Krysztoforski v. Chater ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
5-22-1995
Krysztoforski v Chater
Precedential or Non-Precedential:
Docket 94-1886
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Recommended Citation
"Krysztoforski v Chater" (1995). 1995 Decisions. Paper 136.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/136
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________________
No. 94-1886
_____________________
JOSEPH KRYSZTOFORSKI,
Appellant,
v.
SHIRLEY S. CHATER,
COMMISSIONER OF SOCIAL SECURITY,
Appellee
_____________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 93-5228)
_____________________
Argued May 2, 1995
Before: MANSMANN, SCIRICA, and SAROKIN, Circuit Judges
(Filed May 22, l995)
_____________________
B. Adam Sagan
Flager & Sagan
1210 Northbrook Drive
Suite 280
Trevose, PA 19053
James B. Mogul (argued)
Sagan & Greenberg
3260 Tillman Drive
Suite 120
Bensalem, PA 19020
Attorneys for Appellant
Margaret J. Krecke (argued)
Department of Health & Human
Services
DHHS/OGC/Region III
3535 Market Street
P.O. Box 13716, Room 9100
Philadelphia, PA 19101
Attorney for Appellee
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OPINION OF THE COURT
_____________________
PER CURIAM.
The issues presented are whether workers' compensation
benefits for specific loss of use of a particular body part
constitute "disability" benefits for purposes of offset against
Social Security Disability Insurance ("SSDI") benefits and
whether workers' compensation for one injury may be offset
against SSDI benefits for a separate, unrelated injury. We
conclude that the compensation paid is a disability benefit, and
that offset is appropriate even if the benefits arise from
unrelated injuries or disabilities.
I.
On January 27, 1989, plaintiff Joseph Krysztoforski
injured his left ankle and foot and was awarded weekly worker's
compensation benefits of $ 306.66. See 77 Pa.C.S.A. § 101, et
seq. His ankle improved, and he planned to return to work.
On October 27, 1989, he suffered a cerebral vascular
accident ("stroke"), leaving him permanently paralyzed and unable
to speak. As a result of the effects of his stroke, plaintiff
received SSDI benefits of $ 852.70 per month from the onset date
of October 27, 1989. According to the formula in 42 U.S.C. §
424a, his worker's compensation payments were subtracted from his
SSDI benefits.
He continued to receive workers' compensation benefits
for his ankle and foot injury until early November 1990 when
plaintiff and his employer stipulated that this disability had
resolved into a specific loss of the use of his left foot, and he
was awarded $ 306.66 per week for 250 weeks from December 5,
1990. He requested these payments in a lump sum of $ 76,665.00,
which he was granted on December 6, 1990.
After plaintiff received his lump sum award, the
Secretary, pursuant to 42 U.S.C. § 424a(b), prorated the lump sum
at $ 260.66 per week through September 1995, for a total of 250
weeks, and continued to offset that amount against his SSDI
benefits. Plaintiff objected to the offset which was affirmed
upon reconsideration. He filed a timely request for a hearing
before the administrative law judge ("ALJ") who determined that
the offset was proper.
The Appeals Council denied plaintiff's request for
review of the ALJ's decision which became the final decision of
the Secretary. Having exhausted his administrative remedies,
plaintiff appealed to federal district court which had
jurisdiction under 42 U.S.C. § 405(g) and adopted a magistrate
judge's report and recommendation to affirm the ALJ's decision.
Plaintiff has filed a timely notice of appeal to this court. We
exercise jurisdiction pursuant to 28 U.S.C. § 1291.
II.
The court must accept the ALJ's factual findings if
there is substantial evidence to support them. Van Horn v.
Schweiker, 717 F.2d 871, 873 (3d Cir. 1983). Our review is
plenary as to the Secretary's application of the law. Wilkerson
v. Bowen, 828 F.2d 117, 119 (3d Cir. 1987).
III.
The Social Security Act ("Act") provides that any
person who is "disabled" as defined in the Act is eligible for
SSDI benefits. 42 U.S.C. § 423(a). The Secretary determined
that plaintiff is disabled and eligible for benefits. However,
the Act limits the amount of benefits an individual may receive
from both SSDI and workers' compensation. 42 U.S.C. § 424a;
Richardson v. Belcher, 404 U.S. 78 (1971).
