Lead Opinion
*842This appeal presents the issue of whether a workers' compensation insurance carrier may bring a third-party action against an alleged tortfeasor on behalf of an injured employee to recoup the amount paid in workers' compensation benefits where the employee did not independently sue the tortfeasor, did not join in the insurer's action, and did not assign her cause of action to the insurer. Reaffirming the well-settled proposition that the right of action against the tortfeasor remains in the injured employee, we hold that, unless the injured employee assigns her cause of action or voluntarily joins the litigation as a party plaintiff, the insurer may not enforce its statutory right to subrogation by filing an action directly against the tortfeasor. Accordingly, we vacate the judgment of the Superior Court and reinstate the order of the trial court, which sustained the preliminary objections filed by the tortfeasor and dismissed the insurer's complaint with prejudice.
On October 10, 2013, Chunli Chen was standing in the parking lot of Thrifty Rental Car when she was struck by a rental vehicle operated by Kafumba Kamara. Appellee's Complaint, Dec. 8, 2015, at ¶ 8.
On September 15, 2015, when the two-year statute of limitations was about to expire on Chen's cause of action, Insurer sought to effectuate its subrogation right under Section 319 of the Workers' Compensation Act ("WCA"),
Tortfeasors filed preliminary objections to Insurer's complaint in the nature of a demurrer, claiming that the complaint should be dismissed on two grounds. First, Tortfeasors alleged that Insurer's attempt to enforce its subrogation rights in an action filed directly against the alleged third-party tortfeasors was prohibited by this Court's decision in Liberty Mutual Insurance Co. v. Domtar Paper Co. ("Domtar Paper") ,
*844In response to the preliminary objections, Insurer contended that it complied with Domtar Paper' s requirement that the action against the tortfeasor be brought "in the name of the injured employee" because it captioned its complaint as being filed "on behalf of" Chen, rather than as "the subrogee" of Chen, which Domtar Paper precluded. Insurer also posited that the verification by Insurer's workers' compensation subrogation specialist, Jaime Young, was proper even though Young was not present at the scene of the accident because she had knowledge of the facts contained in the complaint through her work on Chen's workers' compensation claim. Insurer emphasized that Pa.R.C.P. 1024(a) permits verification on personal knowledge or information and belief, and that its verification was based on the latter.
On February 25, 2016, the trial court issued an order sustaining both of Tortfeasors' preliminary objections and dismissing Insurer's complaint with prejudice. In its opinion dated June 23, 2016, the trial court relied upon Whirley Indus., Inc. v. Segel ,
The Superior Court subsequently vacated the trial court's order and remanded the matter for further proceedings, finding that the trial court erred in sustaining Tortfeasors' preliminary objections and dismissing Insurer's complaint. Hartford Ins. Group ex rel. Chen v. Kamara ,
The intermediate appellate court found it well-settled that the right to sue a third-party tortfeasor remains in the injured employee and the employer's/insurer's right of subrogation under Section 319 of the WCA must be achieved through a single action brought in the name of the injured employee or joined by the injured employee.
Notably, the Superior Court found that Insurer complied with this jurisprudence requiring the insurer to bring an action "in the name of" the injured employee by filing its action "on behalf of" Chen. Hartford Ins. Group ex rel. Chen,
The Superior Court further held that the verification of the complaint by Young, Insurer's workers' compensation subrogation specialist, was proper because Insurer is a party to the action, as it filed the suit on Chen's behalf after Chen declined to sue, and, concomitantly, Insurer has a real interest in the lawsuit due to its statutory subrogation right to Chen's recovery against Tortfeasors.
