City of Philadelphia v. F. Zampogna
177 A.3d 1027
| Pa. Commw. Ct. | 2017Background
- On Nov. 1, 2007, Philadelphia police officer Frank Zampogna was injured in a motor-vehicle crash while on duty; the City paid $286,447.77 in Heart and Lung Act (salary continuation and medical) benefits and issued a Notice of Compensation Payable (NCP).
- Zampogna sued the third-party driver (tort action); the third-party claim later settled for $246,000 placed in escrow while the City asserted a subrogation lien.
- The City (self-insured) sought declaratory relief to recover its Heart and Lung payments from the tort settlement; the trial court ruled for Zampogna, holding 75 Pa. C.S. § 1720 bars such subrogation.
- Relevant statutory framework: Workers’ Compensation Act permits employer subrogation (Section 319); the Heart and Lung Act provides full salary continuation for public safety employees; the Motor Vehicle Financial Responsibility Law (MVFRL) § 1720 (anti-subrogation) and § 1722 (preclusion of claiming such benefits in tort actions) affect subrogation for motor-vehicle-related injuries.
- Act 44 (1993) repealed MVFRL §§ 1720 and 1722 "insofar as they relate to workers’ compensation," restoring employer subrogation rights for workers’ compensation payments but said nothing about Heart and Lung benefits.
- Prior appellate decisions (Fulmer, Oliver, Stermel) treated Heart and Lung benefits as outside the employer’s subrogation right for motor-vehicle tort recoveries; the City challenged whether the 1990 amendment to § 1720 altered that result.
Issues
| Issue | Plaintiff's Argument (Zampogna) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Whether the 1990 amendment to MVFRL § 1720 restored employer subrogation of Heart and Lung benefits | § 1720’s catch‑all language continues to bar subrogation of Heart and Lung benefits; precedent supports anti‑subrogation | The 1990 replacement of "benefits in lieu thereof" with "benefits paid or payable by a program, group contract or other arrangement" narrows § 1720 to private first‑party programs and thus permits subrogation of Heart and Lung payments | Held: § 1720 (as amended) still bars subrogation of Heart and Lung benefits; the 1990 amendment did not restore employer subrogation for those benefits |
| Whether two‑thirds of Heart and Lung payments (amount equivalent to WC) are subrogable under WC Act § 319 because an NCP made WC "payable" | Heart and Lung payments are distinct from WC; issuance of an NCP does not convert them into workers’ compensation payable for § 319 subrogation | The NCP made WC benefits payable, so employer may subrogate two‑thirds as WC under § 319 | Held: The City cannot recast Heart and Lung payments as WC for § 319 subrogation; Heart and Lung benefits remain non‑subrogable under § 1720 |
| Whether precedent requires revisiting because earlier discussions were dicta or relied on different statutory versions | Fulmer/Stermel/Oliver correctly understand § 1720’s scope; their reasoning applies to the 1990 text | Fulmer’s reference to the 1990 text was dictum and not binding; Oliver and Stermel did not analyze the 1990 amendment’s language sufficiently | Held: Prior decisions’ treatment of Heart and Lung benefits as excluded from subrogation is persuasive and correctly construed § 1720 as amended |
| Effect of § 1719 definition/ejus‑dem generis on meaning of "program, group contract or other arrangement" in § 1720 | The catch‑all phrase in § 1720 should be read broadly to include statutory programs like Heart and Lung; § 1719’s limited definition applies only to § 1719 itself | § 1719(b) suggests the phrase targets insurance‑style programs, excluding Heart and Lung benefits | Held: § 1719’s definition does not limit § 1720; ejus‑dem generis and textual context do not narrow § 1720 to exclude Heart and Lung benefits |
Key Cases Cited
- Topelski v. Universal South Side Autos, Inc., 180 A.2d 414 (Pa. 1962) (common‑law recognition of public‑employer subrogation historically and policy reasons for subrogation)
- Fulmer v. Pennsylvania State Police, 647 A.2d 616 (Pa. Cmwlth. 1994) (interpreting pre‑ and post‑1990 § 1720 language and concluding Heart and Lung benefits fall within anti‑subrogation catch‑all)
- Oliver v. City of Pittsburgh, 11 A.3d 960 (Pa. 2011) (Supreme Court: Act 44 restored subrogation only for workers’ compensation; Act 44 did not affect anti‑subrogation mandates as to Heart and Lung benefits)
- Stermel v. Workers’ Compensation Appeal Board (City of Philadelphia), 103 A.3d 876 (Pa. Cmwlth. 2014) (reaffirming that Heart and Lung benefits are distinct from WC and are not subrogable under § 1720)