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Lusby v. Workers' Compensation Appeal Board

July 9, 2009

WILLIAM LUSBY, PETITIONER
v.
WORKERS' COMPENSATION APPEAL BOARD (FISCHLER CO. & SPARMON, INC.), RESPONDENTS



The opinion of the court was delivered by: Judge Simpson

Argued: May 6, 2009

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE DAN PELLEGRINI, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE JOHNNY J. BUTLER, Judge.

OPINION

This workers' compensation appeal is currently a dispute between two insurance companies about which one must recoup duplicate payments to medical providers. Liability to William Lusby (Claimant) is fully satisfied. The Workers' Compensation Judge (WCJ) ruled in favor of Claimant's private insurer, Highmark, now represented by Claimant's lawyer. The Workers' Compensation Appeal Board (Board) ruled in favor of the workers' compensation insurer. To resolve this dispute, we must decide whether Highmark's subrogation lien was sufficiently established in prior proceedings so that a penalty could be awarded for failure to satisfy the lien.

In particular, Claimant petitions for review of the order of the Board, which concluded the subrogation lien was not sufficiently established in prior proceedings and therefore reversed the order of the WCJ. We conclude that the subrogation lien was sufficiently established in prior proceedings; accordingly, we reverse the Board's order and reinstate the WCJ's award of a penalty for failure to satisfy the lien.

The prior proceedings arose from a 2002 incident in which Claimant suffered a low back injury while employed by Fischler Co. & Sparmon, Inc. (Employer). As a result, Claimant received weekly workers' compensation benefits pursuant to the provisions of the Pennsylvania Workers' Compensation Act (Act).*fn1 Some of Claimant's medical bills were paid by his private insurer, Highmark.

At the heart of the prior proceedings is an August 8, 2005, Compromise and Release Agreement (C&R) executed by the parties pursuant to Section 449 of the Act.*fn2 See Reproduced Record (R.R.) at 23-30. Under the agreement, Claimant received one lump sum payment of $85,000.00 in settlement of his workers' compensation claim against Employer. Id. at 23.

In addition, the body of the agreement stated the following, in pertinent part:

10. Summarize all benefits to be paid on and after the date of this stipulation or agreement for reasonable and necessary medical treatment causally related to the injury and the length of time such payment of benefits is to continue.

Employer/insurer shall remain liable for any medical expenses outstanding or incurred by [Claimant] up to the date of the hearing on this agreement, 8/8/2005, to the extent that such medical expenses are causally related to the work injury and reasonable and necessary medical treatment thereof. Employer/insurer maintains its right to challenge any such medical expenses, in accordance with the [Act]. Employer/insurer is released from liability for any and all medical expenses incurred by [C]laimant on or after 8/8/2005. Any medical expenses incurred by [Claimant] on or after 8/8/2005 are the responsibility of [Claimant].

11. Is there an actual or potential lien for subrogation under Section 319*fn3 ? Yes No

16. The fee agreement between claimant and counsel must be attached.

[Claimant's] attorney also has 20% fee agreement on Highmark lien (attached).

R.R. at 24, 25 (emphasis added).

As indicated, Claimant's attorney requested approval of fees both for his representation of Claimant and for his efforts in obtaining reimbursement of Highmark's subrogation lien. Fee agreements for both aspects of his work were attached to the C&R. The attached fee agreement relating ...


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