Budd Co. v. Workmen's Compensation Appeal Board

601 A.2d 1322, 144 Pa. Commw. 533, 1992 Pa. Commw. LEXIS 41
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 7, 1992
Docket196 C.D. 1991
StatusPublished
Cited by7 cases

This text of 601 A.2d 1322 (Budd Co. v. Workmen's Compensation Appeal Board) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Budd Co. v. Workmen's Compensation Appeal Board, 601 A.2d 1322, 144 Pa. Commw. 533, 1992 Pa. Commw. LEXIS 41 (Pa. Ct. App. 1992).

Opinions

[535]*535BLATT, Senior Judge.

Budd Company (employer) appeals a decision of the Workmen’s Compensation Appeal Board (Board) affirming a referee’s decision to modify a supplemental agreement between the employer and Vincent Bradley (claimant), entered into pursuant to Section 407 of The Pennsylvania Workmen’s Compensation Act (Act)1. We affirm.

On June 8, 1987, the claimant suffered a work-related injury to his head. A notice of compensation payable was executed on June 23, 1987. The claimant returned to work on July 6, 1987. A final receipt was executed on July 9, 1987.

Approximately six weeks later, the claimant and the employer entered into a supplemental agreement (agreement). By its terms, the employer agreed to pay the claimant compensation of $361.00 a week for six weeks for the facial scar resulting from the claimant’s injury. The claimant signed the agreement, drafted by the employer, without benefit of legal counsel. It was neither witnessed nor dated. Pursuant to the agreement, the employer delivered a check for $2,166.00 to the claimant in October 1987. The claimant did not cash the check.2

On June 20, 1988, the claimant filed a petition for review of the agreement with the Board. The claimant asserted that six weeks of compensation for this injury was unconscionable. The referee entered an order modifying the agreement and awarding the claimant eighty weeks of compensation. The employer appealed to the Board which affirmed the referee’s decision.

On appeal to this Court, the employer argues that the referee had no authority to modify the agreement. The claimant also petitions for counsel fees pursuant to Pa. [536]*536R.A.P. 2744. The petition is consolidated with the employer’s appeal on the merits.

I. THE REFEREE’S AUTHORITY TO MODIFY

Section 413(a) of the Act authorizes a referee, at any time, to modify a supplemental agreement “if it be proved that ... [the] agreement was in any material respect incorrect.” 77 P.S. § 771.

The employer argues that an insufficient award does not fall within the statutory standard for modification. In support of its argument, the employer cites Baluta v. Glen Alden Coal Co., 109 Pa.Superior Ct. 66, 165 A. 764 (1933). In Baluta, the superior court addressed a petition for modification of a supplemental agreement on the basis of insufficient compensation for a disfigurement. The agreement was reviewed and approved by the Board. Payments, pursuant to the approved agreement, had ceased six months prior to filing the petition for modification.

The superior court expressed reluctance at setting aside an agreement which was referred to and approved by the Board. The court noted that the parties were protected by the provision of the Act which required such review and approval. The court’s decision to deny the petition ultimately turned on the fact that the supplemental agreement was not a then existing agreement appropriate for modification.

Unlike Baluta, the agreement which set forth the compensation in this case was not approved by the Board nor was compensation paid out pursuant to the agreement.

Further, Baluta was governed by statutory language which required proof that the supplemental agreement “was procured by the fraud, coercion, or other improper conduct of a party, or was founded upon a mistake of law or of fact____” Act of June 2,1915, P.L. 736, as amended, 77 P.S. § 731.3 Based on this standard and the petitioner’s argument, the superior court concluded that there was no [537]*537mistake of fact, as contemplated under Section 771, where “another referee or board would fix a different period as the measure of liability than that fixed by the agreement of the parties fairly entered into. . . .” Baluta, 109 Pa.Superior Ct. at 68, 165 A. at 764.

Significantly, this case is governed by a different standard. The statutory language which controlled Baluta was changed by Section 1 of the Act of June 4, 1937, P.L. 1552, which substituted the standard “in any material respect incorrect” for the above quoted language.4 As a result, a referee may modify or set aside an agreement, “even absent a finding of mistake of law or fact, fraud or overreaching.” Furmanek v. Workmen’s Compensation Appeal Bd., 64 Pa.Commonwealth Ct. 367, 370, 439 A.2d 1359, 1361 (1982).

Though pure mistakes of fact and law clearly remain within the standard, see e.g., Reed v. Workmen’s Compensation Appeal Bd., 499 Pa. 177, 452 A.2d 997 (1982), their absence does not otherwise render a referee powerless to modify an agreement. Hill v. Booth & Flinn Co., 146 Pa.Superior Ct. 575, 23 A.2d 85 (1941).5 The standard also reaches agreements based on claimant’s misunderstandings of their rights under the Act, Ambrosia Coal & Constr. Co. v. Workmen’s Compensation Appeal Bd., 42 Pa.Commonwealth Ct. 512, 400 A.2d 1377 (1979) and agreements which fail to reflect the extent of a claimant’s disability. Litton Indus. v. Workmen’s Compensation Appeal Bd. (Christner), 78 Pa.Commonwealth Ct. 79, 466 A.2d 1114 (1983).

In this case, the referee identified three bases for modification of the agreement: (1) the inadequacy of the compensation, (2) the lack of a date on the agreement itself and (3) [538]*538the lack of a witness attesting the claimant’s signature. In affirming the referee, the Board concluded that “[t]he discrepancy here ... between six weeks and eighty weeks is sufficiently great as to arise to the level of making the Supplemental Agreement materially incorrect.” Bd. Op., Reproduced Record (R.R.) at 45a.6

None of the elemental facts — the claimant’s appearance, the seriousness of the disfigurement nor its permanence — is at issue. The dispute rests solely on the adequacy of the compensation set forth in the agreement.

Section 306(c)7 of the Act establishes the maximum compensation for disfigurement of the head. It contains no standards or guidelines to assist the referee in fixing the appropriate number of weeks to be awarded in a disfigurement case. Once the referee determines, as a matter of fact, that a claimant’s scarring rises to the level of a compensable disfigurement, the Act clearly vests him with the authority to find the factual elements necessary to support an award and the discretion to set the compensation up to a maximum of two hundred and seventy-five weeks.8

The basic concern in setting aside awards based on an agreement is to assure that the compensation is fair. Where the compensation set forth in an agreement is gross[539]*539ly disproportionate to the degree of disfigurement and the compensation rights relinquished, it materially overlooks the loss resulting from the injury.

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Budd Co. v. Workmen's Compensation Appeal Board
601 A.2d 1322 (Commonwealth Court of Pennsylvania, 1992)

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Bluebook (online)
601 A.2d 1322, 144 Pa. Commw. 533, 1992 Pa. Commw. LEXIS 41, Counsel Stack Legal Research, https://law.counselstack.com/opinion/budd-co-v-workmens-compensation-appeal-board-pacommwct-1992.