Court Opinion

ID: 4285712
Source: CourtListenerOpinion
Date Created: 2018-06-19 13:51:23.999899+00
Date Added: 2024-06-11T14:35:43.409660
License: Public Domain

[J-24-2018]
                    IN THE SUPREME COURT OF PENNSYLVANIA
                                MIDDLE DISTRICT

     SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

    CRAIG M. WHITMOYER,                        :   No. 52 MAP 2017
                                               :
                      Appellant                :   Appeal from the Order of the
                                               :   Commonwealth Court at No. 614 CD
                                               :   2015 dated December 1, 2016
               v.                              :   Affirming the Order of the Workers'
                                               :   Compensation Appeal Board at No.
                                               :   A13-1373 dated March 20, 2015
    WORKERS' COMPENSATION APPEAL               :
    BOARD (MOUNTAIN COUNTRY                    :   ARGUED: April 11, 2018
    MEATS),                                    :
                                               :
                      Appellees                :

                                        OPINION

JUSTICE DONOHUE                                                DECIDED: June 19, 2018

        The Pennsylvania Workers’ Compensation Act (“WCA”)1 makes an employer liable

for paying the disability benefits and medical expenses of an employee who sustains an

injury in the course of his or her employment. See 77 P.S. §§ 431 (disability), 531

(medical). This liability attaches without regard to the employer’s negligence. See id; see

also Heckendorn v. Consolidated Rail Corp., 465 A.2d 609, 613 (Pa. 1983). Under

section 319 of the WCA, however, employers (or their insurance carriers) are “subrogated

to the right of the employe” and therefore entitled to reimbursement for certain expenses

1   Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.1, 2501-2708
where a third party caused the employee’s injury. 77 P.S. § 671. The instant matter

addresses a specific question about the scope of this reimbursement.

       Section 319 of the WCA provides, in pertinent part:

              Where the 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 employe, his personal
              representative, his estate or his dependents, against such
              third party to the extent of the compensation payable under
              this article by the employer; reasonable attorney's fees and
              other proper disbursements incurred in obtaining a recovery
              or in effecting a compromise settlement shall be prorated
              between the employer and employe, his personal
              representative, his estate or his dependents. The employer
              shall pay that proportion of the attorney's fees and other
              proper disbursements that the amount of compensation paid
              or payable at the time of recovery or settlement bears to the
              total recovery or settlement. Any recovery against such third
              person in excess of the compensation theretofore paid by the
              employer shall be paid forthwith to the employe, his personal
              representative, his estate or his dependents, and shall be
              treated as an advance payment by the employer on account
              of any future instalments of compensation.

77 P.S. § 671 (internal footnote omitted) (emphasis added). We granted allowance of

appeal to determine whether the Commonwealth Court erred in concluding that the term

“instalments of compensation” in section 319 encompasses both disability benefits and

payment of medical expenses.2

       We recognize that the word “compensation,” as used elsewhere in the WCA

(including elsewhere in section 319), refers variously to one or both of these types of

benefits. See Giant Eagle, Inc. v. W.C.A.B. (Givner), 39 A.3d 287, 294 (Pa. 2012)

2 We also granted review to consider whether the Commonwealth Court erred in finding
that Mountain Country Meats did not waive its rights under section 319 by waiting thirteen
years to assert a purported right to reimbursement of medical expenses. Because our
resolution of the first issue disposes of this appeal, we do not reach the question of waiver.

                                       [J-24-2018] - 2
(plurality).   “Instalments of compensation,” however, is a more specific term.          As

discussed herein, we find that it means what it says: compensation that is paid in

installments. Under the WCA, disability benefits are required to be paid in this manner,

namely, "in periodical installments, as the wages of the employe were payable before the

injury.” See 77 P.S. § 601. Medical expenses are not. See 77 P.S. § 531. Accordingly,

when a workers’ compensation claimant recovers proceeds from a third-party settlement

(following repayment of compensation paid to date) as prescribed by section 319, the

employer (or insurance carrier) is limited to drawing down against that recovery only to

the extent that future disability benefits are payable to the claimant. Accordingly, and as

explained herein, we reverse the decision of the Commonwealth Court.

