Stark v. Posh Const. Co.

• Decision Date: 15 June 1960
• Citation: 192 Pa.Super. 409,162 A.2d 9
• Parties: Robert STARK v. POSH CONSTRUCTION COMPANY and United States Fidelity & Guaranty Company, Insurance Company, Appellants.
• Court: Pennsylvania Superior Court

Page 9

162 A.2d 9

192 Pa.Super. 409

Robert STARK v. POSH CONSTRUCTION COMPANY and United States Fidelity &

Guaranty Company, Insurance Company, Appellants.

Superior Court of Pennsylvania.

June 15, 1960.

Application for Allocatur Denied Aug. 22, 1960.

David B. Skillman, Easton, Frank R. Ambler, Ambler, for appellants.

A. Albert Gross, Gross & Herster, Easton, for appellee.

Before RHODES, P. J., and GUNTHER, WRIGHT, WOODSIDE, ERVIN, WATKINS and MONTGOMERY, JJ.

WOODSIDE, Judge.

The injured person involved in this matter has been paid. The question is whether the workmen's compensation insurance carrier for his employer is to bear a part of the payment or whether it is to be borne solely by the liability insurance carrier of a third party whose negligence, along with that of the employer, caused the injury.

Robert Stark, an employe of Posh Construction Company, suffered a compensable injury when the crane on which he was working struck an electric wire. He was so seriously burned that he became totally, and presumably permanently, disabled. Through its insurance carrier, Posh entered into a compensation agreement under which Stark was paid compensation for total disability.

The claimant also brought an action in trespass against Lehigh Foundries, Inc., et al., to recover damages for his injuries, and his employer was brought into that case as an additional defendant by Lehigh. The final judgment in that case was against Lehigh Foundries, Inc., and Posh Construction Company in the amount of $111,123.42. See Stark v. Lehigh Foundries, Inc., 1957, 388 Pa. 1, 130 A.2d 123.

Between the time of the accident and the affirmance by the Supreme Court of the judgment in the trespass action, Posh, through its insurance carrier, had paid Stark $7,518.65 under the workmen's compensation agreement. ¹ Lehigh, through its carrier, then paid Stark $103,604.77, or the difference between the judgment and the sum paid for workmen's compensation, and took an assignment of the judgment.

Posh, through its carrier, then moved the Workmen's Compensation Board to terminate the compensation agreement on the ground that the claimant's recovery from Lehigh precluded any further payments. Posh claims that under section 319 of the Workmen's Compensation Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671, it is subrogated to the rights of the employe against Lehigh to the extent of the compensation pensation paid and payable by it to Stark. Athough the issue here is whether Posh is relieved of all future payments of compensation, Posh suggests that it could recover from Lehigh the compensation it already paid, less reasonable attorney fees for the recovery in Stark v. Lehigh. It has made no claim from Lehigh for the return of the compensation which it paid, because it considers the reasonable attorneys fees which it owes to approximate the compensation it paid.

Lehigh's carrier petitioned the board to be made a party to the compensation case, and claimed the right to all future installments of compensation due under the agreement, on the ground that it was subrogated to the claimant's rights to future installments by virtue of its payment of the judgment, which Stark had assigned to it.

The referee permitted Lehigh's carrier to intervene, dismissed the petition of Posh's carrier to terminate, and directed Posh's carrier to continue the compensation payments to the claimant, who was directed to endorse them to Lehigh's carrier. Upon appeal by Posh's carrier, the board affirmed the decision of the referee, but amended the order to have the paymemts made directly to Lehigh's carrier. Upon appeal by Posh's carrier to the Court of Common Pleas of Northampton County, that court affirmed the board. Posh's carrier then appealed to this Court.

Posh contends it is relieved from all its liability to the claimant. It denies liability for workmen's compensation; it denies liability for its negligence. If there were no workmen's compensation law, it would be liable for $55,551.71, or half of the judgment in the trespass action; if there were no trespass action it would be liable for a maximum of $20,000 compensation. There being both, it says it is liable for nothing. This conclusion is absurd and unreasonable. The legislature does not intend such result. See Statutory Construction Act of May 28, 1937, P.L. 1019, § 52(1), 46 P.S. § 552(1).

The appellant admits that equity dictates that it should contribute, but contends the Workmen's Compensation Act supersedes the application of equitable principles.

The appellant rests its case upon section 319 of the Workmen's Compensation Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671 which reads in part 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 employe * * * 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 employe * * *'. The appellant argues that under this section it is subrogated to the right of its employe against Lehigh whether or not it was jointly negligent with Lehigh.

The appellant takes too narrow a view of the law. The Workmen's Compensation Act can not be read alone to the exclusion of all other law. The Uniform Contribution Among Tortfeasors Act of July 19, 1951, P.L. 1130, 12 P.S. § 2082 et seq. which repealed and replaced the Act of June 24, 1939, P.L. 1075, 12 P.S. § 2081, relating to contribution among tortfeasors, must be read along with the Workmen's Compensation Act. Brown v. Dickey, 1959, 397 Pa. 454, 155 A.2d 836, 839.

When we do this it is evident that the court below was correct in affirming the board. We need not base our conclusion on our own examination and interpretation of these statutes as the Supreme Court has clearly set forth the principles to be followed.

In Maio v. Fahs, 1940, 339 Pa. 180, 14 A.2d 105, the Court held that a judgment entered in a common-law trespass action against the plaintiff's employer and others was valid, and that although the plaintiff could not collect under the judgment from her employer (and from the others only the amount of the judgment less the amount of workmen's compensation) the defendants paying the judgment are entitled to be subrogated to the plaintiff's rights under the workmen's compensation agreement (p. 190).

In Shaull v. A. S. Beck New York Shoe Co. Inc., 1952, 369 Pa. 112, 116, 85 A.2d 698, 701, Mr. Justice Horace Stern (later Chief Justice) said, 'although the plaintiff (in a trespass action) would not be able to enforce any judgment recovered against (his employer, the other defendant) might be able to establish against (the employer) a right of contribution.'

In the recent case of Brown v. Dickey supra, 1959, 397 Pa. 454, 155 A.2d 837, Mr. Justice Cohen left no doubt that the right of contribution by a third party extends to the amount of...