Commonwealth of PA/ Dept. of Transportation, Petitioner
Workers' Compensation Appeal Board (Noll), Respondent Joseph Carey Noll, Petitioner
Workers' Compensation Appeal Board (Commonwealth of PA/ Dept. of Transportation), Respondent
Submitted: August 30, 2013
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
MARY HANNAH LEAVITT, Judge.
The Commonwealth of Pennsylvania, Department of Transportation (Employer) and Joseph Carey Noll (Claimant) have filed cross petitions for review of an adjudication of the Workers' Compensation Appeal Board (Board) denying Employer's request for recoupment of an overpayment of compensation to Claimant and denying Claimant an award of attorney's fees. The Board held that there had been an overpayment, but it denied Employer recoupment for the stated reason that Employer did not demonstrate that its overpayment was based upon a mistaken belief. Concluding that the Board erred in this regard, we reverse and remand for further findings on Employer's recoupment request. However, we affirm the remainder of the Board's order that reversed the Workers' Compensation Judge's (WCJ) award of attorney's fees to Claimant for an unreasonable contest by Employer.
On June 19, 1995, Claimant injured his left shoulder while working as a highway foreman. Claimant and Employer executed an agreement providing for five weeks of total disability compensation followed by a suspension. Claimant's average weekly wage at the time of injury was $863.84, which yielded a weekly total disability compensation rate of $509. Claimant continued to work at his pre-injury job with restrictions until Employer discharged him in August 1997. The discharge was grieved and settled. Claimant returned to work at a different job, i.e., transportation equipment operator, at a lower salary.
In July of 1999, Claimant suffered a recurrence of his 1995 work injury. On July 23, 1999, the parties executed a supplemental agreement under which Employer paid Claimant a weekly total disability benefit of $433.50. Claimant returned to modified-duty work as a parts runner from August 1999 until June 2, 2000, when Employer informed him that work within his restrictions was no longer available. Employer agreed to reinstate total disability benefits as of June 3, 2000.
Claimant filed a petition to review compensation benefits, asserting that Employer was not paying him the correct amount of disability. Employer answered that it was paying weekly compensation in the amount of $433.50 because Claimant was working at a lower paying job when his work injury recurred. The WCJ found that Claimant's average weekly wage on the date of his 1995 work injury was determinative and, thus, ordered Employer to pay Claimant total disability benefits of $509 per week as of June 3, 2000, and ongoing. Finding Employer's contest of Claimant's review petition to be unreasonable, the WCJ ordered Employer to pay quantum meruit fees of 20% "of all past due and owing benefits directly to Claimant's counsel not [to be deducted] from Claimant's proceeds." WCJ Decision, March 19, 2002, at 12, Order ¶5; Reproduced Record at 91a (R.R.___). Finally, the WCJ approved the contingent fee agreement between Claimant and his counsel and directed Employer "to deduct 20% of the claimant's benefits and pay them directly to counsel." Id. at ¶6. Employer appealed, and the Board affirmed. No further appeal was taken.
In December 2004, Employer filed a termination petition and a suspension petition. Employer contended that Claimant was fully recovered from his 1995 injury and, in any case, had retired and had voluntarily withdrawn from the workforce. The WCJ denied both petitions. The WCJ approved Claimant's 20% contingent fee agreement with his counsel and ordered Employer to pay Claimant's "reasonable counsel fees and litigation costs." WCJ Decision, March 15, 2006, at 7, Order ¶3; R.R. 66a. The WCJ did not make any findings or conclusions regarding an unreasonable contest nor did Claimant's counsel submit a quantum meruit exhibit. No appeal was taken.
Employer then filed a modification petition based upon its referrals of jobs suitable for Claimant. The WCJ denied the modification but concluded that Employer's contest was reasonable. The WCJ approved Claimant's 20% contingent fee agreement with his counsel. No appeal was taken.
In April 2010, Employer filed the instant petition to review compensation benefits, asserting that it had overpaid Claimant in the amount of $30, 540. Employer sought to recover the overpayment by taking a $75 weekly credit toward his weekly disability payment. Claimant denied that he had been overpaid or that Employer was entitled to recoupment. The review petition was assigned to the same WCJ who decided the prior petitions, and he held a hearing at which both parties appeared by their counsel. No testimony was presented.
Employer offered into evidence a computer printout documenting an overpayment of $30, 540 made to Claimant between March 6, 2004, and December 4, 2009. Employer, by counsel, explained the overpayment. Employer had paid Claimant $509 per week without deducting 20% for Claimant's attorney fee because of a misunderstanding of the WCJ's orders. Employer should have paid Claimant $407.20 and Claimant's counsel $101.80 each week, for a total of $509 each week.
Claimant, by his counsel, argued that this was not an overpayment because the WCJ had ordered the 20% counsel fee to be paid in addition to Claimant's weekly compensation check. Claimant argued that, in any case, the "overpayment" resulted from Employer's unilateral mistake and, thus, could not be recovered from Claimant.
The WCJ denied Employer's review petition. The WCJ found that there was no overpayment because his prior orders required that Claimant be paid $509 per week. Further, even if there had been an overpayment, Employer could not recoup money from Claimant because under Dollar Tree Stores, Inc. v. Workers' Compensation Appeal Board (Reichert), 931 A.2d 813 (Pa. Cmwlth. 2007), recoupment is permitted only where there has been a mathematical miscalculation or a mistake in the agreement by which the claimant receives compensation. Neither was the case here. Accordingly, the WCJ ordered Employer to "continue to pay Claimant weekly wage loss benefits in the amount of $509.00, and pay Claimant's counsel fees [of 20% of Claimant's benefits] over and above the $509.00 consistent with this [WCJ's] prior orders." WCJ Decision, December 29, 2010, at 5, Conclusion of Law 2; R.R. 33a. Concluding that Employer did not present a reasonable contest in filing its review petition, the WCJ ordered Employer to "pay the quantum meruit itemization to Claimant's counsel." Id. at 5, Order. Employer appealed.
The Board denied Employer's review petition, but it reversed the WCJ's findings. The Board held that Claimant had, indeed, been overpaid. It reasoned that the WCJ misinterpreted his prior orders and ordered relief not authorized by the Workers' Compensation Act (Act) because the Act does not allow the payment of unreasonable contest fees over an indefinite period of time. With regard to the recoupment, the Board concluded that the WCJ's reliance on Dollar Tree was misplaced, noting that recoupment was not limited to overpayments made because of a mistake in the parties' agreement. Rather, recoupment is available where the employer has made overpayments in the mistaken belief that they are required. The Board held that Employer's evidence, the computer printout, did not prove that Employer had made the payments under a "mistaken belief." Board Adjudication at 8; R.R. 12a. Therefore, the Board ...