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CYRIL CHOVAN v. WHEELING-PITTSBURGH STEEL CORP. AND COMMONWEALTH PENNSYLVANIA. WHEELING-PITTSBURGH STEEL CORP. (05/12/77)

decided: May 12, 1977.

CYRIL CHOVAN
v.
WHEELING-PITTSBURGH STEEL CORP. AND COMMONWEALTH OF PENNSYLVANIA. WHEELING-PITTSBURGH STEEL CORP., APPELLANT



Appeal from the Order of the Workmen's Compensation Appeal Board in case of Cyril Chovan v. Wheeling-Pittsburgh Steel Corp. and Commonwealth of Pennsylvania, No. A-69762.

COUNSEL

Henry J. Wallace, Jr., with him Reed, Smith, Shaw & McClay, for appellant.

Richard G. Spagnolli, with him McArdle, Henderson, Caroselli, Spagnolli & Beachler, and James N. Diefenderfer, for appellees.

Judges Crumlish, Jr., Kramer and Rogers, sitting as a panel of three. President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Kramer. Dissenting Opinion by Judge Blatt. Judge Wilkinson, Jr. joins in this dissent.

Author: Kramer

[ 30 Pa. Commw. Page 129]

This is an appeal by Wheeling-Pittsburgh Steel Corporation from an order of the Workmen's Compensation Appeal Board dated September 11, 1975, in which the Board awarded benefits to Cyril Chovan. Wheeling-Pittsburgh raises issues concerning the Board's award of attorney's fees and its award of interest. Because of inadequacies in the record, we reluctantly conclude that we must remand this case to the Board.

On September 28, 1973, prior to filing his claim petitions, Chovan executed an "Agreement to Reimburse" pursuant to a labor agreement negotiated between Wheeling-Pittsburgh and Chovan's union. This agreement provided, inter alia, to reimburse Wheeling-Pittsburgh or its "authorized agent" for any sickness and accident benefits paid to him during any period for which he was not entitled to such benefits because of the subsequent successful assertion of a workmen's compensation or occupational disease claim covering that same period. The agreement also provided that Chovan would instruct any attorney retained by him in connection with such a claim not to seek compensation from Wheeling-Pittsburgh or its agent for legal services performed by the attorney in securing reimbursement of the amount of overpaid benefits. Finally, in the event that Chovan's attorney did require the payment of compensation from Wheeling-Pittsburgh or its agent for services provided in securing a fund for the reimbursement of benefit overpayment,

[ 30 Pa. Commw. Page 130]

Chovan agreed to reimburse Wheeling-Pittsburgh or its agent in full for such attorney's fees.

The execution of this agreement was a condition precedent to Chovan's receiving sickness and accident benefits under the insurance benefit provisions of the labor agreement. After signing the agreement, Chovan began receiving $100 per week for the period from September 23, 1973 to September 21, 1974 -- a total of $5,200. These payments were made by the General American Insurance Company.

On May 9, 1974, Chovan filed claim petitions alleging total disability arising from exposure to a silica hazard and, on January 22, 1975 a referee found that Chovan was, in fact, disabled. On behalf of General American, Wheeling-Pittsburgh asserted a claim of subrogation.*fn1 The referee awarded Chovan benefits payable by Wheeling-Pittsburgh, and General American was awarded subrogation rights in the amount of $2,143.*fn2 The referee further awarded interest

[ 30 Pa. Commw. Page 131]

    of ten percent against Wheeling-Pittsburgh on amounts due and owing, and Chovan's attorney was awarded $1,000 in fees against Chovan and $214.30 in fees against General American.

Both parties appealed to the Board, Chovan joining in his attorney's request that the fee be increased to $2,080 (representing twenty percent of the first year's benefits). Wheeling-Pittsburgh appealed, inter alia, the referee's awards of attorney's fees against General American and the award of interest. The Board affirmed the referee's decision in all respects except the amount of attorney's fees. The Board increased the attorney's fees to be paid by General American to $428.60, representing twenty percent of the $2,143 subrogation amount.

In its challenge to the Board's award of attorney's fees against General American, one of Wheeling-Pittsburgh's arguments is that General American is no more than Wheeling-Pittsburgh's "authorized agent for payment and collection." While it does appear from the record and the briefs that General American is not Wheeling-Pittsburgh's workmen's compensation carrier and that Wheeling-Pittsburgh is self-insured under the Act, nowhere is it revealed with any degree of clarity what function General American plays with regard to the benefit program established by the collective bargaining ...


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