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Boeing Co. v. Workers' Compensation Appeal Board

June 24, 2009

THE BOEING COMPANY, PETITIONER
v.
WORKERS' COMPENSATION APPEAL BOARD (HORAN), RESPONDENT



The opinion of the court was delivered by: Judge Cohn Jubelirer

Argued: February 24, 2009

BEFORE: HONORABLE DAN PELLEGRINI, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.

OPINION

The Boeing Company (Employer) petitions for review of an order of the Workers' Compensation Appeal Board (Board), which reversed a Workers' Compensation Judge's (WCJ) decision and order granting Employer's Application for Supersedeas Fund Reimbursement. At issue in this case is whether Employer meets the requirements of Section 443 of the Workers' Compensation Act (Act)*fn1 to receive reimbursement from the Supersedeas Fund for overpayments of workers' compensation made to Thomas Horan (Claimant), which resulted from application of the offset/credit provisions of Section 204(a) of the Act, 77 P.S. § 71(a).*fn2

The relevant facts in this case are as follows. Claimant sustained an injury to his low back while working as a material handler for Employer on February 4, 2004. Following his injury, Claimant was placed on light-duty status, and he was restricted to lifting 15 to 20 pounds. Claimant continued working on light-duty status, with no wage loss, from February 4, 2004 to December 23, 2004, when he was laid off. Claimant filed a Claim Petition seeking acknowledgment of his work-injury and payment of temporary total disability benefits as of December 24, 2004, and ongoing. Employer filed an Answer denying the allegations set forth in the Claim Petition.

The matter was assigned to a WCJ, who held several hearings at which the parties presented evidence in support of, and in opposition to, the Claim Petition. Of particular importance, during a hearing held before the WCJ on February 14, 2005, Claimant testified that, after being laid off, he received $419.00 per week in unemployment compensation benefits and 19 weeks worth of severance pay.*fn3 (WCJ Hr'g Tr. at 20-21, February 14, 2005.) Employer filed a brief with the WCJ, arguing, among other issues, that if Claimant's Claim Petition was granted, Employer should receive an offset credit for Claimant's severance pay and unemployment compensation benefits. (Employer's Br. to WCJ, July 14, 2005, at 5-6.) On October 18, 2005, the WCJ issued a decision and order granting Claimant's Claim Petition and directing Employer to pay Claimant temporary total disability benefits at the rate of $688.00 per week, commencing December 24, 2004 and continuing until otherwise modified, plus interest for past due benefits. The WCJ also directed Employer to pay $4,335.00 in unreasonable contest attorney's fees. However, the WCJ did not acknowledge Employer's entitlement to any offsets/credits for the unemployment compensation and severance benefits received by Claimant.

Employer appealed the WCJ's decision and order, arguing, among other things,*fn4 that the WCJ erred in failing to award Employer offsets/credits for the unemployment compensation and severance benefits received by Claimant. In connection with its appeal, Employer filed a request for supersedeas. By order dated December 6, 2005, the Board granted Employer's request for supersedeas as to the award of unreasonable contest attorney's fees, but denied the request as to the award of temporary total disability benefits. As a result, Employer paid Claimant temporary total disability benefits and unreasonable contest attorney's fees totaling $29,861.47.*fn5

After considering Employer's appeal, the Board issued an opinion and order on August 22, 2006 affirming, but modifying, the WCJ's decision and order. In its opinion, the Board explained that Claimant had testified to receiving $419.00 per week in unemployment compensation benefits and 19 weeks of severance pay. (Board Op. at 5-6, August 22, 2006 (citing WCJ Hr'g Tr. at 20-21, February 14, 2005).) The Board concluded that, pursuant to Section 204(a) of the Act, Employer was entitled to offsets/credits for the unemployment compensation and severance benefits received by Claimant.

Employer subsequently filed its Application for Supersedeas Fund Reimbursement, seeking $29,861.47. The Bureau of Workers' Compensation (Bureau), acting as conservator of the Supersedeas Fund, challenged Employer's request. The matter was assigned to a WCJ, who conducted a hearing. The WCJ subsequently issued a decision and order granting Employer reimbursement from the Supersedeas Fund in the amount of 25,526.47. The WCJ found that Claimant received $10,894.00 ($419.00 for 26 weeks) in unemployment compensation benefits and $19,608.00 ($1,032.00 for 19 weeks) in severance benefits, which resulted in a total of $30,502.00. (WCJ Decision, Findings of Fact (FOF) ¶¶ 7, 10, October 1, 2007.) The WCJ further found that Employer had paid Claimant workers' compensation benefits and unreasonable contest attorney's fees totaling $29,861.47, which was the amount of reimbursement being sought by Employer. (FOF ¶ 10.) However, the WCJ found that Employer was not entitled to reimbursement from the Supersedeas Fund for the unreasonable contest attorney's fees because applicable case law does not allow for reimbursement of such fees, and because the Board had granted supersedeas as to the payment of those fees. (FOF ¶ 10.) Thus, the WCJ found that, after subtracting the $4,335.00 in unreasonable contest attorney's fees from $29,861.47, Employer was entitled to reimbursement from the Supersedeas Fund in the amount of $25,526.47. (FOF ¶ 11.)

