Phillips Family Chiropractic & State Farm Fire and Casualty v. WCAB (Phillips) ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Phillips Family Chiropractic and :
State Farm Fire and Casualty, :
Petitioners :
:
v. :
:
Workers’ Compensation Appeal :
Board (Phillips), : No. 1205 C.D. 2018
Respondent : Submitted: March 8, 2019
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: June 14, 2019
Phillips Family Chiropractic, PC and State Farm Fire & Casualty Co.
(collectively, Petitioners) petition this Court for review of the Workers’
Compensation (WC) Appeal Board’s (Board) July 31, 2018 order affirming the
Workers’ Compensation Judge’s (WCJ) decision granting Craig Phillips’ (Claimant)
Claim Petition. Petitioners present one issue for this Court’s review: whether the
Board and the WCJ erred as a matter of law by granting Claimant’s Claim Petition.
After review, we affirm.
Claimant is a chiropractor and the sole shareholder of Phillips Family
Chiropractic, PC. On September 21, 2015, Claimant filed the Claim Petition alleging
that he sustained a work-related injury on April 6, 2015, described as a left shoulder
superior labrum anterior to posterior (SLAP) tear caused by chiropractic
manipulation. Petitioners filed an Answer, denying the material averments of the
Claim Petition. The WCJ held hearings on December 1, 2015 and March 7,
September 12, and December 12, 2016.
On May 30, 2017, the WCJ granted the Claim Petition and awarded
temporary total disability benefits from July 22, 2015 through July 28, 2015.
Beginning July 29, 2015, the WCJ awarded open-ended partial disability benefits
based on Claimant’s return to modified-duty work. The WCJ concluded that
Claimant’s imputed earnings were insufficient to reduce his compensation rate below
the state maximum rate for 2015, and ordered Claimant to receive benefits at the rate
of $951.00 per week for all weeks of payment. Petitioners appealed to the Board. On
July 31, 2018, the Board affirmed the WCJ’s decision. Petitioners appealed to this
Court.1
Petitioners argue that the WCJ erred by granting Claimant’s Claim
Petition because Findings of Fact (FOF) 2, 3 and 5 through 13 and Conclusions of
Law (COL) 2 and 4 through 8 are not supported by substantial evidence. “Substantial
evidence is such relevant evidence as a reasonable person might accept as adequate to
support a conclusion.” Washington v. Workers’ Comp. Appeal Bd. (State Police), 11
A.3d 48, 54 n.4 (Pa. Cmwlth. 2011) (quotation marks omitted). Further, the law is
well established that “[t]he WCJ is the ultimate factfinder and has exclusive province
over questions of credibility and evidentiary weight.” Univ. of Pa. v. Workers’
Comp. Appeal Bd. (Hicks), 16 A.3d 1225, 1229 n.8 (Pa. Cmwlth. 2011). “The WCJ,
therefore, is free to accept or reject, in whole or in part, the testimony of any witness,
including medical witnesses.” Griffiths v. Workers’ Comp. Appeal Bd. (Red Lobster),
760 A.2d 72, 76 (Pa. Cmwlth. 2000).
1
“On review[,] this Court must determine whether constitutional rights were violated, errors
of law were committed, or necessary findings of fact were supported by substantial competent
evidence.” Stepp v. Workers’ Comp. Appeal Bd. (FairPoint Commc’ns, Inc.), 99 A.3d 598, 601 n.6
(Pa. Cmwlth. 2014).
2
Findings of Fact
Finding of Fact 2 states: “Claimant personally appeared before [the
WCJ] and testified on four separate occasions. Based on his demeanor and [the
WCJ’s] personal observation of him during the hearings, [the WCJ] find[s] his
testimony to be credible, truthful and straightforward in its entirety.” WCJ Dec. at
11, FOF 2. Because Claimant did, in fact, testify at four separate hearings, see Notes
of Testimony (N.T.) December 1, 2015, March 7, September 12, and December 12,
2016, and credibility is within the exclusive province of the WCJ, see Griffiths,
Finding of Fact 2 is supported by substantial evidence. “[T]he law is clear that
neither the Board nor the Court may review the evidence or reweigh the WCJ’s
credibility determinations.” Pa. Uninsured Employers Guar. Fund v. Workers’
Comp. Appeal Bd. (Lyle), 91 A.3d 297, 303 (Pa. Cmwlth. 2014).
