W. Swierbinski v. Scranton Restaurant Supply & UEGF (WCAB)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Walter Swierbinski, :

Petitioner :

:

v. : No. 971 C.D. 2021

:

Scranton Restaurant Supply :

and Uninsured Employers :

Guaranty Fund (Workers’ :

Compensation Appeal Board), :

Respondents : Submitted: February 3, 2023

BEFORE: HONORABLE CHRISTINE FIZZANO CANNON, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE LORI A. DUMAS, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY

JUDGE CEISLER FILED: March 20, 2023

Walter Swierbinski (Claimant) petitions this Court for review of the August

24, 2021 order of the Workers’ Compensation Appeal Board (Board), which

reversed the decision of a workers’ compensation judge (WCJ) to the extent it

imposed liability upon the Uninsured Employer’s Guaranty Fund (Fund) for the

payment of Claimant’s workers’ compensation benefits. The Board’s August 24,

2021 order otherwise modified the WCJ’s decision to reflect that Scranton

Restaurant Supply (Employer) was solely liable for payment of Claimant’s workers’

compensation benefits. The issue before this Court is whether the Board erred in

concluding that the Fund was not liable for Claimant’s benefits because Claimant

failed to timely notify the Fund of his work injury, as required by Section 1603(b)

of the Workers’ Compensation Act (Act).1 After review, we reverse in part, and

affirm in part, the Board’s order.

I. Background

The underlying facts of this matter are largely undisputed. On October 10,

2017, Claimant suffered a work injury to his left wrist, right elbow, and right

shoulder after falling down a flight of stairs while in the course and scope of his

work as a restaurant equipment repairman.2 Certified Record (C.R.), Item No. 2;

Item No. 20, Notes of Transcript (N.T.), 10/4/19, at 18, 24. Claimant notified

Employer of his work injury that day. Id. at 23. He returned to work in a light duty

capacity for a few weeks in January or February of 2018. Id. at 23, 38. Although

Claimant only worked a few weeks following his work injury, Employer paid

Claimant’s regular wages through June 2018. Id. at 28-29, 40. Claimant advised

his treatment providers that medical bills should be submitted to Employer under a

workers’ compensation claim.3 Id. at 37. He first became aware that Employer did

not have workers’ compensation insurance in November 2017. Id. at 38.

Claimant filed a claim petition against Employer on July 16, 2019, seeking

total disability benefits from October 10, 2017, and ongoing. C.R., Item No. 2. On

July 24, 2019, Claimant filed a Notice of Claim Against Uninsured Employer

(Notice). C.R., Item No. 35. Thereafter, on August 28, 2019, Claimant filed a claim

1

Act of June 2, 1915, P.L. 736, as amended, added by the Act of November 9, 2006, P.L.

1362, 77 P.S. § 2703(b). Section 1603(b) provides that a claimant must notify the Fund within 45

days after he is advised that an employer is uninsured. The claimant shall not receive

compensation from the Fund unless notice is given.

2

The extent and nature of Claimant’s work injury is not at issue, and, therefore, we need

not summarize the medical evidence further.

3

Employer did not cover Claimant’s medical bills. C.R., Item No. 20, N.T., 10/4/19, at

26; Item No. 21, N.T., 4/9/20 at 20.

2

petition against the Fund. C.R., Item No. 4. The Fund filed an answer denying

liability for Claimant’s work injury on the basis that Claimant failed to timely notify

the Fund of his work injury. C.R., Item No. 6. During an April 9, 2020 hearing

before the WCJ, counsel for the Fund acknowledged that Employer paid Claimant

wages in lieu of compensation, but asserted that Employer’s actions did not bind the

Fund with respect to paying Claimant’s workers’ compensation benefits. C.R., Item

No. 21, N.T., 4/9/20, at 9. Employer did not appear at any hearings before the WCJ

or otherwise present a defense to the claim petition. According to Claimant,

Employer went out of business in early 2019. C.R., Item No. 20, N.T., 10/4/19, at

39. Counsel for Claimant indicated during the April 9, 2020 hearing that Employer

had filed for bankruptcy. C.R., Item No. 21, N.T., 4/9/20, at 7.

