By:  Lisa A. Miller, Esquire

The Commonwealth Court reversed the part of the Board’s Order denying the Suspension Petition, affirmed the Board’s Order affirming the grant of the Penalty Petition and assessment of penalties, and remanded for further fact finding related to the Claimant’s rate of pay for the light-duty position that Employer offered, and the duration of that position.

The Claimant, a drywall installer, sustained a disabling work-related injury to his right wrist on October 11, 2001, which Employer accepted pursuant to a Notice of Compensation Payable.  Claimant was subsequently released to light-duty work, and Employer offered a light-duty position in April 2003.

Employer filed a Suspension Petition asserting that, despite Employer’s offer of light duty work, Claimant did not return to work.  Claimant denied that he had been offered light-duty work within his medical restrictions.  After receiving a more complete description of the light-duty position, Employer offered an indication that the position remained open and available.  Claimant then began working the light duty position.

The position, which was approved by Claimant’s physician, consisted of, among other things, inventorying Employer’s drywall supplies at his warehouse, which was located approximately one and a half hours away from Claimant’s home.  In his prior position, Claimant had to travel approximately the same distance to install drywall.  However, after his work injury occurred, the Claimant’s vehicle was repossessed, and Claimant did not have the funds available to retrieve the vehicle from the lien holder.  (The Board concluded in its 2006 opinion that although Claimant implied that his transportation problems were related to a delay in the receipt of Claimant’s benefit check, the facts of record do not support such a conclusion where the “car was repossessed approximately one week after his injury” suggesting that the reasons for the repossession of Claimant’s car pre-dated Claimant’s injury and was not the result of a delay by Employer).

The Claimant borrowed his father’s vehicle and returned to work.  He had no difficulty performing the light duty position, but after two (2) or three (3) days, the Claimant’s father needed the vehicle back.  Without transportation, Claimant was unable to return to his light duty position at Employer’s warehouse.  Employer did not pay Claimant for his light duty work, and he subsequently obtained a position with a car dealer where his cousin worked, but he resigned because the cold weather bothered his right arm.

The WCJ held that Employer did not satisfy his burden of proof under Kachinski because Employer did not provide available work in Claimant’s area of residence.  The WCJ concluded that he was bound by the Court’s Decisions in DME Company v. WCAB (Peters), 639 A.2d (Pa. Cmwlth., 1994) and Titusville Hospital v. WCAB (Ward), 552 A.2d 365 (Pa. Cmwlth., 1989) to hold that, because Claimant did not have transportation to the jobsite at which the light duty work was located, that position was not available to Claimant.  As such, the WCJ denied the suspension petition.

Employer appealed and the Board reversed.  The Board indicated that DME Company and Titusville Hospital were distinguishable because they involved Claimants who did not have transportation to attend interviews for modified duty positions.  The Board concluded that pursuant to Campbell v. WCAB (Foamex), 707 A.2d 1188 (Pa. Cmwlth. 1998) in which this Court reversed the reinstatement of Claimant’s benefits because the Claimant’s loss of earnings was not related to his work injury, but his loss of the vehicle in divorce proceedings, any loss of earnings Claimant experienced was the result of personal reasons and was unrelated to his work injury.  Accordingly, the Board reversed the WCJ’s determination, and granted the Suspension Petition as of April 16, 2003.

Claimant appealed arguing that Employer was aware of his transportation difficulties, and did not provide him with “available work” within his area of residence.  The Commonwealth Court agreed with the Board that Titusville Hospital and DME Company were distinguishable because Claimant actually reported to and performed the duties of a light duty position for two (2) or three (3) days.  The Commonwealth Court concluded that in reporting to and performing the duties of the light duty position, the position was available to the Claimant, and the WCJ erred in holding otherwise.  However, this Court has indicated that where the Claimant has “accepted and performed the light duty job, and then loses that work… ‘the focus of the inquiry is on the Claimant’s reason for losing the job, i.e., whether the loss of earnings was “no fault of his own.’”

Because the Judge did not make the necessary findings of fact related to why the Claimant suffered a loss of earnings, the Board remanded the matter to the Judge to make the findings of fact.  Further, the Commonwealth   Court remanded to the WCJ to make findings of fact regarding Claimant’s rate of pay for the light duty position, and the duration of the position, which are crucial to determine whether Claimant’s benefits should be reduced or suspended in their entirety or merely for a particular period of time.

On February 19, 2008, Claimant filed a Penalty Petition, alleging that Employer violated the Act by not paying Claimant’s benefits following the Commonwealth Court’s first Decision.

On remand, the WCJ permitted Claimant and Owner testify by deposition regarding the light duty position, and Claimant’s subsequent work history.

