L. Robinson v. WCAB (Service Plus Delivery Systems, Inc. and SWIF)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lallie Robinson, :
Petitioner :
:
v. :
:
Workers' Compensation Appeal :
Board (Service Plus Delivery :
Systems, Inc. and State Workers' :
Insurance Fund), : No. 2013 C.D. 2014
Respondents : Argued: October 5, 2015
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge
HONORABLE MARY HANNAH LEAVITT, Judge1
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McGINLEY FILED: January 8, 2016
Lallie Robinson (Petitioner/Claimant) petitions for review from an
order of the Workers’ Compensation Appeal Board (Board) that affirmed Workers’
Compensation Judge Lawrence C. Beck’s (WCJ Beck) grant of Service Plus
Delivery Systems, Inc.’s (Employer) and the State Workers’ Insurance Fund’s
(SWIF) (collectively, Respondents) petition to review compensation benefits offset
(review petition).
I. WCJ Beck’s Decision
The parties agree that “[t]he facts are not genuinely in dispute on the
issues pertaining to the present appeal.” Brief for Petitioner at 16.
1
This case was assigned to the opinion writer before January 4, 2016, when Judge
Leavitt became President Judge.
WCJ Beck made the following pertinent findings of fact:
1. On July 6, 2010, Workers’ Compensation Judge
Christina Barbieri circulated a decision granting
Claimant’s Claim Petition and Penalty Petition.[2]
(Emphasis added.)
2. Judge Barbieri found that, on March 10, 2006,
Claimant suffered a large eccentric disc herniation at C7-
C8, which impinged the C7-C8 nerve root, causing
cervical radiculopathy at C7-C8 and 1, exacerbation of
pre-existing but symptomatic bilateral acromioclavicular
arthropathy, bilateral post-traumatic shoulder
impingement syndrome, exacerbation of a pre-existing
mildly symptomatic cervical spondylosis, exacerbation of
cervical radiculopathy and clinical evidence of right
neurogenic thoracic outlet syndrome. Claimant suffered
his injuries as the result of a motor vehicle accident.[3]
3. In support of its Review Petition, Employer submitted
the March 29, 2011 deposition of James Jordon, Esquire.
(Emphasis added.) This Judge has reviewed Mr.
Jordan’s testimony and summarizes it as follows:
a. Mr. Jordon is assistant counsel for the State Workers’
Insurance Fund (SWIF). In his capacity as assistant
counsel, Mr. Jordon is point of contact with counsel for
claimant’s [sic] in third-party actions . . . . In this role,
Mr. Jordon has access to SWIF’s payment records with
regard to a claimant’s medical and indemnity benefits.
2
Petitioner filed a claim petition and alleged that he was totally disabled since March 10,
2006. Petitioner also filed a penalty petition and alleged numerous violations of the Workers’
Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-
2708, which included failure to investigate. Petitioner requested fifty percent in penalties,
unreasonable contest fees and workers’ compensation benefits with statutory interest. Employer
and SWIF denied the allegations of the claim and penalty petitions.
3
On March 10, 2006, Petitioner was operating a van for Employer when his vehicle was
rear-ended by one vehicle which forced his vehicle into another vehicle. Brief of Respondents
(Service Plus Delivery Systems, Inc. and State Workers’ Insurance Fund) at 7.
2
b. Mr. Jordon is familiar with Claimant’s subrogation
file. As part of Claimant’s subrogation file, a Notice of
Subrogation was sent to Claimant and Claimant’s third
party counsel, Lowenthal & Abrams, on February 21,
2008. (Emphasis added.)
c. Despite the claim being originally denied, medical
benefits in the amount of $17,494.83 were paid as of
November 21, 2008. Mr. [James B.] Mogul [Petitioner’s
attorney] had discussed third party recovery with John
Aris, Esquire, of Lowenthal & Abrams in 2008.
