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Andrew Cozzone v. Workers' Compensation Appeal Board

January 5, 2012

ANDREW COZZONE, PETITIONER
v.
WORKERS' COMPENSATION APPEAL BOARD
(PA MUNICIPAL/EAST GOSHEN TOWNSHIP), RESPONDENT



The opinion of the court was delivered by: Opinion BY Judge Brobson

Submitted: September 2, 2011

BEFORE: HONORABLE DAN PELLEGRINI, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge

Andrew Cozzone (Claimant) petitions for review of an order of the Workers' Compensation Appeal Board (Board), dated March 15, 2011. The Board reversed the decision of a Workers' Compensation Judge (WCJ), which granted Cozzone's reinstatement and penalty petitions. For the reasons that follow, we affirm the Board's order.

On January 24, 1989, Claimant sustained serious back injuries when he fell through a roof in the course and scope of his employment for East Goshen Township (Employer). On February 6, 1989, Employer accepted Claimant's work-related injury through the issuance of a Notice of Compensation Payable (NCP). Thereafter, Claimant received total disability benefits pursuant to the NCP until September 20, 1989, when Claimant returned to his pre-injury position without a loss of earnings.*fn1

On May 19, 2003, the parties entered into a supplemental agreement, reinstating Claimant's benefits for the period of February 24, 2003, to March 17, 2003. Thereafter, Claimant's benefits were again reinstated for the period of June 17, 2005, to August 29, 2005, as reflected in a notice of suspension dated August 29, 2005. Subsequently, the parties entered into another supplemental agreement on July 31, 2007, reinstating Claimant's benefits as of June 20, 2007, and continuing forward. On November 27, 2007, Claimant began working in a modified-duty capacity for a different employer, and, as a result, the parties entered into a supplemental agreement on January 7, 2008, reducing Claimant's benefits from total disability to partial disability. Claimant worked for the different employer until January 24, 2008, at which time Claimant felt that he was no longer capable of performing his modified duties.

On September 26, 2008, Claimant filed a reinstatement petition, requesting that his benefits be reinstated from partial disability to total disability, effective January 24, 2008. Employer filed an answer, denying the material allegations of Claimant's reinstatement petition, and the matter was assigned to a WCJ.*fn2 Claimant later filed a penalty petition on February 25, 2009, alleging that Employer violated the Act by unilaterally ceasing payment of the partial disability benefits due under the January 7, 2008 supplemental agreement on January 24, 2009. Employer filed an answer, denying the material allegations of Claimant's penalty petition, and the matter was consolidated with Claimant's reinstatement petition.

Before the WCJ, Claimant testified on his own behalf and presented the deposition testimony of Daniel Rubino, M.D., who is board-certified in pain management. In opposition, Employer presented, inter alia,*fn3 the deposition testimony of Eric Holm, M.D., who is board-certified in neurology. In addition, Employer argued that Claimant's reinstatement and penalty petitions should not be granted because Claimant's right to compensation was extinguished by the expiration of the statute of repose set forth in Section 413(a) of the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 772.

By order issued February 25, 2010, the WCJ granted Claimant's reinstatement petition, finding that Claimant was no longer capable of performing the modified-duty position upon which his change from total disability to partial disability was predicated. In so finding, the WCJ credited the testimony of Claimant and Dr. Rubino, and rejected the testimony of Dr. Holm to the extent that it conflicted with Dr. Rubino's. The WCJ also granted Claimant's penalty petition, finding that Employer violated the Act by unilaterally ceasing payment of the partial disability benefits due under the January 7, 2008 supplemental agreement. Finally, the WCJ determined that Employer was equitably estopped from raising a statute of repose defense because Employer had lulled Claimant into believing that his compensation rights were fully protected by executing various supplemental agreements and by filing and pursuing a modification petition.

Employer appealed to the Board, arguing that the WCJ erred in determining that Employer was equitably estopped from raising a statute of repose defense to Claimant's reinstatement and penalty petitions. By order dated March 15, 2011, the Board reversed the WCJ's decision. The Board determined that the WCJ erred in applying the doctrine of equitable estoppel because Claimant's right to compensation had already been extinguished by the expiration of the statute of repose set forth in Section 413(a) of the Act by the time that Employer executed the supplemental agreements and pursued a modification petition. In other words, the Board determined that Employer's actions subsequent to the expiration of the statute of repose could not have affected Claimant's right to compensation. Thus, the Board determined that the WCJ erred in not finding that Claimant's reinstatement petition was time-barred by the statute of repose. The Board further determined that the WCJ erred in granting Claimant's penalty petition, concluding that Employer did not violate the Act by unilaterally ceasing payment of the partial disability benefits due under the January 7, 2008 supplemental agreement because Claimant's right to compensation had already been extinguished by the expiration of the statute of repose. This petition for review followed.

