J. Allen v. WCAB (City of Philadelphia) ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Allen, :
:
Petitioner :
:
v. : No. 1947 C.D. 2015
: Submitted: March 11, 2016
Workers’ Compensation Appeal Board :
(City of Philadelphia), :
:
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE COLINS FILED: August 16, 2016
James Allen (Claimant) petitions for review of an order of the
Workers’ Compensation Appeal Board (Board) that affirmed the decision and
order of a Workers’ Compensation Judge (WCJ) dismissing a reinstatement
petition and penalty petition filed by Claimant against the City of Philadelphia
(Employer) on the grounds that the petitions were barred by the doctrine of res
judicata. Finding no error in the Board’s order, we affirm.
On November 3, 2010, Claimant was employed by Employer as a
local area network administrator for the Free Library of Philadelphia when he was
involved in a work-related motor vehicle accident. (Aug. 10, 2012 WCJ Decision
and Order (2012 WCJ Decision), Findings of Fact (F.F.) ¶¶1a-1b, 2a-2b.)
Employer issued a notice of compensation payable (NCP) on November 22, 2010
describing the injury as a neck, thoracic and lumbar strain and sprain and
Employer began paying Claimant total disability benefits. (Id. at 1.) On April 14,
2011, Employer filed a notification of suspension in which it stated that Claimant’s
benefits were suspended effective April 6, 2011 because Claimant had returned to
work with earnings greater than his pre-injury earnings. (Reproduced Record
(R.R.) at 2a-3a.) Claimant did not file a challenge to the notification of
suspension. (2012 WCJ Decision at 1.)
On May 2, 2011, Claimant filed a claim petition, later amended to a
reinstatement petition and review petition, seeking total disability benefits as of
March 24, 2011 and an expansion of the description of his injury to include his
lower extremities and shoulders. (Id.) Claimant then filed a petition to review a
utilization review determination that found Claimant’s treatment with medication
and physical therapy would not be reasonable and necessary after September 24,
2011, and Employer filed a termination petition alleging that Claimant was fully
recovered and able to return to full duty work as of July 29, 2011, the date
Employer’s medical expert examined Claimant. (Id.) These petitions were
consolidated for proceedings before WCJ Debra Bowers. (Id.)
On August 10, 2012, WCJ Bowers issued a decision denying
Claimant’s reinstatement petition because Claimant failed to demonstrate grounds
for reinstatement of benefits and denying Claimant’s review petition because
Claimant had not proved that the NCP should be expanded to include additional
injuries. (Id., F.F. ¶12, Conclusion of Law (C.L.) ¶3.) WCJ Bowers also granted
Employer’s termination petition effective July 29, 2011, finding that Claimant had
fully recovered from his injuries as of that date and denied Claimant’s utilization
review petition finding that Claimant’s treatment was necessary and reasonable
only until July 29, 2011. (Id., F.F. ¶11, C.L. ¶¶2, 4.) By a February 19, 2014
Opinion and Order, the Board affirmed WCJ Bowers’ grant of Employer’s
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termination petition and denial of Claimant’s reinstatement, review and utilization
review petitions. Claimant did not appeal the Board’s decision to this Court. (Oct.
14, 2014 WCJ Decision and Order (2014 WCJ Decision), F.F. ¶7.)
Claimant filed the reinstatement petition and penalty petition presently
before this Court on April 29, 2014. (R.R. at 25a-28a.) In these petitions,
Claimant alleges that his benefits should be reinstated as of April 6, 2011 and that
Employer improperly suspended his benefits as of that date because, while he was
released to return to work on April 5, 2011, he did not in fact return to work on
April 6 as stated in the notification of suspension. (R.R. at 25a.) Employer
answered Claimant’s reinstatement and penalty petitions and filed a motion to
dismiss based on the doctrine of res judicata. (Answer, R.R. at 29a-33a; 2014
WCJ Decision, F.F. ¶8.) The reinstatement and penalty petitions were assigned to
WCJ Todd Seelig, who bifurcated the matter and allowed the parties to submit
letter briefs pertaining to the motion to dismiss. (2014 WCJ Decision, F.F. ¶8.)
On October 14, 2014, WCJ Seelig issued a decision granting
Employer’s motion and dismissing Claimant’s reinstatement and penalty petitions.
WCJ Seelig found that each of the elements of res judicata was satisfied because
the parties were identical in the prior proceeding and they were sued in their same
capacity; the subject matter and issues in the pending litigation were subsumed in
the litigation before WCJ Bowers, as demonstrated by the fact that WCJ Bowers
amended Claimant’s claim petition to a reinstatement and review petition; and the
benefits sought in the present case from April 6, 2011 onward were included in the
period that Claimant sought reinstatement before WCJ Bowers of March 24, 2011
and ongoing. (Id., F.F. ¶¶10-16, C.L. ¶2.) WCJ Seelig noted that while Claimant
did not argue in the prior litigation that the notification of suspension was invalid,
res judicata applies not only to claims that were raised previously but also to
3
claims that should have been litigated; thus, Claimant’s failure to raise the alleged
invalidity of the suspension notification does not allow him to escape the bar of res
judicata. (Id., F.F. ¶¶10, 12, 16.) Claimant appealed the dismissal of the
reinstatement and penalty petitions to the Board, and the Board affirmed. This
appeal followed.1
Claimant argues on appeal that the Board erred in concluding that the
reinstatement and penalty petitions filed by Claimant in April 2014 are barred by
res judicata. Claimant cites this Court’s decision in Kraeuter v. Workers’
Compensation Appeal Board (Ajax Enterprises, Inc.), 82 A.3d 513 (Pa. Cmwlth.
