By Jeffrey D. Snyder, Esquire and Kevin L. Connors, Esquire
In Cozzone v. WCAB (Pennsylvania Municipal/East Goshen Township), the Pennsylvania Supreme Court held that the Claimant’s attempt to reinstate his workers’ compensation benefits, following a suspension of compensation benefits in 1999, was time-barred under Section 413(a) of the Act.
That means that the space pod doors are locked, making it tough to get back on board!
Section 413(a) sets forth:
• “…And provided further, that where compensation has been suspended because the employee’s earnings are equal to or in excess of his wages prior to the injury that payments under the agreement or award may be resumed at any time during the period for which compensation for partial disability is payable, unless it be shown that the loss in earnings does not result from the disability due to the injury.”
In Cozzone, the Supreme Court clarifies a conflict that had existed in decisional law, regarding whether periods of partial disability can be stacked, essentially negating periods of suspension, in order to calculate the expiration of the 500 weeks-limitations for reinstatement purposes, as set forth in Section 413(a).
From a pure statutory construction analysis, your favorite, no doubt, there is absolutely no reference in Section 413(a) of the Act under which periods of suspension can be stacked to extend the 500 week period of suspension, or for purposes of determining whether an injured worker can seek reinstatement of wage loss benefits.
It is critical, therefore, to distinguish a true statute of limitations from a statute of repose.
That distinction might well determine the availability of equitable relief after the period of limitation in question has been tolled.
Whenever a right is derived from common law, that time limitation for seeking a remedy is a true statute of limitations, and is not a statute of repose. This means that at the expiration of the time limit, the remedy is extinguished, but not the underlying right, which can be equitably revived (tolled) under limited circumstances.
Whenever a right is derived from statutory law, the time limitation for asserting that right, whether called a statute of limitation or not, is actually a statute of repose. When a statute of repose expires, it is not just the remedy that is extinguished, but the very underlying right itself, such that the underlying right is never again subject to revival, which used to be a pretty cool dance club in Philly.
The time limitations that are set forth in the Pennsylvania Workers’ Compensation Act are clearly statutory, and, therefore, those time limitations are all statutes of repose, meaning that exhaustion negates any right to seek revival thereof.
To understand the timeline that the Supreme Court was asked to review in Cozzone, the following occurred over the course of the claim:
• 1/24/89: the Claimant sustained a serious back injury in the course of his employment;
• 2/6/89: an NCP was issued;
• 9/20/89: the Claimant returns to his pre-injury job without further wage loss;
• 5/19/03 (thirteen years later): a Supplemental Agreement was executed, reinstating temporary total disability benefit for periods in 2003 and 2005;
• 6/7/07: temporary total disability benefits reinstated as of 6/20/07;
• 11/27/07: the Claimant began to work in a modified-duty position for a different employer;
• 1/7/08: a Supplemental Agreement was executed, reducing the Claimant’s workers’ compensation benefits from temporary total to temporary partial disability;
• 1/24/08: the Claimant stopped working for the new employer, claiming he was incapable of performing the modified-duty work;
• 9/26/08: the Claimant filed a Reinstatement Petition, seeking reinstatement of temporary total disability benefits as of 1/24/08;
• 1/25/09: the employer stopped making temporary partial disability benefit payments under the 1/7/08 Supplemental Agreement;
• 1/26/09: the Employer raised the issue of the Claimant’s continuing entitlement to wage loss benefits at a hearing before the WCJ; and,
• The Claimant filed a Penalty Petition, alleging a violation of the Act for an alleged unilateral cessation of wage loss payments.
Applying the above timeline, the WCJ granted the Claimant’s Reinstatement Petition, further awarding penalties.
The WCJ’s Decision was then appealed to the Workers’ Compensation Appeal Board, which reversed the WCJ’s Decision.
The Appeal Board’s reversal of the WCJ’s Decision was then affirmed by the Commonwealth Court.
The Commonwealth Court reasoned that the Supplemental Agreement entered into after the expiration of the statute of repose was void, unenforceable, and could not resurrect the claim.
Two issues were then presented to the Supreme Court on appeal:
1.) Whether the Commonwealth Court erred as a matter of law when it held that Claimant’s Petition to Reinstate was barred by § 413(a) of the Workers’ Compensation Act, 77 P.S. § 772, when the Claimant filed the Petition within three (3) years from the last date of payment of compensation paid pursuant to a Supplemental Agreement, payments were ongoing when Claimant filed the Petition to Reinstate, and East Goshen Township unilaterally ceased payments while the Petition was pending?
2.) Whether the Commonwealth Court committed an error of law when it held that East Goshen Township did not violate the Act and thereby denied Claimant’s Penalty Petition when the Township unilaterally ceased payment of compensation on January 25, 2009 after it had entered into a Supplemental Agreement providing for payment of partial disability at the rate of $318.52 effective November 28, 2007 and there was no Order of the WCJ or agreement of Claimant suspending payment?
Ruling that the Claimant’s Reinstatement Petition had been filed after the expiration of the statutory limitation (i.e., after the expiration of 500 weeks of partial or suspended disability), the Supreme Court agreed with the Commonwealth Court’s calculation that the 500 week period of time encompassed all periods of suspension, even without an executed Agreement, recognizing that the period of suspension arises by operation of law at the time of the return to work with no loss of wages.
The Claimant had argued that he should not have been time-barred from filing a Reinstatement Petition within three years of the most recent payment of compensation, arguing that he should have had three years from the date of last payment to timely file his Reinstatement Petition.
The Supreme Court did not agree, finding that the plain language of the statute allows a Claimant alleging a change in disability to file a Reinstatement Petition within three years after the date of the most recent payment of compensation.
However, when payments are suspended based upon a Claimant returning to work without loss in earnings, the right to file for a modification is extended beyond the three years that would be applicable for a Petition predicated upon a change in disability.
In Cozzone, the Supreme Court held that a Claimant who is no longer receiving workers’ compensation benefits, by virtue of the benefits having been suspended based upon a Claimant returning to work without further wage loss, that Section 413(a) “extends that right to Petition to the entire 500-week period during which compensation for partial disability is properly payable”.
Where a Claimant’s right to compensation has “expired”, the Supreme Court held that no payment, “whether by Agreement or misconstruction of the Act”, can operate to resurrect an expired claim, such that the payments that the Claimant received in Cozzone, under the Supplemental Agreements executed subsequent to the expiration of the statutory right to compensation, did not resurrect his expired claim, requiring the denial of the Claimant’s Reinstatement Petition, and the penalty findings entered by the WCJ being overturned.
In short, 500 weeks means 500 weeks, and three years from the date of last payment means three years from the date of last payment of workers’ compensation benefits that are legally required to be made to a Claimant.
The concept of tolling a statute of limitation based on the principle of equitable estoppel, where the derived right is statutory, has been soundly rejected by the Pennsylvania Supreme Court’s reasoning and holding in Cozzone.
The Cozzone outcome has consequences not just to Claimants attempting to reinstate wage loss benefits, but also to employers and insurers who might have meritorious Joinder Petitions where tolling might be an issue against a prior employer or carrier otherwise asserting a statute of limitations bar, thus impacting both sides of the compensation seesaw.
The point simply being that we remain amazed as we boldly go where none have gone before on this compensation odyssey.
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