J.O. Lozado v. WCAB (Dependable Concrete Work and UEGF)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Jose Osorio Lozado, :
:
Petitioner :
:
v. : No. 21 C.D. 2014
:
Workers’ Compensation Appeal : Argued: May 6, 2015
Board (Dependable Concrete Work :
and Uninsured Employers Guaranty :
Fund), :
:
Respondents :

BEFORE: HONORABLE DAN PELLEGRINI, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge

OPINION BY
JUDGE COHN JUBELIRER FILED: August 5, 2015

Jose Osorio Lozado (Claimant) petitions for review of an Order of the
Workers’ Compensation Appeal Board (Board) affirming the Decisions of a
Workers’ Compensation Judge (WCJ) denying Claimant’s “Claim Petition for
Benefits from the Uninsured Employers Guaranty Fund [Fund] and Uninsured
Employer” (Claim Petition). The WCJ denied Claimant’s Claim Petition because
Claimant failed to provide timely notice to the Fund that his former employer,
Dependable Concrete Work (Employer), was uninsured and because, after
providing notice to the Fund, Claimant did not wait the requisite time period before
filing his Claim Petition against the Fund. The Board affirmed on different
grounds, holding that Section 305(d) of the Workers’ Compensation Act1 (Act)
barred the Claim Petition because Claimant had previously elected to pursue an
action at law against Employer. For the reasons that follow, we reverse and
remand to the Board for further proceedings.

I. The Uninsured Employers Guaranty Fund
We begin with a brief description of the Fund and the governing provisions
of the Act.2 The Fund was created in 2006 to provide workers’ compensation
benefits to workers, injured in the course and scope of their employment, where
their employers did not have workers’ compensation insurance. Section 1602(c) of

1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 501(d). Section 305(d) provides
that “[w]hen any employer fails to secure the payment of compensation under this act as
provided in sections 305 and 305.2, the injured employe or his dependents may proceed either
under this act or in a suit for damages at law as provided by article II.” Id.

2
The Fund was created by Act 147 of 2006, which added Article XVI to the Act. See
Sections 1601-1608 of the Act, added by Section 7 of the Act of November 9, 2006, P.L. 1362,
as amended, 77 P.S. §§ 2701-2708. There is limited case law addressing the Fund’s functions
and procedures. See, e.g., Trautman v. Workers’ Compensation Appeal Board (Blystone Tree
Service and Pennsylvania Uninsured Employers Guaranty Fund), 104 A.3d 600 (Pa. Cmwlth.
2014) (addressing the Fund’s liability for unreasonable contest fees); Pennsylvania Uninsured
Employers Guaranty Fund v. Workers’ Compensation Appeal Board (Lyle), 91 A.3d 297 (Pa.
Cmwlth. 2014) (holding that when an employee learns that an employer is uninsured is a
question of fact); Pennsylvania Uninsured Employers Guaranty Fund v. Workers’ Compensation
Appeal Board (Dudkiewicz), 89 A.3d 330 (Pa. Cmwlth. 2014) (addressing joinder of parties).

2
the Act, 77 P.S. § 2702(c).3 The Fund is financed through assessments upon
insurers and self-insured employers, reimbursements or restitutions recovered by
the Fund, interest on money held by the Fund, and infusions of cash from the
treasury. Section 1602(b) of the Act, 77 P.S. § 2702(b); Section 1607(b) of the
Act, 77 P.S. § 2707(b).4

The Fund is not an insurer and is “not [] subject to penalties, unreasonable
contest fees or any reporting and liability requirements under section 440”5 of the

3
The purpose of the Fund is set forth in Section 1602(c) of the Act, which states:

The administrator shall establish and maintain the fund for the exclusive purpose
of paying to any claimant or his dependents workers’ compensation benefits due
and payable under this act and the act of June 21, 1939 (P.L. 566, No. 284),
known as The Pennsylvania Occupational Disease Act, and any costs specifically
associated therewith where the employer liable for the payments failed to insure
or self-insure its workers’ compensation liability under section 305 at the time the
injuries took place.

77 P.S. § 2702(c).

4
Subsection (b) of Section 1607 was added by Section 3 of the Act of June 30, 2011, P.L.
86, 77 P.S. § 2707(b). This section was intended to be a temporary infusion of cash into the
Fund. David B. Torrey & Andrew E. Greenberg, Workers’ Compensation in Law and Practice §
11:40 (2008, Supp. 2014).