        In January 1993, Craig Whitmoyer (“Whitmoyer”) suffered a work-related injury that

resulted in the amputation of part of his arm. Starting at that time, his employer, Mountain

Country Meats (“MCM”), or MCM’s insurance carrier, Selective Insurance (“Selective”),

paid all of Whitmoyer’s medical expenses related to this injury. A few months later, the

parties reached an agreement related to Whitmoyer’s disability benefits – he was entitled

“to a 20 week healing period and 370 weeks of specific loss benefits [at $237.50 per week

after May 22, 1993].” Judge’s Exhibit 3 (Supplemental Agreement for Compensation for

Disability or Permanent Injury, 4/29/1993) (providing that “weekly wages must be

computed in accordance with Section 309 of the [WCA]”).3 Whitmoyer subsequently

petitioned for a commutation of these weekly payments. In December 1994, the Workers’

3  This supplemental agreement provided that “compensation was paid from 1/2/93 thru
[sic] 5/21/93 for 20 weeks at a rate of $158.33 per week for a total of $3,166.60, which
includes both the waiting period and the healing period.” Judge’s Exhibit 3. Section 309
of the WCA sets forth the method of computing a claimant’s wages at the time of his or
her injury for the purpose of determining compensation. See 77 P.S. § 582.

                                      [J-24-2018] - 3
Compensation Judge (“WCJ”) granted his petition and directed MCM or Selective to pay

Whitmoyer a lump sum payment of $69,994.64. While this commutation resolved his

entitlement to disability benefits entirely, MCM remained responsible for Whitmoyer’s

ongoing medical bills. Judge’s Exhibit 4 (Commutation Decision and Stipulation of Facts,

12/27/1994).

       Several years later, Whitmoyer obtained a $300,000 settlement from third parties

related to his injury and, in April 1999, he entered a third-party settlement agreement (the

“TPSA”) with Selective providing that as to past-paid compensation, Selective was

entitled to a net subrogation lien of $81,627.87. See Selective’s Exhibit 7 (TPSA).4 The

net subrogation lien represents the difference between Selective’s total accrued

subrogation lien ($110,583.73) and Selective’s pro rata share of the third-party litigation

expenses ($28,955.86). Id. Thus, under the terms of the TPSA, Whitmoyer’s “balance

of recovery” was $189,416.27. Id. This term is defined on the form as a “fund for credit

against future workers’ compensation payable, subject to reimbursement to claimant of

expenses of recovery at the rate of 37% on credit used.” Id.

       In communicating with Selective about the TPSA, Whitmoyer’s counsel sent two

letters to Jodi Bell (“Bell”), Selective’s claims adjuster. In the first letter, dated March 8,

1999, counsel forwarded the TPSA, noted that “the lien of [Selective] can be satisfied in

full with payment of $81,627.87” pursuant to section 319, and asked “that [Selective]

4    The third-party settlement agreement between Selective and Whitmoyer is
memorialized on a boilerplate form supplied by the Bureau of Workers’ Compensation
(the “Bureau”) for such agreements. The form provides, “In accordance with Section 319
of the Pennsylvania [WCA], parties herein have agreed to the following distribution of
proceeds received from Hollymatic Corporation & Dantro Associates, Inc, third party.”
Selective’s Exhibit 7 (TPSA).

                                       [J-24-2018] - 4
remain responsible for payment of future medical expenses incurred by Mr. Whitmoyer.”

Selective’s Exhibit 6 (March Letter from Donald F. Smith, Jr.). In the second letter, dated

May 26, 1999, counsel enclosed a check for $81,627.13 and advised Selective of

Whitmoyer’s position that “no credit can be applied to future medical bills” because “under

Section 319 such credit only applies to ‘future installments of compensation’,” which does

not encompass “future medical expenses.” Selective’s Exhibit 8 (May Letter from Donald

Smith, Jr.). Selective cashed the check but did not respond to the letter. The TPSA,

dated April 8, 1999, bears Bell’s name and signature but was never signed by

Whitmoyer’s counsel.

       Selective continued to pay Whitmoyer’s work-related medical expenses in full

(without taking credit under the TPSA) for approximately thirteen years, until September

2012. At that time, Selective filed a modification petition requesting an adjustment to the

TPSA to reflect the medical expenses incurred since the parties entered the agreement.

