G.M. Cooper (Deceased) v. WCAB (Armstrong World Industries, Inc.) ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Gene M. Cooper (Deceased), :
Sandra Cooper, as the :
Administratrix of the Estate of :
Gene M. Cooper, :
Petitioner :
:
v. : No. 1163 C.D. 2017
: Argued: September 14, 2018
Workers’ Compensation Appeal :
Board (Armstrong World Industries, :
Inc.), :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER FILED: November 16, 2018
Gene M. Cooper (Deceased)1 by Sandra Cooper, as the Administratrix of the
Estate of Gene M. Cooper (Claimant), petitions for review of the July 24, 2017
Order of the Workers’ Compensation Appeal Board (Board), which affirmed the
December 7, 2016 decision (2016 Decision) of a Workers’ Compensation Judge
(WCJ) that denied two Penalty Petitions Claimant filed against Armstrong World
1
Decedent passed away on February 5, 2014.
Industries, Inc. (Employer).2 The WCJ found that the issue before her was whether
Employer violated the Workers’ Compensation Act3 (WC Act) by not paying the
litigation costs awarded in the underlying litigation on Decedent’s claim petition.
Citing the fact that the Board had granted Employer supersedeas, the WCJ found
that no violation of the WC Act had occurred. On appeal, Claimant argues the
scope of the Penalty Petitions was improperly narrowed to only address
Employer’s nonpayment of litigation costs from the underlying litigation.
Discerning no error or abuse of discretion in the WCJ limiting the scope of the
Penalty Petitions and denying those Petitions, we affirm.4
I. Background
Now in its 11th year, this litigation has a procedurally complex and highly
contentious history. Relevant here, the WCJ granted Decedent’s claim petition
2
This matter was argued seriately with Armstrong World Industries, Inc. v. Workers’
Compensation Appeal Board (Cooper (Deceased)) (Pa. Cmwlth., No. 1089 C.D. 2017, filed
November 16, 2018), which involves a separate appeal from this July 24, 2017 Order filed by
Employer. The two Penalty Petitions denied here, filed February 29, 2016, were not at issue in
the other appeal.
3
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1 - 1041.4, 2501-2708.
4
Also before this Court is Claimant’s Application to Strike the Pleadings filed by Barley
Snyder, LLP, Employer’s counsel, (Application to Strike), in which Claimant alleges that, on
May 5, 2016, the WCJ issued an order, via email, that disqualified counsel from further
representing Employer and that this order was never vacated. Because this order remains in
effect, Claimant asserts, all of the pleadings and filings made by Employer’s counsel should be
stricken. Employer filed a response, asserting the Application to Strike is without merit and
should be dismissed. We agree. In the 2016 Decision, the WCJ expressly denied all of
Claimant’s motions and/or requests to disqualify Employer’s counsel from further participation
in the ongoing litigation in this matter. (2016 Decision, Finding of Fact (FOF) ¶ 12.) Thus, to
the extent that the WCJ’s May 5, 2016 email could be construed as Claimant asserts, the WCJ
essentially vacated that “order” when she denied all of Claimant’s motions and/or requests to
disqualify counsel in the 2016 Decision. Accordingly, Claimant’s Application to Strike is
denied.
2
finding that he suffered from work-related toxic encephalopathy with Parkinsonian
symptoms that was caused by his exposure to a variety of chemicals and solvents
at work.5 In addition to directing Employer to pay Claimant’s reasonable and
necessary medical expenses, the WCJ initially directed Employer to pay litigation
costs in the amount of $99,684.04. The Board, on November 26, 2014, affirmed
the grant of the claim petition, but remanded for further proceedings regarding the
amount of the litigation costs awarded. Following these proceedings, the WCJ
issued a second decision approving litigation costs. Employer filed a second
appeal to the Board, which resulted in a second remand for the consideration of a
more detailed Bill of Costs provided by Claimant. Ultimately, on November 28,
2016, the WCJ ordered Employer to pay $114,225.62 in litigation costs, excluding
costs for mileage, lodging, and meals, which was affirmed by the Board in its July
24, 2017 Order.