(Emphasis added.)
d. On February 12, 2009, SWIF received a check for
$9,494.70 from Lowenthal & Abrams. (Emphasis
added.)
e. On June 24, 2009, SWIF received a check for
$1,663.22 from Lowenthal & Abrams. (Emphasis
added.)
f. Mr. Jordon believed these amounts were for
reimbursement of SWIF’s medical lien at the time.
There were no other liens at that time. Mr. Jordon did
not deem SWIF’s receipt of these amounts to be a waiver
of SWIF’s future lien. (Emphasis added.)
g. Mr. Jordon did not sign any agreement waiving
SWIF’s future subrogation rights against Claimant’s third
party recovery. To Mr. Jordon’s knowledge, no one else
at SWIF agreed to waive SWIF’s subrogation rights.
h. Claimant first began receiving indemnity benefits,
pursuant to Judge Barbieri’s July 6, 2010 decision, on
August 10, 2010.
i. As of November 1, 2010, SWIF had paid Claimant
$97,151.55 in indemnity benefits. (Emphasis added.)
j. As of November 1, 2010, SWIF had paid Claimant
$27,468.36; however, $8,044.09 in litigation costs was
incorrectly included in that amount. This amount
($19,424.27) is the net amount of benefits paid after the
3
$9,494.70 and $1,663.22 payments from Lowenthal &
Abrams were previously deducted.
k. As of March 29, 2011, SWIF had paid $134,736.42 in
indemnity and medical benefits. (Emphasis added.)
4. In opposition to Employer’s Review Petition, Claimant
submitted the September 8, 2011 deposition testimony of
John Aris, Esquire. This Judge has reviewed Mr. Aris’
testimony and summarizes as follows:
a. Mr. Aris is an associate attorney for Lowenthal &
Abrams and represented Claimant in the third party and
under-insured motorist (UIM) claims arising out of the
March 10, 2006 motor vehicle accident.
b. Mr. Aris explained that the third party recovery against
Sharon Merriweather, the driver of the vehicle which
struck Claimant’s vehicle, settled for $15,000.00. These
represented the policy limits of Ms. Merriweather’s
automobile insurance. The matter settled in or about
December 2008.
c. On February 6, 2009, Lowenthal & Abrams forwarded
to SWIF a check for $9,494.70. A second check in the
amount of $1,663.22 was sent on March 25, 2010; as of
June 10, 2010, it had not been cashed.
d. Mr. Aris believed that SWIF’s lien, at the time, had
been satisfied in full. He did not ask SWIF to
compromise its lien. (Emphasis added.)
e. Mr. Aris had no conversations with Mr. Jordon
regarding any potential future payments or the waiver of
any future lien. (Emphasis added.)
f. Following the settlement of Claimant’s third party
claim, Mr. Aris instituted a civil action against United
States Fire Insurance Company for UIM benefits.
g. On March 23, 2010, Claimant and United States Fire
Insurance Company engaged in binding arbitration . . .
[t]he arbitrator determined the value of Claimant’s case
4
to be $110,000.00. As $15,000.00 had already been
tendered to Claimant through the third party settlement,
United States Fire Insurance Company was liable for
$95,500.00. (Emphasis added.)
5. Mr. Aris’ cost incurred in prosecution of Claimant’s
UIM claim was $7,056.34.
6. Mr. Aris’ contingent attorney fee for the prosecution of
Claimant’s UIM claim was 1/3 ($31,666.66), pursuant to
the representation of Claimant’s counsel at the January
11, 2011 hearing on this matter.
7. The schedule of distribution for the recovery of
Claimant’s third party claim included a $5,000.00
contingent attorney fee and $505.30 in litigation costs
and expenses.
WCJ Beck’s Decision, January 7, 2013, Findings of Fact (F.F.) Nos. 1-7 at 3-5;
Reproduced Record (R.R.) at 135a-37a.
WCJ Beck granted Respondents’ review petition and concluded:
2. Employer’s right to subrogation against Claimant’s
third party and UIM benefits is absolute and has not been
waived. (Emphasis added.)