We granted allowance of appeal to examine whether our decision in Domtar Paper permits a workers' compensation insurance carrier to enforce its subrogation rights under Section 319 of the WCA by filing an action against the alleged third-party tortfeasors "on behalf of" the injured employee when that employee has not assigned her cause of action or voluntarily joined the litigation as a party plaintiff. In the event such action is deemed valid, we granted review to determine the propriety of the workers' compensation insurance carrier's verification of its complaint by a company representative, rather than by the injured employee. These issues present questions of law, thus, our standard of review is de novo and our scope of review is plenary. Sernovitz v. Dershaw ,
The arguments set forth in the parties' appellate briefs filed in this Court mirror the positions they asserted below. To reiterate, Tortfeasors, as appellants, contend that the Superior Court's decision sanctioning Insurer's direct action against them conflicts with Domtar Paper' s reaffirmation that the right of action against a third-party tortfeasor under Section 319 of the WCA remains in the injured employee. They argue that while Section 319 grants an employer/insurer the right to subrogate against any settlement received by the injured employee from the alleged third-party tortfeasor, it does not grant the insurer *846the independent right to sue the third-party tortfeasor directly unless the employee is a party to the action. See Brief for Appellants at 16 (citing Whirley Industries, Inc. ,
Tortfeasors submit that the instant matter is governed by Domtar Paper, as both cases involved a subrogation action by the insurer against the alleged third-party tortfeasor without the involvement of the injured employee. They emphasize that as in Domtar Paper , the injured employee here did not assign her cause of action to Insurer, did not join in Insurer's action, and did not sue Tortfeasors independently. Thus, Tortfeasors contend, merely captioning the complaint as "on behalf of" the injured employee, rather than "as subrogee of" the injured employee, has no legal significance because such action offers no protection to the injured worker's independent claims. According to Tortfeasors, the intent of the Court in Domtar Paper was to require workers' compensation carriers to join the injured employee in the single action against the alleged third-party tortfeasor to preserve the employee's independent claims for pain and suffering as well as to provide for enforcement of the insurer's subrogation rights.
Regarding the second issue challenging the propriety of Insurer's verification of its complaint, Tortfeasors reiterate that the verification by Insurer's workers' compensation specialist fails to comport with Pa.R.C.P. 1024(c) because it does not set forth the source of Young's information as to the matters alleged in the complaint. See Pa.R.C.P. 1024(c) (providing that "the verification may be made by any person having sufficient knowledge or information and belief and shall set forth the source of the person's information as to matters not stated upon his or her own knowledge and the reason why the verification is not made by the party"). They argue that absent first-hand knowledge of the accident, Young could not verify any assertions relating to Chen's claims against them. In Tortfeasor's view, the verification of Insurer's complaint by Young illustrates that this action is nothing more than an improper subrogation action filed directly against them by Insurer. Finally, they reject any suggestion that the trial court should have offered Insurer an opportunity to cure the defective verification as Insurer would have been unable to do so considering Chen's non-party status.
The Pennsylvania Association for Justice ("PAJ") has filed an amicus brief in support of Tortfeasors, contending that Tortfeasors' litigation posture in this case is aligned with protecting the interests of injured workers. Therein, the PAJ reiterates the arguments set forth by Tortfeasors and opines that the trial court properly dismissed Insurer's complaint because a workers' compensation insurance carrier should never be permitted to sue the alleged third-party tortfeasor directly without the joinder of the injured employee. To do so, the PAJ asserts, would be detrimental to the employee's interests because the insurer is faced with an insurmountable conflict of interest as it has no incentive to expend time and resources to prosecute vigorously the injured employee's independent claims for pain and suffering because it will receive no benefit from such effort.
Further, the PAJ posits, an injured employee's independent claims will be precluded if the insurer files its subrogation *847claim quickly without the employee's involvement and settles the action before the employee determines whether to pursue an independent third-party suit. The PAJ asserts that whether the claim is brought by Insurer "as subrogee" of the injured employee or "on behalf of" the injured employee, the result is the same, i.e. , the employee whose claim is being asserted is not the entity bringing the action and is not the party who will benefit from such action.
In response, Insurer contends that the Superior Court was correct in concluding that it complied with Domtar Paper and the cases relied upon therein when it filed a single action "on behalf of" Chen and sought damages, not only to satisfy its subrogation interest by recovering the amount paid in workers' compensation benefits, but to obtain the entire amount to which Chen was entitled. It was on this basis, Insurer asserts, that the Superior Court concluded that the instant case was filed "in the name of" the injured employee and was a not an impermissible subrogation action filed by an insurer directly against the alleged third-party tortfeasor. Brief of Appellee at 7 (citing Scalise ,
Contrary to the assertions of Tortfeasors and their amicus , Insurer does not interpret Domtar Paper as holding that an insurer may only enforce its statutory right to subrogation under Section 319 of the WCA where the injured employee independently filed suit against the alleged tortfeasor and obtained a recovery, assigned the cause of action to the insurer, or joined in the latter's action. Insurer posits that there is no requirement, statutory or otherwise, requiring a workers' compensation insurance carrier to demonstrate that the injured employee is aware of and involved in the insurer's action against the alleged tortfeasor.
