Independence Blue Cross, Subroger, and E. Cubbage (deceased) and M. Cubbage (Widow), Subrogee v. WCAB (City of Philadelphia, Fire Department)
535 C.D. 2016
| Pa. Commw. Ct. | Feb 6, 2017Background
- Decedent, a Philadelphia firefighter, died of multiple myeloma on December 8, 2008; his widow Mary Cubbage filed a Fatal Claim Petition (Dec. 6, 2011) and a Lifetime Claim Petition (Feb. 14, 2012) alleging occupational cancer under Act 46.
- Independence Blue Cross (IBC) asserted subrogation rights as an insurer/subrogee and appeared before the WCJ claiming entitlement under Section 319 of the Workers’ Compensation Act.
- WCJ issued an interlocutory order (July 1, 2013) siding with Respondent on a constitutional challenge to retroactive application of Act 46 to pre‑Act medical expenses; that order was incorporated into a July 10, 2014 decision denying and dismissing the lifetime Claim Petition.
- On March 20, 2014 Claimant and Respondent executed a Compromise & Release (C&R): Claimant waived all rights to wage loss, specific loss, and medical benefits from the Fatal and Lifetime Claim Petitions in exchange for a lump sum; C&R stated no known subrogation lien existed.
- The Board granted Respondent’s motion to quash IBC’s appeal for lack of standing; IBC appealed to this Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does IBC have standing to appeal the WCJ decision? | IBC: it is aggrieved and has a direct interest as subrogee under §319. | City: IBC is not aggrieved because no benefits were awarded and Claimant waived rights; thus no direct, substantial, immediate interest. | Held: IBC lacks standing; no direct, substantial, immediate interest because Claimant waived benefits and there is no live benefit to subrogate. |
| Does §319 automatically confer subrogation to IBC here? | IBC: §319 provides a subrogation right to insurer/subrogee. | City: Second paragraph of §319 requires prior payments and either party agreement or establishment at hearing; those conditions are unmet. | Held: §319 second paragraph does not grant automatic subrogation here—no payments were made and no agreement/establishment at hearing. |
| Did Claimant waive only collection but preserve the right to pursue benefits (preserving IBC’s subrogation)? | IBC: Claimant waived collection, not pursuit, so subrogation could survive. | City: Waiver of collection extinguishes ability to recover; insurer stands in employee’s shoes and cannot recover if employee has no collectible claim. | Held: Waiver barred both collection and effective recovery; insurer cannot subrogate when claimant cannot obtain benefits. |
| Was Board’s procedural/order review improper? | IBC: argued aggrievement and error below. | City: argued Board correctly quashed appeal for lack of standing. | Held: Court affirmed Board’s order; findings supported and no error of law in quashing. |
Key Cases Cited
- Byfield v. Workers’ Compensation Appeal Board, 143 A.3d 1063 (Pa. Cmwlth.) (standing/aggrievement analysis)
- Interstate Gas Marketing, Inc. v. Pennsylvania Public Utility Commission, 679 A.2d 1349 (Pa. Cmwlth.) (direct, substantial, immediate interest standard)
- Thompson v. Workers’ Compensation Appeal Board (USF&G Co.), 781 A.2d 1146 (Pa.) (automatic subrogation under §319 first paragraph)
- Independence Blue Cross v. Workers’ Compensation Appeal Board (Frankford Hospital), 820 A.2d 868 (Pa. Cmwlth.) (§319 second paragraph subrogation conditional)
- Frazier v. Workers’ Compensation Appeal Board (Bayada Nurses, Inc.), 52 A.3d 241 (Pa.) (insurer stands in injured employee’s shoes for subrogation)
- World Kitchen, Inc. v. Workers’ Compensation Appeal Board (Rideout), 981 A.2d 342 (Pa. Cmwlth.) (standard of review for Board orders)