The S.D. of Philadelphia v. C. Holman (WCAB) ( 2022 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The School District of Philadelphia, :
:
Petitioner :
:
v. : No. 23 C.D. 2020
: Submitted: January 21, 2022
Carleton Holman (Workers’ :
Compensation Appeal Board), :
:
Respondent :
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: April 19, 2022
The School District of Philadelphia (Employer) petitions for review of
an order of the Workers’ Compensation Appeal Board (Board) that affirmed in part
and reversed in part a decision of the Workers’ Compensation Judge (WCJ), which
denied and dismissed Carleton Holman’s (Claimant) Penalty Petition, and ordered
the reinstatement of Claimant’s indemnity benefits as of April 18, 2017, upon
finding that the Notice of Temporary Compensation Payable (NTCP) converted to a
Notice of Compensation Payable (NCP) under Section 406.1(d)(6) of the Workers’
Compensation Act (Act),1 and that Employer violated the Act when it unilaterally
1
Act of June 2, 1915, P.L. 736, as amended, added by the Act of February 8, 1972, P.L. 25,
77 P.S. §717.1(d)(6).
stopped payment of wage loss benefits. Employer argues that it fully complied with
the Act and the Bureau of Workers’ Compensation’s (Bureau) regulations by issuing
a Medical-Only NCP to stop payment of temporary wage loss benefits. For the
reasons that follow, we reverse.
I. Background
On February 24, 2017, Claimant was injured while in the course of his
employment as a teacher when he was pushed by a student and fell when attempting
to prevent a fight. Employer issued an NTCP, dated March 3, 2017, recognizing
injuries to Claimant’s left knee, bilateral wrists, buttocks, low back, head, left elbow,
and shoulders. Pursuant to the NTCP, Employer agreed to pay Claimant medical
benefits and wages in lieu of compensation. Shortly thereafter, on April 18, 2017,
Employer issued a Medical-Only NCP for the injuries and stopped paying wage
benefits. WCJ’s Opinion, 2/16/18, Findings of Fact (F.F.) Nos. 1-4.
On May 9, 2017, Claimant filed a Penalty Petition alleging that
Employer violated the Act and regulations by unilaterally stopping payment of wage
compensation. Claimant sought penalties in the amount of 50%, interest, attorney’s
fees, litigation costs, and a reinstatement of compensation benefits. Employer filed
an Answer, denying that a violation of the Act had occurred. F.F. No. 5.
The Penalty Petition was assigned to a WCJ. Before the WCJ, Claimant
testified that he has not worked since the accident. In mid-April 2017, Claimant
received a Medical-Only NCP from Employer and his compensation checks stopped.
Claimant testified that he never received a Notice Stopping Temporary
Compensation (NSTC). F.F. Nos. 6-7; Certified Record at 60-61.2
2
Because the Certified Record was filed electronically and was not paginated, the page
numbers referenced in this opinion reflect electronic pagination.
2
In its defense, Employer argued that, by issuing a Medical-Only NCP
on April 18, 2017, within 90 days of issuing the NTCP, it complied with Section
127.17 of the Bureau’s regulations, 34 Pa. Code §127.17, and did not otherwise
violate the Act. The WCJ agreed and determined that Claimant had failed to
establish a violation of the Act. By decision dated February 14, 2018, the WCJ
denied and dismissed Claimant’s Penalty Petition.
From this decision, Claimant sought review with the Board, which
affirmed in part and reversed in part. The Board determined that Employer did not
properly stop the NTCP in accordance with the Act by filing a Medical-Only NCP.
The Board opined that the proper method to stop wage continuation in lieu of
indemnity payments pursuant to an NTCP is to file proper forms as prescribed by
the Department of Labor and Industry (Department), namely, an NSTC (Form
LIBC-502) and a Notice of Compensation Denial (NCD) (Form LIBC-496),
pursuant to Section 406.1(d) of the Act and Section 127.17(d)(1) of the regulations.