Section 424a provides in pertinent part:
(a) If for any month prior to the month in
which an individual attains the age of 65 --
(1) such individual is entitled to
benefits under section 423 of this
title, and
(2) such individual is entitled for
such month to --
(A) periodic benefits on account of
his or her total or partial
disability (whether or not
permanent) under a workmen's
compensation law or plan of the
United States or a State, . . . .
the total of his benefits under
section 423 of this title for such
month . . . based on his wages and
self-employment income shall be
reduced (but not below zero) by the
amount by which the sum of --
(3) such total of benefits under
section[] 423 . . . of this title
for such month, and
(4) such periodic benefits payable
(and actually paid) for such month
to such individual under such laws
or plans, exceeds the higher of --
(5) 80 per centum of his "average
current earnings", or
(6) the total of such individual's
disability insurance benefits under
section 423 of this title for such
month . . . based on his wages and
self-employment income, prior to
reduction under this section.
42 U.S.C. § 424a(a).
As a preliminary matter, we hold that federal law
governs in determining whether a workers' compensation loss-of-
use award should be offset against SSDI benefits. Section 424a
does not refer or defer to state law for the determination of
whether a person's periodic workers' compensation benefits are
subject to offset. Plaintiff's claim that Pennsylvania law
applies to the issue of whether the offset itself is appropriate
is without merit, but we agree with plaintiff that we should look
to state law to inform the nature of the workers' compensation
payments, particularly whether the benefits were for "total or
partial disability . . . under a workmen's compensation law or
plan." 42 U.S.C. § 424a(a)(2)(A). Neither the statute nor the
regulations provide a definition of "disability" for purposes of
§ 424a. "Where Congress uses terms that have accumulated settled
meaning under either equity or the common law, a court must
infer, unless the statute otherwise dictates, that Congress means
to incorporate the established meaning of these terms." NLRB v.
Amax Coal Co., Div. of Amax, Inc., 453 U.S. 322, 329 (1981).
The Pennsylvania Workmen's Compensation Act ("Act")
provides benefits for three general classifications of injured
workers: (1) total disability under § 306(a) of the Act, 77
Pa.C.S.A. § 511; (2) partial disability under § 306(b); 77
Pa.C.S.A. § 512; and (3) disability from permanent injuries of
certain classes under § 306(c), 77 Pa.C.S.A. § 513. Plaintiff's
benefits arose from § 513 which provides in pertinent part:
For all disability resulting from permanent
injuries of the following classes, the
compensation shall be exclusively as follows:
. . . (4) For the loss of a foot, sixty-six
and two-thirds per centum of wages during two
hundred fifty weeks.
77 Pa.C.S.A. § 513.
Plaintiff claims that benefits for specific loss of use
of his foot do not constitute disability benefits. He asserts
that he was entitled to his workers' compensation "whether or not
he had missed any time from gainful employment" and that this is
contrary to the purpose of disability payments -- to compensate
for lost earning potential. Pltf. Br. at 7. Plaintiff refers to
§ 513 as compensating "statutory disability." He argues the
specific loss workers' compensation benefits were not paid for
any actual disability and hence were not disability benefits.
Pennsylvania workers' compensation case law has defined
"disability" as "'the loss, total or partial, of earning power'"
resulting from a work-related injury. Kachinski v. Workmen's
Compensation Appeal Bd. (Vepco Constr. Co.), 516 Pa. 240, 248
(1987)(quoting Woodward v. Pittsburgh Engineering and
Construction Co., 293 Pa. 338, 340 (1928)). Although plaintiff
is correct that permanent injury benefits are not dependent upon
loss of earnings, § 513 benefits encompass "all disability" which
may arise from a permanent injury, including inability to work if
such were to result from the injury. See Killian v. Heintz Div.
Kelsey Hayes, 468 Pa. 200, 204-06 (Pa. 1976).
Thus, "by awarding benefits even where there is no
actual loss of earnings, § 306(c) [§ 513] creates a presumption
that there is disability associated with a specific loss." Sun
Oil Co. v. Workmen's Compensation Appeal Board (Davis), 144 Pa.
Commw. 51, 54-55 (Pa.Comm.Ct. 1991); see also Davidson v.