5
77 P.S. § 996, added by Section 3 of the Act of February 8, 1972, as amended. Section
440 states, in its entirety:

(a) In any contested case where the insurer has contested liability in whole or in
part, including contested cases involving petitions to terminate, reinstate, increase,
reduce or otherwise modify compensation awards, agreements or other payment
arrangements or to set aside final receipts, 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 fees, witnesses, necessary
(Continued…)
3
Act; however, it does have “all of the same rights, duties, responsibilities and
obligations as an insurer.” Sections 1601 and 1602(e) of the Act, 77 P.S. §§ 2701,
2702(e). An injured worker may recover from the Fund by first providing the
Fund with notice of a claim “within 45 days after the worker knew that the
employer was uninsured.” Section 1603(b) of the Act, 77 P.S. § 2703(b). The
Fund must start its inquiry into whether to commence making payments to an
injured employee within ten days of receiving notice of a claim by demanding
proof of insurance for the injured worker from the employer. Section 1605(a) of
the Act, 77 P.S. § 2705(a). If the Fund does not receive proof of insurance within
14 days, “there shall be rebuttable presumption of uninsurance.” 77 P.S. §
2705(a). If the claim is not voluntarily accepted by the Fund within 21 days of
receiving notice of the claim, an injured worker may file a claim petition with the
Bureau of Workers’ Compensation (Bureau). Section 1603(d) of the Act, 77 P.S. §
2703(d). The claim petition must name “both the employer and the [F]und as
defendants.” Section 1604 of the Act, 77 P.S. § 2704.

medical examination, and the value of unreimbursed lost time to attend the
proceedings: 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.

(b) If counsel fees are awarded and assessed against the insurer or employer, then
the workers’ compensation judge must make a finding as to the amount and the
length of time for which such counsel fee is payable based upon the complexity of
the factual and legal issues involved, the skill required, the duration of the
proceedings and the time and effort required and actually expended. If the insurer
has paid or tendered payment of compensation and the controversy relates to the
amount of compensation due, costs for attorney’s fees shall be based only on the
difference between the final award of compensation and the compensation paid or
tendered by the insurer.

Id.

4
 The Fund is required to “exhaust all remedies at law” to seek reimbursement
from the uninsured employer for any payments made by the Fund as a result of an
award or a voluntarily accepted injury. Section 1605(b) of the Act, 77 P.S. §
2705(b). The Department of Labor and Industry may, on the Fund’s behalf,
investigate, prosecute, and seek restitution from an uninsured employer for not
insuring the payment of compensation. Id. The Fund may also seek
reimbursement through asserting its right to subrogation over any recovery an
injured employee receives from the employer or a third party. Section 1606 of the
Act, 77 P.S. § 2706.

II. Procedural History
This case involves two simultaneously issued WCJ Decisions (hereinafter
referred to as “Employer Decision” and “Fund Decision”). The Employer
Decision resulted from a claim and penalty petition which Claimant filed against
Employer on April 15, 2009, in which Claimant sought benefits for “a work injury
suffered on or about May 11, 2007.” (WCJ Decision (Employer Decision),
Findings of Fact (FOF) ¶ 1.) After it was filed, on April 28, 2009, the Bureau
informed Claimant’s counsel that its “research indicate[d] that the employer did
not have workers’ compensation insurance on the date of the alleged injury.”
(WCJ Decision (Fund Decision), FOF ¶ 2.) Shortly thereafter, on May 11, 2009,
the last day Claimant could file a personal injury action within the applicable two
year statute of limitations period, Claimant filed a praecipe for a writ of summons
with the Prothonotary of the Philadelphia County Court of Common Pleas (trial
court) seeking damages from Employer for his injury. (Employer Decision, FOF ¶
2; Civil Docket at 3, R.R. at 15a.) Pursuant to Section 7361 of the Judicial Code,

5
42 Pa. C.S. § 7361, and local rule, this matter was referred to compulsory
arbitration. (Civil Docket at 7, R.R. at 19a.)

The Fund Decision resulted from a “Notice of Claim Against Uninsured
Employer” (Notice of Claim) and the Claim Petition at issue here, both of which
Claimant filed in January 20106 while resolution of the Claimant’s tort action was
pending, in which Claimant sought benefits from the Fund for the alleged May 11,
2007 work-related injury. (Fund Decision, FOF ¶¶ 3, 4.) While the petitions
against both Employer and the Fund were pending, the arbitrator in Claimant’s tort
action against Employer awarded Claimant a default judgment of $50,000 in
damages on May 28, 2010. (Employer Decision, FOF ¶ 5.) Claimant appealed the
arbitration award for a de novo trial in the trial court shortly thereafter. (Civil
Docket at 8, R.R. at 20a.)

Claimant’s Claim Petition against the Fund and the claim and penalty
petitions against Employer were assigned to the same WCJ for disposition. (Fund
Decision, FOF ¶ 5.) The WCJ issued two separate decisions and orders denying
and dismissing both of Claimant’s petitions - against Employer and against the
Fund. With regard to Claimant’s claim and penalty petitions against Employer, the
WCJ reasoned that Section 305(d) of the Act, 77 P.S. § 501(d), requires a claimant
to choose between pursuing a tort remedy and seeking benefits under the Act.

