discovered that Claimant, after delivering Employer's equipment, went to a bar where he drank a number of beers. (Id. at 22a.) After Claimant left the bar, he became involved in the subject vehicular accident and was charged with driving under the *1145influence. (Id. ) Within the same time frame that Employer ceased paying Claimant's medical expenses, Employer also filed review and termination petitions, alleging that Claimant was intoxicated at the time of the accident and, therefore, was not entitled to workers' compensation benefits. (Id. at 19a.) Employer included a request for supersedeas in its petitions. (Certified Record (C.R.), Item No. 11.) Claimant then filed a penalty petition,
On March 8, 2004, Workers' Compensation Judge Charles P. Lawton (WCJ Lawton) issued an interlocutory order granting Employer's request for supersedeas.
Subsequently, on March 1, 2012, Employer filed its Application seeking reimbursement from the Fund for an overpayment of wage-loss benefits and medical expenses. (C.R., Item No. 17.) By decision and order dated January 13, 2016, WCJ Jones granted Employer's Application. (R.R. at 7a.) In so doing, WCJ Jones reasoned that, even though Employer failed to make wage-loss and medical expense payments while the notice of compensation payable was in effect, to deny Employer's Application "only compounds the error that it never should have been liable for wage-loss and medical benefits, since the notice of compensation payable was set aside." (Id. at 5a.) The Bureau of Workers' Compensation (Bureau) appealed WCJ Jones's decision-only with respect to the reimbursement of medical expenses-to the Board, which reversed. (Id. at 11a.) In so doing, the Board reasoned that WCJ Lawton had no authority to grant supersedeas for medical expenses under the Act, and, therefore, his supersedeas order, while silent on the issue, effectively denied supersedeas with respect to the payment of Claimant's medical bills. (Id. at 13a.) The Board further reasoned that, as a result of the implied denial of supersedeas, Employer remained liable for the payment of medical expenses. (Id. ) The Board also reasoned that Employer's payment of Claimant's medical expenses following WCJ Lawton's decision was not due to the denial of supersedeas, but rather, to its failure to pay for Claimant's medical expenses during the pendency of this litigation. (Id. ) In other words, Employer paid Claimant's medical expenses in this case because it was ordered to do so by WCJ Lawton's order granting Claimant's penalty petition, not because WCJ Lawton denied its request for supersedeas. (Id. at 12a-13a.) For these reasons, the Board concluded that WCJ Jones erred in granting Employer's Application with respect to the reimbursement of medical benefits. (Id. at 13a.) Employer now petitions this Court for review.
On appeal,
The General Assembly created the Fund for the purpose of reimbursing, under prescribed circumstances, an employer that has been ordered to pay workers' compensation benefits that are later determined not to be owed. In so doing, "[t]he Legislature recognized that recoupment from the claimant was impractical and would undermine the benevolent purpose of the Act." Bureau of Workers' Comp. v. Workmen's Comp. Appeal Bd. (Allstate Ins. Co.) , 96 Pa.Cmwlth. 566,
With regard to reimbursement, Section 443(a) of the Act provides, in relevant part:
If, in any case in which a supersedeas has been requested and denied under the provisions of section 413[7 ] or section 430,[8 ] payments of compensation are made as a result thereof and upon the final outcome of the proceedings , it is determined that such compensation was not, in fact, payable, the insurer who has made such payments shall be reimbursed therefor.
(Emphasis added.) An employer cannot, however, unilaterally suspend the payment of benefits after filing a petition seeking termination or modification; absent a supersedeas order, an employer is required to continue paying benefits. Robb, Leonard and Mulvihill v. Workers' Comp. Appeal Bd. (Hooper) ,
(1) a supplemental agreement is submitted pursuant to Section 408 of the Act, [as amended , added by the Act of June 26, 1919, P.L. 642,] 77 P.S. § 732 ;
(2) a final receipt is submitted, signed by the claimant pursuant to Section 434 of the Act, [as amended , added by the Act of June 26, 1919, P.L. 642,] 77 P.S. § 1001 ;
(3) an interlocutory order is secured from a WCJ granting a discretionary supersedeas pursuant to Section 413(a.1) and 413(a.2) of the Act, 77 P.S. § 774 ;
(4) a petition to suspend compensation is filed with an accompanying affidavit *1148from the insurer that the claimant has returned to work at wages greater than or equal to his pre-injury wage pursuant to Section 413(c) of the Act, [as amended , added by the Act of July 1, 1978, P.L. 692,] 77 P.S. § 774.2 ; or
(5) a final order is secured from a WCJ terminating a claimant's benefits.
