Renee SNIZASKI, Widow of Randy Snizaski, Deceased, Appellant v. WORKERS’ COMPENSATION APPEAL BOARD (ROX COAL COMPANY), Appellees.
Supreme Court of Pennsylvania.
Decided Feb. 22, 2006.
Re-Submitted March 16, 2005.
891 A.2d 1267
Under Clair, the Commonwealth is correct that Appellant‘s present claims are waived, and this case was not accepted for review and has not been presented in a fashion such that it would be appropriate to reconsider Clair‘s holding.2
The order of the Superior Court is affirmed.
Chief Justice CAPPY, Justice CASTILLE, Justice NEWMAN and Justice EAKIN and BAER join the opinion.
Former Justice NIGRO did not participate in the consideration or decision of this case.
Pamela G. Cochenour, Pittsburgh, for Rox Coal Co., appellee.
Before: CAPPY, C.J., CASTILLE, NEWMAN, SAYLOR, EAKIN and BAER, JJ.
OPINION
Justice CASTILLE.
This appeal presents the question of whether the Workers’ Compensation Judge (“WCJ“) erred in granting a claimant‘s penalty petition against an employer who failed to pay a workers’ compensation award within thirty (30) days of the decision of the Workers’ Compensation Appeal Board (“the Board“) awarding the benefit, in alleged violation of Section 428 of the Workers’ Compensation Act (“the Act“),1 but where the employer failed to pay the award in reliance upon a supersedeas request it timely filed pursuant to Section 111.22 of the Pennsylvania Administrative Code.
Claimant Renee Snizaski (“Claimant“) is the widow of Randy Snizaski (“decedent“), who was employed as a coal mine superintendent for Rox Coal Company (“Employer“). On May 7, 1996, decedent died in a one-car motor vehicle accident while on his way to work. Claimant filed a fatal claim petition alleging that her husband‘s death was compensable under the Act. The WCJ denied the petition. On October 21, 1999, the Board reversed and remanded for the award and computation of benefits. Employer petitioned for reconsideration. On June 13, 2000, the Board denied Employer‘s petition, computed the amount of benefits due, and ordered Employer to pay Claimant and her children weekly compensation at a rate of $527.
On July 6, 2000, Employer appealed to the Commonwealth Court, and also filed an application for supersedeas with the Board.3 After the expiration of 30 days from the Board‘s award of benefits, Claimant‘s counsel demanded payment from Employer. Employer responded that it was not required to make payment while its supersedeas request was pending. Shortly thereafter, however, on July 25, 2000, 42 days after entry of the award, Employer paid Claimant in full (over $147,000). On July 31, 2000, the Board entered a timely order denying Employer‘s petition for supersedeas. On September 8, 2000, the Commonwealth Court likewise denied Employer‘s subsequent application for supersedeas.
On November 13, 2000, Claimant filed a penalty petition alleging that Employer had failed to tender payment within 30
The WCJ granted Claimant‘s penalty petition, awarding a penalty of ten percent, or $14,771.92, as well as attorney‘s fees of $2,810.80.4 The WCJ held that Employer‘s payment on July 25, 2000 was late as a matter of law, deeming the supersedeas request pending before the Board to be irrelevant to the penalty question. The WCJ believed that the filing of an appeal and request for a supersedeas alone were insufficient to suspend an employer‘s obligation to pay benefits under the Act. Instead, only an actual grant of supersedeas was sufficient.
Employer appealed to the Board, which reversed the penalty award and grant of attorney‘s fees, holding that there was no violation of the Act because Employer had no obligation to pay while its timely supersedeas request was pending. Claimant then appealed to the Commonwealth Court. Claimant relied upon the 2-1 panel decision in Hoover v. Workers’ Compensation Appeal Bd. (ABF Freight Systems), 820 A.2d 843 (Pa.Cmwlth.2003), where the panel majority held that a WCJ did not abuse his discretion in awarding a penalty for an employer‘s failure to pay an award within 30 days, notwithstanding that a supersedeas request was filed and pending. Employer countered that Hoover was wrongly decided and should be overruled. Employer reasoned that, although the Act authorizes penalties at the discretion of the WCJ, such penalties are not mandatory. Employer submitted that it was
The Commonwealth Court affirmed the Board in a 6-1, en banc published opinion authored by the Honorable Dan Pellegrini. Snizaski v. Workers’ Compensation Appeal Bd. (Rox Coal Co.), 847 A.2d 139 (Pa.Cmwlth.2004).5 The court agreed with Employer that Hoover was wrongly decided, and thus overruled that panel decision. The majority noted that Hoover had relied on Cunningham v. Workmen‘s Compensation Appeal Bd. (Inglis House), 156 Pa.Cmwlth. 241, 627 A.2d 218 (1993) and Crucible, Inc. v. Workmen‘s Compensation Appeal Bd. (Vinovich), 713 A.2d 749 (Pa.Cmwlth.1998), neither of which raised the issue of whether a penalty award is appropriate where the employer had relied upon the supersedeas procedure contemplated by the Board‘s regulations. The majority further explained that, in Candito v. Workers’ Comp. Appeal Bd. (City of Philadelphia), 785 A.2d 1106 (Pa.Cmwlth.2001), appeals denied, 572 Pa. 711, 813 A.2d 845 (2002) and 572 Pa. 726, 814 A.2d 678 (2002), the panel had held that it was not an abuse of discretion for a WCJ to deny a penalty petition where an employer had failed to pay compensation benefits within 30 days of the award because a request for supersedeas was pending before the Commonwealth Court (a request which that court ultimately granted). The Candito panel reasoned that, “[t]o hold that an employer is liable for penalties for not paying compensation when its request for supersedeas is pending is, in effect, to make an employer‘s right to seek a supersedeas in most instances a nullity.” Candito, 785 A.2d at 1110.