6
Claimant’s Claim Petition was filed on January 5, 2010. (Claim Petition for Benefits
from the Uninsured Employer Guaranty Fund and Uninsured Employer, R.R. at 6a-7a.) The
Notice of Claim does not appear in the certified record; however, the Fund admitted in its
Answer to the Claim Petition that Claimant filed the Notice of Claim on January 25, 2010.
(Answer to Claim Petition ¶ 1, R.R. at 10a.)

6
(Employer Decision, Conclusions of Law (COL) ¶¶ 1-3.) According to the WCJ,
once an injured employee files a civil action, he forfeits his ability to seek benefits
under the Act. (Employer Decision, COL ¶¶ 2-3.) With regard to Claimant’s
Claim Petition against the Fund, the WCJ denied relief for two reasons: 1) because
Claimant did not file the Notice of Claim within 45 days of learning that Employer
was uninsured as required by Section 1603(b) of the Act; and 2) because Claimant
filed his Claim Petition against the Fund concurrently with the Notice of the Claim
instead of waiting 21 days as required by Section 1603(d) of the Act. (Fund
Decision, COL ¶¶ 1-4.)

Claimant appealed both WCJ Decisions, which were consolidated by the
Board on appeal. Upon review, the Board affirmed both Decisions. The Board
held that Section 305(d) of the Act barred all of Claimant’s petitions because
Claimant forfeited his ability to pursue a remedy against both Employer and the
Fund under the Act by initiating his tort action. With respect to its holding that
Section 305(d) barred Claimant’s Claim Petition against the Fund, the Board
reasoned that the Fund was “established for the exclusive purpose of paying to any
claimant . . . benefits due and payable under the Act,” and Claimant is not due any
benefits because he elected a civil remedy. (Board Decision at 5.) Although the
Board ultimately concluded that Claimant’s Claim Petition against the Fund was
barred by Section 305(d), the Board also determined that the WCJ erred by
concluding that a claimant’s failure to file notice within 45 days of learning that an
employer is uninsured, as required by Section 1603 of the Act, completely bars a
claim against the Fund. (Board Decision at 4.) According to the Board, Section
1603 of the Act “does not act as a complete bar to compensation, but instead bars

7
the claimant from receiving compensation until such time as he has provided [the
Fund] with notice.” (Board Decision at 4.) The Board further declined “to
interpret Section 1603 as barring a claimant from receiving compensation where he
fails to follow the 21 day waiting period for filing his claim petition” against the
Fund because the plain language of Section 1603 did not provide for such a bar.
(Board Decision at 4.)

III. Claimant’s Appeal
Claimant now petitions this Court for review of the Board’s Order only with
respect to the Board’s affirmance of the WCJ’s Fund Decision dismissing
Claimant’s Claim Petition against the Fund.7 The Board’s affirmance of the
WCJ’s Employer Decision dismissing Claimant’s claim and penalty petitions
against Employer is not before this Court.

This appeal presents two issues of first impression. First, whether a claim
petition against the Fund is barred by Section 305(d) of the Act where, after
learning that an employer is uninsured, a claimant preserves a civil remedy by
filing a “savings action” at law against an uninsured employer. Second, whether a
claimant’s failure to give timely notice to the Fund that his or her employer is
uninsured acts as a complete or partial bar to a claim against the Fund.

7
“Our scope of review in a workers’ compensation appeal is limited to determining
whether necessary findings of fact are supported by substantial evidence, whether an error of law
was committed, or whether constitutional rights were violated.” Elberson v. Workers’
Compensation Appeal Board (Elwyn, Inc.), 936 A.2d 1195, 1198 n.2 (Pa. Cmwlth. 2007). Our
review is plenary when examining questions of law. Land O’Lakes, Inc. v. Workers’
Compensation Appeal Board (Todd), 942 A.2d 933, 936 n.3 (Pa. Cmwlth. 2008).

8
 A. Whether Claimant’s Claim Petition is barred by Section 305(d) of
the Act
Since the Act was amended in 1974, it has served as a complete substitute
for common law tort actions by “provid[ing] the exclusive means by which a
covered employee can recover against an employer for injury in the course of his
employment.” Kline v. Arden H. Verner Company, 469 A.2d 158, 159 (Pa. 1983).
Section 303(a) of the Act establishes that an employer’s liability under the Act is
exclusive and an employer is immune from suit under the common law. 77 P.S. §
481(a). Our Supreme Court has described this provision as

a version of the historical quid pro quo employers received for being
subjected to a no-fault system of compensation for worker injuries.
That is, while the employer assumes liability without fault for a work-
related injury, he is relieved of the possibility of a larger damage
verdict in a common law action. . . . The 1974 change in the statutory
formulation of the exclusivity principle reflects another, even larger
change which the legislature made that same year: a change from an
elective system of workmen’s compensation, as existed before, to one
that is mandatory. Since, by the express language of section 303(a),
the statutory compensation is “in place of any and all other liability”
on the part of the employer for a worker’s injury in the course of
employment, the conclusion must follow that the section denies a
worker any cause of action at law against his employer for such an
injury. So strong is the principle of exclusivity we have held that it is
a nonwaivable defense, even when not timely raised.
Lewis v. School District of Philadelphia, 538 A.2d 862, 867 (Pa. 1988) (internal
citations omitted).