Crediting the testimony of Bell that she did not have authority to agree to counsel’s

interpretation of “future installments of compensation” as set forth in his May 1999 letter,

the WCJ granted Selective’s petition. In addition, the WCJ found as a matter of fact that

the TPSA made Selective liable to Whitmoyer “for 37% of future medical expenses, up to

the balance of recovery.” See Decision and Order of the WCJ, 10/17/2013, at 2. The

WCJ also found, per the parties’ stipulation, that Selective had paid $206,670.88 for

Whitmoyer’s work injury as of February 2013. Id. The WCJ ordered that Selective’s

percentage credit be reduced to 26.09% of future medical expenses, up to Whitmoyer’s

balance of recovery amount of $189,416.27. Id. at 4.

                                      [J-24-2018] - 5
       Whitmoyer appealed to the Workers’ Compensation Appeal Board (the “Board”),

arguing that the TPSA was unenforceable because neither he nor his counsel had signed

it. Board Op. at 2. He also argued that the WCA only allows credit on account of future

installments of compensation, namely, “indemnity benefits,” none of which, in his case,

remained to be paid. Id. Finally, citing his attorney’s March and May 1999 letters and

Selective’s course of conduct since that time, he urged that the parties had agreed that

no credit would be applied toward future medical bills, and that Selective had waived its

subrogation rights and should be equitably estopped from now raising this claim. Id.

       The Board affirmed, finding no merit to Whitmoyer’s claim that the TPSA was

unenforceable or that the March and May 1999 letters created a binding agreement

barring Selective from taking a credit on future medical expenses. Id. at 6-7. As to

Whitmoyer’s argument that section 319 does not permit credit to be taken on future

medical expenses because they are not “instalments of compensation,” the Board held

that “it is well settled that medical expenses are compensation payments subject to

subrogation rights against a claimant’s recovery from a third party and subject to credit

toward future compensation where the recovery exceeds compensation paid at the time

of recovery.” Id. at 7 (citing Deak v. W.C.A.B. (USX Corp.), 653 A.2d 52 (Pa. Commw.

1994)) (emphasis added). Moreover, the Board explained that Bell’s credible testimony

belied the assertion that Selective chose to waive its subrogation right, which is generally

“absolute and can be abrogated only by choice.” Id. at 9 (noting that Bell did not have

the authority to agree to, nor did she respond to, any of the assertions in counsel’s letters).

Finally, the Board concluded that equitable estoppel was inappropriate under the

                                       [J-24-2018] - 6
circumstances because Selective never agreed to forgo its right to subrogation for future

medical expenses, and the WCA contains no equitable exceptions. Id. at 9-10.

       In a divided en banc opinion, the Commonwealth Court affirmed. The intermediate

appellate court first outlined the three objectives underlying section 319, as identified by

this Court in Dale Mfg. Co. v. W.C.A.B. (Bressi), 421 A.2d 653, 654 (Pa. 1980): (1) to

prevent double recovery by a claimant, (2) to ensure that a non-negligent employer avoids

responsibility for compensation payments necessitated by a negligent third party, and (3)

to prevent a negligent third party from escaping liability. 5      Whitmoyer v. W.C.A.B.

(Mountain Country Meats), 150 A.3d 1003, 1014 (Pa. Commw. 2016) (en banc). It then

reasoned that Pennsylvania appellate courts have concluded on multiple occasions that

medical expenses constitute “compensation” under section 319.               Id. at 1012-13

(discussing Deak, 653 A.2d at 54, Dasconio v. W.C.A.B. (Aeronca, Inc.), 559 A.2d 92,

103 (Pa. Commw. 1989), and Haley to Use of Martin v. Matthews, 158 A. 645, 646-47

(Pa. Super. 1932)). Even while recognizing that no court, least of all this one, has

addressed whether the General Assembly’s use of the distinct term “instalments of

compensation” in the last sentence of section 319 limits subrogation to credit for disability

benefits only, the Commonwealth Court nonetheless concluded that employers are

entitled to seek reimbursement for medical expenses from the employee’s balance of

recovery under section 319. Id. at 1013-15.

       The Commonwealth Court then discussed Giant Eagle. Id. at 1014. In that case,

a plurality of this Court indicated that a case-by-case analysis of the meaning of

5 It is worth noting that we discussed the rationale behind subrogation in section 319 after
citing the beginning of that provision, only, and without any reference to “instalments of
compensation.” See Dale Mfg. Co., 421 A.2d at 654.

