City of Philadelphia v. WCAB (Thompson)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia, :
Petitioner :
: No. 217 C.D. 2020
v. :
: Submitted: January 29, 2021
Workers’ Compensation Appeal :
Board (Thompson), :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE J. ANDREW CROMPTON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: May 26, 2021
In this case arising under the Workers’ Compensation Act (Act),1 the City
of Philadelphia (Employer) petitions for review from the January 29, 2020 order of the
Workers’ Compensation Appeal Board (Board), which affirmed the decision of a
workers’ compensation judge (WCJ) granting the petition for penalties filed on behalf
of Larry Thompson (Decedent). We affirm.
Background
The factual and procedural history of this matter is uncontested. On May
4, 2018, a WCJ issued a decision and order that granted the fatal claim petition filed by
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2710.
Decedent’s widow (Claimant).2 The WCJ ordered Employer to pay Claimant weekly
indemnity benefits, funeral expenses, and reasonable litigation costs. With respect to
indemnity benefits, the WCJ concluded that “Claimant is entitled to weekly benefits at
the rate of [50%] of Decedent’s average weekly wage [(AWW)] at the time he last
worked in 2010 for the duration of her life, unless altered pursuant to the Act.” (WCJ’s
decision and order, 5/04/2018, at Conclusion of Law (C.O.L.) No. 4.) The WCJ further
concluded that “Claimant is entitled to statutory interest of 10% from the date of filing
of the [c]laim [p]etition.” Id.
Employer subsequently appealed to the Board. Significantly, on June 8,
2018, the Board issued an order denying Employer’s request for supersedeas. (WCJ’s
decision and order, 11/21/2018, at F.F. No. 5 & n.5.) Eventually, in a decision dated
October 22, 2019, the Board remanded the case to the WCJ. More specifically, the
Board remanded in order for the WCJ to reconsider the merits of the fatal claim petition
and render additional factual findings based on intervening case law,3 which the WCJ
did not have the benefit of during the proceedings. (Board’s decision, 10/22/2019, at
8-11.)
2
By way of background, Decedent worked for Employer as a firefighter from 1985 until 2010.
In 2013, Decedent was diagnosed with lymphoma and died on May 11, 2013. On May 6, 2016,
Claimant filed a fatal claim petition, alleging that Decedent’s exposure to International Agency for
Research on Cancer Group I carcinogens was a substantial contributing factor in his diagnosis of
Non-Hodgkins lymphoma and death. Claimant asserted that she was entitled to benefits for an
enumerated occupational disease pursuant to sections 301(c)(2), 301(f), and 108(r) of the Act, 77 P.S.
§§411(2), 414, added by section 2 of the Act of July 7, 2011, P.L. 251, and 27.1(r), added by section
1 of the Act of July 7, 2011, P.L. 251, respectively. (WCJ’s decision and order, 5/04/2018, at Findings
of Fact (F.F.) Nos. 1-2.)
See generally City of Philadelphia Fire Department v. Workers’ Compensation Appeal
3
Board (Sladek), 195 A.3d 197 (Pa. 2018) (discussing the burden of proof and evidentiary
presumptions under sections 301(f) and 108(r) of the Act).
2
Meanwhile, Claimant filed a penalty petition on July 29, 2018, alleging
that Employer failed to pay benefits following the WCJ’s decision granting the fatal
claim petition and the Board’s June 8, 2018 order denying supersedeas. Following a
hearing, the WCJ found that Employer admitted that it had not paid Claimant any
indemnity benefits. Instead, Employer argued that its failure to comply with the WCJ’s
order and the Board’s denial of supersedeas was justified because it was unclear
whether Claimant’s benefit rate was 50%, as provided for in the WCJ’s order, or 51%
as provided for in the Act.4 Employer also asserted that it was unable to calculate
Decedent’s AWW and, thus, the benefit rate. (WCJ’s decision and order, 11/21/2018,
at F.F. Nos. 1, 6.)
In a decision and order dated November 21, 2018, which was rendered
prior to the Board’s October 22, 2019 remand order, the WCJ rejected Employer’s
arguments. In so doing, the WCJ found that the decision and order was “clear that
[50%] of [] [D]ecedent’s [AWW] calculated at the time he last worked for [Employer]
in 2010 should be paid with a statutory interest of [10%] thereon.” Id. at F.F. No. 7.
The WCJ further found that
8. . . . irrespective of whether the benefit rate should
have been [50%] or [51%] percent pursuant to the terms of
the . . . Act, this is not sufficient grounds for the Employer to
blatantly disregard the order of [the WCJ] and the denial of
supersedeas by the [Board].
