Court Opinion

ID: 9958493
Source: CourtListenerOpinion
Date Created: 2024-04-09 15:09:53.677107+00
Date Added: 2024-06-11T08:18:26.530219
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Glenny Torres,                     :
                        Petitioner :
                                   :
          v.                       : No. 1398 C.D. 2022
                                   : Submitted: December 4, 2023
Amazon.com Services LLC            :
(Workers’ Compensation Appeal      :
Board),                            :
                        Respondent :

BEFORE:      HONORABLE ANNE E. COVEY, Judge
             HONORABLE STACY WALLACE, Judge
             HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION
BY JUDGE WALLACE                                         FILED: April 9, 2024

      Glenny Torres (Claimant) petitions for our review of the Workers’
Compensation Appeal Board’s (Board) November 16, 2022 order (Board’s Order),
which partially modified Workers’ Compensation Judge (WCJ) Wayne Fegley’s
(WCJ Fegley) order granting Claimant’s request for attorney’s fees pursuant to
Section 440 of the Workers’ Compensation Act (the Act).1 After careful review, we
reverse, in part, the Board’s Order, and remand to the Board with instructions to
vacate the portion of WCJ Fegley’s order awarding attorney’s fees for an
unreasonable contest and remand to the WCJ.

1
 Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710. Section 440 was
added by the Act of February 8, 1972, P.L. 25, 77 P.S. § 996.
                           I. Factual and Procedural History
       On September 17, 2020, Claimant, then an employee of Amazon.com
Services LLC (Employer), sustained a work-related injury to her lower back while
“[u]nloading trucks and palletizing freight.” Reproduced Record (R.R.) at 28a-31a,
77a-79a. Employer acknowledged Claimant’s injury, reduced her work duties, and
supplied her with a list of suggested physicians. Id. at 31a-32a, 79a. On October 5,
2020, Employer filed a medical-only Notice of Temporary Compensation Payable
with the Bureau of Workers’ Compensation which indicated Claimant’s date of
injury was September 24, 2020, the day Claimant reported her injury to Employer,
instead of September 17, 2020. Id. at 1a-2a. On November 18, 2020, Employer
issued a Notice Stopping Temporary Compensation and a Notice of Workers’
Compensation Denial. Id. at 3a-6a. In response, Claimant’s attorney filed claim
petitions under the Act on March 30, 2021 (Claim Petition I), and on April 28, 2021
(Claim Petition II), respectively.2 Id. at 77a-78a. Claimant’s claim petitions alleged,
among other things, that she was unable to work after November 30, 2020, on
account of her injury. Id. at 7a-11a, 37a. Employer timely denied Claimant’s
allegations. Id. at 13a-15a.
       By decision and order circulated March 4, 2022 (WCJ Fegley’s Order), WCJ
Fegley concluded, “[b]ased on the credible and accepted evidence of record
considered in its entirety,” Claimant suffered a work-related injury on September
17, 2020. R.R. at 91a. However, WCJ Fegley also determined Claimant had “fully
recovered” as of June 24, 2021, and was no longer entitled to ongoing workers’

2
  Claim Petition I used Employer’s controlling date, see Section 315 of the Act, 77 P.S. § 602, of
September 24, 2020, whereas Claim Petition II used the actual date of Claimant’s injury,
September 17, 2020. R.R. at 77a. WCJ Fegley consolidated Claim Petition I and Claim Petition
II after an off-the-record discussion between the parties confirmed the claim petitions were,
effectively, the same. Id. 20a-21a.

                                                2
compensation (WC) benefits. Id. at 91a-92a. WCJ Fegley awarded Claimant: (i)
temporary partial disability benefits for the closed period of November 18, 2020, to
December 29, 2020, (ii) temporary total disability benefits for the closed period of
December 30, 2020, to June 23, 2021, (iii) expenses for reasonable and necessary
medical treatment collaterally related to her injury, (iv) litigation costs, and
(v) attorney’s fees under Section 440 of the Act, 77 P.S. § 996 (Section 440), in the
amount of $8,850.00. Id. at 94a. In granting Claimant’s request for attorney’s fees,
WCJ Fegley found:

       [Employer] did not present a reasonable contest based on the accepted
       evidence of record, as it had no basis to continue to deny the claim
       pursuant to [its Notice of Workers’ Compensation Denial]. In this
       regard, [Employer’s medical expert witness (Dr. Amir H. Fayyazi)]
       acknowledged that Claimant sustained a work injury. [Employer]
       offered no contrary fact witness evidence or medical evidence disputing
       that Claimant was restricted and disabled due to her work injury prior
       to Dr. Fayyazi’s [independent medical exam (IME)] on June 24, 2021.

