Court Opinion

ID: 3183137
Source: CourtListenerOpinion
Date Created: 2016-03-07 18:29:58.312297+00
Date Added: 2024-06-11T09:20:39.420558
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Linda Gladziszewski,                  :
                        Petitioner    :
                                      :
                  v.                  :
                                      :
Workers’ Compensation Appeal Board :
(PNC Financial Services Group, Inc.), :          No. 866 C.D. 2015
                        Respondent :             Submitted: October 16, 2015

BEFORE:       HONORABLE RENÉE COHN JUBELIRER, Judge
              HONORABLE MARY HANNAH LEAVITT, Judge1
              HONORABLE ANNE E. COVEY, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COVEY                                      FILED: March 7, 2016

              Linda Gladziszewski (Claimant) petitions this Court for review of the
Workers’ Compensation Appeal Board’s (Board) April 28, 2015 order affirming the
Workers’ Compensation Judge’s (WCJ) decision granting PNC Financial Services
Group, Inc.’s (Employer) Petition for Modification/Review of Compensation Benefits
(Modification/Review Petition). The sole issue before the Court is whether as of
April 18, 2013, Employer was entitled to a decreased reimbursement rate on future
workers’ compensation (WC) payments on account of Claimant’s receipt of a third-
party settlement in excess of the accrued WC lien. After review, we affirm.
              Claimant was employed with Employer when she sustained a left leg
injury on June 8, 2009.        The injury was accepted by a Notice of Temporary
Compensation Payable and described as a fractured left medial femoral condyle.
Following the injury, Claimant returned to work at various times, entitling her to

       1
        This case was assigned to the opinion writer before January 4, 2016, when Judge Leavitt
became President Judge.
periods of indemnity benefits. On September 26, 2011, Claimant’s benefits were
suspended pursuant to an unchallenged Notification of Suspension.
               In addition to her WC benefits claim, Claimant pursued a third-party
lawsuit against Schindler Elevators as a result of her work injury. A settlement
occurred in the third-party lawsuit, and a subrogation agreement was reached between
Claimant and Employer (Agreement).               Thereafter, the Claimant and Employer
disputed whether the Agreement applied to the accrued lien only or to future benefits
as well.
               On June 21, 2013, Employer filed a Modification/Review Petition
alleging that as of April 18, 2013, it was entitled to a decreased reimbursement rate
on future compensation payments on account of Claimant’s receipt of a third-party
settlement in excess of the accrued WC lien. Claimant filed an Answer denying
Employer was entitled to relief from payment of future medical expenses. The WCJ
held hearings on August 20, 2013 and January 30, 2014.2 On June 9, 2014, the WCJ
granted Employer’s Modification/Review Petition. Claimant appealed to the Board
and on April 28, 2015, the Board affirmed the WCJ’s decision. Claimant appealed to
this Court.3
               Claimant argues that Claimant and Employer stipulated that Employer
would accept Claimant’s payment “for a full compromise and release of the entire
lien[,]” and “entire” has only one reasonable meaning, i.e., both past and future,
because the terms entire and accrued have different meanings. Stip. of Fact 14,
Reproduced Record (R.R.) at 12A. Thus, Claimant contends that Employer is not
entitled to a decreased reimbursement rate on her future WC payments.

       2
        No testimony was taken at either hearing.
       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).
                                                2
             Initially, the law is well established that “[t]he WCJ is the ultimate
factfinder and has exclusive province over questions of credibility and evidentiary
weight.” Univ. of Pa. v. Workers’ Comp. Appeal Bd. (Hicks), 16 A.3d 1225, 1229 n.8
(Pa. Cmwlth. 2011). “The WCJ, therefore, is free to accept or reject, in whole or in
part, the testimony of any witness[.]” Griffiths v. Workers’ Comp. Appeal Bd. (Red
Lobster), 760 A.2d 72, 76 (Pa. Cmwlth. 2000). Thus, “[t]he appellate role in [WC]
cases is not to reweigh the evidence or review the credibility of witnesses; rather, the
Board or the [C]ourt must simply determine whether, upon consideration of the
evidence as a whole, the WCJ’s findings have the requisite measure of support in the
record.” Sell v. Workers’ Comp. Appeal Bd. (LNP Eng’g), 771 A.2d 1246, 1251 (Pa.
2001).
             Further,

             ‘[s]ubstantial evidence is such relevant evidence as a
             reasonable person might accept as adequate to support a
             conclusion. In performing a substantial evidence analysis,
             this [C]ourt must view the evidence in a light most
             favorable to the party who prevailed before the factfinder.
             Moreover, we are to draw all reasonable inferences which
             are deducible from the evidence in support of the
             factfinder’s decision in favor of that prevailing party.’ It
             does not matter if there is evidence in the record supporting
             findings contrary to those made by the WCJ; the pertinent
             inquiry is whether the evidence supports the WCJ’s
             findings.

