PENNSYLVANIA LEGAL UPDATE
SPRING 2002 ISSUE

WORKERS' COMPENSATION FOR HEART ATTACKS

Heart attacks may be work related and can result in workers' compensation benefits. Considered a "mental/physical" injury, a heart attack is work related if the worker can prove that "abnormal working conditions" triggered the heart attack. The worker must be able to prove that specific events at work precipitated the heart attack and that those events were not part of the normal workday.

A heart attack or other stress injury is merely part of the everyday stress that flows from the normal wear and tear of work life unless a worker can establish that the triggering event was so extraordinary that it was not within the fair boundaries of the job requirements. Pennsylvania courts have described abnormal work conditions as "almost always an event that exposes a claimant to great physical danger." Courts also have found that shocking verbal reprimands and significant, frequent harassment can constitute abnormal work conditions.

In various cases decided by Pennsylvania courts, "normal" working conditions have been found to include a heavy workload and lack of secretarial help, a worker's being taken to task by his or her supervisor for poor workmanship, and events leading to a worker's losing his or her job due to modernization. Pennsylvania courts have observed that "psychic injury cases are highly fact-sensitive and for actual work conditions to be considered abnormal, they must be considered in the context of the specific employment." For example, normal work conditions for a police officer's ordinary day could be determined to be well beyond the bounds of normal work conditions for an office worker.

Generally, workers must notify their employers of any work-related injury within 120 days of when the worker realizes his or her injury is work related. A Pennsylvania office manager who had a heart attack several hours after a "heated exchange" at a meeting was unaware that a heart attack can be considered a work-related injury. The office manager did not file a workers' compensation claim until over 170 days after the heart attack. It was only after casually reviewing an employee handbook that the office manager realized that he might qualify for benefits. The Pennsylvania court ruled that since the worker filed his claim within the 120-day period after he actually discovered that a heart attack can be considered work related, his claim was allowed to proceed.

DESIGNATING THE RIGHT BENEFICIARIES

If you have an individual retirement account (IRA), a life insurance or accidental death insurance policy, or any retirement benefits at work, you have designated a beneficiary. Retirement plans can include deferred compensation plans, pensions, profit-sharing accounts, stock bonus plans, 401(k)s, disability plans, and death benefits. Employment benefits also often include plans for disability or accidental death.

On any of these benefits or accounts you may carry, you have designated a beneficiary to receive money in the event of your untimely death. These benefits or accounts do not pass through your will or estate--they go to named beneficiaries properly designated by you, usually on a company form.

The Pennsylvania Supreme Court awarded a deceased ex-husband's retirement death benefits to his ex-wife because he had never removed her from his beneficiary designation forms at his workplace. Unwilling to presume that divorce "in all cases automatically spells the end of interest in or even concern for one former spouse by the other," the court found that a validly executed beneficiary designation is not disrupted, set aside, or in any way affected by a subsequent divorce.

Many divorce agreements seem to revoke all of the rights and privileges of marriage. Following divorce, many people assume that their spouses no longer have any rights that are not spelled out in the divorce settlement agreement. If you are divorced, be sure you understand your divorce settlement agreement and review all of your employment benefits and insurance policies to be certain that they comply with your agreement. You can change your beneficiary designations if doing so does not violate your agreement or a final court order.

It is also important for married people to realize that where one spouse dies during the marriage, under some circumstances the surviving spouse can elect to take "against" the will if he or she is not adequately provided for in the deceased spouse's will. With the exception of some kinds of annuities, surviving spouses cannot overcome written beneficiary designations on life insurance or accidental death insurance or on pension, profit-sharing, stock bonus, deferred compensation, disability, death benefit, or retirement plans established by an employer.

Whether you are an employee-participant or a potential spouse-beneficiary under a retirement plan, or whether you have an interest in an IRA or a life insurance policy, you should periodically review your beneficiary designations. It is equally important to be aware of how your spouse or ex-spouse has designated his or her beneficiaries.

AUTOMOBILE INSURANCE AND YOUR RIGHT TO SUE

In Pennsylvania, each consumer must choose whether to retain the right to sue negligent drivers under his or her automobile insurance policy. If you have elected the "full tort option" under your insurance policy, you have the right to sue a negligent driver who injures you in an automobile accident.

Pennsylvania automobile insurance policies must include a minimum of $5,000 in medical coverage for the policy purchaser and anyone insured under the policy. There is no minimum coverage required in Pennsylvania for reimbursing an insured for wage loss, loss of life, or funeral expenses.

When you purchased your automobile insurance policy, your insurance agent gave you options on medical coverage, wage-loss coverage, and other benefits. It is worthwhile to compare your health insurance coverage with the coverage available from your automobile insurance company and to consider increasing your automobile policy's medical coverage to close any gaps in your health insurance coverage. Your agent also had you choose the right to sue or to limit your right to sue. Whether you remember or not, you have chosen a "full tort" or "limited tort" option on your policy.

If you chose the "full tort option," you retained the right to sue negligent drivers for any uncovered medical expenses or wage losses. You also kept the right to sue negligent drivers to recover for your pain and suffering, other economic losses, and any permanent or continuing limitations on your activities and income that may result from your injuries.

