S. Jeck v. WCAB (SRIG Inc.)

S
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Seymour Jeck,                                  :
                             Petitioner        :
                                               :
                     v.                        :   No. 420 C.D. 2020
                                               :   Submitted: October 23, 2020
Workers’ Compensation Appeal                   :
Board (SRIG Inc.),                             :
                   Respondent                  :



BEFORE:       HONORABLE RENÉE COHN JUBELIRER, Judge
              HONORABLE P. KEVIN BROBSON, Judge1
              HONORABLE CHRISTINE FIZZANO CANNON, Judge


OPINION NOT REPORTED


MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                               FILED: May 14, 2021


       Seymour Jeck (Claimant) petitions for review of an Order of the Workers’
Compensation Appeal Board (Board) affirming a Workers’ Compensation Judge’s
(WCJ) August 28, 2019 Decision (Decision) denying Claimant’s Petition to Review
Compensation Benefits/Compensation Benefit Offset (Review Petition) and related
Petition for Penalties (Penalty Petition). The Petitions are based on Whitmoyer v.
Workers’ Compensation Appeal Board (Mountain Country Meats), 

186 A.3d 947

(Pa. 2018) (Whitmoyer), which held that future payments of medical benefits are not
subject to subrogation under Section 319 of the Workers’ Compensation Act (Act).2

       1
        This case was assigned to the opinion writer before January 4, 2021, when Judge Brobson
became President Judge.
      2
        Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671.
The Board affirmed the WCJ’s determination that Whitmoyer does not apply to the
September 26, 2014 Third-Party Settlement Agreement (TPSA) between Claimant
and SRIG Inc. (Employer), reasoning that Employer had expressly retained its right
to subrogation for the payment of ongoing medical expenses. By finding Whitmoyer
inapplicable to the TPSA, the WCJ’s Decision approved Employer’s taking of
subrogation credit against Claimant’s medical benefits after June 19, 2018.
       On appeal, Claimant contends that, under Whitmoyer, Employer is no longer
permitted to subrogate future medical expenses against third-party settlements and
asks for penalties against Employer. Consistent with recent decisions of this Court
in Beaver Valley Slag, Inc. v. Workers’ Compensation Appeal Board (Marchionda),
___ A.3d ___ (Pa. Cmwlth., Nos. 867 and 901 C.D. 2020, March 10, 2021), and
Todd v. Workers’ Compensation Appeal Board (Fastrack Construction Inc.) (Pa.
Cmwlth., No. 505 C.D. 2020, filed March 23, 2021),3 we find that the parties’
deviation from the boilerplate language in the Department of Labor and Industry
(Department), Bureau of Workers’ Compensation’s LIBC-380 form did not grant
Employer subrogation rights to which it was not already entitled and that Claimant
properly raised this issue. We therefore vacate the Board’s Order to the extent that
it determined that Whitmoyer does not apply to the TPSA and permitted Employer
to continue taking its subrogation credit and we remand the matter for further
proceedings. We affirm the denial of Claimant’s Penalty Petition because it was
unclear how, if at all, Whitmoyer would apply to third-party settlement agreements
executed prior to that decision.


       3
         Pursuant to Pennsylvania Rule of Appellate Procedure 126(b), Pa.R.A.P. 126(b), and
Section 414(a) of this Court’s Internal Operating Procedures, 210 Pa. Code § 69.414(a), an
unreported opinion of this Court, while not binding, may be cited for its persuasive value.



                                            2
      I. Background
        In December of 2012, Claimant was injured in a motor vehicle accident during
the course and scope of his employment. (WCJ Decision, Finding of Fact (FOF) ¶
2.)    Employer issued a Notice of Compensation Payable (NCP), recognizing
Claimant’s injury as a concussion and cervical and lumbar sprains, (Board Opinion
(Op.) at 1), and began paying temporary total disability benefits, (FOF ¶ 2). In 2016,
a WCJ expanded the description of Claimant’s injury “to include post-concussional
syndrome, post-traumatic vision disorder, vestibular disorder, cognitive loss and
depression, cervical radiculopathy, cervical myositis with strain and sprain, occipital
headaches, and aggravation of lumbar radiculopathy and left displaced femoral neck
fracture and total left hip arthroplasty.” (Board Op. at 1.)
        Following his receipt of a third-party recovery in the amount of $400,000,
Claimant executed the TPSA on September 26, 2014. (Reproduced Record (R.R.)
at 10a-11a.) Pursuant to Section 121.18(a) of the Department’s Regulations,4 the
parties utilized a Department form, LIBC-380, to memorialize the terms of the
TPSA, which in part calculated the distribution of proceeds from Claimant’s third-
party recovery “[i]n accordance with [S]ection 319 of the [Act].” (

Id. at

11a (citing
77 P.S. § 671).)       Employer’s accrued workers’ compensation (WC) lien for
previously paid indemnity and medical benefits totaled $182,883. (Id.) This amount
was reduced to $105,606 after deduction of Employer’s proportionate share of
litigation expenses incurred in obtaining the third-party recovery. (Id.) Claimant’s
balance of recovery, after deduction of Employer’s accrued lien, totaled $217,117.
(Id.) This sum represented the amount of Employer’s accrued subrogation interest.