2013), wherein we held that a WCJ properly set aside a notification of suspension
because it was based on false information, even though the challenge to the
suspension notification was not filed until more than five years after the
notification was issued. Claimant contends that, like in Kraeuter, the suspension
notification here is also materially incorrect because Claimant did not return to
work on April 6, 2011 and therefore the dismissal based on res judicata was in
error and the WCJ should have allowed the reinstatement of benefits despite
Claimant’s failure to file a timely challenge to the notification.
The doctrine of res judicata encompasses two related, yet distinct,
principles: technical res judicata and collateral estoppel. Cytemp Specialty Steel
v. Workers’ Compensation Appeal Board (Crisman), 39 A.3d 1028, 1034 (Pa.
Cmwlth. 2012); Maranc v. Workers’ Compensation Appeal Board (Bienenfeld),
751 A.2d 1196, 1199 (Pa. Cmwlth. 2000) (en banc). Collateral estoppel acts to
1
Our scope of review of the Board’s order is limited to determining whether an error of law was
committed, whether the WCJ’s necessary findings of fact are supported by substantial evidence
and whether constitutional rights were violated. Merkel v. Workers’ Compensation Appeal
Board (Hofmann Industries), 918 A.2d 190, 192 n.2 (Pa. Cmwlth. 2007).
4
foreclose litigation in a later action of issues of law or fact that were actually
litigated and necessary to a previous final judgment. Cytemp Specialty Steel, 39
A.3d at 1034; Maranc, 751 A.2d at 1199. On the other hand, technical res
judicata, the principle applicable in this case, provides that following a final
judgment on the merits, a future suit on the same cause of action between the same
parties is precluded. Cytemp Specialty Steel, 39 A.3d at 1034; Maranc, 751 A.2d
at 1199. Unlike collateral estoppel, technical res judicata applies not only to
claims that were actually litigated but also to matters that could have been, or
should have been, raised in the prior proceeding. Cytemp Specialty Steel, 39 A.3d
at 1034; Maranc, 751 A.2d at 1199; see also Merkel v. Workers’ Compensation
Appeal Board (Hofmann Industries), 918 A.2d 190, 193 n.5 (Pa. Cmwlth. 2007)
(“In other words, res judicata applies to issues that were, in effect, waived in the
old proceeding.”). The underlying purpose of the doctrine of res judicata is to
minimize the judicial energy devoted to individual cases, establish certainty and
respect for court judgments and to protect the party relying on the prior
adjudication from vexatious litigation. Knox v. Pennsylvania Board of Probation
and Parole, 588 A.2d 79, 82 (Pa. Cmwlth. 1991).
Technical res judicata, often referred to as claim preclusion, applies
when the following four factors are present: (i) identity in the thing sued upon or
for; (ii) identity of the cause of action; (iii) identity of the persons and parties to the
action; and (iv) identity of the quality or capacity of the parties suing or sued.
Henion v. Workers’ Compensation Appeal Board (Firpo & Sons, Inc.), 776 A.2d
362, 365-66 (Pa. Cmwlth. 2001); Maranc, 751 A.2d at 1199. “Generally, causes
of action are identical when the subject matter and the ultimate issues are the same
in both the old and the new proceedings.” Maranc, 751 A.2d at 1199. As we have
explained,
5
[i]dentity of two causes of action may be determined by
considering the similarity in the acts complained of and the
demand for recovery, as well as the identity of the witnesses,
documents and facts alleged and whether the same evidence is
necessary to prove each action. A party cannot escape
operation of the bar of res judicata by varying the form of
action or adopting a different method of presenting the case.
Nor can one avoid the consequences of the prior judicial
adjudication merely by altering the character of the relief
sought.
Swift v. Radnor Township, 983 A.2d 227, 232 (Pa. Cmwlth. 2009) (citation
omitted).
We conclude that the Board and WCJ Seelig correctly applied res
judicata to dismiss the new reinstatement and penalty petitions filed by Claimant.