Id. at 92a. Employer appealed WCJ Fegley’s Order to the Board, arguing WCJ
Fegley improperly awarded Section 440 attorney’s fees and that its contest
“throughout this litigation was entirely reasonable.” See Certified Record (C.R.) at
45.3
       The Board’s Order initially acknowledged WCJ Fegley “correctly
determined” Employer’s contest was unreasonable until June 24, 2021, the date of
Dr. Fayyazi’s IME. R.R. at 105a. The Board further noted Employer “failed to
present any evidence that Claimant did not sustain a work-related injury on
September 17, 2020.” Id. Nevertheless, the Board concluded “Claimant [was] not
entitled to [Section 440 attorney’s] fees incurred on or after June 24, 2021,” because

3
 Because the Board filed its certified record electronically using a variety of pagination, the page
numbers referenced in this opinion reflect our electronic pagination.

                                                 3
Employer “procured conflicting evidence concerning the extent of Claimant’s
disability, and [Employer’s] contest became reasonable.” Id. at 106a. The Board
accordingly modified WCJ Fegley’s award of Section 440 attorney’s fees as follows:

          From the period of March 23, 2021, through April 29, 2021, the period
          before Dr. Fayyazi’s IME [was] performed on June 24, 2021,
          Claimant’s counsel billed Claimant $1,710.00 for a total of 5.7 billable
          hours. As [Employer’s] contest prior to Dr. Fayyazi’s IME was not
          reasonable, Claimant is entitled to [Section 440 attorney’s] fees in the
          amount of $1,710.00. Claimant’s counsel billed Claimant $7,140.00
          from the date of Dr. Fayyazi’s IME until the last billable item on
          January 4, 2022, for a total of 23.8 billable hours. As the remaining
          fees in the amount [of] $7,140.00 were incurred following Dr.
          Fayyazi’s IME, [Employer’s] contest was reasonable at the time they
          were incurred, and Claimant is not entitled to reimbursement.

Id. at 107a. Claimant appealed the Board’s Order and now asks this Court to
reinstate WCJ Fegley’s Section 440 award in its entirety.4 See Petition for Review
¶ 18.

4
    In this regard, Claimant argues:

          The original attorney[’s] fee[s] award granted by WCJ Fegley must be reinstated
          under Lorino [v. Workers’ Compensation Appeal Board, 266 A.3d 487 (Pa. 2021),]
          and in the interests of justice, under the unique facts in this case, and regardless of
          whether the June 24, 2021, IME provided [] Employer with a reasonable basis to
          contest the extent and existence of an ongoing total disability . . . . To hold
          otherwise[] renders the Lorino “no per se disqualification” judicial holding and
          Section 440 substantive law “shall means mandatory” first truth principles in vain.
          The WCJ properly performed his Section 440 attorney[’s] fee[s] assessment task
          under Lorino even if he made a harmless “technical error of law in his
          characterization of the employer’s continued contest after the IME as
          ‘unreasonable.’”

Claimant’s Br. at 23 (citations omitted). We disagree that WCJ Fegley’s characterization of
Employer’s contest as continuing to be “unreasonable” is harmless error. See R.R. at 93a.
Similarly, we disagree that to hold otherwise renders Lorino’s holding in vain. To not hold the
error harmless simply gives the WCJ discretion to determine whether to award Section 440
(Footnote continued on next page…)

                                                    4
                                         II. Discussion
       On appeal, Claimant raises just one issue for this Court’s consideration:

       Whether the [Board] errored [sic] as a matter of law in failing to apply
       the Lorino[, 266 A.3d at 487,] case law principles to this claim petition
       case, and instead continued to use the invalidated “per se
       disqualification” standard in reducing the WCJ’s Section 440
       unreasonable contest attorney fee award of $8,850.00 to
       $1,7[1]0.00 . . . ?

Claimant’s Br. at 5. We review orders of the Board to determine: (i) whether the
Board violated a claimant’s constitutional rights, (ii) whether substantial evidence
supports the Board’s necessary findings of fact, and (iii) whether the Board
committed an error of law. 2 Pa.C.S. § 704. In considering whether the Board erred
as a matter of law, our standard of review is de novo, and our scope of review is
plenary. See Edwards v. Workers’ Comp. Appeal Bd. (Epicure Home Care, Inc.),
134 A.3d 1156, 1161 n.4 (Pa. Cmwlth. 2016) (citation omitted). In other words,
we need not defer to the Board’s conclusions of law, and we review the entire record
before us with a fresh pair of eyes.
       Section 440(a) of the Act provides:

