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GEORGE C. KUNEY v. WORKMEN'S COMPENSATION APPEAL BOARD (CONTINENTAL DATA SYSTEMS AND PMA INSURANCE COMPANY) (07/28/89)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: July 28, 1989.

GEORGE C. KUNEY, PETITIONER,
v.
WORKMEN'S COMPENSATION APPEAL BOARD (CONTINENTAL DATA SYSTEMS AND PMA INSURANCE COMPANY), RESPONDENTS

PETITION FOR REVIEW (WORKMEN'S COMPENSATION)

COUNSEL

William D. Marvin, Cohen, Shapiro, Polisher, Shiekman & Cohen, Philadelphia, for petitioner.

Howard M. Ellner, Philadelphia, for respondents.

Doyle and McGinley, JJ., and Barbieri, Senior Judge.

Author: Barbieri

[ 127 Pa. Commw. Page 630]

George C. Kuney (Claimant) petitions for review of the order of the Workmen's Compensation Appeal Board (Board) insofar as it reversed the referee's assessment of counsel fees against Respondents, Continental Data Systems (Continental) and its insurance carrier, PMA Insurance Company (PMA), pursuant to Section 440 of The Pennsylvania Workmen's Compensation Act*fn1 (Act). Issues presented for review pertain to whether Respondents established a reasonable basis to contest liability. The Board's decision is affirmed in part and reversed in part.

Claimant, a computer salesperson for Continental, was regularly required to lift, carry, and transport computers to the offices of prospective purchasers for demonstration purposes and occasionally directed to unload truck shipments of computers. While unloading computers from a truck on February 4, 1985, Claimant slipped on a patch of ice and sustained a back injury. Claimant notified Continental of the work incident and injury ten days later when he discontinued working due to increasing pain. Shortly thereafter, Claimant sought medical treatment as well.

[ 127 Pa. Commw. Page 631]

On March 11, 1985, PMA filed a Notice of Denial of Compensation*fn2 and, on May 20, 1985, Claimant filed a claim petition seeking compensation benefits and medical expenses. After three hearings, the referee directed Continental to pay total disability compensation to Claimant and reimburse Claimant for medical expenses and legal costs.*fn3 On appeal, the Board affirmed the referee's award of compensation and medical expenses but reversed the referee's assessment of counsel fees on the ground that Respondents had a reasonable basis to contest liability as evidenced by the presentation of conflicting medical opinions. Claimant's petition for review*fn4 to this Court followed.

Whether there exists a reasonable basis for an employer's contest of liability is a question of law premised upon the referee's findings of fact which are supported by substantial evidence and, as such, fully reviewable by this Court. MacNeill v. Workmen's Compensation Appeal Board (Denny's, Inc.), 120 Pa. Commonwealth Ct. 320, 548 A.2d 680 (1988). Reasonableness of an employer's contest depends upon whether the contest was prompted to resolve a genuinely disputed issue or merely to harass the claimant.

[ 127 Pa. Commw. Page 632]

    dispute as to the extent and period of Claimant's disability as demonstrated by Dr. Beller's statements. In support, Respondents cite this Court's decision in White where we found that the employer was justified in contesting liability to ascertain the period of the claimant's disability in view of the fact that the employer's physician released the claimant to return to work two weeks after the date of the claimant's injury.

Here, unlike the employer's physician in White, Dr. Beller qualified Claimant's ability to return to work. The restrictions recommended by Dr. Beller would have effectively precluded Claimant from fully performing the duties of his pre-injury position and bore an adequate causal nexus to Claimant's work-related injury and subsequent disability. Respondents were therefore required to present additional evidence of the availability of work within Claimant's limited capabilities under the principles set forth in Kachinski v. Workmen's Compensation Appeal Board (Vepco Construction Co.), 516 Pa. 240, 532 A.2d 374 (1987), in order to justify their contest on the basis of Dr. Beller's statements. See also Vital Signs Institute, Inc. v. Workmen's Compensation Appeal Board (Burke), 114 Pa. Commonwealth Ct. 191, 538 A.2d 617 (1988) and Investors Diversified Services v. Workmen's Compensation Appeal Board (Howar), 103 Pa. Commonwealth Ct. 562, 520 A.2d 958 (1987) (The burden shifts to the employer once credible evidence establishes that a claimant cannot perform his pre-injury position due to his work-related injury). Review of the record, however, fails to disclose evidence of work availability.*fn6

Respondents alternatively assert that the factual set of circumstances presented here is alone sufficient to support their decision to contest Claimant's version of the events without resort to the medical evidence. However, Respondents failed to offer evidence at the hearings before the referee of any suspicions concerning Claimant's version

[ 127 Pa. Commw. Page 634]

    of the events. This failure effected a waiver of the right to raise this issue on review. See Pa.R.C.P. 1551; DeMarco v. Jones & Laughlin Steel Corp., 513 Pa. 526, 522 A.2d 26 (1987). Moreover, the factual doubts now asserted as grounds for contesting liability were not set forth in the Notice of Denial of Compensation as required by Section 406.1 of the Act, added by Section 3 of the Act of February 8, 1972, P.L. 25, 77 P.S. ยง 717.1, which states in part that:

If the insurer controverts the right to compensation it shall promptly notify the employe . . ., stating the grounds upon which the right to compensation is controverted . . .*fn7

In short, Respondents initiated this contest without any evidence and, when such evidence was subsequently secured, it was inadequate. What began as an unreasonable contest remained unreasonable. Nor can Respondents' belated attempt to employ a post-hoc justification or assert a factual issue which could and should have been recited in

[ 127 Pa. Commw. Page 635]

    their Notice of Denial of Compensation convert this contest from one which was unreasonable into one which is reasonable.

Having found that Respondents failed to sustain their burden of proving a reasonable basis for their contest, the decision of the Board is reversed insofar as it denied counsel fees and affirmed in all other respects.*fn8

Order

AND NOW, this 28th day of July, 1989, the order of the Workmen's Compensation Appeal Board is affirmed as to the award of compensation and medical expenses but reversed as to the denial of counsel fees and the referee's assessment of counsel fees is reinstated.


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