L&I, Uninsured Employers Guaranty Fund v. WCAB (I. Shyra and Ester Auto Group, LLC) ( 2015 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Department of Labor and Industry, :
Uninsured Employers Guaranty Fund, :
Petitioner :
:
v. : No. 2334 C.D. 2014
: Submitted: June 19, 2015
Workers' Compensation Appeal Board :
(Ihor Shyra and Ester Auto Group, :
LLC), :
Respondents :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE SIMPSON FILED: August 26, 2015
In this appeal, the Uninsured Employers Guaranty Fund (UEGF) asks
whether the Workers’ Compensation Appeal Board (Board) erred in affirming a
Workers’ Compensation Judge’s (WCJ) decision finding UEGF liable for death
benefits under the Workers’ Compensation Act (Act)1 based on the death of Ihor
Shyra (Decedent). UEGF contends the WCJ’s necessary findings are not
supported by substantial, competent evidence, but rather inadmissible hearsay
evidence. Upon review, we affirm.
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4; 2501-2708.
I. Background & Procedural History
Decedent’s minor son, Vladimir Shrya (Claimant), filed a fatal claim
petition for compensation of dependents of deceased employees (fatal claim
petition) and a claim petition for benefits from the UEGF (UEGF claim petition)
(collectively, petitions). In the petitions, Claimant alleged Decedent died on
September 30, 2010, from head trauma sustained in a motor vehicle accident in the
course and scope of his employment with Ester Auto Group, LLC (Ester), an
uninsured employer. UEGF denied all material allegations in the UEGF claim
petition.
The petitions were consolidated and assigned to a WCJ. In support of
the petitions, Claimant’s mother, Natalia Zhilkina (Mother), testified she and
Decedent divorced in 2009, but they remained in the same house to care for their
son. Mother and Decedent shared financial information, such as bills and bank
statements, with each other, although she did not have access to Decedent’s bank
accounts. WCJ’s Op., 2/12/13, Finding of Fact (F.F.) No. 1a.
Mother testified Decedent worked solely for Ester and no one else
beginning in 2005. Ester is in the business of selling cars by taking clients to
auctions. Decedent regularly attended auctions out of state. Decedent worked
with another employee, Ihar Baylsh. F.F. No. 1b.
According to Mother, Decedent routinely worked for Ester on
Wednesdays and Fridays, and on Thursdays every three or four months. Ester told
Decedent which auctions to attend. Decedent regularly traveled to Manheim Auto
2
Auction on Fridays and other auctions on Wednesdays and Thursdays. When
attending auctions, Decedent drove one of Ester’s vehicles, not his personal
vehicle. Ester issued Decedent an auction ACCESS card in 2005. Ester always
supplied the funds to buy the cars, and the clients paid Ester. Ester paid Decedent
a commission for each car he sold. According to Mother, Decedent sold about six
vehicles per month and earned commissions between $500 and $1,500 per car.
F.F. No. 1c.
Of significance to our reasoning, on September 30, 2010, Decedent
told Mother that he and Ihar Balysh were taking Ester’s clients to an auto auction.
Later that day, police officers came to Mother’s home and informed her Decedent
was killed in a motor vehicle accident on the Pennsylvania Turnpike. F.F. No. 1d.
On cross-examination, Mother acknowledged she indicated on the
notice of claim that Decedent made $700 per week in wages, but she clarified he
actually earned commissions. Mother never worked for Ester. She filed
Decedent’s 2009 tax return in 2010. F.F. No. 1e.
In addition, Claimant presented the testimony of Joseph D’Allessio, a
Pennsylvania State Police Trooper (Trooper). Trooper testified he was the first
responder on the scene of the single-vehicle accident involving a 2001 Dodge
Durango on the morning of September 30, 2010. The vehicle was on the grass
berm embankment of the Pennsylvania Turnpike, resting against a tree, severely
damaged. There was heavy rain that morning. Trooper observed the driver and
passenger inside the vehicle and two persons outside the vehicle. Decedent was
3
the driver of the vehicle. Decedent was covered in blood, slumped over the right
center console. Trooper testified there was nothing he could do for him. Trooper
checked Decedent’s vitals, driver’s identification, the registration of the vehicle,
and the insurance card. The vehicle was registered to Ester and insured by Piaza
Insurance Company. F.F. No. 6a-d.
Claimant also submitted the deposition testimony of Clark Hood,
M.B., C.H.B., a medical doctor board certified in anatomic and clinical pathology
(Pathologist), and Dave March, Deputy Coroner of Chester County (Coroner).
Pathologist opined Decedent died from head injuries sustained in the accident.
Coroner testified, based on his personal observation and investigation, that
Decedent sustained injuries to his head, neck and chest as a result of the accident.
F.F. Nos. 8a-c, 9a-c.
UEGF made hearsay and lack of foundation objections to the
substantive portions of Mother’s and Trooper’s testimony, which the WCJ
overruled.
No one appeared on behalf of Ester.2 Claimant and UEGF submitted
bank records from Chase Bank, reflecting deposit activity for Decedent’s checking
2
Claimant’s counsel affirmed that no witnesses or representatives for Ester appeared at
any time during the litigation, and the other passengers in Decedent’s fatal accident either could
not be reached or would not cooperate in the litigation of the petitions. WCJ’s Hr’g, Notes of
Testimony (N.T.), 5/31/12, at 55-56. UEGF objected to Claimant’s counsel’s statements
regarding his efforts on the basis those statements are not competent evidence. N.T., 5/31/12, at
56. As the Board noted, although “statements made by counsel are generally not admissible to
support a finding on the substantive issues in a workers’ compensation claim, ... it is permissible
(Footnote continued on next page…)
4
account from November 2009 through December 2010. Claimant also presented
his birth certificate listing his birth date as December 2, 2002, and Decedent and
Mother as his parents; the police crash report; motor vehicle identification card and
insurance identification card; auction ACCESS identification card; and, the notice
of uninsured claim. With the exception of the bank records, UEGF objected to
Claimant’s other exhibits as hearsay. The WCJ overruled those objections as the
documents were corroborated by other testimony and there was no evidence to the
contrary. F.F. Nos. 10, 16-19.
