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Pennsylvania: WCJ Confirms: Overpay...and You Will Pay

overpayment WCJ Pennsylvania

Columbia County Commissioners v. Rospendowski (WCAB)
____ LEXIS ____ (Pa.Cmwlth. 2023), No. 723 C.D. 2021, Filed December 1, 2022

Procedural History

Ms. Rospendowski was employed as a deputy sheriff with Columbia County. She sustained a January 7, 2011 work injury and received various periods of total disability benefits for this injury. The Defendants learned that the Claimant had secured alternate employment after the injury and received wages for the same periods she was receiving wage loss from the carrier for the January, 2011 work injury. Defendants filed a Petition to Modify which was litigated to conclusion before WCJ Baldys who ultimately held that Defendants had overpaid Claimant a total of $14,233.88. He ordered the overpayment to be recouped by reducing wage loss benefits by $192.00 per week though this was later reduced to $100.00 per week taking into account hardship to the Claimant. At the time that Claimant returned to work full duty without a loss in wages in 2016, the balance of the overpayment stood at $10,333.88.

Claimant then sustained a second work injury on January 22, 2019, and filed a Claim Petition seeking the payment of wage loss, medical benefits, and counsel fees. Although the Defendants initially denied liability, the injury was ultimately accepted as an L5-S1 herniated disc for medical only, taking the position that they could recoup some of the 2011 overpayment by not paying wage loss for the 2019 injury. Of note, Claimant missed only twenty-seven (27) days of work for the 2019 injury and sought wage loss for this period only. Defendants presented an Affidavit indicating that Claimant was paid wages in lieu of workers’ compensation for the period where she was absent from the workforce. Alternatively, the Defendants argued that as a large portion of the 2011 overpayment remained, they should be able to apply that overpayment to the wage loss due and owing for the 2019 injury. Defendants argued that denying the request to apply the remaining credit to the 2019 injury would perpetuate the Claimant’s unjust enrichment resulting from the 2011 injury claim.

WCJ Caravaggio ultimately granted the Claim Petition and found that wage loss was due and owing for the 27 day period that Claimant was out of work. Although she acknowledged the request for the credit from the 2011 injury to be applied to the 2019 injury, the Judge denied the same stating that the Act does not allow for recoupment of an overpayment for one injury against an award for a second injury, even where all of the parties to both injury dates are the same. 

Appellate Litigation

Defendants appealed to the WCAB, arguing that the WCJ had the power in equity to order the credit from the 2011 injury be applied to the 2019 injury. The Board considered the argument but held that the Act did not allow for application of a credit for overpayment relative to one injury date against a second later injury, finding that the Act did not provide such a remedy. 

Defendants appealed to the Commonwealth Court, asserting the same arguments. The Commonwealth Court, in a reported Opinion, held that the Act does not permit the assertion of a credit for an overpayment for one injury against benefits due and owing for a second, later injury date. The Court held that there was limited authority for equitable remedies provided for in Section 413(a) of the Act but that the remedy which the Defendants were seeking was not expressly provided for in the Act. The Court sympathized with the Defendants and acknowledged that the lack of a remedy left them without recourse and unjustly enriched the Claimant. However, the Court held that it could not create a remedy that the Legislature did not provide. They noted, however, that Defendants were not entirely without a remedy as they could seek restitution from the Claimant for the overpayment from the 2011 injury date by filing suit in the Court of Common Pleas. Thus, the holdings of both the WCAB and WCJ were affirmed.

The Court suggested in dicta that if the Claimant had again gone out of work for the 2011 injury, the credit for the overpayment previously awarded by WCJ Baldys would have remained valid and could have been asserted against future payment of wage loss for that injury date alone. 

In a separate unreported Opinion published on January 4, 2023, the Court again confirmed that a carrier has the right to recoup an overpayment when an error had led to an overpayment to an injured worker. The Court, in so doing, confirmed again that the WCJ had the authority to order an overpayment be repaid by a Claimant to prevent unjust enrichment. See J.P. Lingelbach v. WCAB (Cummings Bridgeway, LLC), ___ LEXIS UnPub. ___ (Pa.Cmwlth. 2023), No. 1092 C.D. 2021, Filed January 4, 2023.

Practice Tip

The Courts have made it clear that a WCJ has the authority to order reimbursement of an overpayment so long as the original agreement under which the overpayment was made remains valid. However, when an overpayment is not fully recouped before wage loss is no longer payable under the Act, consideration should be given to pursuing restitution through the civil court system. Always ensure that an overpayment is documented by correspondence and if an agreement is reached to recoup an existing overpayment, the parties should document the same with a Supplemental Agreement or by filing a Petition to Review Benefit Offset.

To prevent an overpayment from growing, it is appropriate to utilize LIBC forms 750, 756, and 760 every six (6) months. Failure to do so may result in an inability to fully recoup some overpayments, take certain credits and from a practical standpoint, could potentially cause an overpayment to grow unnecessarily. 

Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.