                                      [J-24-2018] - 7
“compensation,” as used in article III of the WCA, is required whenever that word is

capable of at least two valid interpretations. Giant Eagle, 39 A.3d at 298 (conducting an

ambiguity analysis as to the meaning of “compensation” in section 314(a) and concluding

that it “need not always include medical benefits”). Finding that there are at least two

interpretations of “compensation” as used in section 319, the Commonwealth Court

indicated it would resolve the ambiguity by reference to the purpose of the statutory

provision. Whitmoyer, 150 A.3d at 1014-15 (citing 1 Pa.C.S. § 1921(c)). One objective

of subrogation, as noted supra, is to protect the “presumably [] innocent” employer from

ultimate liability. Because this rationale applies with equal force to medical expenses and

disability benefits, the Commonwealth Court reasoned that “compensation” (and even

“instalments of compensation”) as used in section 319 must be construed to encompass

both types of payments. Id.

       The Commonwealth Court added that the General Assembly’s use of the word

“instalments” could be explained by the fact that medical expenses are not typically paid

in a lump sum but instead must be paid “periodically overtime” or in “discrete payments.”

Id. at 1015. Finally, the Commonwealth Court found no merit to Whitmoyer’s position that

allowing an employer to seek reimbursement for medical expenses violates section

306(f.1) by shifting liability for the cost of medical care from the employer to the claimant.

Instead, allowing an employer to seek reimbursement for these expenses from

Whitmoyer’s balance of recovery was simply “a right expressly agreed upon in the

[TPSA].” Id.

       In dissent, President Judge Leavitt (joined by Judges Cosgrove and McCullough)

argued that the majority’s interpretation of section 319 gives no effect to the General

                                       [J-24-2018] - 8
Assembly’s inclusion of the word “instalment” in the final sentence. She reasoned that

section 306(f.1)(7) makes the employer responsible for all medical expenses and posited

that allowing an employer to seek reimbursement from the employee’s third party

recovery, after the accrued subrogation lien is resolved, improperly “turns the statutory

scheme on its head.” Id. at 1022 (Leavitt, P.J., dissenting). In addition, she noted that

the word “installment” is defined in the dictionary as “one of the parts into which a debt is

divided when payment is made at intervals” and that only disability benefits are “made at

intervals.” Id. at 1022-23 (citing Merriam-Webster’s Collegiate Dictionary 605 (10th ed.

2001). Furthermore, whereas section 319 refers to “compensation paid or payable at

the time of recovery or settlement,” the General Assembly did not use the symmetrical

word “payment” when delineating the type of benefits for which an employer could claim

credit after settlement.   Id. at 1023.   Instead, the General Assembly chose “future

instalments of compensation,” thus deliberately limiting future charges against the

employee’s recovery to disability benefits. Id.

       Judge Cosgrove also separately dissented (joined by the President Judge and

Judge McCullough) to emphasize, as relevant here, that there is clearly “a certain

regularity … attached to the concept of ‘interval’” in the definition of “installment.” Id. at

1023 (Cosgrove, J., dissenting). He concluded that disability benefits are distributed with

regularity whereas medical expenses are typically incurred on a random and uncertain

basis. Id.

       On appeal, Whitmoyer argues that the Commonwealth Court’s decision improperly

reads the word “instalments” out of section 319. He also notes that the cases cited by

the Commonwealth Court are concerned with what the term “compensation” means,

                                       [J-24-2018] - 9
generally, and not with the meaning of “instalments of compensation.” Whitmoyer’s Brief

at 16-19. He insists that section 308 of the WCA supports his position that “instalments

of compensation” refers to disability benefits, but not medical expenses, because that

section states, “except as hereinafter provided, all compensation payable under this

article shall be payable in periodical installments, as the wages of the employe were

payable before the injury.” Id. at 19 (quoting 77 P.S. § 601). Whitmoyer juxtaposes the

disability payments made in “periodical installments,” with section 306(f.1)(1)(i), which

requires the employer to make medical payments “as and when needed.” Id. at 19-20

(quoting 77 P.S. § 531(1)(i)).       Finally, he argues, in the alternative, that the

Commonwealth Court erred in not finding that Selective waived its right to seek any

reimbursement for medical expenses from Whitmoyer’s balance of recovery. Id. at 23-

26.

      MCM takes the position that courts have consistently interpreted the word

“compensation” in section 319 to encompass both disability wages and medical

expenses. MCM’s Brief at 5-17. Like the Commonwealth Court below, MCM urges that

prohibiting an employer from recouping the cost of medical expenses after its initial lien

has been satisfied undermines the purpose of section 319 by facilitating a double

recovery for the employee and by forcing the non-negligent employer to bear the costs of

a third party’s negligence. Id. at 12-13, 20 (citing Dale Mfg. Co., 421 A.2d 653).

