A. Griffis v. WCAB (Albert Einstein Healthcare Network)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Anna Griffis, :
Petitioner :
:
v. : No. 272 C.D. 2019
: Argued: June 9, 2020
Workers’ Compensation Appeal :
Board (Albert Einstein Healthcare :
Network), :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ELLEN CEISLER, Judge (P.)
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER FILED: July 15, 2020
Before this Court is the petition for review filed by Anna Griffis (Claimant),
in which she challenges the Workers’ Compensation (WC) Appeal Board’s (Board)
February 13, 2019 Order. In that Order, the Board affirmed a Workers’
Compensation Judge’s (WCJ) August 15, 2017 Decision (2017 WCJ Decision):
(1) granting the Modification Petition filed by Albert Einstein Medical Center
(Medical Center),1 thereby allowing Medical Center to subrogate Claimant’s third-
party civil recovery in her medical malpractice action; (2) denying Claimant’s
1
Medical Center is a corporate subsidiary of the Albert Einstein Healthcare Network. As
discussed infra, there is a dispute as to which of these entities is Claimant’s employer. However,
we refer to Medical Center here and throughout the opinion because it was the entity that filed the
Modification Petition and was found by the WCJ to be Claimant’s employer.
Review Petition, which sought to expand Claimant’s accepted work injuries to
include C4-5 and C5-6 disc hernias; and (3) denying litigation costs on the basis that
Claimant had not prevailed on any of the contested issues. On appeal, Claimant
asserts the Board erred by allowing Medical Center to subrogate her third-party
recovery because there was no “third party” involved in that action, Medical Center
waived its right to subrogation, and the medical malpractice, if it occurred, did not
worsen Claimant’s condition. The Board further erred, Claimant asserts, in denying
her Review Petition because the medical testimony upon which the WCJ and the
Board relied to find the additional injuries were not work related was not competent.
Finally, Claimant maintains the Board erred in not directing an award of litigation
costs because the WCJ did expand Claimant’s work-related injuries to include
psychological injuries.
I. Background
A. Factual History
1. Claimant’s “Employer”
There is a dispute as to which entity employed Claimant at the time of her
work injury. Claimant asserts that Albert Einstein Healthcare Network (Healthcare
Network) was her employer, and she identified that name on the Petition for Review
and the other documents she has filed with this Court. Claimant also offered the
June 14, 2013 Decision by the WCJ (2013 WCJ Decision) that resolved multiple
review petitions filed by Claimant and a modification petition filed by “[t]he
defendant,” listed there as Healthcare Network, by a stipulation of the parties.
(Reproduced Record (R.R.) at 13a, 16a.) The introductory paragraph of the
stipulation of facts related to the 2013 WCJ Decision (2013 Stipulation) identified
Healthcare Network as Claimant’s employer. (Id. at 17a.) However, the Notice of
2
Temporary Compensation Payable (NTCP), which converted to a Notice of
Compensation Payable (NCP) by operation of law, lists Claimant’s employer as
“Long Term Structured Residence – AEHN.” (Id. at 317a.) Medical Center
presented the deposition testimony of its Human Relations Director (HR Director),
reflecting that Healthcare Network is merely an umbrella entity that consists of
various corporate subsidiaries, including Medical Center and the Einstein Practice
Plan, Inc. (EPPI), which do not control each other. (HR Director’s Dep. at 8-9, R.R.
at 551a-52a.) HR Director testified that Medical Center is Claimant’s employer
because Belmont Center for Comprehensive Treatment (Belmont), where Claimant
worked at the time of her injury, fell within Medical Center’s corporate structure.
(Id. at 9, R.R. at 552a.) A subsequent decision issued by WCJ Michael Rosen on
November 11, 2014, identified Medical Center as Claimant’s employer. (R.R. at
410a.) In the current litigation, the documents, other than those filed by Claimant
with this Court, identify Claimant’s employer as Medical Center. The WCJ credited
HR Director’s testimony over Claimant’s conflicting evidence and found that
Claimant was employed by Medical Center. (2017 WCJ Decision, Finding of Fact
(FOF) ¶ 17.)
2. Claimant’s Injury
Claimant worked as a Registered Nurse at Belmont until the evening of April
28, 2009, when she fell down a flight of stairs and struck the back of her neck on a
handrail. (Id. ¶¶ 1-2.) Immediately following the incident, she experienced head
and neck pain and numbness and tingling in her right arm. Claimant sought
immediate treatment at an emergency room located across the street from Belmont.
Claimant was transferred to Medical Center’s Emergency Room that evening, where
she underwent x-rays and a CT scan at the direction of Kenneth Lavelle, M.D. and
3
Jay Strain, M.D. After reviewing Claimant’s diagnostic tests, Dr. Lavelle and Dr.
Strain discharged Claimant on the morning of April 29, 2009, with the diagnosis of
a neck strain. Following her discharge, Claimant continued to experience worsening
symptoms, including tingling and numbness in her right foot and weakness in her
right hand. Claimant reported to Medical Center’s Occupational Health facility on
April 30, 2009, which transferred her to Medical Center’s Emergency Room. While
Claimant was obtaining an emergency MRI scan, she experienced a total inability to
move her legs and loss of feeling in her lower body. Upon review of the MRI film,
it was discovered that Claimant had an acute C6-7 disc hernia and hematoma that
were compressing her spinal cord resulting in a complete spinal cord injury.
Claimant underwent emergency decompression surgery that same day. Although
Claimant regained the use of her lower extremities, she continues to suffer from
significant neurological dysfunctions. She has not returned to any work since April
28, 2009.
An NTCP was issued on May 11, 2009, recognizing Claimant’s work-related
injury as being in the nature of “cervical strain” and totally disabling. (Id. ¶ 3.) The
NTCP subsequently converted to an NCP by operation of law. In June 2013,
Claimant’s work-related injury was expanded, by stipulation of the parties, to
include “status post anterior cervical discectomy at C6-7 with evacuation of an
epidural hematoma at C6-7 and anterior antibody arthrodesis and application of an
anterior plate at C6-7, right C5-6 and C6-7 radiculopathy, right foot drop, and
neurogenic bladder.” (Id. ¶ 4 (internal quotation marks omitted).) Claimant received
ongoing indemnity benefits and medical treatment for these accepted injuries.
4
3. Claimant’s Third-Party Civil Action and Settlement
On May 24, 2010, Claimant and her husband (Husband) initiated a civil
lawsuit against, among others, Dr. Lavelle, Dr. Strain, Healthcare Network, Medical
Center, and EPPI, alleging that Dr. Lavelle and Dr. Strain were negligent because
they failed to properly diagnose her cervical spinal cord compression and failed to
obtain an MRI. (Id. ¶ 5.) As a result of their negligence, Claimant averred she
incurred additional medical expenses and could no longer perform her occupation.
(Id.) Husband filed a claim asserting a loss of consortium. Claimant averred that,
due to the neurologic symptoms she was experiencing on April 29, 2009, Dr. Lavelle
and Dr. Strain should have ordered an MRI scan, as that is the best method of
determining whether a spinal cord injury is present. She further alleged that the
doctors’ reliance on the CT scan and x-ray results fell below the standard of care for
a patient experiencing progressively worsening neurologic symptoms. The parties
entered into a high-low arbitration agreement (Arbitration Agreement), which
identified Claimant and Husband as the plaintiffs and Dr. Lavelle and Dr. Strain as
the defendants. (R.R. at 269a.) The Arbitration Agreement capped the total recovery
at $2.4 million and explained how payment of that amount would be split between
Broadline Risk Retention Group, Inc. (Broadline RRG) and the Medical Care
Availability and Reduction of Error Fund (MCARE Fund) depending on the
percentage of liability each doctor was found to have. (Id. at 270a-71a.) Following
the presentation of evidence, a civil arbitrator found Dr. Lavelle and Dr. Strain
negligent and awarded Claimant $2.5 million and Husband $375,000. (Verdict
Sheet, R.R. at 267a-68a.) Based upon the arbitrator’s apportionment of damages,
Claimant’s portion of the recovery was $2.088 million. (FOF ¶ 9.) Claimant and
Husband subsequently executed a full release against all the parties involved in the
5
medical malpractice action, including Healthcare Network, Medical Center, and
EPPI.
4. The Petitions
In 2013, Medical Center filed modification petitions seeking subrogation
reimbursement per Section 319 of the Workers’ Compensation Act (WC Act) 2
against Claimant’s civil recovery from her medical malpractice action, but these
petitions were dismissed without prejudice for lack of prosecution on November 7,
2014. (Board Opinion (Op.) at 2 n.1; R.R. at 410a-12a.) On December 19, 2014,
Medical Center filed the current Modification Petition,3 seeking subrogation
reimbursement per Section 319. (Supplemental Reproduced Record (S.R.R.) at
419b-20b.) Medical Center requested that its relief commence on April 8, 2013. (Id.
at 419b.) Claimant filed an answer, specifically denying Medical Center’s
allegations. (Certified Record at Item 4.) On April 27, 2016, Claimant filed her
Review Petition, asserting that the description of her injury was incorrect and the
NCP should be amended to include C5-6 and C6-7 disc hernias “and a pain disorder
associated with both psychological factors and a general medical condition.”4
(S.R.R. at 73b-74b.) In its answer, Medical Center admitted Claimant had
2
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671.
