Frank Martz Coach Company v. WCAB (Avila) ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Frank Martz Coach Company, :
Petitioner :
:
v. : No. 1555 C.D. 2015
: Submitted: March 24, 2016
Workers’ Compensation Appeal :
Board (Avila), :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY PRESIDENT JUDGE LEAVITT FILED: April 13, 2017
Frank Martz Coach Company (Employer) petitions for review of an
adjudication of the Workers’ Compensation Appeal Board (Board) that granted
penalties to Julio Avila (Claimant). In doing so, the Board affirmed the decision of
the Workers’ Compensation Judge (WCJ) that a Supplemental Agreement by
which Employer agreed to pay Claimant total disability benefits, unless or until
modified by order of a WCJ, precluded Employer from thereafter issuing a Notice
of Compensation Denial. Holding that Employer’s unilateral termination of
compensation benefits violated the Workers’ Compensation Act, 1 the Board
affirmed the WCJ’s decision to award penalties. Concluding that the record is
inadequate to conduct appellate review, we vacate and remand.
On January 19, 2013, Claimant sustained a work injury. On February
5, 2013, Employer issued a Notice of Temporary Compensation Payable (NTCP)
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2708.
that described Claimant’s work injury of January 19, 2013, as a lumbar strain that
occurred when “[Claimant] went to pull the latch for the engine compartment panel
and strained his lower back.” Reproduced Record at 3a (R.R. __).2 Employer
began paying Claimant compensation benefits at the rate of $824.84 per week.
Employer’s NTCP stated that the 90-day temporary compensation period began on
January 24, 2013, and would end on April 23, 2013.
On March 12, 2013, Claimant and Employer entered into a
“Supplemental Agreement for Compensation for Disability as Permanent Injury,”
which contained several terms relevant to this appeal. R.R. 5a-6a. First, Claimant
agreed to a reduction of disability benefits from February 11, 2013, through
February 25, 2013, during which period he worked in a light duty position.
Second, Employer agreed to resume the payment of total disability on February 28,
2013, when his work injury recurred. Finally, Employer agreed to pay total
disability benefits into the future for an “uncertain” number of weeks. R.R. 6a.
On April 22, 2013, Employer issued a Notice Stopping Temporary
Compensation (NSTC) and a Notice of Compensation Denial (NCD). Employer
did so for the stated reason that the medical information provided by Claimant was
inadequate to establish a work injury. In response, on April 26, 2013, Claimant
filed a penalty petition, contending that Employer violated the Act by unilaterally
terminating his disability compensation. The penalty petition asserted that the 90-
day-period of temporary compensation expired on April 19, 2013, because
Claimant was injured on January 19, 2013. Thus, Employer’s NTCP converted
2
Because this case turned entirely on the legal significance of Employer’s agreement to pay
Claimant disability compensation in a Supplemental Agreement, there is no evidentiary record
on Claimant’s job title, or when the injury was reported.
2
automatically to an NCP on April 19, 2013, making Employer’s NCD of April 22,
2013, untimely. Claimant sought an immediate reinstatement of disability
compensation and an award of penalties.
The WCJ convened a hearing on May 28, 2013. The WCJ began the
hearing by marking as exhibits filings that had been made with the Bureau of
Workers’ Compensation (Bureau). Exhibit No. 2 was the Supplemental
Agreement, signed by Claimant and Employer’s claims representative.3 R.R. 5a-
6a. Both Claimant’s counsel and Employer’s counsel stated they did not know
about the Supplemental Agreement. Claimant then amended his penalty petition to
add the contention that the Supplemental Agreement precluded Employer from
unilaterally terminating compensation.
Employer’s counsel responded with two points. First, Employer
argued that although Claimant was injured on January 19, 2013, he continued to
work. On January 24, 2013, Claimant took a vacation day.4 Employer argued that
the 90-day duration of the NTCP did not begin until January 24, 2013. Second,
Employer stated that because it had just learned of the Supplemental Agreement,
its significance was unclear. Employer asked for time to research the issue.
The WCJ gave the parties two weeks to brief the significance of the
Supplemental Agreement. The WCJ stated that should the Supplemental
Agreement be found to be controlling, then he would grant the penalty petition. If
3
Other exhibits included the NTCP, Bureau Exhibit No. 1; the NSTC, Bureau Exhibit No. 3; and
the NCD, Bureau Exhibit No. 4.
4
These recitals cannot be confirmed or refuted because there is no evidentiary record. This is
true for both Employer and Claimant.
3
not, he would schedule a hearing to take evidence on the question of when the 90-
day period of temporary compensation began.