The majority below concluded that, in accordance with the reasoning in Candito, Hoover should be overruled because the Hoover panel had failed to adequately consider the employer‘s reliance upon the Board‘s duly-promulgated regulations governing supersedeas. Because the Board‘s regulations “in effect, purport to stay an employer‘s obligation to pay” during the pendency of a supersedeas request, the majority held that it was an abuse of discretion for the WCJ to award penalties
In workers’ compensation appeals, this Court will affirm the adjudication below unless we find that an error of law was committed, that constitutional rights were violated, that a practice or procedure of a Commonwealth agency was not followed or that any necessary finding of fact is not supported by substantial evidence of record.
Claimant argues that the plain language of the Act establishes that Employer was in default, which warranted a penalty, and that the Act overrides any contrary suggestion deriving from the Board‘s regulations. Claimant relies upon Section 428, which provides as follows:
Whenever the employer, who has accepted and complied with the provisions of section three hundred five, shall be in default in compensation payments for thirty days or more, the employe or dependents entitled to compensation thereunder may file a certified copy of the agreement and the order of the department approving the same or of the award or order with the prothonotary of the court of common pleas of any county, and the prothonotary shall enter the entire balance payable under the agreement, award or order to be payable to the employe or his dependents, as a judgment
against the employer or insurer liable under such agreement or award. Where the compensation so payable is for a total and permanent disability, the judgment shall be in the amount of thirty thousand dollars less such amount as the employer shall have actually paid pursuant to such agreement or award. Such judgment shall be a lien against property of the employer or insurer liable under such agreement or award and execution may issue thereon forthwith.
Claimant further argues that the Board‘s regulations do not state that the employer may avoid a penalty by filing a supersedeas request. Indeed, in Claimant‘s view, the Board‘s regulations do not address or resolve the substantive issue of penalties at all; rather, they merely govern the procedural question of the time period to file an appeal and a request for supersedeas following the award of benefits. In contrast, Claimant argues, the substantive provisions of the Act address the issue of penalties. Claimant argues that, the General Assembly having addressed the question of penalties, only that body has the authority to change or amend the law regarding the effect of a timely supersedeas request on an employer‘s obligation to pay an award.
On the question of whether the WCJ abused his discretion in granting the penalty petition in this case, Claimant notes that Employer waited more than 20 days to file the supersedeas request, thus making it unlikely that the request would be decided within thirty days. Claimant also suggests that a penalty was appropriate because supersedeas requests should not be filed in every case, but instead should be reserved for those cases where strong authority exists for the request. Claimant argues that Employer can cite no such authority here. In addition, Claimant notes that the twelve-day delay here deprived a widow and her four children of benefits they had already waited over four years to receive. Claimant concludes that, because Employer violated the Act, alleged no valid substantive authority in favor of supersedeas, and did not act diligently enough to ensure a decision within a thirty-day time frame, the WCJ‘s penalty award was not an abuse of discretion.
Employer and the Board have filed separate appellee briefs. Employer notes that Section 428 speaks in terms of “default in compensation payments,” without purporting to define when the obligation to make an awarded compensation payment can be said to begin. Employer then argues that it cannot be deemed to have been in such “default” because it had exer-
The Board‘s Brief echoes and expounds upon Employer‘s arguments. The Board notes that, under Section 435(b) of the Act, penalties are only permitted where “there has not been compliance with this Act or rules or regulations promulgated thereunder.”
