Court Opinion

ID: 9951065
Source: CourtListenerOpinion
Date Created: 2024-03-15 15:24:22.099088+00
Date Added: 2024-06-11T14:37:00.273989
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Anna Griffis,                             :
                          Petitioner      :
                                          :
                   v.                     :   No. 613 C.D. 2022
                                          :   Submitted: April 28, 2023
Albert Einstein Healthcare Network        :
(Workers’ Compensation Appeal             :
Board),                                   :
                         Respondent       :

BEFORE:      HONORABLE RENÉE COHN JUBELIRER, President Judge
             HONORABLE CHRISTINE FIZZANO CANNON, Judge
             HONORABLE LORI A. DUMAS, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
PRESIDENT JUDGE COHN JUBELIRER                FILED: March 15, 2024

      Anna Griffis (Claimant) petitions for review of a May 24, 2022 Order of the
Workers’ Compensation Appeal Board (Board) that affirmed, as modified, a
decision by a Workers’ Compensation Judge (WCJ) denying Claimant’s Penalty
Petition. Claimant filed the Penalty Petition against Albert Einstein Healthcare
Network (Employer), asserting Employer did not begin paying its share of the costs
associated with a third-party recovery after recovering an accrued lien and failed to
pay specific loss benefits. The WCJ concluded Claimant had not paid the accrued
lien immediately and therefore Employer was entitled to recover the accrued lien by
withholding $332.20 per week over the course of 545.99 weeks. Upon appeal, the
Board concluded the WCJ transposed numbers in the amount of the accrued lien,
resulting in a miscalculation of the period of suspension, and therefore modified the
recovery period to 356.35 weeks, but otherwise affirmed the WCJ’s decision.
Before this Court, Claimant asserts the WCJ erred in calculating the reimbursement
of Employer’s net subrogation lien using pro rata attorney’s fees and costs rather
than the full indemnity1 benefits. For the reasons that follow, we affirm.

I.     BACKGROUND
       With respect to the issue presently before the Court, the WCJ found the
following facts:2
           1. . . . Claimant[] was injured in the course of her employment on
              April 28, 2009[,] while employed by . . . Employer. Her injuries
              were severe. She continues to be entitled to compensation for
              total disability.
           2. Four years after the injury, [] Claimant settled a medical
              malpractice case in the total amount of $2.088 million . . . .
           3. [] Claimant then refused to reimburse [] [Employer’s] already[-]
              substantial subrogation lien[,3] electing instead to challenge []
              [Employer’s] right to subrogation. The [WCJ’s] Order of August
              [1], 2017[4] confirmed [] [E]mployer’s right to subrogation, but []
              Claimant continued to refuse to reimburse the lien.
           4. As a result of [] Claimant’s failure to reimburse the lien, []
              Employer[,] as of October 3, 2017[,] stopped paying wage loss

       1
          Wage-loss benefits, indemnity benefits, and disability benefits are synonymous in
workers’ compensation. See, e.g., CPV Mfg., Inc. v. Workers’ Comp. Appeal Bd. (McGovern),
805 A.2d 653, 658 (Pa. Cmwlth. 2002).
        2
          Claimant represents in her brief that “[t]he facts of this case are not in dispute, only the
calculation of [] Employer’s reimbursement of the net subrogation lien.” (Claimant’s Brief (Br.)
at 8.) We explained in great detail the factual and procedural history of this case in Griffis v.
Workers’ Compensation Appeal Board (Albert Einstein Healthcare Network) (Pa. Cmwlth., Nos.
273 and 280 C.D. 2019, filed July 15, 2020) (Griffis I).
        3
          The subrogation lien represents the amount Claimant owes Employer from the time of
her recovery of the third-party settlement until Employer learned of the settlement and ceased
paying indemnity benefits, as the receipt of the third-party settlement on the part of Claimant
represented a prepayment of future indemnity benefits. Griffis I, slip op. at 30-31.
        4
          The WCJ appears to have accidentally referred to the Order as being dated August 3; the
relevant Order is dated August 1.

