Employer Engages in Unreasonable Contest When There is No Document Filed Accepting Work Injury

As we have discussed in the past, the assessment of unreasonable contest attorney fees is a rare finding in PA workers’ compensation.  This is when the workers’ comp insurance carrier is ordered to pay the fees of the injured worker’s attorney.  Even on those unusual occasions when a Workers’ Compensation Judge (WCJ) orders the payment of unreasonable contest attorney fees, often this is reversed by the appellate courts.  Which is why a recent decision of the Commonwealth Court of Pennsylvania was so refreshing.

In Gabriel v. Workers’ Compensation Appeal Board (Procter and Gamble Products Company), the injured worker suffered a puncture injury to his arm.  Notice was given to the employer by the injured worker within 120 days, as required under the Pennsylvania Workers’ Compensation Act (Act).  The injured worker received medical treatment, and the workers’ comp insurance company paid for such treatment.  However, the insurance carrier failed to issue any document, such as a medical-only Notice of Compensation Payable (MONCP), as would be required by the Act (the Act provides that the insurance carrier accept or deny an injury, issuing the appropriate form, within 21 days).

The injured worker filed a Claim Petition, to which the insurance carrier filed an Answer, denying all of the allegations in the Claim Petition. The matter was fully litigated before a WCJ.  After the final hearing before the WCJ, the insurance carrier finally issued a MONCP (this around two years after the occurrence of the injury).

After considering the evidence, the WCJ granted the Claim Petition, but declined to assess a penalty or award unreasonable contest attorney fees against the workers’ comp insurance company.  The WCJ reasoned that the insurance carrier paid the medical bills and that the injured worker was not denied treatment.  This was affirmed by the Workers’ Compensation Appeal Board (WCAB), since the payment of medical bills was not an admission of liability, and that the injured worker sought more than a simple “puncture wound” in the litigation (there was also numbness as a result of the incident).  The WCAB believed that the WCJ had discretion to order, or not order, unreasonable contest attorney fees.

Upon appeal, the Commonwealth Court of Pennsylvania warmed the hearts of claimant attorneys across the state, when they reversed the decision, ordering that unreasonable contest attorney fees be assessed.  The Court noted that, if the insurance carrier had issued the MONCP in a timely fashion, the Claim Petition would not have needed to be litigated.  The Answer filed by the insurance carrier, denying all of the allegations, was seen as significant.  As to the allegation of numbness being beyond the accepted “puncture wound,” the Court noted that “the numbness was part of the puncture wound and not a different or separate injury.”

The Court observed, as we claimant attorneys always stress, “(u)nder Section 440(a) of the Act, Claimant ‘shall be awarded’ attorney fees unless Employer establishes a reasonable basis for the contest, and Employer has the burden of proving such a reasonable basis.”  In this case, as a matter of law, the Court found the insurance carrier failed to show a reasonable contest, requiring the assessment of attorneys’ fees.