Hartford Insurance Group v. Kamara et. al. 976 EDA 2016 (Pa. Super., 2017)
By Jeffrey D. Snyder, Esquire
The Supreme Court of Pennsylvania has accepted allocatur of the above captioned case, which considers whether an insurance carrier can independently pursue a third-party case “on behalf of” a claimant.
The Superior Court was faced with Preliminary Objections to Hartford’s Complaint, it being argued that Hartford did not have standing to file a Complaint because the Complaint was not verified by someone with personal knowledge, because the claimant had not assigned a cause of action to Hartford, and because the claimant was not a party to the lawsuit.
As background, the claimant Chen was standing in a parking lot of a Thrifty Car Rental location when she was struck by a rental car operated by defendant Kamara. The Complaint against Kamara et. al. averred that Chen was in the employ of Alliance Sourcing Inc., with Hartford paying funds in both medical and wage loss benefits to Chen under a workers’ compensation policy maintained by Alliance Sourcing Inc.
There were two counts of negligence in the Complaint.
Responding to the Preliminary Objections, Hartford asserted that the Supreme Court of Pennsylvania’s holding in Domtar Paper (Liberty Mutual Insurance Co. as subrogee of Lawrence v. Domtar Paper Co. e. al., No. 19 WAP 2014 (Pa., 2015) denying standing to sue was inapplicable because in Domtar the suit was brought “as subrogee of” while in this case suit was brought “on behalf of Chunli Chen”. It was further asserted that the verification to the Complaint was proper because the Hartford employee signing it had knowledge of the facts through her work on the claim.
The trial court dismissed Hartford’s Complaint with prejudice, in reliance on its interpretation of the law asserted as applicable by the defendants, notably that the case was controlled by the Supreme Court’s Opinion in Domtar Paper and because the trial court did not consider the Complaint properly verified. The trial court further stated that it did not grant leave to amend the verification because Hartford had failed to assert a legally cognizable cause of action against the defendants, thus granting leave to attach a sufficient verification would have been futile.
On appeal to the Superior Court, Hartford raised two issues. First, did the trial court misapply Domtar given that Hartford had filed suit “on behalf of” and not as “subrogee of” and, second, whether the trial court improperly characterized the verification as faulty when it was signed by a representative of Hartford with knowledge of the claim – or in the alternative whether the Court should have allowed an amended verification.
The Superior Court agreed that Domtar Paper was inapplicable because Hartford filed suit “on behalf of Chen” and was attempting to establish the liability of third party tortfeasor to Chen. The Court, relying on prior case law, considered that either joining the employer as a party plaintiff or as a use plaintiff would operate to secure the employer’s interest in its recovery of its subrogation lien. “We therefore hold that Section 319 is an exclusive remedy and that for an employer or its insurer to enforce its subrogation rights, it must proceed in an action brought on behalf of the injured employee in order to determine the liability of the third party to the employee. If such liability is determined, then the employer or its insurer may recover, out of an award to the injured employee, the amount that is paid in workers’ compensation benefits”. The Superior Court then stated: “Hartford is not attempting to ‘pursue a subrogation claim directly against a third-party tortfeasor’, is not seeking to recover only the amount that it paid to Chen in workers’ compensation benefits, and is not splitting Chen’s cause of action”. The Court observed that Hartford had otherwise brought a single action against the third-party tortfeasors in the name of the injured employee and was trying to recover the entire amount to which Chen might be entitled.
The Superior Court also noted that because the suit was filed in Hartford’s name it was a party in the litigation and therefore its representative could verify the Complaint as a representative of “one or more of the parties filing the pleading”, remanding for further proceedings.
Ultimately, the Supreme Court of Pennsylvania, Eastern District, at No. 205 EAL 2017, granted a Petition for Allowance of Appeal, which raises three specific questions:
(a) Can a workers’ compensation lienholder bring a third party action on behalf of the injured worker to recoup amounts paid to the injured worker from the alleged tortfeasor to the standard set in Liberty Mutual Insurance Company v. Domtar Paper Company [citation omitted]?
(b) Did the Superior Court fail to see that the failure to attach the verification of Chunli Chen to plaintiff’s Complaint and decision to attach the verification of the insurance adjuster with knowledge of the lien, supports the argument of [Petitioners] that this lawsuit was brought without the cooperation of Chunli Chen and solely on behalf of the insurance company in an attempt to subrogate its lien in direct contradiction of the standard set in Liberty Mutual Insurance Company v. Domtar Paper Company [citation omitted]?
(c) Is the caption, and effect of the caption, “The Hartford Insurance Group on behalf of Chunli Chen” synonymous with “Liberty Mutual Insurance Company, as subrogee of George Lawrence” as it appears in Liberty Mutual Insurance Company v. Domtar Paper Company[citation omitted]?
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