Petition — Lerner v. Haas

78-18 gah Freee |

MAR 30 1979

Unjted States

No. A-548, October Term, 1978.

Sidney S. Lerner, M.D., Administrator

Estate of Samuel Lerner, Deceased

Petitioner

V.

Gerald J. Haas, Esquire, and

Philadelphia Psychiatric Center, and

Pennsylvania Manufacturers’ Association

Insurance Company

Respondents

PETITION FOR WRIT OF CERTIORARI TO

THE SUPREME COURT GF PENNSYLVANIA

Sidney S. Lerner, M.D.

1101 Stratford Avenue

Philadelphia;-Pa..19126

(215) CA4 - 0808 i

Fro se For Petitioner

/ Migs | ae

eal

L RODAM JR. SLERK

ttt te a 5 len 5 TARE. 8

INDEX

Petition ]

Orders, Opinions and Decision Below 2

Jurisdiction 3

Question Presented For Review 3

Constitutional Provision Involved 3

Statement Of The Case 4

Reasons For Granting The Writ 5

Conclusion 12

INDEX TO APPENDIX

Orders by Supreme Court of Pennsylvania deny-

ing allowance of appeal, September 14, 1978 Al

Denial of Reconsideration November 2, 1978 Al

Precedential Opinion in Richman denying counsel

fee even if earned because barred by failure to

satisfy requirements of controlling statutes of

workmen's compensation law A2

Squarely conflicting Opinion in Lerner awarding

counsel fee where Court can point to no feature

distinguishing the cases with regard to applic-

ation of controlling statutes A6

Board's Opinion at A69972 documenting absence

of approval of Agreement For Legal Services af-

ter tolling of timely appeal period AlO, Al4

Board's one sentence Order at C.F. 2384 a-

warding counsel fee sans findings of fact, con-

clusions of law or supporting memorandum Al5

ii

TABLE OF AUT

Sherred v. Pittsburgh, 7 Pa Cmwith 401,

299 A.2d 381 (1973)

Richman v. W.C.A,.B. et al, 16 Pa Cmwith 594,

329 A.2d 920 (1975)

Lerner v. Haas et al, 35 Pa Cmwlth 300,

386 A.2d 1038 (1978)

stitut r s

United States Constitution

Amendment XIV

Pennsylvania Statutes:

Pa. Workmen's Compensation Act, Sections

318, 407, 423, 442,501

Authorities

Barbieri, Pa. Work. Comp., Chapter 5,

Section 5.45 at page 157

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

No. A-548

Sidney S. Lerner, M.D., Administrator

Estate of Samuel Lerner, Deceased

Petitioner

Ws

Gerald J. Haas, Esquire, and

Philadelphia Psychiatric Center, and

Pennsylvania Manufacturers'

Association Insurance Company

Respondents

PETITION FORA WRIT OF CERTIORARI TO

THE SUPREME COURT OF PENNSYLVANIA

The petitioner Sidney S. Lerner, M.D.,

administrator of the estate of Samuel

Lerner, deceased, respectfully requests

that a Writ of Certiorari issue to review

the judgment of the Supreme Court of

Pennsylvania entered in this proceeding

on September 14, 1978; together with a

summary vacation of the Order below.

2

ORDERS, OPINIONS and DECISION BELOW

Supreme Court of Pennsylvania:

An Order denying Pettition for Allowance

of Appeal from this Commonwealth Court

and an Order denying on the merits an

amended petition were both entered by the

Supreme Court of Pennsylvania on Septem-

ber 14, 1978; see Al.

Denial of reconsideration was entered on

November 2, 1978; see Al

Commonwealth Court of Pennsylvania

Richman v. W.C.A.B. et al., 16 Pa.Cmwlth

, ; ; see A2

Sherred Ye Pittsburgh, 7 Pa. Cmwlth 401,

Lerner v. Haas et al., 35 Pa. Cmwlth 300,

A. ; see A6

Pa. Workmen's Compensation Appeal Board:

Lerner v. Phila. Psychiatric Center at

A69972 entered on October 2, 1975; see Al4.

Opinion in Lerner v. Phila. Psychatric

Center at (Counsel Fee)c.f.2304 entered

officially but as an unpublished document on

September 1, 1976.

Order in Lerner v. Phila. Psychiatric

Center at (Counsel Fee)C.F.2364 entered on

November 5, 1976; unpublished copy appended at

Als.

Referee Wallace J. Stevenson:

Decision in Lermer v. Phila. Psychatric Center

and Pennsylvania Manufacturers’ Association

Insurance Company at No. 197-158-4933 issued on

Marc : ‘

<li

3

[URISDICTION

An Order denying Petition for Allowance of Ap-

peal from the Commonwealth Court and an Order de- _

nying on the merits an amended petition were both

entered by the Supreme Court of Pennsylvania on

September 14, 1978. A final Denial of Reconsidera-

tion was entered on November 2, 1978. On February

8, 1979 Mr. Justice Brennan issued an Order extend:

ing the time for filing a Petition for Writ of Certio-

rari in this case to and including April 2, 1979, for

good cause but without prejudice to the Court's con:

sideration of whether the petition is timely filed.

The jurisdiction of this Court is invoked under 28

U.S.C. Section 1257 (3).

