IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Verizon Pennsylvania Inc., :
Petitioner :
:
v. :
:
Workers’ Compensation :
Appeal Board (McCallion), : No. 2167 C.D. 2013
Respondent : Submitted: May 23, 2014
BEFORE: HONORABLE DAN PELLEGRINI, President Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: July 30, 2014
Verizon Pennsylvania Inc. (Employer) petitions this Court for review of
the Workers’ Compensation Appeal Board’s (Board) November 6, 2013 order
affirming the Workers’ Compensation Judge’s (WCJ) order granting John
McCallion’s (Claimant) Penalty Petitions, and counsel fee request. Essentially, there
are two issues before the Court: (1) whether substantial evidence supports the WCJ’s
finding that Employer violated the Workers’ Compensation Act (Act);1 and (2)
whether unreasonable contest attorney’s fees were warranted. After review, we
affirm.
On October 25, 2009, Claimant filed a Claim Petition alleging that on
October 25, 2006, he sustained injuries to his neck, back, hands, wrists and lower
extremities after an automobile collision. By Decision and Order circulated on July
19, 2010, the WCJ dismissed the Claim Petition as moot based on her approval of a
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1–1041.4, 2501–2708.
Stipulation between the parties resolving the matter. The Stipulation of Facts
(Stipulation), signed by Claimant and Claimant’s attorney on July 13, 2010, and
Employer’s counsel on July 9, 2010, detailed Claimant’s October 25, 2006 work
incident and injuries, and included a statement that Employer and Claimant executed
a November 21, 2006 Agreement for Compensation regarding Claimant’s right to
total disability benefits. The Stipulation further provided Claimant’s average weekly
wage and compensation rate. It also noted that Claimant filed a Reinstatement
Petition alleging entitlement to benefits as of August 23, 2009, that the parties agreed
Claimant is entitled to benefits as of August 23, 2009 and that Claimant’s Petition
would be marked withdrawn.
On September 29, 2010, Claimant filed a Penalty Petition alleging that
Employer had engaged in delay to avoid its legal obligation to pay benefits. On May
6, 2011, Claimant filed a second Penalty Petition asserting that Employer had made
sporadic or no payment of benefits, no payment of interest, and was currently 6
weeks behind in the payment of wage loss benefits. WCJ hearings were held June 24
and August 12, 2011 to address both Petitions. No testimony was presented at either
hearing. On November 30, 2011, the WCJ granted Claimant’s Penalty Petitions, and
awarded Claimant attorney’s fees. Employer appealed to the Board and, on
November 6, 2013, the Board affirmed the WCJ’s decision. Employer appealed to
this Court.2
Employer argues that the WCJ’s decision is not supported by substantial
evidence. Specifically, Employer maintains that its payment log evidencing timely
2
“Our review is limited to determining whether the WCJ’s findings of fact were supported
by substantial evidence, whether an error of law was committed or whether constitutional rights
were violated.” Dep’t of Transp. v. Workers’ Comp. Appeal Bd. (Clippinger), 38 A.3d 1037, 1042
n.3 (Pa. Cmwlth. 2011).
2
payments issued to Claimant was disregarded, and the penalty imposed was
excessive. We disagree.
“A claimant who files a penalty petition must first meet his initial burden
of proving a violation of the Act or the attendant regulations occurred; the burden
then shifts to the employer to prove the violation did not occur.” Dep’t of Transp. v.
Workers’ Comp. Appeal Bd., (Clippinger), 38 A.3d 1037, 1047 (Pa. Cmwlth. 2011).
Here, Claimant submitted: various packets of pay stubs from 2009, 2010 and 2011
(Claimant (Cl.) Ex. 1, Ex. 9; Reproduced Record (R.R.) at 25a-99a, 129a-148a); an
August 25, 2010 check issued to him from Sedgwick Claims Management Services,
Inc. (Sedgwick), in the amount of $5,995.00, representing temporary total disability
payments plus interest less attorney’s fees for the period of August 23, 2009 through
October 25, 2009 (Cl. Ex. 4; R.R. at 103a); 7 additional checks issued to Claimant by
Sedgwick representing temporary partial disability benefits (Cl. Ex. 6; R.R. at 112a-
118a); a document Claimant prepared detailing the information regarding the checks
he received (Cl. Ex. 7; R.R. at 119a); and a letter from Claimant’s attorney to
Employer’s counsel concerning Employer’s request for Claimant’s paystubs (Cl. Ex.
8; R.R. at 128a).3 Employer’s evidence consisted solely of a payment log listing
payments made to Claimant from Employer during the period November 21, 2006
through August 5, 2011. Employer Ex. 1; R.R. at 152a.
The WCJ found that the document Claimant prepared
provides the only explanation for any of the sums paid to
him. Only the January 11, 2011 check provided interest.