The WCJ granted the claim petition filed against the Fund in a decision

circulated on September 28, 2020. C.R., Item No. 7 at 9. The WCJ credited

Claimant’s testimony that he was aware in November 2017 that Employer did not

have workers’ compensation insurance and that Employer paid Claimant wages in

lieu of compensation for a period of time. C.R., Item No. 7, Finding of Fact (F.F.)

No. 21. The WCJ acknowledged that Claimant did not provide notice to the Fund

within 45 days of November 2017. Id. Nevertheless, the WCJ found that, because

Employer paid Claimant wages in lieu of compensation, the Fund was estopped from

denying liability for Claimant’s work injury. Id. Accordingly, the WCJ concluded

that the Fund was responsible for paying Claimant’s workers’ compensation

benefits, including any related medical expenses, with the Fund receiving a credit

for any wages Employer paid in lieu of workers’ compensation. Conclusion of Law

(C.L.) No. 3.

3

The Fund appealed to the Board,4 arguing that Claimant failed to notify the

Fund within 45 days of the date that he knew Employer was not insured, as required

by Section 1603(b) of the Act, and that the Fund was not bound by Employer’s

payment of wages in lieu of workers’ compensation. C.R., Item No. 14. The Fund

also argued that the WCJ erred in not granting the claim petition filed against

Employer, as the Fund could only be held secondarily liable to a primarily liable

employer.

The Board reversed, noting that Section 1603(b) of the Act barred the payment

of compensation by the Fund if notice was not provided within 45 days. The Board

recognized that Section 1603(b) had recently been amended by the Act of October

24, 2018, P.L. 804, No. 132 (Act 132), and that, prior to Act 132’s enactment,

Section 1603 only barred compensation until notice was given to the Fund that an

employer was uninsured. Section 4(2) of Act 132 provided, however, that the

amendment to Section 1603(b) applied retroactively to claims existing as of October

24, 2018,5 for which compensation had not been paid or awarded. The Board

interpreted this language to require that amended Section 1603(b) applied

retroactively unless a claimant had been paid compensation “under the Act or an

award by the WCJ.” C.R., Item No. 17, Board Decision at 9. The Board reasoned

that Employer’s payment of wages in lieu of workers’ compensation did not

constitute compensation paid under the Act or pursuant to an award by a WCJ, in

4

Claimant also appealed a finding by the WCJ that unpaid medical bills submitted into the

record did not relate to his work injury but instead stemmed from an unrelated civil matter. C.R.,

Item No. 12. The Board agreed with Claimant after determining that the WCJ misapprehended

the evidence, which indicated that the medical bills at issue were introduced as part of a civil action

filed against the business upon whose property Claimant sustained his work injury. C.R., Item

No. 17.

5

Act 132 became effective immediately upon enactment.

4

part because Employer had not formally accepted liability for Claimant’s work

injury. Id. Accordingly, the Board held that Claimant was required to notify the

Fund within 45 days of the date he knew that Employer was uninsured, which

occurred in November 2017. Id. As Claimant did not file his claim petitions until

July 2019, the Board concluded that his claim was barred by the amendment to

Section 1603(b). Id. Furthermore, while Employer was estopped from denying

liability for Claimant’s work injury, having paid Claimant his regular wages in lieu

of workers’ compensation, Section 1601 of the Act6 explicitly states that the Fund

“shall not be considered an insurer[.]” Therefore, the Fund could not be “substituted

for [Employer’s] insurer” and “absorb [Employer’s] liability to Claimant[.]” Board

Decision at 10.

The Board agreed that the WCJ erred in failing to find Employer primarily

liable for Claimant’s work injury. Therefore, while the Board reversed the WCJ’s

decision imposing liability against the Fund, it granted the claim petition filed

against Employer and modified the WCJ’s decision to reflect that Employer

remained solely liable for Claimant’s work injury. This appeal followed.7

II. Issues

On appeal, Claimant argues that, because Employer paid Claimant wages in

lieu of workers’ compensation, the Board erred in concluding that the Act 132

amendment to Section 1603(b) applied retroactively to bar Claimant from seeking

compensation from the Fund.

