Divided PA Supreme Court Refuses to Allow Comp Carrier to Maintain Third-Party Action on Behalf of Injured Employee

Injured Employee Must Either Assign Cause or Join Litigation as Party Plaintiff

In Pennsylvania, a workers’ compensation insurance carrier may not maintain 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, held a divided Supreme Court of Pennsylvania [Hartford Ins. Grp. ex rel. Chen v. Kamara, 2018 Pa. LEXIS 6033 (Nov. 21, 2018)]. With its decision, the majority of the Court indicated that it was reaffirming the well-settled proposition that in Pennsylvania, the right of action against the tortfeasor remains in the injured employee unless the injured employee assigns her cause of action or voluntarily joins the litigation as a party plaintiff.

Background

The employee, Chen, sustained injuries while standing in the parking lot of Thrifty Rental Car when she was struck by a rental vehicle operated by Kafumba Kamara. At the time of her injury, Chen was in the course of her employment with Reliance Sourcing, Inc., which maintained workers’ compensation coverage through The Hartford Insurance Group. As a result of the accident, Hartford paid $59,424.71 in medical and wage benefits to Chen pursuant to her employer’s workers’ compensation insurance policy. Chen did not seek to recover damages for her injuries by filing an action against Kamara and/or Thrifty Rental Car and did not assign her cause of action against either tortfeasor to Hartford.

Just prior to the expiration of the two-year statute of limitations on Chen’s cause of action, Hartford sought to effectuate its subrogation right under Section 319 of the Workers’ Compensation Act (“WCA”), 77 Pa. Stat. §671, by filing a praecipe for a writ of summons against the alleged tortfeasors. In its subsequently filed complaint, Hartford captioned the plaintiff as “The Hartford Group on behalf of Chunli Chen.” The complaint contained two negligence counts, which asserted that each of the defendants were liable to Hartford and to Chen for injuries the defendants caused to Chen. The complaint was not verified by Chen, but rather by one of Hartford’s workers’ compensation representatives.

Trial Court: Hartford Could Not Move Forward on Claim

The trial court sustained the defendants’ preliminary objections and dismissed Hartford’s complaint with prejudice, finding that since Chen had not filed a complaint against the defendants, Hartford could not proceed.

Superior Court Disagreed

On review, the Superior Court held that Hartford’s action was not precluded by the high court’s decision in in Liberty Mutual Insurance Co. v. Domtar Paper Co. (“Domtar Paper”), 113 A.3d 1230, 631 Pa. 463 (Pa. 2015), because Hartford was not pursuing a subrogation claim directly against the third-party tortfeasors but rather, that Hartford had filed an action to establish the liability of the defendants to Chen. Notably, the Superior Court found that Hartford complied with the subrogation rule in that it filed the civil action in the name of the injured employee by filing its action “on behalf of” Chen. The court emphasized that Hartford was not attempting to “split” Chen’s cause of action as it sought the full amount of recovery due to Chen and not merely the amount representing its subrogation interest.

Majority’s Decision

The majority Insurer stressed that Hartford had offered no authority, statutory or otherwise, permitting it to pursue Chen’s cause of action against the defendants without Chen’s voluntary participation as a party plaintiff or the contractual assignment of her claim. The majority declined Hartford’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 majority refused to retreat from its holding in Domtar Paper and stressed 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.