On June 17, 2013, the WCJ issued a decision granting Claimant’s
penalty petition; striking Employer’s NSTC and the NCD; and reinstating total
disability compensation to Claimant. The WCJ acknowledged that Employer’s
NTCP accepted liability for Claimant’s back injury only on a temporary basis.
However, by executing the Supplemental Agreement, Employer fully accepted
liability as of March 12, 2013. At that point, Claimant’s benefits could not be
terminated unilaterally by Employer but only by agreement of the parties or order
of a WCJ. Accordingly, the WCJ awarded a penalty equal to 30% percent of the
outstanding compensation benefits as of the date of the order.
Employer appealed to the Board. It argued that the Supplemental
Agreement was not controlling, as held by the WCJ. In support, Employer offered
a notice from the Bureau stating that the Supplemental Agreement was an
“Improperly Filed Form.” R.R. 7a. The notice stated as follows:
Claim is in a temporary status. A Supplemental Agreement
(LIBC-337) cannot be used to correct/amend a Notice of
Temporary Compensation Payable (LIBC-501). A
corrected/amended LIBC-501 must be submitted.
Id.
The Board refused to consider the Bureau’s notice for the stated
reason that it had not been presented to the WCJ and, thus, was not part of the
certified record.5 In any case, the Board found the notice irrelevant. The Board
5
The dissent argues that in “fairness,” the Board should have considered the Bureau’s notice.
However, Employer did not appeal this ruling of the Board to this Court.
4
held that Employer could not disavow the terms of the Supplemental Agreement
simply because it filed the “wrong form.” The Board held that the Supplemental
Agreement was binding unless and until it was modified by agreement of the
parties or by an order of the WCJ. Because the Supplemental Agreement provided
compensation “for uncertain weeks” into the future, Employer had admitted
ongoing liability for Claimant’s back injury. The Board noted that the
Supplemental Agreement should have been captioned as an Agreement for
Compensation, but this had no bearing on the meaning and enforceability of the
parties’ agreement.6
Employer petitioned for this Court’s review. On appeal,7 it raises one
issue. It contends the Board erred as a matter of law in concluding that the
Supplemental Agreement altered the provisional nature of Employer’s acceptance
of liability for Claimant’s injury.
Employer argues that the Supplemental Agreement did not have the
legal effect of an Agreement for Compensation. Under Section 406.1(d) of the
Act,8 77 P.S. §717.1(d), an employer may pay compensation payments for 90 days
6
Notably, the form for a “Supplemental Agreement” is identical to that for an “Agreement for
Compensation,” except for the caption.
7
This Court’s review determines whether the findings of fact are supported by substantial
evidence, whether Board procedures were violated, whether constitutional rights were violated or
whether an error of law was committed. City of Philadelphia v. Workers’ Compensation Appeal
Board (Brown), 830 A.2d 649, 653 n. 2 (Pa. Cmwlth. 2003). Our scope of review of questions
of law is plenary, and our standard of review is de novo.
8
It provides, in relevant part:
(d)(1) In any instance where an employer is uncertain whether a claim is
compensable under this act or is uncertain of the extent of its liability under this
act, the employer may initiate compensation payments without prejudice and
without admitting liability pursuant to a notice of temporary compensation
payable as prescribed by the department.
(Footnote continued on the next page . . . )
5
without admitting liability. Employer contends that it did not intend the
Supplemental Agreement to extend the benefit period in the NTCP. Rather, its
purpose was to return Claimant’s rate of compensation to “the rate set forth in the
NTCP initially issued by [Employer].” Employer Brief at 15. Employer argues
that it entered into the Supplemental Agreement solely to obtain Claimant’s
agreement to a reduction in the disability payment set forth in the NTCP for three
weeks in February. It entered the Supplemental Agreement to avoid penalties,
which this Court awarded in Gereyes v. Workers’ Compensation Appeal Board
(New Knight, Inc.), 793 A.2d 1017 (Pa. Cmwlth. 2002), because the employer had
unilaterally reduced the rate of disability compensation stated in its NTCP.
At issue here is a penalty petition filed pursuant to Section 435(d)(i)
of the Act,9 77 P.S. §991(d)(i). In a penalty petition, the claimant bears the burden
(continued . . . )
(2) The notice of temporary compensation payable shall be sent to the claimant
and a copy filed with the department and shall notify the claimant that the
payment of temporary compensation is not an admission of liability of the
employer with respect to the injury which is the subject of the notice of temporary
compensation payable. The department shall, upon receipt of a notice of
temporary compensation payable, send a notice to the claimant informing the
claimant that:
(i) the payment of temporary compensation and the claimant’s
acceptance of that compensation does not mean the claimant’s
employer is accepting responsibility for the injury or that a
compensation claim has been filed or commenced;
(ii) the payment of temporary compensation entitles the claimant to
a maximum of ninety (90) days of compensation[.]
