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PAUL KLEIN v. WORKMEN'S COMPENSATION APPEAL BOARD (PLAZA HOME CENTER (08/21/85)

decided: August 21, 1985.

PAUL KLEIN, PETITIONER
v.
WORKMEN'S COMPENSATION APPEAL BOARD (PLAZA HOME CENTER, INC., AND ST. PAUL FIRE & MARINE INSURANCE COMPANY), RESPONDENTS



Appeal from the Order of the Workmen's Compensation Appeal Board in case of Paul Klein v. Plaza Home Center, Inc., No. A-85077.

COUNSEL

John E. O'Connor, for petitioner.

Z. R. Bialkowski, Jr., with him, Chester F. Dudick, Jr., for respondents, Plaza Home Center, Inc., and St. Paul Fire & Marine Insurance Company.

Judges Craig and Colins, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 91 Pa. Commw. Page 248]

In this appeal from the Workmen's Compensation Appeal Board by claimant Paul Klein, the central question is whether the referee's denial of benefits, affirmed by the board, was based upon a capricious disregard of evidence by the referee, who concluded that the cause of the claimant's mental disability arose, not from the claimant's employment as chief

[ 91 Pa. Commw. Page 249]

    executive officer of the financially distressed defendant Plaza Home Center, Inc., but instead came from the threat of financial loss in connection with his ownership interest, if any, in the corporation.

Work-related mental illness is an injury under section 301(c) of The Pennsylvania Workmen's Compensation Act,*fn1 University of Pittsburgh v. Perlman, 49 Pa. Commonwealth Ct. 347, 405 A.2d 1048 (1980), but, to be work-related, the mental injury of course must stem from the claimant's functioning as an employee, not from circumstances which the claimant encounters in another capacity.

Summarized, the referee's key findings (numbered as indicated in the parentheses following each finding) were as follows:

The claimant created the defendant corporation, which "was wholly owned by him." (4) The defendant corporation had immediate notice of psychiatric injury to the defendant because the knowledge of the claimant, as president of the corporation, was therefore within the knowledge of the defendant. (6)

In late 1978, with the corporation having financial difficulties, the claimant discussed bankruptcy with an attorney who suggested delay of the matter. (7) While later conferring with that attorney concerning the bankruptcy matter in January of 1979, the claimant developed a skin rash or neurodermatitis, which reappeared in subsequent times of stress related to the financial difficulties. (9) A medical injection for that rash put the claimant in shock, requiring two days' hospitalization in January, 1979. Starting in 1979, and continuing thereafter, the claimant had ...


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