        4
         34 Pa. Code § 121.18(a) (stating that a LIBC-380 “shall be executed” “[i]f an employee
obtains a third-party recovery under [S]ection 319 of the [A]ct”).


                                              3
(Id.) Going forward, Employer was responsible for 42% of Claimant’s “future
weekly benefits and medical expenses[,]” until the $217,117 subrogation interest
was exhausted. (Id.)
      In addition, in the section of the LIBC-380 titled “Further Matters Agreed
Upon,” the TPSA provides that Employer’s insurer

      agrees to accept $95,000, in lieu of the [$105,606] stated in box [no.] 7
      [(Employer’s net lien)], in full satisfaction of its lien to date.
      [Employer’s insurer] will exercise a future credit as outlined in [box
      nos.] 8 & 9.

(Id.) Box no. 8 includes Employer’s reimbursement rate on future compensation
liability – 42%. (Id.) Box no. 9 states that “Employer/Insurer is responsible for 42%
[] of any future weekly benefits and medical expenses to satisfy its obligation to
reimburse its pro rata share of [Claimant’s] fees and expenses until the subrogation
interest is exhausted: $217,117 []. Thereafter, Employer/Insurer is responsible for
100% of any compensation liability.” (Id.) Thus, according to the language in the
“Further Matters Agreed Upon” section, Claimant satisfied Employer’s $105,606
accrued WC lien upon payment of $95,000. In exchange for waiving its right to
immediate payment of the remaining balance of $10,606, Employer retained its right
to subrogate Claimant’s future benefits and medical expenses until the balance of
recovery – $217,117 – was exhausted.
      Several years later, in February of 2018, the parties executed a compromise
and release (C & R) agreement, which a WCJ approved. (

Id. at

27a-37a.) The C & R
agreement resolved all issues related to Claimant’s receipt of indemnity benefits by
means of a $60,000 lump sum payment, the proceeds of which would be added to
the total amount of Employer’s accrued WC lien.           (

Id. at

33a.)    Employer
“remain[ed] responsible for the payment of past and future . . . medical benefits[,]”


                                         4
and expressly “retain[ed] all rights of subrogation with respect to any recovery made
by [Claimant] in any third[-]party action stemming from the work injury.” (Id.)
       Shortly thereafter, on June 19, 2018, our Supreme Court decided Whitmoyer,
wherein it ruled that an employer’s right to subrogation under Section 319 of the
Act5 for payment of “future instal[l]ments of compensation” does not include a
claimant’s future medical expenses. 

Whitmoyer, 186 A.3d at 949

. Thus, under
Whitmoyer, an employer could no longer assert its subrogation interest, the amount
of the third-party recovery remaining after its net accrued lien had been reimbursed,
against a claimant’s future medical expenses thereby requiring the employer to pay
the full amount of those expenses.
       In response to Whitmoyer, on December 6, 2018, Claimant filed the Review
Petition, requesting that the WCJ review the TPSA and stop Employer from
continuing to take a future subrogation credit against Claimant’s ongoing medical
benefits. (R.R. at 1a.) In his Review Petition, Claimant argued that, pursuant to
Whitmoyer, Employer’s “[WC] insur[er] should be paying 100% of [] Claimant’s
ongoing medical benefits” and that the WCJ should institute that change as of June
19, 2018. (Id.) In his Penalty Petition, Claimant requested “penalties at the rate of
. . . 50%[] on all past due medical bills” given Employer’s “fail[ure] to comply with


       5
           Section 319 of the Act states:

       Where the compensable injury is caused in whole or in part by the act or omission
       of a third party, the employer shall be subrogated to the right of the employe[e]
       . . . against such third party to the extent of the compensation payable under
       this article by the employer . . . . Any recovery against such a third person in
       excess of the compensation theretofore paid by the employer shall be paid forthwith
       to the employe[e] . . . and shall be treated as an advance payment by the employer
       on account of any future instal[l]ments of compensation.