                                                  2
              compensation benefits[,5] as it was [] Employer’s only means of
              recouping the substantial lien.
           5. Consequently, Claimant filed a Penalty Petition on November 3,
              2017[,] alleging that [] Employer violated the [Workers’
              Compensation] Act [(Act[)6] by failing to pay its pro rata share
              of [Claimant’s] fees and expenses.
           6. The May 10, 2018 [WCJ] Decision [] ordered [] Claimant to
              reimburse [] Employer for its lien and found that [] Employer was
              entitled to a full suspension of [] Claimant’s benefits until the lien
              was reimbursed.
           7. [The May 10, 2018] Order [of the WCJ] was ultimately affirmed
              as modified by the [Board] and then on July 15, 2020[,] by the
              Commonwealth Court.[7]
           8. [] Claimant has failed to offer any evidence or rational theory in
              support of the position that the lien has been reimbursed by []
              Claimant.
           9. Despite the very significant third-party recovery, [] [Employer’s]
              lien is not even close to being reimbursed. Because [] Claimant
              has failed to reimburse, [] Employer can recoup the amount due
              only by withholding the amount that would otherwise be due on
              a weekly basis.
           10.[] Claimant has failed to prove a violation of the Act.

       5
          Where an employer is subrogated to a workers’ compensation claimant’s rights in a third-
party tort settlement, the claimant is entitled to pro rata reimbursement of the fees and costs
associated with procuring that settlement in the first instance. 21A SUMM. PA. JUR. 2d,
EMPLOYMENT & LAB. RELS § 18:39 (2d ed.). Thus, in a scenario where the claimant pays the full
subrogation lien up front, during the grace period in which the employer need not pay
compensation because that compensation has essentially been “prepaid” by the remaining balance
of recovery Claimant has in the settlement, the employer must still pay pro rata costs and fees. Id.
This avoids the potential for unjust enrichment because the claimant has created a fund for the
benefit of the employer at the claimant’s expense. Id. at § 18:41.
        6
          Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.
        7
          In Griffis I, this Court, while acknowledging it was a violation of the Act for Employer
to unilaterally cease payment, affirmed the Board’s affirmance of the WCJ, who declined to
impose penalties. “Because there was no error in suspending Claimant’s benefits until she repays
Employer as set forth above, the WCJ did not abuse his discretion in declining to impose penalties
despite finding a violation of the [] Act.” Id., slip op. at 34.

                                                 3
(WCJ Decision, 11/10/2021, Findings of Fact (FOF) ¶¶ 1-10.)8
      To summarize, the relevant facts are that Claimant was injured during the
course and scope of employment and received, inter alia, indemnity benefits from
Employer. She later received a large settlement in her medical malpractice action
against the doctors who treated her for the work injury. Employer established
subrogation rights in the award, which resulted in: (i) Claimant owing a lump sum
subrogation lien to Employer for past double payment of benefits, which she has
refused to pay, and (ii) the remaining settlement funds (i.e., balance of recovery),
deemed “prepayment” of indemnity benefits under the Act, serving as a credit
Employer is entitled to take against payment of future indemnity benefits (i.e.,
creating a “grace period”). During the grace period, Employer was to pay Claimant
its pro rata share of the costs and fees associated with recovering the medical
malpractice settlement. Employer has not paid any pro rata costs and fees to
Claimant since October 2017.
      The WCJ reasoned that Employer’s “only way to get reimbursed is to stop
paying compensation due until the debt has been recovered” given Claimant’s choice
not to immediately reimburse the existing lien. (Id. at 5.) The WCJ explained that
if Claimant had immediately reimbursed the lien, Employer would have been
obligated to pay fees and costs associated with the medical malpractice recovery of
$332.20 per week, representing Employer’s share of the fees and costs of obtaining
the third-party settlement. However, because Employer can now only recover on
the lien by withholding that $332.20, it may do so in a “grace period,” which is
calculated by dividing the entirety of the lien, which the WCJ calculated to be
$181,380.97, by the weekly amount due, $332.20, which leads to a grace period for
Employer of 545.99 weeks in which Employer is relieved of paying those pro rata