QUESTION PRESENTED FOR REVIEW

If a State appellate court makes the grave pro-

cedural error of reviewing an Order that is devoid

of findings of fact or conclusions of law, and com-

pounds that lapse by entering an Opinion that is in

square conflict with its very own precedential .De-

cision, does this not speak against a fair hearing

and deny the due process and equal protection of

the laws guaranteed by our Constitution ?

CONSTITUTIONAL PROVISION INVOLVED

"... nor shall any State deprive any person of

. property, without due process of law; nor deny

any person within its jurisdiction of the equal pro-

tection of the laws."

4

STATEMENT OF SE

Petitioner seeks review of a cause where-

in the Pennsylvania Workmen's Compensation Ap-

peal Board (Board) has entered an Order devoid of

findings of fact or conclusions of law that directs

payment (from a compensation award) of counsel

fee plus interest. The pervasive pattern of errors

to be specified below involves the failure to apply

relevant statutes as’ well as square conflict in the

Opinions of its Appellate Courts that has negated

a fair hearing and thereby resulted in a denial of

due process and equal protection of the laws that

are so repugnant to our Constitution.

This cause is not narrowly limited to the

needs of petitioner. For the public interest is serv-

ed when workers' compensation litigation, of vital

importance to all working people, is conducted in

a judicial atmosphere where the laws are impartial-

ly administered and a fair hearing is assured. In

1976, the most recent year for which figures are a-

vailable in Pennsylviaia, more than fifteen hun-

dred compensation awards were mace with an aver-

age award of sixteen hundred dollars ($1600). A

mere handful of claimants could afford to avail

themselves of legal counsel. A less-than-fair

hearing in such circumstances creates a crisis of

confidence in our judicial system and deepens the

perception of our courts as favoring the rich and

powerful.

4a

This is such a cause. A petitioner, unre-

presented by counsel, prays for an equitable re-

view of an Order devoid of findings of fact or con-

clusions of law which an appellate body erroneous-

ly undertook to scrutinize, substituting its own

judgments as a fact-finder, and then entered an

Opinion that conflicts squarely with its own pre-

cedential Decision on the issue of counsel fee in

workers' compensation cases. Such a course and

result preclude a fair hearing and deny the workers

of our land of the hard-won rights of the Fourteenth

Amendment. Can the Supreme Court disdain to lend

a helping hand to the under-dog and riglit this

wrong against the American worker ?

5

This Court's jurisdiction is invoked, sua

sponte if need be, to resolve the egregious con-

flict and in the words of John Rutledge of South

Carolina, "to secure the national rights and

uniformity of Judgmts."

REASONS FOR GRANTING THE WRIT

A pervasive pattern of improprieties and

squarely conflicting decisions has deprived peti-

tioner of a fair and impartial hearing. The arbitrary

and capricious result flies in the face of document-

ary evidence of record and bespeaks a denial of

due process and equal protection of the laws which

is repugnant to our Constitution. The Court's re-

view is sought in a matter of vital importance to

all working people in order to resolve egregious

conflicts and to secure the uniformity of precepts

appropriate to a society governed by laws not men.

These conflicts are:

1. Exemption of compensation benefits from

claims. Section 318 of the Pennsylvania Workmen's

Compensation Act (Act) exempts compensation pay-

ments from claims. In Barbieri, an authority on

workers’ compensation in Pennsylvar..a, it is said:

"Section 318 ... includes the exemption clause

which frees compensation payments from claims of

creditors and makes assignments of such payments

illegal. The exemption may not be waived." The

Board's Order in Lerner is written without regard to

that statute. See:

Pennsylvania Workmen's Compensation Act, Sec-

tion 318.

Barbieri, Pa. work. comp., Chapter 5, Section 5.45

at page 157.

Order by Board here appended at page AlS.

cr

Uv

2. Exception For Counsel Fee. Section 501 of

the Act provides an exception whereby attorneys

after having fulfilled specific requirements may ob-

tain a lien against prospective compensation pay-

ments by employer/insurer to the employee. The

record shows that the respondent lawyer in Lerner

did not fulfill said requirements and further , that

the Board ordered payment from already expended

funds by the employee's estate to the attorney.

Section 501 authorizes only a lien against prospect

ive payments by employer to employee. See:

Section 501 of the Act.

Order by Board here appended at page AlS.

3. Findings of fact, Conclusions of law in

Sherred. In Sherred the Court protected the interest

of Mary Alice Sherred ., -emanding the case to the

Board to supply the specific findings of fact and

- conclusions of law that might enable the appellate

_ Court to give “fair judicial scrutiny" to the matter.

In Lerner, however, the Court denied the equal pro-

tection of the laws by proceeding to hear this case

even though the Board had issued its Order sans

findings of fact and conclusions of law. Due pro-

cess was also denied in Lerner since, by its own

words in Sherred, the appellate Court could not

give "fair judicial scrutiny" in such circumstances.

Sherred v. Pittsburgh, 7 Pa Cmwlth 401, 299 A2d 381,

(1973) Lerner v. Haas et al, 35 Pa Cmwith 300,

386 A2d 1038, (1978)

See the unpublished one-sentence Order entered by

the Board in Lerner v. Phila. Psychiatric Ctr., at

C.F. 2384, here appended at page Al5S.