While the matter was on the second remand, Claimant filed two Penalty
Petitions on February 29, 2016, alleging Employer violated the WC Act, Rules and
Regulations because
Employer used fraud to defend this claim. Employer’s fraud was
perpetrating acts to conceal [Decedent’s] exposure and medical
records. Employer’s fraud prevented [Decedent] from establishing
the rebuttable presumption pursuant to Section 108(c), 77 P.S. [§]
27.1(c). As a proximate result of Employer’s fraud, Employer’s
contest was unreasonable.
5
The specific details regarding the background of this litigation and the underlying claim
petition are set forth in Armstrong World Industries, Inc., slip op. at 3-12.
3
(Petition for Penalties, Certified Record (C.R.) Item 2.6) Employer denied the
allegations. (C.R. Items 4, 13.)
The WCJ held three hearings on the Penalty Petitions. During two of those
hearings, the bases of the Penalty Petitions were discussed. (2016 Decision,
Findings of Fact (FOF) ¶¶ 10-11.) At the March 17, 2016 hearing, the WCJ
inquired why she was hearing these Penalty Petitions. Claimant’s counsel
responded she should “keep the penalties because the penalty petitions are based
on employer’s fraud during the pendency of this litigation with respect to
employer’s offer of evidence that . . . [Decedent’s] exposure and medical records
were either shredded or destroyed or unavailable” and the WCJ had “made
decisions with respect to litigation expenses that, in fact, had to recreate
[Decedent’s] exposure record.” (Hr’g Tr., Mar. 17, 2016, at 5.) Claimant’s
counsel indicated that Employer was contesting certain litigation expenses. (Id. at
8.) The WCJ then asked, “[t]he penalty petitions, are they with regard to litigation
costs?” (Id. (emphasis added).) Claimant’s counsel responded “[y]es,” and the
WCJ concluded that the Penalty Petitions would remain with her. (Id. (emphasis
added).) A similar exchange occurred at the May 12, 2016 hearing, at which the
WCJ stated that the pending issue before her was “two penalty petitions for
non[]payment of litigation costs, which are at issue.” (Hr’g Tr., May 12, 2016, at
7.) After further discussion, the parties agreed that this was the issue before the
WCJ.7 (Id. at 7-8, 209, 230-34.) Based on these representations, the WCJ
6
The Penalty Petition at Certified Record Item 11, also filed on February 29, 2016,
contains the same allegations although worded slightly differently. (Petition for Penalties, C.R.
Item 11.)
7
The WCJ also stated, at the June 16, 2016 hearing, “that the Penalty was for the
nonpayment of litigation costs.” (Hr’g Tr., June 16, 2016, at 19-20.)
4
indicated in the 2016 Decision, that “this [D]ecision will only address this specific
issue,” i.e., the nonpayment of litigation costs. (FOF ¶ 11 (emphasis in original).)
Claimant argued that all of the litigation costs should be reimbursed and a
penalty awarded due to the fraud Employer allegedly perpetrated regarding the
destruction of Decedent’s medical and exposure records. In support of this claim,
Claimant presented various witnesses and documentary evidence indicating that, in
2014, records related to Decedent’s employment and exposure were discovered by
other employees and were, at Employer’s instruction, thrown into a dumpster.
Claimant asserted that, with this discovery, Employer’s prior claim that the records
had been inadvertently destroyed earlier was proven fraudulent. Claimant
contended that had Employer turned over the relevant records, litigation over
Decedent’s condition could have been avoided in its entirety. Thus, according to
Claimant, it was entitled to recover all of the litigation costs, as well as a penalty
based on Employer’s actions.
Employer presented testimony indicating, as Employer had asserted in the
underlying litigation, that Decedent’s exposure and employment records were
inadvertently destroyed and the records “discovered” in 2014 were either unrelated
to Decedent or had been provided to Decedent during the underlying proceedings.