Added by Section 3 of the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. §717.1(d).
9
It states, in relevant part, as follows:
(d) The department, the board, or any court which may hear any proceedings
brought under this act shall have the power to impose penalties as provided herein
(Footnote continued on the next page . . . )
6
of proving that a violation of the Act has occurred. Shuster v. Workers’
Compensation Appeal Board (Pennsylvania Human Relations Commission), 745
A.2d 1282, 1288 (Pa. Cmwlth. 2000). The WCJ concluded that Claimant met its
burden.
The WCJ reasoned that in the Supplemental Agreement, Employer
accepted liability for Claimant’s injury and, thus, it could not unilaterally terminate
compensation. The WCJ explained as follows:
Although [Employer] initially only provisionally accepted
Claimant’s injury via a [NTCP], [Employer] subsequently
accepted the claim fully by entering into the Supplemental
Agreement. Pursuant to the terms of the Supplemental
Agreement, [Employer has] accepted liability for a January 19,
2013 work-related injury in the form of a lumbar strain, for
which Claimant should be receiving temporary total disability
benefits at the rate of $824.84 per week.
WCJ Decision at 2, Conclusion of Law No. 2. In affirming the WCJ, the Board
relied upon Sharon Tube Company v. Workers’ Compensation Appeal Board
(Buzard), 908 A.2d 929 (Pa. Cmwlth. 2006).
In Buzard, the claimant, after having been awarded compensation,
returned to work. Thereafter, the claimant suffered a recurrence of his injury. The
(continued . . . )
for violations of the provisions of this act or such rules and regulations or rules of
procedure:
(i) Employers and insurers may be penalized a sum not exceeding
ten per centum of the amount awarded and interest accrued and
payable: Provided, however, That such penalty may be increased
to fifty per centum in cases of unreasonable or excessive delays.
Such penalty shall be payable to the same persons to whom the
compensation is payable.
Added by Section 3 of the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. §991(d)(i).
7
parties executed a supplemental agreement, acknowledging the claimant’s return to
total disability benefits on July 28, 2003, when he left work. Several months later,
the employer filed a modification petition, seeking to reduce the claimant’s
benefits as of July 21, 2003, onward, based on the claimant’s alleged ability to
work. In fact, the claimant did work the week of July 21, 2003. The claimant
argued that because the supplemental agreement was dated July 28, 2003, the
employer could not claim that he was able to work as of July 21, 2003. Employer
argued that the agreement was dated to reflect the claimant’s last day of work, not
because it believed that the claimant had grounds to leave work that day.
The Board rejected the employer’s argument, and this Court upheld
the Board. Section 413(a) of the Act,10 permits a modification only where there
has been a change in a claimant’s condition “since the date of the agreement.”
Buzard, 908 A.2d at 933 (emphasis in original). In so holding, we relied upon our
Supreme Court’s construction of Section 413(a) of the Act, where it explained:
[I]n the case of an agreement or a notice of compensation
payable, a petitioner has the burden of showing that the
employe’s disability has changed after the date of the
agreement or the notice of compensation payable.
10
It provides, in relevant part:
A workers’ compensation judge designated by the department may, at any time,
modify, reinstate, suspend, or terminate a notice of compensation payable, an
original or supplemental agreement or an award of the department or its workers’
compensation judge, upon petition filed by either party with the department, upon
proof that the disability of an injured employe has increased, decreased, recurred,
or has temporarily or finally ceased, or that the status of any dependent has
changed. Such modification, reinstatement, suspension, or termination shall be
made as of the date upon which it is shown that the disability of the injured
employe has increased, decreased, recurred, or has temporarily or finally ceased,
or upon which it is shown that the status of any dependent has changed[.]
77 P.S. §772.
8
Beissel v. Workmen’s Compensation Appeal Board (John Wanamaker, Inc.), 465
A.2d 969, 971 (Pa. 1983) (internal citation omitted, emphasis in original). We also
relied upon Section 407 of the Act which states, inter alia, that a supplemental
agreement for the reinstatement or termination of compensation “shall be valid and
binding unless modified or set aside as hereinafter provided.” 77 P.S. §731. In
short, Buzard established that an employer is bound by the facts stated in the
supplemental agreement, including the stated date of a claimant’s disability.
Buzard, 908 A.2d at 933.