3D Trucking Co., Inc., v. Workers’ Comp. Appeal Bd. (Fine & Anthony Holdings
Int’l), 921 A.2d 1281, 1288 (Pa. Cmwlth. 2007) (quoting Waldameer Park, Inc. v.
Workers’ Comp. Appeal Bd. (Morrison), 819 A.2d 164, 168 (Pa. Cmwlth. 2003)
(citations omitted)).
             Here, the parties submitted a Stipulation of Facts to the WCJ which, in
pertinent part, contained the following agreed upon facts: (1) A settlement occurred
in the third-party lawsuit, and an Agreement was reached between Claimant and
                                           3
Employer for “a full compromise and release of the entire [WC] lien[]” for $45,000;
(2) “[]Employer’s total [WC] lien, as of the date of the settlement conference, was
$141,378.99. The net lien that []Employer was entitled to recover from the third[-
]party settlement was $103,814.79.        As such, []Employer ultimately waived
$58,814.79 of [its] lien[;]” (3) “A full and final resolution by way of a Compromise
and Release Agreement was not agreed upon by the parties[;]” (4) “At no time
during, before, or after negotiation of the waiver of the net accrued lien was the
question of future reduced reimbursement rates discussed[;]” (5) The parties disputed
whether the $45,000 settlement of the WC lien applied to the accrued lien only or to
future benefits as well; (6) Due to the ongoing dispute, “[o]n June 21, 2013,
[]Employer filed [its Modification/Review Petition] asserting its entitlement to a
decreased reimbursement rate on future compensation payments due to Claimant’s
receipt of a third[-]party settlement in excess of the accrued [WC] lien[;]” and, (7)
“On July 15, 2013, Claimant filed an Answer to the Modification/Review Petition
denying the requested relief . . . asserting . . . that the [A]greement reached between
[the parties] was that the payment of the $45,000 was in full satisfaction of all [WC]
lien issue[s].” Stip. of Fact 14-17, 23- 24, R.R. at 12A-14A.
            Claimant offered her attorney, Jon R. Perry, Esquire’s (Perry) affidavit,
wherein, Perry stated that an Agreement was reached between the parties, whereby,
“[Claimant] would reimburse [Employer] $45,000 from [her] $463,000 [third-party]
settlement ‘for a full compromise and release of the entire lien.’” R.R. at 27A. Perry
also stated that he “later learned [he and Employer] had different understandings of
the [A]greement . . . with regard to future [WC] benefits to which [Claimant] might
be entitled.” Id. He further attested that when considering Claimant’s significant
pain and suffering damages, her significant residual disability, and her husband’s loss
of consortium claim, “it [was] readily apparent that no amount of Claimant’s
$463,000 [third-party] settlement represented damages for future medical expenses.”
                                          4
R.R. at 28A. In addition, Perry stated that “[Claimant] did not, and would not have,
agreed to a compromise and release that included a reduction of future medical
benefits.” Id. Perry further asserted that considering his “general naivety in the area
of [WC] law, of which [Employer] was aware, [he] believed that a settlement ‘for a
full compromise and release of the entire lien’ included all future benefits, if any, and
if [Employer] intended that the [Agreement] left open [its] claim for a credit against
future benefits, [it was] obligated to inform [him], which [it] did not.” Id.
               Employer offered the affidavit of its attorney, Scott Newman, Esquire
(Newman), wherein, Newman stated:

               At no time . . . did the parties discuss waiver of
               []Employer’s reimbursement rate on future compensation[,
               and he] first discovered there was a dispute as to
               [Employer’s] entitlement to reduced future reimbursements
               when a draft of the [Agreement] was sent to Claimant’s
               counsel containing the standard language entitling [his]
               client to a future reimbursement rate of 26.57% until the
               full subrogation interest of $321,621.01 is exhausted.

R.R. at 25A. Newman further asserted that “[a]t no point during negotiation[s] was it
intended, or even contemplated by []Employer, that [its] entitlement to a reduced
future reimbursement was being waived or was part of the negotiations.” Id.
               Claimant contends that the interpretation of the use of the words “entire
lien” in the Agreement is the dispositive issue in this matter. We disagree. Clearly,
the language used in the Agreement cannot be reviewed in a vacuum as it relates to
WC and thus, the WC Act (Act)4 must be reviewed as well.

               Section 319 of the [Act], 77 P.S. § 671, provides that where
               a 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 employee against such third
               party to the extent of compensation payable. Thus, an

      4
          Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1–1041.4, 2501–2708.

                                                5
            employer who has paid [WC] benefits to a claimant injured
            by a third party has an absolute right to immediate payment
            of its subrogation lien from the claimant’s recovery against
            the third party, after payment of attorney fees and litigation
            expenses; to the extent the recovery exceeds the past due
            lien and litigation costs, the balance is paid to the claimant,
            and the employer retains a contingent lien against this
            payment for the reimbursement of future compensation
            benefits which may become payable. It is well-settled
            that payments of medical expenses are compensation
            payments subject to subrogation rights against a
            claimant’s recovery from a third party, and subject to a
            credit toward future compensation, where that recovery
            exceeds compensation paid at the time of the recovery.

