S. Guida, (Deceased) by D. Guida as Personal Rep. v. ARO Properties d/b/a Tiger Properties (WCAB)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Salvatore Guida, (Deceased) by Denise :
Guida, as Personal Representative, :
:
Petitioner :
:
v. : No. 233 C.D. 2021
: Submitted: November 18, 2021
ARO Properties d/b/a Tiger Properties :
(Workers’ Compensation Appeal :
Board), :
:
Respondent :
BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: December 30, 2021
Salvatore Guida (Claimant), deceased,1 through his personal
representative and widow, Denise Guida, petitions for review of the order of the
Workers’ Compensation Appeal Board (Board) that affirmed a Workers’
Compensation Judge’s (WCJ) decision denying Claimant’s first Penalty Petition
(Penalty Petition #1) upon determining that the late payment was a de minimis
violation of the Workers’ Compensation Act (Act).2 Claimant contends that the WCJ
1
Claimant passed away on April 28, 2009.
2
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1 - 1041.4, 2501-2710.
erred and abused his discretion by denying Claimant’s Penalty Petition #1.
Discerning no error or abuse of discretion, we affirm.
I. Background
This case has a protracted and complex history with multiple petitions
filed by both parties, including six penalty petitions filed by Claimant, numerous
appeals taken, and several remands concerning various petitions. This redacted
history pertains to Penalty Petition #1.
On February 15, 2005, Claimant filed a Claim Petition against ARO
Property d/b/a Tiger Properties (Employer) seeking wage loss and medical benefits
for work injuries he sustained to his right knee and low back in January and February
2005. By decision dated August 17, 2006, WCJ John Liebau (WCJ Liebau) granted
the Claim Petition as of February 15, 2005, and ongoing, and awarded litigation
costs.
Employer timely appealed the WCJ’s decision to the Board and
requested supersedeas. The Board denied Employer’s supersedeas request by order
dated September 25, 2006. On October 25, 2006, Employer sent payment in the
amount of $47,632.91 to Claimant and his attorney. The Board later vacated the
WCJ’s decision granting the Claim Petition and remanded for further findings.
On October 26, 2006, Claimant filed Penalty Petition #1 alleging that
Employer violated the Act by refusing to pay Claimant’s benefits and attorneys’ fees
following the September 25, 2006 order denying supersedeas. Claimant later
maintained that payment was not received until October 31, 2006.
WCJ Joseph Stokes (WCJ Stokes) considered the remanded Claim
Petition and Penalty Petition #1 together. By decision dated February 22, 2013, WCJ
Stokes granted the Claim Petition on remand, finding that Claimant was entitled to
2
benefits at the weekly rate of $432.90 from February 6, 2005, through his date of
death on April 28, 2009, and an additional 10% interest on the delayed compensation
benefits. As for Penalty Petition #1, WCJ Stokes found that, on October 25, 2006,
Employer paid $33,565.36 to Claimant and $14,067.55 to Claimant’s counsel
(combined, $47,632.91). The WCJ granted Penalty Petition #1 but determined that
Employer already made full payment “including the 50% penalty on those Penalty
Petitions.” WCJ Op., 2/22/13, at 10; Certified Record (C.R.) at 238.3
On appeal, by decision dated January 6, 2015, the Board affirmed the
grant of the remanded Claim Petition but vacated the decision as to Penalty Petition
#1 with instructions for the WCJ to make new findings of fact and conclusions of
law necessary for adequate appellate review.
On remand, by decision dated November 24, 2015, WCJ Stokes found
that Penalty Petition #1 was granted but that Employer provided evidence of full
payment. The WCJ found: “The evidence presented by [Employer] has shown that
checks were issued in the amount of $33,565.36 paying Claimant from February 15,
2005, to October 31, 2006; $14,067.5[5] paid to [Claimant’s counsel] from February
15, 2005, to October 31, 2006, for attorney fees.” WCJ Op., 11/24/15, Finding of
Fact (F.F.) No. 16; C.R. at 323; see C.R. at 509. Claimant appealed.
