IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Miguel Castaneda-Escobar, :

Petitioner :

:

v. :

:

Ralph Martin Construction :

(Workers’ Compensation Appeal :

Board), : No. 961 C.D. 2020

Respondent : Submitted: February 5, 2021

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY 

JUDGE COVEY FILED: March 25, 2021

Miguel Castaneda-Escobar (Claimant) petitions this Court for review 

of the Workers’ Compensation (WC) Appeal Board’s (Board) September 8, 2020 

order affirming the Workers’ Compensation Judge’s (WCJ) decision denying and 

dismissing Claimant’s Petition for Penalties (Penalty Petition). Claimant presents 

two issues for this Court’s review: (1) whether the Board erred by affirming the 

WCJ’s determination that Whitmoyer v. Workers’ Compensation Appeal Board 

(Mountain Country Meats), 186 A.3d 947 (Pa. 2018), cannot and should not be 

applied retroactively to obligate Ralph Martin Construction (Employer) to reimburse 

Claimant for the work-related medical expenses of $62,973.73 paid by Claimant 

following the settlement of Claimant’s second third-party personal injury case; and 

(2) whether the Board erred by affirming the WCJ’s determination that Employer 
2

did not violate the WC Act (Act)1 when Employer refused to reimburse Claimant for 

the work-related medical expenses. After review, we affirm.

Claimant sustained a work-related injury on May 12, 2010, during the 

course and scope of his employment with Employer. Following the work injury, 

Claimant resolved several third-party litigation cases. The first third-party case 

resolved for $1,000,000.00. Claimant executed a Third-Party Settlement Agreement

(TPSA), which was filed with the Bureau of WC (Bureau) on August 11, 2014. 

Claimant received a second settlement for $5,000,000.00. Following the second 

settlement, Claimant executed a second TPSA (TPSA II), which was filed with the 

Bureau on April 1, 2015. Claimant also received a third settlement in the amount of 

$1,775,000.00 in December 2015. No TPSA was executed following this third

settlement. 

The proceeds of the second settlement were sufficient to satisfy 

Employer’s WC lien pursuant to Section 319 of the Act.2 In TPSA II, the parties 

agreed, “[t]he balance of recovery in the amount of $3,512,390.83 shall be a credit 

against future weekly benefits and medical expenses as set forth in [TPSA II].” 

Reproduced Record at 12a. Following the execution of TPSA II, Employer began 

taking a credit against future weekly indemnity benefits and Claimant’s ongoing 

medical expenses in accordance with the parties’ agreement as memorialized in 

TPSA II. 

On June 19, 2018, the Pennsylvanian Supreme Court decided 

Whitmoyer, wherein the Court held that Section 319 of the Act did not contemplate 

a credit against future medical expenses for the balance of recovery. Specifically, 

the Whitmoyer Court noted that Section 319 of the Act addresses periodic payments 

and, as medical expenses are not always paid at a regular interval, the Court 

1 Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.

2 77 P.S. § 671.
3

concluded that Section 319 of the Act only applied to future indemnity benefits, not 

future medical expenses. Thereafter, Employer immediately stopped taking any 

reduction against Claimant’s ongoing medical expenses. Claimant sought a 

retroactive reimbursement of the amount of medical expenses previously offset 

under TPSA II. Employer did not reimburse Claimant for those medical expenses,

arguing that, prior to Whitmoyer, Employer was acting in accordance with the 

current state of the law, as well as the agreement between the parties as set forth in 

TPSA II. Employer also noted that the Whitmoyer Court did not specify that its 

decision applied retroactively.

When Employer did not reimburse the previously withheld medical 

expenses, Claimant filed the Penalty Petition, alleging that Employer violated the 

Act when it failed to make the retroactive reimbursement. The WCJ held hearings 

on November 6, 2018, and February 5, and April 16, 2019. On July 23, 2019, the 

WCJ denied and dismissed the Penalty Petition. Claimant appealed to the Board. 