Sullivan, 942 F.2d 90, 95 (1st Cir. 1991)(a statutorily
prescribed award for permanent injury "compensates for a
conclusively presumed wage loss" and is subject to offset). This
interpretation makes sense given that a worker who suffers a
permanent injury is not able to recover separately for loss of
use under § 513 and for loss of earnings. See Carnevali v.
Heckler, 616 F. Supp. 1500, 1504 (W.D.Pa. 1985)("Compensation
received under 77 P.S. § 513 makes an individual ineligible for
partial or total disability compensation under 77 P.S. § [sic.]
511 and 512").
Although plaintiff emphasizes the fact that a worker
could receive § 513 benefits and continue to work at her job, §
513 permanent injury benefits clearly include compensation in the
event of lost earnings and hence constitute disability benefits
for purposes of offset under § 424a.
Plaintiff mentions Senator Edward M. Kennedy's
criticism of offsetting permanent injury benefits during debate
of the Social Security Amendments of 1965. However, the
Senator's comments were not incorporated into the statute, and as
the First Circuit remarked, the "'unfortunate effects'" of
reducing the worker's benefits were "contemplated by the offset
provision as enacted, notwithstanding Senator Kennedy's
criticism." Davidson, 942 F.2d at 96.
We now turn to examining whether workers' compensation
benefits for one injury may be offset against SSDI benefits for a
separate, unrelated injury. If the language of the statute is
clear, we need not look to the legislative history. Barnes v.
Cohen, 749 F.2d 1009, 1013 (3d Cir. 1984)(citations omitted),
cert. denied sub nom. Cohen v. Betson, 471 U.S. 1061 (1985). A
plain reading of § 424a calls for offset regardless of whether
the benefits derived from identical or different injuries. The
statute simply does not make such distinctions. See Kananen v.
Matthews, 555 F.2d 667, 670 (8th Cir. 1977)("No portion of § 424a
limits its application to payments for a disability caused by the
same physical or mental condition"); Campbell, 14 F.3d at 428
(following Kananen, supra).
As we noted in Sciarotta v. Bowen,
Congress enacted § 424a because of concern
about the concurrent receipt by many injured
workers of both federal disability benefits
and state workers' compensation benefits.
See S. Rep. No. 404, 89th Cong., 1st Sess.,
reprinted in 1965 U.S. Code Cong. & Admin.
News 1943, 2040 . . . . [T]he [Senate
committee's] report makes clear that "the
committee believes that it is desirable as a
matter of sound principle to prevent the
payment of excessive combined benefits." Id.
at 2040.
837 F.2d 135, 138 (3d Cir. 1988). The clear intent of the
statute was to preserve and protect a level of income for the
disabled employee while avoiding a duplication of benefits
irrespective of the cause of the disability. Accordingly we
conclude that the offset at issue was proper.1
As to plaintiffs' argument that it was unreasonably
excessive and harsh for the ALJ to prorate his lump sum award of
$ 76,665.00 through September 1995, instead of over the course of
his employment lifetime, we decline to entertain his argument
1 In addition, plaintiff consistently refers to his workers'
compensation benefits as a "lump sum," but there is no doubt that
the lump sum award is "periodic benefits on account of his or her
total or partial disability." 42 U.S.C. § 424a(a)(2). The lump
sum award arose from plaintiff's own request to commute his 250
weeks of compensation. The Act specifically authorizes proration
of commuted periodic payments. 42 U.S.C. § 424a(b).
since it was not raised before the ALJ or the district court.
See, e.g., Salvation Army v. Department of Community Affairs, 919
F.2d 183, 196 (3d Cir. 1990); Matney v. Sullivan, 981 F.2d 1016,
1019 (9th Cir. 1992); Keating v. Secretary of Health and Human
Services, 848 F.2d 271, 275 (1st Cir. 1988). Plaintiff contends
that we permitted the appellant in Sciarotta to raise a
miscalculated proration allegation for the first time. His
assertion is misleading: the appellant had raised the
miscalculation issue before the district court, Sciarotta, 647
F. Supp. 132, 136 n.4 (D.N.J. 1986), and we reached the issue,
noting that the district court "did not reach the miscalculation
argument in the original proceedings," having disposed of the
case on other grounds. 837 F.2d at 141 n. 9.
IV.
For the foregoing reasons, we will affirm the district
court's affirmance of the Secretary's final determination.
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