By decision dated August 12, 2016, the Board affirmed. Claimant
appealed to this Court arguing that Employer’s payments were for compensation and
statutory interest only and did not include a 50% penalty. We vacated and remanded
for new findings of fact and conclusions of law with respect to Penalty Petition #1.
Guida by Guida v. Workers’ Compensation Appeal Board (ARO Properties)
(Pa. Cmwlth., No. 1498 C.D. 2016, filed April 19, 2017). We directed the WCJ to
3
Because the Certified Record was filed electronically and was not paginated, the page
numbers referenced in this opinion reflect electronic pagination.
3
make findings as to the timeframe involved, the amount of indemnity owed, the
amount of interest owed, the amount of penalty owed, and the calculations used that
would support the WCJ’s conclusion that Employer paid the penalty owed. Id.
On remand, by decision dated January 29, 2018, WCJ Stokes denied
Penalty Petition #1. The decision was based on Employer’s evidence that it paid
$33,565.36 to Claimant and $14,067.55 to Claimant’s attorney on October 25, 2006,
for a total of $47,632.91, covering the period of February 15, 2005, through October
31, 2006. The WCJ found that Claimant was entitled to $432.90 per week in
disability benefits for that time period plus 10% statutory interest for a total of
$42,380.10. The WCJ further found that Employer’s exhibit showed that 100% of
what was owed to Claimant was paid to Claimant, including statutory interest, by
October 25, 2006, which was within 30 days of the Board’s decision denying
supersedeas. The WCJ also found that excess payments were made after Penalty
Petition #1 was filed amounting to $177,977.90 over the course of time, when
Claimant was only entitled to $94,805.00 in indemnity benefits. Therefore, the WCJ
found that Employer made excess payments to Claimant, which more than covered
a 50% penalty award. Concluding that Employer ultimately paid all indemnity
benefits with interest and “penalty owed,” the WCJ denied Penalty Petition #1. WCJ
Op., 1/29/18, Conclusions of Law No. 2; C.R. at 509.
From this decision, Claimant appealed asserting numerous errors. By
decision dated November 13, 2019, the Board vacated and remanded yet again. The
Board found that the WCJ improperly considered ancillary information in deciding
whether to award a penalty and miscalculated statutory interest by using a flat 10%
instead of 10% per annum. The Board also found that, although the WCJ has, at
times, referenced a 50% penalty and penalty owed, the WCJ had never made a
4
determination as to the amount of the penalty. The Board further found that there
was never a specific finding that Employer engaged in an unreasonable or excessive
delay, which is necessary to justify the maximum 50% penalty. The Board noted
that even if a violation of the Act is found, the WCJ does not have to award a penalty
and has discretion as to what amount to award, if anything. The Board instructed
the WCJ not to consider any extraneous factors in reaching his decision, noting that
“Penalty Petition #1 concerns only a finite period of time, namely from the original
grant of the Claim Petition by WCJ Liebau on August 17, 2006, until [Employer]
issued checks to Claimant and his counsel on October 25, 2006.” Board Op.,
1/13/19, at 8; C.R. at 406. The only relevant payments are those associated within
that period of time and any subsequent payment that can be shown to be for a penalty
relating to that period of time. The Board instructed that the WCJ must decide
whether a penalty is warranted, and if so, how much. The Board directed that there
must be findings regarding unreasonable and excessive delay before a 50% penalty
can be justified. The Board also advised that the WCJ may consider extenuating
circumstances pertinent to the violation of the Act as alleged in Penalty Petition #1,
but not extraneous factors, such as any perceived overpayment over the long run.