Here, the Supplemental Agreement states, as fact, that “it is now
hereby agreed between parties hereto that the status of the disability of the said
employee changed” on February 28, 2013. R.R. 5a. An “x” is placed before
“Recurred.” Id. The Supplemental Agreement states that Claimant will be paid
$824.84 per week beginning on February 28, 2013, and then recites:
Compensation payable for ___UNK ___weeks ____days; or if
the future period of disability is uncertain, then to continue at
said rate until further changed by supplemental agreement,
final receipt, or order of a Workers’ Compensation Judge, or
the Workers’ Compensation Appeal Board.
Id. (emphasis added). The Supplemental Agreement recites that Claimant was paid
disability compensation at a rate lower than that stated in the NTCP when he
worked at a light duty job for three weeks in February. Id. at 6a. Finally, the
Supplemental Agreement concludes as follows:
AS OF 02-18-13 CLAIMANT’S DISABILITY RECURRED
TOTAL IN CHARACTER & COMPENSATION SHALL BE
PAYABLE TO THE SAID EMPLOYEE AT THE RATE OF
$824.84 PER WEEK FOR UNCERTAIN WEEKS.
9
We, the undersigned, agree upon the facts represented by the
above-named employee and the[] above-named employer.
Id. Based on these provisions of the Supplemental Agreement, the Board held that
Employer could neither stop the payment of compensation nor change the rate of
compensation by the issuance of a NSTC or NCD.
An NTCP is not an admission of liability, and Employer was entitled
to file a NSTC and a NCD any time before the expiration of the 90-day period of
temporary compensation. It is also the case that Employer agreed “to continue [to
pay compensation] at said rate until further changed by supplemental agreement,
final receipt, or order of a [WCJ] or the [Board].” R.R. 5a. These four documents
constitute the entire record in this case.
As a consequence, we know nothing about the circumstances that led
Employer’s claim adjuster to present the Supplemental Agreement to Claimant.
Under Gereyes, an employer’s unilateral reduction in an NTCP’s stated disability
rate violates the Act and subjects that employer to penalties.11 Employer contends
that it intended the Supplemental Agreement, which gave Claimant’s after-the-fact
imprimatur to the reduction for the period February 11, 2013, to February 25,
2013, to avoid the Gereyes result. Claimant responds that Employer should have
filled out the Supplemental Agreement to show that the reinstatement was only for
a maximum of 90 days, if that had been its intent.
11
In Gereyes, 793 A.2d 1017, the employer issued a NTCP and paid the claimant full disability.
Shortly thereafter, the claimant returned to work, and the employer unilaterally reduced the
benefit amount set forth in the NTCP. We held that the employer violated the Act by unilaterally
reducing the amount of compensation paid set forth in the NTCP without the claimant’s
agreement and awarded penalties to the claimant.
10
The absence of any evidentiary record impedes effective appellate
review. The Supplemental Agreement was executed, apparently, without the
knowledge or advice of either party’s counsel.12 It is not known why Employer did
not file an amended NTCP (LIPC-501), as suggested by the Bureau.13 Likewise,
the record does not support the Board’s supposition that Employer should have
used the form for an Agreement for Compensation instead of a Supplemental
Agreement.
The intentions of either Claimant or Employer cannot be discerned
solely from the Supplemental Agreement. Accordingly, we vacate the Board’s
order and remand for the development of a record that can resolve whether the
Supplemental Agreement was a mutual mistake of the parties and, if so, whether
Employer’s NCD was issued within the 90-day deadline.
______________________________________
MARY HANNAH LEAVITT, President Judge
12
Employer claims that the Supplemental Agreement was a mistake, without any evidence to
support that claim. Upon remand, a full record needs to be made, not one that favors only
Employer. Claimant may have a different version of the facts that led to the execution of the
Supplement Agreement.
13
Given this Court’s ruling in Gereyes, it is not clear that the Bureau’s suggestion relieves an
employer of liability for a unilateral reduction in the rate of benefits set forth in a NTCP.
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Frank Martz Coach Company, :
Petitioner :
:
v. : No. 1555 C.D. 2015
:
Workers’ Compensation Appeal :
Board (Avila), :
Respondent :
ORDER
AND NOW, this 13th day of April, 2017, the order of the Workers’
Compensation Appeal Board, dated July 28, 2015, is hereby VACATED and the
matter REMANDED for further proceedings consistent with the attached opinion.
Jurisdiction relinquished.