      In addition, MCM posits that the TPSA must be read to evidence the Bureau’s

understanding of section 319, namely that “where the balance of recovery exceeds the

accrued lien, the balance of recovery is a fund to be depleted by payment of credits to

the injured worker as a percentage of future compensation which becomes payable.”

                                     [J-24-2018] - 10
MCM’s Brief at 22 (noting that there is nothing on the form to denote that credit applies

only to future disability benefits). Moreover, MCM contends that the TPSA has no

meaning if the “37%” figure therein only relates to disability benefits, because Whitmoyer

is not owed any future disability benefits. Thus, according to MCM, in drafting the TPSA,

Whitmoyer’s counsel acknowledged that Whitmoyer’s balance of recovery was subject to

a 37% credit toward future medical expenses. Id. at 22-23 (arguing that Whitmoyer’s

counsel should have inserted “zero” or “disputed” instead of “37%” if he believed no credit

could be taken for future medical expenses). Finally, MCM argues that it has not waived

any rights. Id. at 28-34.

       In an amicus brief in support of Whitmoyer, the Pennsylvania Association for

Justice (“PAJ”) focuses on the structure of section 319, characterizing the provision as

presenting two distinct scenarios. PAJ’s Brief at 7. The first two sentences of section

319 set forth the employer’s entitlement to subrogation at the time of a third-party

recovery. This encompasses “compensation” already paid and therefore contemplates a

reimbursement for both disability benefits and medical expenses paid out to date. By

contrast, the final sentence refers to “future instalments of compensation,” which refers

only to disability benefits still outstanding at the time of settlement. Id.

       We are called upon to interpret the term “instalments of compensation” in section

319 of the WCA. The proper interpretation of a statute is a question of law as to which

our standard of review is de novo, and our scope of review is plenary. Borough of

Heidelberg v. W.C.A.B. (Selva), 928 A.2d 1006, 1009 (Pa. 2007). As with all questions

of statutory interpretation, we are guided by the rules of construction, 1 Pa.C.S. §§ 1901-

1991. First and foremost, these rules provide that the object of interpretation is to

                                       [J-24-2018] - 11
“ascertain and effectuate the intention of the General Assembly.” 1 Pa.C.S. § 1921(a). In

pursuing this goal, we must take care to give meaning to every word and provision of the

statute. Id.

       Moreover, the statute’s plain language generally offers the best indication of

legislative intent, and we are instructed to give the statute its obvious meaning whenever

the language is clear and unambiguous. 1 Pa.C.S. § 1921(b). To that end, we will

construe words and phrases according to their common and approved usage. 1 Pa.C.S.

§ 1903(a). In addition, in determining whether language is clear and unambiguous, we

must assess it in the context of the overall statutory scheme, construing all sections with

reference to each other, not simply examining language in isolation.         See Housing

Authority of County of Chester v. Pennsylvania State Civil Service Com'n, 730 A.2d 935,

945-46 (Pa. 1999); see also Commonwealth v. Office of Open Records, 103 A.3d 1276,

1285 (Pa. 2014) (concluding that the statutory term at issue was unambiguous by

reference to surrounding statutory provisions). Only if we determine that the statutory

text is ambiguous may we look to considerations beyond the text such as the mischief to

be remedied by the statute or what gave rise to its enactment. 1 Pa.C.S. § 1921(c).

       Initially, we observe that section 319 addresses two distinct scenarios. See Rollins

Outdoor Advertising v. W.C.A.B., 487 A.2d 794, 796 (Pa. 1985). First, “the compensation

paid by the employer to the date of the third-party recovery constitutes a claim against

the recovery, payable immediately upon recovery to the employer.” Id. As to this scenario,

the General Assembly chose to use the word “compensation” without modification by the

term “instalments of.” That is, an employer’s subrogation right “at the time of recovery or

settlement” encompasses all “compensation” “theretofore paid” or “payable” to date. 77

                                     [J-24-2018] - 12
P.S. § 671. This amount is understood to be the employer’s accrued subrogation lien or

“total lien.”6 See Selective’s Exhibit 7 (TPSA).

