DocketNumber: Appeal, No. 2134 C.D. 1983
Citation Numbers: 97 Pa. Commw. 520, 510 A.2d 373
Judges: Barbieri, Doyle, MacPhail
Filed Date: 5/30/1986
Status: Precedential
Modified Date: 6/24/2022
Opinion by
Before this Court is the Department of Labor and Industry of the Commonwealth of Pennsylvania in its capacity as custodian of the Workmen’s Compensation Supersedeas Fund (Fund) under Section 443 of The Pennsylvania Workmen’s Compensation Act, (Act),
Claimant recovered from injury of October 20, 1975 to the extent that by May 2, 1978 he was able to return to employment that has been determined to be available, and therefore defendant seeks suspension of compensation benefits désignating instant petition as request for supersedeas.
Claimant filed answer under date of October 30, 1978, denying the Insurers allegations as follows:
Claimant has not recovered from his injury of October 20, 1975 to the extent that he has been unable to return to any available employment.
In hearings held on Insurers petition and the Claimants answer thereto, it was established that Claimant had suffered a disc herniation, demonstrated by myelogram, as “almost complete block at the L5-6 area.”
Supersedeas requested in the petition of October 18, 1978 was. denied and at a referees hearing on April 23,. 1979 a renewed request for supersedeas was made,
The instant controversy arose out of the circumstances that Claimant, having settled with a third party tortfeasor for $83,000.00, made an additional settlement with Insurer of its claim for $36,765.00, representing compensation benefits paid by it to Claimant, whereby Insurer agreed to accept out of the third party recovery only the sum of $7,500.00, but obtained an agreement from Claimant in the form of a stipulation, dated February 28, 1980, which contained the following:
3. It is now agreed between the parties that as of May 2, 1978, the Claimant was physically capable of returning to existing and available employment at wages equal to or in excess of his average weekly wage on the date of injury.
As previously noted, of course, this stipulation of facts is not supported by the record. Nevertheless, pursuant to the stipulation, the referee adopted certain of the assertions therein as his own Findings of Facts, concluding that “Claimant was able to return to existing and available employment effective May 2, 1978. . .,” and granting Defendants Petition for Suspension as of that date.
When the instant Petition for Reimbursement From the Supersedeas Fund came before the referee, in decision dated October 16, 1980, he made the following “Finding of Fact:” “Claimant received a Third Party Settlement in regards to the work-related injury and De
The Applicant in this matter waived its Right to any Subrogation of Claimants Third Party Action; accordingly, Applicant shall not now seek reimbursement for monies paid to the Claimant from the Commonwealth, when in feet Applicant should have received any over-payment from Claimants Third Party Settlement. Applicants request shall be denied.
The referees denial of reimbursement was appealed to the Board which remanded on the basis that the “Finding” above-quoted was insufficient for the Boards review, whereupon the referee filed more extensive findings including the following:
2. Thereafter, on February 28, 1980, a Stipulation of Fact agreed upon by respective counsel and with the express consent and approval of the Claimant was submitted to this Referee. In accordance with this Stipulation of Fact the Referee incorporated same into his decision and order dated April 28, 1980, granting Defendants Petition for Suspension as of May 2, 1978.
3. During the course of the Workmens Compensation litigation, Claimant had initiated a Third Party Action and said action was concluded by way of a settlement between the parties in that litigation. The Defendant/Employer Insurance Carrier waived its rights to any Subrogation Lien it may have had against Claimants Third Party Settlement.
4. Defendant now seeks to recover those sums of money from the Commonwealth as conservator of the Supersedeas Reimbursement Fund.
The Applicant/Insurer in this matter waived its Right to any Subrogation Lien of Claimants Third Party Settlement; Applicant now seeks reimbursement of said monies paid to the Claimant from the Commonwealth of Pennsylvania in their roll [sic] as conservator of the Workmens Compensation Supersedeas Fund. Applicants waiver of their Right to Subrogation of said Third Party Action Settlement, acts as an estoppel to any claim against the Commonwealth of Pennsylvania, since said Subrogation was the Applicants primary remedy.
On appeal by Insurer, the Board reversed, stating:
There is no precedent for the Referees finding that reimbursement for excess compensation could be recovered through a compensation lien. Therefore, the Referee made an error of law in concluding that acceptance of a compensation lien waives the right to recover from the supersedeas fund for reimbursement of excess compensation.
