276 A.3d 830
Pa. Commw. Ct.2022Background
- Claimant Michael Dengel injured on June 6, 2017 and filed a claim; parties stipulated and the WCJ ordered Employer Essix Holdings to pay temporary total disability and medical benefits (order entered Oct. 18, 2018).
- Insurer NorGuard delayed payments, asserting it had sent Claimant Form LIBC-760 (employee verification) and had not yet received a completed form.
- Claimant returned the completed LIBC-760 on Jan. 25, 2019; Insurer paid benefits on Mar. 6, 2019. Claimant filed a Penalty Petition on Jan. 24, 2019 for the withholding of benefits.
- The WCJ found Employer violated the Workers’ Compensation Act by withholding court-ordered payments and imposed a 50% penalty; the Board affirmed on the alternate ground that Employer failed to provide the required LIBC-762 suspension notice under the regulations.
- Commonwealth Court affirmed: employer may not withhold initial court-ordered payments pending return of LIBC-760; suspension under Section 311.1 requires (1) the claimant’s failure to return the form after 30 days and (2) compliance with the regulatory notice procedure.
Issues
| Issue | Dengel's Argument | Essix's Argument | Held |
|---|---|---|---|
| May an employer withhold initial WCJ-ordered payments pending return of LIBC-760? | Employer must pay immediately; withholding violates award. | Employer may withhold because insurer may suspend benefits under Section 311.1 when LIBC-760 is not returned. | Employer cannot withhold initial payments; Section 311.1 suspension applies only after 30 days and does not authorize delaying initial payments. |
| Is employer required to provide LIBC-762 notice before suspending benefits for failure to return LIBC-760? | Suspension without notice was improper; notice and procedure are required. | Notice not required because benefits were not being received when LIBC-760 was issued. | Notice under 34 Pa. Code §123.502 (Form LIBC-762) is required to suspend; Employer did not comply, so withholding was unlawful. |
| Was the 50% penalty excessive? | 50% penalty is excessive. | Delay (five months) was unreasonable; penalty warranted. | WCJ acted within discretion; 50% penalty affirmed. |
Key Cases Cited
- Snizaski v. Workers’ Comp. Appeal Bd., 891 A.2d 1267 (Pa. 2006) (no grace period; employer immediately subject to penalties for refusal to pay).
- Nat’l Fiberstock Corp. v. Workers’ Comp. Appeal Bd., 955 A.2d 1057 (Pa. Cmwlth. 2008) (WCJ orders to pay take immediate effect).
- City of Philadelphia v. Workers’ Comp. Appeal Bd., 934 A.2d 156 (Pa. Cmwlth. 2007) (orders to pay are immediately effective).
- Kuemmerle v. Workers’ Comp. Appeal Bd., 742 A.2d 229 (Pa. Cmwlth. 1999) (employer may refuse payment only if authorized by statute or WCJ order).
- Graphic Packaging, Inc. v. Workers’ Comp. Appeal Bd., 929 A.2d 695 (Pa. Cmwlth. 2007) (Section 435 authorizes penalties for failure to make prompt payment).
- Robb, Leonard & Mulvihill v. Workers’ Comp. Appeal Bd., 746 A.2d 1175 (Pa. Cmwlth. 2000) (employer refusal to pay subjects it to penalties).
- Sheridan v. Workers’ Comp. Appeal Bd., 713 A.2d 182 (Pa. Cmwlth. 1998) (court disfavors unilateral employer suspension of benefits absent statutory permission or order).