Ultimately, the WCJ found the testimony of Mother credible and
persuasive. The WCJ noted Mother was married to Decedent for four years before
their divorce and they continued to live together after divorcing. The WCJ found
this arrangement supported Mother’s knowledge regarding Decedent’s job duties.
There was no contradictory evidence submitted. The WCJ also credited the
testimony of Trooper, Pathologist and Coroner. F.F. Nos. 12-15.
(continued…)
and appropriate to consider statements made by counsel to clarify circumstances surrounding
litigation when counsel is in the best position to give essential background or procedural
information.” Bd. Op., 11/26/14, at 5 n.6 (citing Brady v. Workers’ Comp. Appeal Bd. (Morgan
Drive Away, Inc.), 923 A.2d 529 (Pa. Cmwlth. 2007)). We believe an attorney's obligation to
the court is one that is unique and must be discharged with candor and with great care. Great
Valley Sch. Dist. v. Zoning Hearing Bd. of East Whiteland Twp., 863 A.2d 74 (Pa. Cmwlth.
2004). Furthermore, on appeal, UEGF readily confirms “both Claimant and UEGF attempted to
secure potential witnesses from [Ester] to appear at hearing. Just as Claimant was impeded in
garnering evidence to support his claim, UEGF was hindered in defending against the Petition
....” Pet’r’s’ Br. at 16.
5
Based on the evidence, the WCJ found Decedent was an employee,
not an independent contractor, of Ester. Decedent worked solely for Ester from
2005 through the date of his death. Ester instructed Decedent which clients to pick
up and which auctions to attend. The WCJ inferred Ester had the capacity to
discharge Decedent. Ester provided Decedent with the vehicle to do his job, an
auction ACCESS identification card, and funds to buy the cars. The fact that Ester
paid Decedent commissions without deducting taxes did not outweigh other
evidence of employer-employee relationship. The WCJ found Decedent died as a
result of a head trauma in a motor vehicle accident on September 30, 2010. At the
time of death, Decedent was not performing a task that was different from the
business of Ester, that is, selling cars. F.F. Nos. 20-21.
The WCJ further found Decedent had an average weekly wage of
$1,500. The Chase Bank records show Decedent deposited $55,503 between
February 8, 2010 and September 27, 2010. The average of this amount over the 37
weeks is $1,500. Finally, the WCJ found Claimant is a dependent of Decedent.
F.F. Nos. 22-23.
Ultimately, the WCJ concluded Decedent was an employee of Ester,
and his death occurred while he was in the course and scope of his employment
with Ester on September 30, 2010. At the time of the fatal injury, Ester did not
maintain Pennsylvania workers’ compensation liability. The WCJ concluded
Claimant, as Decedent’s dependent, was entitled to death benefits at the rate of
$480 per week. The WCJ granted Claimant’s petitions.
6
UEGF appealed to the Board. It challenged the WCJ’s findings on the
basis they were not supported by substantial, competent evidence, but only
inadmissible hearsay evidence. The Board acknowledged some of Claimant’s
evidence was objected-to hearsay, but some was not. Notably, the Board
determined some of Mother’s testimony was not hearsay because it was based on
her personal knowledge as Decedent’s former wife and current co-habitant at the
time of his death, and it did not depend solely on Decedent’s statements made to
her the morning of the accident. For instance, the Board reasoned Mother had
general knowledge of Decedent’s work, which involved taking clients to auto
auctions, sometimes in Pennsylvania, and sometimes on Thursday. She knew
Ester was Decedent’s only employer. She knew Decedent owned a Chrysler
Pacifica, which she now possesses, and that Decedent did not drive his personal
vehicle to auctions. Because Mother had access to Decedent’s bank records and
shared household expenses, she had knowledge of his commissions. The bank
records offered by both parties reflected various deposits up to $5,000.
In addition, the Board determined Trooper’s testimony that Decedent
was driving a Dodge Durango, not a Chrysler Pacifica, was based on his personal
observations at the accident scene and was not hearsay. However, the Board
determined Trooper’s statements relating the information he gathered from the
registration and insurance cards were based on out-of-court declarations making
them hearsay that could not support a finding. The Board further determined the
registration and insurance cards constituted hearsay as well because they were not
properly authenticated to satisfy the business record exception to the hearsay rule.
7
Notwithstanding the Board’s rejection of certain evidence, the Board
determined there was sufficient, uncontradicted non-hearsay evidence to support
the WCJ’s findings and conclusions. The WCJ drew reasonable inferences from
this evidence in reaching his findings and conclusions. In addition, relying on
Mathies Coal Co. v. Workmen's Compensation Appeal Board (Tau), 591 A.2d 351
(Pa. Cmwlth. 1991), the Board opined competent, circumstantial evidence
supported the WCJ’s findings and preponderated in favor of the conclusion
reached so as to outweigh any other evidence and any inconsistent inferences. On
these grounds, the Board affirmed. This appeal followed.3
II. Issues
In this appeal, UEGF challenges the WCJ’s decision on the ground
that his findings and conclusions are not supported by substantial, competent
evidence. Rather, the WCJ improperly relied on hearsay or other incompetent
evidence, to which UEGF properly objected. Specifically, UEGF contests the
WCJ’s findings that Decedent: (1) was an employee, not an independent
contractor, for Ester; (2) was acting in the course and scope of his employment
when the accident occurred; and, (3) had an average weekly wage of $1,500. F.F.
Nos. 20, 21. Alternatively, UEGF contends, even if the evidence of record could
be considered competent, the Board erred by holding Claimant met his burden by
circumstantial evidence of record.
