IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Shawn Hoss, :

Petitioner :

:

v. : No. 241 C.D. 2020

: Submitted: September 25, 2020

Workers’ Compensation Appeal :

Board (Select Staffing), :

Respondent :

BEFORE: HONORABLE P. KEVIN BROBSON, Judge1

HONORABLE ANNE E. COVEY, Judge

HONORABLE J. ANDREW CROMPTON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE BROBSON FILED: February 25, 2021

Shawn Hoss (Claimant) petitions for review of an order of the Workers’ 

Compensation Appeal Board (Board), dated February 12, 2020. The Board affirmed 

the order of a Workers’ Compensation Judge (WCJ), denying the review petition 

Claimant filed against Select Staffing (Employer).2 For the reasons set forth below, 

we affirm the Board’s order.

1 This case was assigned to the opinion writer before January 4, 2021, when Judge Brobson 

became President Judge.

2 Employer has identified itself using various names over the course of this litigation. For 

ease of reference and because the precise name is irrelevant to this appeal, we identify Employer 

simply as Select Staffing.
2

On March 26, 2009, while working for Employer, Claimant sustained an 

injury to his left leg when it was caught under a forklift. Employer issued a 

Notice of Temporary Compensation Payable (NTCP), describing the injury as a 

fracture and “crush” injury of Claimant’s lower left leg, and began paying 

temporary total disability benefits. (Reproduced Record (R.R.) at 16a.) The NTCP 

converted to a Notice of Compensation Payable (NCP) by operation of law. 

Thereafter, the parties executed a compromise and release agreement (C&R), which

WCJ James A. Stapleton (WCJ Stapleton) approved by decision and order dated 

October 4, 2011. The C&R provided for a payment by Employer to Claimant 

of $85,000 in satisfaction of Claimant’s wage indemnity benefits claim. The C&R 

further provided that “[a]ll sums paid previously and all sums paid pursuant to this 

[C&R]” were subject to Employer’s subrogation lien pursuant to Section 319 of the 

Workers’ Compensation Act (Act).

3

 (Id. at 23a.) 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, . . . 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 . . . . The employer shall pay that 

proportion of the attorney’s fees and other proper disbursements that 

the amount of compensation paid or payable at the time of recovery or 

settlement bears to the total recovery or settlement. Any recovery 

against such third person in excess of the compensation theretofore paid 

by the employer shall be paid forthwith to the employe, . . . and shall 

be treated as an advance payment by the employer on account of any 

future instalments of compensation.

3 Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671.
3

On December 1, 2014, the parties entered a third-party settlement agreement

(TPSA) using the Bureau of Workers’ Compensation’s LIBC-380 form. The TPSA

listed a third-party recovery of $187,500, expenses of recovery of $85,925.65,4and 

an accrued workers’ compensation lien amount of $472,688.47. (Id. at 29a.) Under 

the section titled “Further Matters Agreed Upon,” the TPSA provided that 

Employer’s insurer agreed to reimbursement of the workers’ compensation lien 

“at the discounted rate of $50[,]787.17, in exchange for a credit for future medical 

benefits of [Claimant] that may come due in the future in the amount of $50,787.17, 

the sum [Claimant] received from the third[-]party claim.” (Id.)

The next day, Claimant and Employer’s insurer, via its recovery agent,

executed a separate document titled “Settlement Agreement Workers [sic] 

Compensation Statutory Lien” (Agreement). The Agreement provided that 

Claimant received a total of $187,500 from various defendants in a third-party suit 

and that Employer’s statutory lien was $471,714.94 as of September 3, 2013.

(Id. at 30a.) The Agreement further provided that Employer’s insurer had agreed to 

accept one-third of the net settlement,5 which equaled $50,787.17, as satisfaction of 

the workers’ compensation lien. (Id. at 31a.) Additionally, the Agreement provided 

that Employer’s insurer agreed to Claimant’s direct receipt of one-third of the net 

settlement, “but [Claimant] further agreed that [Employer’s insurer] would receive 

a credit for any future medical expenses due and owing to [Claimant] for his 

workers’ compensation claim and/or his medical providers up to the amount 

4 This amount appears to include $50,787.17 for attorney’s fees and $35,138.48 attributable 

to other litigation expenses.

