Central Transport & Cherokee Ins. Inc. v. WCAB (Thornton) ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Central Transport and Cherokee :
Insurance Inc., :
Petitioners :
:
: No. 580 C.D. 2020
v. :
: Submitted: September 25, 2020
Workers’ Compensation Appeal :
Board (Thornton), :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge1
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: May 5, 2021
Central Transport and Cherokee Insurance, Inc. (collectively, Employer)
petitions for review of the order of the Workers’ Compensation Appeal Board (Board)
mailed on May 27, 2020, which affirmed the order of a Worker’s Compensation Judge
(WCJ) dismissing Employer’s termination petition on the grounds that the termination
petition was barred by the doctrine of res judicata.2 Upon review, we affirm.
Background
In this case, Employer filed a termination petition alleging that Claimant
had recovered from his work injuries. At a subsequent hearing, the termination petition
1
This case was assigned to the opinion writer before January 4, 2021, when Judge Leavitt
completed her term as President Judge.
2
Donald Thornton (Claimant) is not participating in the instant appeal.
was amended to a Compromise and Release (C & R) agreement where the parties
settled Claimant’s entitlement to wage/specific loss and to medical benefits. The WCJ
dismissed the termination petition as moot. Shortly after the C & R agreement was
entered, Employer filed another termination petition again declaring that Claimant was
fully recovered from his work injuries. The question here is whether the second
termination petition is barred by res judicata.
The factual background of the instant matter is uncontested. On July 6,
2016, Claimant sustained a work-related injury in the nature of an “[o]pen fracture of
the proximal phalanx which was extra articular, as well as a particular disruption of the
extensor mechanism, an ulnar digital neuroma with neuropraxia and radial digital
neurapraxia as well as partial amputation of the right thumb and medial neuropathy.”
(Reproduced Record (R.R.) at 22a.) Employer filed a termination petition on
November 19, 2018. (R.R. at 5a.) However, on March 14, 2019, at a hearing before
WCJ Kelly Melcher, the termination petition was amended to seek approval of a C &
R agreement between the parties. Id. Commensurately, the parties entered into a C &
R agreement pursuant to Section 449 of the Workers’ Compensation Act (Act).3, 4
The C & R agreement resolved Claimant’s entitlement to benefits,
specifically, all wage loss benefits, specific loss benefits, and medical benefits. (R.R.
at 23a.) Accordingly, Claimant was to be paid a one-time lump sum in the amount of
$90,000.00 to resolve his entitlement to wage/specific loss benefits. Id. Furthermore,
the C & R agreement stated that “[m]edical bills which are reasonable, necessary, and
3
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2710.
4
This section provides, in pertinent part, that “[n]othing in this act shall impair the right of
the parties interested to compromise and release, subject to the provisions herein contained, any and
all liability which is claimed to exist under this act on account of injury or death.” Section 449 was
added by the Act of June 24, 1996, P.L. 350, 77 P.S. §1000.5(a).
2
causally related to the injury . . . will remain the responsibility of Employer, in
accordance with the cost containment provisions of the [Act].” Id. The C & R
agreement required Employer to either “fund [an] MSA[5] and stop paying Claimant’s
medical benefits or continue paying Claimant’s medical benefits.” Id. In a written
decision, dated March 15, 2019, WCJ Melcher accepted the C & R agreement, and
incorporated it into her decision as factual findings. (WCJ Melcher Findings of Fact
(F.F.) Nos. 4-6, R.R. at 20a.) In the same decision, WCJ Melcher dismissed the
November 19, 2018 termination petition as moot. Id.
On March 19, 2019, four days after WCJ Melcher accepted the C & R
agreement, Employer filed another termination petition alleging that Claimant was no
longer entitled to benefits because he fully recovered from his work injury on October
22, 2018. (Certified Record (C.R.) Item No. 2.) By decision circulated April 26, 2019,
WCJ Donald Poorman denied the March 19, 2019 termination petition. (C.R. Item No.