On this appeal to us, the Fund contends that the Board erred in its order and that the Insurer does not have the right to reimbursement from the Supersedeas Fund compensation that was subject to the Insurers right to subrogation under Section 319
While there is some apparent merit in each of the four arguments by the Fund against the claimed reimbursement,
(a) If, in any case in which a supersedeas has been requested and denied under the provisions of section 413 or section 430, payments of compensation are made as a result thereof and upon the final outcome of the proceedings, it is determined that such compensation was not, in feet, payable, the insurer who has made such payments shall be reimbursed therefor. (Emphasis added.)
Very simply, as we read this provision, the requirement that it be “determined that [the] compensation was not, in fact, payable” does not authorize invasion of the Fund by agreement of the parties, excluding the Fund, much less would it authorize the transfer, as here, of the Insurers subrogation claim against the third party tortfeasor to one against the Fund. We are supported in this view, we think, by the clear imposition of responsibility upon the Department of the Funds management and conservation with thé provision
Accordingly, we hold that there was no determination as required to validate a claim against the Fund, but only an agreement on which to base the claim; that the Department was not a party to the agreement or on notice, either directly or by compliance with its regulations, 34 Pa. Code §121.18; and, in any event, whether the Insurer by the settlement agreement to which the Fund was not a party “waived” any claim against the Fund, as the referee ruled, or simply accepted $7,500.00 in satisfaction of its claim for $36,765.00 which latter sum included the $10,308.91 claimed from the Fund, see Meehan v. Philadelphia, 184 Pa. Superior Ct. 659, 136 A.2d 178 (1957), no valid claim was presented under Section 443(a) of the Act. Accordingly, we will reverse the Boards order and reinstate the referees denial of reimbursement.
Order
Now, May 30, 1986, the order of the Workmens Compensation Appeal Board, as of No. A-82424, dated July 14, 1983, is reversed and the referees order, dated September 24, 1981, is reinstated.
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §999.
Claimant has six lumbar vertebrae.
While we have not been furnished with a complete record of hearings on Insurers suspension petition, reports from William J. Cassidy, M.D., apparently Claimants physician, and Martin L. Beller, M.D., Insurers witness, indicate that Claimants back injury continues to be disabling.
It thus appears that the supersedeas requests were properly denied, since the record would apparently not support the suspension sought in the petition.
77 P.S. §671.
Settlement with the claimant out of the fund paid by the third party tortfeasor for less than the amount available to satisfy the employers subrogation claim is a satsfhction of all existing and future subrogation claims of the employer. Meehan v. Philadelphia, 184 Pa. Superior Ct. 659, 136 A.2d 178 (1957). In Meehan, the City’s claim was $4,741.54 for disability and medical bills at the time of the settlement with the third party, at which time there was pending a compensation proceeding in which claimant sought and later was awarded compensation for total disability. Claimant’s share of the third party settlement was $2,500 and the City agreed to accept $500. Claimant’s counsel was paid $625, leaving to claimant a net of $1,875. When judgment for the total disability compensation was later entered against the City for $10,667.86, the City claimed credit for the $1,875 received by claimant in the third party settlement. The credit was denied, the Court stating: “The City in compromising its claim in the trespass action, gave up any additional subrogation rights in return for the amount paid.”
Also, we note, as the Fund contends, that there is no indication of compliance by the Insurer with the subrogation requirements in the Department’s regulation at 34 Pa. Code §121.18.
77 P.S. §731.
In this Courts en banc decision in Westmoreland Cas. Co. v. Workmen's Compensation Appeal Board, 32 Pa. Commonwealth Ct. 492, 379 A.2d 1080 (1977), where the period of payments to be reimbursed was fixed in a case involving a termination petition,' we stated:
The Insurer, preliminary to its argument on the merits, contends that the Commonwealths appeal is not properly before us since its appeal to the Board was untimely. It argues that, if the Commonwealth disagreed with that portion of the April 4, 1975 decision of Referee Kovach ordering reimbursement back to December 19, 1973, it should have filed an appeal to the Board within 20 days, and that its failure to do so rendered the referees decision final. The Commonwealth responds that the Department of Labor and Industry, as administrator and conservator of the Supersedeas Fund, was never a party to the termination proceedings before Referee Kovach and was not joined by Insurer for purposes of deciding the reimbursement issue, which, the Commonwealth implies, the referee should not have decided. Thus, since it was never made a party in interest to the termination proceedings and since it was never served with notice of the decision, the Commonwealth contends that it is not bound by the determination or by the appeal time limit. We agree. (Emphasis added.)
32 Pa. Commonwealth Ct. at 497-498, 379 A. 2d at 1083.
While in Westmoreland, unlike this case, the reimbursement issue was also decided without Fund participation, there would be
We note that there is no finding that the compensation on which the claim here is based was “not, in feet, payable.”