3
This Court’s review is limited to whether there was a violation of constitutional rights
or error of law, and whether necessary findings of fact were supported by substantial evidence.
Am. Rd. Lines v. Workers’ Comp. Appeal Bd. (Royal), 39 A.3d 603 (Pa. Cmwlth. 2013).
8
III. Discussion
In workers’ compensation proceedings, the WCJ is the ultimate finder
of fact. Westmoreland Cnty. v. Workers’ Comp. Appeal Bd. (Fuller), 942 A.2d
213 (Pa. Cmwlth. 2008). As the fact-finder, matters of credibility and evidentiary
weight are within the WCJ’s exclusive province. Id. The WCJ is free to accept or
reject the testimony of any witness, in whole or in part. Id. If the WCJ’s findings
are supported by substantial evidence, they are binding on appeal. Id. It is
irrelevant whether there is evidence to support contrary findings. Id. The relevant
inquiry is whether substantial evidence supports the WCJ’s necessary findings. Id.
Substantial evidence is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. WAWA v. Workers' Comp.
Appeal Bd. (Seltzer), 951 A.2d 405 (Pa. Cmwlth. 2008). Substantial evidence
must be both competent and sufficient. Gibson v. Workers' Comp. Appeal Bd.
(Armco Stainless & Alloy Prods.), 861 A.2d 938, 947 (Pa. 2004). In performing a
substantial evidence analysis, we must view the evidence, and every reasonable
inference deducible from the evidence, in a light most favorable to the prevailing
party. WAWA. Generally, “questions concerning the admission and exclusion of
evidence are within the sound discretion of the tribunal and are not to be reversed
on appeal absent a finding of an abuse of discretion.” Gibson.
The evidentiary rules in administrative proceedings, including
workers’ compensation proceedings, are relaxed. Rox Coal Co. v. Workers' Comp.
Appeal Bd. (Snizaski), 807 A.2d 906 (Pa. 2002); see Section 422 of the Act,
77 P.S. §834 (“[n]either the [B]oard nor any of its members nor any [WCJ] shall be
bound by the common law or statutory rules of evidence in conducting any hearing
9
or investigation, but all findings of fact shall be based upon sufficient competent
evidence to justify same”); Section 505 of the Administrative Agency Law,
2 Pa. C.S. §505 (all relevant evidence of reasonably probative value may be
received). In certain circumstances, hearsay, which is a statement other than one
made by the declarant while testifying at trial or hearing offered in evidence to
prove the truth of the matter asserted, may be admitted. Rox Coal; see Pa. R.E.
802 (definition of hearsay); cf. Pa. R.E. 801(c) (hearsay is generally not admissible
unless an exception applies).
This Court consistently applies the following guidelines with respect
to the use of hearsay to support findings of fact in administrative proceedings:
(1) Hearsay evidence, [p]roperly objected to, is not
competent evidence to support a finding of the Board[;]
(2) Hearsay evidence, [a]dmitted without objection, will
be given its natural probative effect and may support a
finding of the Board, [i]f it is corroborated by any
competent evidence in the record, but a finding of fact
based solely on hearsay will not stand.
Walker v. Unemployment Comp. Bd. of Review, 367 A.2d 366, 370 (Pa. Cmwlth.
1976) (citations omitted); accord Graves v. Workers' Comp. Appeal Bd. (Phila.
Housing Auth.), 983 A.2d 241 (Pa. Cmwlth. 2009); Guthrie v. Workers’ Comp.
Appeal Bd. (The Travelers’ Club, Inc.), 854 A.2d 653 (Pa. Cmwlth. 2004). The
vitality of Walker has been reaffirmed by our Supreme Court. See Rox Coal;
Joyce v. Workmen's Comp. Appeal Bd. (Ogden/Allied Maint.), 680 A.2d 855 (Pa.
1996).
10
For a document to be admissible, it must be properly authenticated by
“evidence sufficient to support a finding that the item is what the proponent claims
it is.” Pa. R.E. 901(a); see Guthrie; see also Keystone Dedicated Logistics, LLC v.
JGB Enters. Inc., 77 A.3d 1 (Pa. Super. 2013). A document not prepared by the
person testifying is not automatically rendered inadmissible as long as the
authenticating witness provides sufficient information relating to the preparation
and maintenance of the record to justify a presumption of reliability. Guthrie. A
document may be authenticated by direct proof or by circumstantial evidence. Zuk
v. Zuk, 55 A.3d 102 (Pa. Super. 2012). Proof of any circumstances that will
support a finding that the writing is genuine will suffice to authenticate the writing.
Id.
Another fundamental evidentiary rule applicable in administrative
proceedings is that witnesses must have first-hand knowledge of the subject on
which they are testifying for that testimony to be admissible. Gibson; see Pa. R.E.
602 (a witness may not testify to a matter unless evidence is introduced sufficient
to support a finding that the witness has personal knowledge of the matter). Where
an employee has died, his spouse may lay a foundation and describe the decedent’s
general job duties. See Guthrie (spouse testified about decedent’s employment
status and job duties); see also Am. Rd. Lines v. Workers’ Comp Appeal Bd.
(Royal), 39 A.3d 603 (Pa. Cmwlth. 2012) (spouse testified regarding job duties and
payments made by the employer).
With these evidentiary principles in mind, we examine UEGF’s
contentions.
11
A. Employer-Employee Relationship
UEGF contends substantial evidence does not support the WCJ’s
finding that an employment relationship existed between Ester and Decedent.
According to UEGF, all evidence that might show an employment relationship was
based on hearsay. As UEGF properly objected to Claimant’s hearsay evidence,
such evidence is not competent evidence to support a finding of fact.
In a proceeding on a claim petition, the claimant bears the burden of
proving all the elements necessary to support an award of benefits. Zuchelli v.
Workers' Comp. Appeal Bd. (Indiana Univ. of Pa.), 35 A.3d 301 (Pa. Cmwlth.
