eNotes: Workers’ Compensation – February 2025 – Pennsylvania

SIGNIFICANT CASE SUMMARIES

Pennsylvania Case Summary

Jackiw v. Soft Pretzel Franchise
No. 3 EAP 2024
Supreme Court of Pennsylvania

Decided: January 22, 2025

Background

The Claimant sustained a work injury necessitating the amputation of her right forearm, which the parties agreed was a specific loss entitling her to a healing period of up to 20 weeks followed by 370 weeks of compensation. Her average weekly wage was $322.05. The Claimant sought benefits at the rate described by Section 306(c)(25), while the Employer asserted that the benefits rate should be the same as the total disability rate. Under Section 306(c)(25), Claimant’s benefit rate for the 370 weeks attributable to the specific loss would be at least 50% of the maximum compensation rate for total disability, while the 20-week healing period would be the total disability rate – here, 90% of the Claimant’s small average weekly wage. Under the Employer’s interpretation of the Act, Claimant would receive the total disability rate for all 390 weeks.

Holding

The Pennsylvania Supreme Court sided with the Claimant. The Court held that for specific loss benefits, the plain text of Section 306(c)(25) unambiguously states that the benefit rate is to be no lower than 50% of the maximum compensation rate.

Takeaway

This case impacts on the value of specific loss cases, especially those from claims with low average weekly wages. Previously, the consensus was that the specific loss rate was the same as the total disability rate. Now, the Pennsylvania Supreme Court has clarified that the specific loss portion of the claim must be paid at the rate set forth in Section 306(c)(25), which sets the “floor” of the benefit rate at 50% of the maximum total disability rate. The outcome of this case made the difference between the Employer owing $113,051.50 and $205,782.00.

Questions about this case can be directed at John Morgan at 267-861-7580 or jmorgan@tthlaw.com.

Old Republic Ins. Co. v. Linnik
No. 289 EDA 2024
Superior Court of Pennsylvania

Decided: January 28, 2025

An Employer or Carrier cannot use a civil action to subrogate a Workers’ Compensation Claim

Background

The Claimant sustained an injury while working for the Employer. In 2018, a WCJ granted a Claim Petition against the Employer for benefits. The Insurer paid benefits for the injury, which later became exacerbated by alleged medical malpractice. The Claimant filed a medical malpractice action, which settled in 2019. The Insurer requested access to that settlement agreement, which was declined. In July 2023, the Insurer filed an amended complaint against the Claimant, the attorneys involved, and the Pennsylvania Insurance Department, averring that as the workers’ compensation insurance carrier responsible for making payments to the Claimant, it had subrogation rights to the settlement amounts paid to the Claimant in the medical malpractice action. The Defendants filed Preliminary Objections, which the trial court sustained and dismissed the Insurer’s amended complaint with prejudice. The Insurer filed a timely notice of appeal.

Holding

The only issue the Insurer brought on appeal was whether the trial court had subject matter jurisdiction over the action. The Pennsylvania Supreme Court has clearly stated that the courts of common pleas lack jurisdiction to adjudicate Workers’ Compensation claims including issues involving subrogation. However, the preliminary objections were granted by the trial court on multiple grounds. Because the Insurer only challenged subject matter jurisdiction, the Superior Court affirmed the trial court’s findings on the other preliminary objections.

Takeaway

When faced with the potential of subrogation rights, Employers and insurers must follow the procedures proscribed in the Workers’ Compensation Act rather than filing a civil complaint, as the Pennsylvania courts of common pleas do not have jurisdiction over such claims.

Questions about this case can be directed to Gabrielle Martin at 610-332-7003 or gmartin@tthlaw.com.

Grow v. PECO Energy Company
No. 63 CD 3035
Commonwealth Court of Pennsylvania

Decided: January 8, 2025

Under Section 413(a) of the Pennsylvania Workers’ Compensation Act, a description of injury may not be amended to add a new distinct injury more than 3 years after the last indemnity payment.