3
To obtain subrogation reimbursement due to the commission of medical malpractice
during the treatment of a claimant’s work-related injury, an employer must show that the
claimant’s work injury worsened due to the third party’s negligence, the employer is paying
benefits for the claimant’s condition, and the funds that the claimant recovered from the third-party
action were for the same conditions for which the employer is paying benefits. Griffin v. Workers’
Comp. Appeal Bd. (Thomas Jefferson Univ. Hosp.), 745 A.2d 61, 63-64 (Pa. Cmwlth. 1999).
4
Pursuant to Section 413(a) of the WC Act, 77 P.S. § 771, a claimant seeking to amend an
NCP based on an incorrect description of a work-related injury must show either that when the
NCP was issued there was a material mistake of fact or law made, or that consequential injuries
have developed as a result of the initial work injuries. Cinram Mfg., Inc. v. Workers’ Comp. Appeal
Bd. (Hill), 975 A.2d 577 (Pa. 2009).
6
“developed an emotional injury/depression,” but denied that the asserted disc hernias
were the result of the April 28, 2009, work injury. (Id. at 76b.) It is undisputed that
Medical Center had been paying for the treatment of Claimant’s psychological
condition. The Petitions were consolidated and assigned to the WCJ for resolution.
B. Proceedings before the WCJ
1. The Modification Petition
(a) The Medical Evidence
In support of its Modification Petition, Medical Center presented the
deposition testimony of Lee Harris, M.D.,5 who testified as follows. Dr. Harris, a
board-certified neurologist, examined Claimant at Medical Center’s request on
October 13, 2014. Following his examination and review of Claimant’s medical
records, Dr. Harris opined that Claimant’s work injury resulted in an acute C6-7
herniated disc that caused a spinal cord compression and a complete spinal cord
injury. (FOF ¶ 10.) In his opinion, the nearly two-day delay between Claimant’s
initial treatment in Medical Center’s Emergency Room and the decompression
surgery “caused the Claimant to develop significant neurological dysfunction,
including bladder dysfunction and ambulatory dysfunction.” (Id.) Had Claimant’s
decompression surgery been performed sooner, Claimant would not have
experienced complete paraplegia in her lower extremities or developed urologic and
neurologic impairments. Further, had Claimant been correctly diagnosed and
treated, she would have had “a complete or near complete recovery and would have
been able to return to her normal work.” (Id.)
5
Dr. Harris testified on April 27, 2016, and the transcript from that deposition is found at
pages 16b-45b of the supplemental reproduced record and is summarized in finding of fact 10.
7
In opposition to the Modification Petition, Claimant offered the deposition
testimony of Robert Sing, D.O., a board-certified family practitioner, who testified
as follows.6 Dr. Sing examined Claimant on April 14, 2016, at which time he
obtained a history of Claimant’s work injury and the treatment thereof. From his
examination, he found that Claimant continued to experience pain and stiffness with
spasms in her neck, a dropped right foot, unsteady gait for which she uses a cane,
sleep disruptions, a neurogenic bladder, and depression/emotional problems. He
also reviewed various medical records related to Claimant’s treatment, as well as
records related to Claimant’s medical malpractice action. After reviewing the
reports, but not the studies themselves, from the CT scans initially performed on
Claimant’s brain and cervical spine, Dr. Sing indicated the CT did not reveal a
hemorrhage or trauma to Claimant’s brain and no subluxation or fracture of her
cervical spine. Reviewing the report, but not the study itself, from the April 30, 2009
MRI of Claimant’s cervical spine, Dr. Sing opined that the MRI showed a six-
centimeter-long mass at C6-7. In Dr. Sing’s opinion, Claimant’s disc extrusion at
C6-7 did not occur until Claimant was in the MRI machine that day. Dr. Sing opined
that CT scans are preferable to MRI scans to diagnose soft tissue injuries, like the
one here. (R.R. at 444a-45a.) Thus, in Dr. Sing’s opinion, “the emergency room
doctors did not commit any malpractice that would have increased the degree or
duration of the Claimant’s work injury.” (FOF ¶ 11(f).) He further explained, even
if there had been medical malpractice, it would not have extended Claimant’s degree
of disability and “she would have ended up here anyway.” (R.R. at 455a.)
Dr. Sing’s deposition testimony is found at pages 416a-92a of the reproduced record and
6
is summarized in finding of fact 11.
8
In rebuttal to Dr. Sing’s testimony, Medical Center presented a second
deposition of Dr. Harris.7 Dr. Harris testified that when Claimant initially presented
to the emergency rooms, she was already complaining of a tingling sensation in her
upper extremities, reflecting that she was experiencing spinal cord compression.
(FOF ¶ 12.) The existence of this symptom immediately after the fall establishes
that Claimant did not develop the disc hernia while in the MRI two days later. He
disagreed with Dr. Sing’s testimony that the CT scan was ordered to assess whether
Claimant had sustained a soft tissue injury because it was ordered to determine
whether she had a fracture. Contrary to Dr. Sing’s opinion, Dr. Harris testified that
CT scans are used to “identify bony pathology.” (Id.) He reiterated his earlier
opinions that if Claimant had received the decompression surgery following her
initial admission to Medical Center’s Emergency Room, “she would not have
developed weakness and dysthesia in the right upper and lower extremities,
ambulatory dysfunction, neurogenic bladder[,] and neuropathic pain syndrome.”
(Id.)
Medical Center also presented the deposition testimony of Robert Pinsk,
M.D., a board-certified radiologist, who reviewed the films of Claimant’s cervical
CT scans and the MRI scan of her cervical spine and testified as follows.8 Dr. Pinsk
noted that the CT films revealed degenerative changes at C5-6 and a moderate disc
hernia on the right side of C6-7 that was affecting Claimant’s spinal cord and causing
spinal stenosis. The MRI films showed an eight-millimeter “mass-like structure
posterior to the C6-7 space causing mass effects upon the cervical spinal cord and
7
Dr. Harris’s second deposition was taken on August 26, 2016. The transcript of that
deposition is found at pages 157a-63a of the reproduced record and is summarized in finding of
fact 12.
8
Dr. Pinsk’s deposition testimony is found at pages 575a-81a of the reproduced record and
is summarized in finding of fact 13.
9
severe central spinal stenosis.” (Id. ¶ 13.) Like Dr. Harris, Dr. Pinsk disagreed with
Dr. Sing’s position that CT scans are superior to MRI scans at assessing soft tissue
pathology. Dr. Pinsk noted that Dr. Sing did not review the actual films of any
diagnostic studies. Instead Dr. Sing was only repeating what was included on those
studies’ reports, as evidenced by Dr. Sing’s testimony that Claimant’s C6-7 disc
herniation was six centimeters in length, which was clearly a typographical error in
the report as disc hernias are measured in millimeters.
(b) Other Evidence
In addition to the medical evidence, Medical Center relied on HR Director’s
deposition testimony in support of its Modification Petition.9 As mentioned, HR
Director described the relationship between Healthcare Network and its separate,
subsidiary corporate entities, such as Medical Center and EPPI. She testified as
follows. Claimant worked for Medical Center when she was injured, and Dr. Lavelle
and Dr. Strain were employed by EPPI. EPPI, Medical Center, and Healthcare
Network are separate corporate entities with distinct and separate chains of
command without financial interest or ownership interest in each other. Finally, HR
Director pointed out that Medical Center’s Emergency Room was not an employee
dispensary but a trauma center.
Claimant testified before the WCJ and by deposition as follows.10 She was
employed by “Albert Einstein Health Systems.” (FOF ¶ 15.) Claimant continues to
seek treatment for her work-related injuries with various physicians and has
9
HR Director’s deposition testimony is found at pages 545a-72a of the reproduced record
and is summarized in finding of fact 14.
10
Claimant’s deposition testimony is found at pages 1a-10a of the reproduced record, and
her testimony from a June 21, 2016 hearing is found at pages 80b-115b of the supplemental
reproduced record. Claimant’s testimony is summarized in findings of fact 15 and 16.
10
difficulty functioning. Claimant continues to receive her WC benefits, as well as
Social Security Disability benefits. Claimant explained her symptoms worsened
progressively from the time of the fall until she underwent the MRI. (Id. ¶ 16.)
Believing she was not properly treated initially, Claimant retained counsel in May
2010 to bring her medical malpractice action.
Medical Center also introduced into evidence the original civil complaint, the
Agreement, the arbitrator’s verdict sheet, and the full and final release signed by
Claimant and Husband. Claimant also introduced a discovery deposition of Dr.