Employer presented evidence indicating that it had advised Claimant’s counsel that
it would pay a portion of the litigation costs and had, in fact, paid some of those
litigation costs.8 (FOF ¶¶ 37-39.) Employer also asserted that while it had paid
8
Employer contested paying for, inter alia, certain expert reports that were not used in
the underlying litigation, legal expenses related to Decedent’s wife having to obtain guardianship
of Decedent due to his incapacity, access to online medical journals and articles, costs that
appeared to be duplicative, and costs that were not supported by paper invoices. (Hr’g Tr., Mar.
17, 2016, at 20, 22, 27-28, 35, 39.)
5
some of the litigation costs, it had no obligation to do so because the Board had
granted it supersedeas. Employer entered these supersedeas orders as exhibits D-2
and D-3.
After summarizing the evidence, the WCJ found that Employer did not
violate the WC Act because “Employer did not have an obligation to render
payment of the court-ordered litigation costs as the [Board] had issued a
supersedeas order granting supersedeas on said payment.” (Id. ¶ 41.)
Accordingly, the WCJ held that Claimant had not met the burden of proof on the
Penalty Petitions and, therefore, denied those Petitions. (2016 Decision,
Conclusion of Law ¶ 2.)
II. Board’s Decision
Claimant appealed to the Board, arguing the WCJ erred in “limiting the
scope of [the] Penalty Petitions based on [Employer’s] ex parte communication
with the director of the [WC] Office of Adjudication” (Director) and this limitation
violated Claimant’s due process rights of notice and opportunity to be heard.
(Board Opinion (Op.), July 24, 2017, at 6.) In Claimant’s brief to the Board,
Claimant included, as evidence of an alleged ex parte communication between
Employer and Director, a copy of an email from Director, addressed to both
Claimant’s counsel and Employer’s counsel, which stated “I’ve reviewed both
[Employer’s Counsel’s] email and [Claimant’s Counsel’s] email below . . . .” (Id.
at 7.) The emails from counsel to Director were not attached to Claimant’s brief.
(Id. at 7 n.6.)
The Board found no indication in the record or the 2016 Decision that
Employer engaged in ex parte communication with Director or, if such
6
communication had occurred, that the WCJ had been influenced by it. It noted that
the email Claimant relied upon was addressed to both parties’ counsel and
references communications Director received from both parties. The Board
“fail[ed] to see how this is evidence of an ex parte communication.” (Id.) On the
merits, the Board found no error in the WCJ’s limiting the scope of the Penalty
Petitions to Employer’s nonpayment of litigation costs previously approved by the
WCJ. The Board noted that the WCJ confirmed at both the March 17, 2016, and
May 12, 2016 hearings that this was the issue before her on the Penalty Petitions.
(Id. at 7-8.) As for Claimant’s due process arguments, the Board noted that the
WCJ allowed Claimant to present many witnesses in support of this claim and,
therefore, was afforded an opportunity to present Claimant’s case. (Id. at 8 n.8.)
Accordingly, the Board affirmed the 2016 Decision denying the Penalty Petitions.
Claimant now petitions this Court for review.9
III. Discussion
On appeal, Claimant argues it did not agree to limit the scope of the Penalty
Petitions “to a straight up analysis of the litigation costs at issue” and the Board
erred in holding that Claimant did so. (Claimant’s Brief (Br.) at 15.) Claimant
contends the passages from the WCJ hearings on the Penalty Petitions upon which
the Board relied were taken out of context. There is no question, Claimant asserts,
that the question at issue related to Employer’s unreasonable contest of the
underlying litigation via its fraudulent destruction and/or nondisclosure of
9
In reviewing Board orders, we determine “whether constitutional rights were violated,
whether the adjudication is in accordance with the law[,] or whether necessary findings of fact
are supported by substantial evidence.” City of Phila. v. Workers’ Comp. Appeal Bd. (Sherlock),