Background

The Claimant sustained a compensable injury in 2013 for which the Employer issued a Notice of Compensation Payable describing the injury as contusions and fractures at C3-C4. The Claimant’s last compensation payment was in 2014, at which time his benefits were suspended as he returned to work without wage loss. In 2021, the Claimant underwent surgery at C6-C7, which his doctor opined to be a consequential injury from the work injury. The Claimant filed new petitions in 2022 to amend the description of injury to include C6-C7 and to reinstate disability benefits. The WCJ granted the Claimant’s Petitions, the Board reversed, and Claimant appealed to the Commonwealth Court.

Holding

The Commonwealth Court affirmed the Board, denying the Claimant’s petitions. The Court relied on its prior precedents in Dillinger, Fitzgibbons, and Marcusky, which held that when a claimant seeks to add a distinct, consequential injury to an accepted work injury, the petition must be filed within three years of the last payment of compensation. The Court found that the plain language of Section 413(a) does not restrict the three-year limitation to only injuries known at the time the NCP was issued and declined to read additional exceptions into the statute.

Takeaway

This reported case makes clear the difference between a claimant alleging a new injury versus a worsening of an accepted injury for reinstatement purposes. The three-year limitations period set forth in Section 413(a) of the Act applies when a claimant seeks to add a distinct, consequential injury to the accepted work injury described in an NCP. The exception allowing reinstatement within 500 weeks of the last compensation payment then only applies for a claim of a worsening of the accepted injury.

Questions about this case can be directed to Shelby A. Bennett at 412-926-1441 or sbennett@tthlaw.com.

Tymes v. City of Phila.
No. 464 CD 2024
Commonwealth Court of Pennsylvania

Decided: January 29, 2025

Continuing to pay a claimant’s salary does not automatically equate to a de facto acceptance of a claim, but rather, the key factor in making this determination is the employer’s intent behind distributing the payment.

Background

The Claimant alleged he sustained a work-related injury when he contracted COVID in October 2020 while he was employed with the Employer. The Claimant was temporarily unable to return to work. Claimant continued to receive regular paychecks and accrue sick and vacation time until March 5, 2022. In July of 2022, the Employer denied the claim asserting that it was not a work-related injury. The Claimant then filed a Petition in August 2022 alleging that the Employer unilaterally terminated his benefits after accepting liability for a work-related injury by continuing to pay his salary. In a July 2023 decision, the Workers’ Compensation Judge (WCJ) denied the Claimant’s Reinstatement Petition and Penalty Petition. Based on the testimony of the Employer’s Deputy Finance Director in its Risk Management Department and Employer’s Risk Manager, the WCJ found that Claimant was not receiving his regular paychecks, but rather he was receiving compensation through an administrative time-keeping tool utilized to continue paying salaries in order to avoid the risk of unfairly penalizing workers who needed prolonged time off due to contracting COVID. The ongoing payment of the Claimant’s salary was determined not to be a disability benefit as it was not administered by Employer’s third-party claims administrator and because it was not funded through any federal legislation designed to provide sick leave for disabled employees.

Holding

When the Employer continues to pay the Claimant in relief of the employee’s capacity to labor, and the Employer has knowledge that the employee sustained a work injury, a presumption arises that the payments are intended to compensate the employee for that injury. However, payments made pursuant to a plan for non-occupational injury or illness are not identified as being workers’ compensation. In determining if ongoing payments of wages are in lieu of workers’ compensation, the employer’s intent in making those payments is the critical element.

Takeaway

An employer merely continuing to pay a claimant’s salary does not amount to de facto acceptance of a claim, but rather, the intent of the employer when making these payments must be examined to determine if the continuation of payment was to compensate the claimant for a work-related injury.

Questions about this case can be directed to Emily LaGreca at 610-312-1978 or elagreca@tthlaw.com.

