decided: January 7, 1988.
DAVID J. ORGAN, JR., PETITIONER
COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA STATE POLICE, AND OFFICE OF BUDGET AND ADMINISTRATION, DEPARTMENT OF LABOR & INDUSTRY, RESPONDENTS
Appeal from the Order of Office of Budget and Administration in case of Re: Payment of Attorney Fees/David J. Organ, dated January 23, 1986.
Anthony C. Busillo, II, Mancke, Lightman & Wagner, for petitioner.
Robert J. Schwartz, Assistant Counsel, for respondent.
Judges Craig, Colins, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Craig.
[ 112 Pa. Commw. Page 353]
David J. Organ, a recipient of benefits under both the Heart and Lung Act*fn1 and the Workmen's Compensation Act,*fn2 appeals a determination of the Office of Budget and Administration deducting from his salary the amount of the workmen's compensation award paid directly to his attorney.
The undisputed facts are established by documentary evidence in the record. Mr. Organ suffered a heart attack while employed as a state trooper, which resulted in his receiving benefits under the Heart and Lung Act. Mr. Organ also applied for and received workmen's compensation benefits.*fn3 Twenty percent of the award went directly to Mr. Organ's attorney, and the balance of the award went to the state police as required by the Heart and Lung Act. Mr. Organ later retired from the state police. Upon receipt of a retirement
[ 112 Pa. Commw. Page 354]
and sick leave payment, he discovered that the Commonwealth had deducted from that money the amount of the workmen's compensation award which had been paid directly to his attorney.*fn4
After Mr. Organ protested this deduction, the Office of Budget and Administration ruled that the Heart and Lung Act requires that money paid directly to an attorney from the workmen's compensation award be credited to the Commonwealth as if paid by the state to the employee.
The issue is whether the portion of the workmen's compensation benefits paid directly to the attorney was constructively received by Mr. Organ and was therefore subject to recovery by the Commonwealth under the Heart and Lung Act.
Because the rules of statutory construction require a literal reading of the statute and because Mr. Organ never actually received the portion of the workmen's compensation benefits paid directly to his attorney, nor any benefit therefrom greater than what the state received, that portion is not subject to recovery by the Commonwealth. Therefore, we reverse.
The Heart and Lung Act provides as follows:
[ 112 Pa. Commw. Page 355]
(a) Any member of the State Police Force . . . who is injured in the performance of his duties . . . and by reason thereof is temporarily incapacitated from performing his duties, shall be paid by the Commonwealth of Pennsylvania. . . . During the time salary for temporary incapacity shall be paid by the Commonwealth of Pennsylvania . . . any workmen's compensation, received or collected by any such employee for Page 355} such period, shall be turned over to the Commonwealth of Pennsylvania. . . and paid into the treasury thereof, and if such payment shall not be made by the employe the amount so due the Commonwealth of Pennsylvania shall be deducted from any salary then or thereafter becoming due and owing.
53 P.S. § 637 (emphasis added).
The Commonwealth would apply the statute here as if the attorney's fee portion of the workmen's compensation award had been paid solely to and for the benefit of the claimant.
A literal reading of the statute does not support the Commonwealth's position.*fn5 The statute states that any money from workmen's compensation received or collected by a beneficiary under the Heart and Lung Act must be turned over to the Commonwealth. Mr. Organ never received or collected the portion of the workmen's compensation award paid directly to his attorney.
To accept the Commonwealth's argument, we would have to find Mr. Organ to be in constructive receipt of the payment made to the attorney. The concept of constructive receipt exists to prevent injustice.
In Huckel v. Unemployment Compensation Board of Review, 68 Pa. Commonwealth Ct. 193, 448 A.2d 700 (1982), Mr. Huckel misrepresented the reason for his unemployment when he applied for unemployment benefits. While waiting for the receipt of unemployment
[ 112 Pa. Commw. Page 356]
benefits, he applied for and received welfare benefits. When Huckel began to receive his unemployment benefits, the Office of Employment Security (OES) sent the first five checks to the Department of Public Welfare as reimbursement. OES later determined that Huckel was liable for a fault overpayment because of his misrepresentation. When Huckel again became unemployed, the OES withheld the amount of the fault overpayment made during his earlier receipt of unemployment benefits. Huckel argued that he had never received the overpayments because they had been sent to the Department of Public Welfare and therefore he should not be liable because the overpayment had simply gone from one branch of the government to another. The Huckel court rejected this argument and held that Huckel was in constructive receipt of the payments and therefore liable for the fault overpayments.
Thus, in the Huckel case, this court applied the principle of constructive receipt to ensure that Mr. Huckel would not benefit unjustly from his misrepresentation to the OES. Unlike the Huckel case, the application of constructive receipt in this case would not correct an injustice but would create one.
Although a Heart and Lung Act beneficiary is not required to recover workmen's compensation, if the employee recovers workmen's compensation benefits, he must relinquish them to the employer. Therefore, proceeds which a Heart and Lung Act beneficiary receives from workmen's compensation may inure to the benefit of the employer, at least if insurance is involved, as is the case with respect to many municipal employers of Heart and Lung Act beneficiaries. To make Mr. Organ also responsible for the 20% of the workmen's compensation award paid directly to the attorney would penalize
[ 112 Pa. Commw. Page 357]
pursuance of a process which tends to benefit employers.*fn6
Moreover, the purpose of the Heart and Lung Act is to provide important public safety personnel with full compensation while disabled from work related injuries. Official Attorney General Opinion, 79-4. In this case, the determination of the Department of Budget and Administration obviously would defeat the legislative purpose of providing full compensation.
Accordingly we reverse the determination of the Office of Budget and Administration.
Now, January 7, 1988, the determination of the Office of Budget and Administration dated January 23, 1986 is reversed. The Commonwealth is ordered to pay Mr. Organ $2,888.46 plus interest.
Reversed. Reimbursement ordered plus interest.