Opinion
J-S01012-15 No. 483 WDA 2014
10-19-2015
LIBERTY MUTUAL INSURANCE AS SUBROGEE ON BEHALF OF NATHAN MIHALCIK, AS PLAINTIFF, Appellant v. SAC, INC., Appellee
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order entered on February 19, 2014 in the Court of Common Pleas of Bedford County, Civil Division, No. 712-2009 BEFORE: GANTMAN, P.J., JENKINS and MUSMANNO, JJ. MEMORANDUM BY MUSMANNO, J.:
Liberty Mutual Insurance ("Liberty Mutual"), as subrogee on behalf of Nathan Mihalcik ("Mihalcik"), appeals from the Order granting SAC, Inc.'s ("SAC") Renewed Motion for Reconsideration of Motion for Summary Judgment, and dismissing Liberty Mutual's Complaint with prejudice. We affirm.
Liberty Mutual paid approximately $60,000 in worker's compensation benefits to Mihalcik, who, during the course of his employment for Schneider National, was injured in 2007 at a convenience store owned by SAC Inc. ("SAC"). Neither Mihalcik nor Schneider National filed a cause of action against SAC. On July 3, 2009, Liberty Mutual, asserting its capacity "as subrogee on behalf of [] Mihalcik," filed a Complaint against SAC, asserting that the cause of Mihalcik's injuries was a dangerous condition that SAC negligently permitted to exist on its property. Liberty Mutual did not name Mihalcik as a party to this action, and Mihalcik has not joined in this action. SAC filed preliminary objections, including objections to Liberty Mutual's standing to bring suit against SAC, which were denied by the trial court. Thereafter, SAC filed a Motion for Summary Judgment based on Liberty Mutual's lack of standing, which was denied by the trial court. SAC filed a Motion for Reconsideration, which the trial court denied. SAC thereafter filed a Renewed Motion for Reconsideration. On November 19, 2013, the trial court granted SAC's Renewed Motion for Reconsideration, and dismissed Liberty Mutual's Complaint, with prejudice, on the basis that Liberty Mutual lacked standing to bring an action against SAC. Liberty Mutual filed a timely Notice of Appeal, and a court-ordered Concise Statement of Errors Complained of on Appeal.
Although the Complaint is date-stamped August 3, 2009, the court docket indicates that it was filed on July 3, 2009.
On appeal, Liberty Mutual raises the following issue for our review: "[Whether] section 319 of the Pennsylvania Workers' Compensation Act [hereinafter "PWCA"], 77 P.S. § 671[,] allow[s] the employer/insurer to step into the shoes of the insured employee to subrogate against the tortfeasor?" Brief for Appellant at 6 (capitalization omitted).
Under our standard of review of an order granting or denying a motion for summary judgment, we view the record in the light most favorable to the non-moving party, and all doubts
as to the existence of a genuine issue of material fact must be resolved against the moving party. Summary judgment is properly entered only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to judgment as a matter of law. Our scope of review is plenary, and our review of a question of law, as presented here, is de novo.Barnett v. SKF , USA , Inc., 38 A.3d 770, 776 n.6 (Pa. 2012) (internal citations omitted).
Liberty Mutual contends that the question of whether a workers' compensation insurer can be subrogated to the rights of the employee is controlled by section 319 of the PWCA, 77 P.S. § 671 (hereinafter "section 319"). Brief for Appellant at 12. Liberty Mutual points out section 319's provision that an employer "shall" have subrogation rights against the third party tortfeasor, and discusses, at great length, an employer's subrogation rights against a third party under section 319. Id. at 13-20, 22-24, 27-28. Nevertheless, Liberty Mutual claims, in conclusory fashion, that section 319 was written to protect an insurer's right to subrogate workers' compensation benefit payments, and "mandates a workers' compensation carrier's right to subrogate in the shoes of the insured employee." Id. at 14-15, 18, 32. Liberty Mutual contends that the trial court erred by construing the word "subrogated," as used in section 319, to mean that that the workers' compensation insurer may be "reimbursed if and only if the [injured employee] sues [the third party tortfeasor] directly." Id. at 14.
