Wednesday, August 22, 2007

Commonwealth Court Holds WCJ May Not Decide Termination Petition After Full C&R

In Bureau of Workers' Compensation v. WCAB (US Food Service) the Commonwealth Court held the Employer could not get a post C&R decision on a pending termination petition and proceed to request supersedeas reimbursement.

The Court distinguished the present case from the Optimax case, holding a C&R is a final resolution of a case unlike the stipulation the parties entered into in Optimax. The Court also distinguished the present case from those in which the parties specifically reserved issues in their C&R agreements. However, the Court finalized its reasoning in a way that suggests all post C&R action of the WCJ is invalid, whether the parties reserve rights or not.

The Bureau's argument focused on the fifth element of proof for supersedeas reimbursement, that "in the final outcome of the proceedings it is determined that such compensation was not, in fact, payable." The Court held: "The hallmark of a compromise and release is finality. As we said in Stroehmann, 'we believe that the legislature intended that a C&R should be on equal footing with civil settlements, which are based on a public policy that encourages settlements and stresses finality.' 768 A.2d at 1196. Thus, the C&R, as the final agreement between the parties, was the 'final outcome of the proceedings' under Section 443 of the Act." The Court held it was therefore error for the WCJ to decide the termination petition in this case.

The Court's opinion is difficult to assimilate. The purpose of the "final outcome of the proceedings" language is to provide that an application for supersedeas reimbursement may not be made while an appeal is pending. There is no "final outcome of the proceedings" until the appeal period expires without an appeal having been filed.

In this case, twelve days after the C&R decision, the WCJ issued a decision granting termination. Because this was within the appeal period, it was prior to the "final outcome of the proceedings." Optimax should still control. Without knowing whether either party would appeal the decision on the C&R, the WCJ issued a decision on evidence prior to and independent of the stipulation underlying the C&R (as reasoned by the WCJ who granted the Petition for Supersedeas Reimbursement).

The obvious steps for the practitioner are to only enter into a C&R of future liability, to reserve the right to a decision on prior evidence independent of the stipulation underlying the Compromise and Release, and, if treatment is minimal, consider leaving the medical open for a limited period of time that will exceed the time frame for the WCJ's Order on the pending termination petition.

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