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STEPHEN I. RICHMAN v. WORKMEN'S COMPENSATION APPEAL BOARD (01/07/75)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: January 7, 1975.

STEPHEN I. RICHMAN, GREENLEE, RICHMAN, DERRICO & POSA, APPELLANTS,
v.
WORKMEN'S COMPENSATION APPEAL BOARD, U.S. STEEL CORPORATION AND BUREAU OF EMPLOYMENT SECURITY, APPELLEES

Appeal from the Order of the Workmen's Compensation Appeal Board in case of Lloyd E. Myers v. U.S. Steel Corporation, No. C.F. 2284.

COUNSEL

Stephen I. Richman, with him Greenlee, Richman, Derrico & Posa, for appellant.

James N. Diefenderfer, for appellee, Workmen's Compensation Appeal Board.

James D. Strader, for appellee, U.S. Steel Corporation.

Donald G. Swartz, Assistant Attorney General, with him Herbert W. Hoffman, Assistant Attorney General, and Israel Packel, Attorney General, for appellee, Bureau of Employment Security.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Wilkinson.

Author: Wilkinson

[ 16 Pa. Commw. Page 595]

The facts of this case are essentially undisputed. The appellant is the law partnership of Greenlee, Richman, Derrico & Posa. This firm had been retained by Lloyd E. Myers, claimant, to represent him in a workmen's compensation claim against appellee United States Steel Corporation.

[ 16 Pa. Commw. Page 596]

Claimant had been injured on April 2, 1971. Appellee corporation denied that a compensable accident had taken place, but in lieu of workmen's compensation, had paid claimant sickness and accident benefits during the period of his disability. Also during this period, the claimant received unemployment compensation benefits from the other appellee, the Pennsylvania Bureau of Employment Security.

On October 19, 1972, the parties were notified by the referee that claimant had proven a compensable accident did occur and claimant, therefore, was entitled to workmen's compensation benefits from appellee corporation, a self-insurer, in the amount of $3437.15. The referee's order further established that subrogation rights were granted to both appellee corporation and appellee bureau for all payments of social insurance benefits ($2340.00) and unemployment compensation benefits ($900.00) that had been paid to claimant. There was no appeal from any part of this order.

On November 20, 1972, appellee corporation mailed appellant a check for $197.15 as the balance due to claimant after deduction of the two subrogation claims of the appellees. Appellant then, on March 16, 1973, submitted invoices to both appellees for their respective pro-rata share of appellant's charges for legal services and costs advanced in prosecuting claimant's case. Both appellees refused to honor appellant's bill and on April 12, 1973, almost six months after the referee's award, appellant filed a "Petition for Award of Counsel Fees" with the Workmen's Compensation Board, requesting that the Board order payment of appellant's expenses and legal fees properly due from each subrogee.

The Board denied appellant's petition, holding that the request for counsel fees is in the nature of an appeal from the referee's award and under Section 423 of the Pennsylvania Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 853,854 (Supp.

[ 16 Pa. Commw. Page 5971974]

-1975), the appeal was too late, having been filed beyond 20 days of the notice of the referee's award. The Board also held that because the provisions of Section 501 of the Act, 77 P.S. § 1021, were not met, "this Board has no authority to direct the parties to make payments to counsel for claimant." The instant appeal followed.

The appellant now argues, based on the equitable principles of subrogation as laid down in Furia v. Philadelphia, 180 Pa. Superior Ct. 50, 118 A.2d 236 (1955), and the intent evidenced in the legislative history of Section 319 of the Act, 77 P.S. § 671, that they are entitled to receive attorney fees from the fund they created which benefitted the subrogees. We find it unnecessary to reach this issue for we hold that appellant did not comply with the statutory provisions that would enable him to collect the fees they are claiming, either from the claimant, from the subrogees or as a lien on the fund.

Appellant's right to receive his attorney fees from subrogees of a workmen's compensation award must be controlled by the Workmen's Compensation Act. Section 501 of the Act, 77 P.S. § 1021, provides that, inter alia :

". . . .

"No claim or agreement for legal services or disbursements in support of any claim for compensation, or in preparing any agreement for compensation . . . shall be an enforceable lien against the amount to be paid as compensation, or be valid or binding in any other respect, unless the same be approved by the board. . . ." (Emphasis supplied.)*fn1

[ 16 Pa. Commw. Page 598]

The section goes on to require that such claim or agreement be filed with the department for approval, and then provides for creation of a lien by giving notice to the employer.*fn2 Appellant, who has the burden of proof, has made no showing that the approval of attorney's fees contemplated in Section 501 was ever granted or even sought.

Surely equity, and perhaps the law, would allow appellant to be paid a reasonable attorney fee in a case such as presented here, absent a controlling statute. However, when, as in this case, there are attorney fees claimed for protection of subrogation interests, such claims must be presented in accordance with Section 501 or Section 442 of the Workmen's Compensation Act for approval by the referee or the Board. Since neither procedure was followed in the instant case, we, therefore, must affirm the Board's decision and deny appellant's petition and appeal.

[ 16 Pa. Commw. Page 599]

Accordingly, we enter the following

Order

Now, January 7, 1975, the decision of the Workmen's Compensation Appeal Board is hereby affirmed.

Disposition

Affirmed.


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