9. . . . while there was no earning documentation
submitted in the underlying matter, [] Employer cannot
credibly argue an inability to calculate an [AWW] and
compensation rate inasmuch as wage records are within the
complete control of [] Employer. Any wage information
4
Section 307(2) of the Act provides that when there is a successful fatal claim petition under
the Act, indemnity benefits payable “[t]o the widow or widower, if there be no children,” shall be
“[51%] of wages, but not in excess of the Statewide [AWW].” 77 P.S. §561(2).
3
presented by Claimant would have come directly from
earnings statements generated by [] Employer.
10. . . . as with the earning documentation, [] Employer
cannot credibly argue an inability to ascertain [] Claimant’s
last date of work and/or retirement date as any attendance
records for [] Claimant are within the complete control of the
Employer. Any information presented by Claimant would
have come directly from attendance records generated by []
Employer.
11. . . . in the event the . . . Board [would have] calculated
the wages differently than that which had been paid by []
Employer, [] Employer would have the remedy of the
Supersedeas Fund for reimbursement of an overpayment.
12. . . . the arguments raised by [] Employer to be
disingenuous as the order of the [WCJ] was clear and the
information missing was within the control of [] Employer.
Id. at F.F. Nos. 8-12.
Based on these findings, the WCJ determined that Employer violated the
terms and provisions of the Act and granted Claimant’s penalty petition. The WCJ
imposed a 50% penalty upon Employer for failing to comply with the order granting
the fatal claim petition and awarding benefits and the Board’s order denying
supersedeas. The WCJ assessed the penalty on the total amount of outstanding monies,
including interest, that was due and owing to Claimant. Id. at F.F. Nos. 13, 15; C.O.L.
at 4.
Employer appealed to the Board, which, by order dated January 29, 2020,
affirmed the WCJ. In so doing, the Board noted that Employer did not dispute that it
failed to pay Claimant indemnity benefits pursuant to the WCJ’s decision and order.
Addressing Employer’s argument “that Claimant had an affirmative duty to establish
Decedent’s AWW and thus it did not violate the Act,” the Board could not discern a
“fallacy in the WCJ’s reasoning that attendance and wage records are within
4
[Employer’s] control and it ha[d] access to the necessary information and could
calculate benefits due at will.” (Board’s decision, 01/29/2020, at 4.) Regarding
Employer’s contention that the WCJ’s decision was unclear as to the date to be used to
calculate the AWW and benefits due, the Board concluded these issues are decided by
statutory law “and the benefits due were discernable.” Id. at 4 n.6. The Board also
added that “[e]ven if the benefit calculation required more [of] a greater degree of
definitiveness, [] Employer presented no evidence of a good-partner payment.” Id.
Ultimately, the Board concluded that Employer violated the Act and that the WCJ did
not abuse her discretion in imposing a penalty because “[t]he Act does not give an
employer the right to ignore its requirements and unilaterally refuse to pay benefits
without following prescribed statutory remedies.” Id. at 4.
Employer now petitions this Court for review.5
Discussion
Employer argues that the WCJ abused her discretion in granting
Claimant’s penalty petition for three primary reasons. First, Employer asserts that the
WCJ ordered benefits in an incorrect percentage because, “according to [s]ection
307(2) of the Act, death benefits are payable to a surviving spouse at [51%] of the
decedent’s [AWW], not [50%] as the WCJ ordered.” (Employer’s Br. at 11.) Second,
Employer submits that “the WCJ ordered benefits to be paid based on Decedent’s
wages in 2010 when . . . [t]he evidence of record established that Decedent was
employed . . . through the end of 2011,” and, as such, “[t]he year 2010 is largely
irrelevant to the case as it pertains to wages.” Id. at 11. Third, Employer maintains
5
Our scope of review is limited to determining whether constitutional rights have been
violated, whether an error of law has been committed, or whether findings of fact are supported by
substantial evidence. Anderson v. Workers’ Compensation Appeal Board (Penn Center for Rehab),
15 A.3d 944, 947 n.1 (Pa. Cmwlth. 2010).
5
that “there was no evidence in the records regarding Decedent’s wages,” and,
consequently, the WCJ “did not make findings of fact regarding Decedent’s average
weekly wage or the rate at which [Employer] was to pay death benefits.” Id. at 8. In
the latter regard, Employer asserts that “the lack of a specific ordered benefit rate or
[AWW] rendered the WCJ’s [o]rder useless” and states that it has no obligation “to
correct a WCJ’s flawed decision” or that it “pay benefits on an [o]rder that does not
specifically enumerate an [AWW] or benefit rate.” Id. at 11. We disagree.
Initially, we recognize that
[p]ursuant to [s]ection 435 of the Act, 77 P.S. §991(d)[6], a
WCJ is authorized to impose penalties for violations of the
Act. The assessment of penalties, as well as the amount of
penalties imposed, is discretionary, and absent an abuse of
discretion by the WCJ, this Court will not overturn a penalty
on appeal. An abuse of discretion is not merely an error of
judgment but occurs, inter alia, when the law is misapplied
in reaching a conclusion.