Finding of Fact 3 reads: “Claimant sustained an injury on April 6, 2015.
Claimant’s injury is described as an acute anterior labral tear and a [SLAP] tear with
pre-existing glenohumeral arthritis.” WCJ Dec. at 11, FOF 3. Claimant testified that
“April 6th” was his “best guestimate” of his injury date, Reproduced Record (R.R.) at
109, based on when his co-worker went out on maternity leave because he knew it
happened during that time. See R.R. at 106. Although Claimant admitted he did not
know the exact date of injury,2 as explained by the WCJ, Claimant “provided a
credible and logical explanation for how he determined a date of injury.” WCJ Dec.
at 12, FOF 8. Further, James P. Bradley, M.D. (Dr. Bradley) testified:
Q. Doctor, based on your clinical examinations, the
diagnostic tests you reviewed, your operative results, do
you have an opinion to a reasonable degree of medical
certainty as to [Claimant’s] diagnosis?
2
Because Claimant was both the employee and employer, he did not know he was entitled
to WC benefits. Thus, Claimant did not report the injury until after he became aware that he was
covered under his WC insurance.
3
A. Yes. He had a traumatic Type V SLAP tear with pre-
existing gleno[]humeral arthritis.
R.R. at 253. Dr. Bradley elaborated on cross-examination: “It’s more than a SLAP.
Remember, it’s an anterior labral tear and a SLAP tear. That was the acute event.
The arthritis was not. And there really wasn’t much else wrong with the shoulder.”
R.R. at 270. Accordingly, Finding of Fact 3 is supported by substantial evidence.
Finding of Fact 5 provides:
For employees with wages fixed by the year, the average
weekly wage is calculated by dividing the annual earnings
by 52 weeks. Based on Claimant’s testimony that he earned
a salary of $160,000[.00] in 2015, 2014, and 2013, [the
WCJ] find[s] that Claimant has an average weekly wage of
$3,076.92. Based on the average weekly wage of
$3,076.92, Claimant is entitled to the maximum
compensation rate for 2015 of $951.00 per week, beginning
July 22, 2015, when Claimant stopped working in
anticipation of undergoing shoulder surgery.
WCJ Dec. at 11, FOF 5. Relative to his wages, Claimant testified:
Q. In 2013, what salary were you being paid through the S
corporation?
A. $160,000[.00].
Q. In 2014[,] what salary were you being paid?
A. $160,000[.00].
....
Q. That was an annual salary?
A. Correct.
Q. In 2015[,] at the beginning of the year, what was your
salary set at?
A. $160,000[.00].
4
Q. Did you continue to receive your salary payments of
$160,000[.00] up until you went off of work for the surgery
that you testified about at the first hearing?[3]
A. Yes.
Q. At that time, did you stop paying yourself a salary?
A. Yes.
R.R. at 135-136. Claimant also submitted a Statement of Wages indicating an annual
salary of $160,000.00. See R.R. at 236-237 (Ex. C-03). Accordingly, Finding of Fact
5 is supported by substantial evidence.
Finding of Fact 6 states: “Claimant returned to performing
administrative functions for Employer two days following his surgery of July 27,
2015; however, he did not resume payments to himself until February of 2016, when
he paid himself $1,500[.00]. Thereafter, he has paid himself $1,000[.00] per week.”
WCJ Dec. at 11, FOF 6.
Claimant related:
Q. Since you stopped paying yourself, around the time of
your surgery, have you paid yourself anything in wages
from the S corporation until the current time?
A. I did for the very first time, the last pay period, which
was right at the end of February.
Q. What did you pay yourself at that time?
A. $1,500[.00].
Q. And that payment was --- constituted from when to
when? Give us a period of time.
A. From the beginning of the year, I guess, until that pay
period. That was the first money I had withdrawn.
....
3
Claimant testified that his “last day with patients was July 22nd.” R.R. at 99.
5
Q. Now, following your surgery, did you go back to work?
In any capacity?
A. I did. Immediately in an administrative -- resumed my
administrative capacity working from home, remoting in
with a computer beginning just a day or two after the
surgery. And I continued to do those administrative
procedures.
