Geriatric & Medical Centers v. Workmen's Compensation Appeal Board

648 A.2d 1289, 167 Pa. Commw. 590, 1994 Pa. Commw. LEXIS 553

• Court: Commonwealth Court of Pennsylvania
• Decided: September 23, 1994
• Status: Published

Opinions

SMITH, Judge:

Geriatric & Medical Centers (Employer) petitions for review of the order of the Workmen’s Compensation Appeal Board (Board) which affirmed the referee’s decision denying Employer’s petitions for review and for termination of notice of compensation payable to Theresa Facey (Claimant). The issue before this Court is whether the Board erred in refusing to set aside the notice of compensation payable which Employer contends was incorrectly issued because Claimant was injured while participating in a ridesharing arrangement which is excluded from workers’ compensation coverage as provided in Section 3 of the Act of December 14, 1982, P.L. 1211, as amended, 55 P.S. § 695.3, commonly known as the Ridesharing Act (Ride-sharing Act).

Claimant was employed as a nursing assistant for Employer on August 17, 1988 when she was injured in a motor vehicle accident while riding in an Employer-owned and operated van on the way to her job site at the West Chester Arms, West Chester. Employer provided van service from its corporate headquarters on Walnut Street in Philadelphia to the job site. The van was used as a part of Employer’s ridesharing program whereby employees were provided free transportation on a voluntary basis. On October 13, 1988, Employer filed a notice of compensation payable for injuries sustained by Claimant in the nature of strain and sprain to her lumbar and cervical spine.

On July 10,1990, Employer filed a petition for review of notice of compensation payable, alleging that Claimant was being paid compensation due to injuries sustained in a ride-sharing arrangement; pursuant to Section 3 of the Ridesharing Act, such injuries were not compensable under the Workers’ Compensation Act (Act), Act of June 2,1915, P.L. 736, as amended, 77 P.S. §§ 1-1031, and the notice of compensation was materially incorrect. On August 13, 1990, Employer filed a petition for termination alleging that Claimant’s benefits should be terminated for the reasons indicated above. Claimant denied the allegations of both' petitions. The referee, on March 2, 1991, dismissed Employer’s petitions and ordered Employer to continue paying Claimant’s compensation.

The referee found that under the terms of the Ridesharing Act, Claimant would not be legally entitled to worker’s compensation coverage but concluded however that the legal inaccuracy of the notice of compensation payable was not apparent on its face and that Employer failed to discover the inaccuracy before issuing the notice of compensation payable. Additionally, Employer failed to carry its burden to show why it did not investigate facts surrounding the accident prior to issuance of the notice of compensation payable and failed to prove that the notice was materially incorrect. The Board affirmed the referee’s decision.¹

Employer argues that where a referee finds that a claimant participated in a ridesharing arrangement, any workers’ compensation agreement made pursuant to injuries incurred as a result of the arrangement must be set aside on the grounds that the agreement is materially incorrect. Modification of a compensation agreement is justified where there is a true mistake of fact or law which renders such agreement materially incorrect. Section 413 of the Act, 77 P.S. § 771; Litton Indus. v. Workmen’s Compensation Appeal Board (Christner), 78 Pa.Commonwealth Ct. 79, 466 A.2d 1114 (1983). The burden is on the party seeking a modification of the notice of compensation payable to prove that a material mistake of law was made at the time of the agreement. Hartner v. Workmen’s Compensation Appeal Board (Phillips Mine & Mill, Inc.), 146 Pa.Commonwealth Ct. 167, 604 A.2d 1204, appeal denied, 531 Pa. 662, 613 A.2d 1210 (1992).

The relevant portion of Section 3 of the Ridesharing Act provides that the Workers’ Compensation Act “shall not apply to a passenger injured while participating in a ridesharing arrangement between such passenger’s place of residence and place of employment.” Section 413 of the Workers’ Compensation Act provides:

A referee of the department may, at any time, review and modify or set aside a notice of compensation payable and an original or supplemental agreement or upon petition filed by either party with the department, or in the course of proceedings under any petition pending before such referee, if it be proved that such notice of compensation payable or agreement was in any material respect incorrect.

Employer argues the referee had the authority under Section 413 to set aside the notice of compensation payable based on provisions of the Ridesharing Act.

While concluding that Employer faded to meet its burden as to setting aside the notice of compensation payable, the referee also determined that with respect to the termination petition, Employer failed to present evidence that Claimant’s condition had changed or ceased. As support for their decisions, the referee and the Board relied upon Home Ins. Cos. v. Workmen’s Compensation Appeal Board (Bureau of Workers’ Compensation), 98 Pa.Commonwealth Ct. 249, 510 A.2d 1280 (1986), appeal denied, 515 Pa. 588, 527 A.2d 547 (1987) (citing Barna v. Workmen’s Compensation Appeal Board (Jones & Laughlin Steel Corp.), 513 Pa. 518, 522 A.2d 22 (1987)); the referee concluded that Employer was prohibited from litigating the cause of Claimant’s disability where Employer failed to avail itself of an opportunity to investigate the claim. The Ridesharing Act was the law at the time Employer issued its notice of compensation payable and Employer failed to explain why facts surrounding the accident were not discovered in order to determine the applicability of the Ride-sharing Act prior to entering the notice of compensation payable.