4. Denial of award of counsel fee in Richman.

In Richman the Court held:

7

",.. that appellant did not comply with the

statutory provisions that would enable him to col-

lect the fees they are claiming either from the

claimant, from the subrogees or as a lien on the

fund." (underlining supplied)

The Opinion concluded:

"Surely equity, and perhaps the law, would

allow appellant to be paid a reasonable attorney

fee in a case such as presented here, absent a

controlling statute. However, when, as in this

case, there are attorney fees claimed for protec-

tion of subrogation interests, such claims must be

presented in accordance with Section 501 or Secr

tion 442 of the Workmen's Compensation Act for

approval by the referee or the Board. Since neither

procedure was followed in the instant case, we,

therefore, must affirm the Board's decision and

deny appellant's petition and appeal." See:

Richman v. WCAB et al, 16 Pa. Cmwlth 594,

329 A2d 920 (1975) here appended at page A2

In Lerner, however, the Court affirmed award

of counsel fee although the attorney “did not com-

ply with the statutory provisions that would enable

him to collect the fees" nor can the Court point to

any feature that distinguishes the cases with re-

spect to the applicability of the controlling stat-

utes. The statutory requirements are:

(a) Prior Board approval of Agreement for Legal

Services conforming to Section 442.

(b) Petition For Counsel Fee Under 50] is in

the nature of an appeal from Referee's award and

by statute must be filed within twenty days. See:

Lerner v. Haas etal, 35 Pa Cmwith 300, 386 A2d

1038 (1978)

Attorney Haas has made no showing nor is there

evidence of record that prior approval of Agreement

8

For Legal Services was granted or even applied for.

Contrariwise, the absence of such approval is doc

umented in an appeal filed by claimant before the

Board at A69972 in which the award of counsel fee

was one of the issues raised. In the Opinion, the

Board concluded:

"Purther, section 501 of the Pennsylvania

Workmen's Compensation Act... negates the val-

idity of any counsel fee arrangement unless such

an arrangement is approved by this board. Since

there is no such approval in this case, the peti-

tion for allowance of attorney fees and disburse-

ments must be dismissed." (underlining supplied)

See: Pennsylvania Workmen's Compensation Appeal

Bcard in Lerner v. Phila. tr tr at Appeal

A69972 unpublished Opinion here appended at page

Al0, and its conclusion at page Al4. That decision

not only documents the absence of approval neces-

sary to validate a claim for counsel fee but by its

date of October 2, 1975 clearly indicates that the

timely filing of an appeal within twenty days of

the award by Referee on March 5, 1975, had long

since tolled.

5. Quantum meruit award in Sundheim.

The Respondent, Attorney Haas, entered a Petition

For Counsel Fee Under Section 501 with the Board

and sought by a back-door approach to insinuatean

alternative quantum meruit claim. There is no pro-

vision for such claim in Section 501. The Court

cluded its Opinion in Sundheim hy stating:

"The plaintiff, in our judgment, was not enti-

tled to recover on his contract, the basis of this

suit, but he may have an action on quantum meruit

for damages as a result of a breach of contract."

The Petitioner here holds while an award under

9

Section 501 was clearly improper, that might not

preclude "an action on quantum meruit for damages

as a result of a breach of contract." To sustain

such an action, however, the attorney must demor-

state that he seeks the amount deserved coinciding

with the amount by which the estate benefitted as

a result of the attorney's efforts. The record shows

clearly, however, that the eState gained no bene-

fit at all through Mr. Haas. The award by the Re-

feree states:

" Based on a careful consideration of this tes-

timony (totalling 397 pages) and the exhibits, the

Referee hereby makes the following Findings of

Fact, Conclusions of Law and Order, applicableto

all three petitions:- "

Attorney Haas had withdrawn himself from the case

long before the hearings at which that testimony

and the exhibits were presented and he did not par

ticipate or contribute to them in any way. The at-

torney did himself state in a letter to petitioner

dated April 25,1974:

",.. my forbearance to insist on payment at

this time should not be in any way construed as my

considering the fee to be a contingent upon the

successful conclusion of the case."

It is thus clear that Mr. Haas considered himself

entitled to a counsel fee based on $5000 without

regard to any beneficial award, based solely on

petitioner's telephoned assent to a figure of $4800

as a basis for negotiation. Mr. Haas did not ex-

amine or prepare any witnesses. He appeared at

no evidentiary hearings. Nor did he ever once meet

to talk with the claimant. With no supporting docu-

ments, we are asked to believe that that this ex-

pert spent 20 hours negotiating with the insurer at

the implausible rate of $73 per hour. Mr. Haas

ee er

16

seeks the best of both worlds but he has no equi-

table claim either under Section 501 or by a quan*

tum meruit award. As to which was the basis for

the award, the Court can only speculate since the

Board entered its Order sans findings of fact or

conclusions of law. See:

Sundheim v r unty Bu & L Ass

140 Pa. Super 529, 14 A2d 349 (1940)

See the unpublished one-sentence Order entered by

the Board in Lerner v. Phila. Psychiatric Ctr., at

C.F. 2384, here appended at page AlS.

