             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Elliot Izquierdo,                      :
                    Petitioner         :
                                       :
             v.                        : No. 2143 C.D. 2013
                                       : Submitted: May 2, 2014
Workers’ Compensation                  :
Appeal Board                           :
(Aerotek Commercial Staffing           :
and Broadspire Services, Inc.),        :
                  Respondents          :


BEFORE:      HONORABLE RENÉE COHN JUBELIRER, Judge
             HONORABLE MARY HANNAH LEAVITT, Judge
             HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge


OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE LEAVITT                                        FILED: August 7, 2014

             Elliot Izquierdo (Claimant) petitions for review of an order of the
Workers’ Compensation Appeal Board (Board) denying his penalty petition. In
doing so, the Board affirmed the decision of the Workers’ Compensation Judge
(WCJ) not to impose a penalty upon Aerotek Commercial Staffing (Employer)
when it did not pay attorney fees and costs owed to Claimant’s counsel
immediately upon settlement of Claimant’s claim petition. We affirm the Board.
             On February 14, 2011, Claimant sustained a work injury to his right
heel and foot. The injury was accepted as work-related in a compromise and
release agreement (C&R Agreement) between the parties that was approved by the
WCJ on July 8, 2011.       The C&R Agreement awarded Claimant a lump-sum
payment of $29,500; attorney fees of $5,900; and litigation costs in the amount of
$163.89. On August 2, 2011, Claimant filed a penalty petition, alleging that
Employer did not pay the attorney fees and litigation costs and requesting a penalty
of 50% of $6,063.89, the amount outstanding. Employer’s answer stated, inter
alia, that it had paid counsel within 30 days of the approval of the C&R
Agreement.
             At the hearing before the WCJ, Claimant’s Counsel argued that
because Claimant received his payment on July 23, 2011, Counsel’s payment was
due on the same date. However, Counsel did not receive his payment until August
8, 2011, or 31 days after the C&R Agreement was approved.
             Counsel presented his office receptionist, Pamela Wilson, to testify.
Wilson was responsible for handling the office mail, which included affixing a date
stamp on mail received. The stubs attached to Employer’s two checks, one for
$163.89 and one for $5,900, were both date stamped August 8, 2011, which was a
Monday. Both checks were dated August 1, 2011.
             On cross-examination, Wilson acknowledged that the stamp can be
turned manually to change the date. Wilson also acknowledged that the law office
is closed on Saturday. Accordingly, mail delivered on Saturday is not opened until
the following Monday. When asked why the envelopes in which the checks had
been mailed had not been produced, Wilson responded that she attaches the
envelopes to the checks. Employer’s counsel requested that Counsel produce the
envelopes, and the WCJ granted the request. The envelopes were not produced by
Claimant’s counsel, in spite of the WCJ giving Claimant the opportunity to add
them to the record.




                                         2
              The WCJ held that Claimant did not prove that the payments to his
Counsel were untimely, i.e., that they were made more than 30 days after the C&R
Agreement was approved. First, Counsel failed to provide the envelopes that
would have shown the date of mailing. Second, Counsel’s office was closed on
Saturday, August 6, 2011, leaving open the possibility that the payments were
received 29 days after approval of the C&R Agreement. In any case, at most, the
payments were one day late, which was de minimis. Penalties are not mandatory,
but discretionary. The WCJ decided that a penalty was not warranted in the case
of a one-day delay in payment and denied the penalty petition.
              Claimant appealed to the Board. Claimant argued that the WCJ erred
in his assumption that Employer had 30 days to comply with the payment
obligations recited in the C&R Agreement. The Board agreed that there is no 30-
day grace period for an employer to satisfy a workers’ compensation payment
obligation. The Board held that employers have to act with reasonable diligence in
making a payment, and here there was no evidence that Employer did not act with
reasonable diligence. The Board concluded that a penalty was not warranted and
affirmed the WCJ. Claimant petitioned for this Court’s review.1
              On appeal, Claimant raises two issues.2 First, Claimant argues that
the WCJ erred in his premise that Employer had 30 days to satisfy its obligation to



