County of Allegheny v. Workers' Compensation Appeal Board (County of Allegheny)

177 A.3d 864
CourtSupreme Court of Pennsylvania
DecidedJanuary 18, 2018
DocketNo. 28 WAP 2017; No. 29 WAP 2017
StatusPublished
Cited by6 cases

This text of 177 A.3d 864 (County of Allegheny v. Workers' Compensation Appeal Board (County of Allegheny)) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Allegheny v. Workers' Compensation Appeal Board (County of Allegheny), 177 A.3d 864 (Pa. 2018).

Opinion

OPINION

JUSTICE BAER.

I. Introduction

Section 440 of the Workers’ Compensation Act (“the Act”), 77 P.S. § 996, provides that an employee in a workers’ compensation case is entitled to attorney’s fees when an insurer unreasonably contests its liability under the Act.1 In the case sub judice, the employer, Allegheny County, was ordered to pay $14,750.00 in attorney’s fees under Section 440 after the Workers’ Compensation Appeal Board (“WCAB”) determined that the County unreasonably contested its liability under the- Act. Though the County sought supersedeas of that order, arguing that the finding, of liability was in error, supersedeas was denied. Thus, the County complied with the order and paid the awarded fee to the employee’s counsel. Upon reaching the merits of the County’s appeal, however, the Commonwealth Court reversed, concluding that the County not only had a reasonable basis for its contest, but, indeed, a prevailing one, and that the employee was no longer entitled to workers’ compensation benefits. Thereafter, the County filed a separate petition before a Workers’ Compensation Judge (“WCJ”) in which it sought reimbursement of the erroneously awarded attorney’s fees from the employee’s counsel.

■ We granted allowance of appeal in this matter to consider whether a court may order an employee’s attorney to disgorge erroneously awarded, but already paid, unreasonable contest attorney’s fees pursuant to Section 440, when the substantive basis for the award is later overturned on appeal. For the reasons that follow, we hold that the General Assembly, in enacting the Workers’ Compensation Act, did not provide any mechanism by which employers can recoup erroneously awarded counsel fees, once paid. Rather, the General Assembly contemplated that when a merits appeal is undertaken, a court may grant supersedeas of an order awarding attorney’s fees. Because such a supersede-as was requested and denied in this case, thus requiring the appellee to pay the awarded attorney’s fees, and there is no statutory provision authorizing reimbursement if the award is reversed, we hold that the County may not recoup the already paid attorney’s fees from the employee’s counsel. Accordingly, we vacate the Commonwealth Court’s order and reinstate the order of the WCAB, which affirmed the denial of the County’s reimbursement petition.

II. Background

The instant appeal involves a prolix factual and procedural history spanning several decades and involving numerous decisions related to the County’s repeated attempts to suspend Harold Parker’s (“Parker”) workers’ compensation benefits. However, we recite only those facts necessary to resolve the discrete legal issue before us.

On September 12, 1998, Parker sustained an injury to his shoulder during the course of his employment as the chief supervisor of the Allegheny County Schuman Detention Center (“Schuman Center”). Because Parker’s injury prevented him from continuing to work in that position, he began receiving disability benefits under the Act.

In 2002, the County filed a petition to suspend Parker’s workers’ compensation benefits, in which it alleged that Parker voluntarily withdrew from the workforce altogether by failing to seek work within his physical capabilities. Ultimately, a WCJ determined that Parker had not voluntary removed himself from the workforce and ordered the County to continue paying his disability benefits; WCJ Decision and Order, 12/28/04, at 2.

In June of 2007, the County filed another suspension petition, again arguing that Parker voluntarily removed himself from the workforce. This time, however, the County averred that Parker’s condition had improved since the County’s previous attempt to suspend his workers’ compensation benefits and that Parker declined a specific job offer within his work abilities. Following a hearing, a WCJ found that Parker had indeed failed to follow through in good faith on a job offer within his work restrictions and granted the County’s suspension petition.

Parker appealed to the WCAB, arguing that the County was collaterally estopped from pursuing the 2007 suspension because its 2002 petition, purportedly on the same basis, was denied by a WCJ. Agreeing with Parker that collateral estoppel barred the County’s 2007 suspension petition, the WCAB reversed.2 Consistent with its erroneous conclusion that the 2007 petition raised the same grounds for suspension rejected by the WCJ in the County’s 2002 petition, the WCAB further held that the County lacked a reasonable basis for the 2007 contest and awarded attorney’s fees under Section 440 of the Act. See 77 P.S. § 996(a) (providing that when an employer contests liability under the Act but the employee prevails, the employee shall be entitled to attorney’s fees unless “a reasonable basis for the contest has been established by the employer”). It was subsequently determined.- that the County owed $14,750:00 in attorney’s fees for its unreasonable contest.

Thereafter, the County filed an appeal with the Commonwealth Court, arguing, inter glia, that the WCAB erred in concluding that the County was collaterally estopped from pursuing the 2007 suspension because that petition was based upon different grounds for suspension than the 2002 petition. Consistent with its position that it was not collaterally estopped from pursuing the 2007 suspension, the County further argued that it had a reasonable basis for contesting its liability and that the WCAB erred in awarding unreasonable contest.attorney’s fees under, Section 440. • . .

Simultaneous with its appeal on the merits, the County filed before the WCAB a separate request for supersedeas of the attorney’s fee payments pending its merits appeal to the .Commonwealth Court pursuant to Pa.R.A.P. 1781 (providing for a stay pending action on petition for review of an order of any government unit) and Section 111.21 of the Special Rules of Administrative Practice and Procedure Before the Workers’ Compensation Appeal Board, 34 Pa. Code § 111.21 .(setting, forth requirements for a request for supersedeas of a workers’ compensation order).’ In support of its request, and, indeed, portending the issue currently before this Court, the County argued that it would suffer irreparable injury if forced to pay the erroneously awarded fees because the Workers’ Compensation Supersedeas Fund established by the General Assembly under Sec.tion 443 of the Act (“Section 443 Fund”), 77 P.S. § 999, which provides a fund to reimburse employers for erroneously awarded workers’ compensation benefits, does not provide for reimbursement of attorney’s fees paid for an unreasonable contest.3 Nonetheless, the WCAB denied the County’s request for'supersedeas.

Following the WCAB’s denial of super-sedeas, the County filed a supersedeas request before the Commonwealth Court, again arguing that it would suffer irreparable injury if forced to pay the erroneous attorney’s fee award. The Commonwealth Court denied the County’s request for su-persedeas in a single sentence order. Consequently, the County, having no other recourse at that time, paid the $14,750.00 award to Parker’s attorney. See 77 P.S. § 971 (providing that an employer who refuses to furnish payment without being granted a supersedeas shall be subject to a penalty). It also continúed paying Parker’s workers’ compensation benefits.

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Bluebook (online)
177 A.3d 864, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-allegheny-v-workers-compensation-appeal-board-county-of-pa-2018.