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What's Hot in Workers' Comp

A workers’ compensation judge did not abuse his discretion in finding that decedent was in an ongoing employment relationship with defendant at the time of death and was not a borrowed servant at the time of his fatality.

Reading Anthracite Company v. Molly Oxenrider, et al.; No. 120 C.D. 2023, No. 126 C.D. 2023, No. 170 C.D. 2023; filed June 11, 2024; Judge Covey

August 1, 2024

by Francis X. Wickersham

This case involved two companies involved in coal mining operations, West Spring and Reading Anthracite Company (RAC). The decedent was employed by West Spring as an equipment operator, but he had been scheduled to be laid off. RAC needed a bulldozer operator, and the decedent was directed to report to RAC for a bulldozer operator assignment. He did so, and on July 25, 2017, he was fatally injured while operating a bulldozer. 

West Spring and its workers’ compensation insurer filed a Notice of Temporary Compensation Payable (NTCP) and began paying the decedent’s widow benefits. The NTCP subsequently converted. 

RAC’s insurer later filed a Notice of Compensation Denial (NCD) on the basis that no policy was in effect on the date of the accident. RAC then filed a subsequent NCD on the basis that the decedent was not an employee of RAC. 

In 2019, the claim representative for West Spring’s insurer entered into an agreement with the widow, acknowledging the decedent’s fatal injuries. 

In February 2020, the United States Secretary of Labor filed a Motion to Approve a Settlement between the Mine Safety and Health Administration and RAC. The settlement indicated that the decedent was working under RAC’s direct control and supervision at the time of death. 

Thereafter, West Spring filed a review petition and joinder petition against RAC, alleging that RAC and their insurer were responsible for the payment of benefits. Subsequently, the widow and West Spring’s insurer entered into a stipulation resolving a separate review petition filed by the widow, wherein it was agreed that West Spring’s insurer would pay ongoing fatal claim benefits to the decedent’s three dependent children.
    
The workers’ compensation judge denied the joinder and review petitions, concluding that West Spring failed to show that there was either a material mistake of fact at the time it issued its NCP or that there was insufficient time to investigate the claim before West Spring accepted it. Appeals and cross-appeals were filed with the Workers’ Compensation Appeal Board, which affirmed. Appeals were then filed with the Commonwealth Court.

The Commonwealth Court held that the workers’ compensation judge did not abuse his discretion in finding that there was not a material mistake of fact in existence at the time that West Spring issued the NCP or by finding that there was sufficient time to investigate the identity of the decedent’s employer. The court pointed out that in his decision, the judge explained that more than two years after the accident, the claims representative from West Spring’s insurer entered into the agreement with the widow. Further, there was evidence showing that the decedent remained on the payroll of West Spring up until the date of death and that no determination had been made as to whether the decedent would be permanently transferred to RAC. According to the court, the judge properly determined that there was an ongoing relationship between the decedent and West Spring at the time of death. The court additionally held that the judge properly found that West Spring’s insurer took adequate and sufficient time to investigate the issue of the decedent’s employment, again pointing out the agreement between the claims adjuster for West Spring’s insurer and the widow two years after the accident. 

 

What’s Hot in Workers’ Comp, Vol. 28, No. 8, August 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

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