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OLLIE D. JONES v. COMMONWEALTH PENNSYLVANIA (03/09/82)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: March 9, 1982.

OLLIE D. JONES, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, WORKMEN'S COMPENSATION APPEAL BOARD AND UNITED STATES STEEL CORPORATION, RESPONDENTS

Appeal from the Order of the Workmen's Compensation Appeal Board in case of Ollie D. Jones v. U.S. Steel Corporation, No. A-79622.

COUNSEL

Joseph S. Bekelja, Margolis, Edelstein and Scherlis, for petitioner.

Robert C. Jones, with him James D. Strader, for respondent, United States Steel Corporation.

Judges Blatt, Williams, Jr. and Craig, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 65 Pa. Commw. Page 209]

This is an appeal from an order of the Workmen's Compensation Appeal Board reversing a referee's decision to award penalties and attorney's fees to Ollie D. Jones, claimant, and modifying that award to give credit for benefits previously paid. The award of compensation benefits to the claimant is not on appeal.

By agreement, the claimant received compensation after he injured his right shoulder in a work-related incident on September 28, 1972. He returned to work, but suffered a serious injury to the same shoulder on April 3, 1978. On July 22, 1980, a referee awarded claimant benefits for that second injury, and ordered the employer to pay claimant's attorney's fees and a penalty of 20% of the total award.

[ 65 Pa. Commw. Page 210]

The board affirmed the referee's award of compensation, but ordered that the award of attorney's fees and the penalty be deleted. Furthermore, the board granted the employer a credit for sickness and accident benefits it had paid to claimant under a self-insurance plan.

We affirm the portion of the board's decision granting the employer credit for sickness and accident benefits paid under a self-insurance plan and reversing the referee's award of penalties, but we reverse that portion of the board's deicison that deletes the award of attorney's fees.

In construing Section 440 of The Pennsylvania Workmen's Compensation Act (Act),*fn1 this court has held that "the award of attorney's fees is the rule and their exclusion is the exception to be applied in cases where the record establishes that the employer's or carrier's contest is reasonably based." Weidner v. Workmen's Compensation Appeal Board, 16 Pa. Commonwealth Ct. 561, 565, 332 A.2d 885, 887 (1975).

In reviewing this question of law,*fn2 we have previously held that a contest is unreasonable "where

[ 65 Pa. Commw. Page 211]

    no conflicting medical testimony was presented regarding the 'contested' issues of the claimant's disability and his continued treatment for an injury." Poli v. Workmen's Compensation Appeal Board, 34 Pa. Commonwealth Ct. 630, 634, 384 A.2d 596, 598 (1978).

Here, the employer presented no medical evidence to rebut the fact of injury established by the claimant's direct case. Rather, it presented the testimony of its own doctor, Joseph C. Koch, M.D., the medical director at the plant where the claimant worked, who testified only that on the day following the injury, the claimant, as he had done since his 1972 injury, reported to Dr. Koch that he needed medication for his shoulder. Although Dr. Koch said that claimant did not report the new injury expressly to him, he acknowledged that claimant continued to undergo tests and receive treatment from a number of his consultants.

Thus the testimony of Dr. Koch "did not provide a sufficiently probative counterinference upon which it could be concluded as a matter of law that the contest was reasonably based." Murray v. Workmen's Compensation Appeal Board, 45 Pa. Commonwealth Ct. 3, 9, 404 A.2d 765, 767 (1979). Therefore, the referee's award to claimant for attorney's fees in the amount of 20% of the total award will be reinstated.*fn3

In relation to the matter of penalty, this court has construed the relationship between subsections (b) and (d) of Section 435 of the Act,*fn4 concluding that:

[ 65 Pa. Commw. Page 212]

No penalty may be imposed under subsection (d) absent proof of a violation of the Act or of the rules of the department or board.

Not only does a reading of Section 435 in its entirety indicate the Legislature's intention that notice and hearing be provided on the issue of violations, an interpretation which would allow the imposition of penalties for asserted violations without notice and opportunity to be heard would render the proceedings unfair and therefore constitutionally infirm. We . . . hold that an apparent offender may not be penalized under subsection (d) without notice and an opportunity to be heard on that issue.

Crangi Distributing Co. v. Workmen's Compensation Appeal Board, 17 Pa. Commonwealth Ct. 530, 535, 333 A.2d 207, 210 (1975).

Here, the referee did not follow the procedure set forth in Section 435, and therefore the board was correct in reversing his order awarding penalties against the employer.

[ 65 Pa. Commw. Page 213]

Finally, the board correctly granted the employer a credit on future installments of compensation for payments that have already been made to claimant. We have often stressed that a claimant does not have the right to a double recovery. See Workmen's Compensation Page 213} Appeal Board v. Olivetti Corp. of America, 26 Pa. Commonwealth Ct. 464, 364 A.2d 735 (1976).

Order

Now, March 9, 1982, the order of the Workmen's Compensation Appeal Board dated April 23, 1981, at No. A-79622, is affirmed to the extent that it grants the employer credit for sickness and accident benefits paid and deletes the referee's award of penalties, but that portion that deletes the award of attorney's fees of 20% to be awarded to claimant is reversed.

It Is Further Ordered that the case is remanded to the Workmen's Compensation Appeal Board for a determination of the total amount of benefits paid to Ollie D. Jones under United States Steel's self-insurance plan, which amount shall be credited against the amounts owed by United States Steel under the board's order amended in accordance with our decision.

Disposition

Affirmed in part and reversed in part. Case remanded.


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