569 A.2d 994 | Pa. Commw. Ct. | 1990
Frederick G. Schramm and Betty Jane Schramm (Schramms) appeal the order of the Court of Common Pleas of Allegheny County (common pleas court) directing the proceeds of a settlement in the amount of $45,000.00 be
On July 12, 1984, while in the course of his employment, Frederick G. Schramm’s auto was struck from the rear by a vehicle owned by ALCOSAN and operated by an ALCOSAN employee. Schramm was injured and received workmen’s compensation benefits. The Schramms instituted a civil action against ALCOSAN. Liberty Mutual notified the parties that it was asserting a right of subrogation pursuant to Section 319 of The Pennsylvania Workmen’s Compensation Act (Act)
On appeal the Schramms argue that Liberty Mutual does not have a right of subrogation to the settlement proceeds by reason of Section 8553(d) of the Judicial Code (Code), 42 Pa.C.S. § 8553(d).
Initially, the Schramms argue that the Employer’s and Liberty Mutual’s policy of workmen’s compensation insurance should not be treated differently than any other insurance policy under Section 8553(d) of the Code and that Liberty Mutual has no claim to the settlement proceeds. In Michel v. City of Bethlehem, 84 Pa.Commonwealth Ct. 43, 478 A.2d 164 (1984), Hans and Wilhelmina Michel sought to recover damages to their home in the amount of $23,490.00 from the City of Bethlehem caused by the rupture of a
As in the present controversy, the parties in Michel agreed that the Michels’ claim was within one of the eight exceptions to governmental immunity under the Political Subdivision Tort Claims Act (Tort Claims Act).
The employer’s duty to provide compensation benefits to the employee is statutory and arises even where the injury to an employee is caused by a third party. See Olin Corporation v. Workmen’s Compensation Appeal Board, 14 Pa.Commonwealth Ct. 603, 324 A.2d 813 (1974); Section 301(a) of the Act, 77 P.S. § 431. Section 319 of the Act provides the Employer a right of subrogation to the extent of the compensation paid where the employee’s injury “is caused in whole or in part by the act or omission of a third
The right of subrogation is founded on principles of equity which seek (1) to prevent double recovery for the same injury by a claimant, (2) to ensure that the employer is not compelled to make compensation payments necessitated by the negligence of a third party, and (3) to prevent a third party tortfeasor from escaping liability for his negligence.
Helms Express v. Workmen’s Compensation Appeal Board (Lemonds), 106 Pa.Commonwealth Ct. 287, 291, 525 A.2d 1269, 1271 (1987).
Section 8553(d) is neutral concerning the employer-employee relationship and any inclusion of workmen’s compensation benefits within Section 8553(d) of the Code is contrary to the legislative intent clearly expressed in the Act. Liberty Mutual contracted to insure the Employer and paid compensation benefits to Frederick G. Schramm. The Schramms obtained a $45,000.00 settlement of the trespass action against ALCOSAN, the third party tortfeasor, as a result of the same compensable injury that the Employer was responsible for under the Act and which compelled the payment of benefits to Frederick G. Schramm. Helms Express. Where there is no reference and no mention by the legislature that workmen’s compensation benefits are
The Schramms also argue that the present facts are distinguishable from the facts in Bentler
It is clear that Section 8553(d) operates as a limitation on damages which may be recovered from a governmental defendant by a party directly, or by that party’s subrogee. The provision has no application in actions by a subrogee against the one to whose rights and disabilities he is subrogated, which is the situation here presented.
Id., 121 Pa.Commonwealth Ct. at 337, 550 A.2d at 857 (footnote omitted and emphasis in the original).
