Court Opinion

ID: 4030727
Source: CourtListenerOpinion
Date Created: 2016-09-01 18:36:30.712274+00
Date Added: 2024-06-11T09:17:49.336736
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Nalda Batista Cruz,                     :
                         Petitioner     :
                                        :
            v.                          :   No. 2452 C.D. 2015
                                        :   Submitted: July 1, 2016
Workers’ Compensation Appeal            :
Board (Clemens Family Corporation       :
and Liberty Insurance Corporation),     :
                        Respondents     :

BEFORE: HONORABLE P. KEVIN BROBSON, Judge
        HONORABLE MICHAEL H. WOJCIK, Judge
        HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE BROBSON                            FILED: September 1, 2016

            Petitioner Nalda Batista Cruz (Claimant) petitions for review of an
order of the Pennsylvania Workers’ Compensation Appeal Board (Board). The
Board affirmed the decision of a Workers’ Compensation Judge (WCJ), denying
Claimant’s penalty petition against Clemens Family Corporation (Employer). For
the reasons set forth below, we reverse the Board’s order and remand the matter for
further proceedings.
            On April 4, 2012, Claimant sustained a lumbar injury while working
for Employer.    Employer accepted that injury pursuant to a compromise and
release agreement (C&R), which WCJ Cathleen Sabatino approved by her decision
circulated on June 7, 2013. The C&R provided for a payment by Employer to
Claimant of $62,500 (less $12,500 in counsel fees) in satisfaction of Claimant’s
disability claim. With respect to medical bills, the C&R provided:
            Employer shall either pay, per the Act, medical bills
            totaling $30,000 or medical bills for treatment provided
            on or before December 1, 2013, whichever comes first.
            In no event shall Employer’s liability for medical bills
            exceed $30,000, regardless of the treatment that may be
            provided or the amounts that may be billed. In no event
            shall Employer be responsible for the payment of bills for
            the treatment provided on or after December 2, 2013,
            regardless of when, where or why such treatment might
            be provided. Claimant understands and agrees that
            Employer may pay less than $30,000 or that Employer’s
            liability for payment of medical bills may end prior to
            December 1, 2013.         In the event that, as of
            December 2, 2013, Employer has paid less that [sic]
            $30,000 for medical treatment, Employer shall promptly
            pay the difference to Claimant. No attorney’s fee shall
            be deducted from this payment.
(Reproduced Record (R.R.) 54a.)
            On or about July 24, 2014, Claimant filed a penalty petition, alleging
that Employer failed to pay Claimant for her medical bills in accordance with the
C&R. Employer paid $18,350.13 for Claimant’s medical treatment from the onset
of her injury through December 1, 2013. Employer paid Claimant an additional
$11,649.87 (the difference between the $30,000 cap in the C&R and the total
amount Employer paid for Claimant’s medical treatment). Claimant argues that
Employer’s payment to Claimant under the medical treatment payment provision
of the C&R should have been greater. She contended that the $30,000 cap applied
only to medical bills paid from the date of the C&R up to December 1, 2013, and
did not include bills that Employer had already paid. From the date of the C&R to
December 1, 2013, Employer paid only $5,758.38 in medical bills. The difference
between that amount and the $30,000 cap is approximately $24,241.62, to which
Claimant claims she was entitled under the terms of the C&R. As Employer
remitted to Claimant only $11,649.87, Claimant alleged that she was owed the

                                        2
balance of $12,591.75.       Based upon that contention, Claimant asserted that
Employer failed to comply with the medical treatment payment provision in the
C&R and sought penalties from Employer for an alleged violation of
Section 435(d) of the Workers’ Compensation Act (Act).1
             WCJ Brian Puhala conducted a hearing on Claimant’s penalty
petition. WCJ Puhala’s written decision included findings of fact, confirming the
all of the payments above, with the exception of the amount Employer paid toward
Claimant’s medical bills between the date of the C&R and December 1, 2013.
WCJ Puhala rejected Claimant’s proffered reading of the medical treatment
payment provision of the C&R, reaching the following relevant legal conclusions:
             3. The language of the [C&R] is the exclusive source of
                the terms between the parties;
             4. The clear language of the [C&R] provides [that
                Employer] would pay medical bills for Claimant’s
                work injury through December 1, 2013, subject to a
                $30,000 ceiling. There is no language in the [C&R]
                stating that this obligation began as of the date of the
                [C&R] or the approval thereof, as argued by
                Claimant;
             5. Claimant’s argument that the $30,000 ceiling began
                as of 6/6/2013 is not supported by language in the
                [C&R].
(WCJ Puhala decision at 4; R.R. at 19a.)
             Claimant appealed to the Board, arguing that WCJ Puhala erred by
failing to find a latent ambiguity in the medical treatment payment provision of the
C&R based on parole evidence—that being Claimant’s testimony as to her