On September 8, 2020, the Board affirmed the WCJ’s decision. Claimant appealed 

to this Court.3

Claimant first argues that the Board erred by affirming the WCJ’s 

determination that Whitmoyer cannot and should not be applied retroactively to 

obligate Employer to reimburse Claimant for the $62,973.73 in work-related medical 

expenses Claimant paid following the settlement of Claimant’s second third-party 

personal injury case. Claimant asserts that the Whitmoyer Court unequivocally held 

that the Act never authorized a credit to an employer for medical expenses as against 

a personal injury third-party recovery. Thus, Claimant contends that, if the Act never 

3

“On review[,] this Court must determine whether constitutional rights were violated, 

errors of law were committed, or necessary findings of fact were supported by substantial 

competent evidence.” Stepp v. Workers’ Comp. Appeal Bd. (FairPoint Commc’ns, Inc.), 99 A.3d 

598, 601 n.6 (Pa. Cmwlth. 2014).
4

authorized the credit, then the right to take a credit did not exist when Claimant and 

Employer signed TPSA II. Hence, Claimant maintains that Employer did not have 

the right to take a credit for Claimant’s second third-party recovery against the workrelated medical expenses. Accordingly, Claimant contends that Employer should 

reimburse Claimant for the credit Employer was not authorized by the Act to take. 

Employer rejoins that the Board’s decision should be affirmed because the credit 

Employer took against future medical expenses was consistent with existing law, 

was authorized by TPSA II, and Whitmoyer does not apply retroactively.

This Court addressed the retroactivity of Whitmoyer in Beaver Valley 

Slag, Inc. v. Marchionda (Workers’ Compensation Appeal Board), ___ A.3d ____ 

(Pa. Cmwlth. Nos. 867, 901 C.D. 2020, filed March 10, 2021). Therein, this Court 

held that, because “the status of the TPSA terms for future medical expense 

subrogation was not ‘pending on direct appeal’ at the time Whitmoyer was decided[,]

Dana Holding [v. Workers’ Compensation Appeal Board (Smuck)], 232 A.3d [629,]

647 (Pa. 2020),] . . . Dana Holding [] does not require, and this Court will not order, 

that Whitmoyer be applied retroactively to the date of the TPSA’s origination.” 

Beaver Valley, slip op. at 11. 

Similarly, here, because the status of TPSA II’sterms for future medical 

expense subrogation was not pending on direct appeal when Whitmoyer was decided, 

Dana Holding does not require that Whitmoyer be applied retroactively to the date 

of TPSA II’s origination. Accordingly, the Board properly affirmed the WCJ’s 

determination that Whitmoyer did not retroactively obligate Employer to reimburse 

Claimant for the work-related medical expenses paid by Claimant following the 

settlement of Claimant’s second third-party personal injury case.4

4 This Court does not however, endorse the WCJ’s conclusion that Whitmoyer established 

a new rule of law. Under the Dana Holding Court’s reasoning, because Section 319 of the Act 

was an existing statute which the Pennsylvania Supreme Court had not yet interpreted, and 

applying well-settled statutory interpretation principles was foreseeable, Whitmoyer did not 
5

Claimant next argues that the Board erred by affirming the WCJ’s 

determination that Employer did not violate the Act when Employer refused to 

reimburse Claimant for the work-related medical expenses. Employer rejoins that, 

inter alia, given the fact that Employer’s actions were consistent with how future 

medical expenses had been credited prior to Whitmoyer, there was and is no violation 

of the Act that would have supported the imposition of a penalty.

This Court has explained:

Section 435(d)(i) of the Act allows for a penalty of up to 

50[%] of the compensation due to be assessed if an 

employer violates the Act or its regulations. [See] 77 P.S. 

§ 991(d)(i).[5]In penalty petition proceedings, the 

claimant ‘bears the burden of proving a violation of the 

Act occurred’ and, if met, the burden ‘shifts to the 

employer to prove it did not violate the Act.’ Dixon v. 

