The 2008 Commonwealth Court case of Romanowski v. Workers' Compensation Appeal Board (Precision Coil Processing), 944 A.2d 127 (2008), defined the appropriate limitations period applicable to a claimant seeking a reinstatement of disability benefits after the expiration of the 500-week period under Section 413(a) of the Workers' Compensation Act. The court analyzed the section and concluded that it actually contained two provisions of limitation. The first limitation provision allows a claimant to file a petition to modify or reinstate benefits stemming from a notice of compensation payable within three years of the most recent payment of compensation. The second provision suggests that where benefits have been suspended, a claimant may seek further benefits by filing a petition within 500 weeks of the suspension, a duration of time also known as "the period for which compensation for partial disability is payable," which comes from Section 306(b)(1) of the act.
The essential point of Romanowski was that a claimant's failure to timely challenge a suspension of benefits within the applicable 500-week limitation period would bar any claims under Section 413(a). Moreover, the first limitation provision of Section 413(a), which allows a claimant to file a petition to modify or reinstate benefits within three years of the most recent payment of compensation, cannot be "stacked" on the second. Therefore, the expiration of the 500-week period following a suspension of benefits operates as a bar to a subsequent modification or reinstatement petition. While the question was not addressed as to whether a claimant with wage loss throughout the 500-week period had three years from the end of that timeframe to file a petition, it seemed to be a logical progression.
The state Supreme Court has now weighed in on the matter with the new decision of Cozzone v. WCAB (PA Municipal/East Goshen Township), No. 51 MAP 2012 (decided August 19, 2013). Cozzone presents an issue of statutory interpretation concerning Section 413(a). The court specifically addressed whether a claimant should be permitted to proceed on a post-500-week petition for reinstatement of total disability benefits when he filed that petition within three years of his most recent payment of compensation. However, that last payment was made pursuant to a post-500-week supplemental agreement, notwithstanding a prior suspension of payments during the 500-week period, due to his return to work without a loss in earning capacity.
The court framed the issue as whether expiration of the 500-week period statute of repose operates as a bar to the assertion of total disability claims by employees who have experienced a suspension of benefits. After an exhaustive analysis of Commonwealth Court case law, including Romanowski, the Supreme Court concluded that because the claimant, Andrew Cozzone, did not file the reinstatement petition during the 500-week period and did not petition for reinstatement within three years after his most recent (legally enforceable) payment, he did not retain the right to petition for reinstatement under Section 413(a). Amazingly, the court further held that Cozzone's receipt of payments under supplemental agreements that were executed after his right to compensation expired did not resurrect his expired claims. The court termed these payments "payments made pursuant to supplemental agreements upon an otherwise expired workers' compensation claim."
Much of the fact pattern of Cozzone is not entirely uncommon for older cases that do not settle. Cozzone sustained a work-related back injury January 24, 1989. The case was accepted by the notice of compensation payable and Cozzone received temporary total disability benefits until returning to his preinjury job September 20, 1989, with no loss of earnings.
More than 13 years later, on May 19, 2003, the parties entered into a supplemental agreement retroactively reinstating the claimant's total disability benefits from February 24, 2003, through March 17, 2003. His temporary total disability (TTD) benefits were also reinstated from June 17, 2005, to August 29, 2005, based on a later agreement. Finally, on June 20, 2007, Cozzone's TTD benefits were once again reinstated.
On November 27, 2007, Cozzone took a modified-duty job with another employer. This prompted the parties to execute a new supplemental agreement, dated January 7, 2008, which modified Cozzone's indemnity benefits from total to partial disability. Cozzone remained in this position until January 24, 2008, at which time he became incapable of continuing in the modified-duty capacity.