The Board explained that these forms provide the required notice to Claimant that
Employer has not accepted liability and that Claimant must file a claim to establish
Employer’s liability. Because Employer failed to file the proper forms, the NTCP,
which provided for payment of medical expenses and wages in lieu of indemnity
benefits, converted to an NCP by operation of law. 77 P.S. §717.1(d)(6). The Board
concluded that, based on the NCP, Employer was obligated to pay indemnity
benefits on and after April 18, 2017, as well as medical expenses related to
Claimant’s work injuries. The Board also concluded that Employer violated the Act
when it stopped paying indemnity benefits. Despite this finding, the Board declined
to award a penalty noting that the regulations are confusing as to which form should
be used to stop the payment of indemnity benefits while continuing the responsibility
3
for payment of medical bills, and that Employer acted in good faith in attempting to
comply with the regulations by issuing a Medical-Only NCP. Thus, by order dated
December 12, 2019, the Board affirmed in part the WCJ’s order insofar as the WCJ
awarded no penalty, but otherwise reversed and ordered the reinstatement of
Claimant’s indemnity benefits as of April 18, 2017. Employer’s petition for review
followed.
II. Issues
On appeal,3 Employer contends that the Board erred in reversing the
WCJ’s decision denying and dismissing Claimant’s Penalty Petition. Employer
maintains that it followed the Act and the regulations by correctly utilizing a form
prescribed by the Department, and otherwise acting in accordance with the law.
Employer asserts the Board erred by focusing its inquiry on Section 406.1(d) without
any regard to Section 406.1(c). Employer maintains that a NSTC and NCD are only
required when the employer controverts a claim, which is not the case here because
Employer accepted medical liability. The Medical-Only NCP is a form prescribed
by the Department, which sufficiently apprised Claimant of the status of his claim.
Thus, Employer maintains that it did not violate the Act and seeks reversal of the
Board’s decision.
3
Our review is limited to determining whether the WCJ’s findings of fact were supported
by substantial evidence, whether an error of law was committed, or whether constitutional rights
were violated. Frankiewicz v. Workers’ Compensation Appeal Board (Kinder Morgan, Inc.),
177 A.3d 991, 995 n.2 (Pa. Cmwlth. 2017). Regarding questions of law, our scope of review is
plenary and our standard of review is de novo. Sedgwick Claims Management Services, Inc. v.
Bureau of Workers’ Compensation, Fee Review Hearing Office (Piszel and Bucks County Pain
Center), 185 A.3d 429, 433 n.2 (Pa. Cmwlth. 2018).
4
III. Discussion
Where an employer violates the Act, an award of penalties and
attorney’s fees is an appropriate remedy. Coyne v. Workers’ Compensation Appeal
Board (Villanova University), 942 A.2d 939, 951 (Pa. Cmwlth. 2008). However,
the imposition of penalties is not automatic. Brutico v. Workers’ Compensation
Appeal Board (US Airways, Inc.), 866 A.2d 1152, 1156 (Pa. Cmwlth. 2004). It is
within the discretion of the WCJ to impose penalties. Id. It is “an abuse of discretion
to assess a penalty in an instance where the employer acted in good faith reliance
upon the . . . procedure contemplated in the . . . regulations.” Snizaski v. Workers’
Compensation Appeal Board (Rox Coal Co.), 891 A.2d 1267, 1278 n.12 (Pa. 2006).
Section 406.1(c) of the Act generally provides that if an “insurer
controverts the right to compensation[,] it shall promptly notify the employe[e] or his
dependent, on a form prescribed by the [D]epartment, stating the grounds upon
which the right to compensation is controverted and shall forthwith furnish a copy
or copies to the [D]epartment.” 77 P.S. §717.1(c) (emphasis added).
Section 406.1(d) of the Act specifically addresses NTCPs.