R.R. at 137-138. Claimant further testified:
Q. You indicated at a prior hearing that you started in
January of 2016 paying yourself a salary? Have you
continued to pay yourself a salary?
A. I have.
Q. What is the salary you have been paying yourself since
then?
A. It is $2,000[.00] every two weeks or $1,000[.00] every
week.
R.R. at 177-178. Accordingly, substantial evidence supports Finding of Fact 6.
Finding of Fact 7 reads: “I accept as credible Claimant’s assertion that
he has been unable to perform chiropractic duties since his surgery, due to limited
range of motion and strength in his left shoulder. His testimony is corroborated by
the credible opinion of his treating surgeon, Dr. Bradley.” WCJ Dec. at 12, FOF 7.
Dr. Bradley opined:
Q. Do you have an opinion to a reasonable degree of
medical certainty as to whether [Claimant], since the time
of his surgery to the current time, could go back and []
perform [his] job duties as a chiropractor, full duty, no
restrictions whatsoever?
A. He cannot.
Q. Can you describe what he cannot do and why, please?
A. Well, his strength is not back. His motion is not back.
And he can’t forcibly load someone. Which are all
requirements of being a chiropractor.
6
R.R. at 254-255. Accordingly, substantial evidence supports Finding of Fact 7.
Findings of Fact 8, 9 and 10 state:
8. I accept Dr. Bradley’s opinions as credible for the
following reasons. First, he is a well-qualified orthopedic
surgeon who specializes in sports medicine and shoulder
and elbow surgeries. Dr. Bradley’s diagnosis of a traumatic
Type V SLAP tear and anterior labral tear with pre-existing
glenohumeral arthritis is supported by his physical
examination findings, the diagnostic studies and his
intraoperative findings. I note that he based his opinion that
Claimant was injured during an acute event on the history
provided by the Claimant. Although Claimant testified to
being uncertain of the precise date of injury, I find his
testimony to be credible and consistent that the injury
occurred as a result of a sudden event while manipulating a
patient. I also find that Claimant provided a credible and
logical explanation for how he determined a date of injury.
Because I find [] Claimant to be credible in regard to his
history, I find Dr. Bradley’s opinions based on that history
to be credible.
9. I find Dr. Bradley’s opinions regarding [] Claimant’s
functional capacities to be credible. I accept his opinion
that Claimant is unable to return to his full duties as a
chiropractor, providing hands-on manipulations of patients.
Dr. Bradley supports this opinion by explaining that
Claimant’s range of motion and strength have not returned
to the level that would allow him to perform these activities.
I further accept Dr. Bradley’s prognosis that Claimant’s
ability to return to chiropractic duties will depend on how
much strength and motion he is able to regain. According
to Dr. Bradley, although full strength and mobility have not
been regained, the surgery was a success in that Claimant
has improved stability in his shoulder.
10. In regard to Claimant’s imputed earnings, I do not find
the analysis or testimony of Erin Saniga [(Saniga)] to be
credible. Her analysis is inconsistent with [] Claimant’s
testimony regarding his actual business practices. [] Saniga
valued [] Claimant’s administrative functions as
$54,031[.00] to $63,100[.00] per year on a full time basis in
the Butler County area. I do not find it to be credible or
believable that an administrative position would offer
7
wages in this range in Butler County. [] Saniga valued []
Claimant’s patient care functions as up to $46,800[.00] per
year. Adding the two together, she opined that Claimant
has total imputed earnings of between $100,000[.00] and
$109,000[.00] per year. She based her patient care
valuations on Claimant’s stated availability of nine hours
per week at a reimbursement rate of $25[.00] per 15-minute
unit.
In rebuttal, Claimant testified that an appropriate salary for
an office manager performing administrative duties is
$33,000[.00] per year. He based this assertion on the actual
pay of his office manager, who he pays $16.50 per hour. I
find this to be a more appropriate and credible estimation of
earnings for performing administrative functions in Butler
County as opposed to up to $63,000[.00] per year. Further,
it is based on what Claimant actually pays an individual to
perform these functions. Claimant asserted that [] Saniga’s
valuation of his patient care duties inappropriately assumes
that all fees generated equal dollar for dollar income.
