Communication Test Design v. WCAB (Simpson) ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Communication Test Design, :
Petitioner :
:
v. :
:
Workers’ Compensation :
Appeal Board (Simpson), : No. 1196 C.D. 2019
Respondent : Submitted: January 17, 2020
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION BY
JUDGE COVEY FILED: April 22, 2020
Communication Test Design (Employer) petitions this Court for review
of the Workers’ Compensation (WC) Appeal Board’s (Board) August 2, 2019 order
affirming the Workers’ Compensation Judge’s (WCJ) decision denying Herbert L.
Simpson’s (Claimant) Claim Petition, granting Claimant’s Reinstatement and Penalty
Petitions, and dismissing Employer’s Suspension Petition as moot; and reversing the
WCJ’s decision dismissing Employer’s Termination Petition as moot and modifying
that decision to reflect a termination of Claimant’s WC benefits as of February 23,
2017. Employer presents two issues for this Court’s review: (1) whether Claimant
had to prove ongoing disability and entitlement to temporary total disability (TTD)
benefits to prevail on his Reinstatement and Penalty Petitions; and (2) whether
Employer is required to pay unreasonable contest fees when Claimant is not entitled
to TTD benefits.
On December 5, 2016, Claimant allegedly sustained work injuries during
the course and scope of his employment with Employer. On December 20, 2016,
Employer issued a Medical Only Notice of Temporary Compensation Payable
(NTCP), accepting liability for medical bills for the alleged work injury, described as
an eye laceration. On January 4, 2017, Employer issued an amended NTCP, under
which it began paying Claimant disability benefits. On February 7, 2017, Employer
issued a Notice Stopping Temporary Compensation Payable (NSTC), indicating that
it ceased paying compensation as of January 19, 2017. Attached to the NSTC was a
Notice of Compensation Denial (NCD), denying that Claimant sustained a work
injury.
On February 13, 2017, Claimant filed a Claim Petition, alleging he
sustained work injuries in the nature of a concussion, post-concussion syndrome,
right eye laceration, right shoulder sprain/strain and internal derangement of the right
shoulder on December 5, 2016. Claimant sought TTD from the date of injury and
ongoing, reimbursement for associated medical services, litigation costs, and
unreasonable contest attorney’s fees. On April 7, 2017, Claimant filed the
Reinstatement and Penalty Petitions, claiming that Employer violated the
Pennsylvania Workers’ Compensation Act (Act).1 Specifically, Claimant asserted
that Employer failed to issue an NSTC within five days after the last payment of
temporary compensation. Claimant requested penalties at the rate of 50% on all past
due compensation. Claimant also sought assessment of unreasonable contest
attorney’s fees pursuant to Section 440 of the Act, 77 P.S. § 996.2 Claimant further
asked for reinstatement of total disability benefits based on Employer’s misuse of
documents.
On April 18, 2017, Employer filed the Termination Petition averring that
Claimant fully recovered from his alleged work injuries as of February 23, 2017.
Employer also filed the Suspension Petition on May 3, 2017, asserting that Claimant
responded in bad faith to a specific job offer. The WCJ held hearings on March 20,
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.
2
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
2
May 8, September 13 and November 6, 2017. On May 4, 2018, the WCJ denied
Claimant’s Claim Petition, granted Claimant’s Reinstatement and Penalty Petitions,
and dismissed Employer’s Termination and Suspension Petitions as moot. The WCJ
determined that Claimant’s work injury was limited to a right eye laceration, which
did not result in disability.
However, the WCJ ruled that Claimant was entitled to a reinstatement of
benefits based on the conversion of the amended NTCP to a Notice of Compensation
Payable (NCP) by operation of law, because Employer failed to timely file an NSTC
and NCD. Thus, the WCJ granted the Reinstatement Petition. The WCJ also
awarded a 10% penalty because Employer violated the Act by failing to timely file
the NSTC and NCD and by unilaterally ceasing payment. The WCJ further
determined that Employer’s contest as to the Reinstatement Petition was
unreasonable and awarded $8,140.00 in unreasonable contest fees. Finally, the WCJ
held that Claimant failed to establish any injury other than an eye laceration and
terminated Claimant’s WC benefits as of the date of decision. The WCJ dismissed as
moot Employer’s Suspension and Termination Petitions, concluding that Claimant
failed to meet his burden of establishing that his eye laceration resulted in disability
or that he had any other compensable work injuries. Claimant and Employer
appealed to the Board.