6. The levy of interest in Palmgreen

By the 1972 amendments to the Workmen's Compen-

sation Act, the General Assembly of Pennsylvania

sought to assure "the prompt payment of compensa-

tion when due." To discourage the endemic delay,

an interest rate of 10% was instituted on payments

due. That provision applies to compensation pay-

ments from employer/insurer to employee. A levy

of interest on counsel fee to be paid by a disabled

employee is nowhere specified or contemplated.

The Commonwealth Court's Opinion in Lerner rely-

inc on Palmgreen states:

"In all cases of contract interest is allowable

at the legal rate from the time payment was with-

held after it became the duty of the debtor to make

payment. Palmgreen v. Palmer's Garage, Inc.,

383 Pa. 105, 117 A2d 721 (1955)." In relying on

Palmgreen the Court has chosen a case in the gen-

eral domain of law without any reference at all to

workers' disability compensation. It is inconceiv-

able that the Legislature which strictly regulates

the counsel fee that may be assessed against a

disabled worker would countenance a leyy of in-

terest on that fee. The levy assessed here is with-

8}

out precedent and has no basis in law or equity.

Palmgreen, however, does serve to raise the issue

of when it “became the duty of the debtor to make

payment.’ In its Opinion in Lerner, the Common-

wealth Court stated on the first page:

"On November 14, 1972 respondent (Haas)

and the employer's insurance company agreed to

a stipulation of facts and a proposed payment of

$4800. The petitioner (Lerner) orally agreed to acr

cept the agreement that same day and the following

day the agreement was presented to the referee."

Section 407 of the Act requires that all agreements

for compensation be in writing and signed by all

parties in interest. The "document" variously call-

ed above a “Stipulation of facts" and an “agree-

ment" supposedly executed by Haas and the insur-

er and to which Lerner orally agreed (by telephone)

and said to have been presented to the referee on

the following day was presumably a bona fide docu-

ment (in writing). Such, however, is not the case.

No Agreement bearing either.a $4800 or a $5000

figure was ever presented to the referee. No such

document has been offered in evidence nor does it

appear of record.The Board's Order levies interest

from January 1, 1973 when, presumably it "became

the duty of the debtor to make payment." Unfortun-

ately for this concocted version, the insurer wrote

Mr. Haas on March 1, 1973, saying:

"Re: Samuel Lerner v Phila. Psychiatric Hosp.

Termination Petition #197-18-4933

Dear Mr. Haas:

"With reference to the above-captioned

case, youwill recall I previously wrote to you

by letter of January 5, 1973 requesting copies

of medical bills and your contention as to the

disability time involved in this case so that

12

the Stipulation can be worked out and drawn up.

"The Referee's office is awaiting the Stip-

ulation, can you please advise me of these

matters so that the Stipulation can be prepared.

Very truly yours,

( signed )

John F. McElvenny

JFM:chy

c.c. - Referee Wallace J. Stevenson"

To this Mr. Haas appended a hand-written note:

" 3-2-73

“Dear Sid -

For your information & action. May I hear

from you soon?

(signed) Jerry"

It is incredible that despite the inchoate state of

any agreement or stipulation of facts let alone an

award or payment as of March 1, 1973 yet the levy

of interest dates from January 1, 1973 when it pur-

portedly “became the duty of the debtor to make

payment." This strange set of circumstances took

place when the Board chose to make an award while

abstaining from submission of findings of fact or

conclusions of law that might reasonably reflect

the evidence of record. This lapse was compound-

ed by the appellate Court's proceeding contrary to

Sherred and assuming the role of advocate in a vain

effort to justify the capricious result.

CONCLUSION

The essence of civil liberty requires a legal

remedy for a legal wrong. Since our government is

one of laws not men, the rights and safeguards

established by the workmen's compensation laws

13

should be impartially administered for the protec-

tion of all disabled workers.

WHEREFORE, petitioner respectfully requests

that a Writ of Certiorari issue to review the judg-

ment of the Supreme Court of Pennsylvania, and a

summary vacation of the Order below.

CERTIFICATE OF SERVICE

I certify that three copies of this document

have been mailed to each of the below-named and

that all who should be served have been served.

Gerald J. Haas, Esq., 225 S. 15th Street,

Philadelphia, Pa. 19102

Larry Pitt, Esquire, 925 Chestnut Street

Philadelphia, Pa. 19107

Sidnef¥S. Lerner, M.D.

Pro se for Petitioner

1101 Stratford Avenue

Philadelphia, Pa. 19126

Al

IN THE SUPREME COURT OF .PENNSYLVANIA

Eastern District

September 18, 1978

In re: Lerner v. Haas etal, No. 3636A.D. 1978

Dear Dr. Lerner:

Please be advised that the Court has entered

the following Orders in the above captioned matter:

On the Petition for Allowance of Appeal from the

Commonwealth Court:

"September 14, 1978 Denied By the Court"

On the Amended Petition for Allowance of Appeal:

"September 14, 1978 Denied on the merits

By the Court"

Very truly yours,

Sally Mrvos, Prothonotary

November 2, 1978

RE: Lerner v Haas et al, No. 3636A.D. 1978

Dear Dr. Lerner:

The Court has decided not to reconsider its

denial of allocatur in the above case. This ends

the matter.

If further advice is needed, please seek it

from legal counsel of your choice.