The Board also argues that its supersedeas regulations were validly adopted. Section 435(c) of the Act grants the Board express authority to “establish rules of procedure, consistent with this act, which are reasonably calculated to expedite the hearing and determination of appeals to the board and to
The Board also provides some helpful perspective. It notes that the notion of a hard and fast rule fixing the employer‘s obligation to pay, and the beginning of the default period, as beginning on the thirtieth day after the WCJ or Board first announces its benefit award is a product of Commonwealth Court decisional law involving awards rendered before the Board promulgated its supersedeas regulations. See Cunningham v. Workers’ Compensation Appeal Bd. (Inglis House), 156 Pa.Cmwlth. 241, 627 A.2d 218 (1993).8 In light of the timing of the decision, the Cunningham court was left to fill that gap and fix the point of obligation in the absence of any binding legislative or administrative direction. In the Board‘s view, the en banc decision in the case sub judice
[T]he Commonwealth Court had previously fashioned a somewhat uneven rule, whereby an employer who does not pay compensation within 30 days of the award, but who has a supersedeas application pending with the Board, may be retrospectively absolved of liability for penalties if a supersedeas is ultimately granted. Candito[, supra.] On the other hand, the Commonwealth Court tolerated the assessment of penalties if a supersedeas was later denied. Hoover[, supra.] In other words, the employer‘s liability for penalties was controlled by a condition subsequent.
The irrationality of this uneven rule was best borne out by the respective facts of Candito and Hoover. In Candito, an employer delaying payment 52 days before receiving a supersedeas from the Commonwealth Court, incurred no penalty; whereas the employer in Hoover was assessed a ten percent penalty on indemnity benefits for a delay of six days in mailing the claimant‘s check. Both cases paradoxically encouraged employers to engage in what Cunningham deemed a violation of the Act. The en banc panel below sensibly eliminated this paradox by overruling Hoover, and giving greater weight to the Board‘s regulations in defining the employer‘s obligation to pay an award of compensation pending an application for supersedeas.
Brief for Appellee Board, 7-8 (emphases original).
Finally, the Board submits that Claimant‘s absolutist position—i.e., if the Board will not or cannot compress the supersedeas process from the existing 50-60-day time frame into a 30-day time frame, then employers should file for supersedeas immediately and should pay awards before the supersedeas is decided, if necessary, to protect themselves—would deprive
The Statutory Construction Act,
We are persuaded by the Board‘s argument on the proper interplay of its regulations and the provisions of the Act. Under the statute, the power to assess a penalty is dependent upon the party violating the Act or pertinent rules and regulations.
Claimant reads the plain language of Section 428 as if it granted an employer thirty days to pay a compensation award without fear of penalty, with a penalty-triggering “de-
The Act does, however, recognize that an employer or insurer may seek a supersedeas. See, e.g.,
Where an agency, acting pursuant to delegated legislative authority, seeks to establish a substantive rule creating a controlling standard of conduct, it must comply with the provisions of the Commonwealth Documents Law. That statute sets forth formal procedures for notice, comment and ultimate promulgation in connection with the making of rules that establish new law, rights or duties. Such substantive regulations, sometimes known as legislative rules, when properly enacted under the Commonwealth Documents Law, have the force of law, Commonwealth v. DePasquale, 509 Pa. 183, 187, 501 A.2d 626, 628 (1985) (citation omitted), and enjoy a general presumption of reasonableness. See Commonwealth, Dep‘t of Environmental Resources v. Locust Point Quarries, Inc., 483 Pa. 350, 360, 396 A.2d 1205, 1210 (1979).
Borough of Pottstown, 712 A.2d at 743 (footnote and other citation omitted).
When the Act and the Board‘s supersedeas regulations are read in pari materia, the logical conclusion is that an employer can be deemed in default only if it fails to seek supersedeas while pursuing additional review or refuses to make a compensation payment after its supersedeas request is denied. To hold otherwise would render the Board‘s supersedeas regulations and authority a nullity. Moreover, we agree with the Commonwealth Court below that it is absurd and
For the reasons set forth above, this Court finds that an employer who fails to pay a compensation award during the pendency of a timely-filed supersedeas petition authorized under the Board‘s regulations is not subject to a penalty assessment. Accordingly, we affirm the order of the Commonwealth Court.
Affirmed.
Chief Justice CAPPY and Justices SAYLOR, EAKIN and BAER join the opinion.
Justice BALDWIN did not participate in the consideration or decision of this case.
Justice NEWMAN files a dissenting opinion.
Justice NEWMAN dissenting.