      8
          Certified Record (C.R.) Item 5.

                                            4
fees and costs. (Id.) The WCJ also reasoned Claimant was not entitled to the
payment of specific loss benefits, given Claimant’s outstanding obligation to repay
the subrogation lien, as well as her continuing disability. (Id., Conclusion of Law
(COL) ¶ 3.)
      The Board affirmed the WCJ with a modification. First, the Board noted that
the WCJ had erroneously transposed a digit, resulting in the lien amount as
$181,380.97, instead of the correct amount of $118,380.97. Recalculating the time
until the lien would be repaid in full, it found that to recoup the lien, Employer was
entitled to 356.35 weeks, not 545.99 weeks. (Board Op. at 4-5.)9
      Next, the Board rejected the contention that Monessen, Inc. v. Workers’
Compensation Appeal Board (Fleming), 875 A.2d 415, 419 (Pa. Cmwlth. 2005),
supported Claimant’s position. It agreed with the WCJ that Employer could retain
the $332.20 it would otherwise be required to pay Claimant because she did not pay
the lump sum out of her third-party recovery. Accordingly, it reasoned the WCJ did
not err in refusing to grant the Penalty Petition. (Board Op. at 5.) Further, rejecting
Claimant’s contention that because the lien had been satisfied, specific loss benefits
were now payable, the Board explained, “Claimant’s eligibility for indemnity
benefits for total disability benefits has not ended.” (Board Op. at 6.) It continued:
“She is not receiving weekly payments of indemnity benefits because the balance of
recovery has not been exhausted. The specific loss benefits are therefore not yet
payable.” (Id.) It affirmed the WCJ’s Order, but modified it to fix the scrivener’s
error in the WCJ’s calculation. Claimant timely petitioned for review to this Court.

      9
          C.R. Item 8.

                                          5
II.   PARTIES’ ARGUMENTS
      Claimant argues that the WCJ erred as a matter of law in calculating the net
reimbursement of the subrogation lien by using pro rata attorney’s fees and costs as
opposed to full indemnity.           Claimant points to the language in a previous
memorandum opinion, in which we stated that “[o]nce there is full reimbursement,
Employer is able to take a credit against Claimant’s ongoing indemnity benefits,
minus the pro rata share, until Claimant’s third-party recovery is exhausted.” Griffis
v. Workers’ Comp. Appeal Bd. (Albert Einstein Healthcare Network) (Pa. Cmwlth.,
Nos. 273 and 280 C.D. 2019, filed July 15, 2020) (Griffis I), slip op. at 31-32. In
her view, Employer’s credit was exhausted on June 23, 2020; accordingly, the return
of pro rata attorney’s fees and costs should have begun then. Claimant arrives at the
June 2020, date by dividing $118,380.97 by her weekly indemnity benefits
compensation rate of $836, which results in 141.6 weeks of “grace period” for
Employer to recoup the lien. One hundred forty-one point six weeks after October
3, 2017, is approximately June 23, 2020. (Claimant’s Br. at 15.) Claimant cites to
Monessen for the proposition that “where there is no cash from the third[-]party
settlement to satisfy the past subrogation lien by a lump sum payment, a WCJ may
grant a grace period at the full compensation rate.” (Claimant’s Brief (Br.) at 14)
(citing Monessen, 875 A.2d at 419) (emphasis added in brief). A full reimbursement
having been made, Claimant asserts, notwithstanding a credit due, an employer must
still pay pro rata fees and costs.
      Employer asserts that because Claimant has refused to repay the lien,
Employer has a right to suspend payment of the weekly reimbursement payments of

                                            6
$322.2010 for a total period 367.4 week or 7.1 years.11 Employer emphasizes that it
is inaccurate for Claimant to suggest the weekly disability benefit rate should be
used to calculate the lien’s repayment, which is an entirely separate matter.
Employer explains that, typically, employers are entitled to the immediate
repayment of their lien, less their pro rata share of costs incurred in securing the
settlement, and that the resulting “grace period” in which employers need not pay
compensation derives from the fact that compensation is deemed prepaid as a result
of the settlement, and that during the grace period, the employee receives pro rata
civil litigation cost reimbursement, and not disability benefit payments. According
to Employer, it is not that Claimant’s disability benefits have been suspended, but
rather, Employer is within the grace period with respect to those benefits; it will not
be until the $1,647,422.02 balance of recovery12 is exhausted that Employer will
have to begin repayment; that grace period in this case is nearly 38 years.13 Employer