As to the second issue for which we granted allowance of appeal, Insurer argues that the Superior Court was correct in holding that Insurer's complaint was properly verified by Young, Insurer's workers' compensation subrogation specialist. Because Chen chose not to sue Tortfeasors, Insurer submits that it was the party controlling the litigation, and, thus, could verify the complaint. Insurer contends that there is no requirement of first-hand knowledge under Pa.R.C.P. 1024(a) when the verification is based on the "information and belief" as to the source of the facts verified.
In analyzing the parties' arguments, we begin with the most basic notion that the purpose of the WCA is "to provide the employee an exclusive right to benefits without the necessity of proving fault in exchange for abrogation of the employee's common law negligence remedies." Winfree v. Philadelphia Electric Co. ,
The doctrine of subrogation has its origin in common law where it served as an equitable device that prevented the injured party from receiving double recovery and ensured that the party at fault, and not the innocent party, was held responsible for the claimed injury. Dale Mfg. Co. v. Workers' Compensation Appeal Board (Bressi) ,
We are not examining this language for the first time as Section 319 has been historically interpreted as providing that the right of action against the tortfeasor lies exclusively in the injured employee. See Scalise ,
The mere recognition that the cause of action against the tortfeasor remains in the injured worker does not resolve this appeal as both the Superior Court below and Insurer, as Appellee, agree with such proposition, but rely on case law suggesting that where the injured employee refuses or otherwise fails to commence an action against the third-party tortfeasor, the employer or insurer may enforce its Section 319 subrogation right by filing an action "in the name of" the injured employee. Thus, reduced to its essence, this appeal requires us to determine whether the instant action commenced by Insurer "on behalf of Chunli Chen," absent Chen's voluntary joinder or assignment, constitutes an action brought "in the name of the injured employee" so as to effectuate Insurer's Section 319 subrogation right.
We answer this inquiry in the negative as Insurer has offered no authority, statutory or otherwise, permitting it to pursue Chen's cause of action against Tortfeasor without Chen's voluntary participation as a party plaintiff or the contractual assignment of her claim. The precedent relied upon by Insurer, i.e. , this Court's previous decisions in Scalise and Domtar Paper , does not support the proposition that an employer or workers' compensation carrier can seize the injured employee's cause of action against the tortfeasor by merely captioning the complaint "on behalf of" the employee and/or by including in the complaint independent claims of the employee in addition to the claim for subrogation of workers' compensation benefits. Rather, as detailed infra , those cases confirm that the cause of action belongs to the injured employee and that Section 319 grants the employer/insurer an automatic right of subrogation of any recovery that the injured employee obtains from the third-party tortfeasor who was responsible for the compensable injuries. Because there was no recovery by Chen from which Insurer could subrogate and Chen did not join Insurer's cause of action or assign her cause of action to Insurer, the trial court was correct in sustaining the preliminary objections filed by Tortfeasors and dismissing Insurer's complaint with prejudice.
We agree with Tortfeasors that this conclusion flows from our recent decision in Domtar Paper , upon which both the parties and the lower courts rely for their respective positions. There, George Lawrence, while employed by Schneider National Inc., suffered a work-related injury when he slipped and fell in a parking lot *850leased by Domtar Paper Company ("Domtar Paper"). Accordingly, the employer's insurance carrier, Liberty Mutual Insurance Company ("Liberty Mutual"), paid Lawrence $ 33,929 in workers' compensation benefits. Lawrence did not sue or settle with Domtar Paper and did not assign his cause of action to Liberty Mutual. Nevertheless, Liberty Mutual filed a complaint against Domtar Paper "as Subrogee of George Lawrence," in which Lawrence did not join. Therein, Liberty Mutual contended that Lawrence's work-related injuries were caused by Domtar Paper's negligent maintenance of the parking lot and that Liberty Mutual was entitled to recover its subrogation interest under Section 319 of the WCA, regardless of Lawrence's refusal to participate in the action.