Reeder v. Workers’ Comp. Appeal Bd. (Mercer Lime & Stone Co.), 871 A.2d 337,
338-39 n.1 (Pa. Cmwlth. 2005) (citation omitted; emphasis added). As our Supreme
Court has explained:

            Subrogation in our [WC] system is a significant and firmly
            established right. Specifically, while subrogation is an
            important equitable concept that applies whenever a debt or
            obligation is paid by one party though another is primarily
            liable, in the realm of [WC], it has assumed even greater
            stature. Our Court has stated that the statutory right to
            subrogation is ‘absolute and can be abrogated only by
            choice.’ This is so because the statute granting subrogation
            ‘clearly and unambiguously’ provides that the employer
            ‘shall be subrogated’ to the employee’s right of recovery.
            Thus, the importance and strength of subrogation in our
            system of [WC] cannot be understated.

Brubacher Excavating, Inc. v. Workers’ Comp. Appeal Bd. (Bridges), 835 A.2d 1273,
1275-76 (Pa. 2003) (citations omitted; emphasis added).
            In Reeder, a case also involving the issue of whether a third-party
agreement waived the employer’s future indemnity rights, the claimant asserted that
the interpretation of the words “our compromise of our lien” was dispositive of the
entire matter. The Reeder Court expounded:

                                          6
                   [The c]laimant insist[ed] that th[e] letter ‘clearly speaks’ to
                   the release of any and all subrogation interest previously
                   held by [the insurance carrier] on behalf of [the e]mployer
                   and constitutes a bar to any further recovery. However, the
                   WCJ accepted the contrary testimony of [the employer’s
                   witness] as credible and persuasive with respect to the
                   parties’ understanding. It is axiomatic that the WCJ, as fact
                   finder, has exclusive province over questions of credibility
                   and evidentiary weight and that, unless such determinations
                   are made arbitrarily and capriciously, they are binding on
                   appeal.

Id. at 340. Here, the WCJ determined:

                   [E]mployer’s acceptance of the $45,000[] applies only to
                   the indemnity and medical expenses that already had been
                   paid at the time of the settlement negotiations[,] i.e.[,] the
                   accrued lien. In so concluding, [the WCJ found] that both
                   the affidavits of [Newman] and [Perry] reflect that the
                   resolution only encompassed the amount of the accrued lien
                   and that there was never any discussion of any future rights
                   and obligations of the parties. Furthermore, the [WCJ]
                   notes that the email between the parties further reflects the
                   agreement between the parties that it was [C]laimant’s
                   counsel[’s] understanding that the $45,000[] was in full
                   satisfaction of its ‘accrued lien.’[5] [The WCJ found] that
                   this email is a direct contradiction of [C]laimant’s current

            5
                The email was sent from Perry’s associate Paul Hilko to Newman, and reads in its
entirety:
              I have called on at least two occasions, asking you to call me to
              discuss this matter, but you have yet to call back. I thought an email
              may be a better way to handle this matter. You have sent to us a
              Third Party Settlement for our client’s signature. [Perry] tells me
              that the agreement reached with you and our client was that
              [E]mployer would accept $45,000 in full satisfaction of its accrued
              lien and that is what the Agreement first provides in the section
              entitled ‘Further Matters Agreed Upon[.]’ However, it goes on to
              state that [E]mployer is entitled to future reimbursement until the full
              subrogation amount is exhausted. Please explain why [E]mployer is
              entitled to anything more than the $45,000 our client has agreed to
              reimburse from her settlement.
R.R. at 19A (emphasis added).

                                                  7
            position that the resolution encompassed any future
            entitlement [E]mployer retained pursuant to the [Act.]

WCJ Dec. at 4. Because this Court may not reweigh the evidence or the WCJ’s
credibility determinations, and must view the substantial, credible evidence in a light
most favorable to Employer, we hold that the WCJ did not err in granting Employer’s
Modification/Review Petition. Accordingly, the Board properly affirmed the WCJ’s
decision.
            For all of the above reasons, the Board’s order is affirmed.

                                      ___________________________
                                      ANNE E. COVEY, Judge

                                          8
            IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Linda Gladziszewski,                  :
                         Petitioner   :
                                      :
                  v.                  :
                                      :
Workers’ Compensation Appeal Board :
(PNC Financial Services Group, Inc.), :     No. 866 C.D. 2015
                        Respondent :

                                      ORDER

            AND NOW, this 7th day of March, 2016, the Workers’ Compensation
Appeal Board’s April 28, 2015 order is affirmed.

                                      ___________________________
                                      ANNE E. COVEY, Judge