On remand, by decision dated June 3, 2020, WCJ Stokes denied Penalty
Petition #1. WCJ Stokes reiterated that WCJ Liebau granted Claimant’s Claim
Petition on August 17, 2006, Employer timely appealed and requested supersedeas,
which the Board denied on September 25, 2006. The WCJ found that, according to
Claimant’s calculation, the total compensation due on October 31, 2006, including
interest was $44,475.80. The WCJ found that, on October 25, 2006, before Penalty
Petition #1 was filed, assigned, or decided, Employer made a payment of $47,632.91
to Claimant and his attorney. The WCJ found that, although Employer violated the
5
Act through a delayed payment of compensation, Employer’s delay in paying
Claimant 30 days after the denial of supersedeas was de minimis, i.e., Claimant was
not caused undue harm by the delay.
Claimant appealed to the Board, arguing that the WCJ did not follow
the remand directives; the late payment was over 30 days after the supersedeas order;
and the delay was not de minimis. Claimant requested a 50% penalty and
unreasonable contest fees. The Board affirmed. The Board determined that the WCJ
complied with the remand directives and did not commit an error of law. The Board
further determined that it was within the WCJ’s discretion not to assess a penalty
and that the WCJ did not abuse his discretion. Claimant now petitions this Court for
review.4
II. Issue
Claimant argues that the WCJ erred and abused his discretion by
finding that Employer’s late payment was a de minimis violation of the Act and by
denying Claimant’s Penalty Petition #1.
III. Discussion
Claimant contends that the WCJ’s determination that Employer’s
actions in failing to promptly pay benefits were de minimis was erroneous and an
abuse of discretion. First, Claimant argues that the WCJ did not follow the directives
4
Our review is limited to determining whether an error of law was committed, whether
necessary findings of fact were supported by substantial evidence, and whether constitutional
rights were violated. Department of Transportation v. Workers’ Compensation Appeal Board
(Clippinger), 38 A.3d 1037, 1042 n.3 (Pa. Cmwlth. 2011). Substantial evidence is such relevant
evidence that a reasonable mind might find adequate to support a conclusion based on the findings
of fact. City of Philadelphia v. Workers’ Compensation Appeal Board (Kriebel), 29 A.3d 762, 769
(Pa. 2011).
6
on remand by considering other factors, which were not relevant for determining the
amount of interest due. Second, the record demonstrates that the payment was made
36 days after the denial of supersedeas, which is over 60 days from the date of the
WCJ’s order awarding benefits. Not only was the payment late, Employer’s
calculation of payment was incorrect regarding the benefit amount and statutory
interest. Third, Employer’s failure to commence payments within 30 days of the
date on which the obligation to pay arose, August 17, 2006, constituted a violation
of Section 428 of the Act.5 The Act specifically requires prompt payment of
compensation. An employer that fails to pay benefits in accordance with the order
of the WCJ without supersedeas relief is in violation of the Act and is subject to
penalties. The WCJ’s conclusion that Employer’s delay in complying with the Act
was de minimis and had little effect on Claimant is specious. When viewed in light
of Claimant’s inability to collect benefits for 84 weeks, Employer’s delay in timely
paying Claimant following the award is egregious and a conscious disregard for
Claimant’s rights. While the WCJ may not find an unreasonable or excessive delay
warranting a 50% penalty, the WCJ abused his discretion by excusing Employer’s
violation of the Act by not imposing any penalty. The Board compounded this error
by declining to impose a penalty under its own powers.
Section 413(a.2) of the Act, 77 P.S. §774, imposes on the employer the
responsibility to request a supersedeas during the appeal process or to make
compensation payments. Varghese v. Workers’ Compensation Appeal Board (Ridge
Crest Nursing Home), 899 A.2d 1176, 1179 (Pa. Cmwlth. 2006). Section 430(b) of
the Act, 77 P.S. §971(b), provides that an insurer or employer that refuses to make
any payment provided for in the decision without filing a supersedeas petition and
5
Added by the Act of June 26, 1919, P.L. 642, as amended, 77 P.S. §921.
