County of Allegheny v. Workers' Compensation Appeal Board
151 A.3d 1210
| Pa. Commw. Ct. | 2016Background
- Employer (County of Allegheny) filed a 2007 petition to suspend Claimant Parker’s WC disability benefits; a WCJ granted suspension in 2008.
- The Board reversed in 2009 (applying collateral estoppel) and awarded Claimant unreasonable-contest attorney fees; WCJ awarded fees on remand; Board modified award in 2011 to include appellate work.
- Employer appealed; while appeals were pending, Employer’s supersedeas applications were denied and Employer paid $14,750 in unreasonable-contest attorney fees to Claimant’s counsel in Feb. 2012.
- This Court reversed the Board in 2012, holding Employer prevailed and that unreasonable-contest fees may be awarded only to a prevailing claimant; Employer sought Supersedeas Fund reimbursement for compensation and the fees; the Bureau reimbursed compensation but denied reimbursement for the $14,750 fees.
- Employer petitioned the WCJ to order Claimant’s counsel to refund the $14,750; the WCJ and the Board denied refund and denied counsel additional fees; this appeal followed.
Issues
| Issue | Employer’s Argument | Claimant’s Argument | Held |
|---|---|---|---|
| Whether Employer may recover unreasonable-contest attorney fees it was ordered to pay but that were later reversed on appeal | Employer: Under Barrett, counsel must refund erroneously awarded litigation costs/fees because retention would unjustly enrich counsel and leave Employer without remedy | Claimant: Unreasonable-contest fees differ from ordinary costs; counsel may pay fees to claimant; refund would chill representation | Court: Employer entitled to order directing counsel to refund $14,750; Barrett’s rationale applies to unreasonable-contest fees |
| Whether a WCJ can order counsel (not claimant) to repay erroneously awarded fees | Employer: WCJ has authority to order counsel to refund incorrect awards (Barrett) | Claimant: No clear precedent; ordering repayment of attorney fees exceeds WCJ authority and undermines policy encouraging counsel | Court: WCJ has authority to order counsel to refund erroneously awarded fees; remanded with instructions to order refund |
| Whether allowing refund would unfairly harm claimant or chill counsel from litigating | Claimant/Amicus: Refund would discourage counsel from representing claimants and seeking fees; possible tax/accounting hardships; fees may later be paid to claimant | Employer: No evidence counsel paid claimant; repayment affects counsel not claimant; claimant already received overpaid compensation and keeps it | Court: No special hardship shown; repayment affects counsel only and does not require reclaiming compensation from claimant; chilling argument insufficient to bar refund |
| Whether Claimant is entitled to additional unreasonable-contest fees for opposing Employer’s refund petition | Claimant: Counsel sought further fees for defending refund proceeding | Employer: Employer prevailed on appeal; additional fees improper because claimant did not prevail on merits | Court: Denied claimant’s request for additional fees; Section 440 only allows fees to prevailing claimants |
Key Cases Cited
- Barrett v. Workers’ Compensation Appeal Board (Sunoco, Inc.), 987 A.2d 1280 (Pa. Cmwlth. 2010) (WCJ can order claimant’s counsel to refund litigation costs erroneously awarded to claimant)
- Lucey v. Workmen’s Compensation Appeal Board (Vy-Cal Plastics PMA Group), 732 A.2d 1201 (Pa. 1999) (discussed by Barrett; factual reference to prior WCJ repayment order)
- Ramich v. Workers’ Compensation Appeal Board (Schatz Electric, Inc.), 770 A.2d 318 (Pa. 2001) (WCJs may award unreasonable-contest attorney fees sua sponte under Section 440)
- Pittsburgh Board of Education v. Workmen’s Compensation Appeal Board (Smith), 613 A.2d 99 (Pa. Cmwlth. 1992) (distinguishable: addressed contingent-fee deductions from compensation, not Section 440 unreasonable-contest fees)
- Sciulli v. Workmen’s Compensation Appeal Board (Health Center Hospital Service Corp.), 615 A.2d 920 (Pa. Cmwlth. 1992) (same distinction as Pittsburgh Board)