         The second scenario relates to the distribution of net settlement proceeds, namely

what is left of the recovery after the employer has been reimbursed for “compensation

theretofore paid.”    See id.; see also Rollins Outdoor Advertising, 487 A.2d at 796.

Regarding this “excess” amount, section 319 provides that it shall be “paid forthwith” to

the employee to be treated as an “advance payment by the employer” — not as to

“compensation” but rather “on account of future instalments of compensation.” 77 P.S.

§ 671.

         There is no dispute that the term “compensation” – as it appears three times

unmodified by “instalments of” – encompasses both medical expenses and disability

benefits. See MCM’s Brief at 4-10; Whitmoyer’s Brief at 18. Indeed, Whitmoyer concedes

that a non-negligent employer has a right to be reimbursed for any disability benefits and

medical expenses accrued “up to the date of settlement.” See Whitmoyer’s Brief at 18;

77 P.S. § 671. But the terms “compensation” and “instalments of compensation” are

distinct and we are tasked here with interpreting the latter, more specific, term. To

conclude that “instalments of compensation” carries the same meaning as

“compensation” would render the words “instalments of” meaningless.           Our rules of

statutory construction do not permit such a result. See 1 Pa.C.S. 1921(a); see also

Commonwealth v. Lobiondo, 462 A.2d 662, 664 (Pa. 1983).

6 As noted, this amount is reflected in Part II of the TPSA (relating to the distribution of
proceeds) as the employer’s “total lien.” See supra p. 4; see also infra p. 18 (explaining
that the TPSA reflects MCM’s total lien amount at the time of settlement as $110,583.33,
before pro rata expenses).

                                      [J-24-2018] - 13
       As set forth in President Judge Leavitt’s dissenting opinion, Merriam-Webster’s

dictionary provides that an “installment” is “one of the parts into which a debt is divided

when payment is made at intervals.” See Whitmoyer, 150 A.3d at 1022-23 (Leavitt, P.J.,

dissenting). While a dictionary definition is not dispositive as to the plain meaning of a

statutory term, an examination of the overall statutory scheme confirms that the

legislature intended “instalments of compensation” to be limited to compensation that is

paid at “periodical” intervals (e.g. weekly or bi-weekly) in the same way that an employee’s

wages were paid. See 77 P.S. §§ 601, 603. Disability benefits, but not medical expenses,

are payable in this manner. See id.

       This result necessarily obtains because section 308 of the WCA states, “Except as

hereinafter provided, all compensation payable under this article shall be payable in

periodical installments, as the wages of the employe were payable before the injury.” 77

P.S. § 601. The reference to wages, and to the manner in which wages are paid, makes

plain that this provision, relating to “compensation payable in periodical installments,”

addresses the subset of workers’ compensation aimed at replacing lost wages. See id.

Cases interpreting section 308 bear out this conclusion. For example, in Staller v. Staller,

21 A.2d 16 (Pa. 1941), after discussing section 308 of the WCA, this Court noted that

section 316 of the same article authorizes the commutation of compensation and

explained that “[c]ommutation of periodical payments is not applicable to medical and

hospital expenses.” Id. at 17; see also Essroc Materials v. W.C.A.B.(Braho), 741 A.2d

820, 824 (Pa. Commw. 1999) (providing that section 308, “in furtherance of the inherent

humanitarian purposes of the [WCA], requires that compensation be paid in the same

periodic installment as a claimant's wages were paid before the injury, thus alleviat[ing]

                                      [J-24-2018] - 14
the economic burdens caused by a claimant's loss of earning power”); Bates v. W.C.A.B.

(Titan Const. Staffing, LLC), 878 A.2d 160, 163 (Pa. Commw. 2005) (confirming that

employer was required to pay benefits on a weekly basis so as “to mirror claimant’s pay

schedule prior to his injury”).

       Section 317, which addresses the payment of a lump sum in trust, also

demonstrates that the term “future instalments of compensation” refers exclusively to

disability benefits. See 77 P.S. § 603. That section provides that “a sum equal to all

future instalments of compensation may (where death or the nature of the injury renders

the amount of future payments certain) … be paid by the employer” to a bank, insurance

company or trust company. 77 P.S. § 603. Because death would defeat the need for

future medical expenses and because medical expenses are not capable of

predetermination in a way that renders their future amount “certain,” the General

Assembly’s inclusion of this parenthetical phrase indicates that “future instalments of

compensation” refers only to disability benefits.7     See id.   That section 317 further

provides that the trustee must make payments from said fund “in the same amounts and

at the same periods as are herein required of the employer,” is additional evidence that

“instalments of compensation” encompasses payments made at set intervals under the

WCA. Id. Again, only disability benefits are paid in this way. 77 P.S. § 601.

