OPINION BY Judge COHN JUBELIRER.
Jose Osorio Lozado (Claimant) petitions for review of an Order of the Workers' Compensation Appeal Board (Board) affirming the Decisions of a Workers' Compensation Judge (WCJ) denying Claimant's "Claim Petition for Benefits from the Uninsured Employers Guaranty Fund [Fund] and Uninsured Employer" (Claim
We begin with a brief description of the Fund and the governing provisions of the Act.
The Fund is not an insurer and is "not [] subject to penalties, unreasonable contest fees or any reporting and liability requirements under section 440"
The Fund is required to "exhaust all remedies at law" to seek reimbursement from the uninsured employer for any payments made by the Fund as a result of an award or a voluntarily accepted injury. Section 1605(b) of the Act, 77 P.S. § 2705(b). The Department of Labor and Industry may, on the Fund's behalf, investigate, prosecute, and seek restitution from an uninsured employer for not insuring the payment of compensation. Id. The Fund may also seek reimbursement through asserting its right to subrogation over any recovery an injured employee receives from the employer or a third party. Section 1606 of the Act, 77 P.S. § 2706.
This case involves two simultaneously issued WCJ Decisions (hereinafter referred to as "Employer Decision" and "Fund Decision"). The Employer Decision resulted from a claim and penalty petition which Claimant filed against Employer on April 15, 2009, in which Claimant sought benefits for "a work injury suffered on or about May 11, 2007." (WCJ Decision (Employer Decision), Findings of Fact (FOF) ¶ 1.) After it was filed, on April 28, 2009, the Bureau informed Claimant's counsel that its "research indicate[d] that the employer did not have workers' compensation insurance on the date of the alleged injury." (WCJ Decision (Fund Decision), FOF ¶ 2.) Shortly thereafter, on May 11, 2009, the last day Claimant could file a personal injury action within the applicable two year statute of limitations
The Fund Decision resulted from a "Notice of Claim Against Uninsured Employer" (Notice of Claim) and the Claim Petition at issue here, both of which Claimant filed in January 2010
Claimant's Claim Petition against the Fund and the claim and penalty petitions against Employer were assigned to the same WCJ for disposition. (Fund Decision, FOF ¶ 5.) The WCJ issued two separate decisions and orders denying and dismissing both of Claimant's petitions—against Employer and against the Fund. With regard to Claimant's claim and penalty petitions against Employer, the WCJ reasoned that Section 305(d) of the Act, 77 P.S. § 501(d), requires a claimant to choose between pursuing a tort remedy and seeking benefits under the Act. (Employer Decision, Conclusions of Law (COL) ¶¶ 1-3.) According to the WCJ, once an injured employee files a civil action, he forfeits his ability to seek benefits under the Act. (Employer Decision, COL ¶¶ 2-3.) With regard to Claimant's Claim Petition against the Fund, the WCJ denied relief for two reasons: 1) because Claimant did not file the Notice of Claim within 45 days of learning that Employer was uninsured as required by Section 1603(b) of the Act; and 2) because Claimant filed his Claim Petition against the Fund concurrently with the Notice of the Claim instead of waiting 21 days as required by Section 1603(d) of the Act. (Fund Decision, COL ¶¶ 1-4.)
Claimant appealed both WCJ Decisions, which were consolidated by the Board on appeal. Upon review, the Board affirmed both Decisions. The Board held that Section 305(d) of the Act barred all of Claimant's petitions because Claimant forfeited his ability to pursue a remedy against both Employer and the Fund under the Act by initiating his tort action. With respect to its holding that Section 305(d) barred Claimant's Claim Petition against the Fund, the Board reasoned that the Fund was "established for the exclusive purpose of paying to any claimant . . . benefits due and payable under the Act," and Claimant is not due any benefits because he elected a civil remedy. (Board Decision at 5.) Although the Board ultimately concluded that Claimant's Claim Petition against the Fund was barred by Section 305(d), the Board also determined that the WCJ erred by concluding that a claimant's failure to
Claimant now petitions this Court for review of the Board's Order only with respect to the Board's affirmance of the WCJ's Fund Decision dismissing Claimant's Claim Petition against the Fund.
