Harburg Medical Sales Co. v. SWIF (Bureau of WC Fee Rev. Hearing Office)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Harburg Medical Sales Company, :
Petitioner :
:
v. :
:
State Workers’ Insurance Fund :
(Bureau of Workers’ Compensation :
Fee Review Hearing Office), : No. 608 C.D. 2022
Respondent : Submitted: February 10, 2023
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE STACY WALLACE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: May 23, 2023
Harburg Medical Sales Company (Harburg) petitions this Court for
review of the Bureau of Workers’ Compensation, Fee Review Hearing Office’s
(Bureau) June 1, 2022 order granting the State Workers’ Insurance Fund’s (SWIF)
Motion to Dismiss (Motion to Dismiss) Harburg’s applications for fee review
(Applications), and dismissing claim numbers 613922, 615429, 616085, and
617776. Harburg presents one issue for this Court’s review: whether the Bureau
erred by granting SWIF’s Motion to Dismiss. After review, this Court affirms.
On June 25, 2002, Leroy Harrison (Harrison) was injured in the course
and scope of his employment with Optimal Energy Inc. Harburg filed the
Applications to determine the appropriateness of payments SWIF made for durable
medical equipment supplies it provided to Harrison, specifically, for its bills
generated for the following service dates: March 13 and 23, April 20, May 20, and
June 21, 2021. Medical Fee Hearing Officer Derrick Coker (Hearing Officer Coker)
held hearings on September 16, 2021, and April 11 and May 12, 2022. On
September 16, 2021, SWIF orally made the Motion to Dismiss relying on Harburg
Medical Sales Co. v. PMA Management Corp. (Pa. Cmwlth. No. 635 C.D. 2020,
filed Aug. 30, 2021), appeal denied, 275 A.3d 963 (Pa. 2022), wherein this Court
held that Harburg was not a health care provider within the meaning of Section 109
of the Workers’ Compensation Act (Act),1 and, therefore, lacked standing to invoke
the Bureau’s fee review process.
On May 12, 2022, the parties jointly offered, and Hearing Officer Coker
admitted, into evidence: Medical Fee Hearing Officer David Torrey’s (Hearing
Officer Torrey) June 15, 2020 decision (ruling that Harburg “failed to meet the
burden of proof required to demonstrate that it is a health care provider under the
Act”), Reproduced Record (R.R.) at 16a; this Court’s Unreported Memorandum
Opinion, Harburg Medical Sales Co.; and the Pennsylvania Supreme Court’s March
31, 2022 Order (denying Harburg’s appeal in Harburg Medical Sales Co.). R.R. at
29a. On June 1, 2022, the Bureau granted SWIF’s Motion to Dismiss and dismissed
1
Act of June 2, 1915, P.L. 736, as amended, added by Section 3 of the Act of July 2, 1993,
P.L. 190, 77 P.S. § 29. Section 109 of the Act, defines a “health care provider” as:
[A]ny person, corporation, facility or institution licensed or
otherwise authorized by the Commonwealth to provide health care
services, including, but not limited to, any physicians, coordinated
care organization, hospital, health care facility, dentist, nurse,
optometrist, podiatrist, physical therapist, psychologist,
chiropractor or pharmacist and an officer, employee or agent of
such person acting in the course and scope of employment or
agency related to health care services.
77 P.S. § 29.
2
claim numbers 613922, 615429, 616085 and 617776. Harburg appealed to this
Court.2
Harburg argues that Hearing Officer Coker erred by granting the
Motion to Dismiss because SWIF did not offer any evidence that Harburg was not a
provider under the Act or the Board’s Regulations. Harburg contends that Harburg
Medical Sales Co. dealt with service dates and circumstances which existed prior to
2019, and SWIF offered no evidence that Harburg was not a provider as defined in
the Act or the Board’s Regulations on the dates when the services in question were
provided.3 SWIF rejoins that the Applications were properly dismissed pursuant to
Hearing Officer Torrey’s June 15, 2020 decision determining that Harburg was not
a health care provider under the Act, which this Court affirmed. See Harburg Med.
Sales Co.
Because the issue of whether Harburg is a health care provider under
the Act has been previously litigated and decided by this Court, see Harburg Medical
Sales Co., this Court must determine whether res judicata or collateral estoppel
applies herein in order to determine whether the Bureau erred in granting SWIF’s
Motion to Dismiss.
2
This Court’s scope of review of a decision by the [Bureau]
determines whether the necessary findings of fact are supported by
substantial evidence, whether constitutional rights were violated,
and whether the hearing officer committed an error of law. 2 Pa.C.S.
§ 704; Walsh v. Bureau of Workers’ Comp[.] Fee Rev[.] Off[.]
(Traveler’s Ins[.] Co.), 67 A.3d 117, 120 n.5 (Pa. Cmwlth. 2013).
Regarding questions of law, our scope of review is plenary and our
standard of review is de novo.
Armour Pharmacy v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. (Wegman’s Food Mkts.,
Inc.), 206 A.3d 660, 664 n.2 (Pa. Cmwlth. 2019).