3. Employer’s reimbursement rate on future
compensation liability is 40.2%.
4. Employer is responsible for 40.2% of any future
weekly benefits and medical benefits until it recovers
$91,809.78.
5. Following the recovery of $91,809.78, Employer shall
be responsible for 100% of any compensation liability.
(Emphasis added.)
6. Employer’s contest has been reasonable at all times.
5
WCJ Beck’s Decision, Conclusions of Law (C.L.) Nos. 2-6 at 6; R.R. at 138a.
The Board affirmed and concluded that “[a]lthough the UIM (Under
Insured Motorist) settlement occurred in March of 2013 and at that time, a decision
had not been rendered finding Defendant [Employer] liable for workers’
compensation benefits, Defendant [Employer] was still entitled to recover its lien.”
Board’s Opinion, October 9, 2014, at 4. “Therefore, because subrogation is
mandatory and the purpose of subrogation would not be served if we were to find
that Defendant [Employer] was not entitled to subrogation in these circumstances,
we see no error in the Judge granting Defendant’s [Employer’s] Review Offset
Petition.” Board’s Opinion, October 9, 2014, at 4-5.
II. Issues
A. Whether WCJ Beck Failed To Issue A Reasoned Decision?
Initially, Petitioner contends4 that WCJ Beck failed to render a
reasoned decision because his decision did not provide for meaningful appellate
review. Specifically, Petitioner asserts that WCJ Beck devoted only one sentence
that could be considered a legal analysis of the case. WCJ Beck did not address
the real issue. Petitioner asserts that WCJ Beck failed to provide adequate reasons
for what evidence he rejected and what evidence he accepted “in order to ensure
that a legally erroneous basis will not lie undiscovered and will allow meaningful
appellate review of possible legal error.” Brief for Petitioner at 22. Petitioner
contends that WCJ Beck failed to render credibility determinations and never
indicated what testimony he accepted and what testimony he rejected.
4
This Court’s review is limited to a determination of whether an error of law was
committed, whether necessary findings of fact are supported by substantial evidence, or whether
constitutional rights were violated. Vinglinsky v. Workmen’s Compensation Appeal Board
(Penn Installation), 589 A.2d 291 (Pa. Cmwlth. 1991).
6
Respondents counter that Petitioner waived the issue of whether WCJ
Beck issued a reasoned decision because he failed to raise this issue on appeal to
the Board.
In Wheeler v. Workers’ Compensation Appeal Board (Reading
Hospital and Medical Center), 829 A.2d 730, 734 (Pa. Cmwlth. 2003), this Court
addressed the criteria necessary to determine whether an issue was waived:
It is well established that an issue is waived unless it is
preserved at every stage of the proceeding. Nabisco
Brands, Inc. v. Workers’ Compensation Appeal Board
(Tropello), 763 A.2d 555 (Pa. Cmwlth. 2000). The strict
doctrine of waiver applies to a workers’ compensation
proceeding. Hinkle v. Workers’ Compensation Appeal
Board (General Electric Co.), 808 A.2d 1036 (Pa.
Cmwlth. 2002) . . . . The purpose of the waiver doctrine
is to ensure that the WCJ is presented with all cognizable
issues so that the ‘integrity, efficiency, and orderly
administration of the workmen’s compensation scheme
of redressed for work-related injury’ is preserved . . . .
(Citations omitted and emphasis added.)
Here, the record reveals that after WCJ Beck granted Respondents’
review petition, Petitioner appealed to the Board and alleged the following errors:
Conclusion of Law No. 2. Judge Beck committed a
reversible error of law when his Honor found that the
right of subrogation is absolute and can be abrogated
only by choice. Claimant satisfied the third-party lien
that was in existence at the time of the settlement of the
third-party case. There was no other existing lien at the
time that claimant’s third party case was settled . . . .
Judge Beck erred in finding that the issue is whether or
not State Workers’ Insurance Fund had waived its third-
party lien. Claimant never argued or asserted that State
Workers’ Insurance Fund had waived its third-party lien .