6

Added by the Act of November 9, 2006, P.L. 1362, 77 P.S. § 2701.

7

Our review is limited to determining whether constitutional rights were violated, whether

the adjudication is in accordance with the law, or whether necessary findings of fact are supported

by substantial evidence. City of Phila. v. Workers’ Comp. Appeal Bd. (Sherlock), 934 A.2d 156,

159 n.5 (Pa. Cmwlth. 2007).

5

III. Discussion

Section 1602 of the Act8 established the Fund “for the exclusive purpose of

paying” workers’ compensation benefits under the Act to a claimant whose

employer failed to carry workers’ compensation liability insurance at the time the

work injury occurred. Section 1603(b) of the Act currently mandates that an injured

employee notify the Fund within 45 days after being advised that his employer is

uninsured. Thus, Section 1603(b) acts as a complete bar to compensation if the Fund

has not received notice within 45 days. Prior to its amendment by Act 132, Section

1603(b) provided that a claimant who failed to give the Fund notice within 45 days

was not barred from filing a claim under the Act. Rather, a claimant could not

receive workers’ compensation benefits from the Fund until notice was provided,

and the claimant could only receive benefits from the date notice was given. See

Lozado v. Workers’ Comp. Appeal Bd. (Dependable Concrete Work & Uninsured

Emps. Guar. Fund), 123 A.3d 365, 377 (Pa. Cmwlth. 2015) (failure to meet the 45-

day notice requirement in Section 1603(b) of the Act does not completely bar

payment of compensation; it merely delays such payments until the date notice is

given).

In concluding that Claimant was not barred from receiving workers’

compensation benefits from the Fund, the WCJ relied on Kelly v. Workmen’s

Compensation Appeal Board (DePalma Roofing), 669 A.2d 1023 (Pa. Cmwlth.

1995), in which this Court held that an employer voluntarily paying an injured

employee wages in lieu of workers’ compensation benefits, and who failed to file a

Notice of Compensation Denial, could not later deny that the employee’s injury was

work related. Given our holding in Kelly, the WCJ determined that Employer’s wage

8

Added by the Act of November 9, 2006, P.L. 1362, 77 P.S. § 2702.

6

payments similarly bound the Fund and precluded it from denying liability for

Claimant’s work injury.

The Board disagreed with the WCJ’s interpretation of Kelly, holding that it

should apply narrowly to situations in which an employer or insurer “lulled a

claimant into complacency” through the payment of wages in lieu of compensation,

thereby causing the claimant to file an untimely claim petition. Kelly, according to

the Board, was not intended to transfer an employer’s or insurer’s liability to another

entity, such as the Fund.

At the outset, we agree with the Board that Kelly does not guide our decision

here, although our reasoning differs. The employer in Kelly denied that the

claimant’s injury was sustained in the course and scope of employment after paying

the claimant wages in lieu of compensation for several months. Instantly, the Fund

has not denied that Claimant suffered a work injury or that Employer paid Claimant

wages in lieu of compensation. Rather, it denies liability on the basis that Claimant

did not notify the Fund within 45 days after he was advised that Employer was

uninsured. As the facts are undisputed, we are faced with the purely legal question

of whether the Board erred in applying amended Section 1603(b) retroactively to bar

Claimant’s claim against the Fund after concluding that wages in lieu of

compensation are not compensation “paid or awarded” under Section 4(2) of Act

132.

Claimant argues that his claim does not meet the requirements for retroactive

application of the amendment to Section 1603(b) because Employer paid him wages

in lieu of compensation prior to October 24, 2018, when amended Section 1603(b)

went into effect. As a result, Claimant maintains that the WCJ properly concluded

the Fund was liable for payment of his workers’ compensation benefits, and the

7

Board erred in reversing the WCJ. Claimant also notes that the Fund’s stated

purpose is to pay workers’ compensation benefits to an injured employee whose

employer failed to carry workers’ compensation insurance. Reversing the Board

would merely hold the Fund to its purpose.

