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The recovery of a claimant who sued the manufacturer of a tire that exploded and injured him on the job is not subject to the employer’s right to subrogation because the third-party action fell under the purview of Pennsylvania’s Motor Vehicle Financial Responsibility Law rather than a theory of products liability, the Pennsylvania Commonwealth Court has ruled. In Laidlaw Transit Inc. v. Workers’ Compensation Appeal Board (Lindner), a three-judge panel said claimant David Lindner was engaging in the “maintenance or use” of a motor vehicle, rendering MVFRL applicable. MVFRL protects a claimant from subrogation by an employer. According to the opinion, written by Judge Dan Pellegrini, Lindner was working as a mechanic for Laidlaw Transit Inc. at the time of the accident. He was injured while a tire he was adding air to burst. Laidlaw issued a notice of compensation payable, acknowledging the injury, and paid Lindner $338 per week in benefits. Lindner later filed a civil suit against Goodyear Tire and Rubber Co. and Martin Tire Inc., alleging that as he was inflating the tire, the sidewall of the tire failed, causing a “rush of pressurized air” to strike him, Pellegrini said. Lindner received a $3 million jury verdict against Goodyear and settled with Martin. After the verdict, Laidlaw claimed it was entitled to a suspension of benefits and subrogation because Lindner received a third-party recovery on the basis of his work injury. Laidlaw claimed it had paid Lindner $111,738 in indemnity benefits and $28,313 in medical benefits. The attorney who represented Lindner in his civil action, Dennis Morgenstern, testified at the hearing before the workers’ compensation judge that during the litigation, he contacted Laidlaw’s attorney for help but Laidlaw had apparently lost the file regarding Lindner’s accident. Morgenstern said the civil action stemmed from the maintenance of a motor vehicle. He also testified that he had several discussions with Laidlaw’s attorney before the civil trial regarding the employer’s right to subrogation and held the position that because the case involved the maintenance of a motor vehicle, Laidlaw had no right to subrogation. The WCJ concluded Laidlaw had no right to subrogation, considering the circumstances surrounding Lindner’s injury and the fact that the verdict involved a recovery under MVFRL. Laidlaw appealed to the Workers’ Compensation Appeal Board, which affirmed, finding that based on Lindner’s testimony alone, the WCJ properly found that the third-party action fell under MVFRL. Laidlaw then appealed to the Commonwealth Court. Laidlaw claimed Lindner’s third-party recover was not based on the maintenance or use of a motor vehicle but rather on a theory of products liability. In support, Laidlaw cited the Commonwealth Court’s decision in Greater Lancaster Disposal/SCA Services v. WCAB (Snook), a case decided under the Pennsylvania No-Fault Motor Vehicle Insurance Act, the precursor to MVFRL. The employee in Greater Lancaster was killed when a garbage truck slipped down an incline and pinned him to a dock. The widow received workers’ compensation from the employer and later settled a products liability suit against the truck’s manufacturers. The employer asserted its subrogation rights, arguing that because the widow’s third-party action was based on a products liability theory, it was separate and distinct from a no-fault action. The Commonwealth Court agreed with the employer, finding that because the widow alleged in her complaint the manufacturers were negligent in the design and manufacture of the garbage truck and not that her husband’s death arose out of the use of the motor vehicle, the No-Fault Act did not apply. But Pellegrini said Greater Lancaster provided no precedent that the court was required to follow in Lindner’s case. “While we held that the employer was entitled to subrogation of the third-party recovery because the claimant’s third-party action did not fall within the No-Fault Act, Greater Lancaster does not carve out a products liability exception to the ban on employer’s subrogation rights found in Section 1720 of the Motor Vehicle Financial Responsibility Law,” Pellegrini said. “All that Greater Lancaster holds is that for there to be bar to an employer’s subrogation right, the claimant’s cause of action must have arisen out of the maintenance or use of a motor vehicle, not merely that the claimant happened to be injured by a motor vehicle.” All that was at issue in Lindner’s case was whether his action fell under MVFRL, Pellegrini said. “Because there is no dispute that [Lindner] was injured working in [Laidlaw's] shop while performing maintenance on a school van, his foreman asked him to check the pressure in one of the van’s tires because it appeared to be low, and when he began adding air to the tire it exploded, causing severe injury to his left ear, [Lindner's] injury occurred while he was engaged in the labor of keeping something in a state of repair or efficiency, i.e., the van tire,” Pellegrini said. “Consequently, his third-party action clearly arose ‘out of the maintenance or use of a motor vehicle.’”

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