This appeal presents two issues of first impression. First, whether a claim petition against the Fund is barred by Section 305(d) of the Act where, after learning that an employer is uninsured, a claimant preserves a civil remedy by filing a "savings action" at law against an uninsured employer. Second, whether a claimant's failure to give timely notice to the Fund that his or her employer is uninsured acts as a complete or partial bar to a claim against the Fund.
Since the Act was amended in 1974, it has served as a complete substitute for common law tort actions by "provid[ing] the exclusive means by which a covered employee can recover against an employer for injury in the course of his employment." Kline v. Arden H. Verner Company, 503 Pa. 251, 469 A.2d 158, 159 (1983). Section 303(a) of the Act establishes that an employer's liability under the Act is exclusive and an employer is immune from suit under the common law. 77 P.S. § 481(a). Our Supreme Court has described this provision as
Lewis v. School District of Philadelphia, 517 Pa. 461, 538 A.2d 862, 867 (1988) (internal citations omitted).
Notwithstanding the strength of the exclusivity principle in workers' compensation law, an employer loses its immunity when it does not fulfill its obligations under the quid pro quo bargain and may be sued at common law where it fails to insure for workers' compensation liability. Section 305(d) of the Act, 77 P.S. § 501(d). Pursuant to Section 305(d): "[w]hen any employer fails to secure the payment of compensation under this act as provided in sections 305 and 305.2, the injured employe or his dependents may proceed either under this act or in a suit for damages at law as provided by article II." Id. In Liberty by Liberty v. Adventure Shops, Inc., 433 Pa.Super. 586, 641 A.2d 615, 616 (1994), our Superior Court interpreted this provision as "offer[ing] the employee an election either to proceed under the Act and accept its compensation schedules or to secure relief outside the Act by an action at law for damages against his employer." Id.
The exclusivity principle, which applies to civil actions against the employer, does not foreclose civil actions seeking damages from third parties who bear some responsibility for the claimant's injuries, concurrent with proceedings against an employer under the Act. When a claimant recovers from a third party through a civil action, Section 319 of the Act
The Board determined that Claimant forfeited his right to bring a claim against the Fund because Claimant pursued a civil action for damages against Employer. On appeal, Claimant and the Fund make numerous arguments. Claimant contends that the exclusivity principle does not apply at all to claims against the Fund because Section 305(d) only bars his proceeding against Employer. Claimant argues that the Fund is part of a separate scheme to compensate injured employees, which is evidenced by Section 1606 of the Act, 77 P.S. § 2706, which gives him the right file a direct suit for damages against his Employer without forfeiting his right to pursue benefits against the Fund. Section 1606 provides:
77 P.S. § 2706 (emphasis added). Claimant interprets the plain language of Section
In the alternative Claimant argues that, even if the exclusivity principle would apply, in this case he did not "proceed" in a tort action against Employer within the meaning of Section 305(d). According to Claimant, he filed a praecipe for a writ of summons with the trial court before he knew whether the Fund would provide compensation to him, as a "savings action" in order to preserve his rights, and the rights of any other potentially interested parties, to receive some compensation. Claimant further contends that the fact that he has stayed his tort action pending resolution of the instant matter, and has never recovered any damages, demonstrates that he did not "proceed" in his tort action.
In response, the Fund argues that the General Assembly maintained the exclusivity principle of Section 305(d) when it established the Fund and that Claimant misconstrues Section 1606 by asserting that he may bring a suit against Employer as he would a third party. The Fund asserts that it has all the rights and liabilities of an insurer and, as such, it is only liable if the uninsured employer would be liable and has defaulted on his obligation. Moreover, the Fund argues that Claimant did, in fact, "proceed" in a suit for damages at law, as that word is used in Section 305(d) of the Act, when he commenced his civil action by filing a praecipe for a writ of summons with the trial court.
We need not decide, in this case, whether the exclusivity principle applies in all cases. Even assuming, arguendo, that the exclusivity principle does apply, we find that, under the facts of this case, Claimant did not violate Section 305(d) when he filed a civil action to preserve his ability to recover in tort prior to the expiration of the statute of limitations. Claimant faced a practical dilemma at a time when the Fund was new and little guidance was available.
