DEPT. OF CORRECTIONS v. W.C.A.B., 794 A.2d 977 (Pa.Commw. 2002)

794 A.2d 977

No. 1367 C.D. 2001.Commonwealth Court of Pennsylvania.Argued: February 11, 2002.
Filed: March 25, 2002.

Harry W. Rosensteel, Pittsburgh, for petitioner.

Cynthia M. Porta, Pittsburgh, for respondent.

Before: Honorable Bernard L. McGinley, Judge; Honorable Robert Simpson, Judge; Honorable Joseph F. McCloskey, Senior Judge.

OPINION
SENIOR JUDGE McCLOSKEY

The Department of Corrections (Employer) petitions for review of an order of the Workers’ Compensation Appeal Board (Board), affirming an order of the Workers’ Compensation Judge (WCJ), approving a compromise and release agreement

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(CR) between Employer and Kelland McClellan (Claimant). We affirm.

The facts of this case are unique. Claimant originally sustained an injury to his back in the course and scope of his employment on March 31, 1996.

Employer thereafter issued a notice of compensation payable, describing Claimant’s injury as a “lumbosacral strain.” Initially, Claimant received his gross salary in lieu of workers’ compensation benefits pursuant to what is commonly referred to as the Heart and Lung Act.[1] Those benefits were terminated, however, following a determination that Claimant’s disability was permanent in nature.

Thereafter, Claimant received total disability workers’ compensation benefits. In June of 1999, Claimant, through his counsel, negotiated a proposed settlement with Employer’s workers’ compensation insurance carrier to resolve his claim in exchange for a lump sum payment of $75,000.00. Claimant subsequently filed a petition to seek approval of a CR.

In the meantime, Claimant had apparently relocated to the state of Georgia. At a hearing on August 24, 1999, Claimant requested to be permitted to testify via telephone from Georgia. Employer did not object to this request. The WCJ approved Claimant’s request and a second hearing was scheduled and held on September 22, 1999. At this second hearing, Claimant testified from a hospital room in Georgia as to his understanding of the proposed CR, including his loss of entitlement to future wage loss and medical benefits.[2] Claimant also indicated that he signed the agreement in front of two witnesses, his sister Avona Smith and another person by the name of Michael Irwin, both of whom also signed the same.

On cross-examination, counsel for Employer asked Claimant two simple questions, the first relating to his understanding of waiver of any future workers’ compensation or Heart and Lung Act benefits and the second relating to an August 24, 1999, resignation letter signed by Claimant. The WCJ then stated that he “will be approving the [CR]. And hopefully an order should go out sometime later this week.” (R.R. at 16a).

On the way out of the hearing room, Employer alleged that counsel for Claimant first informed them that Claimant’s medical condition was “terminal.”[3] The next morning, September 23, 1999, counsel for Employer delivered a letter to the WCJ and Claimant’s counsel, requesting that the record remain open in light of this after-discovered information. Counsel for Claimant then advised Employer’s counsel that Claimant had in fact passed away in the evening hours of September 22, 1999, several hours after the hearing of that day.

Employer requested a hearing or conference before the WCJ. A conference call was held later that afternoon, at which time the WCJ informed the parties that an order approving the CR had already been signed and circulated at 7:45 a.m. that morning. Employer then filed an appeal with the Board but the Board affirmed.

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Employer thereafter filed a petition for review with this Court.

On appeal,[4] Employer argues that the WCJ and Board erred as a matter of law in approving the CR despite the fact that Claimant died before the WCJ’s written order was issued. We disagree.

Section 449 of the Pennsylvania Workers’ Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, added by Act of June 24, 1996, P.L. 350, 77 P. S. § 1000.5, addresses the procedure for filing of CR’s. Specifically, Section 449(b) provides as follows:

(b) Upon or after filing a petition, the employer or insurer may submit the proposed compromise and release by stipulation signed by both parties to the [WCJ] for approval. The [WCJ] shall consider the petition and the proposed agreement in open hearing and shall render a decision. The [WCJ] shall not approve any compromise and release agreement unless he first determines that the claimant understands the full legal significance of the agreement. . . .

77 P. S. § 1000.5(b).

In support of its argument, Employer relies upon our prior decisions in Blessing v. Workers’ Compensation Appeal Board (Heintz Corporation), 737 A.2d 820 (Pa.Cmwlth. 1999), petition for allowance of appeal denied, 561 Pa. 701, 751 A.2d 193 (2000) and Strawbridge Clothier v. Workers’ Compensation Appeal Board (McGee), 777 A.2d 1194 (Pa.Cmwlth. 2001) for support. In Blessing, we cited to the requirements of Section 449(b) of the Act and held that a CR submitted by a claimant and only signed by him but not employer or employer’s insurer failed to comport with these requirements.