Claimant testified that his imputed earnings for his patient
care activities would need to be adjusted to account for
business expenses and overhead. I find the $46,800[.00]
figure must be reduced by 50 percent, so that Claimant’s
imputed earnings for his modified patient care work amount
to $23,400[.00]. I find this reduction is supported by
Claimant’s credible testimony that overhead is typically 50
percent of his office’s billings. It is further supported by his
testimony of how compensation for the other chiropractors
and independent contractors in his office is determined.
Specifically, Dr. [Amber] Butler is paid 55 percent of her
collections, with any excess going back into the business,
and the two independent contractor massage therapists are
paid 50 percent of their generated income, with 50 percent
going to the business. Additionally, these figures are
supported by the amount Claimant has determined that he
can actually pay himself while still keeping his practice
running. I find Claimant has an imputed earnings capacity
of $33,000[.00] for administrative work and $23,400[.00]
for patient care, for a total of $56,400[.00]. This figure is
further supported by Claimant’s testimony that he has been
paying himself $1,000[.00] per week for a total of
$52,000[.00] per year. At this rate, he anticipated year-end-
profits of $5,000[.00] to $8,000[.00] for 2016, so he would
be unable to pay himself more.
8
I acknowledge Claimant is not a vocational expert,
however, I still find his lay testimony to be more credible
than the opinions of [] Saniga, because they are based on
his actual business practices. Even without [] Claimant’s
testimony in this regard, I do not find the opinions of []
Saniga to be credible, because there is no support that
administrative roles would pay in the range that she asserts.
I also find that her valuation of [] Claimant’s services in
patient care fail to account for any business expenses and
would not generate a dollar for dollar return to the Claimant
in income.
WCJ Dec. at 12-13, FOFs 8-10 (emphasis added).
This Court has explained:
To constitute a reasoned decision within the meaning of
Section 422(a) [of the WC Act (Act)4] a WCJ’s decision
must permit adequate appellate review. Daniels v.
Workers’ Comp. Appeal Bd. (Tristate Transp.), . . . 828
A.2d 1043 ([Pa.] 2003). Where medical experts testify by
deposition, a WCJ’s resolution of conflicting evidence must
be supported by more than a statement that one expert is
deemed more credible than another. Id. ‘[S]ome
articulation of the actual objective basis for the credibility
determination must be offered for the decision to be a
‘reasoned’ one which facilitates effective appellate review.’
Id. . . . , 828 A.2d at 1053.
Dorsey v. Workers’ Comp. Appeal Bd. (Crossing Constr. Co.), 893 A.2d 191, 194-95
(Pa. Cmwlth. 2006) (footnote omitted). “However, Section 422(a) [of the Act] does
not permit a party to challenge or second-guess the WCJ’s reasons for
credibility determinations. Unless made arbitrarily or capriciously, a WCJ’s
credibility determinations will be upheld on appeal.” Dorsey, 893 A.2d at 195
(emphasis added). Here, the WCJ articulated her reasons for finding Dr. Bradley and
Claimant credible, and Saniga not credible. Because they are not arbitrary or
capricious, Petitioners are not permitted to challenge or second-guess those reasons.
4
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 834.
9
Finding of Fact 11 reads:
Claimant is entitled to temporary total disability benefits
from July 22, 2015 through July 28, 2015. Based on
Claimant’s imputed earnings of $56,400[.00] per year, he
remains entitled to partial disability benefits at the rate of
$951.00 a week from July 29, 2015 and ongoing, as his
earning capacity has not reached a level to reduce his
weekly compensation rate from the maximum rate for a
2015 injury.
WCJ Dec. at 13, FOF 11.
Claimant testified on three separate occasions that he made $160,000.00
per year before his July 27, 2015 surgery. He further testified that he went back to
work performing administrative duties two days thereafter. Claimant expressly
testified that he began paying himself a salary of $1,000.00 per week in January
2016. See R.R. at 177-178. Because Claimant was receiving the maximum weekly
compensation payable,5 and his receipt of $1,000.00 a week did not affect that
amount, Finding of Fact 11 is supported by substantial evidence.