7
being granted a supersedeas is subject to a penalty. “Penalties should be tied to some
discernible and avoidable wrongful conduct.” Snizaski v. Workers’ Compensation
Appeal Board (Rox Coal Company), 891 A.2d 1267, 1278 (Pa. 2006).
An employer that fails to pay a compensation award during the
pendency of a timely filed supersedeas petition authorized under the Board’s
regulations may not be subject to a penalty assessment. However, this is not a “safe
harbor”; if supersedeas is denied, the employer risks the imposition of penalties for
failure to timely pay. Varghese, 899 A.2d at 1179. As we explained: “Not to place
employers at risk of penalties would make it commonplace for employers to file
supersedeas requests with no chance of success just to delay payment and earn
interest on benefits due and owing to claimants.” Id. at 1180. Section 435(d)(i) of
the Act6 provides that the WCJ may impose a penalty of up to 10% of the amount
awarded, which may be increased to 50% in cases of unreasonable or excessive
delay.
A claimant who files a penalty petition must meet his initial burden of
proving a violation of the Act or attendant regulations. Department of
Transportation v. Workers’ Compensation Appeal Board (Clippinger), 38 A.3d
1037, 1047 (Pa. Cmwlth. 2011). The burden then shifts to the employer to prove the
violation did not occur. Id. However, even if a violation of the Act is found, it does
not, by itself, mandate the imposition of penalties. Shaffer v. Workmen’s
Compensation Appeal Board (Avon Products, Inc.), 692 A.2d 1163, 1167 (Pa.
Cmwlth. 1997). The decision to impose penalties as well as the amount of penalties
is within the discretion of the WCJ. Brutico v. Workers’ Compensation Appeal
Board (US Airways, Inc.), 866 A.2d 1152, 1156 (Pa. Cmwlth. 2004). When
6
Added by the Act of February 8, 1972, P.L. 8, as amended, 77 P.S. §991(d)(i).
8
determining whether to assess a penalty, the WCJ may consider extenuating
circumstances pertinent to that particular violation of the Act, but not factors
extraneous to the violation. Lakomy v. Workers’ Compensation Appeal Board
(Department of Environmental Resources and Pimco), 720 A.2d 492, 495-96 (Pa.
Cmwlth. 1998). The WCJ is the ultimate factfinder and has complete authority for
making all credibility and evidentiary weight determinations. Sherrod v. Workmen’s
Compensation Appeal Board (Thoroughgood, Inc.), 666 A.2d 383, 385
(Pa. Cmwlth. 1995).
Relying on Varghese, Claimant contends that a penalty should have
been awarded. In Varghese, we held that where a supersedeas is denied, penalties
may be imposed for failure to make payment within 30 days of the Board’s order
denying supersedeas. There, the employer waited to pay until 28 days after this
Court’s order denying supersedeas, which was 65 days after the Board’s order
denying supersedeas. The claimant sought penalties for the delay. The Board
incorrectly determined that penalties could not be awarded for the period of time
when the supersedeas request was pending both before the Board and this Court,
even though both requests were denied. An employer that fails to pay a
compensation award during the pendency of a timely filed supersedeas petition and
is denied supersedeas is at risk for the imposition of penalties for failure to timely
pay. Varghese, 899 A.2d at 1179. Based on this legal error, we reversed and
remanded the matter to the WCJ “to determine whether an award of penalties [was]
appropriate because [the] [e]mployer did not pay benefits within 30 days of the
Board’s denial of supersedeas.” Varghese, 899 A.2d at 1181 (emphasis added).
Nevertheless, we recognized that the imposition of a penalty is at the discretion of
the WCJ and is not required, even if a violation of the Act is found. Id.