Per Section 4(2) of Act 132, the amendment to Section 1603(b) applies

“retroactively to claims existing as of October 24, 2018, for which compensation has

not been paid or awarded.” In its brief filed in support of the Board’s decision, the

Fund argues that “compensation” in Section 4(2) is governed by the definition of

compensation in Section 1601 of the Act, 77 P.S. § 2701, which limits the term to

“[b]enefits paid pursuant to” Sections 306 and 307 of the Act.9 Because Claimant

did not receive benefits pursuant to Sections 306 and 307 of the Act, the Fund

contends that he was not paid or awarded compensation for purposes of Section 4(2)

of Act 132. Additionally, the Fund notes that Claimant admitted he was aware in

November 2017 that Employer was uninsured, but his claim petitions were not filed

until July 2019. Claimant does not deny that he failed to notify the Fund of

Employer’s status within 45 days of November 2017. As a result, the Fund contends

that amended Section 1603(b) applies retroactively to bar any claim Claimant could

assert against the Fund. Even if this Court determines that Claimant was “paid or

awarded” compensation under Section 4(2) of Act 132, the Fund argues that

amended Section 1603(b) applies retroactively because Claimant did not have a

claim “existing as of October 24, 2018,” having filed his first claim petition on July

9

Sections 306 and 307 of the Act establish the schedules of compensation for total and

partial disability, specific loss, and survivor’s benefits. Section 306 of the Act, 77 P.S. §§ 511,

511.1, 511.3, 512, 513, 514, 531, 531.1, 541, and 583. Section 306(a.1) was added by the Act of

June 24, 1996, 77 P.S. § 511.1. Section 306(a.3) was added by the Act of October 24, 2018, P.L.

714, 77 P.S. § 511.3. Section 306(f.2) was added by the Act of July 2, 1993, P.L. 190, 77 P.S. §

531.1. Section 306(h) was added by the Act of December 5, 1974, P.L. 782, 77 P.S. § 583. Section

307 of the Act, 77 P.S. §§ 542, 561, and 562.

8

16, 2019. The Fund provides no legal authority to support its argument that a

workers’ compensation claim does not exist until a claim petition is filed.

First, we will address whether payments in lieu of compensation qualify as

compensation paid or awarded under Section 4(2) of Act 132. “The object of all

interpretation and construction of statutes is to ascertain and effectuate the intention

of the General Assembly [(GA)].” 1 Pa.C.S. § 1921(a). In the absence of a

demonstrated constitutional infirmity, courts must generally apply the plain terms of

a statute, as written. Lower Swatara Twp. v. Pa. Lab. Rels. Bd., 208 A.3d 521, 530

(Pa. Cmwlth. 2019). Where the plain language in a statute is unambiguous, we must

apply that language “without employing familiar canons of construction and without

considering legislative intent.” Dubose v. Quinlan, 173 A.3d 634, 643 (Pa. 2017).

The plainness or ambiguity of statutory language is determined by reference to the

language itself, as well as the specific context in which the language is used and the

broader context of the statute as a whole. Roethlein v. Portnoff Law Assocs., Ltd.,

81 A.3d 816, 822 (Pa. 2013). We must not interpret statutory words in isolation but

must read them with reference to the context in which they appear. Id. Moreover,

we must presume that the GA “does not intend a result that is absurd, impossible of

execution[,] or unreasonable.” 1 Pa.C.S. § 1922(1). Words and phrases are to be

construed according to their common and approved usage. 1 Pa.C.S. § 1903(a).

The Fund was established pursuant to the Act of November 9, 2006, P.L.