       (a) In any contested case where the insurer has contested liability in
       whole or in part, including contested cases involving petitions to
       terminate, reinstate, increase, reduce or otherwise modify
       compensation awards, agreements or other payment arrangements or to
       set aside final receipts, the employe or his dependent, as the case may

attorney’s fees once the contest becomes reasonable. WCJ Fegley referred to “unreasonable
contest attorney fees” in conclusion of law 8, see id., and Claimant apparently concedes
Employer’s contest became reasonable. See Claimant’s Br. at 23. If not a concession, at the very
least, the Board’s determination that Employer’s contest became reasonable was not challenged
on appeal. See R.R. at 106a. Moreover, WCJ Fegley ordered Employer to reimburse “Claimant’s
[attorney’s] fee[s] based upon the unreasonable contest.” Id. at 94a. It is apparent, therefore, that
WCJ Fegley based the Section 440 award through the lens of the contest being categorized as
“unreasonable.” Id.

                                                 5
      be, in whose favor the matter at issue has been finally determined in
      whole or in part shall be awarded, in addition to the award for
      compensation, a reasonable sum for costs incurred for attorney’s fee,
      witnesses, necessary medical examination, and the value of
      unreimbursed lost time to attend the proceedings: Provided, That cost
      for attorney[’s] fees may be excluded when a reasonable basis for the
      contest has been established by the employer or the insurer.

77 P.S. § 996(a) (emphasis added).
      In Lorino, the Pennsylvania Supreme Court examined a decision of this Court
in which we considered whether “the Board erred by misinterpreting Section 440 of
the Act to always require that an employer engage in an unreasonable contest before
attorney[’s] fees may be awarded to a successful claimant.” Lorino v. Workers’
Comp. Appeal Bd. (Com. of Pa.) (Pa. Cmwlth., No. 1217 C.D. 2019, filed Aug. 19,
2020), slip op. at 3. The employer referred the claimant (Lorino) for an IME nearly
six months after he sustained his work-related injury. Id., slip op. at 2. The IME
indicated Lorino “had fully recovered” and “did not require any further treatment.”
Id. Consequently, the WCJ concluded the employer established a reasonable basis
for its contest by means of an after-acquired IME and determined Section 440
attorney’s fees could only be awarded for the period before the employer’s contest
became reasonable. Id., slip op. at 3. The Board affirmed the WCJ’s partial Section
440 attorney’s fees award, and Lorino filed a petition for review with this Court.
      After reviewing the merits of Lorino’s arguments, we held:

      In line with [Section 440’s] legislative intent and despite the General
      Assembly’s use of the word “may,” this Court has always interpreted
      Section 440 to mean that “attorney[’s] fees shall be awarded unless a
      reasonable basis for the employer’s contest has been established; or
      otherwise expressed, the award of attorney[’s] fees is the rule and their
      exclusion is the exception to be applied in cases where the record
      establishes that the employer’s . . . contest is reasonably based.

                                         6
Id., slip op. at 4 (emphasis added).       Because the employer’s contest became
reasonable, this Court upheld the Board’s partial Section 440 attorney’s fees award.
Id., slip op. at 8.
       The Pennsylvania Supreme Court subsequently reversed this Court’s opinion,
holding “the Commonwealth Court’s interpretation of Section 440 as a per se
disqualification of an award of claimant’s attorney’s fees where the employer has
established a reasonable basis for its contest [] is contrary to the plain language of
the [Act].” Lorino, 266 A.3d at 494. Our Supreme Court further distinguished that
“when the legislature uses the terms ‘shall’ and ‘may’ in the same section of a statute,
it is a clear indication that the legislature intends certain actions to be mandatory,
and others discretionary.” Id. at 487. The Court explained:

       [U]nder Section 440, when a contested case is resolved in favor of an
       employee, a reasonable sum for attorney’s fees shall be awarded to the
       claimant. Such an award is mandatory. Where, however, the employer
       has established a reasonable basis for the contest, an award of attorney’s
       fees may be excluded. In other words, the WCJ is permitted, but not
       required, to exclude an award of attorney’s fees. The Commonwealth
       Court below, in “always interpret[ing] Section 440 to mean that
       ‘attorney[’s] fees shall be awarded unless a reasonable basis for the
       employer’s contest has been established,’” [(citation omitted)]
       disregarded the distinction between the terms “shall” and “may,” and
       failed to recognize the discretion afforded to the workers’
       compensation judges to award attorney’s fees even when they find a
       reasonable basis for an employer’s contest.

       To be clear, we do not suggest that, under Section 440, a WCJ may
       never deny an award of attorney’s fees when the employer has
       established a reasonable basis for its contest. As explained above, the
       language of Section 440 affords the WCJ discretion to refuse an award
       of attorney’s fees in such circumstances.

