The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
J. Conley & Sons Plumbing, :
Petitioner :
:
v. : No. 883 and 884 C.D. 2016
: SUBMITTED: March 31, 2017
Workers' Compensation :
Appeal Board (Gainer), :
Respondent :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: September 19, 2017
J. Conley & Sons Plumbing (Employer) petitions for review of two
orders of the Workers’ Compensation Appeal Board (Board) involving Jesse
Gainer (Claimant).1 In No. A14-0353, the Board: (1) affirmed as modified the
grant of the claim petition, excluding an inguinal hernia and herniated lumbar disc
from the work injury due to the lack of an unequivocal opinion as to those
conditions; (2) affirmed the penalty award based on Employer’s failure to issue a
timely Bureau document; and (3) affirmed the unreasonable contest determination
and the award of counsel fees because Employer’s medical witness did not
disagree that Claimant sustained a work injury but Employer continued to contest
both the nature of the work injury and the entire claim petition. In No. A15-0369,
1
In August 2016, this Court granted Employer’s unopposed applications to consolidate
these matters.
the Board: (1) affirmed the grant of the modification petition based on Claimant’s
two periods of post-injury employment, as well as the WCJ’s order awarding a
credit to Employer for the overpayment of benefits during those periods, payable at
$5 per week; (2) affirmed the award of ongoing benefits after the last period of
employment; (3) affirmed the denial of the suspension petition;2 (4) affirmed the
grant of Claimant’s penalty petition; and (5) affirmed as modified the WCJ’s
award of costs. On appeal, Employer is not challenging the adjudication of the
nature of Claimant’s work injury, but rather disputes the alleged “failure to afford
it relief on the basis of claimant’s surreptitious post-work-injury return to the work
force with various employers and failure to provide the [WCJ] with accurate
information regarding his work history and his medical history.” 3 For the reasons
set forth below, we affirm the Board’s orders.
In January 2013, Claimant sustained a work-related injury after lifting
a sewer machine in his capacity as a plumber’s apprentice helper. In February
2013, he filed: (1) a claim petition alleging an injury to his groin area and seeking
total disability benefits and payment of medical bills and counsel fees; and (2) a
penalty petition, alleging that Employer failed to issue a timely Bureau document.
At an April 2013 hearing, Claimant testified that he could not return to his pre-
injury job, that he had not been offered light-duty work, and that he had not
received any income since his work injury. April 15, 2013, Hearing, Notes of
Testimony at 18, 19, and 28; Reproduced Record (R.R.) at 26a, 27a, and 36a. In
an April 2014 decision, the WCJ: (1) granted the claim petition, determining that
2
Employer does not dispute the denial of the suspension petition, noting that the earnings
that were subsequently identified and documented warranted only a modification of benefits.
3
Employer’s June 9, 2017, Application for Relief (clarification), ¶ 7.
2
Claimant was totally disabled and entitled to weekly compensation of $414 into the
indefinite future; (2) granted the penalty petition for failure to issue any bureau
documents accepting or denying the claim; and (3) determined that Employer’s
contest was unreasonable. Employer appealed in April of 2014, and sought
supersedeas, which was denied in May.
Shortly thereafter, also in May 2014, Employer filed a modification
petition alleging that it learned after the above-described proceedings that Claimant
had returned to work after his work injury. In March 2015, the WCJ granted the
modification petition from August 3 to 26, 2013, after which total disability
benefits were to be reinstated, and from April 4 to June 13, 2014, with the same
reinstatement. In ascertaining the wages and time periods for his positions as a
dishwasher for the Rose Tree Inn and a technician for Jiffy Lube, the WCJ relied
on employment records that Employer procured via subpoenas. October 1, 2014,
Hearing, Employer’s Exhibits D-2 (Rose Tree Inn) and D-3 (Jiffy Lube); R.R. at
187-203a and 204-41a.