77 P.S. § 671 (emphasis added).


                                               5
. . . [Whitmoyer] and pay 100% of [] Claimant’s ongoing work[-]related medical
expenses.” (

Id. at

5a.)
        The WCJ found Whitmoyer inapplicable to the TPSA. (FOF ¶ 12.) The WCJ
reasoned that, unlike in Whitmoyer, here Claimant did not “raise[] or preserve[] the
issue that [E]mployer was not entitled to the lien against future medical benefits,
either at the time the [TPSA] was entered into or during subsequent litigation.” (Id.)
Instead, “Claimant raised the issue and filed his [Review and Penalty Petitions] only
after the Supreme Court decided Whitmoyer.” (Id.) In addition, the WCJ found it
“significant that [Employer] waived part of its subrogation lien with the
understanding that it would be entitled to a future lien against medical benefits; the
waiver constitutes separate consideration beyond the obligation of [Employer] with
respect to the [TPSA].” (Id.) Last, the WCJ noted that Whitmoyer is a case of
statutory interpretation and not a case holding Section 319 of the Act
unconstitutional, and the decision is silent about whether it applies retroactively.
(Id.)
        Claimant appealed, and the Board affirmed, holding that Whitmoyer “should
not invalidate the otherwise valid prior [TPSA].” (Board Op. at 5.) Specifically, the
Board reasoned that “[t]his case is not controlled by Whitmoyer because here[] there
was an agreement that the future credit against medical expenses would be taken in
return for a reduction in the immediate lien[,]” whereas in Whitmoyer, “the parties,
not including the claimant’s counsel, executed the LIBC-380 boilerplate form and
there was no meeting of the minds as to a credit for medical expenses . . . .” (

Id. at

4.) The Board stated that “[t]he fundamental rule in construing a contract is to
ascertain and give effect to the intention of the parties,” and here “Claimant
specifically bargained for the credit which he now says is not due and owing.” (Id.



                                          6
at 5.) In addition, the Board stated that Claimant’s claim “was not ‘in the pipeline’
at the time of the Supreme Court’s determination [in Whitmoyer].” (

Id. at

4.)
Claimant petitioned for this Court to review the Board’s Order.6

   II. Parties’ Arguments
       Claimant argues that the Board erred because, pursuant to Whitmoyer,
“employers are no longer permitted under the [Act] to take subrogation
reimbursement for future medical expenses against third-party settlements[,]”
including those executed prior to June 19, 2018, the date Whitmoyer was decided.
(Claimant’s Brief (Br.) at 12 (emphasis omitted).) Claimant contends that, in
distinguishing Whitmoyer from this case, the WCJ misstated certain facts about
Whitmoyer. (

Id. at

10, 15.) Moreover, Claimant takes the position that the “Supreme
Court’s interpretation of statutory terms takes priority over any features, including
linguistic features, of an individual third-party settlement agreement.” (

Id. at

10.)
Specifically, Claimant points out that in Whitmoyer, the Supreme Court stated that
“because we granted allocatur to determine the meaning of a statutory term, the
parties’ arguments that are specific to the TPSA . . . , rather than to the language of
the statute, are unavailing.” (Claimant’s Br. at 15 (quoting 

Whitmoyer, 186 A.3d at
957

) (emphasis omitted).) Claimant further maintains that principles of contract law
should not override Whitmoyer’s change in the law because “settlements made under
the [Act] are unique in that they are tightly managed[,] and compromise and releases
require a judge to determine that a claimant understands the deal and to approve it.”
(

Id. at

16.) According to Claimant, WC settlements “are not simply the products of


       6
        This Court’s “review is limited to determining whether constitutional rights were violated,
whether the adjudication is in accordance with the law[,] or whether necessary findings of fact are
supported by substantial evidence.” City of Philadelphia v. Workers’ Comp. Appeal Bd.
(Sherlock), 

934 A.2d 156

, 159 n.5 (Pa. Cmwlth. 2007).


                                                7
contract law.” (Id.) Last, Claimant argues that Whitmoyer announced a new rule of
law and that “it is well settled that retroactive application of a new rule of law is a
matter of judicial discretion.” (Id. (citing Dist. Off. of Disciplinary Counsel v.
Surrick, 

749 A.2d 441

(Pa. 2000).))
      Employer responds that Whitmoyer is readily distinguishable from the present
case. (Employer’s Br. at 10.) Specifically, Employer points out that, in Whitmoyer,
“neither the [c]laimant nor counsel agreed to sign the third-party settlement
agreement and . . . counsel for [the claimant] made clear his position that the lien
would not apply to future medical[] [benefits.]” (Id.) Here, in contrast, Claimant
“never took a position that medical[] [benefits] were not subject to the subrogation
lien.” (

Id. at

11.) In fact, stresses Employer, “the [TPSA] providing for a lien against
future medical obligations was signed and additional language reflecting Claimant’s
understanding of the ongoing entitlement of the [insurance] carrier to exert its
subrogation lien was incorporated as part of the [TPSA].” (