Westinghouse Electric Corporation v. Workers’ Compensation Appeal Board
(Weaver), 823 A.2d 209, 213-14 (Pa. Cmwlth. 2003) (citations omitted).
6
Section 435(d) of the Act addresses penalties and provides, in pertinent part, that:
(d) The department, the [B]oard, or any court which may hear any
proceedings brought under this act shall have the power to impose
penalties as provided herein for violations of the provisions of this act
or such rules and regulations or rules of procedure:
(i) Employers and insurers may be penalized a sum not exceeding ten
per centum of the amount awarded and interest accrued and payable:
Provided, however, That such penalty may be increased to fifty per
centum in cases of unreasonable or excessive delays. Such penalty shall
be payable to the same persons to whom the compensation is payable.
77 P.S. §991(d)(i), added by the Act of February 8, 1972, P.L. 25, as amended.
6
It is well-settled that where an employer fails to commence payment of
compensation in accordance with a WCJ’s order, the failure to make payment
constitutes a violation of the Act and the employer is subject to the imposition of
penalties. See, e.g., Varkey v. Workers’ Compensation Appeal Board (Cardone
Industries), 827 A.2d 1267, 1275 (Pa. Cmwlth. 2003); Thomas v. Workers’
Compensation Appeal Board (Delaware County), 746 A.2d 1202, 1204 (Pa. Cmwlth.
2000). Section 428 of the Act, 77 P.S. §921,7 essentially states that an employer
violates the Act if it fails to make payments within 30 days of the date on which its
obligation to pay arises. Further, section 430(b) of the Act specifically cautions that
“[a]ny insurer or employer who . . . refuses to make any payment provided for in the
[WCJ’s] decision without filing a petition and being granted a supersedeas shall be
subject to a penalty as provided in [s]ection 435 . . . .” 77 P.S. §971(b). “Indeed, only
a grant of supersedeas relieves an employer of an obligation to pay.” CMR
Construction v. Workers’ Compensation Appeal Board (Begley), 165 A.3d 69, 73 (Pa.
Cmwlth. 2017).8 Previously, this Court has “held that [an] employer was obligated to
7
Added by the Act of June 2, 1915, P.L. 736, as amended.
8
Notably, the Act does not give an employer the right of self-help, i.e., the right to ignore the
requirements of the Act and unilaterally refuse to pay benefits without following the prescribed
statutory remedies and obtaining supersedeas. See City of Philadelphia v. Workers’ Compensation
Appeal Board (Sherlock), 934 A.2d 156, 160 n.9 (Pa. Cmwlth. 2007). In prior cases, we have upheld
the imposition of a penalty where an employer did not pay compensation because it was actively
contesting a claimant’s disability and, also, where an employer unilaterally discontinued paying
benefits and eventually received a successful ruling on the merits in subsequent litigation and/or an
appeal. See North Pittsburgh Drywall Co. v. Workers’ Compensation Appeal Board (Owen), 59 A.3d
30, 43 (Pa. Cmwlth. 2013); Sheridan v. Workers’ Compensation Appeal Board (Anzon, Inc.), 713
A.2d 182, 185-87 (Pa. Cmwlth. 1998); Spangler v. Workmen’s Compensation Appeal Board (Ford),
602 A.2d 446, 448 (Pa. Cmwlth. 1992). In sum, these factual situations “do[] not alter [an employer’s]
obligation to pay indemnity benefits during the pendency of the litigation or excuse its non-payment
of benefits during the litigation period.” North Pittsburgh Drywall Co., 59 A.3d at 43. Further, “it is
well-settled that only the grant of a supersedeas will obviate an employer’s obligation to pay
(Footnote continued on next page…)
7
pay the claimant disability benefits once its request for supersedeas was denied, that a
violation of the Act occurred when the employer did not begin paying claimant’s
benefits, and that the employer’s subsequent four-month delay in making such
payments justified the WCJ’s award of a 50% penalty.” Id. (discussing Indiana Floral
Co. v. Workers’ Compensation Appeal Board (Brown), 793 A.2d 984, 991 (Pa.
Cmwlth. 2002)).
In Graphic Packaging, Inc. v. Workers’ Compensation Appeal Board
(Zink), 929 A.2d 695 (Pa. Cmwlth. 2007), the claimant filed a claim petition, which the
WCJ denied and, thereafter, the Board affirmed. On appeal to this Court, we reversed,
concluding that the claimant was entitled to benefits as a matter of law. Specifically,
we remanded to the WCJ “for an appropriate award.” Id. at 697. The employer then
appealed to the Supreme Court (but did not request supersedeas), the Supreme Court
denied review, and the matter was remanded to the WCJ pursuant to our directive. On
remand to the WCJ, the claimant filed a penalty petition, alleging that the employer
violated the Act by failing to timely pay the claimant as directed by our decision. The
WCJ granted the petition, and the employer filed an appeal to this Court. The employer
argued that the WCJ erred and abused his discretion in imposing a penalty because we
“did not expressly direct [it] to pay an amount certain to [the claimant], but rather
remanded the matter to a WCJ for an appropriate award,” and, therefore, “our order . .
