Argued May 6, 2015.
As Corrected August 17, 2015.
Appealed from No. A11-1813 and A11-1814. State Agency: Workers' Compensation Appeal Board.
Rania M. Major, Philadelphia, for petitioner.
Thomas P. Howell, Assistant Counsel, Harrisburg, for respondent Uninsured Employers Guaranty Fund.
BEFORE: HONORABLE DAN PELLEGRINI, President Judge, HONORABLE RENÉ E COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge. OPINION BY JUDGE COHN JUBELIRER.
RENÉ E COHN JUBELIRER,
Jose Osorio Lozado (Claimant) petitions for review of an Order of the Workers' Compensation Appeal Board (Board) affirming the Decisions of a Workers' Compensation Judge (WCJ) denying Claimant's " Claim Petition for Benefits from the Uninsured Employers Guaranty Fund [Fund] and Uninsured Employer" (Claim
Petition). The WCJ denied Claimant's Claim Petition because Claimant failed to provide timely notice to the Fund that his former employer, Dependable Concrete Work (Employer), was uninsured and because, after providing notice to the Fund, Claimant did not wait the requisite time period before filing his Claim Petition against the Fund. The Board affirmed on different grounds, holding that Section 305(d) of the Workers' Compensation Act (Act) barred the Claim Petition because Claimant had previously elected to pursue an action at law against Employer. For the reasons that follow, we reverse and remand to the Board for further proceedings.
I. The Uninsured Employers Guaranty Fund
We begin with a brief description of the Fund and the governing provisions of the Act. The Fund was created in 2006 to provide workers' compensation benefits to workers, injured in the course and scope of their employment, where their employers did not have workers' compensation insurance. Section 1602(c) of the Act, 77 P.S. § 2702(c). The Fund is financed through assessments upon insurers and self-insured employers, reimbursements or restitutions recovered by the Fund, interest on money held by the Fund, and infusions of cash from the treasury. Section 1602(b) of the Act, 77 P.S. § 2702(b); Section 1607(b) of the Act, 77 P.S. § 2707(b).
The Fund is not an insurer and is " not  subject to penalties, unreasonable contest fees or any reporting and liability requirements under section 440"  of the Act; however, it does have " all of the same rights, duties, responsibilities and obligations as an insurer." Sections 1601 and
1602(e) of the Act, 77 P.S. § § 2701, 2702(e). An injured worker may recover from the Fund by first providing the Fund with notice of a claim " within 45 days after the worker knew that the employer was uninsured." Section 1603(b) of the Act, 77 P.S. § 2703(b). The Fund must start its inquiry into whether to commence making payments to an injured employee within ten days of receiving notice of a claim by demanding proof of insurance for the injured worker from the employer. Section 1605(a) of the Act, 77 P.S. § 2705(a). If the Fund does not receive proof of insurance within 14 days, " there shall be rebuttable presumption of uninsurance." 77 P.S. § 2705(a). If the claim is not voluntarily accepted by the Fund within 21 days of receiving notice of the claim, an injured worker may file a claim petition with the Bureau of Workers' Compensation (Bureau). Section 1603(d) of the Act, 77 P.S. § 2703(d). The claim petition must name " both the employer and the [F]und as defendants." Section 1604 of the Act, 77 P.S. § 2704.
The Fund is required to " exhaust all remedies at law" to seek reimbursement from the uninsured employer for any payments made by the Fund as a result of an award or a voluntarily accepted injury. Section 1605(b) of the Act, 77 P.S. § 2705(b). The Department of Labor and Industry may, on the Fund's behalf, investigate, prosecute, and seek restitution from an uninsured employer for not insuring the payment of compensation. Id. The Fund may also seek reimbursement through asserting its right to subrogation over any recovery an injured employee receives from the employer or a third party. Section 1606 of the Act, 77 P.S. § 2706.
II. Procedural History
This case involves two simultaneously issued WCJ Decisions (hereinafter referred to as " Employer Decision" and " Fund Decision" ). The Employer Decision resulted from a claim and penalty petition which Claimant filed against Employer on April 15, 2009, in which Claimant sought benefits for " a work injury suffered on or about May 11, 2007." (WCJ Decision (Employer Decision), Findings of Fact (FOF) ¶ 1.) After it was filed, on April 28, 2009, the Bureau informed Claimant's counsel that its " research indicate[d] that the employer did not have workers' compensation insurance on the date of the alleged injury." (WCJ Decision (Fund Decision), FOF ¶ 2.) Shortly thereafter, on May 11, 2009, the last day Claimant could file a personal injury action within the applicable two year statute of limitations
period, Claimant filed a praecipe for a writ of summons with the Prothonotary of the Philadelphia County Court of Common Pleas (trial court) seeking damages from Employer for his injury. (Employer Decision, FOF ¶ 2; Civil Docket at 3, R.R. at 15a.) Pursuant to Section 7361 of the Judicial Code, 42 Pa. C.S. § 7361, and local rule, this matter was referred to compulsory arbitration. (Civil Docket at 7, R.R. at 19a.)
The Fund Decision resulted from a " Notice of Claim Against Uninsured Employer" (Notice of Claim) and the Claim Petition at issue here, both of which Claimant filed in January 2010 while resolution of the Claimant's tort action was pending, in which Claimant sought benefits from the Fund for the alleged May 11, 2007 work-related injury. (Fund Decision, FOF ¶ ¶ 3, 4.) While the petitions against both Employer and the Fund were pending, the arbitrator in Claimant's tort action against Employer awarded Claimant a default judgment of $50,000 in damages on May 28, 2010. (Employer Decision, FOF ¶ 5.) Claimant appealed the arbitration award for a de novo trial in the trial court shortly thereafter. (Civil Docket at 8, R.R. at 20a.)
Claimant's Claim Petition against the Fund and the claim and penalty petitions against Employer were assigned to the same WCJ for disposition. (Fund Decision, FOF ¶ 5.) The WCJ issued two separate decisions and orders denying and dismissing both of Claimant's petitions - against Employer and against the Fund. With regard to Claimant's claim and penalty petitions against Employer, the WCJ reasoned that Section 305(d) of the Act, 77 P.S. § 501(d), requires a claimant to choose between pursuing a tort remedy and seeking benefits under the Act. (Employer Decision, Conclusions of Law (COL) ¶ ¶ 1-3.) According to the WCJ, once an injured employee files a civil action, he forfeits his ability to seek benefits under the Act. (Employer Decision, COL ¶ ¶ 2-3.) With regard to Claimant's Claim Petition against the Fund, the WCJ denied relief for two reasons: 1) because Claimant did not file the Notice of Claim within 45 days of learning that Employer was uninsured as required by Section 1603(b) of the Act; and 2) because Claimant filed his Claim Petition against the Fund concurrently with the Notice of the Claim instead of waiting 21 days as required by Section 1603(d) of the Act. (Fund Decision, COL ¶ ¶ 1-4.)
Claimant appealed both WCJ Decisions, which were consolidated by the Board on appeal. Upon review, the Board affirmed both Decisions. The Board held that Section 305(d) of the Act barred all of Claimant's petitions because Claimant forfeited his ability to pursue a remedy against both Employer and the Fund under the Act by initiating his tort action. With respect to its holding that Section 305(d) barred Claimant's Claim Petition against the Fund, the Board reasoned that the Fund was " established for the exclusive purpose of paying to any claimant . . . benefits due and payable under the Act," and Claimant is not due any benefits because he elected a civil remedy. (Board Decision at 5.) Although the Board ultimately ...