P. Varghese v. WCAB (Ridge Crest Nursing Home, et al.) (Majority Opinion)
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA Pascaria Varghese, Petitioner v. Workers Compensation Appeal Board (Ridge Crest Nursing Home and Consolidated Risk Serv.), Respondents BEFORE: : : : : No. 58 C.D. 2008 : Submitted: April 25, 2008 : : : : HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE DAN PELLEGRINI, Judge HONORABLE MARY HANNAH LEAVITT, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE PELLEGRINI FILED: May 22, 2008 We had remanded this matter in a previous appeal to the Workers Compensation Judge (WCJ) for a determination of whether penalties should be awarded against Ridge Crest Nursing Home and Consolidated Risk Serv. (collectively, Employer) for failing to timely pay benefits. In complying with our order, the WCJ found that Employer did not make payment within the statutory 30day period1 and granted Pascaria Varghese s (Claimant) penalty petition. Claimant 1 Section 428 of the Workers Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §921, provides, in pertinent part: Whenever the employer, who has accepted and complied with the provisions of section three hundred five, shall be in default in (Footnote continued on next page ¦) now appeals from an order of the Workers Compensation Appeal Board (Board) affirming the WCJ s decision not awarding her penalties for the entire period from the Board s denial of Employer s supersedeas request until it issued payment to her, and finding that Employer engaged in a reasonable contest opposing her request for penalties. The facts in this case may be summarized as follows. On January 2, 1999, Claimant sustained a work-related injury which Employer accepted by way of a notice of compensation payable. Employer subsequently filed a termination petition which was granted by a WCJ, but on December 16, 2003, the Board reversed for reasons not relevant here. Employer appealed the Board s decision to this Court and, in the interim, filed a timely application for supersedeas with the Board, which it denied on February 18, 2004, and with this Court, which we denied on March 26, 2004. On April 23, 2004, Employer issued payment to Claimant for $31,478.64 in compliance with the Board s December 16, 2003 order. While Employer s appeal was pending with this Court, on April 1, 2004, Claimant filed the penalty petition at issue seeking penalties of 50% for compensation (continued ¦) compensation payments for thirty days or more, the employe or dependents entitled to compensation thereunder may file a certified copy of the agreement and the order of the department approving the same or of the award or order with the prothonotary of the court of common pleas of any county, and the prothonotary shall enter the entire balance payable under the agreement, award or order to be payable to the employe or his dependents, as a judgment against the employer or insurer liable under such agreement or award. 2 to which she was entitled because Employer had not paid her benefits within 30 days of the Board s December 16, 2003 decision. She also claimed that she was entitled to legal fees for unreasonable contest because of Employer s failure to pay penalties. The WCJ, who determined that Employer s obligation to pay back compensation was stayed while its supersedeas requests were pending before the Board and this Court, denied Claimant s petition and concluded that Employer established a reasonable basis for its contest of that petition. Claimant appealed the WCJ s decision to the Board which affirmed. Claimant then appealed to this Court. Although she recognized that under Snizaski v. Workers Compensation Appeal Board (Rox Coal Company), 847 A.2d 139 (Pa. Cmwlth. 2004), an employer had a safe harbor from penalties while a supersedeas request was pending before the Board, she argued that both the WCJ and the Board erred in denying her penalty petition based on the mistaken belief that Employer enjoyed a similar safe harbor from payment while a supersedeas request was pending before this Court. In agreeing with Claimant, we determined that Employer s obligation to pay her benefits was not stayed during the pendency of its supersedeas request before this Court, and that an employer ran the risk of penalties if it did not pay within 30 days of the Board s denial of supersedeas. See Varghese v. Workers Compensation Appeal Board (Ridge Crest Nursing Home), 899 A.2d 1176 (Pa. Cmwlth. 2006). Because a determination of whether penalties were appropriate for the period 30 days after the Board denied Employer s supersedeas request until it issued payment on April 23, 2004, was necessary, we remanded the case to the WCJ. 3 On remand, Claimant submitted into evidence her penalty petition; Employer s answer to her petition denying the allegations therein; the Board s December 16, 2003 decision reversing the termination of Claimant s benefits; and a memorandum dated April 22, 2004, from Employer; and a copy of a check dated April 23, 2004, in the amount of $31,478.64 payable to Claimant. Employer s evidence only consisted of a WCJ decision dated February 28, 2002.2 Based on that evidence, the WCJ found that Employer had requested a supersedeas with the Board and this Court, both of which were denied, and that by March 18, 2004, 30 days after the Board s denial, Employer had not issued payment. While it had not engaged in any actions to intentionally delay the payment,3 the WCJ found that Employer s eventual payment was 34 days after the expiration of the 30day period following the Board s denial of supersedeas. Concluding that this constituted a technical violation of the Act, the WCJ granted Claimant s penalty petition and awarded penalties for 34 days beginning on March 18, 2004, through April 23, 2004. The WCJ also determined that Employer had engaged in a 2 This decision awarded Clamant periods of partial and total disability benefits between January 3, 1999, and December 9, 1999, with a termination effective December 9, 1999. The termination was subsequently reversed by the Board s December 16, 2003 order. 