Coffman, S. v. Kline, D.
167 A.3d 772
| Pa. Super. Ct. | 2017Background
- Child support established against Father; arrears existed and DRS issued a non-disbursement order to a third-party workers’ compensation claims administrator (Sedgwick) to secure settlement funds for arrears.
- Father settled a workers’ compensation claim for $3,400 (net to him after attorney fees $2,550), below the $5,000 threshold in 23 Pa.C.S. § 4308.1’s “net proceeds” definition.
- A WCJ approved the compromise and release and directed disbursement to Father; Sedgwick relied on that WCJ order and released the settlement despite the DRS non-disbursement order under § 4305.
- DRS (for Mother) filed a contempt petition against Sedgwick for violating the non-disbursement order; the trial court dismissed the contempt petition, reasoning § 4308.1 controlled distribution and no automatic lien existed on the sub-$5,000 award.
- On appeal, the Superior Court reversed, holding §§ 4305 and 4308.1 are complementary: § 4305 authorizes DRS to issue non-disbursement orders for any amount, while § 4308.1 creates an automatic lien only for net proceeds over $5,000.
- The Court held Sedgwick was not entitled to § 4308.1 immunity for disbursements made in violation of a § 4305 non-disbursement order and that Sedgwick willfully disobeyed the order, so dismissal with prejudice was an abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred in dismissing contempt petition against Sedgwick | Mother: Sedgwick knowingly received and willfully violated a valid DRS non-disbursement order under § 4305 | Sedgwick: it complied with the WCJ order and followed routine practice; acted under § 4308.1 procedures and thus lacked wrongful intent | Reversed: Sedgwick willfully violated the non-disbursement order; dismissal with prejudice was an abuse of discretion |
| Whether § 4308.1 displaced § 4305 or insulated Sedgwick from liability for disbursing sub-$5,000 settlement | Mother: § 4308.1’s automatic lien applies only to net proceeds > $5,000; § 4305 empowers DRS to seize settlements of any size, so non-disbursement order controls | Sedgwick: § 4308.1 (and WCJ procedure) governs workers’ compensation distributions; reliance on WCJ order and § 4308.1 immunity shields it | Held: §§ 4305 and 4308.1 are complementary; § 4308.1 applies only to net proceeds over $5,000. § 4308.1 immunity does not protect distributions made contrary to a § 4305 non-disbursement order |
Key Cases Cited
- Campbell v. Walker, 982 A.2d 1013 (Pa. Super. 2009) (holds § 4305 and § 4308.1 are complementary; § 4308.1 creates automatic lien only for net proceeds > $5,000)
- Faust v. Walker, 945 A.2d 212 (Pa. Super. 2008) (interprets “net proceeds” under § 4308.1 as amounts in excess of $5,000 after deductions)
- Casselbury v. American Food Service, 30 A.3d 510 (Pa. Super. 2011) (appellate remedies for procedural missteps; discretion to remand when notice-of-appeal service omitted)
- Orfield v. Weindel, 52 A.3d 275 (Pa. Super. 2012) (standards for reviewing civil contempt determinations)