Workers’ Compensation Act Section 319 (employer/insurer’s right of subrogation where compensable injury caused by third-party); Proper application of Liberty Mut. Ins. Co. v. Domtar Paper Co., 113 A.3d 1230 (Pa. 2015) 

Hartford Ins. Group on behalf of Chen v. Kamara, 155 A. 3d 1108 (Pa. Super. 2017); allocatur granted Aug. 9, 2017, appeal docket 25 EAP 2017

Background:  

In Liberty Mut. Ins. Co. v. Domtar Paper Co., 113 A.3d 1230 (Pa. 2015), the Supreme Court reaffirmed:

  • that the right of action against a third-party tortfeasor under Section 319 of the WCA remains in the injured employee;
  • that the employer/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; and
  • that employer’s insurer could not bring a lawsuit captioned as “[Employer’s Insurer] as subrogee for [injured employee]” where the injured employee was not named as a plaintiff, did not join in the lawsuit, and had not assigned his right to sue.

In Hartford Ins. Group on behalf of Chen v. Kamara, 155 A. 3d 1108 (Pa. Super. 2017), on facts nearly identical to those in Domtar, with the exception that the insurer’s suit was captioned as “on behalf of [the injured employee]” rather than “as subrogee for [injured employee]” a three judge panel of the Superior Court held that  the plaintiff insurer had “followed [Domtar]” by instituting suit against the Defendants as “The Hartford Insurance Group on behalf of” the injured employee, and then within the complaint sought to establish the liability of the third-party tortfeasors to the injured employee. Therefore, the insurer was “not attempting to ‘pursue a subrogation claim directly against a third-party tortfeasor,” was not “seeking to recover only the amount that it paid to [the injured employee] in workers’ compensation benefits,” and was not “splitting” the injured employee’s cause of action. 155 A. 3d at 1113-14.  The Court also found that it was proper for the insurer’s employee to verify the facts pleaded in the complaint.

The Supreme Court granted allocatur to consider whether (a) the “on behalf of the injured employee” designation is sufficient to bring the action in the name of the injured employee, as required in Domtar; (b) use of the insurer’s employee rather than the injured employee himself to verify the complaint supports the argument that insurer was acting without the consent of the injured employee; and (c) the “[Employer’s Insurer] on behalf of the injured employee” designation is synonymous with “[Employer’s Insurer] as subrogee for [injured employee]” and thus prohibited by Domtar.

For more information, contact Kevin McKeon or Dennis Whitaker.