On appeal,*fn4 Claimant argues that Employer should be equitably estopped from raising a statute of repose defense. Next, Claimant argues that his reinstatement petition is not time-barred by the statute of repose because it was filed within three years of the last payment of compensation. Finally, Claimant argues that he is entitled to penalties because Employer violated the Act by unilaterally ceasing payment of his partial disability benefits. We address these issues in order.

Section 413(a) of the Act provides, in pertinent part:

A workers' compensation judge designated by the department may, at any time, modify, reinstate, suspend, or terminate a notice of compensation payable, an original or supplemental agreement or an award of the department or its workers' compensation judge, upon petition filed by either party with the department, upon proof that the disability of an injured employe has increased, decreased, recurred, or has temporarily or finally ceased, or that the status of any dependent has changed. Such modification, reinstatement, suspension, or termination shall be made as of the date upon which it is shown that the disability of the injured employe has increased, decreased, recurred, or has temporarily or finally ceased, or upon which it is shown that the status of any dependent has changed: Provided, That . . . no notice of compensation payable, agreement or award shall be reviewed, or modified, or reinstated, unless a petition is filed with the department within three years after the date of the most recent payment of compensation made prior to the filing of such petition. . . And provided further, That where compensation has been suspended because the employe's earnings are equal to or in excess of his wages prior to the injury that payments under the agreement or award may be resumed at any time during the period for which compensation for partial disability is payable, unless it be shown that the loss in earnings does not result from the disability due to the injury.

(Emphasis added.) Section 306(b) of the Act, 77 P.S. § 512, in turn, provides that compensation for partial disability is payable for a period not to exceed 500 weeks. Interpreting Sections 413(a) and 306(b) of the Act in Lopresti v. Workers' Compensation Appeal Board (Taylor Wharton Company), 692 A.2d 629 (Pa. Cmwlth. 1997), this Court stated:

Section 413 of the Act imposes a statute of repose whereby a reinstatement petition must be filed within 500 weeks from a suspension of a claimant's benefits in order to be considered timely filed. The 500-week statute of repose not only limits a remedy, but completely and totally extinguishes a claimant's rights to benefits in the first instance. The expiration of the statute of repose deprives the Board of the jurisdiction to consider a claimant's petition and can never be waived by an employer. The purpose of the statute of repose is to encourage the prompt resolution of legal rights and to protect an employer from having to defend against stale claims. For this reason, the only exception to the statute of repose is if the claimant can establish estoppel against his or her employer.

Lopresti, 692 A.2d at 631 (citations omitted). Accordingly, under Section 413(a) of the Act, where a claimant's benefits are suspended because of no current loss of earnings, said benefits may be resumed only if the claimant files a reinstatement petition within 500 weeks from the effective date of the suspension. Absent circumstances justifying application of the doctrine of equitable estoppel, a reinstatement petition filed outside of the 500-week period will be considered time-barred by the statute of repose.

Here, Claimant's benefits were suspended on September 20, 1989, when Claimant returned to his pre-injury position without a loss of earnings. Pursuant to Section 413(a) of the Act, therefore, Claimant had until approximately April 1999 to file a reinstatement petition before his right to benefits was completely extinguished. Claimant, however, did not file a reinstatement petition until September 26, 2008; over nine years after the 500-week period had expired.

Accordingly, unless we find that equitable estoppel applies, this Court must hold that Claimant's reinstatement petition was time-barred by the statute of repose.*fn5 Describing the doctrine of equitable estoppel in Sharon Steel Corporation v. Workmen's Compensation Appeal Board (Myers), 670 A.2d 1194 (Pa. Cmwlth. 1996),*fn6 this Court stated:

The doctrine of equitable estoppel applies in situations where a party, through its acts, negligently misrepresents material facts while knowing or having reason to know that the party will justifiably rely on the misrepresentation to its detriment and indeed the other party does so rely. The two essential elements of equitable estoppel which a claimant must prove by clear and convincing evidence, are, first, inducement and, second, the justifiable reliance on the inducement.

Sharon Steel, 670 A.2d at 1199 (citations omitted). In the context of a statute of repose under the Act, the relevant inquiry is whether the employer's words or conduct "convince[ed] [the] [c]laimant not to pursue his claim with the compensation authorities within the statutory period." Id. at 1200.

Claimant argues that equitable estoppel should apply because Employer suspended his benefits on September 20, 1989, without a supplemental agreement or WCJ's order.*fn7 In so ...


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