Frazier v. Workers' Compensation Appeal Board
52 A.3d 241
| Pa. | 2012Background
- Act 44 (1993) §23 grants sovereign/official immunity from subrogation or reimbursement claims arising from a claimant's tort recovery.
- Claimant Lillian Frazier injured in SEPTA bus accident; Bayada Nurses insured; claimant settled with SEPTA for $75,000.
- Bayada, as workers’ comp insurer, sought $47,351.93 under §319 for its paid benefits (subrogation/reimbursement) after settlement.
- WCJ held §23 barred the reimbursement claim; Commonwealth Court reversed, citing Fox v. WCAB; claim advanced for appellate review.
- This Court analyzes §319 and §23, reconciling sovereign immunity with subrogation/reimbursement, and approves a narrow §23 application to settlements with Commonwealth entities.
- Court endorses structuring settlements to avoid double recovery and to preserve immunity while ensuring public fisc protection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §23 bar reimbursement/subrogation against a claimant’s settlement with a Commonwealth party? | Frazier argues §23 immunity extends to reimbursements from settlements with Commonwealth entities. | Bayada Nurses contends §23 applies only to direct actions against government entities, not to settlements. | Yes; §23 bars reimbursement/subrogation against settlements with a Commonwealth party. |
| Is Fox v. WCAB (PECO) controlling on this formula of reimbursement? | Fox supports §23 blocking reimbursement where recovery is from settlement with the government. | Bayada Nurses argues Fox is distinguishable; §23 does not foreclose reimbursement from employee settlements. | Fox rejected; this opinion disapproves Fox and adopts §23-based immunity in this context. |
| How should §23 be read alongside §25(b) of Act 44? | Read §23 to provide immunity while §25(b) preserves subrogation rights in MVFRL cases; tension resolved by narrow application. | Section 25(b) expands subrogation rights; §23 is a carve-out for Commonwealth-related cases to protect the public fisc. | §23 provides a narrowly tailored immunity that reconciles both provisions in Commonwealth settlements. |
| What is the practical effect of §23 on settlements structured to include or exclude workers’ compensation elements? | If settlements avoid workers’ compensation components, §23 can still block reimbursement. | Settlements should be structured to prevent double recovery and protect the public fisc; immunity must not be avoided. | Settlements structured to exclude WC benefits can still be protected by §23 immunity. |
Key Cases Cited
- Thompson v. WCAB (USF & G Co.), 781 A.2d 1146 (Pa. 2001) (subrogation rights are absolute and automatic)
- Fox v. WCAB (PECO Energy Co.), 969 A.2d 11 (Pa.Cmwlth. 2009) (reimbursement rights not foreclosed by §23 per Commonwealth Court)
- Poole v. WCAB (Warehouse Club, Inc.), 810 A.2d 1182 (Pa. 2002) (double recovery and structure of settlements considerations)
- Dale Mfg. Co. v. WCAB (Bressi), 421 A.2d 653 (Pa. 1980) (three purposes of subrogation: prevent double recovery, avoid employer's payment for others' negligence, hold third party liable)
- Mayle v. Pa. Dep’t of Highways, 388 A.2d 16 (Pa. 1978) (sovereign immunity retained; later statutory carve-outs)