Finding of Fact 12 states:
Claimant is entitled to reimbursement of the UPMC Health
Plan lien with 80% of $6,669.05, owed to Equian, and 20%
owed as counsel fees. Additionally, Claimant is entitled to
reimbursement of his out-of-pocket medical expenses of
$4,614.94 and reimbursement of $939.85 from his personal
Health Savings Account.
WCJ Dec. at 13, FOF 12.
Claimant submitted a Consolidated Statement of Benefits from UPMC
Health Plan indicating a “[b]alnce [d]ue” of “$6,669.05.” Certified Record (C.R.)
Item 23 (Ex. C-09). Further, Claimant submitted a list of his medical expenses he
5
See Section 105.2 of the Act, added by Section 4 of the Act of March 29, 1972, P.L. 159,
77 P.S. § 25.2 (“The terms ‘the maximum weekly compensation payable’ and ‘the maximum
compensation payable per week,’ as used in this [A]ct, mean sixty-six and two-thirds per centum of
‘the Statewide average weekly wage’ . . . .”).
10
paid from his personal checking account, totaling “$4,614.94,” as well as the medical
expenses he paid from his Health Savings Account, totaling “$939.85.” C.R. Item 22
(Ex. C-08). Accordingly, Finding of Fact 12 is supported by substantial evidence.
Finding of Fact 13 states in relevant part:
The two law firms representing Claimant incurred
reasonable litigation costs as follows:
Payable to Conboy Law, LLC
....
TOTAL $510.90
Payable to Dillon, McCandless, King, Coulter & Graham,
LLP:
....
TOTAL $5,226.49
WCJ Dec. at 13-14, FOF 13 (emphasis omitted).
Claimant submitted an Amended Bill of Costs signed by Timothy
Conboy, Esquire, indicating the costs of four certified transcripts totaling “$510.90”
“[p]ayable to Conboy Law, LLC” and the costs of medical records, deposition fee
and a certified transcript totaling “$5,226.49” “[p]ayable to Dillon, McCandless,
King, Coulter & Graham.” C.R. Item 28 (Ex. C-14). Accordingly, substantial
evidence supports Finding of Fact 13.
Conclusions of Law
Conclusion of Law 2 states: “Claimant met his burden of proving he
sustained an injury in the course of his employment on April 6, 2015 in the nature of
an acute Type-V SLAP tear and anterior labral tear.” WCJ Dec. at 14, COL 2.
11
“Under Section 301(c)(1) [of the Act6], a claimant has the burden of proving by
unequivocal evidence that the injury arose in the course of the employment and that
the injury was related to that employment.” Justus v. Workers’ Comp. Appeal Bd.
(Bay Valley Foods), 147 A.3d 1237, 1241 (Pa. Cmwlth. 2016).
Here, Dr. Bradley testified:
Q. Based on the history you received from [Claimant], do
you have an opinion as to the causation of his diagnosis?
A. Yeah. He had what we call an acute SLAP event. We
see them a lot in pictures [sic] and athletes where they’ll be
fine for periods of time. And they tend to have these [sic]
labral mobility. Their labrum is mobile. And then all of the
sudden, it just goes from a good SLAP to a bad one when it
just rips off. And it’s kind of the straw that broke the
camel’s back and that’s it.
Q. Are you relating that to the injury he described to you?
MR. SUTTER: If I could note an objection. It’s a leading
question.
A. Yes. I’m describing the way that SLAP tears typically
present themselves.
Q. Just so I’m not in trouble because of the objection,
doctor, do you have an opinion as to the causation of the
diagnosis as you gave it to us?
A. Yes. I think it was from him manipulating the
patient.
R.R. at 253-254 (emphasis added). As Claimant is a chiropractor and Dr. Bradley
testified that the injury occurred during manipulation of a patient, Claimant met his
burden of proving that the injury occurred in the course of his employment.
Conclusion of Law 4 states:
Claimant established that he has been unable to return to
work in his full duty capacity since July 22, 2015. He has
6
77 P.S. § 411(1).
12
been limited to modified duty since July 29, 2015, when he
resumed some light duty functions for the Employer.
Benefits are suspended from April 7, 2015 through July 22,
2015, as Claimant had no wage loss during that time.
WCJ Dec. at 14, COL 4.
