Court Opinion

ID: 9755578
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:43:27.072414+00
Date Added: 2024-06-11T07:28:09.279878
License: Public Domain

PELLEGRINI, Judge,
dissenting.
I respectfully dissent because I believe that to imply unjust enrichment against a claimant is against the legislative scheme embodied in the Workers’ Compensation Act. In any event, even if equitable principles were implied, the doctrine of equitable estoppel should be applied, not unjust enrichment.
After Eric Kiebler (Claimant) suffered a work-related injury, Specialty Tire of America (Employer) issued a Notice of Compensation Payable (NCP) providing a weekly benefit rate of $451.85 for total disability based upon an average weekly wage of $677.77. Because it had allocated Claimant’s 1994 yearly bonus of $1,600 over the entire year (1994) rather than to the quarter in which it was paid (Sept-Dec. 1994) in calculating Claimant’s average weekly wage, Employer filed a petition to modify benefits pursuant to Section 413 of the Workers’ Compensation Act (Act).1 It alleged that Claimant’s correct average *517weekly wage was $601.50, the correct weekly compensation rate was $401, and there was an overpayment and recoupment of $4,678.20 based on the overpayment from Claimant of $50.85 per week for the 92 weeks he received the incorrect amount.
The majority, relying on Fahringer, McCarty & Grey, Inc. v. Workmen’s Compensation Appeal Board (Green), 107 Pa.Cmwlth. 597, 529 A.2d 56 (1987), holds that because under Section 413 of the Act, a WCJ may, at any time, set aside a notice of compensation payable if it is proven that such notice of compensation payable or agreement was in any material respect incorrect, attendant with that power is the power to order recoupment on the basis of unjust enrichment. While Section 418 of the Act authorizes the setting aside of an NCP based on a mistake of material fact, nothing in that provision or any other provision of the Act, as the majority acknowledges, authorizes an employer to obtain recoupment for overpayment directly from a claimant. By agreeing with Fahringer and allowing recoupment against claimants who innocently relied on their Employer’s negligent miscalculation, the majority is saying such power is implied in Section 413 of the Act.
While I believe the majority’s outcome is in accord with our decision in Fahringer, I would overrule that case because I disagree that the equitable power of recoupment can be implied in Section 413 of the Act when there is no provision anywhere in the Act that allows recoupment where the claimant merely received compensation that was miscalculated by the employer because it goes against the legislative scheme embodied in the Workers’ Compensation Act. If the General Assembly wanted to allow recoupment from an innocent claimant, it would have said so. When a WCJ grants a claim petition that later is reversed because the injury is not work-related, or where an employer has accepted an injury but challenges the medical treatment as being unrelated to the work-injury, the General Assembly did not provide for recoupment from the claimant or the medical provider, even though each could have received thousands or hundreds of thousands of dollars in payment found not to be work-related. Instead, it provided that recoupment be made from the Supersedeas Fund, a Fund funded by employers or their carriers.
Even if equitable powers are implied, the equitable doctrine that should be applied is the doctrine of equitable estoppel. Equitable estoppel applies where a party negligently misrepresents material facts while knowing or having reason to know that another party will justifiably rely on the misrepresentation to its detriment, and the other party does so rely. Edgewater Steel Co. v. Workers’ Compensation Appeal Board (Beers), 719 A.2d 812 (Pa.Cmwlth.1998); Sharon Steel Corporation v. Workers’ Compensation Appeal Board (Myers), 670 A.2d 1194, 1199 (Pa.Cmwlth.), petition for allowance of appeal denied, 544 Pa. 679, 678 A.2d 368 (1996).2 An employer’s computation of weekly average wages falls within that criteria because that computation is generally relied upon by a claimant in determining what he or she has available to spend, especially when the employer has the payroll records and knows how to allocate bonuses, accumulated vacation and such to the relevant pay quarter. Fahringer, however, adopted a blanket rule that no matter the depth of a claimant’s reliance or the detriment that it would cause to that person’s ability to care for him or herself or his or her family,3 a *518workers’ compensation claimant could never justifiably rely upon statements of an opposing party as to what his or her own weekly wages were for computation purposes, making equitable estoppel inapplicable.
In making such a blanket rule, Fahringer essentially takes a cynical view that-the compensation system is an adversarial process and not an insurance system to aid injured workers, and that nothing that an employer says or calculations it has made can be relied upon in any way by the claimant; if the claimant does so, he or she does so at his or her own risk. Just as in Fahringer, while invoking equitable principles, the majority here takes the position that the doctrine of unjust enrichment prevails incongruously no matter what the competing equities are. The competing equities demand that where there is no fraudulent behavior by the claimant, the employer or its carrier bear the loss of payments made as a result of their negligent miscalculation, especially insurance carriers who are in the business of making calculations, and they are better able to bear the loss than the claimant who would have to pay the employer back out of his or her already reduced compensation payments and possibly not be able to care for the daily living needs of his or her family.
Consequently, I would overrule Fah-ringer because the General Assembly did not intend to make innocent claimants pay back compensation received as a result of employers’ negligent miscalculations, and because applying the equitable doctrine of unjust enrichment in that situation is essentially inequitable. Accordingly, I dissent.
Judge KELLEY joins in this dissenting opinion.

. Act of June 2, 1915, 736, as amended, 77 P.S. § 771. That section provides in relevant part:
A workers' compensation judge may, at any time, review and modify or set aside a notice of compensation payable and an original or supplemental agreement or upon petition filed by either party with the department, or in the course of the proceedings under any petition pending before such workers’ compensation judge, if it be proved that such notice of compensation payable or . agreement was in any material respect incorrect.

. Whether the facts of a case give rise to the application of equitable estoppel is a question of law that may be addressed by this Court on appeal. Walker v. Workmen’s Compensation Appeal Board (Sherbren Manufacturing), 656 A.2d 164 (Pa.Cmwlth.), petition for allowance of appeal denied, 542 Pa. 638, 665 A.2d 472 (1995).

. In Fahringer, we reversed the Referee and the Board which denied recoupment based on equitable estoppel and allowed an employer to recoup $18,320.07. By allowing recoup*518ment where there was a miscalculation and also a termination of benefits, the majority’s position could essentially force a claimant into bankruptcy.