. . . Claimant never had any established entitlement to
7
any workers’ compensation benefits, until the Judge
granted the claim petition and awarded benefits. None of
that existed at the time that the third-party case was
settled. Defendants had no lien in addition to the lien
already satisfied in full when the third-party case was
settled. Therefore, Judge Beck committed a reversible
error of law. Judge Beck did not address the critical
issues in this case at all. (Emphasis added.)
Appeal from Judge’s Findings of Fact and Conclusions of Law, January 22, 2013,
at 1 and 3; R.R. at 130a and 132a.5
Clearly, Petitioner failed to raise the issue that WCJ Beck’s decision
was unreasonable before the Board. Pa. R.A.P. 1551(a) provides that “[r]eview of
quasijudicial orders shall be conducted by the court on the record made before the
government unit . . . [n]o question shall be heard or considered by the court which
was not raised before the government unit . . . .” (Emphasis added.) Therefore,
this issue is waived on appeal to this Court.
B. Whether The Board Erred As A Matter Of Law Because “Only A Lien On A
Third-Party Case That Actually Exists In Fact And Not In Theory Can Be
Satisfied?”6
5
Petitioner responded:
This allegation could not be further from the truth. Petitioner did
raise this issue with the . . . Board. Petitioner argued to the . . .
Board and to this Honorable Commonwealth Court . . . that [WCJ
Beck] issued an unreasoned decision because he failed to address
the genuine issue in this case. . . . This argument formed the core
of petitioner’s appeal to the . . . Board and the appeal to this . . .
Court . . . .
Reply Brief for Petitioner at 1-2. This Court must disagree. Petitioner’s allegation of error was
that WCJ Beck failed to address the genuine issue in the present matter, not that he failed to issue
a reasoned decision.
6
Brief for Petitioner, Statement of Questions Involved at 2.
8
Petitioner next contends that he did not contest the issue of whether
Respondents have a right to subrogation. Specifically, Petitioner contends that
when he received the third-party award, WCJ Barbieri did not rule on his claim
petition. Petitioner states that the existing subrogation lien of $11,157.92 was paid
in full at the time of the third party settlement. Petitioner concludes that SWIF
failed to establish legal entitlement to a future reimbursement of a lien which did
not exist at the time of the third-party settlement.
Respondents counter that this Court has previously recognized that
employers have an absolute right to immediate payment of a past-due lien from the
recovery fund after payment of attorneys’ fees and litigation expenses.
Respondents state that at no time did it either explicitly or impliedly waive its
future right to subrogation with respect to Petitioner’s still-pending workers’
compensation claim. Respondents pose that Petitioner could have choosen not to
pursue the workers’ compensation claim to its conclusion and just accepted the
third party settlement and arbitration award. As a result of the compensation
award by WCJ Barbieri, Respondents’ subrogation lien increased. Respondents
caution that to allow Petitioner to keep the entire third party settlement/award after
it paid a total of $134,736.42 in indemnity and medical benefits would result in a
double recovery.
Section 319 of the Act, 77 P.S. § 671, provides:
Where the compensable injury is caused in whole or in
part by the act or omission of a third party, the employer
shall be subrogated to the right of the employe . . .
against such third party to the extent of the compensation
payable under this article by the employer; reasonable
attorney’s fees and other proper disbursements incurred
in obtaining a recovery or in effecting a compromise
9
settlement shall be prorated between the employer and
employe . . . . The employer shall pay that portion of the
attorney’s fees and other proper disbursements that the
amount of compensation paid or payable at the time of
recovery or settlement bears to the total recovery or
settlement bears to the total recovery or settlement. Any
recovery against such third person in excess of the
compensation theretofore paid by the employer shall be
paid forthwith to the employe . . . and shall be treated as
an advance payment by the employer on account of any
future installments of compensation.