       10
            It appears Employer has transposed a number in its brief, as the record shows the weekly
pro rata costs and fees are $332.20 per week, not $322.20 per week. (WCJ Decision at 5; 12-23-
2020 Hearing Transcript, C.R. Item 10 at 14 (Employer’s counsel explaining that $332 is the
weekly pro rata costs and fees amount due before the WCJ).)
         11
            Employer reaches this figure by dividing the $118,380.97 lien by the $322.20 per week
of litigation costs that would be payable to Claimant. (Employer’s Br. at 29-30.) As discussed
above, the correct calculation would involve the $332.20 figure as denominator; which the Board
used, and this Court uses, in our analysis below.
         12
            The Board noted in its February 13, 2019 Opinion and Order, which we affirmed, that
the balance of recovery, taking into account the correctly calculated subrogation lien, was
$1,891,560.80. (C.R. Item 21 at 10 n.9.) In its brief, Employer says that this figure derives from
the parties’ third-party settlement agreement. (Employer’s Br. at 28.) Employer’s approximately
$1.6 million figure does not appear in the Certified Record. However, the precise amount of the
balance of recovery is not relevant to the immediate question before the Court, whether the WCJ
erred in calculating the number of weeks necessary for the subrogation lien to be considered paid
in full.
         13
             Employer reaches this figure by dividing $1,647,422.02, by Claimant’s total weekly
disability rate of $836.00, which results in 1,970.6 weeks, or 37.89 years. (Employer’s Br. at 28.)

                                                 7
posits the “suspension” has only to do with the litigation costs Employer would have
been required to pay.
       Employer further argues that Monessen is inapposite, noting that there, the
subrogation lien figure was much larger than the claimant’s third-party civil
recovery. According to Employer, this Court “did not address in Monessen the
situation presented in this case – where [] Claimant’s civil recovery establishes a
substantial [b]alance of [r]ecovery, but [C]laimant refuses to honor her obligation to
provide immediate net subrogation reimbursement.” (Employer’s Br. at 32-33.)
Employer cites to Mrkich v. Workers’ Compensation Appeal Board (Allegheny
County Children & Youth Services), 801 A.2d 668, 674-75 (Pa. Cmwlth. 2002), for
the proposition that in a case such as this, where a claimant has not physically
recovered from her injury but has a balance of recovery from the third-party
settlement that exceeds her lien, “the employer retains a contingent subrogation
interest in the balance of recovery paid to [the] claimant[] and receives a credit in
this amount towards future compensation benefits to the extent they become payable.
Employer is excused from paying future benefits until this credit is exhausted.”
(Employer’s Br. at 34 (quoting Mrkich, 801 A.2d at 674).)
       Employer further asserts that Claimant misapprehends the nature of the
benefits she is due. It explains that under Section 306(c) of the Act, she is entitled
to a disability benefit.14 See Section 306(c) of the Act, 77 P.S. § 513. Section
306(c)(22) provides for specific loss benefits, which fall within the general category
of disability benefits. Employer reiterates that all disability benefits are in their grace
period and suspended until the approximately $1.6 million settlement is depleted. In
support, Employer cites Kinzler v. Workers’ Compensation Appeal Board

       14
          Section 306(c) refers to “all disability resulting from permanent injuries . . . .” Section
306(c) of the Act, 77 P.S. § 513.

                                                 8
(Association for Vascular Access), 245 A.3d 389 (Pa. Cmwlth. 2021) (adopting the
view that specific loss benefits are subject to subrogation in the same manner as total
disability benefits).