Similar to the instant case, Domtar Paper filed preliminary objections, alleging that in the absence of an injured employee suing in his own right, a workers' compensation carrier has no independent ability to bring a subrogation claim directly against the third party tortfeasor. The trial court agreed and granted Domtar Paper's preliminary objections. The Superior Court affirmed, rejecting Liberty Mutual's contention that Section 319 conferred upon it a right to pursue separately its subrogation claims against the tortfeasor when Lawrence, as claimant, took no action of his own.
This Court granted allowance of appeal to determine "whether Section 319 of the WCA confers on employers or their workers' compensation insurers a right to pursue a subrogation claim directly against a third-party tortfeasor when the compensated employee who was injured has taken no action against the tortfeasor." Domtar Paper ,
First, we rejected Liberty Mutual's contention that prior decisions of this Court authorized an employer/insurer to commence suit directly against a third-party tortfeasor to enforce its Section 319 subrogation right to recover paid workers' compensation benefits. Specifically, we held that the language employed by this Court in our 1930 decision in Scalise , i.e. , that an employer "is not to be denied his right of suit because the employee does not sue, but may institute an action in the latter's name,"
Second, we held in Domtar Paper that several cases of the Superior Court had addressed the precise inquiry and concluded that Section 319 did not afford employers/insurers an independent right to sue third-party tortfeasors.
We found no persuasive reason in Domtar Paper to stray from the aforementioned Superior Court jurisprudence, which was consistent with the Court's ruling in Scalise that the right of action against the tortfeasor is indivisible and remains in the employee who suffered the loss. Id. at 1240. Recognizing that Pennsylvania courts disfavor splitting causes of action, we opined that preventing insurers from asserting independent actions against tortfeasors accomplished two laudable goals: (1) eliminating the prospect that the tortfeasor could be exposed to multiple suits; and, (2) preserving the rights of the injured worker who retains the beneficial interest in the cause of action against the tortfeasor. Id. Both of these considerations come into play in the instant case.
Accordingly, the Domtar Paper Court "reaffirm[ed] that the right of action against a third-party tortfeasor under Section 319 of the WCA remains in the injured employee, and that the employer['s]/insurer's right of subrogation under Section 319 must be achieved through a single action brought in the name of the injured employee or joined by the injured employee." Domtar Paper,
*852Overlooking the basis of the Domtar Paper decision, which was to reaffirm that under Section 319 the injured worker retains the cause of action against the tortfeasor, Insurer proffers a more literal interpretation of our holding, suggesting that by commencing the action "on behalf of" Chen, Insurer filed the action "in the name of" Chen, thereby utilizing an accepted method to enforce its Section 319 subrogation rights. We decline Insurer's invitation to facilitate an employer's/insurer's ability to recoup workers' compensation benefits at the expense of placing the injured worker's independent cause of action in peril. The WCA is remedial in nature and should be interpreted for the benefit of the worker and liberally construed to effectuate its humanitarian interests. Peterson v. Workers' Compensation Appeal Board, (PRN Nursing Agency) ,
Recognizing this notion, the PAJ, as amicus advocating for the rights of injured workers, cogently observes that an employer's workers' compensation insurance carrier has every incentive to limit its focus of the litigation against a third-party tortfeasor to the amount it is due in subrogation, and has no incentive or obligation to pursue vigorously the injured employee's independent claims, such as those seeking compensation for pain and suffering. To elucidate, upon receiving an offer from the tortfeasor that satisfies the subrogation lien, but does not compensate the injured employee sufficiently for pain and suffering or the like, the Insurer would have no obligation, nor, indeed, incentive, to decline the offer and proceed to trial so that the injured worker has the opportunity to be made whole. In fact, Insurer concedes in its brief to this Court that it is not representing the interests of Chen, the injured worker, in this litigation. See Brief for Appellee at 7 (asserting that although it contacted Chen and discussed the filing of the lawsuit, "[c]ounsel for [a workers' compensation insurance carrier] cannot also represent the employee in a civil suit against tortfeasors, so employee is not listed as a separate party").