2011). This includes proving the existence of an employer-employee relationship.
Universal Am-Can, Ltd. v. Workers’ Comp. Appeal Bd. (Minteer), 762 A.2d 328
(Pa. 2000); Am. Rd. Lines. An independent contractor is not entitled to benefits
under the Act because of the absence of a master-servant relationship. Universal
Am-Can; Guthrie. Whether an employer-employee relationship exists is a question
of law based on the facts presented in each case. Am. Rd. Lines; Guthrie.
“Although it is a claimant's burden to demonstrate an
employer/employee relationship, ... ‘neither the compensation authorities nor the
courts should be solicitous to find contractorship rather than employment, and …
inferences favoring the claim need make only slightly stronger appeal to reason
than those opposed.’” Universal Am-Can, 762 A.2d at 330 (quoting Diehl v.
Keystone Alloys Co., 156 A.2d 818, 820 (Pa. 1959)). We are mindful that the Act
is remedial in nature and must be liberally construed to effectuate its humanitarian
12
objectives. Hannaberry HVAC v. Workers' Comp. Appeal Bd. (Snyder), 834 A.2d
524 (Pa. 2003).
In determining whether a particular relationship is that of employer-
employee or owner-independent contractor, courts consider many factors. Am.
Rd. Lines. These factors include:
(1) control of manner the work is done; (2) responsibility
for result only; (3) terms of agreement between the
parties; (4) nature of the work/occupation; (5) skill
required for performance; (6) whether one is engaged in a
distinct occupation or business; (7) which party supplies
the tools/equipment; (8) whether payment is by time or
by the job; (9) whether work is part of the regular
business of employer; and, (10) the right to terminate
employment.
Id. at 611 (citing Hammermill Paper Co. v. Rust Eng’g Co., 243 A.2d 389 (Pa.
1968)); accord Guthrie.
Although no one factor is dispositive, control over the work to be
completed and the manner in which it is to be performed are the primary factors in
determining employee status. Universal Am-Can; Am. Rd. Lines. Control exists
where the alleged employer: “possesses the right to select the employee; the right
and power to discharge the employee; the power to direct the manner of
performance; and, the power to control the employee.” Am. Rd. Lines, 39 A.3d at
611 (citing 3D Trucking v. Workers’ Comp. Appeal Bd. (Fine & Anthony
Holdings Int’l), 921 A.2d 1281 (Pa. Cmwlth. 2007)).
13
Here, the WCJ found factors indicative of an employer-employee
relationship. F.F. No. 20. Specifically, the WCJ found: the nature of Decedent’s
work involved taking clients to auctions to purchase vehicles; Decedent worked
only for Ester; Ester directed Decedent which auctions to attend; Ester supplied
Decedent a vehicle to travel to the auctions, an Auction ACCESS card, and the
money to pay for the cars; Decedent did not use his personal vehicle to travel to
auctions; Decedent died in a car crash in Pennsylvania in a Dodge Durango, which
was registered to and insured by Ester; and, Ester paid Decedent by commission.
The WCJ based his findings on the credited testimony of Mother and Trooper,
documentary evidence, and reasonable inferences drawn therefrom.
Mother testified Decedent began working for Ester in 2005. WCJ’s
Hr’g, Notes of Testimony (N.T.), 5/31/12, at 27. Decedent did not work for any
other employer. Id. at 26-27. According to Mother, Ester was in the business of
selling cars; Decedent, who was multilingual, would take clients to auto auctions to
purchase cars for them. Id. at 30. Decedent regularly attended auto auctions in
New Jersey and Pennsylvania. Id. at 12, 33. Decedent went to auctions at Ester’s
direction. Id. at 45. Typically, he went to auctions on Wednesdays and Fridays,
and on Thursdays, once every three or four months. Id. at 33, 45-46. One auction
he frequented was the Manheim Auto Auction in Pennsylvania. Id. at 45. Mother
testified Decedent did not use his own funds or a personal credit card to purchase
vehicles at auction. Id. at 42.
Mother testified Decedent owned a 2007 Chrysler Pacifica, which is
now in her possession. Id. at 35. Decedent did not drive his personal vehicle to
14
auctions. Id. at 33-34, 35-36. On the morning of the accident, he left for work
between 5:00 a.m. and 6:00 a.m. Id. at 27. He did not drive his personal vehicle
the day of the accident. Id. at 35. Mother learned Decedent died in a motor
vehicle accident from the police. Id. at 24.
Mother confirmed Decedent’s picture appeared on the Auction
ACCESS card, which was issued in 2005. Id. at 51; see C.R., Ex. No. C-7. She
testified he did not have an Auction ACCESS card prior to employment with Ester.
Id. at 51. She testified Decedent was not in the auto sales business prior to
working for Ester in 2005. Id.
Mother further testified Ester paid him based on sales commissions.
Id. at 40, 42. On average, Decedent sold six vehicles a month. Id. at 44. His
commissions were between $500 to $1,500. Id. at 44.
Although UEGF objected to Mother’s testimony on hearsay and lack
of foundation grounds, the WCJ overruled the objections. Based on her
relationship to Decedent and their living arrangement, the WCJ determined Mother
possessed a general and approximate knowledge of Decedent’s job duties, work
schedule, vehicle usage, and sources of income. Mother and Decedent had a child
in 2002. Id. at 20. Mother referred to Decedent as her husband even though they
“technically divorced” in 2009. Id. at 19. They continued to live together in New
York and shared financial information, household expenses and parenting duties.
Id. at 19, 37, 40. Although she did not have access to Decedent’s bank accounts,
she had access to his bank financial statements and records. Id. at 37-38. She filed
15
his tax return for 2010, and she paid for his funeral. Id. at 53, 62. In light of this
foundation, we conclude the WCJ did not err or abuse his discretion in determining
Mother’s testimony drawn from her personal knowledge was competent evidence.