4.) WCJ Poorman found that the termination petition filed on March 19, 2019, was
identical to the one filed on November 19, 2018. (WCJ Poorman F.F. No. 5, C.R. Item
No. 4.) WCJ Poorman noted that on April 3, 2019, a hearing was held on the March
19, 2019 petition, where Employer submitted the deposition testimony of Dr. John
Pasquella. (WCJ Poorman F.F. No. 6, C.R. Item No. 4.) WCJ Poorman dismissed
Employer’s termination petition under res judicata on the grounds that it was identical
5
It is unclear from the agreement what an MSA is. However, logic would dictate that it refers
to a Medicare Set-Aside Arrangement. See Sheaffer v. Workers’ Compensation Appeal Board
(Standard Steel, LLC) (Pa. Cmwlth., No. 783 C.D. 2016, filed Feb. 14, 2017) (unreported) (“When
a claimant is entitled to Medicare payments or may be entitled to Medicare payments in the future,
workers’ compensation agreements settling future medical benefits must adequately consider
Medicare’s interests. 42 U.S.C. §1395y(b)(2); 42 [C.F.R.] §§411.46, 411.47, and 411.21. The
recommended method to protect Medicare’s interests is a Workers’ Compensation Medicare Set
Aside Account, a financial agreement that allocates a portion of a workers’ compensation settlement
to pay for future medical services related to the work injury, illness, or disease.”) (citation omitted).
3
to the one dismissed as moot before WCJ Melcher on March 15, 2019. (C.R. Item No.
4.) The WCJ also explained that under the C & R agreement, Employer remained
obligated to pay for Claimant’s medical benefits. Id.
Employer appealed to the Board alleging that WCJ Poorman erred in
dismissing the termination petition based on res judicata. On May 27, 2020, the Board
affirmed the decision of WCJ Poorman. (C.R. Item No. 7, R.R. at 117a-23a, Board’s
Decision at 1.) The Board framed the issue as purely one of law. (Board’s Decision
at 1-2.) The Board rejected Employer’s claim that technical res judicata was
inapplicable because Employer did not have the opportunity to actually litigate the
merits of its November 19, 2018 termination petition. Id. at 2. The Board concluded
that technical res judicata applies where the following four factors are met: “1. identity
of the thing sued upon or for; 2. identity of the cause of action; 3. identity of the persons
and parties to the action; 4. identity of the quality or capacity of the parties suing or
sued.” (Board’s Decision at 3 (quoting Patel v. Workmen’s Compensation Appeal
Board (Sauquoit Fibers Co.), 488 A.2d 1177 (Pa. Cmwlth. 1985).) The Board further
reasoned that res judicata applies both to claims that were actually litigated and those
that should have been litigated. (Board’s Decision at 3.)
As to this case, the Board held that because “the instant case does not have
a final judgment on the merits[,] and the parties did not actually litigate either
[t]ermination [p]etition, collateral estoppel does not apply.” (Board’s Decision at 3.)
Instead, the Board concluded technical res judicata applied. Id. The Board’s reasoning
indicates that under its interpretation of technical res judicata, a final determination on
the merits is not necessary. Id. at 2. Thus, the Board proceeded to analyze the four
identities needed to prove technical res judicata. Id. at 2-3. The Board reasoned that
the second and third identities were satisfied because the parties are the same and are
4
in the same capacity. Id. at 3. Further, it determined that the thing sued upon and the
cause of action were the same because the termination petition filed by Employer on
November 19, 2018 was identical to the one filed on March 19, 2019. Id. The Board
explained that both termination petitions were based on the allegation that Claimant’s
work injury fully ceased as of October 22, 2018. Id. at 4. The Board concluded that,
if Employer had been successful on the first termination petition before WCJ Melcher,
the instant litigation would be unnecessary because both petitions are based on the same
facts. Id. Furthermore, the Board explained that Employer did not appeal WCJ
Melcher’s March 15, 2019 order, thus failing to preserve its right to proceed on the
merits. Id. Thus, the Board held that Employer was precluded by res judicata from
relitigating the termination petition. Id. Employer appealed to this Court.
Discussion
On appeal, Employer raises two issues. First, it argues the Board erred in
concluding that its March 19, 2019 termination petition was barred by res judicata.
Second, it argues that the Board erred in failing to find that substantial competent
evidence demonstrated that Claimant was fully recovered from his work injury.