The Bureau appealed the WCJ's decision and order, arguing that the WCJ erred in granting Employer Supersedeas Fund reimbursement for offsets/credits awarded under Section 204(a) of the Act. The Board subsequently issued an opinion and order reversing the WCJ's decision and order. The Board, relying on City of Wilkes-Barre v. Workers' Compensation Appeal Board (Spaide), 868 A.2d 620 (Pa. Cmwlth. 2004), concluded that Employer is not entitled to reimbursement from the Supersedeas Fund. (Board Op. at 5-6, July 7, 2008.) Employer now petitions this Court for review of the Board's order.*fn6 The Bureau has intervened to oppose Employer's Petition for Review.

Before this Court, Employer argues that the Board erred in reversing the WCJ's decision and order granting Employer reimbursement from the Supersedeas Fund. Employer contends that it satisfied all of the requirements set forth in Section 443 of the Act governing the granting of reimbursement from the Supersedeas Fund. Employer asserts that the Board erred in relying on Spaide because that case is distinguishable from the present case. Employer contends that, unlike in Spaide, here Claimant's entitlement to benefits was first established through the WCJ's decision and order. The WCJ granted the litigated Claim Petition and directed Employer to pay Claimant temporary total disability benefits, but failed to acknowledge Employer's entitlement to any offsets/credits pursuant to Section 204(a) of the Act. Employer argues that, under these circumstances, it could not engage in self-help to take automatic offsets/credits using the Bureau's regulations*fn7 because to do so would have violated the Act and subjected Employer to penalties. Employer further contends that, by the time the Board issued its determination concluding that the WCJ had erred in failing to award Employer offsets/credits for the unemployment compensation and severance benefits received by Claimant, Claimant had already returned to work and, thus, Employer could no longer collect its overpayment by making deductions from future payments of workers' compensation benefits.

In response, the Bureau argues that the Board acted properly in reversing the WCJ's decision and order granting Employer reimbursement from the Supersedeas Fund. The Bureau contends that Spaide is controlling in this case. According to the Bureau, under Spaide, Employer is not entitled to reimbursement from the Supersedeas Fund because the offsets/credits that Employer was seeking are derived from Section 204(a) of the Act, and not Section 413, 77 P.S. § 771-774.3,*fn8 or Section 430, 77 P.S. § 971.*fn9 The Bureau asserts that, under Spaide, Employer is also not entitled to reimbursement because there was never a determination that compensation was not, in fact, payable. The Bureau further contends that there is nothing in Section 204(a) of the Act or the Bureau's regulations at 34 Pa. Code §§ 123.6*fn10 and 123.11*fn11 that prohibited Employer from utilizing the same mechanisms available to the insurer in Spaide to obtain the offsets/credits to which it is entitled.

We begin our review by considering the applicable law governing reimbursement from the Supersedeas Fund. The statutory provisions creating the Supersedeas Fund and allowing for reimbursement therefrom are found in Section 443 of the Act, which provides, in relevant part, as follows:

(a) If, in any case in which a supersedeas has been requested and denied under the provisions of section 413 or section 430, payments of compensation are made as a result thereof and upon the final outcome of the proceedings, it is determined that such compensation was not, in fact, payable, the insurer who has made such payments shall be reimbursed therefor. . . .

(b) There is hereby established a special fund in the State Treasury, separate and apart from all other public moneys or funds of this Commonwealth, to be known as the Workmen's Compensation Supersedeas Fund. The purpose of this fund shall be to provide moneys for payments pursuant to subsection (a) . . . .

77 P.S. § 999 (emphasis added). Interpreting these statutory provisions, this Court has explained that reimbursement from the Supersedeas Fund will be granted where the following requirements are satisfied:

1) a supersedeas was requested; 2) the request for supersedeas was denied; 3) the request was made in a proceeding under Section 413 or Section 430 of the Act; 4) payments were continued because of the order denying supersedeas; and 5) in the final outcome of the proceedings, it was determined such compensation was not, in fact, payable.

Mark v. Workers' Compensation Appeal Board (McCurdy), 894 A.2d 229, 233 (Pa. Cmwlth. 2006) (en banc) ...


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