IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania, :
Department of Labor and Industry, :
Uninsured Employers Guaranty Fund, :
Petitioner :
:
v. : No. 1849 C.D. 2014
: Argued: March 9, 2016
Workers’ Compensation Appeal :
Board (Kendrick and Timberline :
Tree & Landscaping LLC), :
Respondents :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION
BY JUDGE COHN JUBELIRER FILED: May 9, 2016
The Uninsured Employers Guaranty Fund (Fund) petitions for review of an
Order of the Workers’ Compensation Appeal Board (Board) affirming and
amending an order of a Workers’ Compensation Judge (WCJ). The WCJ granted
Larry Kendrick’s (Claimant) Claim Petition against the Fund seeking total
disability (wage loss) and medical benefits as of the date of Claimant’s injury,
November 7, 2011. The Board affirmed the WCJ’s decision to grant medical
benefits as of the date of Claimant’s injury, but limited the Fund’s liability for
wage loss benefits to payments due after February 8, 2012, the date the Fund
received notice of Claimant’s injury. On appeal, the Fund contends that the Board
erred in requiring it to pay Claimant’s medical benefits prior to the date it received
notice of the claim. For the reasons that follow, we reverse in part and affirm in
part.
The parties jointly stipulated to the facts in this case.1 Claimant was injured
in the course and scope of his employment with Timberline Tree & Landscaping,
LLC (Employer) on November 7, 2011. Claimant filed a Claim Petition against
Employer on or about November 16, 2011, which was not accepted by Employer.
It was determined by Claimant at a December 21, 2011 hearing that Employer was
not insured for workers’ compensation purposes in Pennsylvania.
Claimant filed a Notice of Claim against the Fund on February 8, 2012, that
served to notify the Fund of his injury and that Employer was uninsured. Claimant
then filed a Claim Petition against the Fund on March 6, 2012. “As it appear[ed]
that [E]mployer ha[d] no intention of voluntarily paying the claim, the [Fund]
agree[d] to pay the claim set forth [in the Claim Petition].” (Stipulation ¶ 8, R.R.
at 156a.) The parties stipulated that “Claimant sustained a compensable work-
related injury on [November 7, 2011], for which the Claimant is entitled to receive
workers’ compensation benefits from the secondarily liable [Fund] due to the
primary liable Employer’s failure to accept or pay the claim.” (Stipulation ¶ 12,
R.R. at 157a.) The description of Claimant’s injury was stipulated to “as an orbital
fracture, which has healed, as well as a traumatic brain injury with ongoing post-
concussion symptomatology.” (Stipulation ¶ 18, R.R. at 158a.)
1
The parties’ joint Stipulation is found at pages 155a-59a of the Reproduced Record.
2
The parties could not reach an agreement as to when Claimant’s benefits
were to commence. The Fund maintained that Claimant is not entitled to
compensation until notice was provided to the Fund on February 8, 2012.
(Stipulation ¶ 12, R.R. at 157a.) Claimant asserted that he is entitled to benefits
retroactively to the date of the injury, November 7, 2011. (Stipulations ¶ 12, R.R.
at 157a.) As agreed to by the parties, this issue was presented to the WCJ.
At issue is Section 1603(b) of the Workers’ Compensation Act,2 which
provides:
Time.--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) (emphasis added). In his interpretation of Section 1603(b), the
WCJ stated that he could “fathom no reason why the [General Assembly] could
have intended in creating [the statute] to prohibit an injured worker from collecting
both wage loss benefits and payment of medical expenses prior to the date when
[n]otice was given.” (WCJ Decision, Findings of Fact (FOF) ¶ 9.) The WCJ,
finding no controlling precedent foreclosing the retroactive payment of benefits by
the Fund when notice was given outside the statutory 45-day period, concluded, in
light of the humanitarian purposes of the Act, that Claimant is entitled to both
2
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 2703(b), added by Section 7 of the
Act of November 9, 2006, P.L. 1362.
3
wage loss and medical benefits as of the date of the injury. (WCJ Decision, FOF ¶
9; Conclusions of Law ¶ 2.)
The Fund appealed to the Board. Upon review, the Board concluded that
because Claimant did not notify the Fund until 48 days after learning that
Employer was uninsured, the Fund did not owe Claimant wage loss benefits
incurred prior to the date notice was given. (Board op. at 4.) However, the Board
affirmed the WCJ insofar as the WCJ held that medical benefits were due as of the
date of the injury. Id. According to the Board:
Where a claimant fails to abide by the notice provisions of the Act[,]
compensation becomes payable as of the date of notice. Therefore,
the WCJ erred in awarding [wage loss] benefits as of Claimant’s date
of injury. Consequently we must amend the WCJ’s Decision and
Order to award Claimant [wage loss] benefits as of February 8, 2012.
...
Whether the term “compensation” includes medical benefits as well as
[wage loss] benefits is determined on a section-by-section basis.