There is no dispute that the third and fourth elements are present because the prior
and current litigation involve the same parties in their same capacities. It is also
clear that the “thing sued upon” is identical in the old and new litigation. In the
proceedings before WCJ Bowers, Claimant sought reinstatement of total disability
benefits as of March 24, 2011 and ongoing, while Claimant now seeks
reinstatement as of April 6, 2011, the effective date of the notification of
suspension. Thus, the period for which Claimant currently seeks benefits is
entirely subsumed within the period at issue in the previous case; in other words,
had Claimant been successful in the case before WCJ Bowers, the current litigation
would be superfluous.2
Furthermore, we agree with WCJ Seelig that the identity of the cause
of action is the same in the old and new action. In the litigation before WCJ
Bowers, Claimant’s claim petition sought payment of total disability benefits as of
2
Claimant has also filed a penalty petition in the current matter, however, the request for a
penalty is solely based on Claimant’s contention that Employer violated the Workers’
Compensation Act by failing to promptly pay the benefits as of the date of suspension.
6
March 24, 2011 and to change the description of his injuries on the NCP and was
amended to a reinstatement petition and a review petition based on the nature of
the relief sought. In the instant matter before WCJ Seelig, Claimant filed a
reinstatement petition which also seeks to have his total disability benefits restored.
Both the old and new litigation relate to the same November 3, 2010 motor vehicle
accident, and both sought to reinstate benefits at the level set in the original NCP.
While Claimant has presented a new theory in the present case based on the
alleged misrepresentation by Employer in the suspension notification that Claimant
had returned to work on April 6, 2011, this new argument could have been
presented in the previous case and does not rescue this matter from the preclusive
effect of res judicata.
Our decision in Kraeuter does not compel a different result. In
Kraeuter, the employer’s insurer issued a notification of suspension in May 2006
based upon the claimant’s return to work; also in May 2006, the employer and
claimant executed a final receipt agreement which stated that the claimant was able
to return to work without a loss of earnings. 82 A.3d at 515. The claimant did not
file a challenge to the suspension notification or take any other action for the
reinstatement of benefits until 2011, when she filed a challenge to the suspension
notification, a petition to set aside the final receipt and a penalty petition, alleging
that she had not in fact returned to work in May 2006. Id. The WCJ granted the
challenge to the notification of suspension and the claimant’s petitions, finding that
the claimant had not returned to work and had not recovered from her injury and
that the claims adjuster for the employer’s insurer engaged in fraudulent conduct
by representing that the claimant had returned to work despite being aware of
information to the contrary. Id. at 516-17. The Board reversed the WCJ, holding
that both the challenge to the suspension notification and petition to set aside the
7
final receipt were time barred under the Workers’ Compensation Act (Act).3 Id. at
517.
On appeal, this Court reversed the Board and reinstated the WCJ’s
award of the reinstatement of benefits. Relevant to this matter, we observed that
the Act requires that a notification of suspension include an affidavit by the insurer
that the claimant has returned to work with earnings equal to or greater than pre-
injury earnings, but that if a notification is not challenged within 20 days the
employee shall be deemed to have admitted the return to work and the notification
shall have the same binding effect as a fully executed supplemental agreement for
the suspension of benefits. Id. at 519-20 (citing Section 413(c) of the Act, added
by the Act of July 1, 1978, P.L. 692, as amended, 77 P.S. § 774.2). Despite the
fact that the claimant in Kraeuter did not challenge the suspension notification
within 20 days, we held that the WCJ acted appropriately pursuant to the first
paragraph of Section 413(a) of the Act which provides that a WCJ “may, at any
time, ... set aside a ... supplemental agreement ... if it be proved that such ...
agreement was in any material respect incorrect” in light of the evidence of record
that the claimant never returned to work and the claims adjuster had no basis in
affirming that she had done so. Id. at 520-21 (quoting Section 413(a) of the Act,
77 P.S. § 771).
Claimant argues that because he has alleged that Employer
misrepresented that he had returned to work by April 6, 2011, his request for
reinstatement should be permitted “at any time” pursuant to Section 413(a) and
Kraeuter. This argument misses the key difference between the two cases: while
Claimant presents the same argument as in Kraeuter that the failure to lodge a
3
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1–1041.4, 2501–2708.
8
timely challenge of a suspension notification does not prevent a WCJ from later
reinstating benefits where fraudulent conduct was present, in Kraeuter there was
no prior litigation involving the same cause of action. Res judicata applies only
where there is a final judgment on the merits in a prior action involving the same
parties and thus the question of whether res judicata barred the litigation was not
present in Kraeuter. Here, by contrast, Claimant had previously initiated litigation
in 2011 seeking reinstatement of his benefits, which was rejected by WCJ Bowers
and became final following Claimant’s failure to appeal to this Court. Claimant
could have presented his current argument that the suspension notification was
invalid in the litigation before WCJ Bowers but chose not to.
Accordingly, the order of the Board is affirmed.
____________________________________
JAMES GARDNER COLINS, Senior Judge
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Allen, :
:
Petitioner :
:
v. : No. 1947 C.D. 2015
:
Workers’ Compensation Appeal Board :
(City of Philadelphia), :
:
Respondent :
ORDER
AND NOW, this 16th day of August, 2016, it is hereby ORDERED
that the order of the Workers’ Compensation Appeal Board in the above-captioned
matter is AFFIRMED.
____________________________________
JAMES GARDNER COLINS, Senior Judge