Lavelle from the medical malpractice action, in which she claims he testified that on
April 29, 2009, he was employed by Healthcare Network. However, Dr. Lavelle
was asked where he was employed, not by whom he was employed. (R.R. at 325a.)
2. The Review Petition
In addition to her own testimony, Claimant relied on Dr. Sing to support her
Review Petition. Dr. Sing testified as follows. Based on his review of a report of a
2016 MRI of Claimant’s cervical spine, Dr. Sing opined that Claimant had
developed disc hernias at C4-5 and C5-6, which are two levels higher than the
acknowledged C6-7 disc hernia. (FOF ¶ 11(g).) He related these two new hernias
to Claimant’s initial injury and surgery as being “evolutionary herniations . . . due
to the instability of her cervical spine, the hardware and just day-to-day functioning
. . . .” (R.R. at 439a-40a.) Therefore, Dr. Sing opined these two hernias were also
work related.
Medical Center presented Dr. Harris’s and Dr. Pinsk’s deposition testimony
in opposition to the Review Petition. After reviewing the actual films of Claimant’s
diagnostic studies, Dr. Harris opined that the 2016 MRI did not reveal a disc hernia
at C5-6, although there was a protrusion that was present in an August 2009 MRI.
11
In Dr. Harris’s opinion, the changes at C4-5 and C5-6 were the result of preexisting,
long-standing degenerative changes, not the work injury. (FOF ¶ 12.) Dr. Pinsk
noted that Claimant’s diagnostic studies only showed mild degenerative changes
between C2-3 and C5-6. (Id. ¶ 13.)
3. The 2017 WCJ Opinion
Reviewing this evidence, the WCJ found Claimant’s testimony generally
credible but rejected that testimony to the extent it was contradicted by Medical
Center’s expert medical evidence and by HR Director’s testimony as to what entity
employed Claimant and Drs. Lavelle and Strain. (Id. ¶ 17.) The WCJ found the
opinions of Dr. Harris and Dr. Pinsk credible and rejected the contrary opinions of
Dr. Sing as not credible. In making these determinations, the WCJ noted that Dr.
Harris and Dr. Pinsk reviewed the actual CT and MRI films to render their
opinions,11 and Dr. Sing relied solely on the reports of those studies by other
physicians. (Id. ¶ 19.) The WCJ further observed that Dr. Sing’s opinions were
“completely contrary to the civil verdict that has already established the malpractice
in issue.” (Id.) In contrast, the WCJ found that the opinions of Dr. Pinsk and Dr.
Harris are “consistent with the Claimant’s unchallenged testimony about the
development of her symptoms and the civil verdict.” (Id.) The WCJ found that, to
the limited extent Dr. Lavelle’s deposition was relevant, it was not persuasive given
the result of the third-party lawsuit and the credible testimony of Medical Center’s
witnesses.
11
This finding states, conflictingly, that Dr. Sing did review and did not review the films.
However, given the evidence and the WCJ’s other findings, this appears merely to be a
typographical error and the first reference to Dr. Sing was intended to be Dr. Pinsk.
12
Based on the credited evidence, the WCJ concluded that, due to the
malpractice committed by Dr. Lavelle and Dr. Strain, “Claimant has developed
permanent neurological impairment and dysfunction including ambulatory
dysfunction and neurologic dysfunction that has required [Medical Center] to
continue to pay compensation for total disability and related medical expenses.” (Id.
¶ 20.) Therefore, the WCJ held that Medical Center established its right to
subrogation against Claimant’s third-party civil recovery. (2017 WCJ Decision,
Conclusions of Law (COL) ¶ 2.) The WCJ further found that, due to the lack of
credible expert evidence, Claimant did not prove that the C4-5 and C5-6 disc hernias
were related to her work injury. (Id. ¶ 1.) Finally, noting that Medical Center had
agreed that Claimant’s work injury included a psychological component following
the filing of the Review Petition, the WCJ found this issue was not actually in
dispute. (FOF ¶ 21.) Accordingly, the WCJ did not award litigation costs because
Claimant had not prevailed on any litigated issues. (COL ¶ 4.)
C. The Board’s Opinion
Claimant appealed to the Board, arguing that the grant of the Modification
Petition, the denial of the Review Petition, and the denial of litigation costs were in
error. Claimant first asserted that there was no “third-party” recovery in this matter
because her employer and the entity from which she recovered in that action were
the same, the right to subrogation is either waived or barred by res judicata or laches,
and the medical malpractice did not worsen Claimant’s medical condition. The
Board disagreed with each of Claimant’s contentions. The Board held that, in cases
involving multiple, affiliated corporate entities, the Supreme Court has held that, for
purposes of the WC Act, each “subsidiary corporate entity retains its own identity
separate and apart from another subsidiary corporation and the parent corporation.”
13
(Board Op. at 4 (citing Kiehl v. Action Mfg. Co., 535 A.2d 571 (Pa. 1987)).) Citing
HR Director’s credited testimony, the Board held that the record does not support
Claimant’s argument because Medical Center is a separate corporate entity from
EPPI, which employed Dr. Lavelle and Dr. Strain, and both of those entities are
separate corporate entities from the parent corporation, Healthcare Network. (Id. at
10.) Pursuant to Kiehl, each of these corporate entities retained their own identities
and, therefore, the Board concluded that the WCJ did not err in holding that Medical
Center could recover its subrogation lien.
As for Claimant’s res judicata arguments, which were premised on a
contention that the identity of her employer was settled in prior litigation, the Board
held that there was no evidence that the corporate identity of Claimant’s employer
had ever been determined. (Id. at 11.) In addition, observing that subrogation under
Section 319 is automatic, the Board held that equitable defense of laches is not
applicable and that while an employer can compromise or waive its subrogation
rights, this must be agreed to by the parties and set forth in writing. (Board Op. at
4-5 (citing Superior Lawn Care v. Workers’ Comp. Appeal Bd. (Hoffer), 878 A.2d
936 (Pa. Cmwlth. 2005); Rissmiller v. Workers’ Comp. Appeal Bd. (Warminster
Twp.), 768 A.2d 1212 (Pa. Cmwlth. 2001)).) As laches cannot apply, and Claimant
did not present an executed agreement whereby Medical Center agreed not to assert
a subrogation interest, the Board found no merit in Claimant’s arguments.
The Board similarly found that Claimant’s arguments that Medical Center did
not meet its burden of showing that the medical malpractice worsened Claimant’s
work injury were without merit. Pointing to the credited testimony of Dr. Harris,
the Board held that the WCJ’s finding in this regard was supported by substantial
evidence. Because it was undisputed that Medical Center paid Claimant benefits for
14
the work injuries and the neurological issues that resulted from the negligent care
and that the $2.4 million award was for damages related to that negligent care, the
Board concluded Medical Center established its entitlement to subrogation. (Id. at
11-12.)
Claimant next argued the WCJ erred in denying the Review Petition because
Dr. Harris’s opinion that the C4-5 and C5-6 disc hernias were not work-related was
not competent since he was unaware that Claimant’s accepted work injury included
C5-6 radiculopathy. The Board rejected this argument, noting that the WCJ’s
decision to credit Dr. Harris’s opinions was not subject to its review, and there was
no evidence that such decision was arbitrary and capricious. (Id. at 13.) It explained
that the record showed “that Dr. Harris was well-versed on Claimant’s conditions,”
as reflected in his thorough review of Claimant’s diagnostic studies and medical
records. (Id.) More importantly, the Board held, the WCJ did not credit Dr. Sing’s
testimony and, therefore, Claimant could not meet her burden of proving that the
description of her work injuries should be expanded to include the additional cervical
disc hernias. (Id.)
Finally, Claimant challenged the denial of litigation costs, noting that she was
successful in part because the WCJ did expand the description of her work injury to
include a psychological component. The Board discerned no error in the WCJ’s
denial of litigation costs because the injury added was not a matter at issue due to
Medical Center’s acceptance thereof at the beginning of the litigation and its
payment of the medical costs associated therewith. Because Claimant did not prevail
on any of the contested issues, the Board held she was not entitled to litigation costs.
(Id. at 14 (citing Barrett v. Workers’ Comp. Appeal Bd. (Sunoco, Inc.), 987 A.2d
1280 (Pa. Cmwlth. 2010), overruled on other grounds by Crocker v. Workers’
15
Comp. Appeal Bd. (Georgia Pac. LLC), 225 A.3d 1201 (Pa. Cmwlth. 2020)).)
Claimant now petitions this Court for review.12,13
II. Claimant’s Appeal
A. Modification Petition
1. General Legal Principles
Section 319 of the WC Act provides, in relevant part:
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 . . . 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 settlement shall be prorated between the
employer and employe . . . . The employer shall pay that proportion 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. 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
instalments of compensation.