At the time the document was created, Claimant was owed
an additional 20 weeks of temporary partial disability
benefits as well as $1,937.00 in interest from the other
3
Clamant also submitted his Statement of Wages for injury (Cl. Ex. 2; R.R. at 100a-101a);
his Agreement for Compensation accepting his injury (Cl. Ex. 3; R.R. at 102a); and the July 19,
2010 WCJ decision accepting the parties’ Stipulation of Facts (Cl. Ex. 5; R.R. at 104a-107a).
3
seven checks received. The chart Claimant prepared also
shows the egregiously sporadic nature of the payments.
November 30, 2011 WCJ Dec. (WCJ Dec.) at 2, Finding of Fact (FOF) 6. The WCJ
explained that
as documented in . . . [Claimant’s] exhibit []7, . . . the
payment of April 6, 2011 in the amount of $596.00, . . . is
the only payment which could possibly be considered
timely made. Employer’s evidence does nothing to explain
why it has continued to violate the Act, and fails to supply
any accounting for the payments made.
WCJ Dec. at 2, FOF 9.
“[S]ubstantial evidence has been defined as such relevant evidence that a
reasonable mind might accept as adequate to support a conclusion.” Jacobi v.
Workers’ Comp. Appeal Bd. (Wawa, Inc.), 942 A.2d 263, 268 n.7 (Pa. Cmwlth.
2008). “It is irrelevant whether the record contains evidence to support findings other
than those made by the WCJ; the critical inquiry is whether there is evidence to
support the findings actually made.” Del. Cnty. v. Workers’ Comp. Appeal Bd.
(Baxter Coles), 808 A.2d 965, 969 (Pa. Cmwlth. 2002). In the instant case, the
above-cited evidence Claimant submitted supports the WCJ’s findings, and we agree
that Claimant met his initial burden of proving that a violation of the Act occurred.
Employer argues that its payment log “confirms that numerous
payments were properly and timely issued within 30 days of the date the payment
obligation arose.” Employer Br. at 9 (emphasis added). Employer contends “[i]t is
well settled that failure to commence payments within thirty days of the date on
which the obligation to pay arises constitutes a violation of Section 428 of the Act.[4]”
Employer Br. at 9. Employer cites Cunningham v. Workmen’s Compensation Appeal
Board (Inglis House), 627 A.2d 218 (Pa. Cmwlth. 1993), for this proposition, thereby
4
77 P.S. § 921 (relating to entry of default judgment against employer or liable insurer for
failure to pay compensation for 30 days or more).
4
inferring that Section 428 of the Act grants an employer thirty days to pay a
compensation award without a penalty. However, the Pennsylvania Supreme Court
explained:
Section 428 [of the Act], which is entitled, ‘Final judgment
on default in payments; entry in common pleas; lien of
judgment and execution thereon,’ does not separately
address or authorize penalties. Instead, that Section grants a
claimant the right to secure a judgment by default if the
employer is in ‘default of compensation payments for thirty
days or more.’ [77 P.S.] § 921. However, Section 428 [of
the Act] does not address what amounts to a ‘default,’ such
that the period for measuring the 30–day default period may
be ascertained.
Snizaski v. Workers’ Comp. Appeal Bd. (Rox Coal Co.), 891 A.2d 1267, 1276 (Pa.
2006). In Snizaski, the claimant argued, as Employer does here, that “the plain
language of Section 428 [of the Act] . . . grant[s] an employer thirty days to pay a
compensation award without fear of penalty . . . .” Id. at 1276-1277. The Snizaski
Court rejected this argument and held: “To the contrary, Section 430(b) [of the Act5]
makes an insurer or employer ‘subject to a penalty’ upon termination, increase, or
refusal to pay an award, with no time-qualification or grace period.” Id. at 1277.
Moreover, as explained by the WCJ, the payment log does not supply
any accounting for the checks issued, nor does it explain why they were untimely.
Employer’s own statement that “numerous payments” were timely reveals
Employer’s admission that other payments were untimely. In addition, the payment
log evidences Employer’s position that it issued Claimant numerous large checks in
the amounts of $10,728.00, $2,682.00, $4,768.00, $39,628.76, $9,907.19, $5,995.55
and $2,120.58, among others. See Employer Ex. 1; R.R. at 152a. Based on the
parties’ Stipulation to Claimant’s average weekly compensation rate of $745.00,
5
77 P.S. § 971(b) (relating to an insurer or employer who refuses to make compensation
payments without first requesting and obtaining supersedeas being subject to penalties).
5
these payments as well as others were clearly beyond the required payment date. See
Cl. Ex. 5; R.R. at 107a. Accordingly, Employer’s payment log is insufficient to meet
Employer’s burden of proving it did not violate the Act, but rather establishes
Employer’s violation of the Act.
Employer further asserts in its brief to this Court and, apparently in its
Board brief,6 that because of Claimant’s varying wages, it requested paystubs from
Claimant which Claimant’s counsel refused to produce. See Employer Br. at 10;
Board Dec. at 5. Employer contends that any delay in payments was the result of
Claimant’s unwillingness to comply with its request. This argument was not
presented to the WCJ, however, the WCJ did comment on the paystub request as it
was referred to in Claimant’s exhibit 8. Specifically, the WCJ stated:
Claimant submitted the August 3, 2001 letter his counsel
wrote defense counsel harshly critiquing Employer’s
position that Claimant must provide copies of his paystubs
back to his own Employer because Employer needs its own
salary documents to find out how much it is paying
Claimant. Claimant’s counsel’s critique is fair. If Claimant
had returned to a different employer, the request would be
logical. It is illogical.
