eNotes: Workers’ Compensation – April 2021

SIGNIFICANT CASE SUMMARIES

PENNSYLVANIA CASE LAW UPDATE

Malecki v. WCAB (Franklin Regional Sch. Dist.)
582 C.D. 2020
Filed March 26, 2021, 2021 WL 1157693 (unreported, Pa. Commw. 2021)

The causation element of an original claim petition may be established even in the absence of unequivocal medical evidence if the causal connection between employment, injury, and disability is “obvious,” i.e. “where the claimant’s injuries immediately and directly or naturally and probably result from a work incident.” An employer who wishes to contest a claim where causation is “obvious” may be subject to an unreasonable contest counsel fee if it fails to present medical evidence rebutting a causal relationship between employment and disability.

Background:
The Claimant worked as a custodian for a school district. On March 12, 2018, as Claimant threw a heavy piece of garbage into a dumpster, he experienced a sharp left-sided low back pain. Claimant reported the injury to Employer and went to the emergency room the following day, where a lumbar CT scan showed a herniated disc. Claimant had never experienced or treated for pain in his back or legs prior to March 12, 2018. On April 19, 2018, Employer denied the compensability of the claim citing a lack of injury. Claimant filed a Claim Petition on June 19, 2018, seeking partial disability benefits from March 12, 2018 through April 23, 2018. Claimant subsequently filed a Review Petition seeking to amend the injury description to include herniated discs, radiculopathy, stenosis, left-sided low back pain, and sciatica.

In support of his Claim Petition, Claimant testified regarding the onset of his back pain, and submitted medical records from the emergency room, a family doctor, an orthopedist, and a physical therapist, which supported the alleged diagnoses. In response, Employer submitted an IME report dated October 9, 2018, which concluded that Claimant’s work injury was consistent with a lumbar strain and that Claimant had fully recovered. The WCJ found that Claimant’s alleged work injury could not be considered “obvious,” and the medical evidence failed to establish a causal connection between the March 12, 2018 work incident and the injury, or between the injury and the disability. The WCJ denied and dismissed the Claim Petition, and the WCAB affirmed. Claimant appealed to the Commonwealth Court.

Holding:
In an unpublished opinion, the Commonwealth Court held that Claimant must present unequivocal medical evidence establishing a causal relationship between his or her employment and injury only where such causal connection is not obvious. The court clarified that the causal connection is obvious where a claimant’s injuries immediately and directly or naturally and probably result from a work incident. If the causal relationship is obvious, then the WCJ is not required to rely upon medical testimony to find causation. An example from several cases is where a claimant experiences contemporaneous pain while exerting herself, such as while lifting a heavy object. The “obviousness” principle also applies where disability is the natural and probable consequence of an injury. The court therefore reversed the WCJ’s denial of the claim petition, holding that the causation element was obviously met based on the credible evidence of record. The court further held that Employer’s contest was unreasonable from the outset given the “obvious” nature of the work injury. Even Employer’s own IME report, dated months after the alleged period of disability, failed to contradict a causal relationship between employment, injury, and disability. The court therefore remanded the case to allow for factual findings regarding the calculation of disability benefits due and unreasonable contest attorney’s fees appropriate for the work performed by Claimant’s Counsel.

Takeaway:
This decision shows that a causal relationship can be established between employment, an injury, and disability where such relationship is obvious based on the natural and probable consequence of the actions occurring contemporaneously with injury, even without unequivocal medical evidence establishing causation. This decision further shows that an employer may risk exposure to unreasonable contest counsel fees if it contests a claim with an “obvious” causal connection between employment and disability without evidence which presents a genuine dispute as to the work-relatedness of Claimant’s injury. It is important to consider this possibility when determining whether to accept or deny liability for an alleged work injury.

Any questions regarding this case can be addressed to John T. Morgan, Esquire, at JMorgan@tthlaw.com or (267) 861-7595.