Workers’ Comp. Appeal Bd. (Medrad, Inc.), 134 A.3d 518, 

525 (Pa. Cmwlth. 2016) (quoting Gumm v. Workers’

Comp. Appeal Bd. (Steel), 942 A.2d 222, 232 (Pa. 

Cmwlth. 2008)). ‘When a violation of the Act occurs, it is 

within the discretion of the WCJ to impose penalties.’

Jordan v. Workers’ Comp. Appeal Bd. (Phila. 

Newspapers, Inc.), 921 A.2d 27, 41 (Pa. Cmwlth. 2007). 

Kurpiewski v. Workers’ Comp. Appeal Bd. (Caretti, Inc.), 202 A.3d 870, 888 (Pa. 

Cmwlth. 2019).

Here, the Board opined:

Whitmoyer does not apply fully retroactively [sic] in this

current matter; therefore, [Employer] did not violate the 

Act by failing to reimburse Claimant. Additionally, 

[Employer] followed the state of the law prior to 

establish a new rule. Thus, this Court’s holding that Whitmoyer is not retroactive is not based on 

finding that Whitmoyer established a new rule of law, just as the Dana Holding Court’s ruling that 

Protz v. Workers’ Compensation Appeal Board (Derry Area School District), 161 A.3d 827 (Pa. 

2017), was not retroactive was not based on such a finding. See Chrzan v. Workers’ Comp. Appeal 

Bd. (Allied Corp.), 805 A.2d 42, 47 n.10 (Pa. Cmwlth. 2002) (“We may affirm the order of a lower 

tribunal on other grounds where such other grounds to affirm exist.”).

5 Added by Section 3 of the Act of February 8, 1972, P.L. 25.
6

Whitmoyer and took credits in compliance with the terms 

of [TPSA II], which was in effect at that time. Thus, 

[Employer] did not violate the Act prior to the issuance of 

Whitmoyer or after Whitmoyer was decided.[6] As 

Claimant failed to establish that [Employer] violated the 

Act, Claimant is not entitled to a penalty award.

Bd. Op. at 11. This Court discerns no error in the Board’s reasoning. 

Prior to Whitmoyer, this Court interpreted Section 319 of the Act as 

permitting employers to take a credit against medical expenses. See Zacour v. 

Workers’ Comp. Appeal Bd. (Mark Ann Indus.), 824 A.2d 336 (Pa. Cmwlth. 2003). 

“Here, Employer did not violate the Act by following this Court’s construction of 

the Act as set forth in [Zacour].” LifeQuest Nursing Ctr. v. Workers’ Comp. Appeal 

Bd. (Tisdale), 190 A.3d 811, 818 (Pa. Cmwlth. 2018). Accordingly, the Board 

properly affirmed the WCJ’s determination that Employer did not violate the Act 

when Employer did not reimburse Claimant for the $62,973.73 in work-related 

medical expenses. 

For all of the above reasons, the Board’s order is affirmed.

_________________________________

ANNE E. COVEY, Judge

6 Concerning whether Employer violated the Act after Whitmoyer was decided, 

“[f]ollowing the Whitmoyer [d]ecision, [Employer] immediately stopped taking any reduction 

against Claimant’s ongoing medical expenses.” WCJ Dec. at 3, Finding of Fact 11. Thus, the 

issue of whether and/or when Whitmoyer required Employer to stop taking reductions against 

Claimant’s ongoing medical expenses was not before the WCJ, the Board or this Court.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Miguel Castaneda-Escobar, :

Petitioner :

:

v. :

:

Ralph Martin Construction :

(Workers’ Compensation Appeal :

Board), : No. 961 C.D. 2020

Respondent :

O R D E R

AND NOW, this 25th day of March, 2021, the Workers’ Compensation 

Appeal Board’s September 8, 2020 order is affirmed.

_________________________________

ANNE E. COVEY, Judge