1
  This Court’s review of an order of the Board is limited to determining whether the necessary
findings of fact are supported by substantial evidence, whether Board procedures were violated,
whether constitutional rights were violated or an error of law was committed. Cytemp Specialty
Steel v. Workers’ Compensation Appeal Board (Crisman), 39 A.3d 1028, 1033 n.6 (Pa. Cmwlth.
2012).
2
  Claimant raises five issues for this Court’s review, but his brief only sets forth one argument
section. We will only address the issues actually raised and developed in that section of the
(Footnote continued on the next page . . . )
                                               3
pay Claimant’s legal fees and costs. Second, because the Board agreed that there
is no 30-day grace period, the Board should have remanded the matter to the WCJ.
             We begin with a review of the relevant provisions of the Workers’
Compensation Act (Act).3       Section 428 of the Act states that where an employer
has been in default of a compensation payment for 30 days, the employee may
obtain a lien on the employer’s property.4 Section 435 of the Act states that
payment of compensation must be paid in full “when due” and authorizes the
imposition of penalties.5 The Pennsylvania Supreme Court has explained that a


(continued . . . )
brief. See Boniella v. Commonwealth, 958 A.2d 1069, 1072 n.8 (Pa. Cmwlth. 2008) (this Court
will not consider the merits of an issue not developed in the brief).
3
  Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §921.
4
  Section 428 was added by Section 6 of the Act of June 26, 1919, P.L. 642, and it states:
        Whenever the employer, who has accepted and complied with the [insurance
        provisions of Section 305 of the Act, 77 P.S. §501] shall be in default in
        compensation payments for thirty days or more, the employe or dependents
        entitled to compensation thereunder may file a certified copy of the agreement
        and the order of the department approving the same or of the award or order with
        the prothonotary of the court of common pleas of any county, and the
        prothonotary shall enter the entire balance payable under the agreement, award or
        order to be payable to the employe or his dependents, as a judgment against the
        employer or insurer liable under such agreement or award. Where the
        compensation so payable is for a total and permanent disability, the judgment
        shall be in the amount of thirty thousand dollars less such amount as the employer
        shall have actually paid pursuant to such agreement or award. Such judgment
        shall be a lien against property of the employer or insurer liable under such
        agreement or award and execution may issue thereon forthwith.
77 P.S. §921.
5
  Section 435 was added by the Act of February 8, 1972, P.L. 25. It provides:
        (a) The department shall establish and promulgate rules and regulations
              consistent with this act, which are reasonably calculated to:
                (i) expedite the reporting and processing of injury cases,
                (ii) insure full payment of compensation when due,
(Footnote continued on the next page . . . )
                                            4
(continued . . . )
               (iii) expedite the hearing and determination of claims for
                     compensation and petitions filed with the department under
                     this act,
               (iv) provide the disabled employe or his dependents with timely
                     notice and information of his or their rights under this act,
               (v) explain and enforce the provisions of this act.
       (b)   If it appears that there has not been compliance with this act or rules and
             regulations promulgated thereunder the department may, on its own motion
             give notice to any persons involved in such apparent noncompliance and
             schedule a hearing for the purpose of determining whether there has been
             compliance. The notice of hearing shall contain a statement of the matter to
             be considered.
       (c)   The board shall establish rules of procedure, consistent with this act, which
             are reasonably calculated to expedite the hearing and determination of
             appeals to the board and to insure full payment of compensation when due.
       (d)   The department, the board, or any court which may hear any proceedings
             brought under this act shall have the power to impose penalties as provided
             herein for violations of the provisions of this act or such rules and
             regulations or rules of procedure:
              (i)    Employers and insurers may be penalized a sum not
                     exceeding ten per centum of the amount awarded and interest
                     accrued and payable: Provided, however, That such penalty
                     may be increased to fifty per centum in cases of unreasonable
                     or excessive delays. Such penalty shall be payable to the
                     same persons to whom the compensation is payable.
               (ii) Any penalty or interest provided for anywhere in this act
                     shall not be considered as compensation for the purposes of
                     any limitation on the total amount of compensation payable
                     which is set forth in this act.
               (iii) Claimants shall forfeit any interest that would normally be
                     payable to them with respect to any period of unexcused
                     delay which they have caused.
        (e) The department shall furnish to persons adversely affected by occupational
             disease appropriate counseling services, vocational rehabilitation services,
             and other supportive services designed to promote employability to the
             extent that such services are available and practical.
77 P.S. §991 (emphasis added).