With respect to the first issue, Employer argues that res judicata does not
apply because its November 19, 2018, termination petition was never adjudicated and
a final determination on the merits never existed with respect to that petition. Further,
it asserts that no evidence was submitted on that termination petition, and therefore, it
was not litigated. Similarly, Employer notes that instead of litigating the termination
petition, it agreed to amend its petition to seek the approval of the C & R agreement.
Employer refutes the Board’s conclusion that, had it been successful before WCJ
Melcher, the instant litigation would be unnecessary because it withdrew its
5
termination petition and offered no evidence on the petition. Employer argues that this
also prevented it from filing an appeal from WCJ Melcher’s decision.
Employer asserts that in order for res judicata to apply, a final
determination on the merits must exist. Accordingly, Employer argues that the March
15, 2019 decision of WCJ Melcher, approving of the C & R agreement, did not
constitute a final decision, whereupon res judicata could apply. Further, Employer
argues that the Board erred by failing to reverse WCJ Poorman’s determination that,
because the C & R agreement provided that Employer would continue to provide
Claimant’s medical benefits, the termination petition was properly denied. Employer
maintains that while under the C & R agreement it was to continue providing medical
benefits, it never waived its right to seek a termination petition as to those benefits.6
A. Whether Res Judicata Bars the March 19, 2019 Termination Petition
“[R]es judicata encompasses two related, yet distinct principles: technical
res judicata and collateral estoppel.” Henion v. Workers’ Compensation Appeal Board
(Firpo & Sons, Inc.), 776 A.2d 362, 365 (Pa. Cmwlth. 2001). “Technical res judicata
provides that when a final judgment on the merits exists, a future suit between the
parties on the same cause of action is precluded.” Id. (emphasis added). Whereas,
“[c]ollateral estoppel acts to foreclose litigation in a later action of issues of law or fact
that were actually litigated and necessary to a previous final judgment.” Id. (emphasis
added). Where there is a final judgment on the merits, res judicata applies when these
four factors are established: “(1) identity of the thing sued upon or for; (2) identity of
the cause of action; (3) identity of the persons and parties to the action; and (4) identity
of the quality or capacity of the parties suing or sued.” Id. Technical res judicata
6
Due to our disposition below, we need not discuss Employer’s claim that the Board erred in
failing to address whether Claimant was fully recovered.
6
“applies to claims that were actually litigated as well as those matters that should have
been litigated.” Id.In the context of a workers’ compensation claim, we have described
collateral estoppel, as follows:
The doctrine of collateral estoppel, often referred to as issue
preclusion, “is designed to prevent relitigation of an issue in
a later action, despite the fact that the later action is based on
a cause of action different from the one previously
litigated.” Pucci v. Workers’ Compensation Appeal Board
(Woodville State Hosp[ital]), 707 A.2d 646, 647-48 (Pa.
Cmwlth. 1998). Collateral estoppel applies where:
(1) the issue decided in the prior case is identical
to the one presented in the later case; (2) there
was a final judgment on the merits; (3) the party
against whom the doctrine is asserted was a
party or in privity with a party in the prior case
and had a full and fair opportunity to litigate the
issue; and (4) the determination in the prior
proceeding was essential to the judgment.
Id. at 648.
Namani v. Workers’ Compensation Appeal Board (A. Duie Pyle), 32 A.3d 850, 856-57
(Pa. Cmwlth. 2011). Both technical res judicata and collateral estoppel require a “final
judgment on the merits.” Id. at 856. Contrary to the Board’s position, for technical res
judicata to apply, a final determination on the merits must exist. Namani, 32 A.3d at
856; Weney v. Workers’ Compensation Appeal Board (Mac Sprinkler Systems, Inc.),
960 A.2d 949, 954 (Pa. Cmwlth. 2008); Henion, 776 A.2d at 365.
First, we must address Employer’s contention that a final judgment on the
merits never existed. We disagree. Generally, we have stated the following as to the
finality of C & R agreements: “Once approved, a valid compromise and release
agreement is ‘final, conclusive, and binding on the parties.’” H.A. Harper Sons, Inc.
7
v. Workers’ Compensation Appeal Board (Sweigart), 84 A.3d 363, 367 (Pa. Cmwlth.
