Rickard, C. v. American National Property
774 WDA 2015
| Pa. Super. Ct. | Oct 25, 2017Background
- William Rickard (decedent) was injured in a work-related accident; a Welfare Fund paid $279,498.03 in medical/disability benefits and claimed a subrogation interest in any recovery.
- The Rickards had pending bankruptcy proceedings when the accident occurred; bankruptcy counsel (appointed) negotiated a $250,000 underinsurance settlement from ANPAC and sought bankruptcy-court approval.
- The Welfare Fund intervened in bankruptcy, relying on its Plan terms that give it first priority to any sums recovered by the covered individual and disclaim responsibility for attorney fees unless agreed.
- The bankruptcy court ruled the Welfare Fund’s subrogation interest was superior and denied approval of the proposed distribution; that ruling was not appealed.
- After William’s death and dismissal of the bankruptcy, Carolyn Rickard (as administratrix) obtained a $250,000 wrongful-death settlement from ANPAC and petitioned the orphans’ court for distribution; the Welfare Fund again intervened asserting the prior bankruptcy ruling collaterally estopped relitigation and asserting its lien.
- The orphans’ court applied collateral estoppel based on the bankruptcy decision and denied distribution to Rickard; this dissenting opinion argues that collateral estoppel should bar Rickard’s claim and affirms the denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Welfare Fund’s subrogation interest in the ANPAC settlement is superior to Rickards’ interests | Rickard contends the wrongful-death recovery is not governed by the bankruptcy ruling and the Fund’s lien should not attach to beneficiaries’ wrongful-death proceeds | Welfare Fund argues the bankruptcy court already decided its Plan gives it first priority; Rickard is bound or in privity and cannot relitigate | Court (dissent): Collateral estoppel applies — Fund’s interest is superior and Rickard is precluded from relitigating |
| Whether collateral estoppel applies to preclude relitigation of lien priority | Rickard argues the wrongful-death claim and parties differ from the bankruptcy matter, so issues are not identical | Fund argues identical issue was litigated and decided in bankruptcy, final and essential to that judgment; parties are same or in privity | Court (dissent): All collateral estoppel elements satisfied — identical issue, final adjudication, privity, full and fair opportunity, essential to judgment |
| Whether Rickard (as administratrix) is in privity with the decedent for collateral estoppel purposes | Rickard asserts she is a different party (administrator/beneficiary) and thus not bound by debtor’s bankruptcy ruling | Fund asserts administratrix is sufficiently in privity with decedent (same legal interest in settlement) so estoppel binds her | Court (dissent): Privity satisfied — administratrix represents same legal interest and is bound |
| Whether bankruptcy court’s decision was final and essential to judgment | Rickard notes wrongful-death statutory context differs and no appeal from bankruptcy was filed; argues issue not necessarily controlling | Fund notes bankruptcy court made a final determination of lien priority that was essential to denying settlement approval | Court (dissent): Bankruptcy ruling was final and its determination of lien priority was essential to the judgment, so estoppel applies |
Key Cases Cited
- Office of Disciplinary Counsel v. Kiesewetter, 889 A.2d 47 (Pa. 2005) (sets Pennsylvania collateral estoppel elements)
- Ammon v. McCloskey, 655 A.2d 549 (Pa. Super. 1995) (discusses privity as mutual or successive relationship to same property right)