Where the Act penalizes a claimant by limiting compensation for
failure [to] take an action prescribed by the Act, compensation has
been defined as only encompassing wage loss or indemnity benefits. .
. . Claimant’s failure to give prompt notice affects when his [wage
loss benefits] begin[], not [the Fund’s] responsibility to pay
Claimant’s medical benefits. . . . Therefore, the WCJ did not err in
ordering [the Fund] to pay Claimant’s medical benefits as of the date
of injury, November 7, 2011.
(Board op. at 4-5 (internal citations omitted).) The Fund now petitions this Court
for review.
While the Petition for Review was pending, on August 5, 2015, this Court
issued its opinion in Lozado v. Workers’ Compensation Appeal Board
4
(Dependable Concrete Work & Uninsured Employers Guaranty Fund), 123 A.3d
365 (Pa. Cmwlth. 2015) (en banc) which interpreted Section 1603(b) of the Act.
In light of the potential impact of Lozado upon this case, this Court issued an order
on January 19, 2016 directing the parties to file memoranda of law addressing
specific questions potentially implicated by Lozado.3
In its memorandum of law, the Fund argues that Lozado is controlling
precedent determining the consequences of Claimant’s failure to file timely notice
of a claim to the Fund. The Fund contends that Lozado stands for the proposition
that claimants that do not meet the 45-day statutory deadline to provide notice of a
claim to the Fund are prohibited from receiving both medical and disability
benefits incurred prior to notice being provided. The Fund argues that Lozado is
consistent with the plain language of the Act, where the term “compensation”
under Article XVI of the Act is defined in Section 1601 of the Act, 77 P.S. § 2701,
as including both disability and medical benefits.
Claimant argues in his memorandum of law that the Act allows for liberal
payment of medical expenses. Claimant, like the Board, cites to our Supreme
Court’s decision in Giant Eagle, Inc. v. Workers’ Compensation Appeal Board
(Givner), 39 A.3d 287, 291 (Pa. 2012), in which the Supreme Court interpreted the
term “compensation” as used in a different section of the Act by differentiating
between the provision of medical benefits and wage loss benefits. Claimant
contends that the majority of medical expenses in workers’ compensation cases are
3
The Board filed an Application for Remand on February 10, 2016 seeking to have the
case remanded so that it may consider the facts in the case in light of Lozado. In the
Application, the Board stated that “if the Board would have had the benefit of Lozado in this
case, it may have resulted in a decision different from that issued in the September 19, 2014
Opinion and Order.” The Board’s application was denied by a per curiam order of this Court on
February 19, 2016.
5
typically incurred when a claimant is initially treated following an injury and that
the Fund’s interpretation of the Act would preclude payment of the majority of
medical expenses, penalizing medical providers who are not responsible for the
employer’s lack of insurance. Claimant argues that, because the purpose of Article
XVI of the Act is both to provide benefits to injured employees of uninsured
employers and to provide payment to medical providers who care for injured
workers, the term “compensation” as used in Section 1603(b) must be construed as
excluding medical benefits.
In Lozado, a claimant who was injured while working for an uninsured
employer filed notice of a claim to the Fund eight months after he knew his
employer was uninsured. The central issue in that case was whether failure to
provide timely notice pursuant to Section 1603(b) of the Act acted as a complete
bar to compensation, or whether compensation is simply delayed until notice is
provided. Lozado, 123 A.3d at 376. We examined Section 1603(b) of the Act and
noted:
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).
Importantly, the statute does not provide that 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).
Id. at 376-77. We interpreted this provision by considering Section 311 of the Act,
77 P.S. § 631, which contains similar language to Section 1603(b). Section 311 of
the Act provides, in relevant part, that “no compensation shall be due until such
6
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.
§ 631.4 This Court has construed Section 311 of the Act 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.’” Lozado, 123 A.3d at 377 (quoting Martincic
v. Workmen’s Compensation Appeal Board (Greater Pittsburgh International
Airport), 529 A.2d 600, 602 (Pa. Cmwlth. 1987)). However, under the Section 311
scheme, unless notice is provided within 120 days of the injury, compensation is
only payable from the date notice was given. Id. We held:
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. Unless the Fund is given the opportunity
4
Section 311 of the Act provides in its entirety:
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. However, in cases of
injury resulting from ionizing radiation or any other cause in which the nature of
the injury or its relationship to the employment is not known to the employe, the
time for giving notice shall not begin to run until the employe knows, or by the
exercise of reasonable diligence should know, of the existence of the injury and
its possible relationship to his employment. The term “injury” in this section
means, in cases of occupational disease, disability resulting from occupational
disease.
77 P.S. § 631.
7
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 . . . delays the provision of
compensation to the date notice is given.
Id. at 377-78 (internal quotation marks and citations omitted).