On August 2, 2019, the Board affirmed the WCJ’s decision denying
Claimant’s Claim Petition, granting Claimant’s Reinstatement and Penalty Petitions,
and dismissing Employer’s Suspension Petitions as moot; reversed the WCJ’s
decision dismissing Employer’s Termination Petition as moot; and modified the
WCJ’s decision to reflect a termination of benefits as of February 23, 2017.
Employer appealed to this Court.3
3
“On review[,] this Court must determine whether constitutional rights were violated, errors
of law were committed, or necessary findings of fact were supported by substantial competent
3
Employer first argues that the WCJ erred by granting Claimant’s
Reinstatement and Penalty Petitions. Claimant rejoins that, pursuant to Section 406.1
of the Act, 77 P.S. § 717.1 (relating to prompt payment),4 his WC benefits were
reinstated as a matter of law because Employer did not file its NSTC within five days
of the last WC payment.
Initially, the Pennsylvania Supreme Court has explained:
A claimant seeking reinstatement of suspended benefits
must prove that his or her earning power is once again
adversely affected by his or her disability,[5] and that such
disability is a continuation of that which arose from his or
her original claim. The claimant need not re-prove that
the disability resulted from a work-related injury
during his or her original employment. Once the
claimant meets this burden, the burden then shifts to the
party opposing the reinstatement petition. In order to
prevail, the opposing party must show that the
claimant’s loss in earnings is not caused by the disability
arising from the work-related injury. This burden may
be met by showing that the claimant’s loss of earnings is, in
fact, caused by the claimant’s bad faith rejection of
available work within the relevant required medical
restrictions or by some circumstance barring receipt of
benefits that is specifically described under provisions of
the Act or in this Court’s decisional law.
Bufford v. Workers’ Comp. Appeal Bd. (N. Am. Telecom), 2 A.3d 548, 558 (Pa. 2010)
(emphasis added).
However, “in certain situations[,] a claimant who seeks a reinstatement
of benefits must establish disability through the pendency of the reinstatement
evidence.” Stepp v. Workers’ Comp. Appeal Bd. (FairPoint Commc’ns, Inc.), 99 A.3d 598, 601 n.6
(Pa. Cmwlth. 2014). “Substantial evidence has been defined as such relevant evidence as a
reasonable person might accept as adequate to support a conclusion.” Id.
4
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
5
“‘[F]or purposes of receiving [WC], ‘disability’ is a term synonymous with loss of earning
power; it does not refer to physical impairment.’” Lindemuth v. Workers’ Comp. Appeal Bd.
(Strishock Coal Co.), 134 A.3d 111, 123 (Pa. Cmwlth. 2016) (quoting Kmart v. Workers’ Comp.
Appeal Bd. (Williams), 771 A.2d 82, 85 (Pa. Cmwlth. 2001)).
4
petition.” Kranak v. Workers’ Comp. Appeal Bd. (U.S. Airways) (Pa. Cmwlth. No.
1265 C.D. 2013, filed March 7, 2014),6 slip op. at 14. “Here, Claimant never
established disability prior to the filing of the [R]einstatement [P]etition.” Id.
(emphasis added). Thus, “[i]t was Claimant’s burden to establish his entitlement to a
reinstatement of benefits.” Id.
In his Penalty/Reinstatement Petition, Claimant alleged:
[Employer] has failed to issue a[n] [NSTC] no later than
five (5) days after the last payment of temporary
compensation. Claimant requests penalties at the rate of
fifty percent (50%) on all past due compensation. Claimant
requests assessment of unreasonable contest attorney’s fees
pursuant to [Section] 440 of the Act. Claimant requests
reinstatement of total disability benefits based on the
misuse of documents.
Reproduced Record (R.R.) at 20a (emphasis added).