Lorino, 266 A.3d at 494. Effectively, the Pennsylvania Supreme Court’s holding in
Lorino overturned this Court’s longstanding Section 440 jurisprudence that

                                           7
automatically excluded an award of attorney’s fees whenever the employer’s contest
was deemed reasonable. Id.
       In this matter, the Board concluded “reasonable fees are awarded against the
employer as a cost under [S]ection 440,” if the employee prevails in the contest,
“unless the employer meets its burden of establishing facts sufficient to prove a
reasonable basis for the contest.” R.R. at 100a-01a (emphasis added). The Board’s
application of Section 440 is invalid because, according to Lorino, an award of
Section 440 attorney’s fees is “mandatory” when a WCJ resolves a contest in favor
of the claimant and finds the basis of the employer’s contest was unreasonable.
Lorino, 266 A.3d at 494.            Just as assuredly, however, an employer is not
automatically absolved from exposure to Section 440 attorney’s fees whenever its
contest is deemed reasonable; instead, a WCJ has discretion to either award or
exclude attorney’s fees under Section 440 if the WCJ determines the contest is
reasonable. Id. Simply put, an unreasonable contest will always result in an award
of Section 440 attorney’s fees, and a reasonable contest may result in such an award.5
                                      III. Conclusion
       Based on the foregoing, we reverse the Board’s Order to the extent it
automatically foreclosed the imposition of attorney’s fees against Employer after its
contest became reasonable, disregarding the plain language of Section 440(a) of the

5
  We, as well as the Board, WCJs, and the WC bar, may be prudent to move away from calling
Section 440 attorney’s fees “unreasonable contest fees.” This label came to be under this Court’s
pre-Lorino case law, see, e.g., Crouse v. Workers’ Comp. Appeal Bd. (NSP Energy SVC), 801 A.2d
655, 660 (Pa. Cmwlth. 2002), and, consistent with our pre-Lorino case law, we recognized that a
reasonable contest automatically precluded an award of attorney’s fees, whereas an unreasonable
contest called for an award of attorney’s fees. Weidner v. Workmen’s Comp. Appeal Bd., 332 A.2d
885, 887 (Pa. Cmwlth. 1975). However, as we now understand, even when a contest is reasonable,
Section 440 attorney’s fees are still awardable by the WCJ. Moving away from the label of
“unreasonable contest fees” will thus aid in the proper implementation of our post-Lorino
jurisprudence.

                                               8
Act and the Pennsylvania Supreme Court’s decision in Lorino. We remand this
matter to the Board to vacate WCJ Fegley’s Section 440 award with the instruction
to further remand to the WCJ to issue a new award of attorney’s fees in accordance
with Section 440(b).6
       On remand, the WCJ must accept the Board’s legal conclusion that
Employer’s contest was initially unreasonable but became reasonable after
Employer presented Dr. Fayyazi’s June 24, 2021 IME. Then, consistent with
Section 440 and Lorino, the WCJ shall: (i) grant Claimant an award of attorney’s
fees for the period during which Employer’s contest was unreasonable, i.e.,
November 18, 2020, through June 23, 2021, and (ii) determine, in his or her
discretion, whether to additionally award attorney’s fees for the period after
Employer’s contest became reasonable. The WCJ may, or may not, reach the same
result as before; nonetheless, it is imperative WCJs and the Board realize that, even
if WCJ Fegley had determined Employer’s contest was reasonable throughout the
pendency of litigation, WCJ Fegley could have awarded Section 440 attorney’s fees
under these circumstances.

                                                     ______________________________
                                                     STACY WALLACE, Judge

6
  We note that, under Section 440(b), a WCJ is expected to, among other things, determine “the
skill required” to litigate the claimant’s WC claim. 77 P.S. § 996(b). Although nuanced, the
distinction is important, and we point out that, on remand, the WCJ should focus on the “skill
required” as compared to the individual skillset or reputation of the claimant’s attorney. See R.R.
at 92a.

                                                9
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Glenny Torres,                     :
                        Petitioner :
                                   :
          v.                       : No. 1398 C.D. 2022
                                   :
Amazon.com Services LLC            :
(Workers’ Compensation Appeal      :
Board),                            :
                        Respondent :

                                    ORDER

      AND NOW, this 9th day of April 2024, the November 16, 2022 order of the
Workers’ Compensation Appeal Board (Board) is REVERSED, in part, and
REMANDED to the Board to vacate Workers’ Compensation Judge (WCJ) Wayne
Fegley’s award of attorney’s fees under Section 440 of the Workers’ Compensation
Act, and to further remand to the WCJ for a new determination of Section 440
attorney’s fees consistent with the foregoing opinion.
      Jurisdiction relinquished.

                                         ______________________________
                                         STACY WALLACE, Judge