5

It appears that “net settlement” as used in the Agreement refers to the proceeds remaining 

after the $35,138.48 in litigation expenses were subtracted from the gross settlement amount 

of $187,500.00.
4

[Claimant] received from the net settlement.” (Id.) The remaining one-third of the 

net settlement amount was allocated to attorney’s fees.6(Id.)

Years after the execution of the TPSA and Agreement (collectively, 

“settlement agreements”), our Supreme Court decided Whitmoyer v. Workers’ 

Compensation Appeal Board (Mountain Country Meats), 186 A.3d 947 (Pa. 2018). 

In Whitmoyer, the Court was tasked with interpreting Section 319 of the Act and, 

specifically, whether the phrase “instalments of compensation” as used therein

encompassed both disability benefits and payment of medical expenses. 

See 77 P.S. § 671 (providing that any recovery against third party that is “in excess 

of the compensation theretofore paid by the employer shall be paid forthwith to the 

employe, . . . and shall be treated as an advance payment by the employer on account 

of any future instalments of compensation”).

Relevant to this appeal, the Supreme Court explained that Section 319 of the 

Act “addresses two distinct scenarios”:

First, the compensation paid by the employer to the date of the 

third-party recovery constitutes a claim against the recovery, payable 

immediately upon recovery to the employer. As to this scenario, the 

General Assembly chose to use the word “compensation” without 

modification by the term “instalments of.” That is, an employer’s 

subrogation right “at the time of recovery or settlement” encompasses 

all “compensation” “theretofore paid” or “payable” to date. 

This amount is understood to be the employer’s accrued subrogation 

lien or “total lien.”

The second scenario relates to the distribution of net settlement 

proceeds, namely what is left of the recovery after the employer has been 

reimbursed for “compensation theretofore paid.” Regarding this 

“excess” amount, section 319 provides that it shall be “paid forthwith” 

to the employee to be treated as an “advance payment by the 

6 Employer then took the agreed-upon credit, though evidence of the current credit balance 

was not offered in the proceedings before the WCJ in this matter. (WCJ’s Decision at 4.)
5

employer”—not as to “compensation” but rather “on account of future 

instalments of compensation.”

Whitmoyer, 186 A.3d at 954-55 (footnote, internal citations, and certain internal 

quotations omitted).

The Court then turned to its analysis of the phrase “instalments of 

compensation,” holding that it referred to the payment of disability benefits only,

and not medical expenses. See id. at 955-58. The Court thus concluded that,

“after satisfying the employer’s accrued subrogation lien, which encompasses 

‘compensation’ payments made by the employer toward both disability benefits and 

medical expenses prior to the third-party settlement, . . . the excess recovery [is] to 

be paid to the injured employee and to be treated as an advance payment only on 

account of any future disability benefits.” Id. at 957. Stated another way, an 

employer cannot take a credit for future medical expenses against that excess or 

“balance of recovery.” Id. at 958 (“[H]aving satisfied its accrued subrogation lien 

at the time of settlement, an employer is not permitted to seek reimbursement for 

future medical expenses from the employee’s balance of recovery.”).

Following Whitmoyer, and in light of that decision, Claimant filed a review 

petition seeking to eliminate Employer’s right to its credit for ongoing medical 

expenses payable for Claimant’s work injury. By decision and order dated 

February 26, 2019, WCJ Terry Knox (WCJ Knox) denied the petition. In doing so, 

WCJ Knox initially noted that Employer had the right under Section 319 of the Act 

to demand and receive not only the $50,787.17 it obtained pursuant to the settlement

agreements between the parties, but also the $50,787.18 Claimant received, 
6

as Employer’s subrogation lien was substantially more than what it collected.

7

 

(WCJ’s Decision at 5.)

The WCJ further concluded that Whitmoyer did not control this matter. 