______________________________________
MARY HANNAH LEAVITT, President Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Frank Martz Coach Company, :
Petitioner :
:
v. :
:
Workers’ Compensation Appeal :
Board (Avila), : No. 1555 C.D. 2015
Respondent : Submitted: March 24, 2016
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
CONCURRING/DISSENTING OPINION
BY JUDGE COVEY FILED: April 13, 2017
Although I agree that the Workers’ Compensation (WC) Appeal Board’s
(Board) order should be vacated and the matter remanded for the parties to present
evidence with respect to the timeliness of the Notice Stopping Temporary
Compensation (NSTC) and the Notice of Workers’ Compensation Denial (NCD), I
respectfully dissent from the Majority’s directive that the matter be remanded to
determine the intent of the parties with respect to the Supplemental Agreement for
Compensation for Disability or Permanent Injury (Supplemental Agreement). The
Majority concludes that a remand is warranted on that issue because Julio Avila
(Claimant) “may have another version of the facts, i.e., that the ‘mistake’ was using
the form for a supplemental agreement when the form for an agreement for
compensation should have been used.” Majority Op. at 11 (emphasis added). I
disagree because: (1) Claimant did not raise that argument either before the Board or
this Court; and (2) the WC Act (Act),1 and the WC Bureau’s (Bureau) rejection of the
Supplemental Agreement support Frank Martz Coach Company’s (Employer)
contention. Thus, I believe this Court should vacate the Board’s order and remand
the matter for the sole purpose of litigating the timeliness issue.
On February 5, 2013, Employer issued a Notice of Temporary
Compensation Payable (NTCP) accepting Claimant’s January 19, 2013 work-related
injury described as a lumbar strain. Claimant began receiving temporary total
disability benefits as of January 24, 2013 at the rate of $824.84 per week, based upon
an average weekly wage of $1,237.20. Thereafter, Employer and Claimant entered
into the March 12, 2013 Supplemental Agreement which reduced Claimant’s WC
benefits to temporary partial disability at varying rates from February 11, 2013
through February 27, 2013 due to Claimant’s return to work, with total disability
recurring as of February 28, 2013, and Claimant returning to temporary total
disability at the rate of $824.84 per week for uncertain weeks. Employer filed the
Supplemental Agreement with the Bureau. On April 22, 2013, Employer issued an
NSTC and an NCD. Claimant’s benefits were terminated as of April 22, 2013.
On April 26, 2013, Claimant filed a penalty petition (Petition) alleging
that, as of April 22, 2013, Employer violated the Act by unilaterally suspending
Claimant’s benefits based on a late and incorrect denial of Claimant’s accepted
work injury. The Workers’ Compensation Judge (WCJ) held a hearing on May 28,
2013. Importantly, at the beginning of the hearing, the WCJ introduced the
Supplemental Agreement. Neither Counsel was aware of the Supplemental
Agreement’s existence as evidenced by the following exchange:
ATTORNEY VENTRE [Employer’s Counsel]:
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2708.
AEC - 2 -
Judge, to be perfectly frankly [sic], I didn’t even know
there was a Supplemental Agreement until you just
mentioned it as one of the Bureau Exhibits. The only- - -
JUDGE HEMAK [WCJ]:
Here, I’ll let you take a look at it.
ATTORNEY VENTRE:
Please. May I approach?
JUDGE HEMAK:
You may. Claimant’s Counsel was unaware of it as well.
ATTORNEY VENTRE:
Thank you, Your Honor.
Reproduced Record (R.R.) at 27a-28a (emphasis added). Clearly, since Claimant’s
Counsel was unaware of the Supplemental Agreement’s existence, he was not
arguing that Employer violated the Act based thereon.2 Because neither counsel
was aware of the Supplemental Agreement, they were prepared to argue only what
was in the Petition which made no reference to the Supplemental Agreement. In the
Petition, Claimant stated as the “reason[]” for his claim:
[Employer] has unilaterally suspended benefits based on a
late and incorrect denial of Claimant’s accepted work
injury. Claimant’s injury was accepted by way of [an
NTCP]. The 90 days following which elapsed on April 19,
2013. The denial was improperly issued and late, thus
having no effect. Claimant is seeking an immediate
reinstatement of benefits along with penalties and counsel
fees.
Original Record (O.R.) at 2, Claimant’s Petition (emphasis added). In addition, the
Petition gave Claimant the opportunity to state the basis for which WC benefits were
2
The Majority states that Claimant “amended his [P]etition to add the contention that the
Supplemental Agreement precluded Employer from unilaterally terminating compensation.”
Majority Op. at 3. However, Claimant’s Counsel made no such amendment. Claimant’s Counsel
merely argued that the Supplemental Agreement was controlling after acknowledging the
Supplemental Agreement which he did not know existed before that time. See R.R. at 24a-25a.
