Kamp v. Green Acres Contracting Co.
| Decision Date | 21 January 2022 |
| Docket Number | 1275 C.D. 2020 |
| Citation | 270 A.3d 602 |
| Parties | Jamey KAMP, Petitioner v. GREEN ACRES CONTRACTING CO. (Workers' Compensation Appeal Board), Respondent |
| Court | Pennsylvania Commonwealth Court |
William M. Martin, Uniontown, for Petitioner.
David R. Kunz, Ardmore, for Respondent.
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge,1 HONORABLE MARY HANNAH LEAVITT, Judge (P),2 HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge
OPINION BY JUDGE CEISLER
Jamey Kamp (Claimant) petitions this Court for review of the November 23, 2020 order of the Workers' Compensation Appeal Board (Board), affirming the decision of a workers' compensation judge (WCJ). The WCJ denied Claimant's review petition seeking to limit the subrogation interest of Green Acres Contracting Co. (Employer) under Section 319 of the Workers' Compensation Act (Act).3 The issues before the Court are whether Section 319 of the Act violates article I, section 1 and article III, section 18 of the Pennsylvania Constitution.4 After review, we affirm the Board.
The underlying facts of this matter are set forth in a joint stipulation executed by the parties on March 9, 2019. Certified Record (C.R.), Item No. 23, Joint Stipulation. Claimant suffered a work injury on April 21, 2016, when he was struck by a motor vehicle while performing road work. Id. at 1. Employer issued a notice of temporary compensation payable (NTCP), which automatically converted to a notice of compensation payable (NCP) by operation of law. C.R., Item No. 5, WCJ Decision, Finding of Fact (F.F.) No. 1. On June 18, 2018, a WCJ approved a compromise and release (C&R) agreement between the parties, under which Claimant received a lump sum payment of $80,000 in exchange for waiving any future right to specific loss benefits for disfigurement under Section 306(c)(22) of the Act.5 C.R., Item No. 19 at 6. Employer remained liable for Claimant's ongoing wage loss and for medical expenses directly attributable to the April 21, 2016 work injury. Id. Employer specifically reserved its right to subrogation under Section 319 of the Act for payment of "any and all [workers' compensation] benefits" paid to Claimant. Id.
The third-party tortfeasor responsible for the car accident that caused Claimant's April 21, 2016 work injury held two insurance policies with a combined liability limit of $150,000. C.R., Item No. 22 at 2. After rejecting settlement offers from the two insurers in the amount of their respective policy limits, Claimant filed a declaratory action in the Court of Common Pleas of Fayette County (trial court) against Employer, the third-party tortfeasor, and the two insurers, seeking a determination of damages caused by the April 21, 2016 work accident. Id. Following an evidentiary hearing, the trial court issued an order on January 3, 2019, in which it determined that Claimant's damages totaled $1,894,877.98, of which $1,500,000 was designated for Claimant's pain and suffering. C.R., Item No. 22, Ex. D. The trial court allocated the remainder as follows: $99,618.85 for lost wages, of which Employer paid $65,662.91; $16,997.42 for lost pension contributions; and $100,000 for permanent disfigurement. Id.
Thereafter, Claimant received payment in the amount of each insurer's liability limit, for a total recovery of $150,000. Joint Stipulation at 3. On February 4, 2019, Claimant filed a review petition, seeking a determination as to Employer's subrogation interest in Claimant's third-party recovery, the proceeds of which were placed in an escrow account. C.R., Item No. 2, Item No. 12, Hearing Transcript, 3/8/19, at 6. Employer's proposed third-party settlement agreement (TPSA) allocated Claimant's entire third-party recovery to its accrued workers' compensation lien, resulting in a net subrogation lien in the amount of $99,735.12, after deduction of litigation costs. C.R., Item No. 17.
Claimant's TPSA recommended a distribution of proceeds based on Employer's proportional share of the damages calculated by the trial court in Claimant's declaratory action. C.R., Item No. 15. Employer's accrued workers' compensation lien in the amount of $327,861.85 represented 17.3% of the $1,894,877.98 in damages set forth in the trial court's January 3, 2019 order. Id. Therefore, Claimant asserted that Employer's subrogation interest was limited to 17.3% of Claimant's actual third-party recovery, minus Employer's share of the litigation expenses, resulting in a net workers' compensation lien of $17,150.54. Id. Additionally, Claimant challenged Section 319 of the Act as unconstitutionally granting Employer a subrogation interest in Claimant's entire third-party recovery, including damages that were unrelated to Employer's payment of compensation under the Act. C.R., Item No. 20.
