Workers’ Compensation Pays for Home Modifications. What About a New Home?

Pennsylvania’s workers’ compensation law authorizes modifications to a home to accommodate an injured employee’s needs. It also may require paying for a new van for a disabled worker.

However, does the law go so far as to require an employer to pay any costs for the purchase of a new home?

No, that would be unreasonable, the Commonwealth Court of Pennsylvania has ruled.

The law also does not require an employer to pay for home modifications that are considered but never done, according to the court.

The court has reversed a Workers’ Compensation Appeal Board order that Ralph Martin Construction and its insurer, Lackawanna American Insurance Co., contribute to the cost of a new home purchased by injured employee Miguel Castaneda- Escobar who decided to move rather than renovate the home he was living in after he was seriously injured.

Citing the state Supreme Court, the Commonwealth Court opinion notes that the “particular circumstances of the claimant must be considered” in determining the obligation of the employer. There is no precedent under the Workers’ Compensation Act that “an employer can be held liable to purchase an entire house for a claimant or to pay for modifications that were never undertaken,” the justices concluded.

Escobar fell off a roof and injured his cervical spine in 2010, which rendered him a paraplegic. Ralph Martin Construction and Lackawanna Insurance accepted liability for the injury. At the time of his injury, he resided in his brother’s rowhouse in Reading, Pennsylvania, where the bedrooms and bathroom are located on the second floor.

A construction firm estimated that it would cost $119,722.21 to modify the Reading home with the construction of a first-floor addition that included a new bedroom and bathroom. That firm and another firm advised that it might be more cost effective for Escobar to relocate to a single-floor residence with wheelchair accessibility and that modifying the structure might not be the best long-term solution especially given that Escobar did not own the home. Modifications to the Reading home were never done.

In 2018, Escobar bought a home for $230,000 in Leesport. The Leesport home accommodates his needs with a first-floor master bedroom and bathroom; however, the shower had to be modified to provide wheelchair accessibility. His employer reimbursed him for the $5,905.04 he spent to modify this bathroom.

Because the modifications to the house where Escobar resided at the time of his injury were projected to cost $119,722.21, the appeal board required the employer to contribute that amount towards his purchase of his new one-story home that required few modifications.

While Pennsylvania courts have required employers to pay for the purchase of a wheelchair-accessible van, they have not required employers to pay for the purchase of a new home. But the appeal board concluded that the purchase of the Leesport home did not relieve the employer of its obligation to renovate the Reading home. Accordingly, the board ordered the employer to pay the cost of that renovation, with a credit for the $5,905.04 it had already paid for the bathroom renovation in the Leesport home. It ordered the employer to pay $113,817.17 and litigation costs.

Ralph Martin Construction and Lackawanna Insurance petitioned the Commonwealth Court for review, arguing that the board erred in requiring the employer to pay for home modifications that were never done. Second, it argued that the board erred by making the employer liable for the claimant’s litigation costs because Escobar should not have prevailed.

Escobar argued that the board’s adjudication was consistent with the humanitarian purposes of the workers’ compensation act.

The state’s workers’ compensation statute states in part: “[T]he employer shall provide payment for medicine and supplies, hospital treatment, services and supplies and orthopedic appliances, and prostheses.” Consistent with the act’s humanitarian principle, the term “orthopedic appliances” has been construed to cover the acquisition of vehicles and the construction of home modifications, where necessary.

But, the employer argued, an orthopedic appliance cannot be construed to include the acquisition of an entire house. It maintained it fulfilled its statutory obligation by paying for the new roll-in shower. The firm noted that the state Supreme Court has cautioned that claimants are not entitled to “windfalls” in connection with their right to orthopedic appliances.

Escobar did not testify to explain his decision to purchase a home, which, apparently, was facilitated by his receipt of third-party settlements that totaled at least $6 million. He abandoned his original claim that his employer pay the entire cost of his new home and, instead, sought an award of $119,722.21, the cost to modify the Reading home.

However, the employer noted that Escobar did not have the Reading home modified. Why he elected not to modify the Reading home or why he elected to move to Leesport is simply not part of the record as he did not testify.

Commonwealth Court in its analysis concluded that when Escobar made the bathroom renovations to his newly purchased home, the employer promptly fulfilled its obligation to pay for the modification. The fact that the claimant spent less to modify his new home than it would have cost to modify his prior residence does not make the new home an orthopedic appliance. “The fact that claimant eliminated an expense that was never incurred by purchasing the new home is not the equivalent of modifying the home,” the court wrote.

The court agreed with employer’s brief that the “purchase of a new home extends the phrase ‘orthopedic appliances’ beyond a reasonable construction.”