3 As a basis for this determination, the WCJ found that (a) no evidence of record that [Employer] made an unnecessary supersedeas request to the Commonwealth Court, or that the supersedeas request was not timely made; (b) no evidence to suggest a motive by [Employer] that it intended to earn money on Claimant s benefits; (c) no evidence of record to suggest that [Employer] intended to harass Claimant, who required her benefit; (d) no competent evidence or record to show that the calculation of total disability benefits could be made in a matter of minutes, (e) no evidence of record that [Employer] knew that delayed payment caused substantial prejudice to Claimant; and (f) no evidence of record upon which this Judge can render a finding of fact that [Employer s] conduct amounted to stonewalling. (WCJ s November 22, 2006 Decision at 2). 4 reasonable contest of Claimant s petition. She appealed both determinations to the Board, which modified the WCJ s decision to include 36 rather than 34 days in the penalty award, but otherwise affirmed it in its entirety, and this appeal followed.4 On appeal, Claimant makes an interesting argument. She contends that a penalty5 should begin to run from the date the Board denied Employer s request for supersedeas, February 18, 2004, even though in Snizaski, we decided that an Employer had a safe harbor until 30 days after the Board acted on a supersedeas. Because when Employer failed to make payment within 30 days of the Board s December 16, 2003 decision awarding benefits the Snizaski safe harbor did not exist, Claimant argues that Employer could not have relied on it in not making payment after 30 days of the Board s decision, entitling her to 66 and not 36 days on which her penalty award would be calculated.6 4 Our review of a decision of the Board is limited to determining whether an error of law was committed, whether necessary findings of fact are supported by substantial evidence, and whether constitutional rights were violated. Shop Vac Corporation v. Workers Compensation Appeal Board, 929 A.2d 1236 (Pa. Cmwlth. 2007). 5 Where a claimant files a petition seeking an award of penalties, the claimant bears the burden of proving a violation of the Act occurred. Sims v. Workers Compensation Appeal Board (School District of Philadelphia), 928 A.2d 363 (Pa. Cmwlth. 2007). The WCJ has discretion to determine whether a penalty should be imposed and the amount of the penalty. Galizia v. Workers Compensation Appeal Board (Woodloch Pines, Inc.), 933 A.2d 146 (Pa. Cmwlth. 2007). A WCJ s penalty award should not be reversed on appeal absent an abuse of discretion. Schenck v. Workers Compensation Appeal Board (Ford Electronics), 937 A.2d 1156 (Pa. Cmwlth. 2007). 6 Snizaski was decided on March 19, 2004. 5 What this argument ignores is that while Snizaski had not been decided, it did not announce a new principle of substantive law,7 but was an interpretation of the interaction between the Act and Board s regulations regarding supersedeas both of which were in place at the time Employer failed to make payment. See also Land O Lakes, Inc. v. Workers Compensation Appeal Board (Todd), 942 A.2d 933 (Pa. Cmwlth. 2008) (application of recent Supreme Court decision did not constitute an impermissible retroactive application when the Court s decision was only interpreting a section of the Act, not advancing new law). While Employer did not have the benefit of our holding in Snizaski, under the regulations promulgated by the Board and extant at the time Employer withheld payment, its obligation to pay Claimant benefits was stayed until the Board s denial of supersedeas. Consequently, it was not an abuse of discretion by the WCJ to award penalties only for the period following the 30-day safe harbor of the Board s denial of supersedeas.8 7 The threshold test in deciding whether a new decision might be given prospective application only is whether the decision establishes a new principle of law, either by overruling clear past precedent or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Blackwell v. State Ethics Commission, 527 Pa. 172, 589 A.2d 1094 (1991). 8 Claimant also argues that the Board erred in determining that Employer engaged in a reasonable contest of her penalty petition. We, however, must reject this argument because Employer was successful in defending against the petition as the WCJ properly determined that it was liable for penalties for only 36 days (March 18, 2004-April 23, 2004) rather than 66 days which Claimant originally requested (February 18, 2004-April 23, 2004). Because Employer was successful in demonstrating why Claimant was only entitled to a 36-day period of penalties, it is illogical to argue that it engaged in an unreasonable contest of the penalty petition. See Norris v. Workers Compensation Appeal Board (Hahnemann Hospital), 726 A.2d 1 (Pa. Cmwlth. 1999). 6 Accordingly, the order of the Board is affirmed. __________________________ DAN PELLEGRINI, JUDGE 7 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Pascaria Varghese, Petitioner v. Workers Compensation Appeal Board (Ridge Crest Nursing Home and Consolidated Risk Serv.), Respondents : : : : No. 58 C.D. 2008 : : : : : ORDER AND NOW, this 22nd day of May, 2008, the order of the Workers Compensation Appeal Board, No. A06-2770, is affirmed. __________________________ DAN PELLEGRINI, JUDGE
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