III.   DISCUSSION
       Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704, limits our
review in workers’ compensation matters to determining whether the WCJ violated
constitutional rights, failed to act in accordance with law, or made findings
unsupported by substantial evidence. Universal Am-Can, Ltd. v. Workers’ Comp.
Appeal Bd. (Minteer), 762 A.2d 328, 331 n.2 (Pa. 2000). A WCJ’s grant or denial
of a penalty petition falls within the rubric of errors of law; we have explained that
        Section 435(d) of the Act authorizes the assessment of penalties
        against an employer [that] violates the Act or the Bureau [of
        Workers’ Compensation]’s regulations. 77 P.S. § 991(d).[15]
        Claimants seeking the imposition of a penalty bear the initial burden
        of proving that a violation of the Act or the regulations has occurred.
        . . . If the claimant meets this initial burden, “the burden then shifts
        to the employer to prove it ha[s] not” violated the Act. . . . Even if a
        violation of the Act or the regulations is established, the imposition
        of a penalty is not mandatory but falls within the discretion of the
        fact finder. . . . Accordingly, this Court will not overturn a penalty
        [decision] on appeal absent an abuse of discretion, which is not
        merely an error of judgment, but among other reasons, occurs where
        the law is misapplied in reaching a conclusion.

Bennett v. Jeld-Wen, Inc. (Workers’ Comp. Appeal Bd.), 306 A.3d 949, 958-59 (Pa.
Cmwlth. 2023) (internal citations and quotation marks omitted) (emphasis added).
       Therefore, the threshold question is whether Claimant has met her burden of
showing that Employer violated the Act. In Griffis I, we concluded that, as of
October 2017, when Employer unilaterally stopped paying its pro rata share of costs

       15
            Section 435 was added by Section 3 of the Act of February 8, 1972, P.L. 25.

                                                 9
and fees, even if such unilateral cessation did violate the Act, it did not warrant
imposition of penalties because it was justified. See Griffis I, slip op. at 34 (“Because
there was no error in suspending Claimant’s benefits . . . the WCJ did not abuse his
discretion in declining to impose penalties.”) (emphasis added). Indeed, we made
clear that ongoing suspension of benefits was warranted until the lien is paid.16
Because this Court, in affirming the Board in Griffis I, said that Employer was not
violating the Act by continuing to decline to pay pro rata costs and fees, here, the
WCJ would only have erred in dismissing the Penalty Petition if, by the time it was
filed in November 2020, the situation had fundamentally changed so as to render
Employer’s continued refusal to pay improper, given this Court’s Order in Griffis I.
       We first address Claimant’s contention that it was error for the WCJ not to
use her $836 weekly indemnity benefit to calculate the number of weeks necessary
to fully repay the subrogation lien, which necessarily requires us to consider
Employer’s current obligation with respect to Claimant’s $836 weekly indemnity
benefit and its corresponding grace period.
       We explained in Monessen:
         Where [a] claimant has not fully [physically] recovered[17] . . . the
         employer retains a contingent subrogation interest in the balance of
         recovery paid to [a] claimant, and receives a credit in this amount
         toward future compensation benefits to the extent they become
         payable. [The e]mployer is excused from paying future benefits
         until this credit is exhausted. This period of time, measured in

       16
           We explained in Griffis I, that Claimant could satisfy the subrogation lien one of two
ways: either by paying it in full or “through the suspension of all of Claimant’s benefits including
her pro rata share . . . until that [subrogation lien] is reimbursed in full.” Id., slip op. at 32. We
explained that Employer, upon reimbursement of the subrogation lien, would be entitled to
continue not to pay any indemnity benefits because it is entitled to a credit against those benefits
until the third-party recovery is exhausted. Id.
        17
           This is the case here, where the WCJ found that Claimant continues to be entitled to full
indemnity benefits. (WCJ Decision, 11/10/2021, FOF ¶ 1.)

                                                 10
         weeks, is computed by dividing the credit by the weekly
         compensation benefit amount. The result is known as the “grace
         period.”