Id. at

11-12 (emphasis
omitted).)
      In addition, Employer contends that the TPSA in this case is unique because,
in the section of the LIBC-380 form titled “Further Matters Agreed Upon,”
“[Employer] waived its entitlement to $10,606 of its net lien” and, in consideration
thereof, “Claimant agreed to [Employer’s] continued right to exercise subrogation
against future medical[] [benefits] incurred by Claimant.” (

Id. at

12.) Employer
claims that its agreement to forgo $10,606 of its net lien “was separate consideration
above and beyond [its] obligation [] with respect to the [TPSA]” and its concession
enabled Claimant to settle his third-party case. (Id. (emphasis omitted).)
      Employer also argues that the doctrines of technical res judicata and laches
apply and that, pursuant to those doctrines, Claimant’s appeal should be dismissed.



                                           8
(

Id. at

12-13.) Employer contends that, though Claimant had the opportunity in other
proceedings before a WCJ, he failed to raise the issue “that [Employer] was not
entitled to the lien against future medical [benefits] . . . ,” and, as such, has waived
those claims under technical res judicata. (

Id. at

15.) Moreover, Employer submits
that laches applies here because the TPSA was executed in 2014 and “Claimant
waited [four] years to challenge the application of the subrogation lien to payment
of medical benefits incurred by Claimant.” (

Id. at

16.) According to Employer, it
would be prejudiced if compelled to disgorge the credit it took “after [four] years of
asserting its agreed to subrogation lien against future medical [benefits].” (

Id. at

16-
17.)
       Last, Employer maintains that Whitmoyer does not retroactively apply based
on Blackwell v. State Ethics Commission, 

589 A.2d 1094

(Pa. 1991) (Blackwell II).
(

Id. at

19.)7 According to Employer, under Blackwell II, Whitmoyer’s applicability
to the TPSA turns on whether Claimant raised and preserved a challenge to
Employer’s subrogation right to future medical benefits under Section 319 of the
Act. (Id.) Because “there was no pending litigation or appeal challenging the
applicability of Section 319 to the lien against medical [benefits] at the time
Whitmoyer was decided[,]” Employer argues that Whitmoyer does not apply
retroactively to the TPSA here. (Id.)




       7
        Although Employer is arguing against retroactive application of Whitmoyer under the
Blackwell II standard, it provided the citation for the initial decision, Blackwell v. State Ethics
Commission, 

567 A.2d 830

(Pa. 1989) (Blackwell I).


                                                9
   III.     Discussion
       A. Whether Claimant is Entitled to Application of Whitmoyer.
       As a threshold matter, we first address Employer’s contentions that Claimant
is not entitled to Whitmoyer’s change to the prevailing interpretation of Section 319
of the Act because Claimant did not challenge Employer’s subrogation right to future
medical benefits prior to that decision. Only if Claimant is entitled to the change in
the law must we address whether Whitmoyer applies to the TPSA. First, it is
important to clarify that Claimant’s Review Petition did not request that the WCJ
apply Whitmoyer retroactively to the date the TPSA was executed, September 26,
2014. Rather, Claimant seeks relief from his obligation to pay any future medical
benefits as of the date Whitmoyer was decided, June 19, 2018. (R.R. at 1a.) Before
this Court, Employer’s assertion regarding technical res judicata8 and its argument,
based on Blackwell II,9 that Whitmoyer does not apply retroactively, seem to merge


       8
          Pursuant to the doctrine of technical res judicata, “when a final judgment on the merits
exists, a future suit between the parties on the same cause of action is precluded.” Weney v.
Workers’ Comp. Appeal Bd. (Mac Sprinkler Sys., Inc.), 

960 A.2d 949

, 954 (Pa. Cmwlth. 2008)
(quoting Henion v. Workers’ Comp. Appeal Bd. (Firpo & Sons, Inc.), 

776 A.2d 362

, 365 (Pa.
Cmwlth. 2001)). In order for technical res judicata to apply, there must be: “(1) identity of the
thing being sued upon or for; (2) identity of the cause of action; (3) identity of the persons and
parties to the action; and (4) identity of the quality or capacity of the parties suing or sued.”

Id.
(quoting Henion, 776

A.2d at 366). Technical res judicata may be applied to bar “claims that were
actually litigated as well as those matters that should have been litigated.”

Id. (emphasis in
original).