934 A.2d 156, 159 n.5 (Pa. Cmwlth. 2007).
7
Decedent’s work and exposure records, which then required the recreation of those
records. Because Claimant had to recreate the records and litigate the entire matter
as a result of Employer’s conduct, Claimant argues Employer should be
responsible for all of the litigation costs and for paying a penalty due to its
fraudulent actions. Claimant also challenges the Board’s determination that there
was no record evidence of Employer’s counsel having an ex parte communication
with Director, asserting that no other conclusion can be reached to explain why
subpoenas Claimant had secured from the WCJ to question Employer’s counsel
regarding the destruction and/or withholding of exposure documents were quashed
after Employer contacted Director. Moreover, Claimant argues, Employer’s
counsel admitted during oral argument before the Board that he initiated such
communication with the Director.
Employer responds that the issue raised in the Penalty Petitions was whether
it had improperly withheld payment of litigation costs in violation of the WC Act.
It maintains the scope of the Penalty Petitions was discussed and agreed to by the
parties and the WCJ during the hearings. Employer asserts Claimant’s arguments
on appeal relate to matters not relevant to the determination of whether the WCJ
abused her discretion in denying the Penalty Petitions. According to Employer, no
abuse of discretion or legal error occurred here because, while Employer paid some
of the litigation costs, it had no obligation to do so having been granted
supersedeas by the Board. As there were no payments of litigation costs due until
the pending appeals were resolved, Employer argues, there was no violation of the
WC Act.
8
Pursuant to Section 435(d) of the WC Act, 77 P.S. § 991(d),10 a WCJ is
authorized to impose penalties for violations of the WC Act. In a penalty petition
proceeding, the claimant bears the burden of proving a violation of the WC Act or
its regulations. Shuster v. Workers’ Comp. Appeal Bd. (Pa. Human Relations
Comm’n), 745 A.2d 1282, 1288 (Pa. Cmwlth. 2000). The assessment of a penalty,
if any, is within the WCJ’s discretion. Essroc Materials v. Workers’ Comp. Appeal
Bd. (Braho), 741 A.2d 820, 825 (Pa. Cmwlth. 1999). “An abuse of discretion is
not merely an error of judgment” but occurs, inter alia, “when the law is
misapplied in reaching a conclusion.” Candito v. Workers’ Comp. Appeal Bd.
(City of Phila.), 785 A.2d 1106, 1108 (Pa. Cmwlth. 2001). One common violation
of the WC Act is where there is an excessive or unreasonable delay in payment to a
claimant by an employer. McKay v. Workmen’s Comp. Appeal Bd. (Bethenergy
Mines, Inc.), 654 A.2d 262, 264 (Pa. Cmwlth. 1995).
The Penalty Petitions alleged fraud by Employer which, Claimant argued,
hindered the ability of Decedent to present his WC claim. During the hearings, the
WCJ, who has presided over this matter since it began 11 years ago, explained her
understanding as to the basis of the Penalty Petitions – which was that they were
related to Employer’s nonpayment of the litigation costs awarded in the underlying
litigation. Claimant agreed that this was the basis of the Penalty Petitions, and
Employer concurred. (Hr’g Tr., Mar. 17, 2016, at 5, 8; Hr’g Tr., May 12, 2016, at
7-8, 209, 230-34.) Although Claimant takes the position that all of the litigation
10
Section 435(d) of the WC Act was added by Section 3 of the Act of February 8, 1972,
P.L. 25, as amended, 77 P.S. § 991(d). That section states that “[t]he 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 for violations of the provisions of this act or such rules and
regulations or rules of procedure.” Id.