77 P.S. § 671 (emphasis added). Our Supreme Court has described subrogation
under Section 319 as follows:
Subrogation in our workers’ compensation system is a significant and
firmly established right. Specifically, while subrogation is an important
equitable concept that applies whenever a debt or obligation is paid by
one party though another is primarily liable, . . . in the realm of workers’
12
Our review in WC matters “is limited to a determination of whether constitutional rights
were violated, errors of law were committed, or the necessary findings were supported by
substantial, competent evidence.” Griffin, 745 A.2d at 63 n.3.
13
By Memorandum Opinion and Order dated July 9, 2019, a single judge of this Court
denied Claimant’s Petition for Supersedeas following telephone argument during which the parties
agreed to maintain the status quo. Griffis v. Workers’ Comp. Appeal Bd. (Albert Einstein
Healthcare Network) (Pa. Cmwlth., No. 272 C.D. 2019, filed July 9, 2019).
16
compensation, it has assumed even greater stature. Our Court has
stated that the statutory right to subrogation is “absolute and can
be abrogated only by choice.” . . . . This is so because the statute
granting subrogation “clearly and unambiguously” provides that the
employer “shall be subrogated” to the employee’s right of recovery. .
. . Thus, the importance and strength of subrogation in our system
of workers’ compensation cannot be understated.
Yet, whether an employer is entitled to subrogation in any given case
remains depend[e]nt upon the statutory provision that creates this right.
Thus, [the court must consider] the issue of whether the statutory
provision granting subrogation, Section 319, affords [an employer] a
right to subrogation over monies recovered by [the claimant] pursuant
to a settlement of [the particular third-party] action . . . .
Brubacher Excavating, Inc. v. Workers’ Comp. Appeal Bd. (Bridges), 835 A.2d
1273, 1275-76 (Pa. 2003) (emphasis added) (citations omitted). The policy behind
subrogation under the WC Act is to prevent double recovery for the same injury, to
prevent an employer from having to pay compensation due to the wrongful acts of a
third party, and to prevent a third party from escaping liability for its wrongful
conduct. Poole v. Workers’ Comp. Appeal Bd. (Warehouse Club, Inc.), 810 A.2d
1182, 1184 (Pa. 2002). Whether an employer is entitled to subrogation is a question
of law based upon the facts as found by a WCJ. Griffin v. Workers’ Comp. Appeal
Bd. (Thomas Jefferson Univ. Hosp.), 745 A.2d 61, 63 n.3 (Pa. Cmwlth. 1999).
In determining whether a WCJ’s findings are supported by substantial
evidence,14 we “consider the evidence as a whole, view the evidence in the light most
favorable to the party who prevailed before the WCJ, and draw all reasonable
inferences which are deducible from the evidence in” that party’s favor. Frog,
Switch & Mfg. Co. v. Workers’ Comp. Appeal Bd. (Johnson), 106 A.3d 202, 206 (Pa.
14
“Substantial evidence is such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” City of Philadelphia v. Workers’ Comp. Appeal Bd. (Kriebel),
29 A.3d 762, 769 (Pa. 2011).
17
Cmwlth. 2014) (quotation omitted). Where both parties present evidence, it does
not matter if there is evidence that supports a contrary finding; the only question is
whether there is evidence that supports the findings that were made. McCabe v.
Workers’ Comp. Appeal Bd. (Dep’t of Revenue), 806 A.2d 512, 515 (Pa. Cmwlth.
2002). “The WCJ is the ultimate fact finder and has complete authority for making
all credibility” and evidentiary weight determinations. Rife v. Workers’ Comp.
Appeal Bd. (Whitetail Ski Co.), 812 A.2d 750, 755 (Pa. Cmwlth. 2002). It is well-
settled that a “WCJ may reject the testimony of any witness in whole or in part, even
if that testimony is uncontradicted.” Hoffmaster v. Workers’ Comp. Appeal Bd.
(Senco Prod., Inc.), 721 A.2d 1152, 1156 (Pa. Cmwlth. 1998). Where the WCJ is
required to assess the credibility of deposition testimony, the WCJ must articulate
objective bases for crediting one witness’s deposition testimony over another
witness’s deposition testimony. Daniels v. Workers’ Comp. Appeal Bd. (Tristate
Transp.), 828 A.2d 1043, 1053-54 (Pa. 2003). In the rare instances where we review
a credibility determination, “[w]e must view the reasoning as a whole and overturn
the credibility determination only if it is arbitrary and capricious or so fundamentally
dependent on a misapprehension of material facts, or so otherwise flawed, as to
render it irrational.” Casne v. Workers’ Comp. Appeal Bd. (Stat Couriers, Inc.), 962
A.2d 14, 19 (Pa. Cmwlth. 2008).
2. Whether Claimant’s recovery in the medical malpractice action was
a “third-party” award subject to subrogation under Section 319.
On appeal, Claimant argues there can be no WC subrogation of her civil
recovery pursuant to Section 319 of the WC Act and the Medical Care Availability
18
and Reduction of Error (MCARE) Act15 because there was no third party involved
in the civil action. Arguing that subrogation is an equitable doctrine to which
equitable principles apply, Remy v. Michael D’s Carpet Outlets, 571 A.2d 446, 452
(Pa. Super. 1990), Claimant argues there can be no subrogation here because an
employer cannot assert subrogation against itself. Claimant maintains that the
identity of her employer was previously stipulated to in the 2013 WCJ Decision and
was listed on her NTCP as being Healthcare Network. (Claimant’s Brief (Br.) at
17.) In her view, this prior identification of Healthcare Network as her employer
precludes further litigation over that issue pursuant to the principles of res judicata,
which apply in WC matters. Weney v. Workers’ Comp. Appeal Bd. (Mac Sprinkler
Sys., Inc.), 960 A.2d 949, 957 (Pa. Cmwlth. 2008). The import of this conclusion,
Claimant asserts, is that because both Medical Center and EPPI fall under Healthcare
Network’s corporate umbrella, they are not separate and distinct corporate entities
so as to support the conclusion that there was a “third party” involved in this matter.
Claimant further argues that while the WCJ credited HR Director’s testimony that
EPPI employed Dr. Lavelle and Dr. Strain, such testimony was contrary to Dr.
Lavelle’s testimony that he was employed by Healthcare Network, which the WCJ
rejected without elaboration.
15
Act of March 20, 2002, P.L. 154, as amended, 40 P.S. §§ 1303.101-1303.910. The
Pennsylvania Association For Justice has filed an amicus curiae brief asserting that the MCARE
Act prohibits an employer from asserting any claim for subrogation of either past or future WC
benefits paid under Section 319 of the WC Act. The Pennsylvania Association For Justice further
asserts that Healthcare Network is Claimant’s employer and its right to subrogation under the WC
Act was waived here because it was not asserted during the litigation in the prior proceedings.
While the second argument addresses an issue specifically raised by Claimant in this case, the first
argument, as well as other arguments regarding the MCARE Act prohibiting any subrogation,
relate to two consolidated petitions for review involving the same parties, argument on which was
heard on the same day as this matter, Griffis v. Workers’ Compensation Appeal Board (Albert
Einstein Medical Center) (Pa. Cmwlth., Nos. 273, 280 C.D. 2019, filed July 15, 2020).
19
Medical Center responds that the right to subrogation under Section 319 is
absolute and it is well settled that a WC defendant can recover a subrogation
reimbursement from a claimant’s civil medical malpractice action where the
treatment arose out of the claimant’s work injury. Claimant’s challenges to the 2017
WCJ Decision and the Board’s affirmance thereof, Medical Center argues, are really
challenges to the WCJ’s credibility determinations. According to Medical Center,
in continuing to assert that Healthcare Network is her employer, Claimant is asking
the Court to disregard the WCJ’s acceptance of HR Director’s testimony as credible,
testimony that supports the finding that Medical Center employed Claimant and
EPPI employed Dr. Lavelle and Dr. Strain. According to Medical Center, Dr.
Lavelle’s discovery deposition, which the WCJ found irrelevant and unpersuasive,
went to Claimant’s treatment, not for whom Dr. Lavelle was employed. Medical
Center points out that even this part of Dr. Lavelle’s testimony was equivocal.
(S.R.R. at 434b, 437b-38b.) Medical Center argues the NTCP issued and the “pro
forma” 2013 WCJ Decision similarly do not support Claimant’s contention that it
was error for the WCJ to find that Medical Center was Claimant’s employer.
(Medical Center’s Br. at 36.) According to Medical Center, the NTCP accurately
listed Claimant’s employer as “Long Term Structured Residence – AEHN,” (R.R. at
317a), because Claimant worked for a long-term structured residence when she was
injured. And, Medical Center asserts, the 2013 WCJ Decision and stipulation were
not the result of litigation and did not adjudicate what entity employed Claimant, Dr.