Notwithstanding the strength of the exclusivity principle in workers’
compensation law, an employer loses its immunity when it does not fulfill its
obligations under the quid pro quo bargain and may be sued at common law where
it fails to insure for workers’ compensation liability. Section 305(d) of the Act, 77

9
P.S. § 501(d). Pursuant to Section 305(d): “[w]hen any employer fails to secure
the payment of compensation under this act as provided in sections 305 and 305.2,
the injured employe or his dependents may proceed either under this act or in a suit
for damages at law as provided by article II.” Id. In Liberty by Liberty v.
Adventure Shops, Inc., 641 A.2d 615, 616 (Pa. Super. 1994), our Superior Court
interpreted this provision as “offer[ing] the employee an election either to proceed
under the Act and accept its compensation schedules or to secure relief outside the
Act by an action at law for damages against his employer.” Id.

The exclusivity principle, which applies to civil actions against the
employer, does not foreclose civil actions seeking damages from third parties who
bear some responsibility for the claimant’s injuries, concurrent with proceedings
against an employer under the Act. When a claimant recovers from a third party
through a civil action, Section 319 of the Act8 allows an employer to assert
subrogation rights against any recovery of damages the claimant receives from a
liable third party; this avoids a double recovery by the claimant while also more

8
77 P.S. § 671. Section 319 of the Act provides in relevant part:

Where the compensable injury is caused in whole or in part by the act or omission
of a third party, the employer shall be subrogated to the right of the employe, his
personal representative, his estate or his dependents, against such third party to
the extent of the compensation payable under this article by the employer;
reasonable attorney’s fees and other proper disbursements incurred in obtaining a
recovery or in effecting a compromise settlement shall be prorated between the
employer and employe, his personal representative, his estate or his dependents.

Id.

10
equitably allocating the burden of compensation to those who are responsible for
the injury.

The Board determined that Claimant forfeited his right to bring a claim
against the Fund because Claimant pursued a civil action for damages against
Employer. On appeal, Claimant and the Fund make numerous arguments.
Claimant contends that the exclusivity principle does not apply at all to claims
against the Fund because Section 305(d) only bars his proceeding against
Employer. Claimant argues that the Fund is part of a separate scheme to
compensate injured employees, which is evidenced by Section 1606 of the Act, 77
P.S. § 2706, which gives him the right file a direct suit for damages against his
Employer without forfeiting his right to pursue benefits against the Fund. Section
1606 provides:

Nothing contained in this article shall serve to abrogate the provisions
of section 305(d) allowing the claimant or dependents to bring a direct
suit for damages at law as provided by Article II. The fund shall be
entitled to assert rights to subrogation under section 319 for recovery
made from the employer or any other third party.

77 P.S. § 2706 (emphasis added). Claimant interprets the plain language of
Section 1606 as providing the Fund with the right to subrogation against any
recovery a claimant receives from an employer as it would from any other third
party.

In the alternative Claimant argues that, even if the exclusivity principle
would apply, in this case he did not “proceed” in a tort action against Employer
within the meaning of Section 305(d). According to Claimant, he filed a praecipe

11
for a writ of summons with the trial court before he knew whether the Fund would
provide compensation to him, as a “savings action” in order to preserve his rights,
and the rights of any other potentially interested parties, to receive some
compensation. Claimant further contends that the fact that he has stayed his tort
action pending resolution of the instant matter, and has never recovered any
damages, demonstrates that he did not “proceed” in his tort action.

In response, the Fund argues that the General Assembly maintained the
exclusivity principle of Section 305(d) when it established the Fund and that
Claimant misconstrues Section 1606 by asserting that he may bring a suit against
Employer as he would a third party. The Fund asserts that it has all the rights and
liabilities of an insurer and, as such, it is only liable if the uninsured employer
would be liable and has defaulted on his obligation. Moreover, the Fund argues
that Claimant did, in fact, “proceed” in a suit for damages at law, as that word is
used in Section 305(d) of the Act, when he commenced his civil action by filing a
praecipe for a writ of summons with the trial court.