Importantly, Mother testified regarding where Decedent was traveling
the day of the accident. In particular, on the day of the accident Decedent told
Mother he was taking clients and going to work, going to an exclusive auction. Id.
at 24-25. He was also taking his co-worker, Ihar Balysh. Id. at 27-28. UEGF
objected on hearsay grounds. It maintains that this testimony from Mother was not
competent. The Board agreed. However, UEGF and the Board are wrong.
This testimony as to Decedent’s state-of-mind constituted an
exception to the hearsay rule. Thus, Rule of Evidence 803 provides that the
following evidence is not excluded under the hearsay rule (with emphasis added):
(3) Then-Existing Mental, Emotional, or Physical
Condition. A statement of the declarant’s then-existing
state of mind (such as motive, intent or plan) or
emotional, sensory, or physical condition (such as mental
feeling, pain, or bodily health), but not including a
statement of memory or belief to prove the fact
remembered or believed unless it relates to the validity or
terms of the declarant’s will.
Pa. R.E. 803(3). Pursuant to this rule, Decedent’s then-existing plan to go to an
auction with clients and a co-worker satisfies an exception to the hearsay rule.
Therefore, the statement is competent evidence, and the WCJ committed no error
when he relied upon the statement in determining that Decedent was an employee
and that he was in the course of his employment at the time of death.
16
Also, Trooper testified regarding his personal knowledge based on his
observations. He described the accident scene involving a 2001 Dodge Durango
that was severely damaged on the grass berm embankment of the Pennsylvania
Turnpike. N.T., 9/25/12, at 5. He observed four occupants of the vehicle,
including Decedent who was fatally injured in the driver’s seat. Id. at 7-8, 13.
In addition, Trooper testified he retrieved vehicle information from
the vehicle’s registration and insurance cards at the accident scene. N.T., 9/25/12,
at 13. He also ran a license plate search. Id. He determined the vehicle was a
2001 Dodge Durango, which was registered to and insured by Ester. Id. Claimant
offered the registration and insurance cards into evidence, which identified Ester as
the registrant and the insured. C.R., Ex. No. C-6. The WCJ admitted this
evidence, over UEGF’s lack of foundation and hearsay objections. N.T., 5/31/12,
at 15, 51.
Although the Board determined this evidence constituted hearsay and
was not properly authenticated, we respectfully disagree. As to hearsay, the
registration and insurance cards are documents which may be used to prove
something other than their contents. In other words, while the documents may not
be used to prove the particulars of registration or insurance coverage, the
documents may be used to prove another fact in question, ownership of the vehicle.
Generally, an out-of-court statement may not be used to prove the
truth of the matter asserted in the statement. See Pa. R.E. 802. However, as
comments to Rule 801 illustrate, “[t]here are many situations in which evidence of
17
a statement is offered for a purpose other than to prove the truth of the matter
asserted.” Pa. R.E. 801, comment. So, Rule of Evidence 411, entitled “Liability
Insurance,” provides:
Evidence that a person was or was not insured against
liability is not admissible to prove whether the person
acted negligently or otherwise wrongfully. But the court
may admit this evidence for another purpose, such as
proving a witness’s bias or prejudice or proving agency,
ownership, or control.
Pa. R.E. 411. Under this rule, the insurance card cannot be used to prove whether
the vehicle was insured, but it can be used to prove a different fact, that Ester
owned or controlled the vehicle in question. Offered for such a purpose, the
evidence is non-hearsay and competent to support a finding of ownership. Indeed,
the WCJ made such a finding: “Additionally, Ester Auto Group provided the
vehicle for [Decedent] to do his job ….” F.F. No. 20.
Further, this competent evidence also gives rise to a rebuttable
presumption in favor of the Claimant here: that the operator of a vehicle was
operating the vehicle with the permission of the owner. Exner v. Safeco Ins. Co. of
Am., 167 A.2d 703 (Pa. 1961).
As to authentication of the insurance card, we discern no error in the
WCJ’s determination that it was authentic under the circumstances here.
Specifically, Trooper testified he followed protocol for obtaining information when
the driver of the vehicle is unresponsive. N.T., 9/25/12, at 12. He retrieved
Decedent’s driver’s license and identification card from his wallet. Id. at 12-13.
He also obtained the registration and insurance cards from the vehicle. Id. at 13.
18
Moreover, UEGF cross-examined Trooper regarding the information
he retrieved from the registration and insurance cards. Id. at 18-19. UEGF offered
no basis upon which to cast doubt on the authenticity of the records. Given relaxed
evidentiary rules as well as the deferential standard applicable to the WCJ’s
evidentiary rulings, we conclude the WCJ did not err or abuse his discretion by
admitting the insurance card. Therefore, this evidence was competent to support a
finding that the Dodge Durango was owned and controlled by Ester.
Based on the above competent evidence, there was a reasonable basis
from which the WCJ could draw an inference or inferences that an employment
relationship existed between Decedent and Ester. There was no evidence offered
to the contrary and little to infer that Decedent was an independent contractor. We
conclude the WCJ’s determination that an employment relationship existed is
supported by substantial, competent evidence and the reasonable inferences drawn
therefrom.
B. Course and Scope of Employment
Next, UEGF challenges the WCJ’s finding that Decedent was acting
within the course and scope of his employment when he was killed in the motor
vehicle accident on the basis that it is not supported by competent evidence.
UEGF contends Claimant’s evidence regarding course of employment is
inadmissible hearsay.
Where an injury occurs off of an employer’s premises, a claimant
must show the injury occurred “while the employe is actually engaged in the
19
furtherance of the business or affairs of the employer” for the injury to be
compensable. Section 301(c)(1) of the Act, 77 P.S. §411(1); accord Marazas v.