       The foregoing provisions stand in contrast to section 306(f.1)(1)(i) which provides

that “the employer shall provide payment in accordance with this section for reasonable

surgical and medical services … as and when needed.” 77 P.S. § 531(1)(i) (emphasis

7 Moreover, under the WCA, the nature of an injury may determine with certainty the
amount of disability benefits to which an injured employee is entitled. See 77 P.S. § 513.

                                    [J-24-2018] - 15
added). Notably, this section does not speak in terms of installments or periods, but

instead recognizes that medical expenses arise unpredictably, based upon the

individualized and changing needs of an injured employee.8

       Returning to section 319, we observe further that the “excess” recovery from a

third-party settlement is to be “paid forthwith” to the employee as an “advance payment

by the employer on account of any future instalments of compensation.” 77 P.S. § 671.

MCM refers to this “excess” as having strings attached, noting that “the recipient … is on

notice that the funds are being distributed to them only conditionally, and that they are not

free to utilize these funds however they wish.” MCM’s Brief at 11. But the statutory

language does not support MCM’s position. Nothing in section 319 indicates that the

employee is receiving his or her recovery “conditionally.” The plain language provides

that the employee is receiving an “advance payment.” 77 P.S. § 671. The fact that this

advance is “on account of any future instalments of compensation” does not imply that

the employee will later have to relinquish his advance funds, nor is this the common usage

of “advance payment.”

       Construing the sentence to encompass only disability benefits is consistent with

the concept of an “advance payment.” As to disability benefits, which are known amounts

8  Taken together, sections 308, 317, and 319 of the WCA render unreasonable the
Commonwealth Court majority’s position, adopted by MCM, that “the Legislature’s use of
the word ‘instalments’ can reasonably be explained and harmonized with the fact that
future medical expenses, which generally may occur periodically over time, are typically
not costs payable in a lump sum. Rather, it is more likely that an employer or insurer will
have to make discrete payments on an ongoing basis.” MCM’s Brief at 18 (quoting
Whitmoyer, 150 A.3d at 1015) (emphasis in original). It is clear that “instalments” are
related to “periodical” payments made in the nature of wages, not payments that occur
“as and when needed,” in the nature of medical expenses. Compare 77 P.S. § 601, with
77 P.S. § 531.

                                      [J-24-2018] - 16
paid at established intervals, the “excess” recovery is a true “advance payment.” The

employee has simply been paid in advance for outstanding instalments owed to him, and

the money is his to do with as he chooses. The logical corollary is that the employee will

not receive any additional disability compensation from the employer (up to the amount

of the recovery) nor is he obligated to reimburse the employer for any amount. To that

end, this Court has explained that dividing the balance of recovery by the weekly

compensation rate results in what is known as the employer’s “grace period.” See P & R

Welding & Fabricating v. W.C.A.B. (Pergola), 701 A.2d 560, 563-64 (Pa. 1997). The

“grace period” represents the number of weeks an employer may abstain from paying

“future installments” of disability benefits by charging them against the employee’s

recovery balance. Id. (recognizing that an employer would still be obligated under section

319 to reimburse the employee for legal expenses attributable to this period).

       Unlike disability benefits, future medical expenses are unknown at the time of

settlement. As MCM concedes, the insurance carrier pays medical bills upfront. MCM’s

Brief at 26. Thus, in order to recoup its costs, the insurance carrier would have to require

the employee to relinquish some of its “advance payment,” in derogation of the plain

meaning of that term. Indeed, finding that “instalments of compensation” encompasses

future medical expenses would undermine the clear language of section 319 by turning

the employee’s “advance payment” into a type of loan.

       In sum, after satisfying the employer’s accrued subrogation lien, which

encompasses “compensation” payments made by the employer toward both disability

benefits and medical expenses prior to the third-party settlement, the General Assembly

intended the excess recovery to be paid to the injured employee and to be treated as an

                                     [J-24-2018] - 17
advance payment only on account of any future disability benefits. See 77 P.S. 671. The

fact that, in this case, Whitmoyer was not owed any outstanding disability benefits is

wholly irrelevant to our analysis.