In Michel, where the Michels were insured, the Michels had no claim for the damages covered by their insurance policy. The Michels had no claim to which their insurer was
The Schramms’ cause of action is more involved because it is a personal injury action, unlike the contract action in Michel. But the nature of the action and the manner of the resolution are inconsequential. The fact that the outcome was “in the form of a settlement rather than a verdict is of no consequence ... mere proof of a third-party settlement is sufficient to establish an employer’s right to subrogation.” Helms Express. After all, Liberty Mutual’s rights are derived from the insurance contract with the Employer.
Accordingly, we affirm the decision of the common pleas court.
ORDER
AND NOW, this 31st day of January, 1990, the order of the Court of Common Pleas of Allegheny County at No. 85-21363, dated February 2, 1989, is affirmed.
. The Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 671.
. Liberty Mutual has paid $70,449.96 in total workmen’s compensation benefits. After deducting a $15,000.00 no-fault credit, Liberty Mutual has asserted subrogation rights in the amount of $55,449.96. (Brief in Support of Petition to Distribute Proceeds of Settlement, Original Record (O.R.) at 17.)
. Section 8553(d) of the Code provides:
(d) Insurance benefits. If a claimant receives or is entitled to receive benefits under a policy of insurance other than a life insurance policy as a result of losses for which damages are recoverable under subsection (c), the amount of such benefits shall be*129 deducted from the amount of damages which would otherwise be recoverable by such claimant. .
. Section 8553(c) of the Code provides:
(c) Types of losses recognized. — Damages shall be recoverable only for:
(1) Past and future earnings and earning capacity.
(2) Pain and suffering in the following instances:
(i) death; or
(ii) only in cases of permanent loss of a bodily function, permanent disfigurement or permanent dismemberment where the medical and dental expenses referred to in paragraph (3) are in excess of $1,500.
(3) Medical and dental expenses including the reasonable value of reasonable and necessary medical and dental services, prosthetic devices and necessary ambulance, hospital, professional nursing, and physical therapy expenses accrued and anticipated in the diagnosis, care and recovery of the claimant.
(4) Loss of consortium.
(5) Loss of support.
(6) Property losses.
. Act of November 26, 1978, P.L. 1399 formerly 53 P.S. § 5311.101-5311.803, which act was repealed by Section 333 of JARA Continuation Act of 1980, Act of October 5, 1980, P.L. 693, 42 P.S. § 20043. The provisions providing for governmental and official immunity are presently found in Sections 8541-8564 of the Judicial Code, 42 Pa.C.S. §§ 8541-8564.
. Section 401 of the Act, 77 P.S. § 701 defines employer to “mean the employer as defined in article one of this act ... or his insurer if such insurer has assumed the employer’s liability____”
. In Bentler Claimant’s husband, the Decedent, was fatally injured in a work-related accident while cleaning windows at a school within the Scranton School District. The Employer’s workmen’s compensation insurance carrier (Insurer) provided compensation to the Claimant and the Decedent’s children. Claimant also filed a wrongful death action against the Scranton School District. A settlement was reached, and the Scranton School District agreed to pay the Claimant and the Decedent’s children $175,000.00. The Insurer filed a petition to review the compensation agreement alleging that it was entitled to subrogation against Claimant's third party settlement pursuant to Section 319 of the Act. The referee granted the Insurer’s right to subrogation in the full amount of the settlement. On appeal the Board affirmed but modified the amount of the award to Claimant’s share of the settlement. In Bentler we affirmed the decision of the Board.
. The Schramms allege in their petition that they entered into the settlement in reliance upon Section 8553(d) of the Code. (Petition to Distribute Proceeds of Settlement, Reproduced Record (R.R.) at llaHa.) However, the settlement agreement is not part of the record.
. In the Answer to the Petition to Distribute Proceeds of Settlement, the Employer and Liberty Mutual asserted that Frederick G. Schramm received state mandated benefits from the Employer, pursuant to the Act, and that the Employer fulfilled its statutory obligations by purchasing a workmen’s compensation policy from Liberty Mutual. The Answer unequivocally states that the right of subrogation involved is the Employer’s. (R.R. at 15a-16a.)