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Pennsylvania State University v. Workers' Compensation Appeal Board (Sox)

Commonwealth Court of Pennsylvania

December 19, 2013

The Pennsylvania State University and The PMA Insurance Group, Petitioners,
Workers' Compensation Appeal Board (Sox), Respondent

Submitted: August 2, 2013




The Pennsylvania State University (Penn State) and The PMA Insurance Group (collectively, Employer) petition for review of an order of the Workers' Compensation Appeal Board (Board), dated February 26, 2013. The Board, inter alia, affirmed a Workers' Compensation Judge's (WCJ) decision to award Thomas Sox (Claimant) attorney's fees for unreasonable contest and dismissed as moot a challenge to an interim ruling by the WCJ that limited Employer's counsel's communications with Claimant's treating physicians. For the reasons set forth below, we now affirm in part, vacate in part, and remand the matter for further proceedings.


On June 26, 2006, Claimant sustained a work-related injury in the nature of a right rotator cuff tear, which his then-employer Keystone Central School District (Keystone) accepted by a Notice of Compensation Payable (NCP) issued on October 20, 2006. (Reproduced Record (R.R.) at 73.) Total disability benefits began on September 29, 2006, and they were suspended pursuant to a Notification of Suspension, effective October 16, 2006. (Id.)

Thereafter, on September 30, 2007, Claimant began working for Penn State. (Id. at 42.) On July 18, 2009, Claimant tripped while carrying a vacuum pump up a set of steps in order to fix an air conditioning unit at Penn State's chemical ecology lab, resulting in pain in his right shoulder. (Id. at 42-43.) Then, on October 18, 2009, Claimant caught his right arm in a door as he was exiting a restroom while working to replace a compressor at Penn State's main campus. (Id. at 43.)

On November 13, 2009, Employer issued a medical-only NCP for a right shoulder strain occurring on October 18, 2009. (Id.) On January 27, 2010, Claimant filed a claim petition against Employer, alleging that he suffered a work-related rotator cuff tear of the right shoulder on October 18, 2009. (Id. at 38, 40.) On March 16, 2010, Claimant filed a second claim petition against Employer, alleging that he suffered a work-related rotator cuff tear of the right shoulder on July 18, 2009. (Id. at 38, 40-41.) On August 4, 2010, Claimant filed two penalty petitions against Employer, alleging that Employer violated the Workers' Compensation Act (Act)[1] by failing to make timely payment of benefits for both alleged dates of injury—i.e., July 18, 2009, and October 18, 2009. (Id. at 38, 41.) Claimant also filed a reinstatement petition against Keystone on March 12, 2010, asserting that he suffered a loss of earnings as of January 5, 2010, as a result of the work-related right rotator cuff tear caused by the June 2006 work injury. (Id. at 38, 40.) On November 10, 2010, Keystone filed a termination petition, asserting that Claimant recovered from the effects of the June 26, 2006 work injury by October 15, 2010, based upon an independent medical evaluation (IME) performed by David Rubenstein, M.D.[2] (Id. at 38, 41.) All parties filed answers denying the material averments of all petitions, which were consolidated for disposition, and the WCJ conducted hearings on the matter. (Id. at 38, 40-41.)

During those proceedings, Employer sought to depose James Serene, M.D., and Mark Bates, M.D., who were both treating physicians of Claimant and employees of Penn State. Claimant objected to the deposition of any treating physician by Employer, or, alternatively, requested an order prohibiting what is referred to as ex parte contact between Employer's counsel and any of those treating physicians. (Id. at 17.) By interim order issued on August 20, 2010, the WCJ overruled the objection in part. (Id. at 19-20.) Specifically, the WCJ allowed Employer to schedule the deposition of any treating physician, but prohibited counsel for Employer from having any ex parte contact with any physician to be deposed. (Id. at 19.) Furthermore, the WCJ permitted Claimant's counsel to cross-examine the particular physician as to any such ex parte contacts during any deposition. (Id. at 19-20.) Employer appealed the WCJ's order to the Board, which quashed the appeal to the extent that it sought review of the WCJ's disposition of Claimant's objection. (Id. at 33.) Specifically, the Board concluded that the WCJ's order was interlocutory in this regard.[3] (Id. at 31-33.)

Thereafter, Employer chose not to depose Drs. Bates and Serene. Rather, Employer submitted the physicians' medical reports to the WCJ in lieu of their deposition testimony.