Wegmans Food Mkts. v. Cole (WCAB)
No. 687 C.D. 2024
Commonwealth Court of Pennsylvania

Decided: January 29, 2025

The Commonwealth Court holds that medical advice is not the equivalent of medical treatment when it comes to suspending benefits based on forfeiture.

Background

The Claimant sustained an ankle injury at work. Although her doctors advised her to quit smoking, she continued to do so. Eventually, the Claimant developed osteomyelitis, a bone infection. The Employer presented medical evidence showing that if Claimant had complied with the medical advice to quit smoking, it would have had a high probability of success in leading to the improvement of the Claimant’s condition and preventing its deterioration from the work injury. The Employer’s medical expert further testified that the Claimant’s continued smoking against medical advice led to the infection and the infection and amputation. The Employer filed a Petition to Suspend based on forfeiture. The WCJ granted the Employer’s Petition, but the Board reversed. The Employer appealed to the Commonwealth Court.

Holding

The Commonwealth Court affirmed. The Court held that medical advice was not the equivalent of medical treatment, and therefore the Employer had to prove that a prescribed smoking cessation treatment was both offered to the Claimant and had a high probability of success.

Takeaway

Though this is an unpublished decision, it shows that courts are generally reluctant to suspend benefits based on forfeiture in a scenario that involves medical advice such as quitting smoking or losing weight. TT&H attorney Burke McLemore is appealing this case to the Pennsylvania Supreme Court, as he initially prevailed before the WCJ.

Questions about this case can be directed to Burke McLemore at 717-255-7647 or bmclemore@tthlaw.com, or Elizabeth Saleb at 610-332-7020 or esaleb@tthlaw.com.

Mondragon v. Jo Jo Pizza (WCAB)
No. 174 C.D. 2024
Commonwealth Court of Pennsylvania

Decided: January 26, 2025

An employer’s decision to assert its “automatic” and “absolute” right to subrogate in a workers’ compensation claimant’s third-party tort action cannot itself constitute deliberate “bad faith” per se, even if the full amount of a subrogation lien would consume the entirety of a claimant’s third-party recovery.

Background

The Claimant slipped and fell on ice in the Employer’s parking lot and filed a worker’s compensation claim as well as a third-party tort action against the parking lot property owner. The claim petition was granted and Claimant received wage loss and medical benefits. In December 2018, the parties entered into a Compromise and Release Agreement that resolved the claim and recognized the Employer’s right to subrogation against the property owner to the extent of Employer’s lien. The Employer refused to compromise its lien even though it appeared unlikely that the Claimant could recover the entire amount of the lien at trial. The Claimant’s attorney entered into a new fee agreement for 50% of any third party recovery. After the third party action resolved, it was discovered that the new fee agreement was intended to circumvent the lien and the attorney provided money to the Claimant. The Employer filed Review and Modification Petitions seeking subrogation. The Claimant defended his actions by asserting that the Employer’s refusal to compromise its lien constituted bad faith. The WCJ granted the Employer’s Petitions and the Claimant appealed.

Holding

The Commonwealth Court affirmed, determining that the Claimant’s position lacked any merit.
The Court held that an employer’s mere refusal to reduce, compromise, or negotiate the full amount of its Section 319 subrogation lien, without more, does not as a matter of law constitute the kind of deliberate bad faith conduct that could result in the modification, reduction, or waiver of a subrogation lien. Importantly, this is so even if the full amount of a subrogation lien will consume the entirety of a claimant’s third-party recovery. See 77 P.S. § 671 (“Any recovery [not the recovery] against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe[e] . . . and shall be treated as an advance payment by the employer on account of any future instalments of compensation.”) (emphasis provided).

Takeaway

This decision by the Commonwealth Court confirms and supports the position that the right to subrogation under Section 319. An employer’s decision to assert its “automatic” and “absolute” right to subrogate cannot constitute deliberate “bad faith” under Pennsylvania law.

Questions about this case can be directed Taryn Vender at 570-825-4794 or tvender@tthlaw.com.