In some situations, an injured worker may require home modifications – such as a wheelchair ramp – as part of their workers’ compensation benefits. But can an employer be on the hook for a brand new home?
In an Aug. 1, 2022, decision, the Commonwealth Court of Pennsylvania found that the state’s Workers’ Compensation Act does not require employers to contribute toward the purchase of an injured worker’s new home or reimburse them for modifications that were never made.
Modifications to rowhome ‘not a good long-term solution’
On May 12, 2010, Miguel Castaneda-Escobar was working on a roof at a construction site when he fell and injured his cervical spine, rendering him a paraplegic. His employer, Ralph Martin Construction, accepted liability for the injury.
Castaneda-Escobar was living with his brother in a rowhome at the time, where the bedrooms and bathroom were located on the second floor. In order to accommodate Castaneda-Escobar, the living room was temporarily converted into his living quarters, where he was confined.
In 2011, a design and construction firm estimated it would cost $119,722 to modify the rowhome to properly accommodate Castaneda-Escobar. Due to the cost, the firm suggested it would be more cost effective to relocate to a single-floor home with wheelchair accessibility.
Two years later, Ralph Martin Construction hired a consultant to evaluate appropriate modifications to the rowhome. The consultant found that, due to the age and condition of the home, there would be various mechanical, structural and code issues. Further, Castaneda-Escobar and his brother didn’t own the home and the consultant felt that the cost for modifications wouldn’t be a good long-term solution.
The modifications were never done.
Judge: Employer liable for new home closing costs
On Nov. 16, 2018, Castaneda-Escobar bought a home for $230,000 that had a first-floor master bedroom and bathroom. The purchase required $4,158 in closing costs and the shower in the bathroom needed to be modified to provide wheelchair accessibility at a cost of $5,905. Ralph Martin Construction covered the cost of modifying the shower.
The employer filed a medical review petition on Jan. 31, 2019, asserting that the purchase of the new home was not a reimbursable medical expense under the Workers’ Compensation Act.
A workers’ compensation judge found the employer wasn’t liable to reimburse Castaneda-Escobar for the new home or for the estimated cost to renovate the rowhome. The judge did hold Ralph Martin Construction liable for the closing costs of the new home since its purchase relieved the employer of the obligation to modify the rowhome. The employer was also required to pay $5,067 for Castaneda-Escobar’s litigation costs.
Employer ordered to pay for renovations that weren’t made
Both parties then appealed to the state Workers’ Compensation Board. The board found this was a “novel legal issue” because “Pennsylvania courts have required employers to pay for the purchase of a wheelchair-accessible van, but they have not required employers to pay for the purchase of a new home.”
The board found the purchase of the new home didn’t relieve the employer of its obligation to renovate the rowhome, so it reversed the judge’s decision. Ralph Martin Construction was ordered to pay $113,817, the cost of the renovation with a credit of $5,905 for the bathroom renovation it paid for in the new home along with the litigation costs.
Board overstepped its authority
Ralph Martin Construction filed an appeal with the Commonwealth Court of Pennsylvania.
On appeal, the employer argued the board erred in requiring it to pay for home modifications that were never done and by making it pay the litigation costs, since Castaneda-Escobar shouldn’t have won the case, even in part.
The court found “there is no precedent under the Act that has established that an employer can be held liable to purchase an entire house for a claimant or to pay for modifications that were never undertaken,” and that the board overstepped its authority in ordering the employer to do so.
And since Castaneda-Escobar didn’t win his case on appeal, the employer also wasn’t required to cover the litigation costs.