Additionally, the current statutory scheme does not require that the workers' compensation insurance carrier provide notice to the injured worker of any lawsuits commenced by insurers on the worker's behalf. Consequently, an insurer could swiftly file a lawsuit on behalf of the injured employee without her knowledge and obtain a settlement from the third-party tortfeasor before the employee has decided whether to pursue an action to recover sums for noneconomic damages, thereby extinguishing the injured worker's independent claims. While it would further the purpose of Section 319 to allow for a principled method by which a workers' compensation *853insurance carrier could sue the third-party tortfeasor without detrimentally affecting the injured employee's independent cause of action, it is not for this Court to create a remedy to cure a possible deficiency in the WCA. See Burke ex rel. Burke v. Indep. Blue Cross ,
Under these circumstances, we find it apparent that sanctioning a workers' compensation carrier to pursue litigation of the injured employee merely by captioning the complaint as "on behalf of" the employee and including a bald assertion seeking any recovery due the employee, contravenes the very jurisprudence establishing that it is the injured worker who retains the cause of action against the tortfeasor. It is for these reasons that we reiterate our holding in Domtar Paper and clarify that absent the injured employee's assignment or voluntary participation as a party plaintiff, the insurer may not enforce its Section 319 right to subrogation by filing an action directly against the tortfeasor.
Accordingly, we vacate the judgment of the Superior Court and reinstate the order of the trial court, which sustained the preliminary objections filed by Tortfeasors and dismissed Insurer's complaint with prejudice.
Justice Donohue, Dougherty, Wecht and Mundy join the opinion.
Chief Justice Saylor files a dissenting opinion in which Justice Todd joins.
Justice Todd files a dissenting opinion.
As explained infra , the facts set forth herein are based upon the assertions set forth in the civil complaint filed by Appellee, The Hartford Insurance Group. Because this appeal emanates from an order sustaining preliminary objections in the nature of a demurrer, we accept as true the material facts set forth in the complaint along with any reasonable inferences therefrom. Lord Corp. v. Pollard ,
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1 -1041.1, 2501 -2708.
Section 319 of the Workers' Compensation Act ("WCA") provides, in relevant part:
Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe, his personal representative, his estate or his dependents, against such third party to the extent of the compensation payable under this article by the employer; reasonable attorney's fees and other proper disbursements incurred in obtaining a recovery or in effecting a compromise settlement shall be prorated between the employer and employe, his personal representative, his estate or his dependents. The employer shall pay that proportion of the attorney's fees and other proper disbursements that the amount of compensation paid or payable at the time of recovery or settlement bears to the total recovery or settlement. Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future instalments of compensation.
77 P.S. § 671.
As discussed in detail infra , this Court in Domtar Paper rejected an insurer's attempt to enforce its subrogation rights through an action it filed directly against the alleged third-party tortfeasor "as subrogee" of the injured employee.
Pa.R.C.P. 1024(c) states:
The verification shall be made by one or more of the parties filing the pleading unless all the parties (1) lack sufficient knowledge or information, or (2) are outside the jurisdiction of the court and the verification of none of them can be obtained within the time allowed for filing the pleading. In such cases, the verification may be made by any person having sufficient knowledge or information and belief and shall set forth the source of the person's information as to matters not stated upon his or her own knowledge and the reason why the verification is not made by a party.
Similarly, we exercise de novo review of a lower tribunal's order sustaining preliminary objections in the nature of a demurrer. Bruno v. Erie Ins. Co. ,
Alternatively, the PAJ suggests that if this Court permits insurers to sue alleged third-party tortfeasors "for the use of" injured employees, we should require that formal notice of the action be given to the injured employee so as to allow for protection of the injured employee's independent claims for pain and suffering, which did not occur here.
Insurer asserts that although it contacted Chen and discussed the filing of the lawsuit, "[c]ounsel for [a workers' compensation insurance carrier] cannot also represent the employee in a civil suit against tortfeasors, so employee is not listed as a separate party." Brief for Appellee at 7. In its reply brief, the PAJ maintains that Insurer's concession in this regard illustrates why an employer's workers' compensation carrier "cannot ethically bring suit in [the injured employee's] name, with averments that purport to make claims for damages that may exceed any amount to which [the insurer] has a claim as subrogee, and belong to the employee." Reply Brief for PAJ, at 2.