We need not decide, in this case, whether the exclusivity principle applies in
all cases. Even assuming, arguendo, that the exclusivity principle does apply, we
find that, under the facts of this case, Claimant did not violate Section 305(d) when
he filed a civil action to preserve his ability to recover in tort prior to the expiration
of the statute of limitations. Claimant faced a practical dilemma at a time when the
Fund was new and little guidance was available.9 The statute of limitations for

9
Claimant argues that he filed the civil suit against Employer out of an abundance of
caution. While the Fund was new, there was experience and case law under a statute which
(Continued…)
12
personal injury negligence actions is two years, Section 5524 of the Judicial Code,
42 Pa. C.S. § 5524, while claim petitions under the Act must be filed within three
years after the injury, Section 315 of the Act, 77 P.S. § 602. Claimant filed his
claim petition against Employer on April 15, 2009, and received a letter from the
Bureau alerting Claimant to the fact that its research indicated that Employer
lacked insurance on April 28, 2009. (Fund Decision, FOF ¶¶ 1, 2.) Claimant had
only 13 days after receiving the letter from the Bureau to file a civil action before
the applicable statute of limitations had run; he filed a praecipe to issue a writ of
summons the day the statute of limitations on a tort action had run. (Civil Docket,
R.R. at 14a-15a.) Claimant then waited almost 11 months to file his complaint in
the trial court. (Civil Docket, R.R. at 18a.) Claimant could not hold off on filing
his complaint indefinitely at the risk of forfeiting his claim. See Lamp v. Heyman,
366 A.2d 882, 889 (Pa. 1976) (holding that “a writ of summons shall remain

established a plan to provide compensation for residents injured in a motor vehicle-related
accident who have no available source for insurance, the Pennsylvania Financial Responsibility
Assigned Claims Plan (Plan) under the Motor Vehicle Financial Responsibility Law, 75 Pa. C.S.
§§ 1751-57. Under the Plan, a resident of the Commonwealth injured in a motor vehicle-related
accident may receive benefits when, “through no fault of their [sic] own, [the injured person has]
no other available source of insurance coverage.” Pennsylvania Financial Responsibility
Assigned Claims Plan v. English, 664 A.2d 84, 86 (Pa. 1995). However, under the Plan, a civil
suit must be filed to preserve any claims prior to receiving compensation. The Plan is solely
financed through subrogation and “claimants seeking recovery from the [Plan] forfeit their right
to recover from the [Plan] where the claimants extinguish the insurer’s right to subrogation
against a tortfeaser.” Melendez v. Pennsylvania Assigned Claims Plan, 557 A.2d 767, 768 (Pa.
Super. 1989). A claim may be filed with the Plan “within four years from the date of the
accident,” 75 Pa. C.S. § 1757(a), but a civil action must be filed within two years. Section 5524
of the Judicial Code, 42 Pa. C.S. § 5524. Given that no clarifying case law was yet issued from
this Court at the time Claimant filed his civil action, Claimant likened his responsibilities under
the Act to the requirements of the Motor Vehicle Financial Responsibility Law and took steps to
preserve the Fund’s right to subrogation out of fear that he would otherwise lose his claim under
the Act.

13
effective to commence an action only if the plaintiff then refrains from a course of
conduct which serves to stall in its tracks the legal machinery he has just set in
motion”). Employer did not file an answer to the complaint or appear before the
arbitrator, leading the arbitrator to award Claimant a default judgment of $50,000.
(Civil Docket, R.R. at 19a.) Claimant did not accept the judgment, appealed the
arbitrator’s award to the trial court, and later filed a motion to stay proceedings
pending resolution of the instant matter, which was granted. (Civil Docket, R.R. at
20a; Trial Ct. Order, October 20, 2010.10) According to Claimant, he did only
what was necessary to preserve his civil action under the local rules until he could
determine whether he had a claim under the Act. The fact that Claimant
commenced the action with a praecipe for a writ of summons, delayed filing his
complaint for 11 months, and requested that his tort action be stayed pending
resolution of his workers’ compensation claim shows that Claimant’s first choice
was not to recover tort damages. Claimant has yet to recover from his civil action
and has taken no steps to bring the action to final disposition.

We are mindful that, because the Act “was intended to benefit the injured
employee,” we must construe its provisions “liberally in the employee’s favor in
order to effectuate [the Act’s] humanitarian objectives.” Cruz v. Workers’
Compensation Appeal Board (Kennett Square Specialties), 99 A.3d 398, 406 (Pa.
2014). Accordingly, “borderline interpretations will be decided in favor of the

10
The trial court orders were not included in the certified record. However, “[i]t is well
settled that this Court may take judicial notice of pleadings and judgments in other proceedings
where appropriate.” Lycoming County v. Pennsylvania Labor Relations Board, 943 A.2d 333,
335 n.8 (Pa. Cmwlth. 2007).

14
claimant.” Id. In light of the humanitarian purposes of the Act, we do not find that
Claimant’s actions here bar his workers’ compensation claim against the Fund.
Accordingly, we conclude that Claimant may maintain his workers’ compensation
claim against the Fund.