Sincerely,

Michael J. Eagen

Chief Justice

A2

In The COMMONWEALTH COURT of PENNSYLVANIA

Richman et al v WCAB et alat No. 182 C.D. 1974

Opinion by Judge Wilkinson, January 7, 1975

The facts of this case are essentially undis-

puted. The appellant is the law partnership of

Greenlee, Richman, Derrico & Posa. This firm had

been retained by Lloyd E. Myers, claimant , to re-

present him in a workmen's compensation claim

against appellee United States Steel Corporation.

Claimant had been injured on April 2, 1971..

Appellee corporation denied that a compensable

accident had taken place, but in lieu of workmen's

compensation, had paid claimant sickness and ac-

cident benefits during the period of his disability.

Also during this period, the claimant received un-

employment compensation benefits from the other

appellee, the Pennsylvania Bureau of Employment

Security.

On October 19, 1972, the parties were notified

by the referee that claimant had proven a compens-

able accident did occur and claimant, therefore,

was entitled to workmen's compensation benefits

from appellee corpcration, a self-insurer, in the

amount of $3437.15. The referee's order further

established that subrogation rights were granted to

both appellee corporation and appellee bureau for

all payments of social insurance benefits ($2340)

and unemployment compensation benefits ($900)

that had been paid to claimant. There was no ap-

peal from any part of this order.

On November 20, 1972, appellee corporation

mailed appellant a check for $197.15 as the balance

due to claimant after deduction of the two subroga-

tion claims of the appellees. Appellant then, on

March 16, 1973, submitted invoices to both appel-

lees for their respective pro-rata share of appel-

lant's charges for legal services and costs advan-

Te eee eae

A3

ced in prosecuting claimant's case. Both appellees

refused to honor appellant's bill and on April 12,

1973, almost six months after the referee's award,

appellant filed a "Petition for Award of Counsel

Fees" with the Workmen's Compensation Board, re-

questing that the Board order payment of appellant's

expenses and legal fees properly due from each

subrogee.

The Board denied appellant's petition, holding

that the request for counsel fees is in the nature of

an appeal from the referee's award and under Sec-

tion 423 of the Pennsylvania Workmen's Compensa-

tion Act, Act of June 2, 1915, P.L. 736, as amend-

ed, 77 P.S. Sections 853, 854 (Supp. 1974-1975),

the appeal was too late, having been filed beyond

20 days of the notice of the referee's award. The

Board also held that because the provisions of

Section 501 of the Act, 77 P.S. Section 1021, were

not met, "this Board has no authority to direct the

parties to make payments to counsel for claimant".

| The instant appeal followed.

| The appellant now argues, based on the equit-

able principles of subrogation as laid down in Furia

v. Philadelphia, 180 Pa. Superior Ct. 50,118 A. 2d

236 (1955), and the intent evidenced in the legis-

lative history of Section 319 of the Act, 77 P.S.

Section 671, that they are entitled to receive attor-

ney fees from the fund they created which benefit-

ted the subrogees. We find it unnecessary to reach

this issue for we hold that appellant did not comply

with the statutory provisions that would enable him

to collect the fees they are claiming, either from

the claimant, from the subrogee or as a lien on the

fund.

Appellant's right to receive his attorney fees

from the subrogees of a workmen's compensation a-

ward must be controlled by the Workmen's Compen-

A4

sation Act. Section 501 of the Act, 77 P.S. Section

1021, provides that, inter alia:

“No claim or agreement for legal services or

disbursements in support of any claim for compen-

sation, or in preparing any agreement for compen-

sation ... shall be an enforceable lien against the

amount to be paid as compensation, or be valid or

binding in any other respect, unless the same be

approved by the board...." (Emphasis supplied.) |

The section goes on to require that such claim or

agreement be filed with the department for approv-

al, and then provides for creation of a lien by giv-

ing notice to the employer. Appellant, who has

the burden of proof, has made no showing that the

approval of attorney's fees contemplated in Section

501 was ever granted or even sought.

* section 442 of the Act, 77 P.S. Section 998, was

added on February 8, 1972, long after the injury on

April 2, 1971, but before the referee's determination

on October 19, 1972. This Section provides:

"All counsel fees, agreed upon by claimant

and his attorneys, for services performed in mat-

ters before any referee or the board, whether or not

allowed as part of a judgment, shall be approved

by the referee or board as the case may be, provid-

ing the counsel fees do not exceed twenty per cent

of the amount awarded. The official conducting any

hearing, upon cause shown, may allow a reason-

able attorney fee exceeding twenty per centum of

the amount awarded at the discretion of the hear-

ing official.

"In cases where the efforts of claimants'

counsel to produce a result favorable to the claim-

ant but where no immediate award of compensation

is made such as in cases of termination or suspen-

AS

Surely equity, and perhaps the law, would al-

low appellant to be paid a reasonable attorney fee

in a case such as presented here, absent a control-

ling statute. However, when as in this case, there

are attorney fees claimed for protection of subroga-

tion interests, such claims must be presented in

accordance with Section 501 or Section 442 of the

Workmen's Compensation Act for approval by the

referee or the Board. Stnce neither procedure was

followed in the instant case, we, therefore, must

affirm the Board‘s decision and deny appellant's

petition and appeal.