Todd v. WCAB (Fasttrack Constr. Inc.)
505 C.D. 2020
Filed March 23, 2021, 2021 WL 1100151 (unreported, Pa. Commw. 2021)

Background:
Claimant sustained a work-related injury on August 10, 2010, which included sprains to his left hip, sprains to his cervical, dorsal and lumbar spine, lumbar disc herniation, lumbar radiculopathy, and inflammation of his right trapezoid. Following resolution by the parties, the WCJ approved a Compromise and Release Agreement on October 21, 2016. The settlement resolved all issues related to Claimant’s receipt of indemnity benefits by means of a lump sum payment. The parties agreed that the proceeds of the settlement would not be added to the total amount of the employer’s accrued workers’ compensation lien. The employer agreed to pay for Claimant’s ongoing medical treatment and retained its “full subrogation rights” for “all ongoing medical expenses.” Approximately six weeks after the settlement, the Commonwealth Court issued its decision in Whitmoyer v. WCAB (Mountain Country Meats), 150 A.3d 1003 (Pa. Cmwlth. 2016) (Whitmoyer I), rev’d Whitmoyer II.

In Whitmoyer I, the Commonwealth Court held that the phrase “installments of compensation” encompassed medical expenses, in addition to indemnity benefits, as it pertained to an employer’s subrogation rights. However, the Pennsylvania Supreme Court reversed Whitmoyer I on June 19, 2018 with Whitmoyer II. In Whitmoyer II, the Supreme Court explained that the term “compensation,” as used throughout the Pennsylvania Workers’ Compensation Act, could encompass payment of both indemnity and medical expenses. However, “installments of compensation” was interpreted to be distinct from the term “compensation.” It noted that the plain meaning of “installments of compensation” is compensation paid in installments. The Supreme Court reasoned that the amount of future medical expenses would be unknown at the time of a third-party settlement and, accordingly, “installments of compensation” did not refer to medical expenses. Therefore, the Supreme Court concluded that an employer’s right to subrogation of a claimant’s third-party recovery under Section 319 includes an accrued lien of all past indemnity and medical benefits paid, but future offset is limited to installments of indemnity benefits.

Based on Whitmoyer II, Claimant filed a review petition seeking to eliminate the employer’s right to future subrogation credit against his ongoing medical benefits. The WCJ granted Claimant’s petition by relying on the central holding of Whitmoyer II: that only future indemnity benefits are subject to such a credit under Section 319 of the Act. The WCAB reversed by distinguishing Whitmoyer II. In the instant case, Claimant and the employer had utilized the required LIBC-380 form to memorialize the terms of the third-party settlement agreement, which in part calculated how the proceeds would be distributed from Claimant’s third-party recovery. The Board reasoned that Claimant agreed to the terms of both the Compromise and Release Agreement and the third-party settlement agreement, both of which provided that the employer retained its future subrogation rights with regard to payment of Claimant’s future medical expenses. The Board also cited the fact that this case was not pending on appeal when the decision in Whitmoyer II issued.

Holding:
The Commonwealth Court reversed. It explained that, in Whitmoyer II, the claimant’s balance of recovery was an amount which exceeded his employer’s net subrogation lien by nearly $80,000.00. When the Supreme Court analyzed whether Whitmoyer’s employer had a subrogation interest against his future medical expenses, the Court observed that Section 319 addresses two distinct scenarios: the first constituted the employer’s accrued lien where the employer had a claim against the claimant’s third-party recovery for indemnity and medical expenses it paid to the date of the third-party recovery; the second claim related to the disposition of the net settlement proceeds, or the amount of the claimant’s recovery remaining after deducting the employer’s accrued lien. This “excess recovery” was to be paid to claimant as “an advance payment by the employer on account of any future installments of compensation,” which were limited to the payment of indemnity benefits.

In reversing the opinion of the Board, the Commonwealth Court explained that the record was silent as to whether the employer’s accrued lien had been satisfied. As such, the Court was unable to determine whether the employer’s continued subrogation of Claimant’s future medical expenses represented a permissible reimbursement of the accrued lien, or whether the employer’s subrogation interest has been maintained in contravention of Whitmoyer II. The Board was directed to remand the matter to the WCJ to render findings of fact regarding the extent to which the employer’s subrogation of Claimant’s future medical benefits represented a reimbursement of the employer’s accrued subrogation lien.

Takeaway:
While the Whitmoyer rule is very clear in its general prohibition of offsetting future medical benefits, it would appear that such an offset might be permissible in the event the employer has not yet received complete reimbursement of its accrued lien as calculated at the time of the third-party recovery.

Any questions regarding this case can be addressed to Casey J. Schweppenheiser, Esquire, at CSchweppenheiser@tthlaw.com or 610.332.7008.