Lavelle, and Dr. Strain, but were related to Claimant’s attempt to expand the
description of her work injury. At that time, Medical Center asserts, the precise
identity of Claimant’s employer was immaterial because Claimant’s injury had
already been acknowledged and she was receiving benefits. Medical Center asserts
20
the 2013 WCJ Decision and 2013 Stipulation are not res judicata on the issue to be
decided in this matter because the issue decided in those proceedings was not
identical to the issue presented in this case, the identity of Claimant’s employer was
not fully litigated in those proceedings, and any determination of who Claimant’s
employer was, if there was one, was not essential to the judgment in the 2013 WCJ
Decision. Thus, Medical Center asserts, the Board’s observation that there was no
evidence supporting the claim that the corporate entity had not been previously
established was accurate.
Medical Center further asserts that Claimant’s “no third party” argument is
premised on the contention that distinct, but related, corporate entities must be
treated as a single corporate entity for purposes of the WC Act. This, however, is
inaccurate, Medical Center argues, because in Kiehl the Supreme Court held that, in
analyzing the identity of employers under the WC Act, related corporate entities
retain their individual corporate identities for liability purposes. Here, Claimant was
employed by Medical Center and Dr. Lavelle and Dr. Strain were employed by EPPI,
two corporate entities that, while related, are distinct. As a result, Medical Center
asserts, Claimant was allowed to bring the civil action against them and Medical
Center was allowed to assert its subrogation claim against the civil recovery
Claimant received. The WCJ’s findings in this regard are supported by substantial
evidence, HR Director’s credited testimony, and, therefore, Medical Center argues,
Claimant’s contentions must be rejected.
Initially, we note that Claimant’s arguments that her time of injury employer
was Healthcare Network, rather than Medical Center, are understandable given the
references to Healthcare Network as the “employer” on the NTCP and in the prior
proceedings relating to Claimant’s injury. Nonetheless, for the reasons set forth
21
below, these references do not require the reversal of the WCJ’s finding that
Claimant worked for Medical Center and not Healthcare Network.
We first address Claimant’s assertion that the identity of her employer as
Healthcare Network was previously litigated and resolved and, therefore, that res
judicata precludes the relitigation of that issue in the present matter. Res judicata
includes two related, but distinct principles: technical res judicata and collateral
estoppel. For a party “to invoke either [technical] res judicata or collateral
estoppel[,] the issues presented . . . must be the same as those raised in the instant
action.” Safeguard Mut. Ins. Co. v. Williams, 345 A.2d 664, 668 (Pa. 1975). All of
the elements related to these principles must be met in order for res judicata to bar
the subsequent litigation. Armco Steel Corp. v. Workmen’s Comp. Appeal Bd., 431
A.2d 363, 365 (Pa. Cmwlth. 1981).
“Technical res judicata provides that when a final judgment on the merits
exists, a future suit between the parties on the same cause of action is precluded.”
Henion v. Workers’ Comp. Appeal Bd. (Firpo & Sons, Inc.), 776 A.2d 362, 365 (Pa.
Cmwlth. 2001). Technical res judicata, or claim preclusion, applies where the
following is the same: (1) the “identity of the thing sued upon or for”; (2) the
“identity of the cause of action”; (3) the “identity of the persons and parties to the
action”; and (4) the “identity of the quality or capacity of the parties suing or sued.”
Weney, 960 A.2d at 954 (citation omitted). “[C]auses of action are identical when
the subject matter and the ultimate issues are the same in both the old and the new
proceedings.” Henion, 776 A.2d at 366. Technical res judicata applies to matters
raised and to those matters that should have been raised in an earlier proceeding. Id.
“Collateral estoppel acts to foreclose litigation in a later action of issues of
law or fact that were actually litigated and necessary to a previous final
22
judgment.” Id. at 365 (emphasis added). Collateral estoppel prevents the
relitigation of an already-decided issue and will apply in workers’ compensation
proceedings when: (1) “the issue in the prior adjudication was identical to the one
presented in the later action”; (2) “there was a final judgment on the merits”; (3) “the
party against whom the plea is asserted was a party or in privity with a party to the
prior adjudication”; (4) “the party against whom it is asserted has had a full and fair
opportunity to litigate the issue in a prior action”; and (5) “the determination in the
prior proceeding was essential to the judgment.” Callaghan v. Workers’ Comp.
Appeal Bd. (City of Phila.), 750 A.2d 408, 412 (Pa. Cmwlth. 2000).
It appears from Claimant’s arguments that she is asserting that collateral
estoppel precludes Healthcare Network and Medical Center from asserting that an
entity other than Healthcare Network was Claimant’s employer because, she
maintains, that issue was already litigated and resolved in the NTCP, the 2013 WCJ
Decision, and 2013 Stipulation. Although this is a close question because Healthcare
Network was identified as Claimant’s employer in those documents, collateral
estoppel requires that the issue of law or fact to be foreclosed in subsequent litigation
had to be “actually litigated and necessary to a previous final judgment.”
Henion, 776 A.2d at 365 (emphasis added). Further, the issues litigated in both
proceedings have to be the same, and the determination on that issue had to be
essential to the judgment. Callaghan, 750 A.2d at 412. Reviewing these documents,
these requirements were not satisfied so as to give them preclusive effect on the
matter at issue here: which corporate entity was Claimant’s employer at the time of
her work injury on April 28, 2009.
The issuance of the NTCP was not the result of any litigation. Rather, it is a
standard form filed with the WC authorities through which compensation payments
23
may be initiated without prejudice and without admitting liability for a 90-day period
while an employer is uncertain whether a compensable work injury occurred.
Section 406.1(d) of the WC Act, 77 P.S. § 717.1(d).16 Further, the issue litigated and
resolved in the 2013 WCJ Decision and 2013 Stipulation was not “who” Claimant’s
employer was, but “what” Claimant’s work-related injuries should be, and whether
Claimant’s benefits could be modified based on the results of an impairment rating
evaluation (IRE). (R.R. at 15a-20a.) Notably, the 2013 Stipulation merely identified
Healthcare Network as the employer in the introductory paragraph and there was no
stipulation to that fact elsewhere in the document. Therefore, Claimant did not meet
her burden of proving all of the elements necessary to successfully assert that the
identity of her employer was finally litigated prior to the current matter so as to
invoke the preclusive effect of collateral estoppel here. Thus, Medical Center was
not precluded from establishing that it, rather than Healthcare Network, was
Claimant’s employer, which it did through the credited testimony of HR Director.
Ultimately, the question of which entity employed Claimant at the time of her
injury was one of fact for the WCJ to resolve. Crediting HR Director’s testimony,
the WCJ found that Claimant worked for Medical Center and that Dr. Lavelle and
Dr. Strain were employed by EPPI, which is a corporate entity separate and distinct
from both Healthcare Network and Medical Center. The WCJ did not credit
Claimant’s own testimony regarding her employer or the testimony of Dr. Lavelle,
which, Claimant asserts, proves that Dr. Lavelle was employed by Healthcare
Network. In doing so, the WCJ found Dr. Lavelle’s testimony irrelevant and
unpersuasive given the result of the medical malpractice action and the credibility
of Medical Center’s witnesses. Reviewing that finding, we cannot say it was
16
Section 406.1 was added by Section 3 of the Act of February 8, 1972, P.L. 25.
24
“arbitrary and capricious or so fundamentally dependent on a misapprehension of
material facts, or so otherwise flawed, as to render it irrational.” Casne, 962 A.2d at
19. Thus, Claimant was employed by Medical Center, and Dr. Lavelle and Dr. Strain
were employed by EPPI, and these two corporate entities are subsidiaries of
Healthcare Network. The Court must now consider how these corporate entities
should be treated for purposes of the WC Act.
In Kiehl, our Supreme Court addressed the question of a parent corporation’s
liability to employees of a wholly-owned subsidiary who were injured and brought
negligence actions against the parent corporation. 535 A.2d at 572. The parent
corporation argued it was entitled to immunity, pursuant to the exclusivity provisions
of the WC Act, from the third-party suits brought by those employees. The trial
court agreed and entered judgment against the employees, which the Superior Court
affirmed. On further appeal, the Supreme Court reversed. In doing so, the Court
held that, for WC purposes, “where a parent/subsidiary relationship is established[,]
the question of which corporation has control over an employee is determined by
focusing on the functions performed by each corporation and by the employee in
addition to other indicia of control.” Id. at 573 (emphasis omitted). Reviewing the
functions of the parent corporation and subsidiary corporation, as well as the
functions of the employees of the subsidiary corporation, in Kiehl, the Supreme
Court explained that “[t]he operational functions” of each corporation and its
employees were “distinct” and they had separate corporate existences. Id. at 574.
Thus, in Pennsylvania, the Supreme Court concluded, “a parent corporation and its
subsidiary must be regarded as separate entities in regards to the [WC] Act.” Id.
Therefore, the parent corporation in Kiehl had to be treated as a separate entity from
25
its subsidiary corporation and was not entitled to rely on the latter’s WC immunity
to shield itself from liability in the third-party actions.