Accordingly, we enter the following

ORDER

NOW, January 7, 1975, the decisiorw of the Workmen's

Compensation Appeal Board is hereby affirmed.

(signed)

Roy Wilkinson, Jr., Judge

sion the hearing official shall allow. or award reason-

able counsel trees, as agreed upon by claimant and

his attorneys, without regard to any per centum.”

Since appellant did not comply with either provi-

sion, i.e., approval of the referee or board, wheth-

er this Section applies is immaterial.

- It should be noted that the Board's opinion states

appellant failedto comply with the notice provision

of this third paragraph of Section 50]. At argument,

appellant produced a letter he sent to U.S. Steel

on November 8, 1972, and strenuously contends

that this letter was sufficient notice to comply with

this paragraph. In addition to the letter not being

on the record, we need not decide if this.argument

is meritorious, since we hord that appeliant tailed

to comply with the other portions of the section.

A6

In The COMMONWEALTH COURT of PENNSYLVANIA

Lerner v Haas et al at No. 2109 C.D. 1976

Opinion by Judge Wilkinson, May 16, 1978

This case, an appeal of an order of the Work-

men's Compensation Appeal Board (Board) awarding

counsel fees to respondent, arises out of workmen's

compensation proceedings wherein the employer

sought to terminate benefits to Samuel Lerner’

( claimant ).

Respondent, an attorney, was hired by claim-

ant to represent him at these proceedings on Sep-

tember 26, 1971; claimant died on December 21.

1971. Respondent continued to represent the estate

(of which petitioner, the brother of the claimant,

was appointed administrator) in the workmen's

compensation action. On November 14, 1972 re-

spondent and the employer's insurance company

agreed to a stipulation of facts and a proposed

payment of $4800. The petitioner orally agreed to

accept the agreement that same day and the follow-

ing day the agreement was presented to the referee.

However, when the written agreement (with the a-

mount of payment increased to $5,000) was pre-

sented to petitioner for his signature he delayed

signing it for a period of five months. Finally on

April 19, 1973 petitioner: informed respondent that

he would not sign the agreement and instead re-

quested the respondent to secure an agreement

from the insurance company to pay an additional

$160 for certain medical bills. Respondent refused

to seek this additional sum and withdrew from the

case. Hearings were held with the petitioner ap-

pearing pro se and following a series of appeals an

award was made of $6,271.10 representing compen-

sation of $4911.43 and the balance in interest. Re-

spondent filed a petition with the Department of

Labor and Industry asking for payment for approxi-

yy

A7

mately 20 hours of legal work on the claim. This

petition was granted by the Board in the amount of

$1,460 plus interest at the rate of 6 per cent per

annum from January 1, 1973 until the date of pay-

ment. From this award petitioner appeals.

Petitioner throughout has regrettably misread

The Workmen's Compensation Act} which makes it

difficult for us to sift the wheat from the chaff in

determining and properly disposing of the issues

he has raised. As we apprehend the matter, the

only real issue in this case is whether the Board

had the authority under Section 501 of the Act,

77 P.S. Section 1021, to approve the fee.

Petitioner first argues that this award was im’

proper because there was no prior approval of the

agreement between claimant and counsel by the

Board or referee. He relies on a decision of the

Board dated October 2, 1975 which dismissed the

respondent's petition on the ground there had been

no prior approval of counsel fees. However, that

decision did nothing more than state the proper

procedure under Section 501 required respondent

to file his claim with the Department of Labor and

Industry (which was subsequently done). See

Richman v. Workmen's Compensation Appeal Board

16 Pa. Commonwealth Ct. 594; 329 A2d 920(1973).

Alternatively, Petitioner argues that the re-

spondent, having breached his contract by with-

drawing from the case, should not be permitted to

share in the award of compensation made after his

withdrawal. This argument, however, misstates

allegations in respondent's petition which were

not denied by petitioner, and the legal basis to

Support respondent's award of counsel fees. These

factual allegations show that respondent had nego-

tiated and petitioner had agreed to a settlement on

November 14, 1972 and that respondent's petition

A8

for counsel fee was based on the amount of work

actually performed by respondent on behalf of his

client up to January 1, 1973. While petitioner

could and in fact did repudiate his initial agree-

ment to the settlement, he could not by so doina

deprive counsel of a reasonable fee for the a-

mount of services he did perform. See Sundheim

v. Beaver County Building & Loan Association,

140 Pa. Superior Ct. 529, 14 A2d 349(1940) (al-

locatur refused). For this reason we also find peti-

tioner's assertioner that Section 442 of the Act,ad-

ded by the Act of February 8,,1972, P.L. 25, as a-

mended, 77 P.S. Section 998", precludes this a-

ward to be without merit since that section gives

the Board the authority to award counsel fees ex-

ceeding the statutory amount "upon cause shown’.

Similarly we are not persuaded by petitioner's

assertion that the Board is without authority under

Section 501 to award counsel fee plus interest in

the proper case. Moreover, we believe, sufficient

facts are in the record, undisputed by petitioner to

conclude the award of interest in this case was

"reasonable" and thus, properly made by the Board.

See Workmen's Compensation Appeal Board v.

