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City of Philadelphia, Board of Pensions and Retirement v. Clayton

December 24, 2009

CITY OF PHILADELPHIA, BOARD OF PENSIONS AND RETIREMENT
v.
HERBERT CLAYTON, APPELLANT



The opinion of the court was delivered by: Judge Simpson

Argued: November 10, 2009

BEFORE: HONORABLE ROBERT SIMPSON, Judge, HONORABLE JOHNNY J. BUTLER, Judge, HONORABLE KEITH B. QUIGLEY, Senior Judge.

OPINION

Herbert Clayton (Appellant) asks whether the Court of Common Pleas of Philadelphia County (trial court) erred in entering judgment in favor of the City of Philadelphia's (City) Board of Pensions and Retirement (Pension Board) in the amount of $298,922.04 and accruing interest. Appellant received both service-connected disability pension (disability pension benefits) and workers' compensation benefits for the period of January, 1998 to September, 2004 for a career-ending injury he suffered in 1997. However, it is clear a claimant is not entitled to retain both disability pension and workers' compensation benefits for the same period of disability. Thus, this dispute concerns whether Appellant must reimburse the City for disability pension benefits he received for the same period of time he also received workers' compensation benefits.

In May, 1997, Appellant worked as a police officer for the City when he suffered a permanent work injury. Appellant worked as a police officer for the City for 25 years. As such, Appellant qualified to receive service retirement benefits. He began receipt of those benefits in January, 1998.

On December 9, 1998, Appellant applied for disability pension benefits from the Pension Board. That same day, Appellant entered into a Pension Agreement with the Pension Board, which provided the City's entitlement to pursue a credit if Appellant received both disability pension and workers' compensation benefits.

In September, 2000, the Pension Board approved Appellant's disability pension benefits application. Thereafter, the Pension Board paid Appellant disability pension benefits. The Pension Board retroactively converted the service retirement benefits he had been receiving since 1998 into disability pension benefits.

Appellant subsequently filed a claim under the Workers' Compensation Act (Act).*fn1 In March, 2001, a Workers' Compensation Judge (WCJ) awarded Appellant workers' compensation benefits, effective January, 1998. No appeal was taken from that award. However, the City failed to pay Appellant workers' compensation benefits.

Seven months later, in October, 2001, Appellant filed a petition to reinstate benefits and a penalty petition with the Bureau of Workers' Compensation (Bureau), alleging the City failed to pay workers' compensation benefits in compliance with the WCJ's order. In June, 2004, a second WCJ ordered the City to pay Appellant all past due workers' compensation benefits without offset or credit because the City failed to either file a notice of offset*fn2 or request credit in the earlier WCJ proceedings.*fn3

Subsequently, the City filed with the Bureau two notices of benefit offset. One sought credit for disability pension benefits beginning in August, 2004 against Appellant's future workers' compensation benefits. The other sought a retroactive credit for disability pension benefits to offset Appellant's workers' compensation award for the period of January, 1998 to September, 2004.

The City also appealed the second WCJ's order to the Workers' Compensation Appeal Board (WCAB) and requested a supersedeas as to the payment of ongoing workers' compensation benefits. In August, 2004, the WCAB denied the supersedeas request and, in June, 2005, denied the City's appeal. Nevertheless, the City refused to pay Appellant the retroactive workers' compensation benefits.*fn4

Because the City failed to pay the second WCJ's award within 30 days and the WCAB denied the City's request for supersedeas, Appellant filed a praecipe to enter judgment and a praecipe for writ of execution against the City in the trial court in the amount of $307,136.84.*fn5 The City filed petitions to open judgment and set aside the writ of execution. In April, 2005, another judge of the same court denied both of the City's petitions finding no legal or equitable basis to open the judgment or set aside the writ of execution.

In November, 2005, Appellant filed a second praecipe to enter judgment and a second praecipe for writ of execution. That same day, the City filed an emergency petition to open judgment. Relying on the April, 2005 order, the trial court dismissed the City's emergency petition to open judgment. The City appealed all three orders to this Court.

In October, 2006, this Court affirmed the trial court, noting the City's petitions to open judgment or set aside the writs of execution were collateral attacks on the second WCJ's award of compensation.*fn6

Subsequently, the City paid Appellant $343,540.61 to satisfy the workers' compensation award. Thus, after payment of the workers' compensation award, Appellant possessed both workers' compensation and disability pension benefits for the same period of disability. As a result, in May, 2007, the Pension Board sent Appellant a letter seeking total reimbursement of the disability pension benefits he received in addition to the workers' compensation benefits. Appellant, however, refused to reimburse the Pension Board.

The Pension Board filed a breach of contract and unjust enrichment action. The Pension Board argued it was entitled to recover the disability pension benefits it paid Appellant from January, 1998 to September, 2004 in the form of a dollar-for-dollar credit for the workers' compensation benefits paid to Appellant for the same period of disability. The trial court held a bench trial and, in September, 2008, entered judgment in favor of the Pension Board in the amount of $298,922.04 with a further assessment of $77/day from January 20, 2007 until the date of payment. This is the order currently on appeal.

Appellant filed a motion for a new trial and for judgment notwithstanding verdict (JNOV). The trial court denied Appellant's motions, concluding the 1998 Pension Agreement and the Philadelphia Code*fn7 precluded Appellant's simultaneous retention of the disability pension and workers' compensation benefits. This appeal followed.*fn8

Appellant contends the Pension Board assigned its right to recover the disability pension benefits to the City. Appellant therefore submits the Pension Board lacked standing to pursue the instant breach of contract action. Appellant also contends that if the Pension Board and the City are the same entity, the Pension Board's breach of contract action is barred because the City's right to recovery has been previously litigated. Thus, under the doctrines of res judicata or collateral estoppel, ...


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