                                               5
penalty is theoretically authorized where an employer is one day late in making a
payment, but it also cautioned that “[p]enalties should be tied to some discernible
and avoidable wrongful conduct.” Snizaski v. Workers’ Compensation Appeal
Board (Rox Coal Company), 891 A.2d 1267, 1277-78 (Pa. 2006).
            In Mercer Lime and Stone Company v. Workers’ Compensation
Appeal Board (McGallis), 923 A.2d 1251 (Pa. Cmwlth.), petition for allowance of
appeal denied, 937 A.2d 447 (Pa. 2007), this Court recognized that an employer’s
obligation to pay compensation is immediate upon the award.          However, we
explained that “instantaneous payment is not a practical possibility.” Id. at 1255
n.8. As such, we concluded that the discretion involved in the imposition of
penalties “would seem to suggest a rule of reason—i.e., whether [the] employer
acted with reasonable diligence—as the appropriate standard for measuring
compliance with the Act.” Id. In Allegis Group and Broadspire v. Workers’
Compensation Appeal Board (Coughenaur), 7 A.3d 325, 329 (Pa. Cmwlth. 2010),
we again reiterated that the proper standard to follow is whether the “employer
acted with reasonable diligence.” Notably, all of these cases involve payment of
compensation, not payment of legal fees and costs to a claimant’s attorney.
            The WCJ erred in suggesting that an employer has a 30-day grace
period for making a compensation payment owed under the Act, and the Board so
held. This leads to Claimant’s second issue, i.e, whether the Board should have
remanded the matter to the WCJ. Instead, it concluded that there had been no
showing that Employer failed to act with reasonable diligence.
            Claimant argues that Employer did not act with due diligence based
upon the fact that Claimant’s check was issued on July 17, 2011; his Counsel’s
checks should have been issued on the same day. Instead, Counsel’s checks were


                                         6
issued on August 1, 2011, and not received until August 8, 2011. As such,
Claimant argues that Employer should be penalized.
            We have explained that

            [w]here as here, Claimant is seeking penalties for the
            Employer’s purported violation of the Act, the burden of
            producing such evidence and persuading the factfinder of the
            credibility of such evidence is the burden of the Claimant.

Sanders v. Workers’ Compensation Appeal Board (Marriott Corp.), 756 A.2d 129,
132-33 (Pa. Cmwlth. 2000). Thus, the claimant bears the burden of production and
proof on a penalty petition.      Here, Claimant produced no evidence about
Employer’s check issuing procedures or processes or why a check to Claimant’s
counsel should have been issued on the same day as Claimant’s check. Claimant
argues that it was Employer’s burden to produce evidence to justify this
discrepancy. We disagree. It was Claimant’s burden to establish that Employer
failed to act with reasonable diligence. The absence of any evidence in the record
to account for Claimant’s and his counsel’s checks being issued on different days
represents a failure on the part of Claimant, not of Employer. Further, Claimant
did not identify a provision in the Act or a regulation requiring that payment to a
claimant of his compensation and to his counsel for fees be made on the same day.
            Because Claimant presented no evidence to establish that Employer
failed to act with reasonable diligence, we conclude that the Board was not
obligated to remand the matter to the WCJ to reassess the claim for penalties.
            Accordingly, the order of the Board is affirmed.

                                             ______________________________
                                             MARY HANNAH LEAVITT, Judge


                                         7
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Elliot Izquierdo,                     :
                    Petitioner        :
                                      :
             v.                       : No. 2143 C.D. 2013
                                      :
Workers’ Compensation                 :
Appeal Board                          :
(Aerotek Commercial Staffing          :
and Broadspire Services, Inc.),       :
                  Respondents         :


                                  ORDER


             AND NOW, this 7th day of August, 2014, the order of the Workers’
Compensation Appeal Board, dated November 5, 2013 is AFFIRMED.

                                          ______________________________
                                          MARY HANNAH LEAVITT, Judge
