Department of Labor & Industry, Bureau of Workers' Compensation v. Workers' Compensation Appeal Board
58 A.3d 18
| Pa. | 2012Background
- Claimant injured November 2003; employer’s insurer paid weekly wage and medical benefits at $410/week.
- In 2005 insurer sought supersedeas; petition denied in 2006; later, third-party settlement for $310,000 distributed under §319 (Pergola method).
- Section 319 requires reimbursement of costs of recovering settlement, prorated between employer and employee; excess recovery becomes advance payment of future compensation (grace period).
- Under the gross method, the employer’s lien is reduced by its initial share of recovery costs, and remaining costs are prorated over the grace period.
- After settlement, insurer paid unreimbursed pre-settlement payments and grace-period payments; Bureau argued these were not “compensation” but costs of recovery; WCJ and appellate courts held they were reimbursable compensation under §443 and §319.
- Court affirmed Commonwealth Court holding that insurer is reimbursable for these payments from the Supersedeas Fund; dissent would reverse.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payments were compensation under §443 or costs under §319. | Oestereich's insurer contends payments were compensation under §443. | Bureau argues payments are costs under §319, not compensation. | Payments are compensable and reimbursable as §443/§319 scheme supports reimbursement. |
| Whether the grace-period and unreimbursed pre-settlement payments are reimbursable compensation. | Insurer argues both types are compensation during denial of supersedeas. | Bureau contends they are costs of recovery, not compensation. | Both types reimbursable as compensation under statutory scheme. |
| Whether the calculation method (gross vs net) governs reimbursement entitlement. | Pergola’s gross method governs prorating of costs and benefits to allow longer grace period. | Net method would differ; prior decisions support gross method. | Gross method applies; costs follow benefits, yielding reimbursement. |
Key Cases Cited
- Pergola v. WCAB (Bridges), 701 A.2d 560 (Pa. 1997) (adopts gross method for prorating costs of recovery during grace period)
- Excelsior Ins. v. WCAB, 987 A.2d 855 (Pa. Cmwlth. 2010) (reimbursement under §443 requires denial of supersedeas and not payable status; distinctions on when costs are payable)
- P&R Welding & Fabricating v. WCAB (Pergola), 549 Pa.490 (Pa. 1997) (interprets §319; balance of recovery; grace period; pro rata costs; gross method)
- Brubacher Excavating, Inc. v. WCAB (Bridges), 835 A.2d 1273 (Pa. 2003) (substantiates §319 subrogation purposes and absolute right to subrogation)
- Universal Am-CAN, Ltd. v. WCAB (Minteer), 870 A.2d 961 (Pa. Cmwlth. 2005) (attorney fees/costs not compensated under §443 when scrutinizing recovery against third parties)
- Crawford & Co. v. WCAJB, 23 A.3d 511 (Pa. 2011) (analyzes §443 applicability to pre-denial medical payments and supersedeas reimbursement)