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Pennsylvania Supreme Court Rules

An Insurer Cannot Pursue An Action Against A Third Party On Behalf Of A Claimant To Recovery Its Section 319 Subrogation Lien

Pennsylvania
September 12, 2019
December 20, 2018
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In The Hartford Insurance Group on Behalf of Chunli Chen v. Kamara, et al., 2018 Pa. Lexis 6033 (Pa. 2018), the Pennsylvania Supreme Court again addressed the issue of whether a workers’ compensation lien holder can bring a third party action on behalf of a claimant in a workers’ compensation claim to recover amounts paid to the claimant from a third party tortfeaser.

The Chen case was initiated when Hartford Insurance Group filed a complaint “on behalf of” the claimant against, among other parties, the driver of the vehicle that struck the claimant while claimant was in the course and scope of his employment, alleging that the defendants were negligent in causing the accident, resulting in claimant’s extensive, work-related injuries.  Defendants filed preliminary objections, arguing that, “[w]hile Pennsylvania law allow for a workers’ compensation carrier to be subrogated to the rights of the employee,” the Pennsylvania Supreme Court has previously held in Liberty Mutual Insurance Co. v. Domtar Paper Co., 113 A.2d 1230 (Pa. 2015), that “the right of action against a third-party tortfeaser under Section 319 of the [Workers’ Compensation Act] remains in the injured employee, and that the employer/insurer’s right of subrogation under Section 319 must be achieved through a single action brought in the name of the insured employee or joined by the injured employee.”  In response, Hartford argued that the instant matter is distinguishable from Domtar Paper because in the instant matter, Hartford filed the complaint “on behalf of” claimant and not “as a subrogee” of claimant.  The trial court entered an order sustaining the defendants’ preliminary objection on the basis that the injured employee did not file the complaint, and the trial court dismissed the complaint with prejudice.

On appeal, the Superior Court pointed out that in Domtar Paper, Liberty Mutual did file the action “as subrogee” of the workers’ compensation claimant.  Then, in determining that the trial court erred in sustaining defendants’ preliminary objections, the Superior Court reasoned that in the instant matter “Hartford is not attempting to ‘pursue a subrogation claim directly against a third-party tortfeaser,’ is not seeking to recover only the amount that it paid to Chen in workers’ compensation benefits, and is not ‘splitting’ Chen’s cause of action.   Instead, Hartford brought a “single action … in the name of the injured employee” and is attempting to recovery the entire amount of claimant’s loss.  

Upon appeal by defendants, a split Pennsylvania Supreme Court ultimately agreed with the trial court’s dismissal of the complaint, emphasizing that merely captioning the complaint “on behalf of” the claimant contravenes precedent that it is the claimant who retains the cause of action against the tortfeasor, thereby re-affirming its conclusions in Domtar Paper that a complaint filed against a third party allegedly at fault for a claimant’s workers’ compensation injuries must be brought by the claimant.