Section 319 provides as follows:
Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employee, his personal representative, his estate or his dependents, against such third party to the extent of the compensation payable under this article by the employer; reasonable attorney's fees and other proper disbursements incurred in obtaining a recovery or in effecting a compromise settlement shall be prorated between the employer and employee, his personal representative, his estate or his dependents. The employer shall pay that proportion of the attorney's fees and other proper disbursements that the amount of compensation paid or payable at the time of recovery or settlement bears to the total recovery or settlement. Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employee, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future installments of compensation.77 P.S. § 671.
Where an employee has received payments for the disability or medical expense resulting from an injury in the course of his employment paid by the employer or an insurance company on the basis that the injury and disability were not compensable under this act in the event of an agreement or award for that injury the employer or insurance company who made the payments shall be subrogated out of the agreement or award to the amount so paid, if the right to subrogation is agreed to by the parties or is established at the time of hearing before the referee or the board.
Liberty Mutual contends that the trial court's interpretation of section 319 conflicts with the precedent established by the Pennsylvania Supreme Court in Frazier v. Workers' Compensation Appeal Board (Bayada Nurses , Inc.) , 52 A.3d 241, 248 (Pa. 2012), which, Liberty Mutual asserts, recognizes an employer's right to subrogation. Brief for Appellant at 19, 22-23. Liberty Mutual also claims that, in denying standing to Liberty Mutual, the trial court misapplied the dicta in Reliance Ins. Co. v. Richmond Machine Co., 455 A.2d 686 (Pa. Super. 1983), because it "did not file an action in its own right, but as subrogee of [] Mihalcik, the injured worker." Brief for Appellant at 20, 23. Liberty Mutual also contends that the trial court erred by relying on Liberty Mut. Ins. Co. v. Domtar Paper Co., 77 A.3d 1282 (Pa. Super. 2013). Brief for Appellant at 22.
Liberty Mutual asserts that the trial court's determination permits SAC to escape liability for its negligence, and has caused Liberty Mutual to pay Mihalcik's hospital bills and other workers' compensation benefits, in contravention of the purpose of subrogation. Id. at 25. Liberty Mutual contends that, even if the injured employee elects not to file a lawsuit against the third party tortfeasor, the insurer should not be denied its right to recover against the tortfeasor the amounts that the insurer paid to the employee in compensation benefits. Id. at 25-26.
Liberty Mutual contends that the trial court's concern regarding splitting a cause of action is contrary to the absolute right of subrogation provided by section 319, contrary to the legislative intent regarding workers' compensation subrogation, and will result in higher premiums for employers and a loss of jobs. Id. at 28, 30. Liberty Mutual claims that, unless reversed, the trial court's Order will create a significant negative impact on the Pennsylvania economy by causing an increase in workers' compensation premiums and a potential loss of jobs. Id. Finally, Liberty Mutual contends that the trial court's ruling prejudices workers' compensation insurers because other insurers, who underwrite home, auto and other risks, are entitled to subrogate their entire book of business. Id. at 31.
The trial court addressed Liberty Mutual's claim, set forth the relevant law, and concluded that Liberty Mutual's claim lacks merit. See Trial Court Opinion, 2/19/14, 2-4; see also Liberty Mut. Ins. Co. v. Domtar Paper Co., 113 A.3d 1230, 1240 (Pa. 2015) (holding that Liberty Mutual could not assert an independent cause of action against the tortfeasor, either in its own name or as subrogee of the insured/employee, when the insured/employee had not commenced an action against the tortfeasor, and had not been named in or joined in the action brought by Liberty Mutual). We agree with the sound reasoning of the trial court, and affirm on the basis of the rationale set forth in its Opinion. See Trial Court Opinion, 2/19/14, 2-4.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/19/2015
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