We are mindful that, because the Act "was intended to benefit the injured employee," we must construe its provisions "liberally in the employee's favor in order to effectuate [the Act's] humanitarian objectives." Cruz v. Workers' Compensation Appeal Board (Kennett Square Specialties), ___ Pa. ___, 99 A.3d 397, 406 (2014). Accordingly, "borderline interpretations will be decided in favor of the claimant." Id. In light of the humanitarian purposes of the Act, we do not find that Claimant's actions here bar his workers' compensation claim against the Fund. Accordingly, we conclude that Claimant may maintain his workers' compensation claim against the Fund.
We next turn to the issue of whether Claimant gave timely notice to the Fund of his claim and, if not, whether the lack of timely notice acts as a complete bar or only a partial bar to his claim against the Fund. The WCJ found that Claimant did not give timely notice to the Fund. The Board agreed, but found that the lack of timely notice would not have been a complete bar to his recovery. The applicable provision of the Act, Section 1603(b), provides that:
77 P.S. § 2703(b).
Claimant argues that the WCJ erroneously found that he did not give timely notice to the Fund. Contrary to the WCJ's factual finding, Claimant asserts that the April 28, 2009 letter sent by the Bureau to Claimant's counsel did not put Claimant on notice that Employer was uninsured. Claimant contends that the WCJ disregarded conflicting evidence that clearly shows that he could not be reasonably charged with actual knowledge that Employer was neither insured nor self-insured until at least the time he submitted his Notice of Claim to the Fund. Claimant argues further that the Board correctly rejected the WCJ's legal conclusion that a claim petition is completely barred if a claimant does not provide notice to the Fund within 45 days of learning that an employer is uninsured. Claimant asserts, however, that the Board misinterpreted Section 1603 when it held that Section 1603 permits a partial bar to compensation absent a showing of prejudice to the Fund. Claimant argues that his benefits should not be delayed because the Fund was not prejudiced by his filing the Notice of Claim beyond 45 days.
In response, the Fund contends that Claimant's knowledge of Employer's lack of insurance is well established in the record. Further, the Fund argues that the WCJ was correct when she concluded that Claimant's Claim Petition against the Fund was completely barred because Claimant did not follow the statutory mandate requiring Claimant to file notice with the Fund within 45 days of learning that Employer lacked insurance. According to the Fund, the Board's holding to the contrary neglects the plain and mandatory language of Section 1603.
We first address Claimant's contention that the Board erred by concluding that Claimant did not provide the Fund with timely notice of his claim because the Board's finding that the Bureau's April 28, 2009 letter provided Claimant with knowledge that Employer was uninsured was not supported by the evidence.
We recently addressed the issue of whether a communication from the Bureau provided a claimant with knowledge that his employer was uninsured in Pennsylvania Uninsured Employers Guaranty Fund v. Workers' Compensation Appeal Board (Lyle), 91 A.3d 297 (Pa.Cmwlth. 2014). There, the claimant suffered a work injury in July 2008. Id. at 298. After failing to recover from his employer's automobile liability insurer, the claimant filed a claim petition against employer. The Bureau informed the claimant by letter on October 3, 2008 that his employer "may not have workers' compensation insurance." Id. Claimant then filed a claim petition against the Fund on October 28, 2008. Id. at 298-99. The WCJ and the Board held that the claimant had knowledge
"[W]hether a claimant `knew' [that his employer was uninsured] is a factual determination." Id. Here, the WCJ determined that Claimant was made aware that Employer was uninsured upon receipt of the April 28, 2009 letter from the Bureau and that the Notice of Claim, filed more than eight months later in January 2010, was untimely because it was not filed within 45 days. (Fund Decision, FOF ¶¶ 2-3.) A review of the April 28, 2009 letter from the Bureau shows that the content therein provided Claimant with actual knowledge that Employer lacked workers' compensation insurance.
We must next determine the effect of Claimant's late filing. The WCJ held that Claimant's Claim Petition against the Fund was completely barred by the late filing. The Board disagreed and concluded:
(Board Decision at 4.)