B. Whether Claimant’s Claim Petition is completely or partially
barred by Section 1603 of the Act
We next turn to the issue of whether Claimant gave timely notice to the
Fund of his claim and, if not, whether the lack of timely notice acts as a complete
bar or only a partial bar to his claim against the Fund. The WCJ found that
Claimant did not give timely notice to the Fund. The Board agreed, but found that
the lack of timely notice would not have been a complete bar to his recovery. The
applicable provision of the Act, Section 1603(b), provides that:

An injured worker shall notify the fund within 45 days after the
worker knew that the employer was uninsured. The department shall
have adequate time to monitor the claim and shall determine the
obligations of the employer. No compensation shall be paid from the
fund until notice is given and the department determines that the
employer failed to voluntarily accept and pay the claim or
subsequently defaulted on payments of compensation. No
compensation shall be due until notice is given.
77 P.S. § 2703(b).

Claimant argues that the WCJ erroneously found that he did not give timely
notice to the Fund. Contrary to the WCJ’s factual finding, Claimant asserts that
the April 28, 2009 letter sent by the Bureau to Claimant’s counsel did not put
Claimant on notice that Employer was uninsured. Claimant contends that the WCJ
disregarded conflicting evidence that clearly shows that he could not be reasonably

15
charged with actual knowledge that Employer was neither insured nor self-insured
until at least the time he submitted his Notice of Claim to the Fund. Claimant
argues further that the Board correctly rejected the WCJ’s legal conclusion that a
claim petition is completely barred if a claimant does not provide notice to the
Fund within 45 days of learning that an employer is uninsured. Claimant asserts,
however, that the Board misinterpreted Section 1603 when it held that Section
1603 permits a partial bar to compensation absent a showing of prejudice to the
Fund. Claimant argues that his benefits should not be delayed because the Fund
was not prejudiced by his filing the Notice of Claim beyond 45 days.11

In response, the Fund contends that Claimant’s knowledge of Employer’s
lack of insurance is well established in the record. Further, the Fund argues that
the WCJ was correct when she concluded that Claimant’s Claim Petition against
the Fund was completely barred because Claimant did not follow the statutory
mandate requiring Claimant to file notice with the Fund within 45 days of learning
that Employer lacked insurance. According to the Fund, the Board’s holding to the
contrary neglects the plain and mandatory language of Section 1603.

We first address Claimant’s contention that the Board erred by concluding
that Claimant did not provide the Fund with timely notice of his claim because the

11
Claimant also argues that the WCJ erred by barring his Claim Petition against the Fund
because he did not wait 21 days between giving the Fund notice of his claim and filing his Claim
Petition as required by Section 1603(d) of the Act, 77 P.S. § 2703(d). As stated previously, the
Board rejected the WCJ’s conclusion because the plain language of Section 1603 does not
support such a bar. (Board Decision at 4.) Because the Fund does not contest this issue, we will
not consider it here.

16
Board’s finding that the Bureau’s April 28, 2009 letter provided Claimant with
knowledge that Employer was uninsured was not supported by the evidence.

We recently addressed the issue of whether a communication from the
Bureau provided a claimant with knowledge that his employer was uninsured in
Pennsylvania Uninsured Employers Guaranty Fund v. Workers’ Compensation
Appeal Board (Lyle), 91 A.3d 297 (Pa. Cmwlth. 2014). There, the claimant
suffered a work injury in July 2008. Id. at 298. After failing to recover from his
employer’s automobile liability insurer, the claimant filed a claim petition against
employer. The Bureau informed the claimant by letter on October 3, 2008 that his
employer “may not have workers’ compensation insurance.” Id. Claimant then
filed a claim petition against the Fund on October 28, 2008. Id. at 298-99. The
WCJ and the Board held that the claimant had knowledge of his employer’s lack of
insurance when he attempted to recover from his employer’s automobile insurance
carrier. On appeal, we reversed and held that the WCJ applied the incorrect legal
standard of when the claimant “should have known,” instead of when the claimant
obtained actual knowledge of his employer’s insurance status. Id. at 303. We
concluded that the Bureau’s letter afforded the requisite knowledge even though it
“did not expressly state that Employer did not have valid workers’ compensation
insurance.” Id. at 304.

“[W]hether a claimant ‘knew’ [that his employer was uninsured] is a factual
determination.” Id. Here, the WCJ determined that Claimant was made aware that
Employer was uninsured upon receipt of the April 28, 2009 letter from the Bureau
and that the Notice of Claim, filed more than eight months later in January 2010,

17
was untimely because it was not filed within 45 days. (Fund Decision, FOF ¶¶ 2-
3.) A review of the April 28, 2009 letter from the Bureau shows that the content
therein provided Claimant with actual knowledge that Employer lacked workers’
compensation insurance.12 The April 28, 2009 letter from the Bureau informing
Claimant that Employer “did not have workers’ compensation insurance on the
date of the alleged injury,” (Bureau’s Letter to Claimant (April 28, 2009), R.R. at
5a), is more definitive than the equivocal letter in Lyle, which we found to be
sufficient to commence the 45-day notice period. Thus, we conclude that
substantial evidence supports the WCJ’s finding that Claimant was on notice as of
April 28, 2009 that Employer was uninsured on the date of his alleged work injury;
thus, the Notice of Claim filed with the Fund in January 2010 exceeded the 45-day
requirement of Section 1603(b) of the Act.