        9
          In Blackwell II, our Supreme Court resolved the question of whether its earlier decision,
Blackwell I, which announced a new rule of law, applied retroactively by considering three factors
set forth by the United States Supreme Court: “(1) the purpose to be served by the new rule, (2) the
extent of the reliance on the old rule, and (3) the effect on the administration of justice by the
retroactive application of the new rule.” Blackwell 

II, 589 A.2d at 1099

. The Blackwell II Court
held that its earlier decision applied retroactively and, discussing the third factor, stated that
retroactive application of the new rule “has a limited effect on the operations of the various
agencies, boards[,] and commissions in that our retroactive application is restricted to the instant
case and all cases pending at the time of our [earlier] decision . . . in which the [issue in dispute]
was properly raised and preserved.”

Id. at

1099-1100.


                                                 10

into the singular contention that because Claimant did not raise and preserve a
challenge to Employer’s subrogation right to future medical benefits under Section
319 of the Act prior to the decision in Whitmoyer, Claimant is not entitled to the
benefit of the change in the law. Our recent precedent holds otherwise.
       In Beaver Valley, this Court held that the claimant, who had sought review of
the employer’s subrogation credit of the claimant’s third-party recovery by filing a
review petition two months after Whitmoyer was decided, “preserved the issue of
Whitmoyer’s application to the [third-party settlement agreement] by raising it at the
earliest point.” Beaver Valley, __ A.3d at __, slip op. at 11. As in this case, the
employer in Beaver Valley argued that because the third-party settlement agreement
was final, and no litigation or appeals were pending in the matter at the time
Whitmoyer was decided, the claimant was not entitled to the benefit of the change in
the law.

Id. at

__, slip op. at 5. We stated, however, that “because [the c]laimant
[was] still receiving disability compensation,” the third-party settlement agreement
“was not a final resolution of the claim” and thus Section 413(a) of the Act10
permitted the WCJ to review and modify or set aside the third-party settlement
agreement upon petition filed by either party.

Id. at

__, slip op. at 11.
       Unlike here, the claimant in Beaver Valley argued that “granting a review
petition under Section 413(a) of the Act requires that correction of the erroneous


       10
            Section 413(a) provides:

       A [WCJ] may, at any time, review and modify or set aside a[n] [NCP] and an
       original or supplemental agreement or upon petition filed by either party with
       the [D]epartment, or in the course of the proceedings under any petition pending
       before such [WCJ], if it be proved that such [NCP] or agreement was in any material
       respect incorrect.

77 P.S. § 771 (emphasis added).


                                               11
agreement be effective as of the date of the error’s creation.”

Id. at

__, slip op. at 6.
While this Court in Beaver Valley disagreed that Whitmoyer “applied retroactively
to the date of the [third-party settlement agreement’s] origination[,]” we held that,
because our

      Supreme Court interpreted that portion of Section 319 of the Act for the
      first time in Whitmoyer, such that the [third-party settlement
      agreement’s] terms were not known to be materially incorrect until
      Whitmoyer was decided, and [the claimant] preserved the issue of
      Whitmoyer’s application to the [third-party settlement agreement] by
      raising it at the earliest point, [the claimant] is entitled to the benefit of
      the ruling as of the date Whitmoyer was decided.

Id. at

__, slip op. at 11. Here, Claimant filed his Review Petition on December 6,
2018, which is shortly after Whitmoyer was decided on June 19, 2018. Consistent
with our decision in Beaver Valley, Claimant is entitled to the benefit of the change
in the law created by Whitmoyer, and he did not waive his challenge to Employer’s
subrogation right to future medical benefits under Section 319 of the Act simply
because there was no appeal “in the pipeline” at the time Whitmoyer was decided.
(Board Op. at 4.) Moreover, we are not persuaded by Employer’s technical res
judicata argument because it is premised on the notion that Claimant should have
challenged Employer’s entitlement to subrogate when the TPSA was executed or
during prior WC litigation between the parties. However, in light of our decision in
Beaver Valley, we cannot say that Claimant had to have challenged Employer’s right
to subrogate future medical benefits before Whitmoyer was decided, when the
relevant terms of the TPSA “were not known to be materially incorrect” before then.
Beaver Valley, __ A.3d at __, slip op. at 11.
      Moreover, we do not find the doctrine of laches applicable to the instant
matter. Having filed his Review Petition shortly after Whitmoyer was decided,


                                           12
Claimant in this case did not “greatly delay[] enforcing [his] rights.” (Employer’s
Br. at 15.) Although Employer asserts “[i]t would cause great prejudice to compel
[Employer] to pay back” Employer’s subrogation credit taken against Claimant’s
medical benefits “after [four] years of asserting its . . . subrogation lien . . . ,” (id. at
16-17), Employer mischaracterizes Claimant’s position. Claimant is not seeking
retroactive application of Whitmoyer to September 26, 2014, and, therefore,
Employer is not being asked to pay back four years of the credit it has taken pursuant
to the TPSA.