9Claimant also relies on Thomas v. Workers’ Compensation Appeal
Board (Delaware County), 746 A.2d 1202 (Pa. Cmwlth. 2000), for support that a
penalty is warranted. In Thomas, substantial evidence showed “a pattern of [the]
[e]mployer’s flouting its clear obligations under the Act.” Id. at 1205. The employer
committed “persistent and substantial violations of the Act,” including failing to pay
all benefits due until 14 months after being ordered to do so. Id. at 1206. Despite
“numerous violations of the Act with no arguably valid rationale,” the WCJ denied
the claimant’s penalty petition. Id. Under the circumstances, we determined that
the WCJ abused his discretion by failing to award a penalty. Thus, we remanded the
matter to determine proper penalties and unreasonable contest attorney’s fees. Id.Both cases are distinguishable and do not compel the award of penalties
in this case. In Varghese, the employer did not pay benefits within 30 days of the
Board’s denial of supersedeas. In Thomas, the employer refused to pay benefits for
over 14 months and committed other persistent and substantial violations of the Act.
Here, the WCJ found that Employer issued payment to Claimant and
his attorney on October 25, 2006, which is within 30 days from the Board’s
supersedeas denial. Although Claimant disputes the October 25, 2006 date, claiming
he did not receive payment until October 31, 2006, the WCJ found that 100% of
what was owed to Claimant was paid to Claimant, including statutory interest, by
October 25, 2006, based on Employer’s evidence. WCJ Op., 6/3/20, F.F. Nos. 9,
10, 12; see C.R. at 509 (Employer’s Exhibit D-7). Determinations as to evidentiary
weight and credibility are within the exclusive province of the WCJ and are not
subject to appellate review. Sherrod, 666 A.2d at 385.
Furthermore, the Board’s remand instructions were clear that the WCJ
was not to consider extraneous factors but only those factors relating to Employer’s
10
first payment and Penalty Petition #1. The Board noted that “Penalty Petition #1
concerns only a finite period of time, namely from the original grant of the Claim
Petition by WCJ Liebau on August 17, 2006, until [Employer] issued checks to
Claimant and his counsel on October 25, 2006.” Board Op., 1/13/19, at 8; C.R. at
406. Claimant’s argument that he went without benefits for 84 weeks is spurious
because he was not awarded benefits until August 17, 2006. The relevant period
begins from the date that liability was imposed, not from the date of the injury. As
for Claimant’s argument regarding incorrect interest, Penalty Petition #1 was based
on Employer’s refusal to make payment, not that the payment was incorrect. C.R.
at 65; see Board Op., 11/13/19, at 7 (“Claimant makes no allegation that he did not
eventually receive all benefits and interest that he was entitled to receive. Instead,
Claimant requests a remand for the WCJ ‘to properly calculate the appropriate
penalty due under the Act.’ (Claimant’s brief, p. 3).”); C.R. at 405. The remand was
to determine whether a penalty is warranted, and if so, how much. Board Op.,
11/13/19, at 9; C.R. at 407.
Upon review, the WCJ reconsidered the evidence as it relates to Penalty
Petition #1 by focusing solely on the events and timeline pertaining to Penalty
Petition #1 to determine whether a penalty was warranted. Although the WCJ found
a violation of the Act based on Employer’s delayed payment, because Employer
issued checks within 30 days of the Board’s supersedeas order, the WCJ determined
that Employer’s delay was de minimis and did not warrant a penalty. Considering
the timeline of events, and the WCJ’s discretion concerning imposition of penalties,
we cannot say, as a matter of law, that the WCJ erred or abused his discretion by
denying Penalty Petition #1. The same holds true for the Board.
11
IV. Conclusion
Accordingly, we affirm the order of the Board.
MICHAEL H. WOJCIK, Judge
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Salvatore Guida, (Deceased) by Denise :
Guida, as Personal Representative, :
:
Petitioner :
:
v. : No. 233 C.D. 2021
:
ARO Properties d/b/a Tiger Properties :
(Workers’ Compensation Appeal :
Board), :
:
Respondent :
ORDER
AND NOW, this 30th day of December, 2021, the order of the Workers’
Compensation Appeal Board, dated February 10, 2021, is AFFIRMED.
__________________________________
MICHAEL H. WOJCIK, Judge