Beaver Valley Slag, Inc. v. Marchionda (WCAB)
___ A.3d ___
Filed March 10, 2021, 2021 WL 900664 (Pa. Commw. 2021)

In a published opinion, the Commonwealth Court held that the Employer could not enforce its right under a third party settlement agreement to avoid payment of medical expenses on and after a date certain.

Background:
Claimant sustained a work related injury, which was accepted by the Employer through an NCP. A related third-party case was settled, and as part of that settlement the parties executed a third party settlement agreement (TPSA). The TPSA called for the Employer to take a credit against Claimant’s third-party recovery, whereby it would pay a discounted percentage (33.7%) of future weekly indemnity and medical benefits, representing reimbursement of its pro-rata share of the costs expended to procure the third party settlement until its subrogation interest was satisfied. Once such subrogation interest was satisfied, the Employer would resume responsibility for 100% of Claimant’s indemnity and medical expenses.

After the TPSA was signed, on June 19, 2018, the Supreme Court decided Whitmoyer v. WCAB (Mountain Country Meats), 186 A.3d 947 (Pa. 2018), holding that an employer is not entitled to credit for future medical benefits against a balance of recovery from a third-party settlement. Shortly thereafter, Claimant filed a petition to review the terms of the TPSA. Relying on Whitmoyer, Claimant argued that the TPSA’s terms discounting Employer’s payment for future medical expenses on account of its subrogation lien should be set aside, and that Employer should be held responsible for payment of 100% of Claimant’s medical expenses as of the date the TPSA was signed. Specifically, Claimant sought recovery of the discount amount in medical expenses obtained by Employer pursuant to the TPSA. The WCJ granted Claimant’s Petition, but concluded that Whitmoyer was applicable only as of June 19, 2018. Both parties appealed, and the WCAB affirmed. Both parties subsequently appealed to the Commonwealth Court.

Holding:
On appeal to the Commonwealth Court, Employer argued that Whitmoyer should not apply because the TPSA was final and no litigation or appeal was pending at the time the case was decided. The Court noted that, although the TPSA was executed before Whitmoyer, Claimant was still receiving disability benefits after its execution. Therefore, the Court rejected Employer’s argument and held that the PTSA was subject to review because it was not actually final. Additionally, Claimant argued that the application of the Whitmoyer holding should not be limited to the date of the decision, but instead it should apply retroactively to the date the error was created (or the TPSA’s execution). The Court rejected this argument and, consistent with the WCJ’s ruling below, invalidated Employer’s subrogation rights as of the date of the Whitmoyer decision. In so doing, the Court, relying on past precedent dealing with retroactivity principles, and balancing in the interests of the parties, held that Employer was entitled to the benefits of the terms of the TPSA up to June 19, 2018 but that it was thereafter responsible for the entire cost of Claimant’s medical benefits beginning on June 19, 2018. Employer was consequently required to reimburse Claimant accordingly. The Court further noted that Claimant did not waive his right to raise the issue of reimbursement of medical expenses by signing the TPSA.

Takeaway:
The Court’s holding makes clear that a TPSA, executed prior to Whitmoyer, which by its terms provides an Employer with a credit against future medical expenses, can be set aside. However, if the case was not pending on appeal at the time Whitmoyer was decided, the retroactive effect reaches back only to June 19, 2018. In such scenarios, employers will be required to reimburse any and all credits taken against medical benefits on and after June 19, 2018.

Any questions regarding this case can be addressed to Marjorie G. Moreno, Esquire, at MMoreno@tthlaw.com or 717.237.7157

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VIRGINIA CASE LAW UPDATE

Peter Corbino v. Arlington County
VA00001642582, Virginia Workers’ Compensation Commission
Decided March 16, 2021.

In an opinion delivered by Commissioner Newman, the Commission affirmed that there was no difference between a diagnosis of PTSD and C-PTSD for purposes of a workers’ compensation award, and an additional C-PTSD diagnosis is not considered differently under the occupational disease analysis.

Background:
Claimant was employed as a Deputy Fire Marshall between 2005 and 2020. Over the course of his employment he began to experience anxiety, stress, hypervigilance, social avoidance behaviors, and fear of contamination. Claimant began treatment for anxiety in 2010, and was diagnosed with OCD in 2013. His symptoms continued to worsen, and he was diagnosed with complex post-traumatic stress disorder. He sought an award for OCD, anxiety, and PTSD only (but not C-PTSD).