The WCJ concluded that because there had not been a formal suspension of benefits, Claimant’s disability was presumed to continue, and Employer had the obligation to show that Claimant lost  his job through bad faith in order to prevail on the suspension petition.  The WCJ determined that Claimant’s employment had ended through no fault of his own because “Claimant acted in good faith in attempting to perform the position offered to him, and although he had no transportation, he borrowed a vehicle for the few days he was able to do so and returned to work.”  The WCJ further noted that there was no basis for suspending or modifying Claimant’s benefits because Employer never paid Claimant for the two (2) or three (3) days of work Claimant performed; thus, there were no wages on which to base a suspension of Claimant’s benefits.  The WCJ concluded that Employer did not meet its burden of proof on its petition, and denied the suspension petition.

With regard to the penalty petition, the WCJ found that Employer did not violate the Act because this Court’s Remand Order required the WCJ to make additional findings of fact before the Decision was complete, and that only when there is a complete decision can either side be considered to have violated the Act.  Thus, the WCJ denied the penalty petition.

Both Employer and Claimant appealed the WCJ’s Decision to the Board.  The Board concluded that the WCJ did not err in denying the Suspension Petition because Claimant still suffered a wage loss despite his good faith efforts to work the light duty position.  The Board reversed the WCJ’s denial of the penalty petition, indicating that the WCJ erred in concluding that there could be no violation of the Act until the WCJ issued his remand decision.  The Board agreed with Claimant that once the Court vacated the Board’s 2006 Order suspending Claimant’s benefits, Employer was again obligated to pay Claimant’s benefits.  Therefore, the Board remanded the Penalty Petition to the WCJ for findings concerning the extent of the violation and imposition of penalties within the WCJ’s discretion.

The WCJ issued a third Decision on August 6, 2010 in which he found that when this Court vacated the Board’s 2006 Order suspending Claimant’s benefits, the Order became non-existent and the only operative Order was from the WCJ’s 2005 Decision which had denied Employer’s request to suspend or modify Claimant’s benefits.  According to the WCJ, despite Claimant’s request to be paid and Claimant’s filing of the Penalty Petition, Employer did not pay Claimant any benefits until February 25, 2009 approximately twenty (20) months after the Commonwealth Court’s Order.  Therefore, the WCJ found that Employer violated the Act and did not offer any reasonable explanation for its violation; consequently, the WCJ assessed a twenty (20%) percent penalty against Employer.

Employer appealed to the Board asserting that the WCJ erred in denying the suspension petition, granting the Penalty Petition, and abused his discretion by assessing a twenty (20%) percent penalty against Employer.  The Board affirmed the WCJ Decision concluding that Employer violated Section 428 of the Act when it did not resume making payments to Claimant within twenty (20) days of the date on which its obligation to pay arose and that absent the grant of Supersedeas, Employer had the burden to pay benefits throughout the litigation proceedings.  The Board concluded that the Employer’s obligation to pay arose when this Court vacated the Board’s 2006 Order and remanded the matter to the WCJ to determine whether the Claimant was entitled to a suspension of benefits.  Thus, Employer had an obligation to resume paying Claimant’s benefits as of the date of this Court’s Order and did not therefore, the WCJ did not err or abuse his discretion in granting the penalty petition and assessing a twenty (20%) percent penalty against Employer.

Employer argues that Claimant is not entitled to resumption of benefits because Claimant’s loss of earnings was of his own creation, and unrelated to his work injury.  Employer contends that this matter is factually and legally analogues to Beattie v. WCAB (Liberty Mutual Insurance Company), 713 A.2d 187 (Pa. Cmwlth. 1998), and Campbell in which this Court held that Claimant’s loss of earnings related to non-work injury factors would not support a reinstatement of benefits.  Employer asserts that the Board and Judge erred in relying on Virgo to hold that its obligation to show bad faith part before suspending Claimant’s benefits.

Claimant responds that Campbelland Beattie and the other cases that Employer sites are inapplicable because they involve Reinstatement Petitions in which the Claimant’s had the burden of proving their loss of earnings.

Claimant argues that the WCJ and Board properly relied on Virgo to deny Employer’s Suspension Petition because there was no formal suspension of benefits, the burden of proof lies with the Employer to establish that the Claimant’s loss of earnings was through no fault of his own, and was the result of bad faith.  According to the Claimant he acted in good faith, and he did not voluntarily stop working ,but was forced to do so when through no fault of his own because he lost transportation.  Claimant contends there was no error in concluding that his loss of earnings was through no fault of his own.