Hooper ,
In Estate of O'Neill , the employer refused to pay the workers' compensation benefits following its appeal of the WCJ's decision, even though the Board denied its request for supersedeas through a deemed denial-i.e. , failure to act within 30 days. The employer's unilateral act prompted the claimant to file a penalty petition, which the referee
Similarly, in Hooper , the employer unilaterally suspended the payment of the claimant's benefits following the claimant's refusal to return to work in her pre-injury position after a full release. Approximately six months later, Employer filed a petition to modify or suspend the claimant's benefits and requested supersedeas. The WCJ granted the supersedeas request but ordered the employer to pay to the claimant all of the benefits the employer unilaterally withheld from the six months before the employer filed its petition through the date of the WCJ's order. The employer, thereafter, filed an application for reimbursement from the Fund, which the WCJ granted for the entire period for which the employer paid benefits, including the period during which the employer unilaterally withheld payment of benefits. The Bureau appealed the WCJ's decision to the Board. The Board amended the WCJ's order to rescind reimbursement for the payments that the employer unilaterally withheld prior to its request for supersedeas. This Court affirmed the Board's decision, declining to permit reimbursement of funds for the period of time during which the employer unilaterally withheld payment. In doing so, we recognized that holding otherwise would encourage employers to continuously violate the Act by unlawfully withholding payments. Hooper ,
In this case, Employer has not established that it was entitled to reimbursement for the medical expenses it paid in connection with WCJ Lawton's order granting Claimant's penalty petition. Similarly *1149to the employers' actions in Estate of O'Neill and Hooper , Employer unilaterally withheld payment of medical expenses in violation of the Act and may not be reimbursed for those payments. It is irrelevant that Employer subsequently prevailed on the termination petition because earlier violations of the Act may not be excused. See Estate of O'Neill ,
Accordingly, we affirm the order of the Board.
ORDER
AND NOW, this 21st day of February 2019, the order of the Workers' Compensation Appeal Board is hereby AFFIRMED.
Claimant also filed a review petition seeking specific loss benefits as a result of an alleged disfigurement from the accident. Claimant's review petition is not relevant to this appeal, and, therefore, we will not address it in further detail.
Act of June 2, 1915, P.L. 736, as amended , 77 P.S. §§ 1 -1041.4, 2501 -2708.
Generally, an employer or insurer may seek reimbursement under Section 443 of the Act, as amended , added by the Act of February 8, 1972, P.L. 25, 77 P.S. § 999, from the Workers' Compensation Supersedeas Fund (Fund) for any overpayment of wage-loss compensation and medical expenses ultimately determined to be ineligible for payment. Ins. Co. of N. Am. v. Workmen's Comp. Appeal Bd. (Kline & Packard Press) , 137 Pa.Cmwlth. 393,
Braithwaite v. Workers' Comp. Appeal Bd. (D. Powell, Inc.), (Pa. Cmwlth., No. 1301 C.D. 2011,
This Court's review is limited to a determination of whether an error of law was committed, whether necessary findings of fact are supported by substantial evidence, or whether constitutional rights were violated. Vinglinsky v. Workmen's Comp. Appeal Bd. (Penn Installation) , 139 Pa.Cmwlth. 15,
Employer has divided its argument into three separate, but related, issues. In order to avoid repetition and for the sake of clarity, we have condensed Employer's arguments into one argument.
Section 413 of the Act, 77 P.S. §§ 771 -74.3.
Section 430 of the Act, 77 P.S. § 971.
Prior to the 1993 amendments to the Act, WCJs were referred to as referees. See King v. Workmen's Comp. Appeal Bd. (K-Mart Corp.) ,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.