At issue here is the construction of the phrase: "[a]n injured worker shall notify
The Board noted in its opinion that Section 1603(b) stands in contrast to other portions of the Act where the General Assembly enacted a complete bar to benefits by delineating between provisions providing that no compensation "shall be due until" notice is given and provisions stating that no compensation "shall be allowed unless" notice is given. (Board Decision at 4 n. 2.) The Board pointed to Section 311 of the Act, which provides:
77 P.S. § 631 (emphasis added). We have interpreted Section 311 as establishing a scheme where compensation is payable from the date of the disability if the claimant gives notice "within 21 days of the date he knew or should have known of the injury and its relationship to its employment." Martincic v. Workmen's Compensation Appeal Board (Greater Pittsburgh International Airport), 108 Pa.Cmwlth. 238, 529 A.2d 600, 602 (1987). "If, however, the claimant gives notice after the 21 days has elapsed but within 120 days of the date he knew or should have known of his injury, compensation is then payable from the date that notice was given." Id. According to the Board in the case sub judice, "if the legislature wanted to completely bar a claimant from receiving compensation for his failure to provide [the Fund] with timely notice of his claim . . . it certainly could have done so by adding language" similar to Section 311 to Section 1603. (Board Decision at 4 n. 2.)
We agree with the Board. The plain text of Section 1603(b) does not specifically bar a claimant who does not meet the 45-day notice requirement from ever receiving compensation from the Fund. Like the mandatory language of Section 311, which requires notice within 21 days, the intent of Section 1603(b) is to apprise the Fund "of the claim and to give the opportunity for a thorough investigation while the events are recent." Township of Upper Darby v. Workmen's Compensation Appeal Board, 53 Pa.Cmwlth. 438, 417 A.2d 1319, 1321 (1980). Unless the Fund is given the opportunity to investigate the claim while the events are recent, it will not be responsible for paying compensation
Claimant argues further that by interpreting Section 1603(b) in a manner that bars recovery for any lost wages or medical expense incurred prior to submission of an untimely claim, the above interpretation does not comport with the plain meaning of the statute. According to Claimant, such a reading would bar recovery for lost wages or medical expenses for any claim, whether timely or not. We disagree. Our interpretation allows for compensation for past medical treatment or lost wages so long as a claimant notifies the Fund of the claim within 45 days. However, those that do not meet the statutory deadline are only entitled to compensation for medical treatment or lost wages incurred from the date notice was provided.
Finally, Claimant contends that by interpreting Section 1603(b) in a manner that causes a delay in benefits would only be warranted upon a showing that the Fund was substantially prejudiced. Claimant analogizes the Fund's obligation to automobile liability insurers' obligations under the "notice-prejudice rule." Under this rule, "unless the insurer establishes prejudice resulting from the insured's failure to give notice as required under the policy, the insurer cannot avoid its contractual obligation." Ario v. Underwriting Members of Lloyd's of London Syndicates, 996 A.2d 588, 598 (Pa.Cmwlth.2010) (citing Brakeman v. Potomac Insurance Company, 472 Pa. 66, 371 A.2d 193, 198 (1977)).
We decline to extend the "notice-prejudice rule," which has not been applied in the workers' compensation area, to actions involving the Fund. The cases in which this rule has been applied all involve situations where an insured is required under a contract to provide the insurer with notice "promptly," "as soon as practicable" or "within a reasonable time." See, e.g., Brakeman, 371 A.2d at 195 (requiring notice "as soon as practicable"); Ario, 996 A.2d at 598 (same); American States Insurance Company v. Estate of Braheem, 918 A.2d 750, 756 (Pa.Super.2007) (requiring "prompt written notice"). In contrast to a vague deadline set in a contract between parties who freely entered into an agreement, Section 1603(b) is a statutory requirement that sets a clear 45-day notice requirement. Nowhere in Section 1603(b) does the General Assembly limit its application to instances where the Fund shows it was substantially prejudiced.
In conclusion we reverse in part, and affirm in part, the Board's Order. The Board erred when it held that Claimant's Claim Petition against the Fund was barred by Section 305(d) of the Act as a result of Claimant preserving his civil remedy by filing a "savings action" at law against an uninsured employer. However, the Board correctly concluded that Claimant did not entirely forfeit his Claim Petition against the Fund by not complying with the 45-day notice requirement set forth in Section 1603 of the Act. We, therefore, reverse that portion of the Board's Order affirming the WCJ's Decision dismissing Claimant's Claim Petition against the Fund and remand this matter to the Board for further proceedings consistent
Jurisdiction relinquished.
77 P.S. § 2702(c).
Id.
Id.
(Bureau's Letter to Claimant (April 28, 2009), R.R. at 5a.)
34 Pa.Code § 123.802. We note that the Board has yet to promulgate regulations.
