Loftus, M. v. Decker, K., Appeal of: Eastern
611 WDA 2021
| Pa. Super. Ct. | Mar 10, 2022Background
- Eastern Alliance (appellant), the workers’ compensation carrier for Michele and Richard Loftus, filed a verified petition to intervene in the Loftuses’ pending suit against third‑party tortfeasor Katrina Decker to protect its statutory subrogation lien under 77 P.S. § 671.
- The petition alleged Eastern Alliance gave notice of its lien, Decker had not yet served a rule to file a complaint or settled with the Loftuses, and the Loftuses threatened to abandon the action or accept less than the carrier’s statutory lien if the carrier did not accept a reduced recovery.
- Pennsylvania Rules of Civil Procedure require that, upon filing a petition to intervene, the trial court must hold a hearing with due notice and determine whether the petition’s verified allegations are established before allowing or denying intervention (Pa.R.C.P. 2329).
- The trial court denied Eastern Alliance’s petition without holding the Rule 2329 hearing; the dissenting judge contends this was an abuse of discretion because the verified averments were not adjudicated.
- The dissent also reasons Eastern Alliance cannot enforce its Section 319 subrogation right by suing the tortfeasor directly (per precedent), making intervention in the existing action the only practical method to protect its lien; thus the denial is appealable under the collateral order doctrine (Pa.R.A.P. 313(b)).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred by denying intervention without conducting the Rule 2329 hearing | Eastern Alliance: denial without the required hearing was an abuse of discretion because its verified petition established facts warranting intervention | Loftuses/Decker: (implicit) court discretion to refuse intervention or question sufficiency of allegations | Dissent: trial court abused discretion by denying petition without holding the required hearing; the petition’s verified allegations needed adjudication |
| Whether Eastern Alliance’s appeal is cognizable as a collateral order under Pa.R.A.P. 313(b) | Eastern Alliance: denial of intervention to protect statutory subrogation is collateral to and too important to be denied review | Respondents: denial is peripheral to the underlying tort action and not immediately appealable | Dissent: meets collateral order criteria and appeal is properly before the court |
| Whether a workers’ compensation carrier may protect subrogation rights only by intervening in the employee’s suit | Eastern Alliance: insurer cannot sue tortfeasor directly absent assignment, so intervention is necessary to protect lien | Respondents: (implicit) intervention may be unnecessary or inadequately alleged | Dissent: precedent bars direct suit by carrier; intervention is the only realistic mechanism to protect statutory lien |
| Whether the petition’s verified averments, if credited, justified intervention | Eastern Alliance: averments show notice of lien, no settlement, and insured’s threat to abandon—facts establishing need to intervene | Respondents: adequacy of facts not established without hearing; discretion to deny | Dissent: if credited, the verified facts satisfy Rule 2329 and justify intervention; hearing required to resolve them |
Key Cases Cited
- Bogdan, 257 A.3d 750 (Pa. Super. 2021) (trial court must determine whether petition allegations are established before allowing intervention)
- Gleason v. Alfred I. DuPont Hosp. for Children, 260 A.3d 256 (Pa. Super. 2021) (workers’ compensation carrier’s statutory lien is important and reviewable)
- Hartford Ins. Grp. ex rel. Chen, 199 A.3d 848 (Pa. Super. 2018) (insurer generally may not sue the tortfeasor directly to enforce Section 319 subrogation absent assignment)
- Wilson v. State Farm Mut. Auto. Ins. Co., 517 A.2d 944 (Pa. 1986) (intervention is within trial court’s sound discretion; appellate review limited to abuse of discretion)