Appeal from the Order of the Workmen's Compensation Appeal Board in case of Raymond J. Poli v. Arlyn Printing and Advertising Co., No. A-71887.
Gerald J. Haas, for appellant.
Michael Luber, with him John E. O'Connor, and James N. Diefenderfer, for appellees.
Judges Rogers, Blatt and DiSalle, sitting as a panel of three. Opinion by Judge Blatt.
[ 34 Pa. Commw. Page 631]
The Appellant, Raymond J. Poli, appeals here from an order of the Workmen's Compensation Appeal Board (Board) deleting attorney's fees from his award under Section 440 of The Pennsylvania Workmen's Compensation Act*fn1 (Act). He was the president and one of eight employes of the Arlyn Printing and Advertising Co. (employer) when he sustained a back injury on July 31, 1972 as a result of which he was awarded workmen's compensation benefits. On September 5, 1972, he returned to work and a supplemental agreement was filed noting the continuance of a partial disability and providing payment therefor. On February 26, 1973, the Appellee insurer, State Workmen's Insurance Fund, filed a termination petition alleging that the Appellant's disability had ended and claiming an overpayment. The petition was dismissed by the referee who held there had been no overpayment and compensation was continued in accordance with the supplemental agreement together with medical expenses and interest. The referee concluded
[ 34 Pa. Commw. Page 632]
that the insurer had failed to prove that the Appellant had returned to work without a loss of earning power as a result of the injury. The referee also ordered the employer and/or its insurance carrier to pay the Appellant's attorney fee in the amount of 20% of the sum payable. Upon appeal to the Board, the referee's decision was affirmed except for the payment of attorney's fees.
[ 34 Pa. Commw. Page 633]
Section 440*fn2 of the Act requires that, in workmen's compensation proceedings, the insurer must pay a reasonable fee to the successful claimant's attorney unless a reasonable basis for contesting the award is established, and this section is intended to deter unreasonable contests of workers' claims and to ensure that successful claimants receive compensation undiminished by costs of litigation. Workmen's Compensation Page 633} Appeal Board v. Bethlehem Mines Corporation, 23 Pa. Commonwealth Ct. 517, 353 A.2d 79 (1976). Although the Act does not automatically require attorney's fees to be awarded in cases involving petitions for termination which are resolved in favor of the worker, we have noted that this is ordinarily the rule, with their exclusion being the exception where the record has established that the carrier's contest is reasonably based. Weidner v. Workmen's Compensation Appeal Board, 16 Pa. Commonwealth Ct. 561, 332 A.2d 885 (1975). In this case, although the referee specifically awarded attorney's fees, the Board reversed on the basis that:
the referee did not find that there was not a reasonable basis for contest. This is a necessary finding to support an award of counsel fees. See Crangi Distributing Co. v. Workmen's Compensation Appeal Board, 17 Commonwealth Ct. 530 (1975).
A specific finding of fact on the issue of reasonable basis is not required under the Crangi case, and, in fact, this Court has held that the question of reasonable contest, while including factual queries, is ultimately a question of law. Ball v. Workmen's Compensation Appeal Board, 19 Pa. Commonwealth Ct. 157, 333 A.2d 819 (1975). Here, by awarding attorney's fees to the Appellant, the referee concluded as a matter of law that the basis for the insurer's contest was unreasonable. See Ratchko v. Workmen's Compensation Appeal Board, 31 Pa. Commonwealth Ct. 585, 377 A.2d 1012 (1977). It is this question of law which is on appeal to us here.
Whether or not there has been a reasonable basis for contesting a claimant's award of benefits depends upon both the facts and the legal issues involved. For example, this Court has held the contest to be ...