WORKERS’ COMPENSATION-SUBROGATION-DISABILITY BENEFITS AND MEDICAL EXPENSES

July 3rd, 2018 by Rieders Travis in Workers' Compensation

Whitmoyer v. Workers’ Compensation Appeal Board, 2018 Pa. LEXIS 2995 (June 19, 2018) Donohue, J.  The Pennsylvania Workers’ Compensation Act (“WCA”) makes an employer liable for paying the disability benefits and medical expenses of an employee who sustains an injury in the course of his or her employment. See 77 P.S. §§ 431 (disability), 531 (medical). This liability attaches without regard to the employer’s negligence. See id; see also Heckendorn v. Consolidated Rail Corp., 465 A.2d 609, 613 (Pa. 1983). Under section 319 of the WCA, however, employers (or their insurance carriers) are “subrogated to the right of the employe” and therefore entitled to reimbursement for certain expenses where a third party caused the employee’s injury. 77 P.S. § 671. The instant matter addresses a specific question about the scope of this reimbursement. Section 319 of the WCA provides, in pertinent part: 

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. 

We granted allowance of appeal to determine whether the Commonwealth Court erred in concluding that the term “instalments of compensation” in section 319 encompasses both disability benefits and payment of medical expenses.

In sum, after satisfying the employer’s accrued subrogation lien, which encompasses “compensation” payments made by the employer toward both disability benefits and medical expenses prior to the third-party settlement, the General Assembly intended the excess recovery to be paid to the injured employee and to be treated as an advance payment only on account of any future disability benefits. See 77 P.S. 671. The fact that, in this case, Whitmoyer was not owed any outstanding disability benefits is wholly irrelevant to our analysis.

As to the other stated purposes of section 319, we note that the provision’s protection of “innocent” employers has its limits. The WCA’s default is to hold an employer liable for an employee’s work-related injury. See 77 P.S. §§ 431 (disability benefits), 531 (medical expenses). Indeed, in the instant matter, MCM concedes that even if we found in its favor, its liability would be circumscribed “only to the extent of [Whitmoyer’s] third party recovery.” Once that amount is exceeded, MCM (or Selective) would again be required to pay Whitmoyer’s medical expenses in full, “potentially for the lifetime of the injured worker[].” Id. Finally, it bears emphasizing that the conclusion we reach today is wholly consistent with the remedial nature of the WCA, which should be interpreted for the benefit of the worker and liberally construed to effectuate its humanitarian objectives. Peterson v. W.C.A.B (PRN Nursing Agency), 597 A.2d 1116 (Pa. 1991); 1 Pa.C.S. § 1928. 

The decision of the Commonwealth Court is reversed. 

Chief Justice Saylor and Justices Baer, Todd, Dougherty, Wecht and Mundy join the opinion.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.

Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.

As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]

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