       B. Whether Whitmoyer Applies to the TPSA Here.
       Claimant argues that this case is indistinguishable from Whitmoyer and thus
the terms of the TPSA must be set aside to the extent they conflict with Whitmoyer’s
holding that Section 319 of the Act does not permit subrogation of future medical
expenses.    In contrast, Employer contends that Whitmoyer is distinguishable
because, unlike in Whitmoyer, the TPSA executed here includes language beyond
the boilerplate terms of the LIBC-380 form and specifies that Employer gave up part
of its accrued lien in return for a right to subrogate Claimant’s future medical
benefits.
       In Whitmoyer, the Supreme Court observed that Section 319 of the Act
“addresses two distinct scenarios.” 

Whitmoyer, 186 A.3d at 954

. In the first, an
employer has a claim against a claimant’s third-party recovery for indemnity
benefits and medical expenses it paid “to the date of the third-party recovery . . . .”


Id. (internal citations omitted).

This claim constitutes the employer’s accrued lien
and is payable immediately upon recovery.

Id. “The second scenario

relates to the
disposition of the net settlement proceeds” – the amount of the claimant’s recovery
remaining after deducting his employer’s accrued lien.

Id. This “‘excess’ recovery”

                                             13
is to be paid to the claimant “as ‘an advance payment by the employer on account of
future instal[l]ments of compensation,’” which the Supreme Court concluded in
Whitmoyer would be limited to the payment of indemnity benefits.

Id. at

956
(quoting 77 P.S. § 671). Therefore, an employer whose accrued lien is satisfied at
the time of a third-party settlement may not seek reimbursement for future medical
expenses from an employee’s balance of recovery.

Id. at

957.
      This Court recently addressed the issue of Whitmoyer’s applicability to third-
party settlement agreements executed prior to the date of that decision in Hoss v.
Workers’ Compensation Appeal Board (Select Staffing) (Pa. Cmwlth., No. 241 C.D.
2020, filed February 25, 2021). In Hoss, the claimant argued that Whitmoyer’s
“interpretation of Section 319 overrides the terms of a third-party settlement
agreement and that he and all other similarly[]situated claimants should receive
relief upon filing a review petition to stop the unlawful taking of credit against
ongoing medical benefits.”

Id., slip op. at

7. The parties’ third-party settlement
agreement listed a third-party recovery of $187,500, expenses of recovery of
$85,925.65, and an accrued WC lien of $472,688.47.

Id., slip op. at

3. Furthermore,
terms written into the section of the third-party settlement agreement titled “Further
Matters Agreed Upon” provided that “[the e]mployer’s insurer agreed to
reimbursement of the [WC] lien at the discounted rate of $50[,]878.17, in exchange
for a credit for future medical benefits of [the claimant] that may have come due in
the future in the amount of $50,787.17, the sum [the claimant] received from the
third[-]party claim.”

Id. (internal quotations omitted).

The parties subsequently
executed a separate agreement regarding the claimant’s third-party recovery the
terms of which were not materially different from the terms of their third-party
settlement agreement. The Court “conclude[d] that Whitmoyer d[id] not apply to



                                         14
prohibit [the e]mployer from taking the agreed-upon credit for [the c]laimant’s
ongoing medical expenses” because “there was no excess recovery owed to [the
c]laimant[,]” as the employer’s accrued subrogation lien “well exceeded [the
c]laimant’s third-party recovery.”

Id., slip op. at

8-9. We elaborated that

       while [the] [e]mployer is taking a credit for ongoing medical expenses,
       it is not against any “excess” recovery paid to [the c]laimant in
       contravention of Section 319 as interpreted by Whitmoyer. Rather, [the
       e]mployer is taking the credit against the funds from the third-party
       settlement that, but for the terms of the settlement agreements [the
       c]laimant now seeks to invalidate, [the e]mployer was initially entitled
       to receive. We do not read Whitmoyer to prohibit such an agreement,
       whereby the payment to an employer for its accrued lien is reduced in
       exchange for a credit toward future medical benefits in the amount of
       the reduction.


Id. at

5.
       Subsequently, in Beaver Valley, this Court held that Whitmoyer applied to the
parties’ third-party settlement agreement. The claimant in Beaver Valley sustained
a severe injury during the course of his employment, and the employer accepted the
work injury through an NCP. Beaver Valley, __ A.3d at __, slip op. at 2. The
claimant was adjudicated incapacitated, and his guardian received a third-party
recovery in the amount of $10,450,000 on his behalf.

Id. Of that recovery,

$1,099,600 was allocated to the employer to satisfy its accrued WC lien, $3,519,136
reflected the attorney’s fees and other costs associated with obtaining the third-party
recovery, and $8,794,377 represented the balance of recovery.