At hearing, the Deputy Commissioner denied the claims for anxiety and OCD as being outside the statute of limitations. However, the Deputy Commissioner concluded that Claimant had proven a diagnosis of PTSD. Claimant did not appeal the denials of OCD and anxiety. Employer appealed, alleging that Claimant suffered from C-PTSD and not PTSD, and it was inappropriate for the Deputy Commissioner to award a condition not claimed. In its appeal, Employer cited to the World Health Organization’s ICD-11 for Mortality and Morbidity, which identified that C-PTSD has additional symptoms that manifest in the patient above and beyond regular PTSD.

Holding:
The Full Commission affirmed the award, failing to find that PTSD and C-PTSD are separate and distinct diseases for purposes of a claim.

The Commission was not persuaded that C-PTSD and PTSD are different diseases of life, even while acknowledging the additional requirements of C-PTSD. The Commission went further, and even if the two of them were separate diseases, Claimant constructively claimed PTSD at hearing. They noted that PTSD was mentioned at the start of the evidentiary hearing, and the employer did not claim surprise or seek clarification on the distinction between the two at that time.

Takeaway:

It is always frustrating to lose on a PTSD case before a Deputy Commissioner, but the argument put forth by Employer in this case may have been “chasing good money with bad money.” Whether that is true or not, the pleading requirements at workers’ compensation hearings are becoming more and more relaxed, and a Deputy Commissioner is always within its rights to award things not formally requested in a claim for benefits provided there is no prejudice to the Employer. It is important to remember, on issues such as this, that the due process requirements provided to the Employer are often quite minimal. For instance, an injury/disease not formally claimed will be considered by the Commission if it is mentioned at all in the medical records submitted.

Any questions regarding this case can be addressed to Michael S. Bliley, Esquire, at MBliley@tthlaw.com or 571.464.0435.

Missouri Hodge v. Dreambuilder Logistics, LLC
VA00001781316, Virginia Workers’ Compensation Commission
Decided March 23, 2021.

In a majority opinion issued by Commissioner Rapaport, the Commission reversed a rejection of an Employer’s Application for Hearing when it had an obvious scrivener’s error that would have otherwise led to the valid rejection of the Employer’s App. Commissioner Marshall issued a dissent, arguing that the Employer’s App should be rejected for technical reasons.

Background:
Claimant sustained a compensable injury on October 3, 2020. An open award for temporary total disability benefits was entered from October 13, 2020 and continuing onward. Disability was paid for just over three months, before Claimant began refusing medical treatment. On January 22, 2021, Employer filed an Employer’s Application and paid compensation through the date of the application, as required by Commission Rule 5A. However, the Employer’s App read that “compensation was paid through January 21, 2020.” Even though this was clearly a scrivener’s error, the Commission issued a technical rejection of the Employer’s App because “compensation has not been paid through the correct date.” The Commission ordered that benefits be reinstated.

Holding:
The Full Commission reversed the rejection of the Employer’s App. The majority held that a January, 2020 payment date was obviously impossible for an accident that would have occurred nine months later. They found that the technical rejection was correct based on the filed document, but accepted the Employer’s assertion on review that compensation was actually paid through the correct date in 2021.

Commissioner Marshall dissented. He would have rigidly applied the Rules of the Commission, and upheld the rejection of the Employer’s App on grounds that it did not correctly indicate that benefits were provided through the date of the Application. He gave a pretty deep history of the Commission’s various approaches to mistake of fact and scrivener’s errors, both in the context of Employer’s Apps as well as other situations. He also notes that the aggressively strict requirements of the Employer App process are designed “to police the tendency of employers and insurers to terminate first and litigate later.” Marshall likened the case at bar to other instances, where the Full Commission upheld the rejections of Applications where 1) the incorrect disability rate was given; 2) the required oath was not correctly given; and 3) where the notary gave differing dates for the oath and for the Claimant’s signature.

Takeaway:
This case is the rare exception where a defect in the Employer’s App nevertheless allowed the case to be referred to the docket for hearing. But, Commissioner Marshall’s dissent shows that there are numerous situations in which the Employer’s App can be rejected, which can burden the carrier with an additional 2-3 months of unnecessary compensation. Even though common sense prevailed in this case, we must take great care when attempting to terminate benefits via the Employer’s App.

Any questions regarding this case can be addressed to Michael S. Bliley, Esquire, at MBliley@tthlaw.com or 571.464.0435.