The WCJ issued his final decision and order on June 29, 2011. The WCJ concluded that Claimant did suffer a July 18, 2009 injury of right shoulder pain, which was non-disabling. (Id. at 65.) The WCJ also concluded that Claimant suffered an October 18, 2009 work injury described as a right shoulder rotator cuff tear, which required surgery and resulted in total disability from January 5, 2010, to August 15, 2010. (Id.) Furthermore, the WCJ concluded that Claimant recovered fully from the 2006 work injury with Keystone, and that based on the credited opinion of Dr. Rubenstein, benefit entitlement related to the 2006 injury must be terminated effective October 15, 2010. (Id. at 65, 67.) The WCJ also concluded that Claimant had not recovered fully from the 2009 work injuries with Employer, but that benefits must be suspended effective August 15, 2010. (Id.)

In addressing an argument raised by Claimant relating to the WCJ's consideration of Drs. Bates' and Serene's medical reports and opinions, the WCJ considered Employer's assertion of attorney-client privilege regarding ex parte contacts between Employer's counsel and the treating physicians. The WCJ concluded that ex parte communications between Employer's counsel and the treating physicians were not privileged under Pennsylvania law generally. (Id. at 63.) The WCJ reasoned that the physicians were treating doctors for Claimant and that, therefore, Claimant enjoyed a physician-patient privilege with the treating physicians. (Id.) Hence, in the absence of consent, Employer's counsel was precluded from engaging in ex parte, non-disclosed communications with the treating physicians. (Id.) Furthermore, the WCJ rejected Employer's argument that pursuant to Pennsylvania Rule of Civil Procedure No. 4003.6, an attorney-client relationship existed between the treating physicians and Employer's counsel as a result of the treating physicians' status as employees of Penn State. (Id.) The WCJ reasoned that by requiring a claimant to treat with a panel physician, [4] the General Assembly did not intend to create a privilege for Employer's counsel's ex parte communications with the panel doctor. (Id. at 64.) The WCJ further reasoned that the Act's requirement of disclosing a panel physician's employment with a defendant employer[5] would be of little value if communications between the panel doctor and the employer regarding the case were not discoverable. (Id.) Moreover, the WCJ noted that the fundamental rights of the parties in a workers' compensation case, including the right to confront and cross-examine witnesses, must be safeguarded. (Id.)

Nevertheless, the WCJ observed that neither Dr. Serene nor Dr. Bates were witnesses in this matter.[6] (Id.) The WCJ further noted that although he directed disclosure of ex parte contacts between Employer and the treating physicians in the interim order issued on August 20, 2010, nondisclosure could only be grounds for exclusion of evidence when the treating physicians testify. (Id.) The WCJ, therefore, overruled Claimant's objection to the admission of the treating physicians' reports, noting that the Act allows for submission of hearsay medical reports and records in cases such as this, wherein there is less than 52 weeks of wage loss benefit entitlement at issue.[7] (Id.)

The WCJ further concluded that Employer's contest was reasonable in part and not reasonable in part. (Id. at 65.) Specifically, the WCJ concluded that Employer's contest of the causal relationship, nature, and extent of disability related to the October 2009 injury was reasonable. (Id.) The WCJ further concluded that Employer's contest of liability regarding the July 2009 injury, based on lack of notice, was unreasonable in light of the testimony of Claimant and Claimant's supervisor, John Breezee (Breezee). (Id.) The WCJ also concluded that Employer failed to investigate properly the July 2009 incident and/or timely file a Notice of Compensation Denial (NCD). (Id.)

With respect to the attorney's fees requested by Claimant, the WCJ awarded $8, 632.50. (Id. at 66.) The WCJ concluded that the bill submitted by Claimant's counsel was reasonable as to the time expended for services provided, but reduced the hourly rate requested from $225.00 to $150.00. (Id.) The WCJ also reduced the gross claim of $17, 265.00 by 50% to reflect that portion of the contest which was reasonable as a matter of law. (Id.)

The WCJ also imposed penalties against Employer in the amount of of 40% wage loss paid between January 5, 2010, and August 15, 2010. (Id. at 67.) The WCJ based his decision on the following: (1) Employer's failure to timely investigate the July 2009 injury; (2) Employer's failure to timely file an NCD or NCP with regard to the July 2009 injury; (3) Employer's assertion of a notice defense regarding the July 2009 injury; and (4) Employer's violation of the Act and Special Rules of Administrative Practice and Procedure Before Workers' Compensation Judges (Judges' Rules)[8] requiring disclosure of complete records of ...

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