Sanguedolce v. Workers' Comp. Appeal Bd. (Cascades Tissue Grp.

Samuel Sanguedolce, Petitioner v. Workers' Compensation Appeal Board(Cascades Tissue Group f/k/a Plainwell Tissue Co.), Respondent

No. 406 C.D. 2014

COMMONWEALTH COURT OF PENNSYLVANIA

Submitted: July 18, 2014

September 26, 2014

BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE McCULLOUGH

Samuel Sanguedolce (Claimant) petitions for review of the February 21, 2014 order of the Workers' Compensation Appeal Board (Board), which affirmed as modified the decision of a workers' compensation judge (WCJ) granting the petition to review compensation benefit offset (offset petition) filed by Cascades Tissue Group f/k/a Plainwell Tissue Co. (Employer). We affirm.

The underlying facts of this case are not in dispute. Claimant sustained an injury in the nature of a lower back strain on February 9, 2000, in the course and scope of his employment with Employer. Claimant continued working sporadically after the injury and his loss of earnings exceeded fourteen days on June 11, 2000. On August 28, 2000, Employer issued a notice of compensation payable acknowledging that Claimant was entitled to total disability benefits pursuant to section 306 of the Workers' Compensation Act (Act)¹ as of June 11, 2000.² At some point in time not identified in the record, Claimant began receiving Social Security Disability (SSD) benefits. On June 19, 2009, one month before Claimant's 66^th birthday, these benefits automatically converted to Social Security Retirement (SSR) benefits, also known as old age benefits.³

Despite this conversion, Claimant failed to report his SSR benefits on the LIBC-756 forms provided by Employer. The LIBC-756 forms, entitled "EMPLOYEE'S REPORT OF BENEFITS (UNEMPLOYMENT COMPENSATION, SOCIAL SECURITY (OLD AGE), SEVERANCE AND PENSION BENEFITS) FOR OFFSETS," requires a claimant to set forth the amount of any unemployment compensation, SSR/old age, severance, or pension benefits he received and the dates of such receipt. The form directs a claimant to return the same to the insurer or the self-insured employer. Claimant submitted forms to American Guarantee & Liability, Employer's workers' compensation insurance carrier, on November 2, 2009, July 26, 2010, and January 24, 2011, but never reported his receipt of SSR/old age benefits.

On June 27, 2011, Employer filed its offset petition citing the automatic conversion of Claimant's SSD benefits into SSR benefits. In this petition, Employer originally sought the offset as of Claimant's 65^th birthday. Claimant did not file an answer. The case was assigned to a WCJ, who conducted two hearings. At these hearings, Employer submitted the LIBC-756 forms its insurer received from Claimant, none of which reflected his receipt of SSR/old age benefits; copies of Title 20, sections 404.316 and 404.409 of the Code of Federal Regulations; and a copy of section 123.7 of the regulations of the Bureau of Workers' Compensation (Bureau), which provides that "[w]orkers' compensation benefits otherwise payable shall be offset by 50% of the net amount received in Social Security (old age) benefits." 34 Pa. Code §123.7(a). Employer also modified its request and sought an offset as of June 19, 2009, one month before Claimant's 66^th birthday. For the period from June 19, 2009, through December 31, 2011, Employer sought a weekly offset of $226.73 in accordance with section 123.7(c) of the Bureau's regulations.⁴ Employer noted that Claimant's SSR/old age benefits increased to $2,039.00 as of January 1, 2012, resulting in an increased weekly offset, and that it began taking this offset in March 2012.⁵ Hence, Employer was seeking a retroactive offset from June 19, 2009, through March 2012.

Claimant testified that his wife earns approximately $13,000.00 a year and that he relies on his workers' compensation and SSR/old age benefits to pay his household expenses, including his taxes. Claimant did not dispute Employer's calculations. Instead, Claimant argued that Employer was not entitled to a retroactive credit because Employer was aware of Claimant's age and receipt of SSD benefits and should have been aware of the date that these benefits automatically converted to SSR/old age benefits by operation of law.

By decision and order dated July 23, 2012, the WCJ granted Employer's offset petition and directed Employer to continue taking the offset initiated in March 2012. However, the WCJ refused to award Employer any retroactive credit for the SSR/old age benefits Claimant received prior to that time. The WCJ specifically found that Employer was entitled to an offset as of June 19, 2009, the date of conversion of Claimant's SSD benefits into SSR/old age benefits, but explained that his refusal of a credit was premised on Employer's knowledge of Claimant's date of birth and his receipt of SSD benefits. While the WCJ recognized that Claimant failed to report his receipt of SSR/old age benefits on the LIBC-756 forms, the WCJ found that both Claimant and Employer "contributed to the delay in the start of the offset being taken in this matter." (Finding of Fact No. 10.)