Specifically, the WCJ was unpersuaded that a Supreme Court decision rendered on 

an interpretation of statutory language could be made retroactive to invalidate the 

otherwise valid settlement agreements, each of which explicitly included a term that 

a future credit for medical expenses would be taken in return for the substantial 

reduction in Employer’s initial lien. (Id.) Finding that the settlement agreements 

concerning Employer’s subrogation lien were valid and enforceable and that 

Employer could continue to apply its credit to Claimant’s ongoing medical expenses, 

the WCJ concluded that Claimant was not entitled to relief. (Id. at 6.)

Claimant appealed to the Board, which affirmed the WCJ’s decision and 

order. The Board reasoned that, while Whitmoyer held that excess recovery from a 

third-party settlement is to be paid to the employee and treated as an advance 

payment on account of any future indemnity benefits only, this matter was 

distinguishable because Claimant did not satisfy the full accrued subrogation lien 

and there was no excess recovery from the third-party settlement. 

(Board’s Decision at 4-5.) Indeed, Employer’s lien substantially exceeded 

Claimant’s recovery. The Board observed that the parties thus agreed that, in 

exchange for Employer substantially compromising its accrued lien and allowing 

Claimant to receive a one-third share from the proceeds of the third-party suit, 

Employer would receive a limited credit for future medical expenses due and owing 

7 WCJ Knox additionally noted that, when asked if the settlement agreements should be 

deemed unenforceable against Employer as well as against Claimant, such that Employer could 

immediately enforce the full amount of its lien directly against Claimant for his entire share of the 

settlement proceeds, Claimant had no response. (WCJ’s Decision at 5.)
7

up to the amount Claimant received from the settlement.

8

 (Id. at 5.) Noting that 

Claimant specifically bargained for the credit that he claimed was not due and owing, 

the Board concluded that the WCJ did not err in rendering his determination. (Id.) 

Claimant then petitioned this Court for review.

On appeal,9 Claimant argues that the Board erred as a matter of law in 

affirming the WCJ’s decision and order because Whitmoyer holds that employers 

are no longer permitted to take subrogation reimbursement for future medical 

expenses against third-party settlements. Claimant submitsthat the Supreme Court’s 

interpretation of Section 319 overrides the terms of a third-party settlement 

agreement and that he and all other similarly-situated claimants should receive relief 

upon filing a review petition to stop the unlawful taking of credit against ongoing

medical benefits. Claimant adds that he is entitled to relief irrespective of the fact 

that the settling of his third-party claim occurred prior to Whitmoyer. 

Claimant further asserts that, to the extent Employer argues that it has a contractual 

right to take the credit, that argument should be rejected because, inter alia,

settlement agreements made under the Act are “tightly managed” and are not simply 

the products of contract law. (Claimant’s Brief at 15.)

Employer counters that the WCJ and Board properly concluded that 

Whitmoyer does not apply to invalidate the settlement agreements negotiated by the 

parties in this matter, because Employer’s accrued lien exceeded Claimant’s 

8 The Board also observed that the parties executed their agreements years before 

Whitmoyer and that the matter was not in the “pipeline” at the time Whitmoyer was decided. 

(Board’s Decision at 5 n.2.)

9

“Our review is limited to determining whether an error of law was committed, whether 

necessary findings of fact are supported by substantial evidence[,] and whether constitutional 

rights were violated.” Combine v. Workers’ Comp. Appeal Bd. (Nat’l Fuel Gas Distrib. Corp.), 

954 A.2d 776, 778 n.1 (Pa. Cmwlth. 2008), appeal denied, 967 A.2d 961 (Pa. 2009).
8

third-party settlement; therefore, Claimant did not fully satisfy Employer’s accrued 

lien at the time of settlement and there was no “excess” or “balance of recovery” 

owed to Claimant. Employer thus claims that the credit at issue “cannot possibly be 

‘an advance payment by the employer on account of any future [instalments] of 

compensation’” as provided for in Section 319 of the Act. (Employer’s Brief at 14.) 

Instead, Employer submits, “both the payment [C]laimant received in 2014 and the 

corresponding credit relative to future medical benefits [Employer] has been 

receiving since 2014 were reciprocal obligations created by mutual agreement of the 

parties to satisfy [Employer]’s accrued claim against the recovery[,] funds which 

would otherwise have been payable to [Employer] immediately upon recovery.” 