Id. at

___, slip op. at
2-3. Pursuant to the third-party settlement agreement, the employer was responsible
for 33.7% of the claimant’s future WC compensation benefits and medical expenses
“in order to reimburse its pro rata share of [the c]laimant’s fees and expenses until
exhaustion of [the employer’s] subrogation interest in the amount of $8,794,337.”


Id. at

___, slip op. at 3. We held that “[b]ecause under Whitmoyer, [the e]mployer is


                                          15
not permitted to seek reimbursement for future medical expenses from the
employee’s balance of recovery, the WCJ was permitted to set aside that portion of
the [third-party settlement agreement].”

Id. at

___, slip op. at 6.
      Most recently, in Todd, a decision similar to the instant matter, the parties
executed a compromise and release agreement, which resolved all issues regarding
the claimant’s indemnity benefits through a $195,000 payment. The employer
agreed to pay for the claimant’s ongoing medical treatment and retained its “full
subrogation rights” for, inter alia, “all ongoing medical expenses.” Todd, slip op. at
2. Approximately two months after executing the compromise and release, the
parties executed a third-party settlement agreement. Like the TPSA in the instant
matter, the third-party settlement agreement in Todd included terms beyond the
boilerplate terms of the LIBC-380 form; in Todd, the employer agreed to waive its
right to $52,517.20 of its accrued subrogation lien in exchange for the right to a
credit in this amount against the claimant’s future medical expenses.

Id., slip op. at

5. We held that Whitmoyer applied because the provisions contained in the parties’
compromise and release and third-party settlement agreements “did not grant [the
e]mployer subrogation rights to which it was not already entitled.”

Id., slip op. at

9.
However, remand to the WCJ was necessary to determine whether the employer’s
accrued subrogation lien had been satisfied.

Id., slip op. at

10-11. Our disposition
in Todd was consistent with our interpretation of Whitmoyer in Hoss, which is that,
while Whitmoyer prevents an employer from taking a credit for ongoing medical
expenses against a claimant’s excess recovery, Whitmoyer does not prevent an
employer from taking a credit for ongoing medical expenses in order to satisfy the
balance of its accrued subrogation lien.




                                           16
      In this case, the proceeds of Claimant’s $400,000 third-party recovery
exceeded Employer’s accrued lien of $182,883, leaving Claimant with a balance of
recovery in the amount of $217,117. (R.R. at 11a.) Prior to Whitmoyer, Employer
had the unquestioned right to a credit against its payment of Claimant’s future
medical bills up to the amount of this balance of recovery.           However, after
Whitmoyer, this right no longer exists.        The Board based its conclusion that
Whitmoyer does not control this case in substantial part on the terms set forth in the
section of the LIBC-380 form titled “Further Matters Agreed Upon,” in which the
parties memorialized their agreement “that the future credit against medical
expenses would be taken [by Employer] in return for a reduction in the immediate
lien.” (Board Op. at 4.) Because the parties deviated from the boilerplate language
in the LIBC-380 form, the Board determined that principles of general contract law
compelled the conclusion that Employer’s future subrogation rights were not
extinguished by Whitmoyer, as “Claimant specifically bargained for the credit which
he now says in not due and owing.” (

Id. at

5.)
      Here, however, as in Todd, the parties’ deviation from the boilerplate
language in the LIBC-380 form did not grant Employer subrogation rights to which
it was not already entitled. It is axiomatic that an employer’s right to subrogation
under Section 319 of the Act is “‘statutorily absolute and can be abrogated only by
choice.’” Thompson v. Workers’ Comp. Appeal Bd. (USF&G Co. & Craig Welding
Equip. Rental), 

781 A.2d 1146

, 1152 (Pa. 2001) (quoting Winfree v. Phila. Elec. Co.,

554 A.2d 485

, 487 (Pa. 1989)). Where a claimant’s work injury is due to the
negligent conduct of a third party, “there is a clear, justifiable right to subrogation
under Section 319 of the Act.” Dale Mfg. Co. v. Bressi, 

421 A.2d 653

, 654 (Pa.
1980).