Although Claimant’s appeal does not involve a parent corporation seeking to
invoke the immunity protection of a subsidiary corporation, the Supreme Court’s
holding that these two corporate entities must be regarded as separate is equally
applicable here. Here, Claimant asserts there is no “third party” in her medical
malpractice action because it was her employer that paid to settle that action. This
argument assumes either that Claimant and Drs. Lavelle and Strain were all
employed by Healthcare Network or that, because EPPI and Medical Center fall
under Healthcare Network’s umbrella, they are all essentially the same corporation.
First, as discussed above, per HR Director’s credited testimony, EPPI employed Dr.
Lavelle and Dr. Strain and Medical Center employed Claimant. Therefore, the first
assumption is not applicable.
The second assumption is contrary to the Supreme Court’s holding in Kiehl
and the WCJ’s factual findings, based on HR Director’s credited testimony, that
EPPI, Healthcare Network, and Medical Center are separate corporate entities. (R.R.
at 551a-52a.) HR Director testified that neither EPPI nor Medical Center owned or
had financial control over the other, and their employees are not within the same
chain of command. (Id. at 553a-54a, 556a-60a.) According to HR Director, EPPI
and the Medical Center serve different purposes within the Healthcare Network. (Id.
at 572a.) HR Director’s testimony referred to Healthcare Network as an umbrella
entity for marketing purposes and when asked whether Healthcare Network owned
or had a financial interest in these subsidiaries, she responded that she was “not
aware that it does.” (Id. at 571a-72a.) Nonetheless, HR Director’s credited
testimony established that Healthcare Network is used to market the various services
26
provided by the subsidiary corporations, which is a different function than those
provided by the subsidiary corporations. Thus, Kiehl applies here and requires each
of these corporate entities to be treated as separate entities for the purposes of the
WC Act. Kiehl, 535 A.2d at 574. As such, Claimant’s argument that there was no
“third-party” recovery from which Section 319 subrogation could be taken fails.17
3. Whether the Section 319 subrogation claim is waived and/or barred
by res judicata or the doctrine of laches.
Claimant alternatively argues that, even if there was a potential right to
subrogation, the right was waived because Medical Center did not preserve that right
prior to the 2013 WCJ Decision. Citing the fact that Healthcare Network, Medical
Center, and EPPI were all parties to the final release in the civil action, Claimant
contends Medical Center was aware that it may have a right to subrogation against
Claimant’s medical malpractice award but did not take action to assert or protect that
right when it signed the stipulation in 2013. Rather, it waited until December 2014
to assert and pursue its subrogation claim, which Claimant argues was not a prompt
assertion of that interest and prevents the grant of the Modification Petition pursuant
to Liberty Mutual Insurance Company v. Excalibur Management Services, 81 A.3d
1024 (Pa. Cmwlth. 2013). Therefore, Claimant asserts that the subrogation claim is
barred either by the principles of res judicata or the doctrine of laches.18
17
Medical Center also argues, in the alternative, that the injuries Claimant sustained as a
result of her treatment in the Emergency Room did not arise in the course and scope of her
employment, as she was being treated as a member of the general public and like any other member
of the paying public. (Medical Center’s Br. at 40 n.12.) Because of our disposition, we need not
reach this issue.
18
The Pennsylvania Association For Justice likewise asserts that the subrogation claim is
waived due to the untimely assertion of those rights. (Amicus Curiae’s Br. at 22-25.)
27
Medical Center responds that Claimant’s arguments that its subrogation claim
is waived or somehow barred are without merit. First, it points out that Liberty
Mutual Insurance is distinguishable. That matter involved a subrogation claim
under the second paragraph of Section 319,19 which applies to situations where a
non-workers’ compensation insurer initially pays disability and/or medical benefits
to the injured worker, and that insurer is seeking to subrogate after it is determined
that the injury was work related. This matter involves subrogation under the first
paragraph of Section 319 making Claimant’s reliance on Liberty Mutual Insurance
misplaced. Second, contrary to Claimant’s assertions, Medical Center maintains
19
Section 319 provides in its entirety:
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, his
personal representative, his estate or his dependents, 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 settlement shall be prorated between the employer and
employe, his personal representative, his estate or his dependents. The employer
shall pay that proportion 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. Any recovery against such third person in
excess of the compensation theretofore paid by the employer shall be paid forthwith
to the employe, his personal representative, his estate or his dependents, and shall
be treated as an advance payment by the employer on account of any future
instalments of compensation.
Where an employe has received payments for the disability or medical expense
resulting from an injury in the course of his employment paid by the employer or
an insurance company on the basis that the injury and disability were not
compensable under this act in the event of an agreement or award for that injury
the employer or insurance company who made the payments shall be subrogated
out of the agreement or award to the amount so paid, if the right to subrogation is
agreed to by the parties or is established at the time of hearing before the referee or
the board.
77 P.S. § 671.
28
laches and other equitable principles do not apply to subrogation claims under the
first paragraph of Section 319 and claims delayed for periods longer than the 18
months at issue here have been allowed because the right to subrogation is absolute.
Young v. Workers’ Comp. Appeal Bd. (Chubb Corp.), 88 A.3d 295, 302 (Pa. Cmwlth.
2014); Superior Lawn Care, 878 A.2d at 941. Medical Center further notes that it
first began asserting its subrogation claim in 2013. (Medical Center’s Br. at 45 n.13.)
Medical Center argues that when it filed the current Modification Petition, Claimant
challenged any modification of her benefits from the beginning on the basis that the
MCARE Act eliminated WC subrogation for medical practice recoveries, a
conclusion rejected by this Court in Protz v. Workers’ Compensation Appeal Board
(Derry Area School District), 131 A.3d 572 (Pa. Cmwlth. 2016). (Medical Center’s
Br. at 44.) Third, Medical Center asserts that the only legally effective means for
an employer to waive its right to subrogation is by executing a written document
expressly waiving that right. Rissmiller, 768 A.2d at 1213. Because it has not
executed such a waiver, Medical Center argues, there has been no waiver of its
subrogation rights. Finally, Claimant’s reliance on Weney and her assertion that
Medical Center did not preserve its subrogation claim during the pendency of the
review petitions resolved in the 2013 WCJ Decision are misplaced because neither
involved the issue of subrogation. Weney involved a situation where a claimant was
attempting to relitigate the nature and extent of her work injury, which had been
resolved in a prior review petition, a violation of the principle of res judicata.
Medical Center maintains no such attempt to relitigate has occurred here.
Pursuant to the plain language of Section 319, which provides that an
employer “shall be subrogated,” 77 P.S. § 671, subrogation is “automatic” and “by
its terms, admits of no express exceptions, equitable or otherwise.” Thompson v.
29
Workers’ Comp. Appeal Bd. (USF&G), 781 A.2d 1146, 1151 (Pa. 2001) (emphasis
added). Thus, our Supreme Court has held that, generally, the right to subrogation
is “statutorily absolute and can be abrogated only by choice.” Id. at 1152
(quoting Winfree v. Phila. Elec. Co., 554 A.2d 485, 487 (Pa. 1989)) (emphasis
added).20 In Superior Lawn Care, 878 A.2d at 941, this Court rejected a claimant’s
assertion of the doctrine of laches as an affirmative defense to an employer’s
subrogation claim, citing Thompson. Section 319 does not provide a time limitation
for an employer to assert a subrogation claim. Peeples v. Workmen’s Comp. Appeal
Bd. (Foster Wheeler Energy Corp.), 576 A.2d 1190, 1191 (Pa. Cmwlth. 1990)
(rejecting a claimant’s assertion that the employer’s right to subrogation was waived
because it was asserted three or four years after the third-party recovery).
It is undisputed that Medical Center has not expressly waived its right to
subrogation by executing an agreement releasing that right. Accordingly, we
address Claimant’s laches and res judicata arguments as bases for finding that
Medical Center’s assertion of its subrogation interest is barred. Claimant’s argument
that Medical Center’s subrogation claim is barred by the doctrine of laches is
contrary to our settled case law that laches, as well as equitable principles in general,
are inapplicable to subrogation claims. Thompson, 781 A.2d at 1151; Young, 88
A.3d at 302-03; Superior Lawn Care, 878 A.2d at 941. Further, as Medical Center
points out, Liberty Mutual Insurance did not involve the type of subrogation claim
at issue here, and, therefore, does not support Claimant’s assertion that Medical
Center lost its right to assert its subrogation interest. The insurer in Liberty Mutual
20
There is a narrow exception to this principle where an employer or workers’
compensation insurer engages in deliberate, bad faith conduct that subverts a claimant’s third-party
suit, Thompson, 781 A.2d at 1154, but there are no allegations of such conduct in the matter sub
judice.