The Court noted that “once a Claimant has suitable alternative employment, any loss of earning power not related to the work-related injury does not justify reinstatement of total disability benefits” Campbell, 707 A.2d 1190.  Because Claimant’s loss of earning power was due to his lack of transportation and not to his work injury, the Court concluded that the reinstatement of benefits was not justified.

In Beattie, the Claimant sustained a work injury, returned to work without wage loss and his benefits were suspended by agreement.  The Claimant later quit the modified position due to stress and interpersonal problems with the alternative employer’s board members.  The Claimant sought reinstatement of his total disability benefits, which the WCJ granted.  The Board reversed and the Claimant appealed.  We affirmed the Board’s Decision explaining that “when a Claimant voluntarily terminates his job, the Claimant has the burden to prove that he left due to his disability” and “where the Claimant quits a job for reasons unrelated to the disability or work injury, benefits are not to be reinstated.” Beattie, 713 A.2d 188.  Accordingly, this Court concluded that because the Claimant did not prove that his loss of earnings were the result of his disability, the reinstatement of benefits was not warranted.

In Virgo, the Claimant who continued to work for Employer following her work injury in a light duty position, was discharged for unsatisfactory work performance.  Asserting that she had not fully recovered from her injuries, as evidenced by the light duty position, the Claimant sought reinstatement of her benefits.  The Employer filed a suspension petition averring that the Claimant’s benefits should be suspended because her wage loss was not due to a work injury, but due to a failure to perform all work duties in good faith as noted in numerous warnings and other discipline.  The WCJ denied the reinstatement and granted the Suspension Petition and the Board affirmed.

Noting that the appropriate burden of proof in reinstatement cases was “murky”, the Supreme Court attempted to clarify the standard by “holding that to find that a claimant failed to establish that the discharge was through no fault of his or her own, an employer must demonstrate ‘that suitable work was available, or would have been available but for circumstances which merit allocation of the consequences of the discharge to the Claimant, such as Claimant’s lack of good faith.’” Virgo, 890 A.2d 18.  However, pointing out that there had been no formal suspension of Claimant’s benefits in Virgo, we stated that the employer always had the burden of establishing “lack of good faith.”  Thus, the Court applied the standard for a suspension petition, requiring the employer to establish that there was work available within claimant’s restrictions or that her disability (loss of earnings) was related to non-work injury factors.  Concluding that thee Employer had established that the Claimant’s discharge and corresponding loss of earnings was due to her bad faith conduct, not the work related injury, the Supreme Court affirmed the suspension of benefits.

In reviewing a plethora of cases, the Court noted that if the separation was proven to be related to Claimant’s work injuries, then the Claimant’s continued to receive benefits or have their benefits reinstated.  However, if the reason for separation was not related to Claimant’s work injuries, either because the Claimant’s bad faith conduct or voluntarily quitting for reasons unrelated to their injuries, then the benefits would no be suspended or reinstated.

Here, the Claimant testified that he was capable of performing, and did perform the light duty position without difficulty. His work related injury did not prevent him from performing those duties, and he left the light duty position because he no longer had transportation available to him.  Claimant testified that it was the loss of his borrowed transportation that prevented him from returning to the light duty position.  The Court empathized with Claimant’s transportation difficulties, but it was those difficulties, and not his work related injury that led to Claimant’s loss of earning power.  The fact that Claimant worked two (2) or three (3) days in good faith did not alter the fact that Claimant left the light duty position for a reason other than his work related injury.  As the Supreme Court noted, “the Act was not intended as a remedy where Claimant’s loss of earnings is due to factors other than such injury” Hertz-Penske, 546 A.2d 261, 684 A.2d 549.  As such, the WCJ erred in denying the suspension petition based on the incorrect conclusion that employer had to establish that Claimant’s loss of earnings was a result of Claimant’s bad faith.

There is no question that Employer offered Claimant a light duty position for a particular wage, Claimant accepted that position, Claimant performed that position for two (2) or three (3) days, and Claimant left that position for a reason unrelated to the work injury.  Although the Court did not condone Employer’s failure to pay the Claimant the monies earned on those days, we conclude that this failure does not prevent Employer from seeking and obtaining an otherwise legally established suspension of Claimant’s benefits.

The Court then remanded the matter to the Board to remand to the WCJ to make specific findings of fact related to the Claimant’s rate of pay for the light duty position and the duration of that light duty position so that it can be determined “whether Claimant’s compensation benefits should be reduced or suspended” and for how long those benefits should be suspended.

The Court also affirmed the grant of the Penalty Petition, and the twenty (20%) percent penalty since the fact that the Employer prevailed, in part, on its Appeal does not alter its obligation to pay benefits during the pendency of the litigation.