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EMPLOYER IS NOT ENTITLED TO SUPERSEDEAS FUND REIMBURSEMENT WHERE TERMINATION PETITION GRANTED AFTER C&R WHICH RESOLVED ALL PAST, PRESENT AND FUTURE LIABILITY

See: Bureau of Workers’ Compensation v. WCAB (US Food Service), 932 A.2d 309 (Pa. Cmwlth. 8/22/07).

The employer filed a Petition for Termination. While it was pending, the parties entered into a Compromise and Release Agreement under which the employer paid the claimant a lump-sum to fully satisfy the employer’s past, present and future liability to pay the claimant benefits. A WCJ approved C&R. Two weeks later, the WCJ also granted employer’s Termination Petition. The employer then filed an application for supersedeas fund reimbursement. The Judge granted the Petition and the Board affirmed. The Commonwealth Court reversed and instead the Court concluded the employer was not entitled to reimbursement from the supersedeas fund.

The Court again cited the 5 requirements that an employer must meet before being entitled to reimbursement from the Pa. Workers’ Compensation Supersedeas Fund. Once again, the issue was whether requirement number 5 was met. In this case, the employer submitted the report of a medical expert which was accepted by the Judge in granting the Termination Petition. The Judge further noted that the later stipulation by way of C&R did not affect the basis for his decision regarding termination.

Nonetheless, the Court concluded that the C&R as the final agreement between the parties was the "final outcome of the proceedings" so that it was therefore error for the WCJ to consider the Termination Petition as ripe for disposition and error for the Judge to grant the application for supersedeas fund reimbursement having been aware of the fact that C&R was executed prior to the grant of the Termination Petition.

The Court in US Food Service does provide a careful overview of cases addressing supersedeas fund reimbursement and compromise and release. Initially, the Court notes that the parties can enter into a C&R of any and all liability under the Act or extinguish only partial liability. The Court cited Stroehmann Bakeries, Inc. v. WCAB (Plouse), 768 A.2d 1193 (Pa. Cmwlth. 2001). In that case, the WCJ refused to issue a decision regarding termination where C&R provided a full and complete release of liability. Both the Board and Commonwealth Court affirmed

.

The Court acknowledged that a different case arises where the C&R expressly contains a provision that a particular petition or issue shall remain open after the C&R is executed and approved. In Bethlehem Structural Products v. WCAB (Vernon), 789 A.2d 767 (Pa. Cmwlth. 2001) the C&R contained an expressed provision that the employer would not withdraw the appeal regarding the correction calculation of the average weekly wage and the lump-sum payment resolved only future liability. In Coyne Textile v. WCAB (Voorhis), 840 A.2d 372 (Pa. Cmwlth. 2003), by the express terms of the C&R, the Termination and Challenge Petitions were to remain open and be adjudicated while the Reinstatement and Review Petitions were to be discontinued and withdrawn.

Practice Pointer: Where the employer wants to obtain supersedeas fund reimbursement, the C&R should address future liability only and specifically outline that the Judge retains jurisdiction to address a certain Petition and liability. We are often successful in obtaining supersedeas fund reimbursement under these circumstances. However, there is always a risk for the employer where the Bureau has been aggressively challenging reimbursements if there has been a compromise and release. Moreover, as evidenced by US Food Service, there is a trend in the Commonwealth Court to disallow these types of Petition where they believe that the Termination Petition has been rendered moot.