The rationale for an employer's right of subrogation under Section 319 is aligned with the purpose of the common law doctrine. See Gillette v. Wurst,
In considering the General Assembly's intentions in enacting Section 319, we apply the conventional principles of statutory construction, which require "close adherence to terms of a statute that are plain and clear and resort to other approaches of discernment only in the presence of ambiguity or inexplicitness." Williams v. City of Philadelphia , --- Pa. ----,
In Domtar Paper , we further distinguished as non-binding dicta language employed in Frazier v. Workers' Compensation Appeal Board (Bayada Nurses),
Moltz did not suggest that a workers' compensation insurance carrier could sue the tortfeasor "for the use of" the injured employee. Rather, it held that an employer's Section 319 subrogation right could be enforced by joining the employer as a use plaintiff in the employee's action against the tortfeasor. This is a distinction with a difference as allowing an employer to be joined in the employee's action as a use plaintiff does not abrogate the well-settled proposition that the right of action lies in the employee.
We declined expressly in Domtar Paper to elaborate on the propriety of the practice by which an insurer could commence an action "for the use of" the injured employee, finding such issue beyond the grant of allocatur. Id. at n.7. Further discussion of the antiquated "for use" practice in workers' compensation cases governed by Section 319 is unnecessary as our decision herein makes clear that for an employer/insurer to enforce its Section 319 subrogation right, any action filed by the employer/insurer directly against the third-party tortfeasor must proceed with the injured employee's assignment or voluntary participation as a party plaintiff.
Then Justice, now Chief Justice Saylor filed a dissenting opinion, wherein he asserted that by captioning the complaint as "Liberty Mutual as the subrogee of George Lawrence," Liberty Mutual effectively rendered the injured employee a use plaintiff, and thereby satisfied the requisite that the action be filed "in the name of" the injured employee. Thus, he concluded that there was little danger that the cause of action would be divided because any subsequent action by Lawrence would have been barred by res judicata . Justice Saylor opined that even if the Court would accept only phraseology such as "for the use of" or "in the name of," as opposed to "as subrogee of," form should not affect the substantive rights of the parties, and the trial court should have allowed Liberty Mutual to amend its complaint to use such phraseology.
Justice Todd also filed a dissenting opinion in which she agreed with Justice Saylor that the manner in which Liberty Mutual captioned its complaint was not fatal to its claim. Because Section 319 precludes a subrogee from recovering damages in excess of what it paid the injured employee in benefits, Justice Todd found it critical that the subrogee serve the injured employee a copy of its complaint to allow the injured employee to retain counsel and participate in the litigation to preserve independent claims for damages.
Because we conclude that Insurer failed to assert a legally cognizant cause of action against Tortfeasors, we need not address the second issue in this appeal regarding the propriety of the verification of Insurer's complaint.
Dissenting Opinion
For the reasons expressed in my dissenting opinion in Liberty Mutual Insurance Co. v. Domtar Paper Co. ,
By contrast, the majority now holds that the common law understanding of subrogation no longer pertains, since the right of subrogation is now "afforded expressly by statute in Section 319 of the WCA." Majority Opinion, at 848. The Legislature, however, has not supplied a definition of *854subrogation that is any different from the common law conception or otherwise suggested a departure from the common law model. Moreover, "statutes are not presumed to make changes in the rules and principles of the common law or prior existing law beyond what is expressly declared in their provisions." Commonwealth v. Miller,
Certainly, there are difficulties associated with the enforcement by insurers of their subrogation rights, see Majority Opinion, at 852-53, but as Justice Todd and I have previously suggested, these could be addressed through procedural mechanisms to protect employee interests. See Domtar Paper ,
In summary, I would enforce the explicit language of the Workers' Compensation Act and thus permit subrogee-insurers to enforce their statutorily-conferred rights via the use-plaintiff convention. See 77 P.S. § 671 ("Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe."). Based on the above, and for the additional reasons ably expressed in the Superior Court's treatment, see Hartford Ins. Group ex rel. Chen v. Kamara ,
Justice Todd joins this dissenting opinion.
I agree with the majority that our pronouncement in Frazier v. W.C.A.B. (Bayada Nurses, Inc.) ,
For my own part, I have advocated a more circumspect approach to the fashioning of appropriate procedures. See id. at 458,
Dissenting Opinion
I join Chief Justice Saylor's Dissenting Opinion in full. I write separately to emphasize my concern over the deleterious practical consequences of the majority opinion - namely, that it leaves an insurer which has paid an injured employee's workers' compensation claim arising out of the tortious actions of a third party without a means to enforce its statutory right to subrogation against the third party in situations such as this one, where the injured employee elects, for whatever reason, not to pursue a tort action against the third party. This, in turn, will unavoidably, and unnecessarily, lead to higher workers' compensation insurance rates.