77 P.S. §717.1(d). NTCPs are to be used in situations where, as here, an employer
is uncertain whether a claim is compensable under the Act or the extent of its
liability. 77 P.S. §717.1(d)(1). By issuing an NTCP, an employer may initiate
compensation payments without prejudice and without admitting liability. Id. An
NTCP shall inform the claimant:
(i) that payment does not mean the claimant’s employer is
accepting responsibility for the injury or that a
compensation claim has been filed or commenced; (ii) that
the claimant is entitled to payment for up to ninety (90)
days; and (iii) that in order to ensure continuation of
compensation payments, the claimant “may need to file a
claim petition in a timely fashion under [S]ection 315 [of
5
the Act, 77 P.S. §602], enter into an agreement with his
employer[,] or receive a notice of compensation
payable. . . .” 77 P.S. §717.1(d)(2)(i)-(iii).”
Church v. Workers’ Compensation Appeal Board (Cook), 135 A.3d 1153, 1159-60
(Pa. Cmwlth. 2016).
The payment of temporary compensation may continue for 90 days
while the employer investigates the circumstances surrounding the claim.
77 P.S. §717.1(d)(2)(ii). If an employer chooses to controvert payments of
temporary compensation, it must provide notice to the claimant on a form prescribed
by the Department. 77 P.S. §717.1(d)(4)-(5). Section 406.1(d)(5) provides:
(i) If the employer ceases making payments pursuant to
[an NTCP], a notice in the form prescribed by the
[D]epartment 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 notice of temporary compensation
payable, and the employe[e] must file a claim to establish
the liability of the employer.
(iii) If the employer ceases making payments pursuant to
[an NTCP], after complying with this clause, the employer
and employe[e] retain all the rights, defenses and
obligations with regard to the claim subject to the notice
of temporary compensation payable, and the payment of
temporary compensation may not be used to support a
claim for compensation.
(iv) Payment of temporary compensation shall be
considered compensation for purposes of tolling the
statute of limitations under [S]ection 315.
6
77 P.S. §717.1(d)(5)(i)-(iv) (emphasis added). If the employer fails to file such
notice that the temporary compensation has been stopped within the 90-day period
during which the temporary compensation is payable, the employer shall be deemed
to have admitted liability and the NTCP shall convert to an NCP.
77 P.S §717.1(d)(6).
Section 121.17 of the Bureau’s regulations specifies the Department
forms prescribed for making changes in compensation. 34 Pa. Code §121.17.
Pertinent here, when an employer seeks to stop paying temporary compensation
under an NTCP, an employer may file: (1) an NSTC (Form LIBC-502) and NCD
(Form LIBC-496) within a prescribed timeframe; or (2) an NCP (Form LIBC-495);
or (3) an Agreement for Compensation for Disability or Permanent Injury (Form
LIBC-336). 34 Pa. Code §121.17(d)(1)-(3).
Recently, in Raymour & Flanigan v. Workers’ Compensation Appeal
Board (Obeid), 264 A.3d 817 (Pa. Cmwlth. 2021),4 this Court addressed the issue
presented herein, i.e., whether an employer may stop payment of temporary
compensation by issuing a Medical-Only NCP. In Raymour & Flanigan, the
employer issued an NTCP describing the claimant’s injury and agreeing to pay for
her medical benefits and temporary total disability benefits. Two weeks after issuing
the NTCP, the employer issued a Medical-Only NCP. The claimant filed a penalty
petition seeking penalties for violations of the Act on the basis that the employer did
not properly stop the NTCP in accordance with the Act, as well as a reinstatement
4
We note that this Court decided Raymour & Flanigan after the Board issued its opinion
in this matter, after Employer filed a petition for review in this Court, and only one month before
Employer filed its brief. Although Employer does not reference this case, Claimant does in his
brief. In addition, we note that a petition for allowance of appeal is presently pending before our
Supreme Court. See Raymour & Flanigan v. Workers’ Compensation Appeal Board (Obeid) (Pa.,
No. 388 EAL 2021).
7
of total disability benefits. The WCJ found that, under Section 121.17(d) of the
Bureau’s regulations, the employer was permitted to file an NCP to stop temporary
compensation benefits, which the employer did when it filed the Medical-Only NCP.