875 A.2d at 418 (quoting Mrkich, 801 A.2d at 675) (emphasis added, original
emphasis omitted). To reiterate, Claimant was receiving “a double payment of
indemnity benefits” from the time of her third-party settlement in 2013 until
Employer stopped paying in October 2017. Griffis I, slip op. at 31 (emphasis in
original). The $118,380.97 subrogation lien Claimant owes Employer represents
past indemnity benefits Employer never should have had to pay during that time
period. Id. As of October 2017, Employer entered its grace period with respect to
its obligation to pay future indemnity benefits from that point; its obligation to
resume any indemnity payments will not resume until the entire settlement has been
exhausted, as the settlement funds Claimant received are deemed a prepayment of
any prospective indemnity benefits. Id. See also Monessen, 875 A.2d at 418 (The
employer was “excused from paying future [indemnity] benefits until this credit is
exhausted.”) (emphasis omitted). In other words, Employer’s current nonpayment
of the indemnity benefits does not “chip away” at Claimant’s subrogation lien debt,
which represents overpaid past indemnity benefits, but rather, Employer’s
nonpayment of indemnity benefits right now “chips away” at the remainder of
Claimant’s third-party settlement. Simply put, as of October 2017, Employer is
entitled to a grace period with respect to indemnity benefits until the entire settlement
is exhausted. (Board Op. at 6 (“Claimant’s eligibility for indemnity benefits . . . has
not ended. She is not receiving weekly payments of indemnity benefits because the
balance of recovery [i.e., settlement funds] has not been exhausted.”).)18

       18
           Further, Claimant’s reliance on the following line of Monessen is misplaced: “where
there is no cash from the third[-]party settlement to satisfy the past subrogation lien by a lump sum
(Footnote continued on next page…)

                                                11
       In sum, Employer’s obligation to pay $836 in weekly indemnity benefits is in
its grace period. Each week, Employer’s deemed “prepayment” of those benefits
(i.e., Claimant’s balance of recovery), is reduced by $836. That amount does not
operate to reduce or pay back the subrogation lien debt. Therefore, we reject
Claimant’s argument that the WCJ erred in declining to use the $836 weekly
indemnity figure as the denominator in calculating the number of weeks to which
Employer is entitled as a grace period for recoupment of the subrogation lien.
       We next address Claimant’s related point that the WCJ erred in dividing the
subrogation lien by the pro rata costs and fees figure to determine Employer’s grace
period with respect to recoupment of the subrogation lien. The pro rata attorney’s
fees and costs, in contrast to the weekly indemnity benefits, are indeed monies
Employer owes Claimant; had Claimant paid the subrogation fee in a lump sum as
ordered, Employer would be required to pay her that sum each week. (See Board
Op. at 5.)19 Here, it is key that Claimant owes Employer $118,380.97. Therefore,
Employer should not have to pay its pro rata fees and costs obligation to Claimant
until she has repaid the subrogation lien. In substance, when Employer withholds
the pro rata fees and costs each week, it is as if it writes Claimant a check for
$332.20, Claimant deposits that amount, then writes a check back to Employer in
the amount of $332.20 toward repayment of her debt to Employer. The Board
concluded it would take Claimant 356.35 weeks to pay back the subrogation lien.

payment, a WCJ may grant a grace period at the full compensation rate.” Monessen, 875 A.2d
at 419 (emphasis added). Here, the record shows that there is cash from the third-party settlement
to satisfy the subrogation lien; Claimant has not paid the lump sum. Accordingly, that sentence is
inapplicable on these facts.
         19
            “Claimant is obligated to immediately reimburse Employer for the accrued lien.
Employer is also entitled to a future credit for the balance of recovery, with Claimant receiving
the pro rata share of costs over the grace period . . . .” (WCJ Decision, 5/10/2018, COL ¶ 3
(emphasis added).)