      1
        Act of June 2, 1915, P.L. 736, added by the Act of February 8, 1972, P.L. 930, as
amended, 77 P.S. § 991(d).

                                           3
understanding of what the provision meant. The Board, however, concluded that
the C&R did not contain ambiguous language or language that is susceptible to
different constructions. (Board Op. at 4.) Based upon that view, the Board opined
that the parol evidence rule did not apply and affirmed WCJ Puhala’s decision.
              Claimant petitioned for review of the Board’s order,2 raising the
following issues: (1) whether WCJ Puhala and the Board erred as a matter of law
in concluding that the parol evidence rule does not apply; and (2) whether WCJ
Puhala and the Board erred in failing to address Claimant’s testimony, which, he
contends, provides evidence that a latent ambiguity exists in the C&R.
              “[A] compromise and release agreement only extinguishes liability
which is claimed to exist under the Act where the person with the claim
specifically agrees to relieve the liable person from that liability.” Gingerich v.
Workers’ Comp. Appeal Bd. (U.S. Filter), 825 A.2d 788, 791 (Pa. Cmwlth.),
appeal denied, 839 A.2d 354 (Pa. 2003). When construing contracts to determine
the intent of the parties, courts must consider first the words of the contract, and
when the words are clear and unambiguous, courts must rely upon the express
language of the agreement to find intent. Crawford v. Workers’ Comp. Appeal Bd.
(Centerville Clinics), 958 A.2d 1075, 1083 (Pa. Cmwlth. 2008).                    A latent
ambiguity, however, may arise from collateral circumstances, rendering the
meaning of what was perceived to be an unambiguous writing uncertain.
Krizovensky v. Krizovensky, 624 A.2d 638, 643 (Pa. Super. 1993). Courts regard

       2
          Our review is limited to considering whether an error of law occurred, whether any
constitutional rights were violated, and whether necessary factual findings are supported by
substantial evidence. 2 Pa. C.S. § 704.

                                             4
the express language of a contract as sufficiently clear and, thus, binding, when the
terms of the agreement are not susceptible to more than one interpretation.
Amerikhol Mining, Inc. v. Mount Pleasant Twp., 727 A.2d 1179, 1182 (Pa.
Cmwlth. 1999). If, on the other hand, the terms of a contract give rise to more than
one reasonable interpretation, courts are free to consider extrinsic evidence,
including parol evidence, which may resolve the ambiguity. Id.
             Turning to the language of medical treatment payment provision in
the C&R, we agree with WCJ Puhala’s and the Board’s assessment that the
provision is not ambiguous on its face. Under the provision, Employer “shall pay”
Claimant’s medical bills up to December 1, 2013, or up to maximum amount of
$30,000.00, whichever first occurs.      To the extent that Employer’s medical
payments are less than $30,000.00 as of December 2, 2013, Claimant is entitled to
a payment from Employee of the difference. This much seems clear. It was not
until Employer actually paid Claimant “the difference” that, in Claimant’s view, a
latent ambiguity in the provision arose as to what medical payments by Employer
should count toward the $30,000 cap. That latent ambiguity is founded, at least in
part, on the absence of any language in the provision that specifically addresses the
date on which Employer’s liability for medical treatment payments under the
provision begins for purposes of applying payments toward the $30,000.00 cap.
             We, however, disagree with both WCJ Puhala and the Board that
there is no language in the C&R that supports Claimant’s preferred interpretation
of the medical treatment payment provision. The first sentence of the medical
treatment payment provision of the C&R provides: “Employer shall either pay,
per the Act, medical bills totaling $30,000 or medical bills for treatment provided
on or before December 1, 2013, whichever comes first.” (Emphasis added.) Use

                                         5
of the phrase “shall . . . pay” suggests a command to act in the future, supporting
Claimant’s proffered interpretation that only medical treatment that Employer paid
pursuant to the C&R and thus after the parties executed the C&R should be applied
toward the $30,000 cap.
            We conclude that Claimant has proffered a reasonable, alternative
construction of the medical treatment payment provision in the C&R to that
Employer advances and upon which Employer based its $11,649.87 payment to
Claimant. Accordingly, we reverse the Board’s order and remand the matter to the
Board with the direction to remand the matter to the WCJ for additional
proceedings, as needed, in order to determine the intent of the parties with regard
to the medical treatment payment aspect of the C&R and to render a decision on
Claimant’s penalty petition.

                               P. KEVIN BROBSON, Judge

                                        6
           IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Nalda Batista Cruz,                      :
                         Petitioner      :
                                         :
            v.                           :   No. 2452 C.D. 2015
                                         :
Workers’ Compensation Appeal             :
Board (Clemens Family Corporation        :
and Liberty Insurance Corporation),      :
                        Respondents      :

                                      ORDER

            AND NOW, this 1st day of September, 2016, the order of the
Workers’ Compensation Appeal Board (Board) is REVERSED. The matter is
REMANDED to the Board with the direction to remand the matter to the Workers’
Compensation Judge for further proceedings as required.
            Jurisdiction relinquished.

                               P. KEVIN BROBSON, Judge