In Strawbridge Clothier, we were called upon to examine the requirements of a “final order” from a WCJ. In that case, following a CR hearing before a WCJ, the WCJ issued a bench order approving the same. Before the WCJ issued a final decision and order, claimant, who was pro se, wrote the WCJ stating that she did not understand the CR and had reconsidered.[5] Following a hearing, the WCJ vacated his earlier bench order and dismissed employer’s petition for approval of the CR, thereby reinstating claimant’s benefits.

Employer appealed, arguing that the bench order was a “final order,” but the Board affirmed. Employer appealed to this Court, but we too affirmed, holding that a bench order was not a “final order” under the Special Rules as it did not constitute a written decision. We noted that under The Special Rules Before Referees (Special Rules), 34 Pa. Code § 131.111, WCJs’ are required to issue a written decision and appropriate order and that said decision will be a “final order.”[6]

However, the facts of Blessing and Strawbridge Clothier are distinguishable

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from the unique facts of the present case.[7] In this case, there were neither problems nor disputes concerning the procedural filing of the CR.

Instead, after Claimant filed his petition seeking approval of the CR, a hearing was held before the WCJ. At this hearing, the WCJ accepted and entered into evidence a duly executed copy of the same.[8]
Thereafter, Claimant’s counsel proceeded to question him regarding his understanding of the CR, i.e., the effect of the CR on his future wage loss and medical benefits. Claimant indicated that he fully understood the effect of the CR. Moreover, Claimant had previously signed a waiver of his right to appeal the decision of the WCJ in the event that the CR was approved.

Employer then cross-examined Claimant, simply asking again if he understood that he was losing any entitlement to future workers’ compensation benefits.[9] Claimant again indicated that he understood, after which the WCJ, obviously satisfied that Claimant understood the nature of the CR, indicated that he would “be approving the [CR].” (R.R. at 16a). Unbeknownst to the WCJ, Claimant had passed away several hours after this hearing. Early the very next morning, as he promised, the WCJ signed and circulated a written decision and order approving the CR.[10]

As the parties here complied with both the procedural and substantive requirements of Section 449 of the Act, we cannot say that WCJ and Board erred as a matter of law in approving the CR.[11]

Next, Employer argues that the Board abused its discretion in failing to hold a hearing de novo or to remand the case to the WCJ for rehearing based upon Claimant’s counsel’s alleged material misrepresentations to Employer regarding his health. Again, we disagree.

Section 425 of the Act addresses hearings de novo and rehearings and provides, in pertinent part, as follows:

If on appeal it appears that the [WCJ’s] award or disallowance of compensation was capricious or caused by fraud, coercion, or other improper conduct by any party in interest, the board may, grant a hearing de novo before the board, or one or more of its members or remand the case for rehearing to any [WCJ].

77 P. S. § 856. Moreover, the grant or denial of a rehearing is left to the discretion of the board and this Court will not disturb that decision absent a clear abuse of discretion. UGI Corporation v. Workmen’s Compensation Appeal Board (Wagner), 566 A.2d 1264 (Pa.Cmwlth. 1989).

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The record in this case lacks any evidence of fraud or concealment on Claimant’s part as to the severity of his physical condition. To the contrary, the evidence of record indicates that Employer was aware that Claimant suffered from a non-work-related heart condition as early as 1998. More specifically, at a Heart and Lung Act hearing held on April 8, 1998, there was much discussion between counsel for Employer and Claimant regarding this condition.[12] See R.R. at 44a-56a. In fact, Claimant testified at this hearing via telephone because his heart condition prevented him from attending in person. (R.R. at 55a-56a).

At the September 22, 1999, CR hearing, Claimant again testified via telephone. At the very least, we agree with the Board that such a fact should have raised a “red flag” on the part of Employer. (Board’s Decision, May 14, 2001, p. 6). Moreover, on cross-examination at this hearing, Employer had every opportunity to question Claimant regarding his physical condition and why he was testifying via telephone, but failed to do so. Thus, we cannot say that the Board abused its discretion in failing to hold a hearing de novo or to remand the case to the WCJ for rehearing as to have done so would undoubtedly have given Employer the proverbial second bite at the apple.

Accordingly, the order of the Board is affirmed.[13]

ORDER
AND NOW, this 25th day of March, 2002, the order of the Workers’ Compensation Appeal Board is affirmed.