As Chief Justice Saylor notes in his Dissenting Opinion, see Dissenting Opinion (Saylor, C.J.) at 854, the right of the employer to subrogation of monies it has paid on account of injuries inflicted to its employee by a third-party tortfeasor is explicitly conferred by statute. See 77 P.S. § 671 ("Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of the employe."). Almost 90 years ago, our Court recognized *855that an employer faced with this type of situation may enforce its statutory right to subrogation via "use-plaintiff" practice. See Scalise v. F.M. Venzie & Co. ,
Although the majority dismisses these pronouncements as mere dicta , see Majority Opinion at 850-51, in my view, they were a valid statement of the governing legal principles in this area, which retain their vitality. Indeed, in Mayhugh , the case explicitly cited by Scalise as an example of how use-plaintiff practice may be employed in the workers' compensation subrogation context, the Commonwealth's Workers' Compensation Insurance Fund recovered the sums it had paid to an employee of an electrical company injured by contact with the defendant's dangling and electrically-charged telephone wire by bringing suit in the name of the injured employee, just as the insurer did in the case at bar. See Mayhugh , supra .
For the ensuing nine decades since Scalise was decided, it has not been overruled, nor has the validity of use-plaintiff practice in circumstances such as those presented by the instant matter been questioned by our Court. In fact, our Rules of Civil Procedure permit a subrogee to sue in the name of its insured for its use so that it may enforce its subrogation interest. See Pa.R.C.P. 2002(a) & (d) (providing that civil actions must be prosecuted in the name of the real party in interest except where a subrogee is the real party in interest); Goodrich-Amram , 2d., § 2002(d):1 at 17 (this rule permits an insurer which has paid its insured's claim to pursue the insured's claim against the tortfeasor "in the name of the insured to the use of the insurer"). I would continue to follow these well established precepts, as, in my view, the majority offers no compelling reason to cast them aside. Indeed, in our most recent decision in this area, Liberty Mutual Ins. Co. v. Domtar Paper Co. ,
Under use-plaintiff practice, "the subrogee brings the action for the 'use' or benefit of the party actually possessing the cause of action but who, for whatever reason, is not asserting the cause of action of its own volition." 7 West's Pennsylvania Practice, Workers' Compensation § 12:13 (3d. ed.). Critically, in such circumstances, the subrogee is not asserting its own independent cause of action; rather, the subrogee is asserting the cause of action possessed by the injured worker. Id . ; see also Grubnau v. Centennial National Bank ,
Consequently, if an employer brings an action against a third-party tortfeasor in the name of the injured employee for its own use, the employee's right to maintain the cause of action has not been seized by the employer as the majority characterizes it, see Majority Opinion at 849, but, instead, it remains vested with the injured employee. Indeed, in such situations, the injured employee retains the unqualified right to join in such an action commenced by an employer and to seek to recover all damages which were not covered by the employer's payments under the Workers' Compensation Act, as the employer's recovery is limited to the amount for which it compensated the injured employee. See generally Associated Hospital Service of Philadelphia v. Pustilnik ,
While I agree with the majority that the purpose of the Workers' Compensation Act is remedial, and, as such, it "should be interpreted for the benefit of the worker and liberally construed to effectuate its humanitarian interests," Majority Opinion at 852, and while I endorse the majority's view that, consistent with these principles, our Court should eschew an interpretation of the Workers' Compensation Act which jeopardizes the injured worker's right to pursue an independent cause of action against a third-party tortfeasor, it is possible to safeguard an injured worker's right to pursue his or her own action, while at the same time ensuring that a workers' compensation insurer is not forced to absorb costs occasioned by the tortious actions of a third party - inexorably leading to higher insurance rates - by denying its statutory right to recoupment of those costs through subrogation. As both Chief Justice Saylor and I highlighted in our dissents in Domtar Paper , the injured employee's right to maintain an independent suit for non-economic damages such as pain and suffering may be protected through the adoption of adequate procedural safeguards which apprise the employee of the fact that an action has been commenced by the employer and, correspondingly, may give the injured employee the opportunity to participate in and direct the conduct of the suit so that he or she may fully recoup damages for any uncompensated injuries. See Domtar Paper ,
For these reasons, I respectfully dissent.
Accord United States v. Aetna Cas. & Sur. Co. ,