30
Insurance asserted a subrogation interest under the second paragraph of Section 319,
which is not absolute, unlike subrogation under the first paragraph. Thompson, 781
A.2d at 1151. Subrogation under the second paragraph of Section 319 is not self-
executing and, therefore, must be asserted with reasonable diligence. Liberty Mutual
Insurance, 81 A.3d at 1027. Subrogation under the second paragraph of Section 319
must be established by either contract (by the agreement of the parties) or litigation
(established during a WC hearing), and, if there is no contract, the insurer must
establish its right to subrogation at a hearing before a WCJ or the Board. Id. Because
subrogation under the first paragraph is at issue here, Liberty Mutual Insurance does
not apply. As we explained in Peeples, the first paragraph of Section 319 does not
impose a time limitation on an employer’s filing of a subrogation claim. Thus, the
18-month delay between the settlement of Claimant’s third-party action and Medical
Center’s filing of the Modification Petition does not bar Medical Center’s
subrogation rights.
As for Claimant’s assertion that res judicata bars the Modification Petition
because Medical Center did not “preserve” its subrogation rights because it did not
assert its subrogation rights in the prior proceedings that led to the 2013 WCJ
Decision, we note Claimant does not cite to any precedent applying res judicata as a
bar to an employer’s claim for subrogation under Section 319, and our own research
has not revealed any. See Hill v. Workmen’s Comp. Appeal Bd. (J.F. Judski Assocs.),
543 A.2d 1279, 1281 (Pa. Cmwlth. 1988) (finding no merit in a claimant’s assertion
that collateral estoppel barred an employer’s Section 319 subrogation claim).
Weney, cited by Claimant, did not involve subrogation, but the filing of multiple
review petitions through which a claimant sought to litigate, and then relitigate, the
nature and extent of her work injury. In Superior Lawn Care, we rejected the
31
claimant’s attempt to use non-subrogation case law to incorporate equitable
principles to limit an employer’s absolute right to subrogation. 878 A.2d at 941-42.
We must, therefore, do the same here. Our Supreme Court has expressed that the
only limits to an employer’s absolute right to subrogation under Section 319 of the
WC Act are where the employer limits that right by consent or where the employer
engages in deliberate, bad faith conduct that subverts a claimant’s third-party suit,
Thompson, 781 A.2d at 1151, 1154. Because res judicata does not fall within either
of these narrow limitations, under our precedent, it is not a defense that can defeat
an employer’s absolute right to subrogation under the WC Act.
4. Whether Medical Center met its burden of proving the existence of
medical malpractice that worsened Claimant’s condition.
Finally, Claimant maintains that there was no independent evidence that Dr.
Lavelle and Dr. Strain actually committed medical malpractice and the evidence
presented, the verdict sheet and high-low arbitration agreement, did not meet
Medical Center’s burden of proving that medical malpractice occurred. More
importantly, Claimant argues, the evidence that was presented to establish that the
medical malpractice worsened Claimant’s condition, Dr. Harris’s opinion, did not
include an opinion that Claimant would have sufficiently recovered had it not been
for the malpractice or that Medical Center had to pay greater compensation benefits
due to the malpractice than it would have had to pay with the initial work injury.
Without such evidence, Claimant asserts, the Modification Petition should have been
denied.
Medical Center responds that it has no obligation to prove that negligence
occurred to establish its entitlement to subrogation against a claimant’s third-party
recovery. Even if it had to do so, Medical Center asserts that the negligence of Dr.
Lavelle and Dr. Strain had already been established in the civil verdict sheet of the
32
arbitrator, which found that both doctors had been negligent in their treatment of
Claimant. As for Claimant’s assertion that Medical Center’s evidence did not
support the grant of subrogation, Medical Center points out that Dr. Harris, credited
by the WCJ, testified that the actions of Dr. Lavelle and Dr. Strain did cause
Claimant to develop the neurological conditions that cause her continuing
impairments and need for medical treatment and that, absent the negligence of those
physicians, Claimant would have experienced a complete or near complete recovery.
(R.R. at 33b-36b.) Such credited evidence, Medical Center argues, satisfied its
burden of proving its entitlement to subrogation under Section 319. Dr. Sing’s
contrary testimony, Medical Center argues, attempted to establish that no medical
malpractice occurred on April 29, 2009, notwithstanding Claimant’s $2.4 million
recovery for that medical malpractice in her civil action.
Where, as here, the negligent conduct occurs subsequent to the original injury,
an employer seeking subrogation of a third-party recovery based on that negligence
“must show that it was compelled to make payments by reason of the negligence of
a third-party, and that the fund to which it seeks subrogation was for the same
compensable injury for which it is liable under the Act.” Griffin, 745 A.2d at 64.
To establish that it “was compelled to make compensation payments as result of the
negligen[ce],” an employer has to show, by clear and convincing evidence, that but
for the negligence, the claimant would have been employable again. Id. at 64-65.
However, “no formal adjudication of the third party’s negligence [is] required” to
establish an employer’s right to subrogation. Hill, 543 A.2d at 1281.
Claimant’s arguments reflect a challenge to whether the WCJ’s findings of
fact are supported by substantial evidence. A review of the evidence proffered by
Medical Center, and credited by the WCJ, reveals that those findings are supported
33
and, therefore, are binding on the Court. We agree with Medical Center that, even
if it had to establish that Dr. Lavelle and Dr. Strain did commit medical malpractice,
this fact was proven not only by the verdict sheet reflecting that both physicians were
negligent in their medical treatment of Claimant, but also by the credited expert
testimony of Dr. Harris. In that testimony, Dr. Harris opined that the 48-hour delay
in Claimant having the surgery “had a drastic impact on her ultimate neurological
outcome . . . that lead to ultimately irreversible neurological disability that could
have been prevented had she been diagnosed . . . sooner.” (S.R.R. at 33b-34b.) In
short, Dr. Harris opined that, as a result of the acts of Dr. Lavelle and Dr. Strain in
not diagnosing Claimant earlier, Claimant’s spinal cord compression continued to
worsen, causing her to develop severe neurologic symptoms, an “irreversible spinal
cord injury,” and an “irreversible neurological disability.” (Id. at 34b, 36b-37b.)
Dr. Harris’s credited opinions also support the WCJ’s determination that
Medical Center had met its burden of proving its entitlement to subrogation under
Section 319. Contrary to Claimant’s arguments, Dr. Harris opined that had Claimant
undergone surgery to resolve the spinal cord compression within two or three hours
of initial presentation, “[h]er outcome would have been dramatically better than it
ultimately turned out to be.” (Id. at 34b.) In Dr. Harris’s opinion, Claimant “would
likely have had either a complete or nearly complete recovery,” and Claimant
“would very likely have had an excellent recovery and would have been able to
return to work.” (Id. at 34b-35b.) Dr. Harris explained that Claimant’s “deficits . . .
developed as a result of persistent progressive spinal cord compression” and “[h]ad
that spinal cord compression been relieved by having the discs removed and the
spinal cord compression alleviated early on, those subsequent progressive deficits
would never have occurred.” (Id. at 37b-38b.) Reviewing this credited testimony
34
in the light most favorable to Medical Center as the prevailing party, Frog, Switch
& Manufacturing, 106 A.3d at 206, a reasonable mind would accept it as sufficient
to support the conclusions that Medical Center was “compelled to make payments
by reason of the negligence of a third[]party, . . . that the fund to which it seeks
subrogation was for the same compensable injury for which it is liable under the
Act,” and that but for the negligence, Claimant would have been employable again.
Griffin, 745 A.2d at 64-65. Accordingly, we cannot say it was error for the WCJ to
find that Medical Center met its burden of proving its entitlement to subrogation
under Section 319.
B. Review Petition
Claimant argues that Dr. Sing’s testimony supported the grant of the Review
Petition and that the WCJ erred in accepting Dr. Harris’s contrary testimony because
“it is clear that [Dr. Harris’s] testimony did not have an adequate basis in fact” and
was, therefore, incompetent as a matter of law. (Claimant’s Br. at 12, 26.)
According to Claimant, Dr. Harris believed that Claimant’s work injury consisted
only of injuries to the C6-7 disc, which is contrary to the 2013 WCJ Decision
reflecting that the work injury also included radiculopathy at C5-6.
Medical Center responds that the WCJ gave multiple reasons for not accepting
Dr. Sing’s medical opinions, including that Dr. Sing did not review any of the CT or
MRI films himself, relying only on the reports of those studies. Further, Medical
Center asserts, Dr. Harris reviewed the films themselves, and he opined that the
changes to the discs at C4-5 and C5-6 already existed at the time of the 2009 work
injury and were unrelated to that injury or Claimant’s April 30, 2009 surgery.
Medical Center contends that the WCJ, acting in his role as fact finder, credited its
35
competent evidence and did not credit Claimant’s evidence and, therefore, did not
err in denying the Review Petition.
Section 413(a) of the WC Act provides that
A [WCJ] . . . may, at any time, review and modify or set aside a[n NCP]
. . . upon petition filed by either party with the department, or in the
course of the proceedings under any petition pending before such
[WCJ], if it be proved that such [NCP] . . . was in any material respect
incorrect . . . .”