Workers' Comp. Appeal Bd. (Vitas Healthcare Corp.), 97 A.3d 854, 861
(Pa. Cmwlth. 2014), appeal denied, ___ A.3d ___ (Pa., No. 569 EAL 2014, filed
April 1, 2015), 2015 WL 1542613. Whether an employee is acting within the
course of his employment is a legal determination to be made based on the WCJ's
factual findings. Marazas; Sloane Nissan v. Workers' Comp. Appeal Bd. (Zeyl),
820 A.2d 925, 927 (Pa. Cmwlth. 2003). The operative phrase, “actually engaged
in the furtherance of the business or affairs of the employer,” must be liberally
construed. Marazas, 97 A.3d at 861.
As a general rule, injuries sustained by an employee traveling to or
from his place of employment are not compensable under the Act. Bensing v.
Workers' Comp. Appeal Bd. (James D. Morrissey, Inc.), 830 A.2d 1075
(Pa. Cmwlth. 2003). This rule is grounded on the recognition that in the usual
case, an employee traveling to or from work is not engaged in the furtherance of
the employer's affairs. Id.
However, an injury sustained by a employee while traveling to or
from work may be compensable if: “(1) the employee's employment contract
included transportation to and from work; (2) the employee had no fixed place of
work; (3) the employee was on a special mission for the employer; or (4) special
circumstances indicate that the employee was furthering the business of the
employer.” Sloane, 820 A.2d at 927. When a traveling employee is injured after
setting out on the business of his employer, it is presumed that he was furthering
20
the employer’s business or affairs at the time of the injury. Investors Diversified
Serv. v. Workmen’s Comp. Appeal Bd. (Howar), 520 A.2d 958 (Pa. Cmwlth.
1987).
Here, Mother testified Decedent’s job duties included traveling to auto
auctions with clients to purchase vehicles. N.T., 5/31/12, at 30. Decedent
regularly went to auctions on Wednesdays, Fridays, and sometimes Thursdays. Id.
at 33, 45-46. One auction Decedent frequented was in Manheim, Pennsylvania.
Id. at 45. Mother testified Decedent did not drive his personal vehicle, a 2007
Chrysler Pacifica, which is now in her possession, to the auctions. Id. at 35.
Decedent did not drive his personal vehicle on the date of the accident. Id.
Saliently, Mother also testified that on the morning of the accident
Decedent told her he was taking clients and a co-worker to an auction. N.T.
5/31/12, at 24-28. As discussed above, this testimony satisfied the “present state-
of-mind” exception to the hearsay rule, and it was competent evidence. By itself
this testimony supports the WCJ’s conclusion.
Moreover, Trooper testified he arrived at the scene of a single vehicle
accident involving a Dodge Durango on Thursday, September 30, 2010. N.T.,
9/25/12, at 5. He observed Decedent, who appeared lifeless, in the driver seat as
well as three passengers. Id. at 7-8.
In sum, Decedent planned to take clients and a co-worker to an
auction on a Thursday morning, consistent with his past employment relationship.
21
Decedent was not driving his personal vehicle, but rather a Dodge Durango owned
by Employer. He was involved in a fatal motor vehicle accident in Pennsylvania
later that morning. There were three passengers in the car. Under these
circumstances, a fact-finder could reasonably infer that Decedent was driving to an
auction with clients for Ester when he died. Moreover, there was no evidence to
show Decendent was not acting in furtherance of Ester’s business when the
accident occurred. We conclude that there was competent evidence from which
the WCJ could draw an inference that Decedent died in the course of his
employment.
C. Average Weekly Wage
Next, UEGF contends the WCJ erred in finding Decedent had an
average weekly wage of $1,500. According to UEGF, the record lacks substantial,
competent evidence to support the calculation of average weekly wage as well as
the corresponding benefit rate. Although both parties presented Decedent’s bank
records, the records do not confirm any deposits or checks made by Ester, merely
cash deposits that may or may not be attributable to Ester. UEGF requests a
remand for presentation of additional evidence to confirm actual payments made to
Decedent.
Section 309 of the Act provides for various formulas for computing an
employee’s average weekly wage depending on the method by which the employee
is paid. 77 P.S. §582. An employee’s average weekly wage must reflect what he
expected to earn had he not been injured, or in this case, killed. Hannaberry.
Given the humanitarian purposes of the Act, in making a determination of an
22
average weekly wage, the benefit of the doubt should be given to the employee.
Id.
Here, the WCJ found: “[Decedent] had an average weekly wage of
$1,500.00. The Chase Bank records show that [Decedent] deposited $55,503.00
between February 8, 2010 and September 27, 2010. The average of this amount
over the 37 weeks is $1,500.00. Furthermore, this amount is consistent with the
humanitarian purposes of the Act.” F.F. No. 22. Based on the average weekly
wage calculation, the WCJ concluded Claimant is entitled to death benefits at a
rate of $480 per week.
The WCJ’s average weekly wage finding is supported by the bank
records and corroborated by Mother’s testimony. Both parties presented virtually
identical bank records from Chase Bank, Decedent’s bank. Certified Record, Ex.
Nos. C-11 & D-4; Reproduced Record (R.R.) at 66a-488a. The records show cash
deposits, primarily in the amount of $5,000 once or twice a month. See R.R. at
109a, 117a, 127a, 135a, 146a, 167a, 182a, 184a, 196a, 198a, 206a, 214a, 221a,
223a, 231a, 233a, 247a, 249a.
In addition, Mother testified Decedent only worked for Ester, and he
did not work for any other employers. N.T., 5/31/12, at 26-27. She further
testified Decedent earned commissions on the vehicles he sold. Id. at 42, 44.
Although Mother was mistaken as to the method by which Decedent was paid, i.e.
check versus cash or weekly amounts versus varying amounts, the $1,500 monthly
average of the bank deposit records is not inconsistent with Mother’s estimate of
23
his commissions. There is no traditional documentation of wages to rebut this
evidence. There is also no evidence to suggest the income came from another
source. Although UEGF objected to Mother’s testimony, Mother’s knowledge of
Decedent’s employment and source of income was not necessarily drawn from
Decedent’s out-of-court statements, but from personal knowledge she obtained
based on her relationship to Decedent, their living arrangement, and the allocation
of household expenses and child support.