(Id.) Employer emphasizes that there can be no dispute that it was entitled to enforce 

its entire lien against Claimant at the time he settled his third-party litigation and that

Claimant would have received nothing at that time but for the agreed-upon 

modification of the terms of the payment of Employer’s accrued lien.10

Upon review, we conclude that Whitmoyer does not apply to prohibit 

Employer from taking the agreed-upon credit for Claimant’s ongoing medical 

expenses under the circumstances presented in this matter. As noted in Whitmoyer, 

Section 319 of the Act addresses two scenarios. The first scenario concerns an 

employer’s “accrued subrogation lien,” which encompasses both medical expenses 

and disability benefits paid or payable to the date of the third-party recovery and 

constitutes a claim against the third-party recovery, payable immediately upon 

10 Employer further argues that: (1) Whitmoyer cannot be applied retroactively to 

invalidate the settlement agreements because they were executed in 2014 and no litigation was 

pending at the time Whitmoyer was decided; and (2) if Whitmoyer does apply retroactively to 

prohibit an agreement to reduce the payment to an employer for its accrued lien in exchange for a 

credit toward future medical expenses, then the agreements must be rendered null and void in their 

entirety, thereby entitling Employer to enforce its entire accrued lien.
9

recovery to the employer. Whitmoyer, 186 A.3d at 954-55. The second scenario 

concerns the distribution of “what is left of the recovery after the employer has been 

reimbursed for ‘compensation theretofore paid.’” Id. at 954 (quoting 77 P.S. § 671). 

That excess amount, or balance of recovery, is paid to the employee and treated as 

an advance payment by the employer “on account of future instalments of 

compensation,” meaning, as announced in the Whitmoyer decision, future disability

benefits only. Id. at 949, 955-58.

While Whitmoyer makes clear that an employer cannot take a credit for future 

medical expenses against the excess third-party recovery paid to a claimant in the 

second scenario described above, this matter does not fall under that scenario,

because, as noted, there was no excess recovery owed to Claimant here. 

Indeed, Employer’s accrued subrogation lien, which Section 319 of the Act 

addresses in the first scenario outlined above and encompasses both disability 

benefits and medical expenses, well exceeded Claimant’s third-party recovery.

In this regard, Claimant does not dispute that, but for the settlement 

agreements executed by the parties, Employer would have been entitled to the 

entirety of the third-party recovery amount under the first scenario addressed in 

Section 319. Notwithstanding, Employer agreed to take a substantially reduced 

payment of $50,787.17 and permit Claimant to receive $50,787.18, an amount 

Employer otherwise would have been entitled to receive, in exchange for a credit for

future medical expenses in that same amount. Thus, while Employer is taking a 

credit for ongoing medical expenses, it is not against any “excess” recovery paid to 

Claimant in contravention of Section 319 as interpreted by Whitmoyer. 

Rather, Employer is taking the credit against the funds from the third-party 

settlement that, but for the terms of the settlement agreements Claimant now seeks 
10

to invalidate, Employer was initially entitled to receive. We do not read Whitmoyer 

to prohibit such an agreement, whereby the payment to an employer for its accrued 

lien is reduced in exchange for a credit toward future medical benefits in the amount 

of the reduction.

11

Based on the foregoing, we reject Claimant’s challenge to the validity of the 

settlement agreements, which were otherwise found to be valid and enforceable by 

WCJ Knox. Accordingly, we affirm the order of the Board.

P. KEVIN BROBSON, Judge

11 In light of our analysis above, we need not discuss whether Whitmoyer applies 

retroactively or whether the agreements are null and void such that Employer is entitled to enforce 

the entire amount of its accrued lien against Claimant.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Shawn Hoss, :

Petitioner :

:

v. : No. 241 C.D. 2020

:

Workers’ Compensation Appeal :

Board (Select Staffing), :

Respondent :

O R D E R

AND NOW, this 25th day of February, 2021, the order of the Workers’ 

Compensation Appeal Board is hereby AFFIRMED.

P. KEVIN BROBSON, Judge