In addition, the WCJ also cited Claimant’s affidavit indicating that he
began working at the Rose Tree Inn at $8 per hour on April 21, 2014, because he
had not yet received any benefits as of June 2, 2014, despite an April 2 award
granting his claim. In support of his procurement of what he characterized as the
lightest possible job that he could find to feed his family, Claimant referenced his
wife’s cancer, the household’s lack of income, and no benefits “despite the
insurance companies [sic] attorney’s LIE to the court.” July 9, 2014, Hearing,
Exhibit C-12 (Claimant’s June 9, 2014, Affidavit); R.R. at 128a.
As the Board subsequently clarified, the WCJ erroneously found that
Claimant’s affidavit encompassed both employers whereas it addressed only the
3
Rose Tree Inn. In addition, notwithstanding his stint with Jiffy Lube, Claimant
testified at that July 2014 hearing that, other than the Rose Tree Inn, he did not
work anywhere else after his work injury.4 Id., N.T. at 18; R.R. at 121a.
Nonetheless, the WCJ made the following fact-finding:
22. This Judge has personally observed Claimant’s
testimony and finds that his composure and demeanor
supports his veracity. Claimant is credible that he was in
dire financial straits when he testified for this Judge and
did not have enough money to pay for his wife’s cancer
treatment. This Judge accepts his testimony and his
Affidavit as to his work at Rose Tree Inn and Jiffy Lube.
This Judge accepts that the work Claimant performed at
[both employers] was lighter duty work.
WCJ’s March 11, 2015, Decision, Finding of Fact (F.F.) No. 22. At all events,
based on the wages from those two employers, the WCJ awarded a $4430.62 credit
to Employer with a weekly credit of $5 until recoupment.
In her March 2015 decision, the WCJ also considered Claimant’s
penalty petition wherein he alleged that Employer violated the Workers’
Compensation Act5 by (1) advising the WCJ in the claim petition proceedings that
his claim had been accepted but then filing an appeal from the award of benefits;
and (2) alleging that payment would be made when none was rendered. In
4
Regarding credibility, the Board observed:
In [his] brief, Claimant states that obviously he did work at Jiffy
Lube in 2013 and whether his denial of working anywhere else
other than Rose Tree Inn “was a mistake, a miscommunication or a
lie was for the Judge to decide.” While we may question
Claimant’s veracity, the fact remains that questions of credibility
are for the fact-finder and the WCJ chose to accept Claimant’s
testimony.
Board’s May 4, 2016, Opinion in No. A15-0369 at 10 n.5.
5
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2708.
4
granting the penalty petition, the WCJ entered an order: (1) awarding a five
percent penalty on the amount due from January 10, 2013, to June 7, 2014 (when
Claimant received his first payment of benefits); and (2) directing that Employer
pay Claimant’s counsel an attorney’s fee award on the penalty in the amount of
twenty percent, to be paid directly to Claimant’s counsel with the balance of the
penalty to be paid directly to Claimant; and (3) directing Employer to pay
Claimant’s counsel costs of litigation in the amount of $502.45.6
In May 2015, the Board affirmed the WCJ’s initial April 2014
decision as modified, to exclude the inguinal hernia and herniated lumbar disc
from the injury description. In June 2015, Employer sought Board rehearing based
on after-discovered evidence that Claimant had surreptitiously returned to work by
March 2014 for at least two employers (essentially the same basis as that of its
modification/suspension petition). The Board granted Employer’s rehearing
petition, but subsequently reaffirmed its previous decision and stated, in relevant
part, as follows:
[A] large portion of [Employer’s] argument for remand
goes to the question of whether Claimant had
employment after his January 10, 2013 work injury and
whether he is entitled to ongoing total disability benefits.
However, [Employer] acknowledges that it filed a
Modification/Suspension Petition to address this question
and that on March 11, 2015, the WCJ issued a ruling on
its request for relief, granting it in part. [Employer] has
appealed several aspects of that determination. Its
challenges to that Decision and Order are addressed in a
separate Opinion and Order, docketed at A15-0369.