                                               12
(Id.) We agree with that calculation because it accounts for the reality that the
$118,380.97 debt Claimant owes Employer can be recouped by Employer declining
to pay the only amount it currently owes her, $332.20 per week. As detailed above,
it was not error for the WCJ or Board to decline to require that the weekly indemnity
figure be used to determine how long it would take for Employer to recoup its
subrogation lien. Because Employer stopped payment of any benefits as of October
3, 2017, the fact that it will take 356.35 weeks for Employer to be paid back in full
means the subrogation lien will be satisfied around May 2024, assuming Claimant
does not finally pay in full. Because $332.20 was the correct figure by which to
divide the subrogation lien to yield a period of 356.35 weeks for repayment of the
lien, in November 2020, the time Claimant filed the penalty petition, Employer was
still under no obligation to make weekly payment of pro rata attorney’s fees and
costs to Claimant. Accordingly, the WCJ did not err in finding no violation of the
Act, and therefore, in dismissing the Penalty Petition.
      Further, we agree with Employer that any specific loss benefits to which
Claimant is entitled are indeed, disability benefits, which are fully subject to
subrogation. See Kinzler, 245 A.3d at 389 (specific loss benefits are subject to
subrogation in the same manner as total disability benefits). Therefore, no specific
loss benefits would have been in question until the entire balance of recovery is
exhausted.
      Finally, we address Claimant’s contention that, essentially, Employer has not
followed the approach we set out in Griffis I. There, we said that “[o]nce there is a
full reimbursement [of the subrogation lien], Employer is able to take a credit against
Claimant’s ongoing indemnity benefits, minus the pro rata share, until Claimant’s
third-party recovery is exhausted.” Griffis I, slip op. at 31-32. That language from

                                          13
Griffis I was meant to more broadly explain the propositions involved; it did not
delve into the granular detail of the mechanics of the precise source of the repayment
for the subrogation lien. Given, as explained above, that Employer was in its grace
period with respect to payment of indemnity benefits as of October 3, 2017, the
language from Griffis I can be fairly read to mean that Employer “is able to
[continue] tak[ing] a credit against Claimant’s ongoing indemnity benefits” after the
subrogation lien was reimbursed. Id. (emphasis added). Simply, our broad overview
of how the subrogation lien would be repaid does not foreclose Employer’s
reasonable approach to securing repayment thereof, and we agree with the Board
that the WCJ did not err in endorsing that reasonable approach.
       To be clear, there are two overlapping grace periods in this case. First, there
is the grace period with respect to indemnity benefits; Employer is entitled to cease
payment of the weekly indemnity benefit until Claimant’s “prepayment” in the form
of the settlement proceeds Claimant retained runs out. But second, because Claimant
has refused to repay the subrogation lien, Employer is in a second, independent grace
period with respect to its obligation to pay costs and fees. Simply put, Employer
should not have to count toward the subrogation lien the unpaid indemnity benefit
to which it already deserves a credit into the future against the Claimant’s remaining
settlement funds. As a result, from the time this Court approved of Employer’s
nonpayment of pro rata costs and fees in 2020 until the filing of the instant Penalty
Petition, there has been no intervening change to suggest that Employer has violated
the Act.20 The WCJ, therefore, did not err in declining to find a violation of the Act.

       20
          To the extent our reasoning in Griffis I could be read to suggest that the unpaid indemnity
benefits should be counted toward recoupment of the subrogation lien, for the reasons set forth
above, we maintain that Employer’s interpretation of our reasoning and approach in counting only
unpaid costs and fees toward the subrogation lien was entirely reasonable.

                                                14
IV.   CONCLUSION
      Employer is entitled to recoup its subrogation lien by retaining the fees and
costs it would otherwise be obligated to pay over to Claimant on a weekly basis.
The WCJ did not err in so reasoning, nor did the WCJ err in concluding that no
violation of the Act had occurred, such that the Penalty Petition should be dismissed.
Accordingly, we affirm the Board’s Order.

                                       __________________________________________
                                       RENÉE COHN JUBELIRER, President Judge

                                         15
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Anna Griffis,                           :
                       Petitioner       :
                                        :
                 v.                     :   No. 613 C.D. 2022
                                        :
Albert Einstein Healthcare Network      :
(Workers’ Compensation Appeal           :
Board),                                 :
                         Respondent     :

                                    ORDER

      NOW, March 15, 2024, the May 24, 2022 Order of the Workers’
Compensation Appeal Board is AFFIRMED.

                                      __________________________________________
                                      RENÉE COHN JUBELIRER, President Judge