We stated in Lozado that “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.” Id. at 378 (emphasis added). We now specifically
consider whether the term “compensation” as used in Section 1603(b) includes
both wage loss and medical benefits.
How the term “compensation” is defined is dependent upon where in the Act
the term is used and how it is defined for purposes of the particular section. See,
e.g., Giant Eagle, 39 A.3d at 291. The provisions regarding the Fund are set forth
in its own article, Article XVI, and the definitions for the words “when used in this
article shall have the meanings given to them in [ ]section [1601] unless the
context clearly indicates otherwise.” Section 1601 of the Act, 77 P.S. § 2701.5
“Compensation” is specifically defined in Section 1601 as “[b]enefits paid
pursuant to sections 306 and 307” of the Act. 77 P.S. § 2701 (emphasis added).
Sections 306 and 307 of the Act provide for compensation for both wage loss
benefits, see Section 306(a) (wage loss benefits for total disability claimants, such
as Claimant), and medical benefits, see Section 306(f.1) (medical services and
other services rendered by health care providers). 77 P.S. §§ 511, 531. Nothing in
5
Added by Section 7 of the Act of November 9, 2006, P.L. 1362.
8
the article clearly indicates that the term “compensation” as found in Section 1603
of the Act should be defined more narrowly than the broad definition in Section
1601 of the Act.
In Giant Eagle, the Supreme Court interpreted the term “compensation” in
Section 314(a) of the Act, 77 P.S. § 651(a),6 and, in the absence of a specific
definition, employed the rules of statutory construction and considered how the
term is used in other provisions of the same article of the Act, Article III. As used
in section 314(a), the Supreme Court concluded that the term “compensation” does
not always need to include medical expenses. Giant Eagle, 39 A.3d at 290.
However, the Court noted that the meaning of “‘compensation’ as used in the Act
must be decided on a section-by-section basis.” Id. at 291. Unlike Article XVI of
the Act, which addresses only the Fund and includes a definition of the term
“compensation”, Article III of the Act does not include a definition.
Our interpretation of the term “compensation” in Section 1603(b) as
including both medical and wage loss benefits is based on the plain language of
6
Section 314(a) of the Act provides, in relevant part:
At any time after an injury the employe, if so requested by his employer, must
submit himself at some reasonable time and place for a physical examination or
expert interview by an appropriate health care provider or other expert, who shall
be selected and paid for by the employer. . . . The refusal or neglect, without
reasonable cause or excuse, of the employe to submit to such examination or
expert interview ordered by the workers’ compensation judge, either before or
after an agreement or award, shall deprive him of the right to compensation,
under this article, during the continuance of such refusal or neglect, and the period
of such neglect or refusal shall be deducted from the period during which
compensation would otherwise be payable.
77 P.S. § 651(a) (emphasis added).
9
Section 1601 and this Court cannot disregard the plain language of the Act “under
the pretext of pursuing its spirit.” 1 Pa. C.S. § 1921(b). Moreover, this
interpretation is not in conflict with the humanitarian purposes of the Act.
Employees injured while working for uninsured employers do not assume the costs
of medical treatment provided to them prior to notice being given to the Fund.
Medical providers are prohibited from requiring injured employees to pay for
work-related treatment by Section 306(f.1)(7) of the Act, 77 P.S. § 531(7) (“A
provider shall not hold an employe liable for costs related to care or service
rendered in connection with a compensable injury under this act”). Medical
providers, however, maintain their right to pursue a remedy outside the workers’
compensation system against uninsured employers to cover the expenses incurred
in the treatment of injured employees.
Accordingly, we interpret the term “compensation” in Section 1603(b) of
the Act as including both wage loss benefits and medical benefits, and in
accordance with Lozado, because the Claimant did not give notice to the Fund
within 45 days after he knew the employer was uninsured, he will receive
compensation for wage loss and medical benefits for any expenses incurred after
notice was given to the Fund on February 8, 2012. The Order of the Board is
reversed insofar as it requires the Fund to pay for medical expenses incurred prior
to February 8, 2012. The Board’s Order is affirmed in all other respects.
________________________________
RENÉE COHN JUBELIRER, Judge
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania, :
Department of Labor and Industry, :
Uninsured Employers Guaranty Fund, :
Petitioner :
:
v. : No. 1849 C.D. 2014
:
Workers’ Compensation Appeal :
Board (Kendrick and Timberline :
Tree & Landscaping LLC), :
Respondents :
ORDER
NOW, May 9, 2016, the Order of the Workers’ Compensation Appeal Board
(Board) entered in the above-captioned matter, is REVERSED insofar as it orders
the Uninsured Employers Guaranty Fund (Fund) to pay medical benefits incurred
for the treatment of Larry Kendrick’s compensable injuries prior to February 8,
2012. The Board’s Order is AFFIRMED in all other respects.
___________________________
RENÉE COHN JUBELIRER, Judge