The Majority concludes that, “where, as here, an employer timely files a request for supersedeas pursuant to the Board‘s regulations, it cannot be subject to a penalty award for failing
The June 13, 2000 Order of the Board to pay Claimant compensation at a rate of $527.00 per week triggered the legal duty of Employer to begin paying benefits to Claimant within thirty days pursuant to Section 428 of the Act.2 On July 6, 2000, Employer filed a timely Application for Supersedeas with the Board and an appeal with the Commonwealth Court.3 It is beyond cavil that Claimant was entitled to benefits within thirty days of the June 13, 2000 Order of the Board and that Employer did not commence payment of benefits within thirty days. See
The Majority determines that the term “default” is undefined in Section 428 and therefore, undefined in the Act. The Majority reasons that, because Section 428 does not define when “default” occurs, the regulations of the Board rather than the provisions of the Act should be utilized to define the point in time at which the employer has an obligation to pay benefits. This reasoning is critically flawed and does not comport with the plain language provisions of the Act. Moreover, even if “default” were an ambiguous term, resort to a definition is preferable to the wholesale adoption of the Board regulations, which themselves do not define “default.” Further, there is no argument that the term “default” is ambiguous to require the Majority to depart from the clear language and meaning of the statute.
A “default” is defined in Black‘s Law Dictionary as a failure to perform a legal duty. Black‘s Law Dictionary 428 (7th ed. 1999). Within the workers’ compensation scheme, there are many legal duties that can be imposed upon an employer and from which the employer may default. Several examples immediately come to mind—issuance of a notice of compensation payable or notice of compensation denial, payment of the claimant‘s average weekly wage, payment of medical expenses, payment of fatal claim benefits, and payment of specific loss benefits. Determining when the obligation arises in each of these major areas is not difficult. The obligation arises when the order creating the legal duty is filed. In the instant matter, the obligation to pay fatal claim benefits arose on June 13, 2000, when the Board entered its Order denying reconsideration and awarding benefits to Claimant in a stated amount.4
The mere filing of a supersedeas request is not enough to suspend Employer‘s obligation to remit benefit payments pursuant to the Act. That request must be granted. See
Section 428 of the Act provides that an employer violates the Act if it fails to make payments within thirty days of the date on which its obligation to pay arises. There is no exception contained in the statute that would toll that limitations period. Section 430 of the Act provides that discretionary penalties may be imposed on an employer that fails to pay benefits within the thirty-day time period.
Further support for this interpretation is supplied by the rules relative to a supersedeas. It is axiomatic that a supersedeas provides prospective, not retroactive, relief. Therefore, once the obligation to pay benefits arises, an employer must continue to pay those benefits until the supersedeas is granted. Once granted, the supersedeas does not provide retroactive relief for the employer, but only permits the employer to cease payment of some or all benefits from that point forward.
Hence, it is sophistic to toll the thirty-day time period when an application for supersedeas is pending, because if the supersedeas is granted, it will not relate back to the date upon which the application was filed. While instinctively it seems unfair to penalize an employer for following the regulations promulgated by the Bureau, the problem lies in the application by the Majority of the regulations themselves. The request for supersedeas operates independently of the obligation to pay benefits and the default of that obligation.5
The Majority attempts to shoehorn the process for securing a supersedeas into the thirty-day grace period provided by Section 428. When unable to accomplish this, the Majority simply declares that the thirty-day period, in which to comply with the payment of benefits, is tolled pending the outcome of the supersedeas request. This is clearly inconsistent with the Act, particularly as regulations promulgated by a government entity that are inconsistent with a statute are invalid. Suburban Manor/Highland Hall Care Center v. Dep‘t of Pub. Welfare, 545 Pa. 159, 680 A.2d 867 (1996). No matter how much appeal the Majority finds in the regulations, it is axiomatic that a statute is the law and trumps agency regulations, even properly promulgated ones.
Failure in the instant matter to follow the precise language of the statute subjects the Employer to penalties. I agree with Claimant in this regard that the regulations promulgated by the Board are merely procedural in nature and function as a guide for the litigant on the timing and submissions required as well as defining the decisional timeframe. I believe that Section 428, which penalizes an employer that utilizes self-help
The Majority agrees with the Board that requiring an employer to make payments required by an award without waiting for the outcome of the supersedeas request denies the employer a meaningful supersedeas review. Thus, despite the clear and unambiguous language of the Act, the Majority has implemented a temporary supersedeas pending the outcome of the application for supersedeas. The logical extension of this principle would mean that any time an employer files a request for supersedeas, it is entitled to an automatic supersedeas pending the review of its request. This procedure was invalidated in Baksalary v. Smith, 579 F.Supp. 218 (E.D.Pa. 1984). Before Baksalary, any appeal acted as an automatic supersedeas in workers’ compensation cases pending a decision on the appeal. The federal court reasoned that the claimant acquired a property right in benefits on the date that the order granting benefits was filed. It then held that a Section 413 automatic supersedeas deprived the claimant of his or her property without due process of law. The General Assembly subsequently revised Section 413 to remove the automatic supersedeas on the filing of an appeal.
Employer acquired a legal duty to commence payment of benefits on June 13, 2000. It did not do so and became subject to penalties pursuant to Section 428. The request for supersedeas does not toll the payment of benefits until it is granted, but operates independently of the appeal. Accordingly, I would reverse the Order of the Commonwealth Court.