2014) (citations omitted); DePue v. Workers’ Compensation Appeal Board (N. Paone
Construction, Inc.), 61 A.3d 1062, 1067 (Pa. Cmwlth. 2013). “In essence, the C & R,
once approved by the WCJ, is the final decision in a workers’ compensation case. . . .”
Department of Labor & Industry, Bureau of Workers’ Compensation v. Workers’
Compensation Appeal Board (US Food Service), 932 A.2d 309, 315 (Pa. Cmwlth.
2007). “Simply put, once the WCJ enters an order approving a [C & R a]greement, the
order is final, and an aggrieved claimant’s only recourse, if any, is an appeal to the
Board under Section 419 of the Act[7]. . . .” Pimentel v. Workers’ Compensation Appeal
Board (United Neighborhood Centers of Lackawanna County), 845 A.2d 234, 238 (Pa.
Cmwlth. 2004).
We have considered a C & R agreement as a final determination for the
purposes of collateral estoppel. In Stiles v. Workers’ Compensation Appeal Board
(Department of Public Welfare), 853 A.2d 1119 (Pa. Cmwlth. 2004), a WCJ approved
a C & R agreement between the parties, which settled the claimant’s wage loss claims
in one lump sum payment of $100,000.00, and provided that the employer was
responsible to continue paying reasonable and necessary medical bills. Id. at 1121. The
claimant subsequently filed a petition to reinstate compensation, alleging that at the time
she entered her C & R agreement, she was suffering from severe psychological and
physical injuries which manifested as post-traumatic stress syndrome and that she did
not understand the monetary value of her claim. Id. at 1122. In other words, the
claimant argued that she did not understand the full legal significance of the agreement.
Id. at 1123. The employer moved to dismiss the reinstatement petition under collateral
estoppel. Id. The WCJ determined that the claimant was mentally competent to
7
Added by the act of June 26, 1919, P.L. 642, 77 P.S. §852.
8
comprehend the legal ramifications of entering into the agreement, and made a factual
finding reflecting the same. Id. at 1124. We held that the claimant’s mental competency
was an issue actually litigated at the hearing before the WCJ, was essential to the
judgment approving the C & R agreement, and was material to the adjudication. Id.
Thus, we barred the claimant’s petition under collateral estoppel. Clearly, a C & R
agreement accepted by a WCJ is final for the purpose of collateral estoppel, and by
extension, technical res judicata. See also Farner v. Workers’ Compensation Appeal
Board (Rockwell International), 869 A.2d 1075, 1078 (Pa. Cmwlth. 2005). We can
conclude, therefore, that the C & R agreement accepted by WCJ Melcher constituted a
final determination on the merits. As explained above, a final determination on the
merits is necessary for either technical res judicata or collateral estoppel to apply.
The plain language of the C & R agreement approved by WCJ Melcher
indicates the following. The C & R agreement appears to have been completed on a
standard form provided by the Workers’ Compensation Office of Adjudication. (R.R.
at 22a.) The C & R agreement consisted of separate numbered questions, which
required the parties to identify the nature of the settlement. Id. at 22a-24a.
Under question number 10, the parties were asked to “[s]ummarize all
wage loss, specific loss and medical benefits to be paid in conjunction with this
[agreement].” Id. (emphasis in original). The text beneath this box indicates that
Claimant was to be paid “$90,000.00 for a one[-]time lump sum payment to resolve
[his] entitlement to any benefits he may be entitled under the [Act], except medical
benefits. Medical bills which are reasonable, necessary, and causally related to
the injury [described in this Agreement] will remain the responsibility of []
Employer.” Id. (emphasis added). The C & R agreement further provided a specific
avenue for Employer to continue paying medical benefits. Specifically, “Employer
9
reserve[d] the right to either fund [an] MSA and stop paying Claimant’s medical
benefits or continue paying Claimant’s medical benefits.” Id.The C & R agreement encompassed three types of benefits: wage loss,
specific loss, and medical. In its brief, Employer appears to argue that it retained its
right to seek the termination of Claimant’s medical benefits in the C & R agreement.