Based on reasonable inferences drawn from the evidence, the WCJ
did not err in determining the cash deposits reflected Decedent’s wages and sole
source of income from his only employer. Thus, we conclude the WCJ did not err
in calculating Decedent’s average weekly wage and Claimant’s death benefits. As
counsel for both parties attested Ester could not be located, a remand would serve
no purpose.
D. Circumstantial Evidence
Finally, UEGF maintains, even if the record evidence could be
considered competent, the Board erred by alternatively holding that Claimant met
his burden of proof by circumstantial evidence of record. Mother’s entire
testimony concerning Decedent’s purported employment relationship with Ester
was based on hearsay to which UEGF objected. This evidence was not
corroborated by other competent evidence. UEGF claims there is no competent,
circumstantial evidence to support the award of benefits.
24
A WCJ’s fact-finding authority includes the authority to draw
reasonable inferences from the evidence. Pa. Uninsured Emp’rs Guar. Fund. v.
Workers' Comp. Appeal Bd. (Bonner), 85 A.3d 1109 (Pa. Cmwlth. 2014); Mathies
Coal. A party who has the burden of proof may rely on circumstantial evidence
and inferences reasonably deducible therefrom. Glass v. Workers' Comp. Appeal
Bd. (City of Phila.), 61 A.3d 318 (Pa. Cmwlth. 2013); Mathies Coal. In order to
prevail, that evidence “must be adequate to establish the conclusion sought and
must so preponderate in favor of that conclusion as to outweigh in the mind of the
fact-finder any other evidence and reasonable inferences therefrom which are
inconsistent therewith.” Glass, 61 A.2d at 324 (quoting Smith v. Bell Tel. Co. of
Pa., 153 A.2d 477, 480 (Pa. 1959)); accord Mathies Coal.
As discussed above, UEGF is simply wrong on many of its hearsay
and authentication challenges. For the reasons set forth above, the competent
evidence supports an inference that Decedent was driving to an auction with clients
for Ester when he died. The inferences drawn from the circumstantial evidence
were reasonable, and a reasonable mind could accept such evidence as substantial
evidence to conclude Decedent was an employee and died in the course of
employment. There was no other evidence or reasonable inferences as to outweigh
these conclusions. We conclude the Board did not err in determining Claimant met
his burden of proof through circumstantial evidence.
25
IV. Conclusion
The WCJ’s findings are supported by Claimant’s non-hearsay
evidence, circumstantial evidence, and inferences reasonably deducible therefrom.
These findings support the conclusion that Decedent was an employee of Ester,
injured in the course of his employment, with an average weekly wage of $1,500.
Given the humanitarian and remedial objectives of the Act, we conclude the WCJ
did not err by granting Claimant’s petitions.
Accordingly, we affirm.
ROBERT SIMPSON, Judge
26
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Department of Labor and Industry, :
Uninsured Employers Guaranty Fund, :
Petitioner :
:
v. : No. 2334 C.D. 2014
:
Workers' Compensation Appeal Board :
(Ihor Shyra and Ester Auto Group, :
LLC), :
Respondents :
ORDER
AND NOW, this 26th day of August, 2015, the order of the Workers'
Compensation Appeal Board is AFFIRMED.
ROBERT SIMPSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Department of Labor and Industry, :
Uninsured Employers Guaranty :
Fund, :
Petitioner :
:
v. : No. 2334 C.D. 2014
:
Workers’ Compensation Appeal : Submitted: June 19, 2015
Board (Ihor Shyra and Ester Auto :
Group, LLC), :
Respondents :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
DISSENTING OPINION
BY JUDGE COHN JUBELIRER FILED: August 26, 2015
I respectfully dissent. I do not believe that there is competent evidence to
support the Workers’ Compensation Judge’s (WCJ) finding that an employment
relationship existed between Ihor Shyra (Decedent) and Ester Auto Group, LLC
(Ester). Accordingly, I would reverse the Workers’ Compensation Appeal Board’s
(Board) Order affirming the WCJ’s decision to grant Vladimir Shyra (Claimant),
the son of Decedent, fatal claim benefits. I also do not believe that there is
competent evidence to support the WCJ’s finding regarding Decedent’s average
weekly wage; therefore, even if there were sufficient evidence of an employment
relationship, I would vacate the Board’s Order and remand this matter so that the
parties could present additional evidence regarding the origin of the deposits to
Decedent’s account.
The Majority concludes that there is competent evidence to support the
WCJ’s finding that an employment relationship existed between Decedent and
Ester; however, I respectfully disagree. While hearsay is generally not considered
competent evidence, due to the relaxed evidentiary rules for workers’
compensation proceedings, this Court has set forth the following standard for the
use of hearsay evidence to support findings of fact in such proceedings:
(1) hearsay evidence, properly objected to, is not competent evidence
to support a finding of the [WCJ]; (2) hearsay evidence, admitted
without objection, will be given its natural and probative effect and
may support a finding of the [WCJ], if it is corroborated by any
competent evidence in the record, but a finding of fact based solely on
hearsay will not stand.
Guthrie v. Workers’ Compensation Appeal Board (The Travelers’ Club, Inc.), 854
A.2d 653, 659 (Pa. Cmwlth. 2004) (emphasis in original) (quoting Walker v.
Unemployment Compensation Board of Review, 367 A.2d 366, 370 (Pa. Cmwlth.
1976)).
The Majority relies, in part, on a hearsay exception to conclude that there is
competent evidence to support the WCJ’s finding that an employment relationship
existed between Decedent and Ester. Pennsylvania Rule of Evidence 803(3)
provides that “[a] statement of the declarant’s then-existing state of mind (such as
motive, intent or plan) . . .” is not excluded by the rule against hearsay. Pa. R.E.