“If an employee does not incur an immediate wage loss for an
observable physical disability, the protections granted by the Act can only be
achieved by issuing a suspension order[.]” U.S. Steel Corp. v. Workmen’s Comp.
Appeal Bd., 437 A.2d 92, 94 (Pa. Cmwlth. 1981). Here, Claimant estimated that his
injury occurred on April 6, 2015. However, Claimant declared that his “last day with
patients was July 22nd[,]” R.R. at 99. Thus, a suspension of WC benefits from April
7, 2015 through July 22, 2015 was required because Claimant had no wage loss
during that time. Accordingly, Conclusion of Law 4 is supported by the record
evidence and well-established law.
Conclusion of Law 5 states:
Commencing July 22, 2015, Claimant is entitled to wage
loss benefits at the maximum compensation rate of
$951[.00] per week in the form of temporary total disability
benefits from July 22, 2015 through July 28, 2015.
Beginning July 29, 2015, based on Claimant’s return to
work in a modified duty capacity, his benefit status is
changed to temporary partial disability, at the benefit rate of
$951[.00] per week, because his imputed earnings are
insufficient to reduce his compensation rate below the
statewide maximum rate for 2015. Statutory interest is due
on all past due benefits.
WCJ Dec. at 15, COL 5.
Pursuant to Section 306(b) of the Act, 77 P.S. § 512, an
employer must pay a partially disabled employee
(generally, a residually injured employee who returns to
some level of work at a reduced wage) sixty-six and two-
thirds per cent of the difference between his or her pre-
injury wage and the reduced wage.
13
Landmark Constructors, Inc. v. Workers’ Comp. Appeal Bd. (Costello), 747 A.2d
850, 856 n.6 (Pa. 2000). Here, as the record evidence established, Claimant returned
to work at a lesser wage than his pre-injury wage because of his modified duties, and
thus, he is entitled to the same WC payment because he was receiving the maximum
payment and his partial disability earnings did not effect that amount.
Conclusions of Law 7 and 8 state in relevant part:
7. Counsel fees in the amount of 20% of all past due
benefits and interest, as well as future benefits, are
approved as reasonable. . . .
8. All medical expenses, as referenced in the findings, shall
be reimbursed to the lien holder and Claimant. Any
outstanding bills should be paid pursuant to the Act.
Twenty percent (20%) of the amount payable to Equian as
the recovery agent for UPMC Health Plan should be
deducted and paid to Claimant’s co-counsel on a 50/50 split
to the two law firms.
WCJ Dec. at 15, COL 7, 8.
It is well settled that “[u]nder Section 442 of the Act, [77 P.S. § 998,7]
the WCJ must approve the contingent fee agreement and a twenty percent contingent
fee is reasonable per se.” Young v. Workers’ Comp. Appeal Bd. (LGB Mech.), 976
A.2d 627, 631 (Pa. Cmwlth. 2009). Further, “Claimant’s counsel is entitled to
receive from [Equian] a proportionate twenty percent share of the subrogation award
obtained through the efforts of Claimant’s counsel.” Lamberson v. Workmen’s
Comp. Appeal Bd. (U.S. Silica), 654 A.2d 668, 674 (Pa. Cmwlth. 1995). Thus, based
on the record and the law, the WCJ properly approved the counsel fees and correctly
ordered that the medical expenses be reimbursed less counsel fees.
7
Section 442 of the Act was added by Section 3 of the Act of February 8, 1972, P.L. 25.
14
Conclusion
Because the WCJ’s Findings of Fact are supported by substantial
evidence and the Conclusions of Law are supported by the Findings of Fact, the WCJ
properly granted Claimant’s Claim Petition.
For all of the above reasons, the Board’s order is affirmed.
___________________________
ANNE E. COVEY, Judge
15
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Phillips Family Chiropractic and :
State Farm Fire and Casualty, :
Petitioners :
:
v. :
:
Workers’ Compensation Appeal :
Board (Phillips), : No. 1205 C.D. 2018
Respondent :
ORDER
AND NOW, this 14th day of June, 2019, the Workers’ Compensation
Appeal Board’s July 31, 2018 order is affirmed.
___________________________
ANNE E. COVEY, Judge