Yet, Employer’s March 19, 2019 termination petition does not specify which benefits
it is seeking to terminate. Specifically, the termination petition filed on March 19, 2019
seeks to “[t]erminate [c]ompensation [b]enefits (Stop payment of Workers’
Compensation) due to Claimant’s full recovery as of October 22, 2018.” (C.R. Item
No. 2.) WCJ Poorman concluded that this was identical to the petition filed on
November 19, 2018, which WCJ Melcher dismissed as moot. (WCJ Poorman F.F. No.
5, R.R. at 31a.) Due to the lack of clarity as to what benefit Employer is seeking to
terminate, in an abundance of caution, we will address all the of benefits identified in
the C & R agreement.
With respect to Claimant’s benefits, we first address whether Employer’s
termination petition was precluded by res judicata as to Claimant’s wage and specific
loss benefits. The procedural posture of this case raises the question as to whether
technical res judicata or collateral estoppel applies. Technical res judicata (i.e., claim
preclusion) applies to claims that were or should have been litigated in a prior action,
whereas, collateral estoppel renders issues of law or fact “incapable of relitigation in
a subsequent suit.” Robinson v. Fye, 192 A.3d 1225, 1231 (Pa. Cmwlth. 2018). The
Pennsylvania Supreme Court recently detailed the differences between these doctrines.
Res judicata – literally, a thing adjudicated – is a judicially
created doctrine. See Estate of Bell, [] 343 A.2d 679, 681
([Pa.] 1975). It bars actions on a claim, or any part of a claim,
which was the subject of a prior action, or could have been
raised in that action. See R/S Financial Corp. v. Kovalchick,
10
[] 716 A.2d 1228, 1230 ([Pa.] 1998); Balent v. City of Wilkes-
Barre, [] 669 A.2d 309, 313 ([Pa.] 1995). This Court has
explained that
[r]es judicata, or claim preclusion, prohibits
parties involved in prior, concluded litigation
from subsequently asserting claims in a later
action that were raised, or could have been
raised, in the previous adjudication. The
doctrine of res judicata developed to shield
parties from the burden of re-litigating a claim
with the same parties, or a party in privity with
an original litigant, and to protect the judiciary
from the corresponding inefficiency and
confusion that re-litigation of a claim would
breed.
Wilkes ex rel. Mason v. Phoenix Home Life [Mutual
Insurance] Co., [] 902 A.2d 366, 376 ([Pa.] 2006) (citation
omitted).
In re Coatesville Area School District, 244 A.3d 373, 378 (Pa. 2021). In contrast, the
Court explained that
[c]ollateral estoppel is similar in that it bars re-litigation of
an issue that was decided in a prior action, although it does
not require that the claim as such be the same. For example,
if, in a breach of contract action, the defendant asserts that
the contract is invalid because of fraud, but the contract is
ruled valid and the defendant is found liable, in a future
lawsuit against the same party alleging a separate breach of
the same contract the defendant is precluded from asserting
the invalidity of the contract based on fraud. See Restatement
(Second) of Judgments §27, cmt. a, illus. 2 ([Am. Law. Inst.]
1982).
In re Coatesville, 244 A.3d at 379.
11
Under the procedural posture of this case, collateral estoppel is applicable
rather than technical res judicata.8 Instantly, it is not a claim that is in question, but
rather, an issue. As In re Coatesville illustrates, it would be impermissible under
collateral estoppel for a party that unsuccessfully defended a breach of contract claim
on the grounds of fraud to raise fraud as a defense to a separate breach of the same
contract. Id. Here, it is impermissible for Employer, which accepted liability for
Claimant’s injury and agreed to resolve and pay Claimant’s wage and specific loss
benefits, to reverse course after a final decision on the merits, and to assert that
Claimant is not entitled to those benefits because he has fully recovered. This issue
was already decided in the C & R agreement, which was accepted by WCJ Melcher.
Further, the elements of collateral estoppel are satisfied. As to the first
element, the issue of whether Claimant was entitled to his wage/specific loss benefits
under the March 19, 2019 termination petition is identical to the issue that was settled
in the C & R agreement, which stated that Claimant was to receive a $90,000.00 lump
sum for any wage/specific loss benefit to which he was entitled. Second, as noted, the
C & R agreement that was accepted by WCJ Melcher constituted a final determination
on the merits. Third, the parties are the same and had the full and fair opportunity to
litigate the issue. Specifically, Employer chose to amend its November 19, 2018
termination petition to a C & R agreement; it could have, if it so chose, sought to
terminate Claimant’s entitlement to wage/specific loss benefits instead of settling those
issues. Finally, WCJ Melcher’s determination of Claimant’s entitlement to a
$90,000.00 lump sum was essential to the C & R agreement, which settled his
entitlement to wage/specific loss benefits.