On September 26, 2008, Cozzone attempted to restore his TTD benefits as of the January 24, 2008, date by filing a reinstatement petition, which serves as the underlying petition in the Supreme Court case. On January 25, 2009, the employer unilaterally (and, one would think, illegally) suspended Cozzone's partial disability benefits, which were made payable by the January 7, 2008, supplemental agreement. This prompted Cozzone to file a penalty petition, asserting that the employer violated the act by unilaterally ceasing payments. The two petitions were consolidated.
On February 25, 2010, the workers' compensation judge granted Cozzone's reinstatement petition based on the credible testimony of Cozzone and his medical expert. The WCJ also granted his penalty petition, concluding that the employer had violated the act by unilaterally suspending partial disability payments due under the January 7, 2008, supplemental agreement.
The Workers' Compensation Appeal Board reversed the WCJ's decision and the Commonwealth Court affirmed that reversal in a 2-1 panel decision, holding that Cozzone's reinstatement petition was untimely filed as it was beyond the 500-week period. Moreover, the Commonwealth Court found that based on Cozzone's initial return to his preinjury position and corresponding suspension, the 500-week statute of repose of Section 413(a), and not the three-year statute of limitations of that section, was controlling. Shockingly, the court further held that Cozzone was not entitled to penalties under the act for his employer's unilateral cessation of benefits. The court's rationale was that Cozzone's "'right to compensation was completely extinguished by the expiration of Section 413(a) of the act's 500-week statute of repose,' notwithstanding the supplemental agreement dated January 7, 2008, providing for payment of partial disability benefits." The court found the supplemental agreement to be void, unenforceable and incapable of resurrecting Cozzone's entitlement to benefits.
As indicated above, the Supreme Court accepted discretionary review to hear the case and ultimately agreed with the Commonwealth Court's conclusion that the reinstatement petition was barred by Section 413(a) of the act, "because the claimant's statutory right to workers' compensation benefits expired prior to the filing of his reinstatement petition." However, the Supreme Court overruled an entire line of Commonwealth Court cases in disagreeing with the lower court's rationale. Specifically, the Supreme Court states:
"We now hold that the Commonwealth Court's interpretation of Section 413(a) as automatically barring all post-500-week/post-suspension claims for total disability is mistaken, as the limitations periods set forth in Section 413(a) are to be construed and considered concurrently. The provisions of Section 413(a) stand together, not in opposition to one another, and effect must be given to both as far as possible."
In finding that both provisions of Section 413(a) must be respected, the court concluded that since Cozzone did not file a petition for reinstatement during the 500-week period, and he did not file a petition for reinstatement within three years after the date of his most recent payment, he no longer retained the statutory right to petition for reinstatement of workers' compensation payments. In illustrating its point, the court did concede that had Cozzone received a payment on the last day of his 500-week period, he would have been afforded an additional three-year period from the date of that payment to file his reinstatement petition. The problem is that Cozzone worked right through the 500-week period with no wage loss, even for an additional four years after the expiration of the period.
Adding a bit of insult to injury, the court did not find the employer's voluntary reinstatement of disability benefits to be capable of restoring "appellant's expired workers' compensation rights." Using a technical, statutory construction argument, the court found that the act provides no mechanism whereby an agreement can create or resurrect a right under the statute, where the statute itself mandates that the right is expired.
Finally, and perhaps most dishearteningly for claimants, the Supreme Court did not reinstate Cozzone's penalty award for the employer's unilateral suspension of benefits. The court essentially found that since the supplemental agreement was not enforceable under the act and no payments were, therefore, properly payable to the claimant, there was no violation of the act, as the payments were merely gratuitous. Since I am quite certain the employer did not see it that way at the time, the court simply sanitized bad conduct. Be that as it may, it creates a rather uneasy precedent.
Given the court's extensive analysis of statutory construction and prior case law, it is greatly recommended that the reader pull Cozzone and read it in its entirety. It will be time well spent.
Christian Petrucci is a solo practitioner and past co-chairman of the Philadelphia Bar Association's workers' compensation section. He concentrates his practice in workers' compensation litigation and Social Security disability.