Leuchen, 21 Pa. Commonwealth Ct. 39, 042 A.2d

810 (1975). The record showed the agreement had

been prepared and agreed to by petitioner consist-

ing of a $4,800 settlement and attorney's fees of

$1,393 which was subsequently increased to

$1,460 based on the increase in the settlement to

$5,000. In all cases of contract interest is allow-

able at the legal rate from the time payment was

withheld after it became the duty of the debtor to

make payment. Palmgreen v. Palmer's Garage, Inc.

383 Pa. 105, 117 A.2d 721 (1955). There was ample

evidence for the Board to have concluded the repu-

diation of the agreed settlement was unreasonable

A9

and unwarranted. Petitionerhas advanced no reason

for rejecting the stipulation other than his desire

to have additional compensation for $160 for medi-

cal bills. This assertion, however, must be view-

ed in light of the fact that petitioner had originally

agreed to a $4,800 settlement and later rejected a

stipulation incorporating a $5,000 settlement. Also

germane to this issue is the fact that the $5,000

settlement which would have been paid on or before

January 1, 1973 was above the sum ultimately a-

warded in compensation after protracted hearings

and appeals encompassing a two year period.

Accordingly, we will enter the following

ORDER

AND NOW, May 16, 1978 the order of the

Workmen's Compensation Appeal Board, dated No-

vember 5, 1976 at Docket No. C.F. 2384, is af-

firmed and it is directed that judgment be entered

in favor of Gerald J. Haas, Esquire and against the

Estate of Samuel Lerner, Deceased and/or Sidney

S. Lerner, M.D., in the sum of $1,460 plus inter-

est at the rate of six per cent per year from January

1, 1973 until the date of payment.

(signed)

Roy Wilkinson, Jr., Judge

]

Act of June 2, 1915, P.L. 736. as amended, 77

P.S. Section 1 et seq. ( Hereinafter referred to as

Act.)

Respondent has not argued, nor do we find it ne-

cessary to decide, the issue of the retroactivity of

Section 442 to injuries occurring prior to the ef-

fective date of the 1972 amendments.

Al0

PA. WORKMEN "S COMPENSATION APPEAL BOARD

Lerner v. Philadelphia Psychiatric Center, A69972

Opinion by Commissioner McCullough, Oct 2, 1975

Claimant was injured on January 9, 1970, which

accidental injury was the subject of a compensa-

tion agreement entered into on Pebruary 20, 1970.

The agreement recites that "while helping to sub-

due patient, Claimant was knocked down, striking

head. Resulting in fracture right occipital skull,

cerebral contusion wit» subarachnoid hemorrhage,

lacerations of left eyebrow and left upper lip, and

contusions of left side of face." Compensation at

$60 a week was begun January 16, 1970. On July.

29, 1970 the employer petitioned to terminate com-

pensation on the basis claimant had recovered from

his said injuries and could return to work on March

il, 1970. Claimant died on December 21, 1971. His

brother, a medical doctor, was appointed adminis-

trator of his estate, and petitioned for the statuto-

ry burial expense on May 19, 1972. The said ad*

ministrator petitioned to review the compensation

agreement on December ll, 1973, asking for the

_ payment of two medical bills, one for $90 and one

for $20, for services to his late brother for the

period January 9, 1970 to February 20, 1970. The

referee consolidated the said three petitions, and

after extensive hearing, did not grant the prayer of

the petition to terminate, but continued compensa-

tion under the said agreement to October 7, 1971,

as of which date he granted the termination peti-

tion. The referee also directed payment of the

said two medical bills requested under the petition

to review. The fatal claim petition was dismissed.

The action of the referee was dated February 24,

1975. The carrier appealed, asserting that the re-

feree should have granted its termination petition

as of March ll, 1970. However, counsel for the

All

carrier has submitted a one-sentence brief which

recites, "The findings of fact, conclusions of law,

and award of Referee Stevenson dated February 24,

1975, were supported by sufficient competent evi-

dence." Obviously, therefore, the carrier has with-

drawn its appeal. The administrator appealed, as-

serting that there was no termination of disability

on October 7, 1971.

On the petition to terminate, it is the burden

of the employer to show a reduction or cessation

of disability. Lackman vs. F.W.Woolworth Co.,

205 Pa. Super. 129, 208 A.2d 33(1965). The em-

ployer presented two physicians in support of its

petition. The one physician is Board certified in

neurology and psychiatry. He first saw decedent

on May 19, 1970. He received a history from de-

cedent that he had been struck by an escaping pa-

tient and was rendered unconscious and hospital-

ized from January 9 to February 20,1970, when he

voluntarily vacated the hospital. He stated deced-

ent was supposed to have a skull fracture and con-

tusion, but he knew there was a laceration of the

head and an injury to the right eye. This physician

stated decedent had had diabetes for ten years,

and that the injury aggravated the diabetes, but

thereafter the diabetes came under control. It

was his opinion that the only thing significant

from the accident was the temporary loss of con-

trol of the diabetes. This physician nowhere in

his testimony mentioned the date of October 7, 1971.