77 P.S. § 771. The burden of proof on a review petition seeking to add injuries is
the same as a claim petition. Commercial Credit Claims v. Workers’ Comp. Appeal
Bd. (Lancaster), 728 A.2d 902, 906 (Pa. 1999). Therefore, the claimant bears the
burden of proving, among other things, that additional injury was caused by the
claimant’s work. Inglis House v. Workmen’s Comp. Appeal Bd. (Reedy), 634 A.2d
592, 595 (Pa. 1993).
As set forth above, the WCJ is the ultimate fact finder and is free to accept or
reject, in whole or in part, the testimony of any witness, including medical witnesses.
Rife, 812 A.2d at 755; Hoffmaster, 721 A.2d at 1156. The WCJ’s determination of
evidentiary weight and credibility is not subject to appellate review. Greenwich
Collieries v. Workmen’s Comp. Appeal Bd. (Buck), 664 A.2d 703, 706 (Pa. Cmwlth.
1995). The competency of a medical witness, however, is a question of law subject
to this Court’s review. Amandeo v. Workers’ Comp. Appeal Bd. (Conagra Foods),
37 A.3d 72, 80 (Pa. Cmwlth. 2012). “Where an expert’s opinion is based on an
assumption that is contrary to the established facts of record, that opinion is
[incompetent].” Taylor v. Workers’ Comp. Appeal Bd. (Servistar Corp.), 883 A.2d
710, 713 (Pa. Cmwlth. 2005). But an expert opinion is not made “incompetent
unless it is solely based on inaccurate or false information.” Namani v. Workers’
36
Comp. Appeal Bd. (A. Duie Pyle), 32 A.3d 850, 854 (Pa. Cmwlth. 2011) (quoting
Am. Contracting Enters., Inc. v. Workers’ Comp. Appeal Bd. (Hurley), 789 A.2d
391, 396 (Pa. Cmwlth. 2001)) (emphasis in original). In making this determination,
the Court must review the witness’s testimony as a whole, and the witness’s opinion
will not be rendered incompetent unless it was dependent on the inaccurate
information. Namani, 32 A.3d at 845-55.
Initially, we note that the WCJ did not credit Dr. Sing’s expert opinion that
Claimant sustained the C4-5 and C5-6 disc hernias as a result of either the original
work injury or the April 30, 2009 surgery. (FOF ¶ 19.) Among the reasons the WCJ
gave for not crediting Dr. Sing’s testimony was that his opinions were based entirely
on the reports of other doctors, rather than reviewing the actual films of Claimant’s
diagnostic tests. (Id.) Absent Claimant presenting credited evidence, she cannot
prevail in meeting her burden of establishing that the NCP is materially incorrect.
However, to the extent the WCJ did not credit Dr. Sing’s testimony because Dr.
Harris was more credible, we will review Dr. Harris’s testimony to determine
whether, as Claimant contends, it was not legally competent.
A review of Dr. Harris’s testimony as a whole reveals that his opinions were
based on his examination of Claimant’s medical records and the actual diagnostic
studies taken of Claimant’s cervical spine over the years. From his review of those
studies and records, Dr. Harris opined that the alleged disc hernias Claimant sought
to add to the NCP were not work related and had nothing “to do with her current
condition.” (R.R. at 160a-61a.) Based on his assessment of the 2016 MRI film
itself, rather than just the report relied upon by Dr. Sing, Dr. Harris found no disc
herniation at C5-6, but did observe disc protrusions at C4-5 and C5-6. (FOF ¶ 12;
R.R. at 160a-61a.) However, Dr. Harris opined those changes were degenerative in
37
nature, could be observed in Claimant’s prior MRIs, including the one taken on April
30, 2009, and were not related to Claimant’s April 30, 2009 surgery. (R.R. at 161a.)
According to Dr. Harris, there was no change in Claimant’s C5-6 disc between the
April 30, 2009 MRI and 2016 MRI and, to the extent there was a change to C4-5, “it
would[ not] be unexpected that seven years later there is disc protrusion there[]
because . . . degenerative disc disease does tend to progress over[]time . . . .” (Id.)
While Claimant’s accepted work injury includes right C5-6 and C6-7 radiculopathy,
(FOF ¶ 4), and Dr. Harris did indicate that Claimant’s 2009 injury was to her C6-7
disc and that the injury to that disc and its treatment was the cause of all of her
problems ever since, (R.R. at 161a), we do not view Dr. Harris’s statement as
rendering his testimony incompetent. Dr. Harris’s opinion that the C4-5 and C5-6
injuries were not work related was not based on his belief that the work injury
involved only the C6-7 disc. Rather, it was Dr. Harris’s independent and expert
examination of the actual films of Claimant’s MRIs, and his understanding of the
progressive nature of degenerative disc disease, that formed the basis of his expert
opinion. This opinion was corroborated by Dr. Pinsk, who likewise opined that
Claimant’s initial CT scan and MRI in April 2009 showed preexisting degenerative
changes at these levels. (Id. at 577a-78a.) Therefore, Dr. Harris’s opinion was not
based solely on the alleged inaccurate information and, accordingly, his opinion was
not incompetent as a matter of law and the WCJ could rely upon it to reject Dr.
Sing’s conflicting testimony. Namani, 32 A.3d at 854. Because Claimant’s
evidence was not credited, she could not meet her burden of proof on the Review
Petition.
38
C. Litigation Costs
Claimant argues that the WCJ erred in not awarding litigation costs because
she prevailed on her request, set forth in the Review Petition, to expand her work
injury to include a psychological injury. Claimant notes that, despite Medical
Center’s admission that she sustained this injury, it did not issue any official
document accepting that injury. Therefore, Claimant contends, she still had to
litigate this issue before the WCJ. Claimant maintains that, because the WCJ added
this injury after the litigation, she prevailed “in part” in her litigation, and she is
entitled to the payment of her litigation costs under Section 440(a) of the WC Act,
77 P.S. § 996(a).21
Medical Center argues that because the WCJ did not err in denying the Review
Petition or in granting the Modification Petition, Claimant did not prevail on any
contested issue and was not entitled to litigation costs under the WC Act. Medical
Center asserts that the litigation costs Claimant incurred, which primarily were
related to Dr. Sing’s examination and deposition, were to establish that the claimed
additional cervical injuries were work related and to contest the Modification
Petition. Because Claimant did not prevail on either of those issues, Medical Center
argues there was no error in denying litigation costs.
Section 440(a) of the WC Act provides, in relevant part, that
[i]n any contested case where the insurer has contested liability in
whole or in part, . . . the employe or [her] dependent, as the case may
be, in whose favor the matter at issue has been finally determined in
whole or in part shall be awarded, in addition to the award of
compensation, a reasonable sum for costs incurred . . . .
21
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
39
77 P.S. § 996(a). However, in order to be awarded litigation costs, the “claimant
must prevail on the contested issue.” Jones v. Workers’ Comp. Appeal Bd. (Steris
Corp.), 874 A.2d 717, 721 (Pa. Cmwlth. 2005) (emphasis added).
Here, Claimant’s litigation efforts sought to expand the definition of her work
injury to include both additional cervical injuries and a psychological injury and to
challenge Medical Center’s Modification Petition. While Medical Center contested
Claimant’s attempt to add the C4-5 and C5-6 disc hernias to her work injury, it did
not contest the existence of the psychological injury and, in fact, had been paying
for Claimant’s medical treatment for the psychological injury. As a result of Medical
Center’s admission, the WCJ added the uncontested psychological injury to
Claimant’s NCP without Claimant ever having to present evidence to establish that
her psychological injury was work related. Contrarily, the WCJ did not find that
Claimant established that the disc hernias at C4-5 and C5-6 were work related
because he did not credit Dr. Sing’s opinions, thereby precluding Claimant from
meeting her burden of proof on the only contested issue. Further, Claimant was
unsuccessful in defending against the Modification Petition. Because Claimant did
not prevail on the only contested issue in the Review Petition or on her contest of
the Modification Petition, we cannot say the Board and the WCJ erred in denying
the reimbursement of Claimant’s litigation costs. Id.
III. Conclusion
For the foregoing reasons, we discern no error in the Board’s affirmance of
the WCJ’s grant of the Modification Petition, denial of the Review Petition, and
denial of Claimant’s request for litigation costs. Accordingly, we affirm.
_____________________________________
RENÉE COHN JUBELIRER, Judge
40
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Anna Griffis, :
Petitioner :
:
v. : No. 272 C.D. 2019
:
Workers’ Compensation Appeal :
Board (Albert Einstein Healthcare :
Network), :
Respondent :
ORDER
NOW, July 15, 2020, the Order of the Workers’ Compensation Appeal Board,
entered in the above-captioned matter, is AFFIRMED.
_____________________________________
RENÉE COHN JUBELIRER, Judge