1362, which became effective on January 8, 2007. The statutory provisions

governing the Fund are contained in Sections 1601 through 1610 of the Act. As

noted above, “compensation” is defined in Section 1601 to mean benefits paid

pursuant to Sections 306 and 307 of the Act. While Section 4(2) of Act 132 does

not explicitly state that “compensation” “paid or awarded” is governed by the

9

statutory definition in Section 1601, it stands to reason that amended Section 1603(b)

was not intended to apply retroactively in matters for which the payments at issue

relate to losses that are not compensable under the Act. Such a conclusion is

consistent with prior decisions of this Court holding that the Act does not extend to

include non-health related losses sustained by an injured worker. See Kerr v.

Workmen’s Comp. Appeal Bd. (Campbell Co.), 519 A.2d 62, 64 (Pa. Cmwlth. 1987).

Our discussion does not end here, however, as Pennsylvania courts have consistently

held that, in certain circumstances, payments made by an employer in lieu of

compensation may be treated as workers’ compensation benefits under the Act.

Payments of compensation have been defined by our Supreme Court as

amounts “received and paid as compensation for injury or death of an employee,

occurring in the course of employment.” Schreffler v. Workers’ Comp. Appeal Bd.

(Kocher Coal Co.), 788 A.2d 963, 967 (Pa. 2002). Payments made by an employer

to an injured worker are “in lieu of compensation” when made voluntarily or

informally, “apart from the Act,” and “paid with the intent to compensate for a work-

related injury.” Dickerson v. Workers’ Comp. Appeal Bd. (A Second Chance Inc.),

229 A.3d 27, 32 (Pa. Cmwlth. 2020) (emphasis in original) (internal citations

omitted). It is the intent by which the payment is made, not the receipt thereof, that

is relevant. Kelly, 669 at 1026. To demonstrate the necessary intent, the burden is

on the claimant to show that payments made to him were received as compensation

under the Act and the record must demonstrate that any such finding is based on

substantial evidence. NUS Corp. v. Workmen’s Comp. Appeal Bd. (Garrison), 547

A.2d 806, 809 (Pa. Cmwlth. 1988). An employer effectively admits liability under

the Act by paying wages in lieu of compensation. Id.

10

Payments made in lieu of compensation act to toll the statutory period for

filing a claim petition under Section 315 of the Act,10 provided payments are not

made for services rendered, but to compensate a claimant’s lack of earning power,

“just as if they had been formal payments rendered under the Act.” NUS, 547 A.2d

at 809 n.1 (internal citations omitted). The source of “payments of compensation”

need not be a workers’ compensation carrier. Harley Davidson, Inc. v. Workers’

Comp. Appeal Bd. (Emig), 829 A.2d 1247, 1252 (Pa. Cmwlth. 2002). An employer

is entitled to a credit or offset against its workers’ compensation liability for amounts

paid to an injured employee in relief of the employee’s inability to work. West Penn

Allegheny Health Sys., Inc. v. Workers’ Comp. Appeal Bd. (Cochenour), 251 A.3d

467 (Pa. Cmwlth. 2021). Presumably, if the Fund was deemed liable for payment

of Claimant’s workers’ compensation benefits, the Fund would expect a credit in the

amount of payments made by Employer in lieu of compensation.

Notably, the Fund has not argued that payments made by Employer were not

intended to compensate Claimant for losses not covered by the Act. Indeed, the

Fund has all but conceded that Employer made payments to Claimant in

consideration of his inability to work following the October 10, 2017 work injury.

The Fund’s argument centers on the informality by which Employer tendered its

payments in lieu of compensation.

We are not persuaded by the Fund’s argument, as it lacks support from the

applicable statutory provisions. Moreover, as the case law discussed herein

demonstrates, under the right circumstances, payments made by an employer for the

purpose of compensating an injured employee’s inability to work may substitute for

10

Section 315 of the Act, 77 P.S. § 602, provides that all claims for compensation are

barred unless, within three years after the injury, the parties have either agreed on the amount of

compensation payable, or a petition has been filed by one of the parties.

11

the payment of workers’ compensation benefits. Such a circumstance exists in the

instant appeal. While Claimant was advised in November 2017 that Employer was

uninsured, Employer continued to pay Claimant’s wages until June 2018, including

periods during which Claimant suffered wage loss due to his work injury. These

payments constitute compensation “paid or awarded” under Section 4(2) of Act 132.