The other physician presented by the defendant

was Board certified in internal medicine, who never

saw decedent, but who reviewed available medical

records. He was posed a hypothetical question

which embraced the medical history of decedent

and was asked whether any disability in deced-

ent, after April of 1970 was related to the blow on

Al2

the head suffered by the decedent on January 9,

1970. His answer was to the effect that disability

subsequent to April of 1970, was not causally re-

lated to the then-claimant's cranial trauma. He

was later asked whether the blow sustained by de-

cedent on the head had any effect on the ongoing

diabetes vascular disease of decedent, and his

answer was he found no evidence linking the blow

on the head with the vascular disease. The physic

ian then opined that disability subsequent to April

of 1970 was directly related to the diabetic vas-

cular conditions of decedent. This physician no-

where in his testimony mentioned the date of Oc- ©

tober 7, 1971.

The testimony of the aforesaid two physicians

comprises substantial competent evidence to sup-

port the termination of compensation. It is the

function of the referee to pass upon the credibility

of witnesses. Universal Cyclops Steel Corporation

vs. Workmen's Compensation Appeal Board, 305

A.2d 75(1973). It can be seen from the testimony

of these two physicians that compensation could

have been terminated in April of i970. The referee,

however did not terminate compensation until Oc-

tober 7, 1971. But this board did not pass upon

this extension by the referee of total disability

compensation, because, as recited above, the

one-sentence brief of counsel] for the employer is

tantamount to the withdraw(a)1 of the appeal.

With regard to the petition to review the com-

pensation agreement, which, in effect, was a re-

quest for the payment of services of two physic-

ians, for $90, and $20, the appeal by the defen-

dant, having been in effect withdrawn, these a-

wards stand. They should stand, having been in-

curred during the first and second months of the

disability from accident, in January of 1970.

Al3

It is the burden of the administrator in a peti-

tion for statutory burial expenses to prove that

death was a result of the injury and that the injury

was a cause of death. Hurlburt vs. Fidelity Win-

dow Clean Co., 192 Pa. Super. Ct., 152(1960).

An examination of the medical evidence of-

fered by the administrator has not met said burden.

In addition, finding of fact #7 of the referee recites

that the administrator did not establish by compet-

ent evidence that the death was causally related to

the work injury of January 9, 1970, and that the

death resulted from a prior existing pathological

disease not aggravated by the accidental injury.

Since there is substantial competent evidence in

the record to support this finding, we cannot dis-

turb the denial of the petition for statutory burial

expense.

The determination of the referee is therefore

affirmed, in toto.

In addition to the above proceedings, the ad-

ministrator, on March 25, 1975, mailed to this

board a separate appeal asking for the awarding of

costs for medical expenses, legal fees and dis-

bursements, witness fees, notes of testimony, in-

terest and penalties, etc. Since he did not present

these matters to the referee, other than the matter

concerning attorney fees, we cannot consider such

separate appeal. Further, the administrator is pro-

ceeding under the 1972 amendments to the Pennsyl-

vania Workmen's Compensation Act, and this board

has consistently held that, withregard to accidents

that occurred before said amendments, this board

will not invoke the amendments as set forth in Sec-

tion 435, and 440 under the act as amended.

On March 18, 1975, the administrator petition-

ed for a rehearing. There is no authority in the act

for such a rehearing, because this board has just

Al4

now by this decision finally disposed of the ap-

peals in the matter. The petition is therefore dis-

missed as being premature.

On April 8, 1975, the administrator petitioned

for the allowance of witness fees. This petition

cannot be considered by this board because this

matter was not considered by the referee.

On April 8, 1975, the administrator filed a

Document entitled "Claim Petition for Assessment

of Costs." Again, since this was not presented to

the referee, this board cannot consider this "Claim

Petition for Assessment of Costs."

On April 8, 1975, the administrator also filed

a Document entitled, "Petition for Allowance of At

torney Fees and Disbursements.”

We have hereinabove stated that the imposi-

tion of counsel fees on an employer under the most

recent amendments to the Pennsylvania Workmen's

Compensation Act does not apply to this pre-

amendment accident. Further, section 501 of the

Pennsylvania Workmen's Compensation Act, as it

stood at the time of the accident in this case, Jan-

uary 9, 1970, negates the validity of any counsel

fee arrangement unless such an arrangement is ap-

proved by this board. Since there is no such ap-

proval in this case, the petition for allowance of

attorney fees and disbursements must be dismissed.

Richmond, Greenlee, Richmond Derrico & Posa vs.

Workmen's Compensation Appeal Board, 16 Common.

Ct. 594 (1975). (underlining supplied)

(signed)

Commissioner

Concurred in by: Oct 2 1975

(signed)

Chairman

(signed)

Commissioner

Al5

PA. WORKMEN"S COMPENSATION APPEAL BOARD

Lermmer v Philadelphia Psychiatric Ctr. C.F. 2384

Petition for Counsel Fee By Claimant's Counsel

Order by Commissioner McCullough Nov 5, 1976

McCullough, Commissioner:

Upon consideration of the petitioner of the for-

mer counsel of the estate of Samuel Lerner, de-

ceased, under Section 501 of the Pennsylvania

Workmen's Compensation Act, said estate and/or

Sidney S. Lerner, M.D., is ordered to pay Gerald

J]. Haas, Esquire, the sum of $1,460.00 plus in-

terest at the rate of 6% per annum from January I,

1973 until the date of payment, as a counsel fee.

By the Board:

(signed)

Commissioner

(signed)

Chairman

(signed)

Commissioner

Nov 5,1976