If you chose the "limited tort option," you can only sue negligent drivers for any money that you spent because your losses were not completely covered by your own automobile insurance or other insurance. However, a limited tort consumer who suffers personal injury resulting in death, serious impairment of a body function, or permanent serious disfigurement may sue a negligent driver for pain and suffering, in addition to his or her out-of-pocket losses. Also, a limited tort consumer may still sue for pain and suffering if the negligent driver was drunk, was driving an out-of-state vehicle, acted intentionally, or was uninsured. A limited tort consumer can also bring a lawsuit for injuries suffered in a vehicle that is not a passenger car, and he or she can sue a business to recover damages for an injury caused by a motor vehicle defect.

Consumers who limit their tort options should be sure to purchase adequate medical coverage, extraordinary medical coverage, accidental death coverage, and wage-loss coverage under their own policies. If you do not have your own policy of automobile insurance, you are bound by the tort option selected by your spouse or any insured relative with whom you live. When you select a tort option for yourself, you bind your children, your spouse, and other relatives in your household, unless they have their own insurance policies.

Insurance agents must disclose the premiums for both full tort and limited tort coverage when selling policies. By choosing the limited tort option, you can reduce your annual premium. But be sure you know what you are actually saving before you limit your right to sue--compare those premium savings carefully to the rights you are giving up.

SUNSHINE ACT

The Pennsylvania Sunshine Act requires that certain government officials conduct their decision making at public meetings. Officials and bodies regulated by the Act include the General Assembly, the Governor's cabinet, all of the executive agencies of the Commonwealth, all township, city, and borough boards, school boards, and the boards of state universities and community colleges.

The Sunshine Act requires that government bodies give notice of their meetings in local newspapers and that written minutes of the meetings be recorded. Members of the public may make audio or video recordings of public proceedings, except those held in the Senate and House of Representatives. Residents and taxpayers affected by government decision making are entitled to participate in public meetings during mandatory public comment periods.

Government bodies may meet in closed "executive session" to discuss employment issues and collective bargaining, litigation with professional advisors, legally confidential matters such as upcoming criminal investigations, and preliminary issues on purchasing or leasing real property. Any official action taken in connection with the matters discussed at executive sessions must be taken at a public meeting. Pennsylvania courts may set aside decisions made by government bodies in violation of the Act, and they have the power to award legal fees to litigants who prove that a government body's violation of the Act was willful or wanton.

UNFAIR CREDIT-CARD FEES

The federal court that hears cases from Pennsylvania recently ruled that credit-card holders can sue banks and credit lenders to avoid unfair annual fees.

The suit was brought by a consumer who accepted a "pre-qualified invitation" from a national bank for a "Platinum MasterCard" with "no annual fee." The detailed information enclosed with the invitation included a federally mandated table of basic credit-card information. In addition to identifying a 7.99% interest rate on purchases, the enclosure advised the prospective card holder that a rate of 24.99% interest would be applied to any balance left on the card when the consumer closed the account. The enclosure confirmed that no annual fee would be charged, but the attached agreement included language that the bank had the right to change any of the terms of the agreement with proper notice to the card holder.

Within six months of the issuance of the card, the bank sent the card holder a notice that a new annual fee of $35 would be imposed. Annoyed by the fact that the bank was still soliciting new card holders for "no annual fee" accounts, the card holder sued in federal court.

The court found that the federal Truth in Lending Act and related laws prohibit banks and credit-card companies who advertise "no annual fee" from imposing an annual fee in the first year. The court was especially troubled by the "bait and switch" that resulted when the bank relied on its agreement language to make changes in the terms after specifically soliciting new card holders by holding out the promise of no annual fee. Noting that card holders with balances would suffer a 24.99% interest rate if they chose to close the card on imposition of the fee, the court found that the card holder had a claim under the Truth in Lending Act.

Wise consumers keep copies of the initial offers, enclosures, and agreements relating to their credit cards. While the terms of the credit-card agreement will generally control, comprehensive consumer protection laws like the Truth in Lending Act limit the changes in terms that creditors can impose on card holders and require clear disclosure of all terms at the time the account is opened.

LICENSE SUSPENSION

First offenders charged with driving under the influence are often eligible for the Accelerated Rehabilitative Disposition Program, generally referred to as "ARD." ARD permits a first-time offender to submit to alcohol counseling, probationary supervision, and driver's license suspension and, upon satisfactory completion of the program, to earn an expungement of his or her criminal record. It is commonplace for Pennsylvania judges to require that ARD offenders give their driver's licenses to the court in order to be accepted into the program.

Recently, a Pennsylvania driver was accepted into ARD and relinquished his license in the courtroom. About two weeks later, the Pennsylvania Department of Transportation ("PennDOT") notified the driver that his license was suspended. On the bottom of the PennDOT notice was a paragraph indicating that the suspension date would commence at the end of the next month. Relying on the suspension date in the PennDOT notice, the man resumed driving. Arrested for driving under suspension for DUI, an offense that carries a mandatory 90-day jail sentence, he defended his conduct on the basis of the PennDOT notice.

The Pennsylvania court found that the driver's reliance on the clerical error in the PennDOT notice was unreasonable and that it contradicted the clear face-to-face advice given to him by the judge in the court proceedings where his driving privileges were suspended. While the court conceded that the PennDOT notice may have created confusion, it held that the driver had an obligation to inquire further about the status of his privileges rather than to simply commence driving again when he did not have a valid license in his possession.