Financial Responsibility Law

July 23rd, 2019 by Rieders Travis in Financial Responsibility Law

FINANCIAL RESPONSIBILITY LAW-SUBROGATION-HEART AND LUNG ACT BENEFITS

City of Philadelphia v. Zampogna, 2017 Pa. Commw. LEXIS 1077 (December 27, 2017) Leavitt, P.J.  The City of Philadelphia appealed an order of the Court of Common Pleas of Philadelphia County, granting declaratory judgment in favor of a City employee.  The trial court held that Section 1720 of the Motor Vehicle Financial Responsibility Law prohibited the City from subrogating its payment of Heart and Lung Act benefits to the employee from his third-party tort recovery.  The Commonwealth Court affirmed the order of the trial court.  The City had petitioned to intervene in the employee’s tort action to protect the subrogation lien it intended to assert against any recovery.  The third-party tort action settled, and the money was placed in escrow while the parties litigated the City’s entitlement to its asserted lien.  The City then initiated a declaratory judgment action to establish its right to recover the Heart and Lung Act benefits it paid to the employee from his settlement.

As indicated the Commonwealth Court agreed with the trial court and held that under the law no subrogation was allowed.  The 1990 amendment to Section 1720 of the Motor Vehicle Financial Responsibility Law did not restore a public employer’s right to subrogate Heart and Lung Act benefits.  Those benefits remain subject to the anti-subrogation mandate of Section 1720.

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