The WCJ determined:
Because the last day that compensation was paid was
January 19, 2017, the [NSTC] had to be filed by January 24,
2017. The [NSTC] was not filed until February 7, 2017.
Thus, the [NTCP] accepting Claimant’s injury as a
laceration to his eye with disability effective December 5,
2016 converted to a[n] [NCP] by operation of law.
WCJ Dec. at 4, Finding of Fact (FOF) 12 (emphasis added).
First, although the NSTC stated that “payment of compensation . . .
[was] being stopped as of 01-19-2017[,]” there was no testimony as to what period
that payment covered, see Thomas Lindstrom Co., Inc. v. Workers’ Comp. Appeal Bd.
(Braun), 992 A.2d 961 (Pa. Cmwlth. 2010), nor is the date of the last payment
6
Pursuant to Section 414(a) of the Commonwealth Court Internal Operating Procedures,
unreported opinions of a panel of the Commonwealth Court, if issued after January 15, 2008, may
be cited for persuasive value, but not as binding precedent. 210 Pa. Code § 69.414(a).
5
identified in the record, see Jones v. Workers’ Comp. Appeal Bd. (Villanova Univ.),
164 A.3d 542 (Pa. Cmwlth. 2017); thus, there is no evidence upon which the WCJ
could base his determination that the NSTC was not filed within five days of the last
payment. “No penalty may be imposed . . . absent proof of a violation of the Act or
its regulations, and a violation of the Act must appear in the record in order for a
penalty to be appropriate.” Dow v. Workers’ Comp. Appeal Bd. (Household Fin.
Co.), 768 A.2d 1221, 1226 (Pa. Cmwlth. 2001) (emphasis added; citation omitted).
Because substantial evidence does not support the WCJ’s conclusion that Employer
violated the Act by failing to file the NSTC within five days of the last payment, the
WCJ erred by granting the Penalty Petition.
Second, and more importantly, Section 406.1 of the Act does not
sanction conversion of an NTCP to an NCP for failure to file an NSTC within five
days of stopping payment. Rather, Section 406.1(d)(5) of the Act mandates:
(i) If the employer ceases making payments pursuant to a[n]
[NTCP], a notice in the form prescribed by the
[D]epartment [of Labor and Industry (Department)] shall be
sent to the claimant and a copy filed with the [D]epartment,
but in no event shall this notice be sent or filed later than
five (5) days after the last payment.
(ii) This notice shall advise the claimant, that if the
employer is ceasing payment of temporary compensation,
that the payment of temporary compensation was not an
admission of liability of the employer with respect to the
injury subject to the [NTCP], and the employe must file a
claim to establish the liability of the employer.
(iii) If the employer ceases making payments pursuant to
a[n] [NTCP], after complying with this clause, the employer
and employe retain all the rights, defenses and obligations
with regard to the claim subject to the [NTCP], and the
payment of temporary compensation may not be used to
support a claim for compensation.
6
(iv) Payment of temporary compensation shall be
considered compensation for purposes of tolling the statute
of limitations under [S]ection 315 [of the Act7].
77 P.S. § 717.1(d)(5). There is no remedy stated therein for failure to comply with
Section 406.1(d)(5)(i) of the Act. There is a remedy, however, for failure to file an
NSTC within 90 days of the filing of an NTCP. Section 406.1(d)(6) of the Act
requires: “If the employer does not file a[n] [NSTC] under paragraph (5) within the
ninety-day period during which temporary compensation is paid or payable, the
employer shall be deemed to have admitted liability and the [NTCP] shall be
converted to a[n] [NCP].” 77 P.S. § 717.1(d)(6) (emphasis added).
Here, the NTCP was issued on December 20, 2016, and Employer filed
its NSTC on February 7, 2017. Because the NSTC was filed within 90 days of the
NTCP, the NTCP could not convert to an NCP by operation of law. Thus, the WCJ
and the Board erred by concluding otherwise.
In support of their decisions, the WCJ and the Board relied upon Jones.
