Goldberg v. W.C.A.B. (Girard Provision Co.)
| Decision Date | 11 January 1993 |
| Citation | 620 A.2d 550,152 Pa.Cmwlth. 559 |
| Parties | Rudolph GOLDBERG, Petitioner, v. WORKMEN'S COMPENSATION APPEAL BOARD (GIRARD PROVISION COMPANY), Respondent. |
| Court | Pennsylvania Commonwealth Court |
Richard A. Weisbord, for petitioner.
Carol S. Neitz, for respondent.
Before CRAIG, President Judge, SMITH, J., and NARICK, Senior Judge.
Claimant Rudolph Goldberg appeals an order of the Pennsylvania Workmen's Compensation Appeal Board affirming a referee's decision directing the claimant to reimburse Girard Provision Company, the insurance carrier of the claimant's employer, the amount of its subrogation lien for worker's compensation benefits the insurer had paid the claimant. The referee also ordered the claimant to pay the insurer the interest that had accrued on the disputed amount of the lien that had been held in escrow.
Under section 319 of The Pennsylvania Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671, an employer is entitled to be subrogated where the compensable injury was caused in whole or in part by a third party.
In this appeal, the claimant raises the following issues: (1) whether the referee erred by not reducing the amount of the subrogation lien by the same percentage (20%) as that which was deducted from the claimant's third-party jury award for his comparative negligence; and (2) whether the referee erred in ordering the claimant to pay the employer the interest that had accrued on the subrogation money that had been held in escrow.
The referee made the following pertinent findings of fact:
3. Claimant's third party action was tried before the Honorable Charles A. Lord and a jury verdict was rendered in favor of Claimant and against Defendant Elliot Lewis Corporation. Thereafter, on April 13, 1989 Judge Lord entered a verdict for Claimant in the amount of $176,000.00.
4. The total jury verdict for assessed damages for Rudolph Goldberg before Judge Lord was in the amount of $220,000.00. The jury also found Elliot Lewis Corporation 80% negligent and Rudolph Goldberg was found 20% negligent. It was on this bases that Judge Lord entered verdict for Claimant Rudolph Goldberg for 80% of 220,00.00 or 176,000.00.
5. In reaching the $220,000 amount, the transcript of the April 10, 1989 hearing (Exhibit D-2) shows no specific allocation for wage loss, medical reimbursement, pain and suffering or any other area for which damages were sought.
6. On April 21, 1989, Claimant filed a timely Motion Requesting Damages for Delay in the third party action. That motion requested delay damages in the amount of $100,557.65 and an entry of a total award of $276,557.65 (see Exhibit D-5).
7. Claimant and Defendant Elliot Lewis Corporation subsequently, on May 3, 1989, agreed to settle the claims between them for the amount of $210,000.00. This "compromise settlement" did not allocate between wages, reimbursable medical damages or any other element of damages.
10. On or about October 10, 1989, Claimant reimbursed Defendant in the sum of $37,501.84 representing the amount Claimant agreed to reimburse Defendant for its net compensation lien and and agreed to and did place in escrow the sum of $9,326.90 representing the additional amount of Defendant's net compensation lien to which Defendant claims it is entitled and which Claimant disputes. The parties agreed that Defendant's acceptance of the undisputed amount did not thereby constitute a waiver of its entitlement to the disputed amount of the net compensation lien and further agreed that in no event would the liability to Defendant or Liberty Mutual Insurance Company be greater than the disputed amount of $9,326.90 held in escrow, along with any interest earned thereon. The parties thereafter entered into a written agreement stipulating to the foregoing facts in Exhibit D-4.
The claimant argues that an employer's subrogation rights are governed by established equitable principles of subrogation. The claimant asserts that, as a subrogee, an employer's rights are no greater than the rights of the claimant. Thus, the claimant argues that, when a claimant's right to recovery is reduced in a third-party action because a jury finds the claimant comparatively negligent, the employer's rights should be reduced by the same percentage.
The claimant cites Anderson v. Borough of Greenville, 442 Pa. 11, 273 A.2d 512 (1971), in which the Supreme Court held that an employer is not subrogated to the portion of a wrongful death claim awarded to the children of the plaintiff. In that case, a widow's workmen's compensation award for her deceased husband had been augmented because of her six children. However, the employer was not subrogated to the children's independent recovery from a tort-feasor. If the deceased had been survived only by the children and not his widow, the children would have had a right to compensation under the Workmen's Compensation Act; however, when a widow exists, the presence of children serves only to generate a larger compensation payment to the widow, and the children have no right of their own to recover compensation.
Thus, the court's decision recognized only that the widow's recovery under the Act, although increased because of the presence of children, did not render the children's recovery in their third-party action subject to the subrogation of the decedent's employer.
The claimant argues that, similarly, a subrogee has no rights to award amounts that relate to elements of damage that are distinct from damages for which an employer must pay workmen's compensation benefits.
In support of this statement, the claimant cites Leach v. Meadow Gold Dairies, 171 Pa.Superior Ct. 594, 91 A.2d 293 (1952). In Leach, the court held that, where an employer had not paid as part of workmen's compensation benefits an employee's funeral expenses, the employer was not entitled to be subrogated to that part of a third-party recovery if the recovery included an award for that specific expense. Thus, in determining the amount of the credit due to the employer, the court approved the deduction of the funeral expenses from the third-party recovery, and awarded the remainder to the employer.
The claimant also relies upon the Pennsylvania Superior Court's decision in Allstate Insurance Company v. Clarke, 364 Pa.Superior Ct. 196, 527 A.2d 1021 (1987). In that case, Allstate instituted an action seeking $4,007 from Clarke, whom Allstate had insured. Clarke was involved in an automobile accident with two other vehicles. Allstate paid Clarke the value of the car. Clarke initiated a suit against the other two drivers. Clarke received a $100,000 settlement from one of the drivers. Allstate, upon hearing of the settlement, notified Clarke of its subrogation rights and demanded repayment of the sum it had paid Clarke. Clarke notified Allstate that he had placed the sum in question in escrow pending the outcome of his litigation with the other driver.
Clarke argued that he could not reimburse Allstate, because he could not determine Allstate's interest until the second suit was resolved. Clarke contended that Allstate could not recover the full amount it paid Clarke unless Clarke recovered the full amount of his claim against the alleged tort-feasors. Thus, Clarke argued that the percentage of repayment of Allstate's subrogation interest could not be determined until after the resolution of the second tort claim.
The court noted the significance of the fact that, in Clarke's case, all disputes with potential tort-feasors had not terminated. The claimant quotes from Clarke as follows:
[I]f after damages are determined, the insured does not recover all of the damages [for example, if a jury finds the plaintiff comparatively negligent], the insurer's subrogation rights are more difficult to determine, for the insured, while likely recovering an...
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