3
Harburg does not proffer any reason or evidence that the service dates at issue would
change the analysis of whether Harburg is a health care provider. Its only claim is that, because
the dates of service are different, SWIF should be required to prove that it is not a health care
provider under the Act.
3
Res judicata - literally, a thing adjudicated - is a judicially[
]created doctrine. See Est[.] of Bell, . . . 343 A.2d 679, 681
([Pa.] 1975). It bars actions on a claim, or any part of a
claim, which was the subject of a prior action, or could
have been raised in that action. See R/S Fin[.] Corp. v.
Kovalchick, . . . 716 A.2d 1228, 1230 ([Pa.] 1998); Balent
v. City of Wilkes-Barre, . . . 669 A.2d 309, 313 ([Pa.]
1995). Th[e Pennsylvania Supreme] Court has explained
that
[r]es judicata, or claim preclusion, prohibits
parties involved in prior, concluded litigation from
subsequently asserting claims in a later action that
were raised, or could have been raised, in the
previous adjudication. The doctrine of res
judicata developed to shield parties from the
burden of re-litigating a claim with the same
parties, or a party in privity with an original
litigant, and to protect the judiciary from the
corresponding inefficiency and confusion that re-
litigation of a claim would breed.
Wilkes ex rel. Mason v. Phoenix Home Life Mut. Ins. Co.,
. . . 902 A.2d 366, 376 ([Pa.] 2006) (citation omitted); see
also R/S Fin[.], . . . 716 A.2d at 1230 (“The purposes of
the rule are the protection of the litigant from the dual
burden of relitigating an issue with the same party or his
privy and the promotion of judicial economy through
prevention of needless litigation.” (quoting Foster v. Mut.
Fire, Marine & Inland Ins. Co., . . . 676 A.2d 652, 661
([Pa.] 1996))).
Four elements common to both actions, sometimes termed
the “four identities,” see, e.g., Est[.] of Tower, . . . 343
A.2d 671, 674 ([Pa.] 1975), must be present for res
judicata to apply: “an identity of issues, an identity of
causes of action, identity of persons and parties to the
action, and identity of the quality or capacity of the parties
suing or being sued.” In re Iulo, . . . 766 A.2d 335, 337
([Pa.] 2001) (citing Safeguard Mut. Ins. Co. v.
Williams, . . . 345 A.2d 664, 668 ([Pa.] 1975)).
In re Coatesville Area Sch. Dist., 244 A.3d 373, 378-79 (Pa. 2021).
Collateral estoppel is similar in that it bars re-litigation of
an issue that was decided in a prior action, although it does
4
not require that the claim as such be the same. For
example, if, in a breach of contract action, the defendant
asserts that the contract is invalid because of fraud, but the
contract is ruled valid and the defendant is found liable, in
a future lawsuit against the same party alleging a separate
breach of the same contract the defendant is precluded
from asserting the invalidity of the contract based on
fraud. See RESTATEMENT (SECOND) OF JUDGMENTS §
27, cmt. a, illus. 2 ([Am. Law Inst.] 1982).
Collateral estoppel will only apply where: the issue is the
same as in the prior litigation; the prior action resulted in
a final judgment on the merits; the party against whom the
doctrine is asserted was a party or in privity with a party
to the prior action; and the party against whom the doctrine
is asserted had a full and fair opportunity to litigate the
issue in the prior action. See Rue v. K-Mart Corp., . . . 713
A.2d 82, 84 ([Pa.] 1998). In some renditions, courts add a
fifth element, namely, that resolution of the issue in the
prior proceeding was essential to the judgment. See, e.g.,
Off[.] of Disciplinary Couns[.] v. Kiesewetter, . . . 889
A.2d 47, 50-51 ([Pa.] 2005).
Collateral estoppel is premised on practical considerations
that overlap substantially with those of res judicata. These
include avoiding the “cost and vexation” of repetitive
litigation, conserving judicial resources, “and, by
preventing inconsistent decisions, encourag[ing] reliance
on adjudication.” Id. . . . at 51.
Coatesville, 244 A.3d at 379 (italics added).
Here, res judicata cannot apply because SWIF was not a party to the
prior action. However, all five collateral estoppel elements are met: (1) the issue in
both actions was whether Harburg is a health care provider under the Act; (2) the
prior action resulted in a final judgment on the merits; (3) Harburg was a party to the
prior action; (4) Harburg had a full and fair opportunity to litigate the issue; and (5)
the resolution of the issue was essential to the judgment in the prior action. Because
collateral estoppel applies, re-litigation of whether Harburg is a health care provider
5
under the Act is barred. Accordingly, the Bureau properly granted SWIF’s Motion
to Dismiss.
For all of the above reasons, the Bureau’s order is affirmed.
_________________________________
ANNE E. COVEY, Judge
6
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Harburg Medical Sales Company, :
Petitioner :
:
v. :
:
State Workers’ Insurance Fund :
(Bureau of Workers’ Compensation :
Fee Review Hearing Office), : No. 608 C.D. 2022
Respondent :
ORDER
AND NOW, this 23rd day of May, 2023, the Bureau of Workers’
Compensation, Fee Review Hearing Office’s June 1, 2022 order is affirmed.
_________________________________
ANNE E. COVEY, Judge