Appeal from the Order of the Workmen's Compensation Appeal Board in the case of Raymond T. Huskins v. University of Pennsylvania, No. A-82781.
Richard L. Schuster, for appellant.
Sharon F. Harvey, Swartz, Campbell & Detweiler, for respondents.
Judges Craig, Doyle and Blatt, sitting as a panel of three. Opinion by Judge Blatt.
[ 80 Pa. Commw. Page 162]
Raymond T. Huskins (claimant) appeals here an order of the Workmen's Compensation Appeal Board (Board) which reversed a referee's decision that the claimant was entitled to commutation of benefits and ordered continued payments on a weekly basis.
The claimant suffered a work-related injury in 1980 and has been receiving weekly benefits for total disability. He requested a commutation of benefits from the referee, pursuant to Section 412 of The Pennsylvania Workmen's Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 791,*fn1 so that he could build a home on a lot he owned in Johnson County, Tennessee. In the event that further occurences might lower the employer's insurance carrier's liability, the claimant offered the insurance carrier a first mortgage*fn2 on the property, and the referee
[ 80 Pa. Commw. Page 163]
ruled that the mortgage was sufficient and awarded commutation. The Board held on appeal by the insurance carrier, as a matter of law, that the mortgage would not adequately protect the insurance carrier's rights, and reversed the referee. The claimant then filed the instant appeal.
[ 80 Pa. Commw. Page 164]
The issues raised here are purely matters of law: 1) Is the mortgage offered by the claimant sufficient indemnity to safeguard the insurance carrier's rights? Section 316 of the Act, 77 P.S. § 604, and, 2) Did the Board abuse its discretion in not awarding commutation? Workmen's Compensation Appeal Board v. Montrose, 20 Pa. Commonwealth Ct. 97, 340 A.2d 605 (1975).
The Board held that the mortgage was insufficient in that "it does not take into account the possible depreciation of the asset during the course of the life of the claimant and his wife and because it does not necessarily allow the payment of the unused balance of the lump sum award at the time of claimant's death," and we agree. In addition to the shortcomings noted, the mortgage does not allow for any interest until the death of the claimant and only then is it fixed at "the prevailing mortgage interest rate in the Community in which the property is located on the date of death, such Interest Rate being fixed during the remaining term of the mortgage." When the mortgage terms are read carefully and the possibilities of future events considered, it is clear that the mortgage is not adequate to protect against future loss as is required. See Garrity v. Bituco Mfg. & Chemical Co., 277 Pa. 88, 120 A. 764 (1923). Moreover, ...