. imposed no obligation upon [the employer] to pay Claimant any benefits under the
Act.” Id. at 698 (emphasis in original). This Court rejected the employer’s argument
that it had no obligation to pay benefits, reasoning as follows:
compensation and that, absent a supersedeas, the employer carries the burden of paying workers’
compensation benefits during the litigation period.” Graphic Packaging, Inc. v. Workers’
Compensation Appeal Board (Zink), 929 A.2d 695, 700 (Pa. Cmwlth. 2007).
8
Accepting [the employer’s] argument that our [C]ourt’s
order triggers no legal obligation renders the supersedeas
provisions of the Act meaningless. If our orders do not
impose an obligation on an employer to pay benefits unless
the order expressly directs the employer to pay an amount
certain[,] then employers who prevail before the WCJ and
[the Board], but who lose before this [C]ourt, no longer must
request and receive a supersedeas to relieve themselves of the
obligation to pay benefits while appealing to our [S]upreme
[C]ourt. Rather, the employer could merely petition for an
appeal to the [S]upreme [C]ourt, thereby delaying the
remand of the matter to the WCJ for the “award,” without
paying the claimant benefits to which the claimant is entitled
and without incurring any risk that penalties will be imposed
for nonpayment. Such a result requires claimants to bear the
burden of not receiving benefits during the litigation process
and runs counter to the previously stated principle that,
absent a grant of supersedeas, it is the employer’s burden to
pay compensation benefits throughout the litigation
period. . . .
Here, [the employer] made no payments to [the claimant]
until seventeen months after its obligation to do so was
settled by our order . . . . Thus, we agree with the [Board]
that the WCJ did not err in finding that [the employer’s]
conduct violated the Act. Accordingly, the WCJ was free to
impose a penalty based on a percentage of [the claimant’s]
compensation award as a sanction.
Id. at 700-01 (internal citations omitted).
Applying the above case law, we agree with the Board that the WCJ did
not abuse her discretion in imposing a 50% penalty for Employer’s significant delay in
tendering payments for indemnity benefits to Claimant after the Board denied
supersedeas. Although Employer advanced arguments, in the form of evidence, in an
attempt to excuse or otherwise downplay its noncompliance with the WCJ’s order, the
WCJ dismissed these contentions as not credible. It is beyond cavil that “the WCJ is
the ultimate factfinder and has exclusive province over questions of credibility and
evidentiary weight.” Dixon v. Workers’ Compensation Appeal Board (Medrad, Inc.),
9
134 A.3d 518, 524 (Pa. Cmwlth. 2016) (internal citations omitted). “A court may
overturn a credibility determination only if it is arbitrary and capricious or so
fundamentally dependent on a misapprehension of facts, or so otherwise flawed, as to
render it irrational.” Verizon Pennsylvania, Inc. v. Workers’ Compensation Appeal
Board (Mills), 116 A.3d 1157, 1162 (Pa. Cmwlth. 2015) (internal citations and
quotation marks omitted). Like the Board, this Court cannot discern a legal ground
upon which to disturb the WCJ’s assessment and rejection of Employer’s proffered
excuses.
Moreover, and perhaps more importantly, given our decision in Graphic
Packaging, Inc., we cannot conclude that the WCJ erred as a matter of law in finding
that Employer violated the Act and ordering Employer to pay a penalty. Although the
employer in Graphic Packaging, Inc. introduced the claimant’s statement of wages into
evidence at the initial hearing before the WCJ, while Employer here did not, this is a
fact without a legal difference. As both the WCJ and the Board recognized, Employer
was (and presumably continues to be) in possession of records that not only pertain
to—but also serve as a sufficient basis to verify—Claimant’s actual wages and AWW.
Employer does not assert that it did not have access to such information. Therefore, as
in Graphic Packaging, Inc., we conclude that Employer failed to pay Claimant
indemnity benefits in a timely fashion, and, consequently, the Board did not err in
affirming the WCJ’s imposition of a penalty upon Employer.
Accordingly, we affirm.
________________________________
PATRICIA A. McCULLOUGH, Judge
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia, :
Petitioner :
: No. 217 C.D. 2020
v. :
:
Workers’ Compensation Appeal :
Board (Thompson), :
Respondent :
ORDER
AND NOW, this 26th day of May, 2021, the January 29, 2020 order of
the Workers’ Compensation Appeal Board is hereby affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge