Independence Blue Cross, Subroger, and E. Cubbage (deceased) and M. Cubbage (Widow), Subrogee v. WCAB (City of Philadelphia, Fire Department), 535 C.D. 2016

Background

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)