8
This Court may affirm a decision on other grounds, where grounds for affirmance exists.
Miller v. State Employees Retirement System, 137 A.3d 674, 680 n.6 (Pa. Cmwlth. 2016).
12
With respect to Claimant’s medical benefits, Employer suggests that, even
though the C & R agreement provided for the continued payment of medical benefits,
“it never waived Employer’s right under the [C & R agreement] to proceed with future
petitions, including a [t]ermination [p]etition regarding [the] payment of medical
benefits.” (Employer’s Br. at 13.)
However, because the C & R agreement did not expressly preserve to
Employer the right to seek termination of Claimant’s medical benefits, it is presently
precluded from doing so. The plain language of the agreement indicates Claimant was
to be paid “$90,000.00 for a one[-]time lump sum payment to resolve [his] entitlement
to any benefits he may be entitled under the [Act], except medical benefits. Medical
bills which are reasonable, necessary, and causally related to the injury [described
in this agreement] will remain the responsibility of [] Employer.” (R.R. at 23a)
(emphasis added). Moreover, the C & R agreement provided Employer with two
different avenues to continue to pay reasonable and necessary medical expenses. There
can be no doubt from the language of the agreement that in terms of liability, Employer
was to continue to pay for Claimant’s reasonable and necessary medical benefits and
medical benefits that are causally related to his accepted work-related injuries. See
infra note 7. The plain language of the C & R agreement does not logically comport
with Employer’s argument that it never waived its right to proceed with future petitions
including a termination petition with regard to Claimant’s medical benefits. This is
because Employer did not expressly preserve its right to seek termination of Claimant’s
benefits. To the contrary, the agreement indicates that “[t]he parties wish to enter into
a [C & R agreement] to resolve Claimant’s entitlements to all future benefits.” (R.R.
at 24a.) Nothing in the C & R agreement suggests that medical benefits are not
contemplated in this statement. Indeed, the C & R agreement expressly provides that
13
“[m]edical bills . . . will remain the responsibility of [ ] Employer,” (R.R. at 23a), and,
absent the creation of a special fund to pay for Claimant’s medical benefits, Employer
agreed to “continue paying Claimant’s medical benefits.” Id.Our decision in DePue is instructive. In that case, the claimant and the
employer entered into a C & R agreement settling the claimant’s indemnity benefits
for the accepted injury of a severe closed head injury with seizure disorder and short-
term memory loss. 61 A.3d at 1064. Employer agreed to continue to pay the claimant’s
reasonable and necessary medical benefits. Id. The WCJ accepted and adopted the C
& R agreement. Id. Subsequently, the claimant filed a penalty petition against the
employer for refusing to pay medical bills and a review petition alleging that the
description of his work injuries was incorrect. Id. The claimant alleged that the
petitions were with regard to a left shoulder injury. Id. The WCJ denied the review
petition and penalty petition, concluding that the review petition was barred by res
judicata, because the left shoulder injury alleged by the claimant was not accepted as
an injury by the employer in the C & R agreement. Id. at 1064-65. In no uncertain
terms we stated that “[o]nce a C & R agreement is approved, any issue which was not
expressly reserved in the agreement may not be raised later.” Id. at 1067. We held that
“[b]ecause [the c]laimant did not expressly reserve his right to add a new injury to the
description of his work injuries, he was precluded from doing so more than two years
after the approval of the C & R agreement.” Id. Here, because Employer did not
expressly preserve its right to seek termination of Claimant’s medical benefits, it is
precluded from doing so.9
9
There is a distinction to be made between Employer admitting to liability to Claimant’s
reasonable and necessary medical benefits, and the amount of benefits to be paid. In Rogele, Inc. v.