9
costs should be paid, Claimant did not challenge the premise that the Penalty
Petitions related to the nonpayment of litigation costs that had been awarded. Due
to Claimant’s agreement that the scope of the Penalty Petitions was related to the
nonpayment of the awarded litigation costs, the WCJ did not err or abuse her
discretion in addressing that issue alone. With regard to the allegation that
Employer’s counsel had an ex parte communication with Director in an attempt to
limit the Penalty Petitions’ scope, even if such communication occurred – and
there is no evidence in the record that it did – Claimant’s agreement during the
hearings support the WCJ’s decision to limit the matter to only whether Employer
violated the WC Act by not paying the litigation costs.11
Finally, the WCJ denied the Penalty Petitions because Claimant did not
establish Employer’s violation of the WC Act or its regulations due to Employer’s
nonpayment of Claimant’s litigation costs, noting that the Board had granted
Employer a supersedeas. A grant of supersedeas will relieve an employer of the
obligation to pay benefits or, here, litigation costs until an appeal is decided. See
Crucible, Inc. v. Workers’ Comp. Appeal Bd. (Vinovich), 713 A.2d 749, 752 (Pa.
Cmwlth. 1998) (holding that the time limit to pay benefits under the WC Act
begins to run “when the order to pay is entered and no supersedeas has been
granted”) (emphasis added). The Board granted Employer’s request for
11
We observe that while Claimant asserts some of Claimant’s subpoenas were quashed
without explanation, the parties argued the subpoena issue at the May 12, 2016 hearing. The
WCJ concluded she did not need to hear the testimony of the witnesses Claimant wanted to
subpoena. In addition, she concluded that Employer’s lead counsel was an officer of the court
and, as such, was presumed to have been truthful and honest with the WCJ in his representations.
(Hr’g Tr., May 12, 2016, at 278-86.) Furthermore, to the extent Claimant contends Employer
admitted to an ex parte communication with Director during argument before the Board, the
Board’s decision, in which it found no evidence of an ex parte communication, does not support
Claimant’s contention.
10
supersedeas, a fact Claimant does not dispute. The Board’s supersedeas orders
specifically reference litigation costs. (Exs. D-2, D-3.) Therefore, Employer was
not yet required to pay any of the litigation costs ordered in the underlying
litigation. Because Employer had no obligation to pay the litigation costs, the WCJ
properly held that Claimant did not establish that Employer violated the WC Act or
its regulations by not doing so. Absent a violation of the WC Act or its
regulations, no penalty petition can be granted or penalties imposed. Accordingly,
the WCJ did not abuse her discretion in denying the Penalty Petitions.
IV. Conclusion
Because there was no error or abuse of discretion in the WCJ limiting the
scope of the Penalty Petitions to the issues agreed to during the hearings on those
Petitions or in denying the Penalty Petitions due to Claimant’s failure to prove a
violation of the WC Act or its regulations, we affirm.12
_____________________________________
RENÉE COHN JUBELIRER, Judge
Judges McCullough and Ceisler did not participate in the decision in this case.
12
Claimant, through counsel, also filed what it calls an Application for a Writ of
Mandamus (Application), which seeks the same relief as Claimant’s other filings, a remand for
further proceedings before the WCJ based on the alleged ex parte communication between
Director and Employer’s counsel. However, due to our rejection in this appeal of Claimant’s
arguments regarding the alleged ex parte communication, the Application is dismissed.
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Gene M. Cooper (Deceased), :
Sandra Cooper, as the :
Administratrix of the Estate of :
Gene M. Cooper, :
Petitioner :
:
v. : No. 1163 C.D. 2017
:
Workers’ Compensation Appeal :
Board (Armstrong World Industries, :
Inc.), :
Respondent :
ORDER
NOW, November 16, 2018, the Order of the Workers’ Compensation
Appeal Board, entered in the above-captioned matter, is AFFIRMED. In addition,
the Application to Strike the Pleadings filed by Barley Snyder, LLP, filed by Gene
M. Cooper (Deceased) by Sandra Cooper, as the Administratrix of the Estate of
Gene M. Cooper (Claimant), is DENIED, and the Application for a Writ of
Mandamus filed by Claimant is DISMISSED.
_____________________________________
RENÉE COHN JUBELIRER, Judge