Thus, its concerns will not escape review. Given the
aforementioned, we find nothing constituting a sufficient
6
The Board subsequently reduced the litigation cost reimbursement to Claimant by $45.
Board’s May 4, 2016, Opinion in No. A15-0369 at 13.
5
basis for disturbing our May 15, 2015 Opinion and
Order.
Board’s May 4, 2016, Opinion in No. A14-0353 at 6-7.
In a separate Board decision issued on the same date, it considered,
inter alia, the WCJ’s decision to grant Employer’s modification petition and
Claimant’s penalty petition. In affirming the grant of the modification petition, the
Board acknowledged “the error in the WCJ’s finding that Claimant’s testimony
and Affidavit spoke to his employment at Jiffy Lube when they clearly did not”
and the fact that “[t]he WCJ’s findings to the effect that Claimant’s evidence
recognized this employment and established the job duties are not supported.”
Board’s May 4, 2016, Opinion in No. A15-0369 at 10. Nonetheless, it relied on
the fact that Claimant ultimately did not dispute that he was employed at Jiffy
Lube for the period at issue and that he earned wages thereby warranting a credit to
Employer. Further, the Board approved stretching out the payment of that credit at
$5 per week, noting the WCJ’s credibility determination as to Claimant’s
unfortunate situation and concluding that she had the authority to award the credit
with a weekly deduction. Id. at 12.
In affirming the grant of the penalty petition, the Board opined that
“the 5% award does not evidence a manifestly unreasonable award or any ill will
on the WCJ’s part, but more so a recognition of [Employer’s] failure to comply
with the Act.” Id. In support, the Board cited Allegis Group v. Workers’
Compensation Appeal Board (Coughenaur), 7 A.3d 325, 327 (Pa. Cmwlth. 2010),
holding that an abuse of discretion occurs when a WCJ’s judgment is manifestly
unreasonable, the law is not applied, or the record shows partiality, bias or ill will.
Employer’s timely petitions for review of the Board’s orders followed.
6
Mindful that Employer is not challenging the adjudication of the
nature of Claimant’s work injury, we consider the following cognizable arguments:
(1) that the WCJ erred in disregarding the notations in the Jiffy Lube employment
record indicating an alleged discharge for misconduct and thus awarding total
rather than partial disability benefits going forward after he was terminated from
that job; (2) that the Board should have ordered a new hearing because the WCJ
committed various evidentiary and fact-finding errors; (3) that the WCJ erred in
computation of a $4430.62 credit to Employer, and that it was an abuse of
discretion to order that the credit be recouped at $5 per week; and (4) that the
Board erred in refusing to rescind or reduce the imposition of penalties and award
of counsel fees. We turn to the first issue.
It is well established that when a claimant returns to light-duty
employment at a wage loss and is discharged for willful misconduct, he is entitled
only to continuing partial disability benefits. Howze v. Workmen’s Comp. Appeal
Bd. (Gen. Elec. Co.), 714 A.2d 1140, 1142 (Pa. Cmwlth. 1998). Specifically, there
is a presumption that his disability from the work injury continues and he is
entitled to continue to receive partial disability benefits, calculated according to the
wages he would have earned but for his misconduct. Id. The employer, however,
bears the burden of establishing that a claimant’s loss of earnings is the result of a
post-injury involuntary discharge. Virgo v. Workers’ Comp. Appeal Bd. (County of
Lehigh-Cedarbrook), 890 A.2d 13, 19 (Pa. Cmwlth. 2005).
In the present case, the record reflects that Employer received the Jiffy
Lube record in July 20147 and that the WCJ accepted that record into evidence at
7
October 1, 2014, Hearing, Employer’s Exhibit D-3 (Jiffy Lube record); R.R. at 204a.