Workers’ Compensation Appeal Board (Hall), 198 A.3d 1195, 1201 (Pa. Cmwlth. 2018), we
explained:
(Footnote continued on next page…)
14
“It is accepted that, pursuant to [Section 301(c) of] the [Act], an
employer is only liable to pay for a claimant’s medical expenses that
arise from and are caused by a work-related injury. 77 P.S.
§411(1)[.]” Kurtz v. Workers’ [Compensation] Appeal [Board]
(Waynesburg College), 794 A.2d 443, 447 (Pa. Cmwlth. 2002)
(footnote omitted). Although the burden is initially on the claimant to
establish that the injury is work-related, once the employer
acknowledges liability for the injury, “the claimant is not required to
continually establish that medical treatment of that compensable injury
is causally related because the injury for which the claimant is treating
has already been established.” Id. Accordingly, thereafter, the
employer has the burden of proving that a medical expense is
unreasonable, unnecessary, or is not related to the accepted work
injury. See id. “[T]his Court has recognized that the issue of causation
is separate and distinct from the reasonableness and necessity of
medical treatment.” J.D. Landscaping v. Workers’ [Compensation]
Appeal [Board] (Heffernan), 31 A.3d 1247, 1253 (Pa. Cmwlth. 2011).
Th[is] Court explained in Bloom [v. Workmen’s
Compensation Appeal Board (Keystone Pretzel
Bakery), 677 A.2d 1314 (Pa. Cmwlth. 1996)], that a
petition to review medical treatment relates to the issue
of the causal connection between medical treatment and
the work injury, but utilization review relates to the
reasonableness of and necessity for medical treatment.
A challenge to particular medical treatment as not being
causally related to a work injury, . . . must be filed
directly with a WCJ. A challenge to particular treatment
as being not reasonable or necessary must be pursued
through the administrative utilization review
procedures. Id.Mercy Douglas Corp. v. Workers’ [Compensation] Appeal [Board]
(Davis), 713 A.2d 722, 725 (Pa. Cmwlth. 1998).
198 A.3d at 1200. Thus, under the C & R agreement, although Employer accepted liability for
Claimant’s work-related injuries and agreed to pay for Claimant’s medical expenses, it reserved a
limited right to contest whether the amount of the medical bills or the medical treatments provided
were reasonable and necessary via utilization review or were causally related to the work injuries
through a review petition.
15
Where a C&R agreement on its face is intended to resolve the issues in a
pending termination petition, the underlying termination petition is rendered moot. US
Food Service, 932 A.2d 309; Stroehmann Bakeries, Inc. v. Workers’ Compensation
Appeal Board (Plouse), 768 A.2d 1193 (Pa. Cmwlth. 2001). WCJ Melcher correctly
determined that the November 19, 2018 termination petition was moot. Similarly,
because the C & R agreement already decided Employer’s liability with respect to
Claimant’s medical benefits, there was nothing left to decide under the March 19, 2019
termination petition.
Moreover, collateral estoppel would clearly apply to prevent relitigation
of Claimant’s entitlement to benefits. As we have well established, the issue of
Claimant’s entitlement to medical benefits was decided in the C & R agreement, which
was a final determination on the merits. The parties are identical and had a full and
fair opportunity to litigate the issue. If Employer did not want to be responsible for
Claimant’s reasonable and necessary medical benefits, it should not have agreed to
liability in the C & R agreement, or at a minimum, expressly preserved its right to
challenge Claimant’s entitlement at a later time. The determination of Claimant’s
entitlement to benefits was essential to the C & R agreement. Thus, Employer’s second
termination petition is barred by collateral estoppel.
Having concluded that the second termination petition is barred by the
doctrine of res judicata, we need not address the Board’s failure to consider whether
Claimant was fully recovered from his injury.
________________________________
PATRICIA A. McCULLOUGH, Judge
16
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Central Transport and Cherokee :
Insurance Inc., :
Petitioners :
:
: No. 580 C.D. 2020
v. :
:
Workers’ Compensation Appeal :
Board (Thornton), :
Respondent :
ORDER
AND NOW, this 5th day of May, 2021, the May 27, 2020 order of the
Workers’ Compensation Appeal Board is AFFIRMED.
________________________________
PATRICIA A. McCULLOUGH, Judge