Upon finding no violation of the Act or its regulations, the WCJ denied the
claimant’s penalty petition. Raymour & Flanigan, 264 A.3d at 818.
On appeal, the Board reversed on the basis that the Medical-Only NCP
did not comport with the requirements of the Act by failing to provide the claimant
with sufficient notice regarding the cessation of his disability benefits. The Board
ordered the reinstatement of indemnity benefits upon determining that the NTCP
converted to an NCP by operation of law. The Board acknowledged that the
regulations foster confusion as to which method should be used when an employer
seeks to stop the payment of indemnity benefits while continuing to accept
responsibility for the payment of medical bills. Despite finding a violation of the
Act, the Board declined to award a penalty upon finding that the employer acted in
good faith in attempting to comply with the Act and regulations. Raymour &
Flanigan, 264 A.3d at 818-19.
On further appeal to this Court, we reversed. We determined that the
employer provided requisite notice on a form prescribed by the Department in
accordance with Section 121.17(d) of the Bureau’s regulations by filing a Medical-
Only NCP, which is a version of the Department’s NCP (Form LIBC-495). A
Medical-Only NCP enables an employer to accept responsibility for the payment of
medical treatment but not for loss of wages by checking an appropriate box on the
form. We explained that where a Medical-Only NCP is issued, it sufficiently and
correctly informs a claimant “that only compensation for medical treatment, not loss
of wages, would be paid.” Raymour & Flanigan, 264 A.3d at 822. As for whether
8
an employer must file an NSTC and NCD in addition to a Medical-Only NCP or in
lieu thereof to stop temporary compensation benefits under the Act, we opined that
such an interpretation is “illogical and incorrect as a matter of law,” would lead to
“absurd result[s],” and is contrary to the principles of statutory construction. Id. at
821, 823-24. We explained that such a tortured construction of the Act would not
only misinform the claimant, but it would also cause confusion because the NSTC
and NCD notices contain misstatements of the law when an employer chooses to
accept medical liability. Id. at 822-23. Specifically, the NSTC and NCD state that
the employer is not accepting any liability for the injury, which is not the case when
an employer chooses to accept a claim for medical treatment and a claimant may
establish rights to future compensation by filing a reinstatement petition. Id. at 822-
23. Requiring an employer to issue an NSTC and NCD when it chooses to accept
medical liability would essentially require “an employer to misinform a claimant as
to the status of his or her claim and demand that a claimant expend the time and
resources needed to file an unnecessary claim petition in order to vindicate his or her
rights” and would defeat the “humanitarian purposes of the Act.” Id. at 823. Thus,
we concluded that the filing of a Medical-Only NCP to stop compensation payments
under an NTCP comported with both the Act and its regulations, and we reversed
the Board’s reinstatement of indemnity benefits. Id.
Our analysis in Raymour & Flanigan is directly on point and
controlling here. Because “we are bound to follow the decisions of our Court unless
overruled by the Supreme Court or where other compelling reasons can be
demonstrated,” Crocker v. Workers’ Compensation Appeal Board (Georgia Pacific
LLC), 225 A.3d 1201, 1210 (Pa. Cmwlth. 2020), we conclude that the WCJ did not
9
err in determining that Employer did not violate the Act or regulations and by
denying and dismissing Claimant’s Penalty Petition.
Accordingly, we reverse the Board’s order insofar as it ordered the
reinstatement of Claimant’s indemnity benefits as of April 18, 2017.
MICHAEL H. WOJCIK, Judge
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The School District of Philadelphia, :
:
Petitioner :
:
v. : No. 23 C.D. 2020
:
Carleton Holman (Workers’ :
Compensation Appeal Board), :
:
Respondent :
ORDER
AND NOW, this 19th day of April, 2022, the order of the Workers’
Compensation Appeal Board, dated December 12, 2019, is REVERSED insofar as
it ordered the reinstatement of Carleton Holman’s indemnity benefits as of April 18,
2017.
__________________________________
MICHAEL H. WOJCIK, Judge