                                          17
       Though Employer waived its right to immediately collect a portion of its
accrued lien ($10,606), it expressly reserved a right to subrogate Claimant’s future
benefits and medical expenses until the balance of recovery – $217,117 – was
exhausted, which, practically speaking, would operate to reimburse Employer for
the amount of the accrued lien that it agreed to waive.11 Thus, Employer’s right to
recover the entirety of its accrued lien was not terminated by the TPSA but was
merely deferred. Critically, Employer’s right to subrogate Claimant’s future medical
expenses originated, not with the terms set forth in the section of the LIBC-380 form
titled “Further Matters Agreed Upon,” but instead with the boilerplate terms
contained in that form, which the parties were required to utilize under Section
218.19(a) of the Department’s Regulations. Based on the formula contained in the
LIBC-380, Employer was responsible for 42% of Claimant’s “future . . . medical
expenses” until Employer’s subrogation interest in the amount of $217,117 was
exhausted. (R.R. at 11a.) Claimant merely consented to Employer’s retention of its
existing subrogation rights, which at that time included future medical expenses.
Accordingly, the additional terms set forth in the “Further Matters Agreed Upon”
section of the TPSA do not render this case distinguishable from Whitmoyer.
       We thus conclude that Employer is not entitled to subrogate Claimant’s future
medical expenses up to the excess recovery but can only recover ongoing medical
expenses in order to satisfy the balance of its accrued subrogation lien. However,
on this record, we are unable to determine whether or not Employer has been fully
reimbursed its accrued subrogation lien. Before the WCJ, Employer argued that “[it]
should at least be able to offset future medical against the amount that . . . [Employer]
waived on [its] accrued lien in the underlying third-party case.” (C.R. Item 14,

       11
         In essence, the TPSA enabled Claimant to keep an additional $10,606 because Claimant
had to pay Employer $95,000 rather than $105,606.


                                             18
Hearing Transcript at 6.) We agree.12 However, there are no findings as to the
amounts that Employer has recovered through subrogation to date. We therefore
remand to the WCJ to make this determination.

       C. Penalty Petition.
       Claimant requests that this Court remand this matter to the WCJ for
calculation of a penalty, which Claimant argues is appropriate because “Employer
continued to take subrogation against [] Claimant’s medical benefits after the
issuance of Whitmoyer” in violation of the Act. (Claimant’s Br. at 18.) However,
while we hold that Whitmoyer applies to the TPSA, we discern no error in the denial
of Claimant’s Penalty Petition.13 Prior to Whitmoyer, this Court interpreted Section
319 of the Act as permitting employers to take a credit against medical expenses.
See Zacour v. Workers’ Comp. Appeal Bd. (Mark Ann Indus.), 

824 A.2d 336

, 340
(Pa. Cmwlth. 2003). After Whitmoyer changed the prevailing interpretation of
Section 319 of the Act, there was justifiable confusion regarding whether Whitmoyer
would apply to third-party settlement agreements executed prior to that decision.
Considering that ambiguity, and particularly where, as here, the TPSA included
additional language, we discern no error in denying the Penalty Petition.




       12
           We note that the $60,000 lump sum indemnity payment Employer paid under the terms
of the C&R was also “to be included in the amount of [Employer’s WC] lien.” (R.R. at 33a.)
        13
           The WCJ expressly denied Claimant’s Penalty Petition. While the Board did not
specifically address that aspect of Claimant’s appeal, its affirmation of the Penalty Petition’s denial
flowed from its affirmation of the denial of Claimant’s Review Petition. Although this Court’s
reason for affirming the Penalty Petition’s denial is different than the Board’s, “we may affirm an
agency’s decision ‘on other grounds where grounds for affirmance exist.’” Turner v.
Unemployment Comp. Bd. of Rev., 

899 A.2d 381

, 385 (Pa. Cmwlth. 2006) (quoting Kutnyak v.
Dep’t of Corr., 

748 A.2d 1275

, 1279 n.9 (Pa. Cmwlth. 2000)).


                                                 19
   IV.   Conclusion
      For the foregoing reasons, the Board properly affirmed the WCJ’s Decision
that Employer did not violate the Act. However, with respect to Claimant’s Review
Petition, we vacate the Board’s Order and remand this matter for the Board to further
remand to the WCJ, who shall conduct additional proceedings as necessary to
determine the extent to which Employer’s subrogation of Claimant’s future medical
benefits represents a reimbursement of Employer’s accrued subrogation lien.




                                       _____________________________________
                                       RENÉE COHN JUBELIRER, Judge




                                         20
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Seymour Jeck,                           :
                        Petitioner      :
                                        :
                  v.                    :   No. 420 C.D. 2020
                                        :
Workers’ Compensation Appeal            :
Board (SRIG Inc.),                      :
                   Respondent           :


                                     ORDER


     NOW, May 14, 2021, in accordance with the foregoing Memorandum
Opinion, the Order of the Workers’ Compensation Appeal Board, entered in the
above-captioned matter, is AFFIRMED in part and VACATED in part. This matter
is REMANDED for further proceedings consistent with the foregoing
Memorandum Opinion.
     Jurisdiction relinquished.




                                      _____________________________________
                                      RENÉE COHN JUBELIRER, Judge

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