In Murphy v. Workers’ Compensation Appeal Board (City of
Philadelphia), 871 A.2d 312 (Pa. Cmwlth. 2005), this Court reiterated the
employer’s absolute right to subrogation:
The rationale underlying the right to subrogation is
threefold. First, it prevents double recovery for the same
injury by the claimant. Second, it prevents the employer
from having to make compensation payments which
resulted from the negligence of a third party. Finally, it
prevents a third party from escaping liability for his
negligence. (Emphasis added.)
Id. at 317.
This Court concurs with the Board’s analysis that Respondents were
entitled to subrogation:
In the instant case, the Judge found that despite the fact
that the claim had been originally denied, medical
benefits in the amount of $17,494.83 had been paid by
defendant [Respondents] as of November 21, 2008
(Finding of Fact No.3(c)). In December 2008, Claimant
settled a third-party claim against the driver involved in
his vehicular accident for $15,000.00 (Finding of Fact
No. 4(b)). On February 12, 2009, Defendant
[Respondents] received a check in the amount of
10
$9,494.70 from Claimant’s Counsel and on June 24,
2010, Defendant [Respondents] received a check in the
amount of $1,663.22 from Counsel (Finding of Fact No.
3(d) & (e)). It was believed that these checks were for
the reimbursement of Defendant’s [Respondents’]
medical lien at the time (Finding of Fact No. 4(f)). On
July 6, 2010, Judge Barbieri issued the Decision granting
the Claim Petition and Claimant began receiving benefits
pursuant to that Decision on August 10, 2010 (Findings
of Fact Nos. 1 & 3(h)). As of November 1, 2010,
Defendant [Respondents] had paid $97,151.55 in benefits
(Finding of Fact No. 3(i)). As of March 29, 2011,
Defendant [Respondents] had paid $134,736.42 in
indemnity and medical benefits (Finding of Fact No.
3(k)). While Claimant’s Claim Petition was pending, on
March 23, 2010, Claimant and United States Fire
Insurance Company engaged in binding arbitration and
pursuant to that determination, Claimant settled his UMI
[Under Insured Motorist] claim for $95,000.00 (Finding
of Fact No. 4(g)). (Emphasis added.)
The Judge determined that defendant [Respondents] did
not expressly or impliedly waive its right to subrogation
(Discussion). As a result, he found that Defendant
[Respondents] was entitled to a recovery of $91,809.78
and it was responsible for 40.2% of any future weekly
benefits and medical expenses until it recovers
$91,809.78. We observe no error in this conclusion.
(Emphasis added.)
Although the UMI settlement occurred in March of 2013
and at that time, a decision had not been rendered finding
Defendant [Respondents] liable for workers’
compensation benefits, Defendant [Respondents] was
still entitled to recover its lien. Defendant did
subsequently make payment to claimant for workers’
compensation benefits. Pursuant to Section 319 of the
Act, the right to subrogation is ‘absolute’ and just
because Claimant settled his UMI claim prior to his
workers’ compensation claim, does not render
11
Defendant’s right to subrogation invalid. Subrogation
prevents double recovery for the same injury and relieves
the employer of liability occasioned by the negligence of
a third party. Since Defendant [Respondents] was
eventually found liable for workers’ compensation
benefits and did make payment for those benefits,
disallowing subrogation in these circumstances where a
lien had not been asserted because the party had not yet
been found liable at the time of the settlement would be
in direct contradiction to the mandatory language
contained in Section 319. . . . (Emphasis added.)
Board’s Opinion at 3-5.
Accordingly, this Court affirms the WCJ’s grant of Respondents’
review offset petition.
____________________________
BERNARD L. McGINLEY, Judge
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lallie Robinson, :
Petitioner :
:
v. :
:
Workers' Compensation Appeal :
Board (Service Plus Delivery :
Systems, Inc. and State Workers' :
Insurance Fund), : No. 2013 C.D. 2014
Respondents :
ORDER
AND NOW, this 8th day of January, 2016, the order of the Workers’
Compensation Appeal Board in the above-captioned matter is affirmed.
____________________________
BERNARD L. McGINLEY, Judge