Neither the Fund, nor the Board in its decision, have advanced arguments that would

compel a different outcome.

Accordingly, we conclude that the Board erred in concluding that amended

Section 1603(b) applied retroactively to bar Claimant from filing a claim petition

against the Fund. In so holding, we are mindful, as always, that the Act was intended

to benefit injured employees and that we must interpret its provisions “liberally in

the employee’s favor in order to effectuate [the Act’s] humanitarian objectives.”

Cruz v. Workers’ Comp. Appeal Bd. (Kennett Square Specialties) 99 A.3d 397, 406

(Pa. 2014).

The Fund’s alternative argument, that Claimant did not have a claim existing

prior to October 24, 2018, also lacks merit. Section 1603(a) of the Act applies “to

claims for an injury or a death which occurs on or after” November 9, 2006. In

addition to amending Section 1603(b) of the Act, Act 132 placed the existing

language from Section 1603(d) into a new subparagraph 1 and added subparagraph

2. Section 1603(d)(1) states that a claim petition may not be filed against the Fund

“until at least 21 days after notice of the claim is made to the [F]und.” 77 P.S. §

2703(d)(1). The language created for Section 1603(d)(2) requires that a claim

petition be filed “within 180 days after notice of the claim is made to the [F]und.”

These provisions clearly indicate that an injured worker’s “claim” exists separate

and apart from the filing of a claim petition. The text of Act 132 does not suggest

12

that the term “claim” would have a different meaning in Section 1603(d) than it

would in Section 4(2). In the absence of legislative intent to the contrary, we cannot

interpret claims under Section 1603(d) to encompass work injuries for which

litigation has not been initiated but limit claims under Section 4(2) to those matters

in which a claim petition has been filed.

IV. Conclusion

Claimant’s receipt of payments in lieu of compensation constitutes

compensation “paid or awarded” under Section 4(2) of Act 132. The Board erred in

concluding otherwise, and, therefore, we reverse the Board’s order to the extent it

concluded that Claimant’s claim petition against the Fund was barred by retroactive

application of the amendment to Section 1603(b) of the Act and, based on that

conclusion, reversed the WCJ’s decision to grant Claimant’s claim petition against

the Fund. The Board’s order is affirmed to the extent it granted Claimant’s claim

petition against Employer. Consequently, Employer is primarily liable for the

payment of Claimant’s workers’ compensation benefits under the Act, including any

reasonable and necessary medical expenses causally related to Claimant’s October

10, 2017 work injury. The Fund is secondarily liable to Employer, consistent with

the applicable provisions of the Act.

____________________________

ELLEN CEISLER, Judge

13

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Walter Swierbinski, :

Petitioner :

:

v. : No. 971 C.D. 2021

:

Scranton Restaurant Supply :

and Uninsured Employers :

Guaranty Fund (Workers’ :

Compensation Appeal Board), :

Respondents :

ORDER

AND NOW, this 20th day of March, 2023, the August 24, 2021 order of the

Workers’ Compensation Appeal Board (Board) is reversed in part and affirmed in

part. We reverse the Board’s order to the extent it reversed the decision of a workers’

compensation judge granting the claim petition filed by Walter Swierbinski

(Claimant) against the Uninsured Employers Guaranty Fund (Fund). We affirm that

part of the Board’s order that granted the claim petition filed by Claimant against

Scranton Restaurant Supply (Employer). Employer is primarily liable for payment

of Claimant’s workers’ compensation benefits, including any reasonable and

necessary medical expenses that are causally related to Claimant’s October 10, 2017

work injury. The Fund is secondarily liable for payment of Claimant’s workers’

compensation benefits, including any reasonable and necessary medical expenses

that are causally related to Claimant’s work injury, pursuant to the applicable

provisions of the Workers’ Compensation Act.1

____________________________

ELLEN CEISLER, Judge

1

Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.