In his July 22, 2019 decision, the WCJ concluded that no legal authority existed to support the calculation method proposed in Claimant's TPSA. WCJ Decision, Conclusion of Law (C.O.L.) No. 2. The WCJ found that Employer had an accrued workers' compensation lien in the amount of $327,861.85, and Claimant's litigation expenses totaled $50,863.92. F.F. No. 9, C.R., Item Nos. 14, 17. After deducting Claimant's litigation expenses from his $150,000 third-party recovery, the WCJ found that Employer had a net subrogation lien in the amount of $99,136.08. F.F. No. 9. The WCJ declined to address the constitutional issues Claimant raised, as they were beyond the scope of his authority. C.O.L. No. 5.
Claimant appealed to the Board, reiterating his argument that Section 319 of the Act was unconstitutional, and Employer's net subrogation lien should be limited to 17.3% of Claimant's actual third-party recovery.6 C.R., Item No. 6. The Board noted that its appellate review does not encompass constitutional issues and that it lacked the authority to determine the constitutional validity of its enabling legislation.7 Nevertheless, the Board disagreed with Claimant that Section 319 was constitutionally infirm. The Board noted that the rationale behind an employer's right to subrogation was to prevent a claimant's double recovery for the same injury, to ensure that an employer is not required to pay for the negligence of a third party, and to prevent a third party from escaping liability for its wrongful conduct. Board Decision at 10-11 (quoting Dale Mfg. Co. v. Workmen's Comp. Appeal Bd. (Bressi) , 491 Pa. 493, 421 A.2d 653, 654 (1980) ). The Board opined that the subrogation provisions of Section 319 were rationally related to these goals. Accordingly, the Board affirmed the WCJ. This appeal followed.
On appeal,8 Claimant argues that Section 319 of the Act violates article I, section 1 and article III, section 18 of the Pennsylvania Constitution.
Section 319 of the Act relevantly provides that, where an employee's compensable injury is caused by a third party, "the employer shall be subrogated to the right of the employe[e.]" 77 P.S. § 671 (emphasis added). This language is clear and unambiguous, is written in mandatory terms, and admits no exceptions, equitable or otherwise. Kidd-Parker v. Workers' Comp. Appeal Bd. (Phila. Sch. Dist.) , 907 A.2d 33, 37 (Pa. Cmwlth. 2006) (internal citations omitted). An employer's right to subrogation under Section 319 is statutorily absolute and can be abrogated only by choice. Winfree v. Phila. Elec. Co. , 520 Pa. 392, 554 A.2d 485, 487 (1989). The purpose behind Section 319 is to prevent a claimant's double recovery for the same injury, to ensure that an employer is not required to pay for the negligence of a third party, and to prevent a third party from escaping liability for his wrongful conduct. Gillette v. Wurst , 594 Pa. 544, 937 A.2d 430, 436 (2007).
"[A] statute is presumed to be constitutional and will not be declared unconstitutional unless it clearly, palpably[,] and plainly violates the [Pennsylvania] Constitution." Dep't of Transp. v. McCafferty , 563 Pa. 146, 758 A.2d 1155, 1160 (2000). A party challenging the constitutionality of a statute has a heavy burden of persuasion. Id. Doubts regarding whether a challenger has met this high burden are resolved in favor of finding the statute constitutional. Germantown Cab Co. v. Phila. Parking Auth. , 651 Pa. 604, 206 A.3d 1030, 1041 (2019). "A statute is facially unconstitutional only where there are no circumstances under which the statute would be valid." Id. at 1041. A facial attack tests the constitutionality of a statute based on its text alone without consideration of the facts of a particular case. Haveman v. Bureau of Pro. & Occupational Affs., State Bd of Cosmetology , 238 A.3d 567, 572 (Pa. Cmwlth. 2020).
Claimant acknowledges that Section 319 does not implicate a fundamental right and therefore our analysis of Section 319's constitutionality is governed by the rational basis test. Under this analysis, we first determine whether the challenged statute seeks to promote a legitimate state interest.
Kramer v. Workers' Comp. Appeal Bd. (Rite Aid Corp.) , 584 Pa. 309, 883 A.2d 518, 534 (2005) (internal citations omitted). If so, we must then determine whether the legislation is reasonably related to accomplishing that state interest. Id.
As to the first part of the rational basis test, the overall purpose of the Act is to provide an injured employee benefits, without regard to the employer's fault. Hartford Ins. Grp. v. Kamara , 650 Pa. 217, 199 A.3d 841, 848 (2018). In exchange, the employer is granted the "exclusivity of the remedy of workers' compensation benefits," and the right to subrogate against the injured employee's recovery from any third-party tortfeasor responsible for his compensable injuries. Id.
Claimant does not challenge the legitimacy of Section 319's purpose, which in part seeks to relieve an employer from the financial burden caused by the actions of a...
To continue reading
Request your trial