AEC - 3 -
currently being paid, and provided the following options: “Notice of Compensation
Payable [(NCP)] dated[;] Agreement dated[;] Supplemental Agreement dated[;]
Judge’s Award dated[;] [and] Court order dated[.]” Id. (emphasis added). Claimant
selected none of these options.
The law is well-established that “[a] claimant who files a penalty petition
must first meet his initial burden of proving a violation of the Act or the attendant
regulations occurred; the burden then shifts to the employer to prove the violation did
not occur.” Dep’t of Transp. v. Workers’ Comp. Appeal Bd. (Clippinger), 38 A.3d
1037, 1047 (Pa. Cmwlth. 2011). Here, Claimant asserts Employer violated the Act
by unilaterally stopping his WC benefit payments.
Section 406.1 of the Act3 provides, in relevant part:
(a) The employer and insurer shall promptly investigate
each injury reported or known to the employer and shall
proceed promptly to commence the payment of
compensation due either pursuant to an agreement upon the
compensation payable or a [NCP] as provided in [S]ection
407 [of the Act] or pursuant to a [NTCP] as set forth in
subsection (d), on forms prescribed by the [D]epartment [of
Labor and Industry (Department)] and furnished by the
insurer. The first installment of compensation shall be paid
not later than the twenty-first day after the employer has
notice or knowledge of the employe’s disability. Interest
shall accrue on all due and unpaid compensation at the rate
of ten per centum per annum. Any payment of
compensation prior or subsequent to an agreement or [NCP]
or a [NTCP] or greater in amount than provided therein
shall, to the extent of the amount of such payment or
payments, discharge the liability of the employer with
respect to such case.
....
(d)(1) In any instance where an employer is uncertain
whether a claim is compensable under [the Act] or is
3
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
AEC - 4 -
uncertain of the extent of its liability under [the Act], the
employer may initiate compensation payments without
prejudice and without admitting liability pursuant to a
[NTCP] as prescribed by the [D]epartment.
(2) The [NTCP] shall be sent to the claimant and a copy
filed with the [D]epartment and shall notify the claimant
that the payment of temporary compensation is not an
admission of liability of the employer with respect to the
injury which is the subject of the [NTCP]. The
[D]epartment shall, upon receipt of a [NTCP], send a notice
to the claimant informing the claimant that:
(i) the payment of temporary compensation and the
claimant’s acceptance of that compensation does not mean
the claimant’s employer is accepting responsibility for the
injury or that a compensation claim has been filed or
commenced;
(ii) the payment of temporary compensation entitles the
claimant to a maximum of ninety (90) days of
compensation; and
(iii) the claimant may need to file a claim petition in a
timely fashion under [S]ection 315 [of the Act], enter into
an agreement with his employer or receive a [NCP] from
his employer to ensure continuation of compensation
payments.
(3) Payments of temporary compensation shall commence
and the [NTCP] shall be sent within the time set forth in
clause (a).
(4) Payments of temporary compensation may continue
until such time as the employer decides to controvert the
claim.
....
(6) If the employer does not file a notice under paragraph
(5) within the ninety-day period during which temporary
compensation is paid or payable, the employer shall be
deemed to have admitted liability and the notice of
temporary compensation payable shall be converted to a
notice of compensation payable.
AEC - 5 -
77 P.S. § 717.1 (emphasis added). Pursuant to Section 121.7a(c) of the Bureau’s
Regulations:
To modify a [NTCP], Form LIBC-501, an employer shall
file an amended [NTCP], Form LIBC-501, with the Bureau
during the 90-day temporary compensation payable period.
The amended [NTCP], Form LIBC-501, shall be clearly
identified as ‘Amended’ and may have only the insurer’s
signature.
34 Pa. Code § 121.7a(c). Under Section 121.17(b) of the Bureau’s Regulations:
Termination, suspension, modification or other change in
compensation may be accomplished by filing with the
Bureau a Supplemental Agreement for Compensation for
Disability or Permanent Injury, Form LIBC-337. A
Supplemental Agreement for Compensation for
Disability or Permanent Injury, Form LIBC-337, may be
used to change an Agreement for Compensation for
Disability or Permanent Injury, Form LIBC-336, a
Supplemental Agreement for Compensation for
Disability or Permanent Injury, Form LIBC-337, an
Agreement for Compensation for Death, Form LIBC-
338, a Notice of Compensation Payable, Form LIBC-495,
or an award. . . .
34 Pa. Code § 121.17(b) (emphasis added). Finally, Section 407 of the Act states:
On or after the seventh day after any injury shall have
occurred, the employer or insurer and employe or his
dependents may agree upon the compensation payable to
the employe or his dependents under [the Act] . . . .