       Similarly, because we granted allocatur to determine the meaning of a statutory

term, the parties’ arguments that are specific to the TPSA, rather than to the language of

the statute, are unavailing. Nonetheless, we find no merit to MCM’s contention that

Whitmoyer’s counsel knew, by virtue of filling in the “37%” figure on the TPSA, that his

client’s balance of recovery would be susceptible to diminution for future medical

expenses paid by the employer. MCM’s Brief at 22-23. MCM characterizes this figure as

relevant only to future expenses, and therefore only to medical expenses, because

Whitmoyer’s disability benefits had been commuted many years prior.             Id.   This

characterization is both inaccurate and inconsistent with section 319’s command that “the

employer shall pay that proportion of the attorney’s fees and other proper disbursements

that the amount of compensation paid or payable at the time of recovery or settlement

bears to the total recovery or settlement.” 77 P.S. § 671 (emphasis added).

       The Bureau’s instructions for filling in the blanks of the boilerplate third-party

settlement agreement provide, inter alia, that the “rate of reimbursement to the employee

of expenses of recovery is determined by dividing the workers’ compensation lien by the

gross recovery.” Selective’s Exhibit 2 (Instructions). Here, the employer’s total accrued

lien amount was $110,583.33. Dividing that amount by $300,000, the gross recovery

from the third party, yields a rate of reimbursement to the employee of thirty-seven

percent. This rate is then used, as prescribed, to calculate MCM/Selective’s pro rata

share of recovery expenses to date. The total expenses of recovery are listed on the

                                     [J-24-2018] - 18
TPSA as $78,259.09. Thirty-seven percent of that amount is $28,955.86, which is set

forth as the employer’s pro rata share. This figure is then subtracted from the total lien

amount to arrive at the employer’s “net recovery of Workers’ Compensation Lien,” or

$81,627.87. See Selective’s Exhibit 7 (TPSA) at Part II(A)-(B). Thus, the “37%” figure is

both required by the Bureau and material to calculating the employer’s net entitlement to

subrogation at the time of settlement.

      Viewing “instalments of compensation” in context, with reference to surrounding

language and the overall statutory scheme, we conclude that the term is clear and

unambiguous. It does not refer to medical expenses. Therefore, having satisfied its

accrued subrogation lien at the time of settlement, an employer is not permitted to seek

reimbursement for future medical expenses from the employee’s balance of recovery.

      Because we find that “instalments of compensation” is unambiguous, we need not

consider other factors to divine legislative intent. See 1 Pa.C.S. § 1921(c). Accordingly,

discussion of the purpose or rationale behind section 319, which animated the

Commonwealth Court majority’s opinion, is unnecessary. Even if we were to engage in

an ambiguity analysis, our conclusion would be unchanged.            Contrary to MCM’s

assertions, reading “instalments of compensation” to exclude medical expenses does not

undermine the rationale behind section 319. See Dale Mfg. Co., 421 A.2d at 654.

Regarding the potential ill of an employee making a “double recovery,” we observe that

this would be impossible to know in the context of a settlement, where the amount of

recovery is a lump sum that does not neatly or necessarily breakdown by category of

damages.

                                    [J-24-2018] - 19
       As to the other stated purposes of section 319, we note that the provision’s

protection of “innocent” employers has its limits.       The WCA’s default is to hold an

employer liable for an employee’s work-related injury. See 77 P.S. §§ 431 (disability

benefits), 531 (medical expenses). Indeed, in the instant matter, MCM concedes that

even if we found in its favor, its liability would be circumscribed “only to the extent of

[Whitmoyer’s] third party recovery.” MCM’s Brief at 21. Once that amount is exceeded,

MCM (or Selective) would again be required to pay Whitmoyer’s medical expenses in full,

“potentially for the lifetime of the injured worker[].” Id. Finally, it bears emphasizing that

the conclusion we reach today is wholly consistent with the remedial nature of the WCA,

which should be interpreted for the benefit of the worker and liberally construed to

effectuate its humanitarian objectives. Peterson v. W.C.A.B (PRN Nursing Agency), 597

A.2d 1116 (Pa. 1991); 1 Pa.C.S. § 1928.

       The decision of the Commonwealth Court is reversed.

       Chief Justice Saylor and Justices Baer, Todd, Dougherty, Wecht and Mundy join

the opinion.

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