However, Jones is distinguishable from the instant case in that here, there is no record
evidence as to the last payment date and therefore it is unknown whether the last
payment was made within five days thereof. Further, the Jones Court expressly
stated: “The only issue on appeal is what is the event from which the NSTC has to be
sent or filed within no later than [five] days as set forth in Section 406.1(d)(5)(i) of
the Act, 77 P.S. § 717.1(d)(5)(i).” Jones, 164 A.3d at 544-45. The Court held:
“Because [the Act] provides that ‘compensation shall be paid not later than the
twenty-first day’ after an agreement, NCP or NTCP, under Section 406.1(a), time is
calculated from when compensation must be paid, not the last period for which
compensation is payable ended.” Jones, 164 A.3d at 545. The issue before the Jones
Court is not the same issue herein nor did the Jones Court hold that if the NSTC was
7
77 P.S. § 602.
7
not sent within five days of the last benefit payment the NTCP would convert to an
NCP by operation of law.8 Accordingly, Jones is inapposite and the WCJ and the
Board erred in relying thereon.
Moreover, Section 406.1(d)(5)(ii) of the Act expressly states that if the
employer files an NSTC, “the payment of temporary compensation [is] not an
admission of liability of the employer with respect to the injury,” and “the employe
must file a claim to establish the liability of the employer.” 77 P.S. §
717.1(d)(5)(ii) (emphasis added). Accordingly, Claimant herein filed a Claim
Petition on February 13, 2017, which the WCJ denied. Because “Claimant never
established disability prior to the filing of the [R]einstatement [P]etition[,]” “[i]t was
Claimant’s burden to establish his entitlement to a reinstatement of benefits.”
Kranak, slip op. at 14. The WCJ concluded: “Claimant has failed to sustain his
burden of proving that he sustained anything other than a laceration above his eye in
the incident of December 5, 2016. Thus, Claimant’s Claim Petition for all other
injuries and disability is denied.” WCJ Dec. at 14, Conclusion of Law (COL) 3
(emphasis added); see also COL 4 (“Claimant did not suffer any additional injuries or
any disability as a result of his alleged work injury.”). Because Claimant did not
prove his entitlement to a reinstatement of benefits, the WCJ erred by granting his
Reinstatement Petition.
Employer next argues that it is not required to pay unreasonable contest
fees because Claimant is not entitled to TTD benefits. Specifically, Employer
contends its contest was not intended to harass Claimant but, rather, to determine
8
In addition, the Jones Court found the NSTC was filed within five days of the last
payment; thus, whether the NTCP converted to an NCP by operation of law was not an issue before
the Court, and therefore, “not essential to the decision.” Program Admin. Servs. Inc. v. Dauphin
Cty. Gen. Auth., 874 A.2d 722, 729 (Pa. Cmwlth. 2005), aff’d, 928 A.2d 1013 (Pa. 2007) (quoting
City of Lower Burrell v. City of Lower Burrell Wage & Policy Comm., 795 A.2d 432, 437 n.7 (Pa.
Cmwlth. 2002)). Accordingly, any mention of the conversion by operation of law is merely
“[j]udicial dictum [which] is not binding authority.” Program Admin. Servs. Inc., 874 A.2d at 729.
8
whether Claimant was ever disabled as a result of the accepted work injury. Claimant
rejoins that he is entitled to unreasonable contest fees pursuant to Section 440 of the
Act because Employer continued to litigate the matter after the NTCP converted to an
NCP as a matter of law.
Section 440(a) of the Act provides:
In any contested case where the insurer has contested
liability in whole or in part, including contested cases
involving petitions to terminate, reinstate, increase, reduce
or otherwise modify compensation awards, agreements or
other payment arrangements or to set aside final receipts,
the employe or his dependent, as the case may be, in whose
favor the matter at issue has been finally determined in
whole or in part shall be awarded, in addition to the
award for compensation, a reasonable sum for costs
incurred for attorney’s fee . . . : Provided, That cost for
attorney fees may be excluded when a reasonable basis
for the contest has been established by the employer or
the insurer.
77 P.S. § 996(a) (emphasis added).
Here, the WCJ determined:
47. This [WCJ] has carefully considered Claimant’s request
for unreasonable contest attorney’s fees. In reviewing this,
this [WCJ] does not consider the various defenses to the
[c]laim proposed by Employer. The statute is clear that the
[NSTC] must be filed not later than five days after
compensation is stopped. Employer offers no defense to the
late issuance of the [NSTC] and thus there is no defense for
its failure to reinstate Claimant’s total disability benefits.