Where payment of compensation is commenced without an
agreement, the employer or insurer shall simultaneously
give [a NCP] to the employe or his dependent, on a form
prescribed by the [D]epartment, identifying such payments
as compensation under [the Act] and shall forthwith furnish
a copy or copies to the [D]epartment as required by rules
and regulations. . . .
All [NCPs] and agreements for compensation and all
supplemental agreements for the modification, suspension,
reinstatement, or termination thereof, and all receipts
AEC - 6 -
executed by any injured employe of whatever age, or by
any dependent to whom compensation is payable under
[Section 307 of the Act, 77 P.S. § 561], and who has
attained the age of sixteen years, shall be valid and binding
unless modified or set aside as hereinafter provided.
77 P.S. § 731.
In the instant case, the WCJ concluded that Employer violated the Act
by stopping Claimant’s benefits pursuant to the NSTC and NCD it filed. The WCJ
reasoned that the Supplemental Agreement’s filing reflected Employer’s acceptance
of liability and, thus, precluded Employer from thereafter filing the NSTC and NCD.
However, based upon the above-quoted law, because Employer issued an NTCP, the
filing of the Supplemental Agreement as described in Section 121.17(b) of the
Bureau’s Regulations was improper. Rather, Employer should have filed an
Amended NTCP pursuant to Section 121.7a(c) of the Bureau’s Regulations in order
to modify Claimant’s benefits for the period beginning February 11, 2013.
Notwithstanding, the WCJ and the Board, recognizing that the
Supplemental Agreement was not the proper form, accepted it and deemed it an
Agreement for Compensation. Indeed, the Board stated:
Although it is acknowledged that the parties executed and
filed a [S]upplemental [A]greement rather than an
[A]greement for [C]ompensation, we believe that giving
effect to the parties’ [Supplemental] Agreement avoids
what the courts have condemned as exalting form over
substance, . . . and is consistent with the remedial purposes
of the Act.
Board Dec. at 5. Rather than reject the form as improper, as the Bureau did which
will be discussed below, or ascertain the parties’ intent, the WCJ and the Board
reclassified the Supplemental Agreement as an Agreement of Compensation with no
evidence to support this determination and also without any record evidence, and
determined that the Employer accepted liability. However, the Supplemental
Agreement’s terms do not evidence Employer’s acceptance of liability. Rather,
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the Supplemental Agreement changed Claimant’s benefits because of his return to
work. Thus, there is no substantiated evidence to support the determination that the
Employer accepted liability for Claimant’s injury.
In fact, the Bureau, recognizing that Employer filed the wrong form,
rejected the Supplemental Agreement. The Board opined:
While [Employer] further alleges that the Bureau rejected
the filing[] of the Supplemental Agreement form as
improper based on the procedural posture of this case, we
cannot agree that the Bureau’s alleged rejection of the form
could be dispositive, as [Employer] does not argue that the
Supplemental Agreement lacked any necessary information,
and as we understand from [Beissel v. Workmen’s
Compensation Appeal Board (John Wanamaker, Inc.), 465
A.2d 969 (Pa. 1983)] and Bradley[4] that an employer’s
execution and filing of the document with the Bureau are
the actions upon which liability is based, and thus we reject
[Employer’s] argument.
Board Dec. at 6 (footnote omitted).
The Board’s reliance on Beissel is misplaced. The Beissel Court held
that an NCP filed by an employer, who had an opportunity to and, in fact, did
investigate the cause of an employee’s disability, constituted an admission of the
employer’s liability and operated to preclude the employer, under the guise of a
termination petition, from later contradicting in court precisely that which the
employer admitted in its NCP.
In addition, the Majority cites Sharon Tube Company v. Workers’
Compensation Appeal Board (Buzard), 908 A.2d 929 (Pa. Cmwlth. 2006), for its
conclusion: “an employer is bound by the facts stated in the supplemental agreement,
including the stated date of a claimant’s disability.” Majority Op. at 9. However, the
first paragraph of Section 413(a) of the Act authorizes an agreement to be modified or
4
Because this is the only reference to Bradley in the Board’s decision, we have no further
citation.
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set aside based upon a material mistake of fact or law. See 77 P.S. § 771. Here,
Employer asserted a mistake.
Employer expressly acknowledged in its brief
that a Supplemental Agreement was not the appropriate
Bureau document to utilize at that juncture. As the
Bureau advised in its Notice of Rejected Document, in
order to modify the terms of an NTCP[,] an Amended
NTCP should have been issued. And in point of fact,
[Employer] could have done so unilaterally. See [Section
121.7a(c).3 of the Bureau’s Regulations,] 34 Pa. Code
§[]121.7a(c).3.