WCJ Dec. at 2, FOF 7. The Board agreed, opining:
[Employer’s] request for its own employee to provide his
own paystubs to his own employer to establish what
[Employer] . . . paid Claimant, the employee, was illogical.
[Employer] cites no authority establishing that its position
provided a legal or other appropriate basis for refusing to
pay or failing to timely pay indemnity benefits due and
owing.
Board Dec. at 5.
6
This argument is quoted in the Board’s decision but there is no citation. As there was no
testimony at either hearing, the only possible source would be Employer’s brief to the Board.
6
“The strict doctrine of waiver is applicable to workers’ compensation
proceedings. An issue not raised before the WCJ is waived.” Brown v. Workers’
Comp. Appeal Bd. (Knight Ridder, Inc./Phila. Newspapers, Inc.), 856 A.2d 302,
308 (Pa. Cmwlth. 2004) (citation omitted). Accordingly, this Court holds that
because Employer did not raise this argument before the WCJ, it is waived. Id.
Notwithstanding, proof of Employer’s request for the paystubs it issued would not
satisfy its burden of showing that a violation of the Act did not occur. We agree with
the WCJ and the Board that Employer’s tactic to redirect accountability upon
Claimant to supply Employer with the very information Employer created and
furnished to Claimant is mendacious. Thus, because Claimant met his burden of
proof and the WCJ’s findings based on that evidence is supported by substantial
evidence, we conclude that the Board properly affirmed the WCJ’s finding that
Employer violated the Act.
In addressing the excessiveness of the penalty awarded, Section
435(d)(i) of the Act7 provides:
Employers and insurers may be penalized a sum not
exceeding ten per centum of the amount awarded and
interest accrued and payable: Provided, however, That such
penalty may be increased to fifty per centum in cases of
unreasonable or excessive delays. Such penalty shall be
payable to the same persons to whom the compensation is
payable.
“The assessment of penalties and the determination of the amount of penalties are
within the WCJ’s discretion, and we will not disturb the WCJ’s imposition of
penalties absent an abuse of discretion.” Kraeuter v. Workers’ Comp. Appeal Bd.
(Ajax Enters., Inc.), 82 A.3d 513, 521 (Pa. Cmwlth. 2013). The record supports the
WCJ’s finding that there was a significant violation of the Act as the payment
7
Added by Section 3 of the Act of February 8, 1972, P.L. 25, 77 P.S. § 991(d)(i).
7
representing temporary partial disability benefits for the period of March 20, 2011
through March 26, 2011 is the only payment that may have been timely made.
Accordingly, the evidence supports the WCJ’s exercise of her discretion to impose a
50% penalty against Employer for unreasonably and excessively delaying payment of
compensation.
Employer next contends that unreasonable contest attorney’s fees were
not warranted. We disagree. Section 440(a) of the Act8 authorizes:
In any contested case where the insurer has contested
liability in whole or in part, . . . the employe or his
dependent, as the case may be, in whose favor the matter at
issue has been finally determined in whole or in part shall
be awarded, in addition to the award for compensation, a
reasonable sum for costs incurred for attorney’s fee . . . :
Provided, That cost for attorney fees may be excluded when
a reasonable basis for the contest has been established by
the employer or the insurer.
77 P.S. § 996(a).
The reasonableness of an employer’s contest depends upon
whether the contest was prompted to resolve a genuinely
disputed issue. The employer has the burden of
presenting sufficient evidence to establish a reasonable
basis for its contest. Whether a reasonable basis exists for
an employer’s contest of liability is a question of law and
therefore subject to this Court’s review.
City of Phila. v. Workers’ Comp. Appeal Bd. (Andrews), 948 A.2d 221, 230 (Pa.
Cmwlth. 2008) (citations omitted; emphasis added). Here, the only evidence
Employer submitted was the payment log. This evidence confirmed the late and
sporadic nature of Employer’s payments to Claimant. Because Employer presented
no basis for its egregious delays in Claimant’s payments beyond its disingenuous
request for its own documents, and Employer’s unreasonable and excessive delay of
8
Added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. § 996(a).
8
benefits was “a violation of the Act, there could be no reasonable contest and the
award of counsel fees was . . . proper.” Body Shop v. Workers’ Comp. Appeal Bd.
(Schanz), 720 A.2d 795, 799 (Pa. Cmwlth. 1998).
For all of the above reasons, the Board’s order is affirmed.
___________________________
ANNE E. COVEY, Judge
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Verizon Pennsylvania Inc., :
Petitioner :
:
v. :
:
Workers’ Compensation :
Appeal Board (McCallion), : No. 2167 C.D. 2013
Respondent :
ORDER
AND NOW, this 30th day of July, 2014, the Workers’ Compensation
Appeal Board’s November 6, 2013 order is affirmed.
___________________________
ANNE E. COVEY, Judge