This [WCJ] finds that Employer’s contest to the
[Reinstatement Petition] was unreasonable.
48. Based on Employer’s unreasonable contest, this [WCJ]
awards Claimant’s attorney his Quantum Meruit attorney
fee in the amount of $8,140.00. Said fee shall be paid
directly to Claimant’s attorney.
49. Based on Claimant’s success with regard to the
[Reinstatement Petition] and the Penalty Petition,
9
Employer shall pay Claimant’s attorney his litigation
costs in the amount of $5,939.43. Said costs shall be paid
directly to Claimant’s attorney.
50. This [WCJ] approves the fee agreement between
Claimant and his counsel but does not award a fee because
Counsel’s fee is covered by the unreasonable contest fees
and no disability benefits are awarded in Claimant’s Claim
Petition.
WCJ Dec. at 14, FOFs 47-50 (emphasis added).
At the outset, Claimant did not file separate Reinstatement and Penalty
Petitions. Claimant filed a combined Reinstatement and Penalty Petition, therein
alleging that Claimant was entitled to reinstatement because Employer failed to
timely file its NSTC. The law is well settled that “a claimant who files a penalty
petition bears the burden of proving a violation of the Act occurred. If the claimant
meets his or her initial burden of proving a violation, the burden then shifts to the
employer to prove it did not violate the Act.” Baumann v. Workers’ Comp. Appeal
Bd. (Kellogg Co.), 147 A.3d 1283, 1293 (Pa. Cmwlth. 2016) (quoting Gumm v.
Workers’ Comp. Appeal Bd. (Steel), 942 A.2d 222, 232 (Pa. Cmwlth. 2008) (citation
omitted)).
As discussed above, Claimant did not present any evidence that
Employer violated the Act. Thus, the burden did not shift to Employer to prove it did
not violate the Act. Further, because Claimant never established a disability prior to
the filing of the Reinstatement Petition, he had the burden to establish his entitlement
to a reinstatement of benefits. Kranak. Employer not only contested the
Reinstatement Petition, it prevailed in proving that Claimant did not suffer a
disability. Accordingly, the WCJ erred by awarding unreasonable contest fees.9
9
Employer also requests this Court to reverse the WCJ’s decision dismissing its Suspension
Petition as moot. Given the disposition of the above issues, this Court holds Employer’s
Suspension Petition is now moot.
10
For all of the above reasons, the Board’s order is affirmed in part and
reversed in part. The portion of the Board’s order affirming the WCJ’s decision
granting Claimant’s Reinstatement and Penalty Petitions is reversed; and the portion
of the Board’s order reversing the WCJ’s decision dismissing Employer’s
Termination Petition as moot is reversed. The portion of the Board’s order affirming
the WCJ’s decision denying Claimant’s Claim Petition is affirmed; and the portion of
the Board’s order dismissing Employer’s Suspension Petition as moot is affirmed.
___________________________
ANNE E. COVEY, Judge
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Communication Test Design, :
Petitioner :
:
v. :
:
Workers’ Compensation :
Appeal Board (Simpson), : No. 1196 C.D. 2019
Respondent :
ORDER
AND NOW, this 22nd day of April, 2020, the Workers’ Compensation
Appeal Board’s (Board) August 2, 2019 order is affirmed in part and reversed in part.
The portion of the Board’s order affirming the Workers’ Compensation
Judge’s (WCJ’s) decision granting Herbert L. Simpson’s (Claimant) Reinstatement
and Penalty Petitions is REVERSED. The portion of the Board’s order reversing the
WCJ’s decision dismissing Communication Test Design’s (Employer) Termination
Petition as moot is REVERSED.
The portion of the Board’s order affirming the WCJ’s decision denying
Claimant’s Claim Petition is AFFIRMED. The portion of the Board’s order
dismissing Employer’s Suspension Petition as moot is AFFIRMED.
___________________________
ANNE E. COVEY, Judge