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Case Law - save on Lexis / WestLaw. IN THE COMMONWEALTH COURT OF PENNSYLVANIA Boeing Defense & Space Group, : Petitioner : : v. : No. 1282 C.D. 2004 : Workers' Compensation Appeal Board : Submitted: December 3, 2004 (Genthert), : Respondent : BEFORE: HONORABLE JAMES GARDNER COLINS, President Judge HONORABLE DORIS A. SMITH-RIBNER, Judge HONORABLE JESS S. JIULIANTE, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY SENIOR JUDGE JIULIANTE FILED: March 9, 2004 Boeing Defense and Space Group (Boeing) petitions for review of the May 19, 2004 order of the Workers' Compensation Appeal Board (Board) that affirmed the September 9, 2003 order of the Workers' Compensation Judge (WCJ) granting the claim petition for compensation benefits of Albert Genthert (Claimant). Boeing raises three issues: 1) whether Claimant waived the issue that only self-insured employers may take a credit for severance payments under the Pennsylvania Workers' Compensation Act (Act),1 2) whether the Board erred in denying Boeing a credit for severance benefits where there was no evidence of record concerning its insurance funding arrangement and 3), whether the Board 1Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-104.4, 2501-2626. erred in determining that Employer was not entitled to a credit for severance benefits paid under Section 204(a) of the Act2 based on this Court's decision in Kramer v. Workers' Compensation Appeal Board (Rite Aid Corp.), 794 A.2d 953 (Pa. Cmwlth. 2002), appeal granted, 573 Pa. 32, 820 A.2d 700 (2003).3 For the reasons that follow, we affirm. Claimant worked as a research and development technician/mechanic for Boeing; his duties consisted of assembling, modifying, and dissembling beams for fixtures for mounting aircraft. On December 11, 1998, Claimant filed a petition for benefits alleging a compensable injury in the form of carpal tunnel syndrome arising from the use of impact guns and other hand tools during the course of his employment. R.R. 3a. Boeing filed an Answer denying all allegations of the petition. R.R. 5a. In a decision dated June 28, 2001, the WCJ granted Claimant's petition and awarded benefits in the amount of $561.00 per week from June 4, 1998 to May 10, 2000, based upon an average weekly wage of $1,035.26. See WCJ's June 28, 2001 decision, R.R. 21a. The WCJ also found that Boeing was entitled to receive credit for unemployment compensation benefits and wages from other employment paid to Claimant. Id. The WCJ did not explicitly mention or 2Section 204(a) provides in pertinent part that: The severance benefits paid by the employer directly liable for the payment of compensation and the benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award made under sections 108 and 306 [Sections 108 and 306 of the Act, 77 P.S. §§ 27.1 and 511, respectively], except for benefits payable under section 306(c) [Section 306(c) of the Act, 77 P.S. § 513]. 77 P.S. § 71(a). 3The Supreme Court heard oral argument in Kramer on December 3, 2003. 2 make a determination as to whether Boeing was entitled to credit for severance payments paid to Claimant. On July 31, 2002, the Board affirmed the WCJ's decision but remanded with respect to an ancillary issue, namely the WCJ's failure to make necessary findings on "the availability of alternative work or whether such work was made available to Claimant in lieu of Claimant's election to be laid off... [and] with regard to Claimant's ability to perform the alleged alternative work." Board's July 31, 2002 decision, p. 5, R.R. 31a. Specifically, the Board instructed that on remand, the WCJ was "to make such findings of fact and conclusions of law as necessary to determine Claimant's entitlement to compensation benefits." Id. With respect to the issue of a credit for severance payments made to Claimant, the Board concluded that since Section 204(a) of the Act only allows a credit when the employer is "directly liable" for payment of workers' compensation benefits and this Court has interpreted said Section to mean that only self-insured employers are entitled to credit for benefits paid under Kramer, Boeing was not entitled to a credit for severance payments made to Claimant because it was insured by a carrier. Id. On remand, the WCJ made findings with respect to the availability of alternative work and Claimant's ability to perform such work, concluding that Boeing had failed to meet its burden of proving that Claimant was offered a specific, alternative job within his physical restrictions. See WCJ's September 8, 2003 decision. The Board subsequently affirmed by order dated May 19, 2004.4 4The Court's review of the Board's order is limited to determining whether constitutional rights were violated, an error of law was committed, and whether the findings of fact are supported by substantial evidence in the record. Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704; Gunter v. Workers' Compensation Appeal Board (City of Philadelphia), 573 Pa. 386, 825 A.2d 1236 (2003). 3 Boeing argues that Claimant waived the issue that only a self-insured employer may take a credit for severance payments under the Act by failing to preserve the issue before the WCJ. Boeing cites to Smith v. Workmen's Compensation Appeal Board, 543 Pa. 295, 670 A.2d 1146 (1996), for the proposition that a claimant's failure to preserve an issue at every step of litigation and the appellate process constitutes a waiver. The purpose of the waiver doctrine is to preserve the integrity, efficiency and the administration of the workers' compensation system. DeMarco v. Jones & Laughlin Steel Corp., 513 Pa. 526, 522 A.2d 26 (1987). Boeing also contends that Claimant's failure to address the severance payments issue is similar to the claimant in Pennsylvania Tpk. Comm'n v. Workers' Compensation Appeal Board (Collins), 709 A.2d 460 (Pa. Cmwlth. 1998) (holding that the claimant's failure to argue the WCJ's lack of jurisdiction before the Board constituted a waiver and therefore could not be addressed). Boeing reasons that since Kramer held that Section 204(a) of the Act was applicable to self-insured employers and the Court did not issue Kramer until 2002, Claimant should have been cognizant that Section 204(a) clearly sets forth that employers are entitled to a credit for severance pay. Boeing cites Henkels & McCoy, Inc., v. Workers' Compensation Appeal Board (Hendrie), 565 Pa. 493, 776 A.2d 951 (2001) for the proposition that an issue is waived despite subsequent interpretive case law if the language of the Act exists at the time of trial. Thus, Boeing concludes that since the general language of Section 204(a) already established that employers are entitled to a credit for severance payments, Claimant's failure to assert in his claim petition before the WCJ the issue of whether only self-insured employers are entitled to a credit for severance payments should therefore constitute a waiver. We wholly disagree. 4 As the record demonstrates, the WCJ in her decision dated June 6, 2001 clearly granted Boeing a credit with respect to unemployment compensation benefits and wages from other employment paid to Claimant, but did not make any mention regarding the issue of a credit to Boeing for severance payments. This is largely attributable to the fact that based upon the record, the issue concerning a credit for severance payments was never properly raised. Under the doctrine set forth in Dobransky v. Workers' Compensation Appeal Board (Continental Baking Co.), 701 A.2d 597 (Pa. Cmwlth. 1997) (holding that an issue not raised before the WCJ has been waived), it was Boeing rather than Claimant that had the affirmative duty at every step of litigation, namely before the WCJ, to either argue entitlement to a credit for severance payments made to Claimant or to demonstrate that it was self-insured and therefore was owed a credit under the holding of Kramer. Thus, we conclude that Boeing failed to properly raise the issue before the WCJ. Notwithstanding, Boeing next argues that the Board erred in denying it a credit for severance benefits where there was no evidence of record concerning its insurance funding arrangement. Boeing cites McGuire, Inc. v. Workers' Compensation Appeal Board (Padgett), 834 A.2d 668 (Pa. Cmwlth. 2003), where this Court held that the employer was entitled to a credit for severance payments because there was evidence in the record to show that the employer was directly liable for the claimant's workers compensation benefits. Specifically, in McGuire, the Court found that the employer had contributed 46.3% of the money in the claimant's pension plan, was required to exhaust a deductible before the insurer assumed liability for workers' compensation benefits and directly paid for the claimant's compensation benefits for a period of time. Thus, the employer was entitled to a credit for severance payments made to the claimant. Here, Boeing argues that the Board erred by finding that it was "insured by an insurance company" and was therefore "not entitled to credit for 5 severance benefits paid to Claimant." Board's July 31, 2002 opinion, at pp. 5-6, R.R. 31a-32a. According to Boeing, the Board's reasoning is misguided where there is no evidence in the record pertaining to its insurance arrangement. Thus, Boeing suggests that the matter be remanded to the WCJ for purposes of making such findings of fact and conclusions of law. We disagree. The record demonstrates that the Board had substantial evidence to conclude that Boeing did not qualify for a credit for severance payments paid to Claimant