Employer Br. at 15-16 (emphasis and italics added).
With regard to the Bureau’s rejection of the Supplemental Agreement,
the Board added:
In this respect[,] we note that while [Employer] has attached
a document to its [b]rief filed with the Board on [a]ppeal,
which document it alleges was issued by the Bureau, we are
unable to consider such a document as it is not included in
the evidentiary record certified to the Board on [a]ppeal
herein.
Board Dec. at 6 n.5.
Notably, as Employer’s Counsel was not aware that a Supplemental
Agreement existed prior to the WCJ hearing, he would have no reason to present the
Bureau’s “NOTICE OF REJECTED DOCUMENT” (Notice), wherein the Bureau
expressly rejected the Supplemental Agreement because it was an “Improperly Filed
Form” as the “Claim is in a temporary status.” O.R. at 20. Under the circumstances,
since the WCJ offered and admitted the Supplemental Agreement into the record on
his own accord, as a matter of reviewing all pertinent evidence and fairness to the
parties, the Board should also have considered the Bureau’s Notice. In fact, the
Board did include the Notice in its original record filed with this Court, which it
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certified to be “full, entire and complete as the same remains on file in the [Bureau].”
O.R. at 40. The Notice expressly provided:
IMPORTANT: Claim is in a temporary status. A
Supplemental Agreement . . . cannot be used to
correct/amend a [NTCP]. A corrected/amended [NTCP]
must be submitted.
To accept or deny liability, . . . you must timely file one
of the following to stop temporary payments:
(1) A [NSTC], and a [NCD] . . . .
(2) A [NCP].
(3) An Agreement for Compensation . . . .
O.R. at 20 (emphasis added). As the Bureau expressly directed in its Notice,
Employer filed an NSTC and an NCD for which the WCJ penalized Employer.
More importantly, and as the Bureau specifically recognized, the filing
of an improper form cannot convert the NTCP to an NCP when that document
contains no acceptance of liability. Notwithstanding, the Supplemental Agreement
cannot be the controlling document because the Bureau’s Regulations clearly provide
that the Supplemental Agreement was procedurally improper. See 34 Pa. Code §
121.7a(c), 34 Pa. Code § 121.17(b); see also 77 P.S. § 731.
‘[W]hen construing a statute, we must follow the letter of
the statute if its words are unambiguous[.]’ Velocity
Express v. Pa. Human Relations Comm’n, 853 A.2d 1182,
1185 (Pa. Cmwlth. 2004) (quoting McClellan v. Health
Maint. Org. of Pa., . . . 686 A.2d 801, 805 ([Pa.] 1996)).
We are mindful that, when ascertaining the General
Assembly’s intent with regard to ambiguous
statutory language, courts are to give strong
deference to an administrative agency’s
interpretation of a statute that the agency is charged
to enforce. However,
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[courts] need not give deference to an agency
where its construction of a statute frustrates
legislative intent. Therefore, although courts
often defer to an agency’s interpretation of the
statutes it administers, where . . . the meaning
of the statute is a question of law for the court,
when convinced that the agency’s
interpretation is unwise or erroneous, that
deference is unwarranted.
Rosen v. Bureau of [Prof’l] [&] Occupational
Affairs, State Architects Licensure Bd., 763 A.2d
962, 968 (Pa. Cmwlth. 2000) (citation omitted), . . .
781 A.2d 150 ([Pa.] 2001). Such is the case here.
Velocity Express, 853 A.2d at 1185 (citations omitted).
Further, ‘[i]t is well settled law that an agency’s substantive
regulations . . . have the force and effect of law.’ Eastwood
Nursing [&] Rehab. Ctr. v. Dep’t of Pub. Welfare, 910 A.2d
134, 142 (Pa. Cmwlth. 2006).
Dixon v. Workers’ Comp. Appeal Bd. (Medrad, Inc.), 134 A.3d 518, 526-27 (Pa.
Cmwlth. 2016).
Because the law and the evidence support Employer’s contention that
the Supplemental Agreement was filed inadvertently and that Employer should have
filed an amended NCP, and Claimant did not argue “that the ‘mistake’ was using the
form for a supplemental agreement when the form for an agreement for compensation
should have been used[,]” Majority Op. at 11, the Majority erred in concluding that a
remand is warranted to determine the intent of the parties’ in filing the Supplemental
Agreement. Accordingly, I would vacate the Board’s order and remand the matter to
the Board for remand to the WCJ to determine whether the NSTC and NCD were
timely filed and, thus, valid.
___________________________
ANNE E. COVEY, Judge
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