Submitted, February 13, 2015
Appealed from No. A13-0183. State Agency: Workers' Compensation Appeal Board.
Edith A. Pearce, Philadelphia, for petitioner.
James A. Mazzotta and Stephanie S. Ringbloom, Pittsburgh, for respondent.
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge.
PATRICIA A. McCULLOUGH,
Stacy Gelvin (Claimant) appeals from the August 4, 2014 order of the Workers' Compensation Appeal Board (Board) reversing the order of a workers' compensation judge (WCJ) that granted Claimant's reinstatement and penalty petitions and awarded Claimant unreasonable contest counsel fees and litigation costs.
I. Facts/Procedural History
In 2008, a WCJ awarded Claimant, a former state trooper for the Pennsylvania State Police (Employer), benefits for disability resulting from work-related post-traumatic stress disorder as of December 21, 2006. A few weeks before the WCJ's decision was circulated, Employer accepted the injury by filing a notice of compensation payable. On June 25, 2012, Claimant filed reinstatement and penalty petitions, alleging that Employer unilaterally stopped Claimant's indemnity benefits and improperly took an offset based on Claimant's receipt of a disability pension. (WCJ's Findings of Fact Nos. 1-3.) The petitions were consolidated and assigned to a WCJ.
Claimant testified by way of deposition on October 8, 2012, stating that she applied for disability pension benefits with the Pennsylvania State Employees' Retirement System (SERS) in February 2011 and began receiving those benefits on February 29, 2012. (Reproduced Record (R.R.) at 55a.) Claimant stated that her disability pension was retroactive to February 2011, the date on which she applied, and that she received a lump sum payment to reflect this amount. (R.R. at 65a-66a.) Claimant testified that, on March 16, 2012, she reported the disability pension benefits on an Employee Report of Benefits Form
(LIBC-756 form) sent by Employer in March 2012. (R.R. at 56a.) Claimant noted that she previously signed LIBC-756 forms on December 14, 2010, and December 21, 2011, indicating that she had no other benefits to report. (R.R. at 61a-63a.)
Claimant testified that she received a Notice of Workers' Compensation Benefit Offset from Employer on March 27, 2012, informing her that her workers' compensation benefits would be suspended starting on April 21, 2012, and would be restored on March 5, 2013. (R.R. at 57a-58a.) Claimant testified that she suffered a hardship when Employer suspended benefits because she went nearly a year without receiving any compensation and exhausted all of her financial resources in order to pay her bills. (R.R. at 59a-60a, 67a-68a.)
Employer presented the deposition testimony of Richard Bimeal (Bimeal), a claims adjuster for CompServices. Bimeal testified that after he received Claimant's LIBC-756 form, he sent Claimant a notice of offset form on March 27, 2012, which claimed an overpayment and recoupment of $19,597.99 against Claimant's workers' compensation benefits and suspended her benefits effective April 21, 2012. (R.R. at 123a-25a.) Bimeal acknowledged that there was no WCJ's order or agreement between the parties allowing recoupment against Claimant's workers' compensation benefits. (R.R. at 129a.)
In his decision and order dated January 17, 2013, citing Maxim Crane Works v. Workers' Compensation Appeal Board (Solano), 931 A.2d 816 (Pa.Cmwlth. 2007), the WCJ found that Employer was only entitled to a retroactive credit as of March 16, 2012, when Claimant returned the LIBC-756 form sent to her after her receipt of the disability pension. Thus, the WCJ granted Claimant's reinstatement petition as of April 21, 2012, at a reduced rate to reflect Claimant's receipt of disability pension benefits. Relying on Muir v. Workers' Compensation Appeal Board (Visteon Systems LLC), 5 A.3d 847 (Pa.Cmwlth. 2010), the WCJ also found that the manner in which Employer notified Claimant of her reporting requirements and unilaterally recouped the pension benefit offset violated the Act and Bureau regulations. Consequently, the WCJ imposed on Employer a penalty of 50% of Claimant's benefits payable during the time that Employer suspended Claimant's benefits. The WCJ also determined that Employer " offered no viable evidence to justify its unilateral stoppage of benefits," (R.R. at 9a), and awarded Claimant an unreasonable contest counsel fee.
Employer appealed to the Board. By opinion and order dated August 4, 2014, the Board found that no statutory provision or regulation requires an employer to file a suspension petition in order to recoup workers' compensation benefits paid to a claimant. The Board distinguished Maxim Crane from the present case, stating that, contrary to Employer's actions in this case, the employer in Maxim Crane failed to act with due diligence in notifying the claimant of his duty to report the receipt of his Social Security benefits.
The Board stated that Muir only stood for the proposition that employers must provide claimants with a new LIBC-756 form every six months, and it does not hold that employers are not allowed an offset of a retroactive award. The Board also observed that Employer made Claimant aware of her reporting obligation and provided her with an LIBC-756 form on a regular basis.
The Board reasoned as follows:
The WCJ determined that [Employer] is only entitled to an offset from Claimant's SERS benefits as of the date it provided Claimant with the most recent LIBC-756 [form]. If we were to agree with that thinking, it would lead to the absurd result that an employer would be entitled to an offset from unemployment, old age Social Security, or pension benefits only if it sent [an] LIBC-756 [form], which was received by the employee on the very day that employee received a retroactive payment. We do not believe that is what the Act, its Regulations, or case law states. To the extent that Claimant alleges a prejudice, we would note that Claimant was receiving full ...