under both Section 204(a) and our decision in Kramer. The various pleadings relating to the Notice of Compensation Payable (NCP) list or make reference to AIG Claim Services, Inc. (AIG). For instance, Claimant's petition dated December 11, 1998 lists AIG as Boeing's Insurer. See R.R. 3a. Additionally, Boeing's Answer to Claimant's claim petition, dated February 22, 1999, lists AIG as its insurer. See R.R. 5a. Boeing's appeal from the WCJ's Finding of Fact and Law, dated September 26, 2003, sets forth that AIG is its insurance carrier. See R.R. 8a. On the Board's Acknowledgment of Appeal, dated September 29, 2003, "A.I.G. Claim Services, Inc., P.O. Box 499, Essington, PA 19029" is listed as Boeing's insurance carrier. Although it is conceivable that AIG is merely acting as Boeing's insurance program administrator, Boeing clearly failed to offer any such evidence, or in the alternative, any evidence that it was self- insured. As a result, the Board did not err in determining that Boeing did not qualify for a credit for severance payments made to Claimant. Boeing next argues that the Board erred in determining that it was not entitled to credit for severance payments paid to Claimant under Section 204(a) of the Act based on this Court's decision in Kramer. Boeing argues that the majority in Kramer misconstrued the language of Section 204(a) where the plain meaning of the Section does not limit an offset for severance payments paid by self-insured employers. Specifically, Boeing reasons that since a fundamental principle of 6 statutory construction is that words and phrases should not be interpreted in isolation but rather must be considered with reference to the context in which they appear, Hoosier Eng'g Co. v. Workmen's Compensation Appeal Board (Winters), 620 A.2d 697 (Pa. Cmwlth. 1993), Section 204(a) must be considered in context with the remaining provisions of Section 204. Boeing cites to Section 204(c) which states, The employe is required to report regularly to the insurer the receipt of unemployment compensation benefits ... severance benefits and pension benefits, which post-date the compensable injury under this act.... 77 P.S. § 71(c) (emphasis added). Thus, Boeing argues that Section 204(c) demonstrates that the legislature did not intend for Section 204(a) to apply only to self-insured employers since there would be no reason to report the receipt of severance payments to an "insurer." Boeing also argues that the interpretation of Section 204(a) in Kramer is inconsistent with the broad definition of "employer" used in other sections of the Act, specifically, Section 103 of the Act, 77 P.S. § 21, and Section 401 of the Act, 77 P.S. § 701. We disagree. In ascertaining the legislative intent behind a statute, the Court must begin with the presumption that the legislature did not intend for any statutory language to be "absurd, impossible of execution or unreasonable." 1 Pa. C.S. § 1922(1). The Court must also construe a statute so as to give effect to every word contained therein and to ascertain and effectuate the intent of the legislature. Meier v. Maleski, 670 A.2d. 755 (Pa. Cmwlth. 1996), aff'd, 549 Pa. 171, 700 A.2d 1262 (1997). As to whether Section 204(a) limits an offset for severance to self- insured employers, we reiterate our discussion in Kramer where we stated that the legislature simply could have provided the credit to employers liable for the payment of workers' compensation. Consequently, by restricting the beneficiaries of the credit to employers directly liable for 7 such compensation, the legislature indicated an intent to further narrow the class that might claim an offset pursuant to this provision of the Act. Moreover, we note that section 204(a) of the Act provides the severance credit only to employers, making no mention of insurers in that credit provision. Courts have often relied on the maxim "expressio unius est exclusio alterius;" that is, where the legislature expressly mentions one thing in a statute, we must assume that it intended to exclude all things omitted. Kramer, 794 A.2d at 960 n.15. Given this Court's reasoning as set forth in Kramer, we find no reason to deviate from our determination that the plain meaning of Section 204(a) limits an offsetting credit for severance payments to self-insured employers. Accordingly, the order of the Board is affirmed. JESS S. JIULIANTE, Senior Judge 8 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Boeing Defense & Space Group, : Petitioner : : v. : No. 1282 C.D. 2004 : Workers' Compensation Appeal Board : (Genthert), : Respondent : O R D E R AND NOW, this 9th day of March, 2005, the May 19, 2004 order of the Workers' Compensation Appeal Board is AFFIRMED. JESS S. JIULIANTE, Senior Judge
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