Employer appealed to the Board, which affirmed the WCJ's decision insofar as the WCJ concluded that Employer was entitled to an offset. However, the Board modified the WCJ's order to reflect Employer's entitlement to an offset as of November 2, 2009, the date of the first LIBC-756 form signed by Claimant after he began receiving SSR/old age benefits. The Board described the WCJ's refusal to award Employer a retroactive offset due to its knowledge of Claimant's date of birth as "error." (Board's Decision at 4.) The Board noted that in Maxim Crane Works v.Workers' Compensation Appeal Board (Solano), 931 A.2d 816 (Pa. Cmwlth. 2007), this Court held that where the claimant began receiving SSR/old age benefits in January 2003, but did not receive an LIBC-756 form until June 6, 2005, the WCJ did not err in awarding the employer an offset as of the date that the claimant received the form. Given the lack of any evidence in the present matter regarding the date that Claimant received the November 2009 LIBC-756 form, the Board relied on the execution date of that form as the earliest date supported by the record for the offset.

On appeal to this Court,⁶ Claimant argues that the Board erred in modifying the WCJ's order to award Employer an offset as of November 2, 2009, simply because Claimant did not report his receipt of SSR/old age benefits on the LIBC-756 form. More specifically, Claimant argues that he was unaware of the conversion of his SSD benefits into SSR/old age benefits. However, Claimant failed to raise this argument before the WCJ or in his petition for review. Hence, this argument is waived. Pennsylvania State University v. Workers' Compensation Appeal Board (Sox), 83 A.3d 1081 (Pa. Cmwlth. 2013), appeal denied, 94 A.3d 1011 (Pa. 2014) (issues not raised in the petition for review are deemed waived); Budd Baer, Inc. v. Workers' Compensation Appeal Board (Butcher), 892 A.2d 64 (Pa. Cmwlth.), appeal denied, 906 A.2d 544 (Pa. 2006) (issues not raised before the WCJ are deemed waived on appeal to this Court).

Even if not waived, we note that Claimant's argument would fail. Section 204 of the Act, 77 P.S. §71, addresses offsets and employee reporting requirements, providing, in pertinent part, as follows:

(a) Fifty per centum of the benefits commonly characterized as "old age" benefits under the Social Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.) shall also be credited against the amount of the payments made under sections 108 and 306, except for benefits payable under section 306(c)[⁷]

. . .

(c) The employe is required to report regularly to the insurer the receipt of unemployment compensation benefits, wages received in employment or self-employment, benefits commonly characterized as "old age" benefits under the Social Security Act, severance benefits and pension benefits, which post-date the compensable injury under this act, subject to the fraud provisions of Article XI.

(d) The department shall prepare the forms necessary for the enforcement of this section and issue rules and regulations as appropriate.

77 P.S. §71(a), (c)-(d) (emphasis added.) As noted above, section 123.7 of the Bureau's regulations similarly provides for a 50% offset for SSR/old age benefits. Additionally, we note that Section 123.3(a) of the Bureau's regulations identifies the forms referenced in subsection (d) as the LIBC-756 forms provided by Employer and reiterates the employee's reporting duties. Specifically, section 123.3(a) states that:

(a) Employees shall report to the insurer amounts received in unemployment compensation, Social Security (old age), severance and pension benefits on form LIBC-756, 'Employee's Report of Benefits.' This includes amounts withdrawn or otherwise utilized from pension benefits which are rolled over into an IRA or other similarlyrestricted account while at the same time the employee is receiving workers' compensation benefits.

Section 123.501 of the Bureau's regulations requires Employer to notify Claimant of the reporting requirements under section 204 of the Act and to provide Claimant with the necessary form to comply with these requirements. This form, identified as the LIBC-756 form, states that section 204 of the Act requires employees receiving wage-loss benefits to report the receipt of unemployment compensation, SSR/old age benefits, severance, and pension benefits. The LIBC-756 includes instructions for completing and returning the form and provides a section identifying the type of benefit received, the amount (both gross and net), the frequency, and the dates receipt began and ended. There is no dispute that Employer complied with this regulation.

As noted above, section 204(c) specifically imposes a duty upon Claimant to report his receipt of SSR/old age benefits. Claimant attempts to...