12
The Bureau’s letter states, in its entirety:

The Bureau has received a Claim Petition (LIBC-362) for the above-named
individual. Our research indicates that the employer did not have workers’
compensation insurance on the date of the alleged injury. Therefore, the claimant
may also wish to seek benefits from the Uninsured Employer Guaranty Fund
(Fund).

To seek benefits from the Fund, a claimant must complete and file a Notice of
Claim Against Uninsured Employer, Form LIBC-551. The claimant may seek an
award of benefits against the Fund by filing a Claim Petition for Benefits from the
Uninsured Employer Guaranty Fund and Uninsured Employer, Form LIBC- 550.

For your convenience, copies of Forms LIBC 550 and 551 are enclosed. If you
have any questions about these forms, please contact the Helpline at the above
number.

(Bureau’s Letter to Claimant (April 28, 2009), R.R. at 5a.)

18
 We must next determine the effect of Claimant’s late filing. The WCJ held
that Claimant’s Claim Petition against the Fund was completely barred by the late
filing. The Board disagreed and concluded:

[T]he WCJ erred in finding that Claimant’s Claim Petition against [the
Fund] was barred by Section 1603 where he did not provide [the
Fund] with timely notice of his claim. . . . Section 1603 provides that
no compensation shall be paid or is due until notice is given. Further,
after receiving notice, [the Fund] is to process the claim in accordance
with the provisions of the Act. Thus, pursuant to the plain language
of Section 1603, the failure of a claimant to provide timely notice
does not act as a complete bar to compensation, but instead bars the
claimant from receiving compensation until such time as he has
provided [the Fund] with notice.

(Board Decision at 4.)

At issue here is the construction of the phrase: “[a]n injured worker shall
notify the fund within 45 days after the worker knew that the employer was
uninsured” when it is followed by “[n]o compensation shall be paid from the fund
until notice is given,” and that “[n]o compensation shall be due until notice is
given.” 77 P.S. § 2703(b).13 Importantly, the statute does not provide that

13
The Bureau adopted a policy statement on January 20, 2007 “so that all parties [would]
have a clear understanding of their rights and obligations under the act” until the Board
promulgated regulations governing the Fund. 34 Pa. Code § 123.801. With respect to notice, the
Bureau’s policy states:

(a) For purposes of Article XVI of the act (77 P. S. §§ -- ), an injured worker who
seeks benefits from the Uninsured Employer Guaranty Fund (Fund) shall
notify the Fund of a claim within 45 days from the date upon which the
injured worker knew that the employer was uninsured.

(b) Compensation will not be paid from the Fund until notice is given.

34 Pa. Code § 123.802. We note that the Board has yet to promulgate regulations.

19
compensation will not be paid “unless notice is given.” Instead, Section 1603(b)
states that compensation will not be paid “until notice is given.” 77 P.S. § 2703(b)
(emphasis added).

The Board noted in its opinion that Section 1603(b) stands in contrast to
other portions of the Act where the General Assembly enacted a complete bar to
benefits by delineating between provisions providing that no compensation “shall
be due until” notice is given and provisions stating that no compensation “shall be
allowed unless” notice is given. (Board Decision at 4 n.2.) The Board pointed to
Section 311 of the Act, which provides:

Unless the employer shall have knowledge of the occurrence of the
injury, or unless the employe or someone in his behalf, or some of the
dependents or someone in their behalf, shall give notice thereof to the
employer within twenty-one days after the injury, no compensation
shall be due until such notice be given, and, unless such notice be
given within one hundred and twenty days after the occurrence of
the injury, no compensation shall be allowed.

77 P.S. § 631 (emphasis added). We have interpreted Section 311 as establishing a
scheme where compensation is payable from the date of the disability if the
claimant gives notice “within 21 days of the date he knew or should have known of
the injury and its relationship to its employment.” Martincic v. Workmen’s
Compensation Appeal Board (Greater Pittsburgh International Airport), 529 A.2d
600, 602 (Pa. Cmwlth. 1987). “If, however, the claimant gives notice after the 21
days has elapsed but within 120 days of the date he knew or should have known of
his injury, compensation is then payable from the date that notice was given.” Id.
According to the Board in the case sub judice, “if the legislature wanted to
completely bar a claimant from receiving compensation for his failure to provide
20
[the Fund] with timely notice of his claim . . . it certainly could have done so by
adding language” similar to Section 311 to Section 1603. (Board Decision at 4
n.2.)