7
the final hearing in October 2014.8 In her decision, the WCJ relied on the Jiffy
Lube record to establish wages and employment duration but disregarded the
notations regarding an alleged discharge for misconduct. In determining that the
WCJ did not err in disregarding these notations, the Board relied on the Walker
Rule, providing that, even where otherwise inadmissible hearsay evidence is
admitted without objection, it may only support a finding if corroborated by
competent evidence of record. Walker v. Unemployment Comp. Bd. of Review, 367
A.2d 366, 370 (Pa. Cmwlth. 1976).
Employer disputes the Board’s analysis, noting that it offered an
authenticating deposition affidavit from Jiffy Lube and that Section 131.68 of the
Special Rules of Administrative Practice and Procedure before WCJs provides:
“The deposition affidavit and the records or items authenticated thereby [such as
employment records] will be admissible into evidence in the proceeding before the
judge in the same manner as if the deponent appeared before the judge and testified
as to the authenticity of the records or items.” 34 Pa. Code § 131.68(g). Employer
then argues that the records were admissible under what is commonly called the
business records exception to the hearsay rule. This argument is correct to the
extent that the records were properly authenticated, but only partially correct
regarding hearsay. While the records of regularly conducted business activity fall
within an exception to the hearsay rule,9 not every notation in a business record
qualifies.
8
The record reflects that only counsel for Employer was present at that hearing. Noting that
counsel for Claimant was running late, the WCJ stated that “we’re just going to do the evidence.”
October 1, 2014, Hearing, N.T. at 3. At that time, Employer’s exhibits were marked and
received into evidence.
9
See Pa. R.E. 803(6).
8
Here, the routine entries such as Claimant’s dates of employment,
wages paid, etc., are fully admissible and were properly relied upon by the WCJ.
The evidence about which Employer complains, however, does not fall within that
exception. Even if we believed that a notation saying Claimant admitted taking
cash was made in the regular course of business, and thus could be admitted to
show Employer’s action and motive for the termination—an issue which we need
not here decide—it cannot be admitted to prove as truth that Claimant actually
committed the theft or made such a statement to someone who did not testify, was
not subject to cross-examination, and was not even identified as to his position or
authority. That would go far beyond the underlying principle of the business
record exception: that routine record entries made in the regular course of business
by a person with knowledge, absent some contraindication, are inherently reliable.
See Leonard Packel & Anne Poulin, Pennsylvania Evidence § 803(6)-1 (4th ed.
2013). Employer obtained the records three months before the final hearing and
plainly had the opportunity to subpoena the person who made the note, or to call
Claimant as of cross-examination to ask about Claimant’s purported admission.
Instead Employer chose to rely on the paper record, avoiding the scrutiny attendant
to the cross-examination or explanation which might accompany such testimony.
However, this paper evidence did not fall within the exception to the hearsay rule
and, while properly admitted without objection, could not be the sole basis of a
finding that Claimant’s loss of employment was due to his own misconduct. Thus
we agree with the Board that based on the Walker Rule the WCJ did not err in
disregarding the notations.10
10
In addition, the rule does not supplant the WCJ’s role as the ultimate arbiter of evidence
where she has exclusive province over questions of evidentiary weight and may accept, reject
(Footnote continued on next page…)
9
Employer’s next argument is basically a challenge to the WCJ’s
credibility determinations. Essentially, it argues that Claimant failed to disclose,
and later lied about, his return to work after his injury, and that if the WCJ had
known about this in the beginning her findings might have been different. It
argues that it did not discover Claimant’s return to work or certain medical records
until after the claim petition was decided. Yet, as the Board noted, most of this
evidence could have been discovered with due diligence before the WCJ issued her
first opinion. Moreover, most of this evidence was presented to the WCJ in the
modification/suspension proceedings and it did not change her underlying
impression of Claimant’s credibility. While we, like the Board, might have viewed
the evidence differently, we cannot say that the WCJ’s credibility determinations
were capricious. Finally, as the Board also determined, the surveillance evidence
of Claimant working at Rose Tree Inn, which was not admitted, and the discredited
testimony of Employer’s witness concerning the Jiffy Lube job were of no moment
since the WCJ accepted other proof of Claimant’s work for both of these
subsequent employers.