RCJ-2
803(3). The Majority concludes that Decedent’s statement to Claimant’s mother,
Decedent’s ex-wife, Natalia Zhilkina (Mother), that he intended to go to an auto
auction with a co-worker, Ihar Balysh (Balysh), on the day of his death, satisfies
this hearsay exception and that the WCJ did not err in relying on the statement to
conclude that Decedent was an employee of Ester. While I agree with the Majority
that this particular statement satisfies the hearsay exception, I do not believe this
statement, in conjunction with the other competent evidence of record, provides
sufficient evidence that an employment relationship existed between Decedent and
Ester such that the hearsay evidence in the record may be admitted.
Most of the evidence regarding Ester was either hearsay or lacked sufficient
foundation to be admissible. Mother testified generally about what she thought
Ester’s business was, that Decedent had worked exclusively for Ester since 2005,
and that Decedent worked with Balysh. (Hr’g Tr. at 27-31, May 31, 2012, R.R. at
515a-19a.) However, all of this information was based on what Decedent
allegedly told Mother, (Hr’g Tr. at 61-62, R.R. at 541a-42a), and is, therefore,
hearsay. Unlike Decedent’s statement of intent on the day of his death, I do not
believe these other statements satisfy any hearsay exceptions.
Importantly, Mother lacked sufficient foundation to even testify about
Ester’s business. Pursuant to Pennsylvania Rule of Evidence 602, “[a] witness
may testify to a matter only if evidence is introduced sufficient to support a finding
that the witness has personal knowledge of the matter.” Pa. R.E. 602 (emphasis
added); see also Gibson v. Workers’ Compensation Appeal Board (Armco
Stainless & Alloy Products), 861 A.2d 938, 947 (Pa. 2004) (emphasis added)
RCJ-3
(concluding that under Rule 602, “witnesses must have first-hand knowledge of the
subject on which they are testifying for that testimony to be admissible”). Here,
Mother admitted that she had never met Decedent’s alleged co-worker Balysh, she
had nothing to do with Ester, had no business records of Ester, and that all of her
knowledge of Decedent’s business and association with Ester came from what
Decedent allegedly told her. (Hr’g Tr. at 29, 61-62, R.R. at 517a, 541a-42a.)
Because Mother had no personal knowledge of Ester, her testimony lacked
foundation and was, thus, inadmissible.1 Pa. R.E. 602; Gibson, 861 A.2d at 947.
As stated in Guthrie, hearsay evidence may be admitted in workers’
compensation cases where it is corroborated by competent evidence in the record.
Guthrie, 854 A.2d 659. The only competent evidence demonstrating any sort of an
association between Decedent and Ester was Decedent’s statement that he was
going to the auction on the day of his death and the evidence that he was driving a
car owned by Ester when he was killed. I do not believe that this provides enough
evidence of an employment relationship between Ester and Decedent such that
Mother’s hearsay testimony may be admitted to prove such a relationship. Id.
Because the testimony regarding an employment relationship between Decedent
and Ester was not competent, there is insufficient evidence in the record to support
1
Mother testified, based on her own personal knowledge, that Decedent said he left for
work every Wednesday and Friday, and, once every three or four months, on Thursday, and that
Decedent did not drive his own vehicle at those times. (Hr’g Tr. at 33-34, R.R. at 513a-14a.)
Thus, as UEGF argued before the WCJ, because Decedent allegedly worked so infrequently and
there was no evidence that anyone at Ester exercised control over Decedent or supervised
Decedent, even if the hearsay evidence was admissible, it is questionable whether Claimant met
his burden of demonstrating that Decedent was an employee, rather than just an independent
contractor.
RCJ-4
the WCJ’s finding of an employment relationship and, accordingly, I would
reverse.
In addition, I believe that the WCJ’s finding on Decedent’s average weekly
wage is not supported by substantial evidence. The WCJ’s average weekly wage
was based on Mother’s testimony and Decedent’s bank records. Mother testified
that Ester paid Decedent by check and that the payments made to Decedent were
based on his auto sale commissions, for which he received $500-$1,500 per vehicle
sold. (Hr’g Tr. at 40-42, 44, R.R. at 520a-22a, 524a.) However, Mother stated that
her knowledge of the alleged payments made by Ester to Decedent was based on
what Decedent told her. (Hr’g Tr. at 45, R.R. at 525a.) Other than this hearsay
evidence, there is no evidence that all of the money, or even any of the money,
deposited in Decedent’s bank account actually came from Ester. In particular, the
record fails to confirm that any checks issued by Ester were deposited into
Decedent’s bank account. To the contrary, the bank records entered into evidence
demonstrate that Decedent only deposited cash into his bank accounts. Thus,
Mother’s testimony that Ester paid Decedent with checks has no support in the
record. Moreover, although Mother testified that she filed Decedent’s tax returns
after his death in 2011, (Hr’g Tr. at 62-63, R.R. at 542a-43a), she did not produce
the tax returns.
The WCJ based its average weekly wage on Decedent’s bank records, which
showed that $55,503.00 cash was deposited into Decedent’s bank account over a
37 week period, averaging $1,500 per week. (WCJ Decision, Findings of Fact ¶
22.) However, there is no competent evidence in the record to demonstrate that
RCJ-5
the deposited money came from Ester. Because there is no competent evidence to
corroborate that Ester paid Decedent, Mother’s hearsay testimony regarding
Ester’s alleged payments to Decedent is inadmissible. Guthrie, 854 A.2d 659.
Therefore, even if there were substantial evidence of an employment relationship
between Decedent and Ester, I would vacate the Board’s Order and remand so that
additional evidence could be taken regarding Decedent’s average weekly wage.
For the foregoing reasons, I respectfully dissent.
________________________________
RENÉE COHN JUBELIRER, Judge
RCJ-6