Employer relies upon Barna where the Supreme Court permitted an employer to seek termination of disability payments after the employer began paying benefits pursuant to a notice of compensation payable commencing July 30, 1977, almost two weeks after the employee’s injury. In October 1977, the employer’s doctor reviewed the employee’s hospital records and concluded that his disability was not work related, and thereafter in December 1978, the employer petitioned for review of the notice of compensation payable contending that the cause of claimant’s disability was not work related. The Supreme Court granted allowance of appeal to determine whether its decision in Beissel v. Workmen’s Compensation Appeal Board (John Wanamaker, Inc.), 502 Pa. 178, 465 A.2d 969 (1983), precluded termination of disability benefits where an employer makes payments under a mistaken belief that an employee’s disability was work related. The Supreme Court distinguished its holding in Beissel and reasoned that since the record did not show that J. & L. Steel actually investigated the employee’s condition prior to filing of the notice of compensation payable, and after completion of the investigation the employer determined that the cause of injury was not work related but was due instead to World War II injuries, the notice of compensation payable was materially incorrect and may be set aside in the absence of evidence of repeated contests of the cause of disability.

The facts and holding in Bama are distinguishable from the case sub judice. Employer failed to promptly file a notice of compensation payable in that three months elapsed between the time of Claimant’s work injury and the filing of Employer’s notice of compensation payable, Employer had ample opportunity to investigate the cause of Claimant’s disability due to a specific vehicular accident rather than an underlying condition found to exist in Bama, and had two years from the time of Claimant’s injury and the date of its petition to investigate the applicability of the Ridesharing Act. At no time has Employer specifically argued that it did not investigate Claimant’s claim or was in any respect precluded from determining Employer’s liability for the claim.

In Beissel, the Supreme Court reversed this Court’s decision to uphold the set aside of a notice of compensation payable. The employer filed its petition for termination two years after filing its notice of compensation payable claiming that the employee’s condition was unrelated to her May 1975 fall. In rejecting the employer’s attempt to litigate its admission of liability, the Supreme Court stated:

Just as we have held that the burden is on a petitioner to prove that an employe’s disability has increased or decreased after the filing of a notice of compensation payable, we also hold that a petitioner has the burden of proving that an independent cause of an employe’s disability arose after the filing of a notice of compensation payable if the petitioner is seeking to justify the termination of benefits on the grounds that the employe’s disability is no longer work-related. To hold otherwise would afford the employer an opportunity to litigate that which it has already admitted. This we will not do.

Id., 502 Pa. at 185, 465 A.2d at 972 (emphasis in original).

The preceding text from Beissel was reiterated by this Court in County of Schuylkill v. Workmen’s Compensation Appeal Board (Lawlor), 151 Pa.Commonwealth Ct. 97, 617 A.2d 46 (1992). In County of Schuylkill, this Court refused to set aside a notice of compensation payable where the employer argued that it had not completed an investigation into the cause of the claimant’s injury when the employer issued a notice of compensation payable; the employer later obtained medical records which determined that the claimant’s myocardial infarction and coronary bypass surgery were not related to the claimant’s employment. This Court concluded that the notice of compensation payable should not have been set aside because the worker’s compensation carrier made little effort to determine whether the injury was related and had an opportunity to do so before filing the notice.²

As for Home Ins. Cos., this Court observed that an employer must demonstrate that a notice of compensation is materially incorrect on grounds that the cause of the claimant’s disability was discovered to be not work related after execution of the agreement. The issue in Home Ins. Cos. concerned the employer’s entitlement to reimbursement from the supersedeas fund due to benefits paid to an employee prior to a stipulated set aside of the notice of compensation payable. This Court concluded that before Beissel, a wider range of attacks was permitted on notices of compensation payable but nevertheless, because the notice was filed voluntarily, it continued in full force and effect and all payments made thereunder were “payable” in accordance with the Act. Therefore reimbursement from the supersedeas fund was denied.

In view of established principles governing the set aside of notices of compensation payable, it is evident that Employer in the case sub judice is not entitled to a set aside of its notice of compensation payable as Employer had ample opportunity to investigate and discover the facts surrounding Claimant’s accident and to determine relevant law prior to filing the notice of compensation payable. Not only did Employer fail to avail itself of an opportunity to investigate this claim, it waited almost two years before it decided to petition to set aside the notice of compensation payable. Thus application of the law to the facts of this case precludes the relief sought by Employer to litigate its prior admission of liability for Claimant’s disability. The Board was correct in affirming the referee’s decision, and this Court will therefore affirm its order.

ORDER

AND NOW, this 23rd day of September, 1994, the order of the Workmen’s Compensation Appeal Board is affirmed.

1 . This Court’s, scope of review is limited to determining whether necessary findings of fact are supported by substantial evidence, whether an error of law was committed, or whether there was a constitutional violation. Rite Care Resources v. Workmen’s Compensation Appeal Board (Davis), 154 Pa.Commonwealth Ct. 336, 623 A.2d 917 (1993).

2 . Employer also argues the applicability of Phillips v. Workmen's Compensation Appeal Board, 519 Pa. 31, 545 A.2d 869 (1988), where the employer was permitted to challenge the validity of its notice of compensation. That case is distinguishable from the instant matter in that it concerned the willful concealment of relevant medical evidence by counsel for the claimant which voided the compensation agreement. The referee concluded that the original compensation agreement was void as having been induced by fraud. Employer also relies upon Lawrence v. Workmen’s Compensation Appeal Board (Commercial Lovelace Motor Freight, Inc.), 125 Pa.Commonwealth Ct. 701, 559 A.2d 67 (1989), appeals denied, 524 Pa. 631, 634, 574 A.2d 72, 74 (1990), where the dispute concerned the dates of injuiy and two separate workers' compensation insurance carriers’ liability. That determination would of course dictate which carrier is liable for payment of compensation benefits to the claimant. Lawrence is also clearly distinguishable from the case sub judice where there is no dispute that Claimant was injured under the circumstances and date indicated and that Employer is the only liable party.