Next, Employer claims that the WCJ erred in calculating the credit to
which it was entitled as a result of Claimant’s undisclosed return to the work force
in August of 2013 and April through June of 2014. While we agree with Employer
that the credit should have been based on the difference between the total disability
benefits actually (albeit belatedly) paid and the partial disability benefits to which
Claimant was entitled, rather than on the wages he was paid, Employer’s claim that
_____________________________
(continued…)
and/or disregard portions of an employment record. See Griffiths v. Workers’ Comp. Appeal Bd.
(Red Lobster), 760 A.2d 72, 76 (Pa. Cmwlth. 2000).
10
the credit was deficient is based on the false premise that Claimant was entitled to
only partial benefits going forward after the first date he went back to work.
Properly computing the credit based on the nine weeks that Claimant was actually
employed would result in a credit less than that allowed by the WCJ. Employer’s
more fully-developed complaint lies with the WCJ’s order that the credit be paid
over a long period at the rate of $5 per week. However, as the Board noted, the
WCJ properly took into account Claimant’s financial difficulties, including his
inability to pay his wife’s medical bills, and the fact that Employer was not paying
disability benefits at the time, even though it was undisputed that Claimant had
some form of work injury. It is clear that the WCJ weighed Employer’s violations
of the Act in rendering her decision. The Board concluded that the WCJ “with the
power under the Act to determine whether a party has been erroneously overpaid,
had the authority to resolve this situation in this manner [$4430.62 with weekly
deduction of $5].” Board’s May 4, 2016, Opinion in No. A15-0369 at 12. In
support, the Board cited Fahringer, McCarty & Grey, Inc. v. Workmen’s
Compensation Appeal Board (Green), 529 A.2d 56, 59 (Pa. Cmwlth. 1987), where
we sympathized with the claimant’s difficulty in making restitution of monies
erroneously overpaid for six years due to miscalculation of his average weekly
wage and directed the Board to order a sum deducted from each of his benefit
checks in an amount the Board believed would be just under the circumstances and
manageable for the claimant. See also City of Pittsburgh v. Workers’ Comp.
Appeal Bd. (Wright), 90 A.3d 801, 812 n.11 (Pa. Cmwlth. 2014) (where a claimant
was receiving both a pension and workers’ compensation benefits, the terms of a
proposed recoupment of overpaid workers’ compensation benefits could be
modified consistent with the humanitarian purposes of the Act where it would ease
11
his financial hardship). Accordingly, mindful of the humanitarian purposes of the
Act,11 we decline to disturb the WCJ’s order as to the manner of repaying the
overpayment.
Employer next maintains that the Board erred in failing to rescind or
reduce the impositions of penalties and award of counsel fees. Employer’s
position is without merit. The record is permeated with instances where both
parties had unclean hands. Unfortunately for Employer, the WCJ made credibility
determinations in Claimant’s favor and Employer’s violations of the Act were
apparent from the record. Accordingly, we agree with the Board that the award
does not constitute a manifestly unreasonable award or establish any ill will on the
WCJ’s part.
For these reasons, we affirm the Board’s orders.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
Senior Judge
11
Vandervort v. Workers’ Comp. Appeal Bd. (City of Phila.), 899 A.2d 414, 419 (Pa.
Cmwlth. 2006).
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
J. Conley & Sons Plumbing, :
Petitioner :
:
v. : No. 883 and 884 C.D. 2016
:
Workers' Compensation :
Appeal Board (Gainer), :
Respondent :
ORDER
AND NOW, this 19th day of September, 2017, the orders of the
Workers’ Compensation Appeal Board are hereby AFFIRMED.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
Senior Judge