We agree with the Board. The plain text of Section 1603(b) does not
specifically bar a claimant who does not meet the 45-day notice requirement from
ever receiving compensation from the Fund. Like the mandatory language of
Section 311, which requires notice within 21 days, the intent of Section 1603(b) is
to apprise the Fund “of the claim and to give the opportunity for a thorough
investigation while the events are recent.” Township of Upper Darby v.
Workmen’s Compensation Appeal Board, 417 A.2d 1319, 1321 (Pa. 1980).
Unless the Fund is given the opportunity to investigate the claim while the events
are recent, it will not be responsible for paying compensation incurred prior to
notice being received by the Fund. Section 1603(b) does not serve as a bar to all
compensation; instead, it strongly compels a claimant to quickly provide the Fund
with notice by imposing a consequence for the delay. Accordingly, we hold that
not providing the Fund with notice within 45 days of discovering that an employer
is uninsured does not act as a complete bar to compensation, but like Section 311
of the Act, delays the provision of compensation to the date notice is given.

Claimant argues further that by interpreting Section 1603(b) in a manner that
bars recovery for any lost wages or medical expense incurred prior to submission
of an untimely claim, the above interpretation does not comport with the plain
meaning of the statute. According to Claimant, such a reading would bar recovery
for lost wages or medical expenses for any claim, whether timely or not. We

21
disagree. Our interpretation allows for compensation for past medical treatment or
lost wages so long as a claimant notifies the Fund of the claim within 45 days.
However, those that do not meet the statutory deadline are only entitled to
compensation for medical treatment or lost wages incurred from the date notice
was provided.

Finally, Claimant contends that by interpreting Section 1603(b) in a manner
that causes a delay in benefits would only be warranted upon a showing that the
Fund was substantially prejudiced. Claimant analogizes the Fund’s obligation to
automobile liability insurers’ obligations under the “notice-prejudice rule.” Under
this rule, “unless the insurer establishes prejudice resulting from the insured’s
failure to give notice as required under the policy, the insurer cannot avoid its
contractual obligation.” Ario v. Underwriting Members of Lloyd’s of London
Syndicates, 996 A.2d 588, 598 (Pa. Cmwlth. 2010) (citing Brakeman v. Potomac
Insurance Company, 371 A.2d 193, 198 (Pa. 1977)).

We decline to extend the “notice-prejudice rule,” which has not been applied
in the workers’ compensation area, to actions involving the Fund. The cases in
which this rule has been applied all involve situations where an insured is required
under a contract to provide the insurer with notice “promptly,” “as soon as
practicable” or “within a reasonable time.” See, e.g., Brakeman, 371 A.2d at 195
(requiring notice “as soon as practicable”); Ario, 996 A.2d at 598 (same);
American States Insurance Company v. Estate of Braheem, 918 A.2d 750, 756 (Pa.
Super. 2007) (requiring “prompt written notice”). In contrast to a vague deadline
set in a contract between parties who freely entered into an agreement, Section

22
1603(b) is a statutory requirement that sets a clear 45-day notice requirement.
Nowhere in Section 1603(b) does the General Assembly limit its application to
instances where the Fund shows it was substantially prejudiced.

IV. Conclusion
In conclusion we reverse in part, and affirm in part, the Board’s Order. The
Board erred when it held that Claimant’s Claim Petition against the Fund was
barred by Section 305(d) of the Act as a result of Claimant preserving his civil
remedy by filing a “savings action” at law against an uninsured employer.
However, the Board correctly concluded that Claimant did not entirely forfeit his
Claim Petition against the Fund by not complying with the 45-day notice
requirement set forth in Section 1603 of the Act. We, therefore, reverse that
portion of the Board’s Order affirming the WCJ’s Decision dismissing Claimant’s
Claim Petition against the Fund and remand this matter to the Board for further
proceedings consistent with this opinion. The Board’s Order is affirmed in all
other respects.

RENÉE COHN JUBELIRER, Judge

23
 IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Jose Osorio Lozado, :
:
Petitioner :
:
v. : No. 21 C.D. 2014
:
Workers’ Compensation Appeal :
Board (Dependable Concrete Work :
and Uninsured Employers Guaranty :
Fund), :
:
Respondents :

ORDER

NOW, August 5, 2015, the Order of the Workers’ Compensation Appeal
Board (Board), entered in the above-captioned matter, is REVERSED insofar as it
relates to Jose Osorio Lozado’s Claim Petition against the Uninsured Employers
Guaranty Fund. This matter is REMANDED to the Board with directions for the
Board to REMAND to a Workers’ Compensation Judge to conduct further
proceedings consistent with the foregoing opinion. The Board’s Order is
AFFIRMED in all other respects.

Jurisdiction relinquished.

RENÉE COHN JUBELIRER, Judge