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The plaintiff in an auto accident lawsuit is barred from presenting any evidence of lost wages if, in a prior proceeding, a workers’ compensation judge ruled that the injuries she suffered did not disable her from working, a federal appeals court has ruled. In Rutter v. Rivera, the 3rd U.S. Circuit Court of Appeals found that, under Pennsylvania law, the doctrine of collateral estoppel applies to judgments from workers’ compensation boards in subsequent common law tort actions. The unanimous three-judge panel found that U.S. District Judge J. Curtis Joyner erred when he held that the decision of a workers’ compensation judge was not “final” for collateral estoppel purposes because an appeal of that decision was pending before the Workers’ Compensation Appeal Board at the time of trial. “Under Pennsylvania law, a judgment is deemed final for purposes of res judicata or collateral estoppel unless or until it is reversed on appeal,” visiting 8th Circuit Senior Judge John R. Gibson wrote in an opinion joined by 3rd Circuit Chief Judge Anthony J. Scirica and Senior Judge Morton I. Greenberg. Since Joyner erred by allowing the jury to include lost wages in its lump-sum award, the appellate court ruled that the defendant is entitled to a new trial on the issue of damages. The ruling is a victory for attorney Kevin R. McNulty of Gerolamo McNulty Divis & Lewbart, who represented the defendant, Felix Rivera. According to court papers, in August 1998 plaintiff Jennifer Rutter was working for Valens Information Systems as a local area network administrator, a job that entailed frequent trips to client sites for the installation and maintenance of computer systems. On Aug. 12, 1998, while returning from a client site to her office at Valens, Rutter was involved in an automobile accident on Route 420 in Delaware County. Rutter said she was forced to quickly apply her brake when a car driven by Leora Natan stopped in front of her. Rutter was then struck from behind by an automobile driven by Rivera. After the accident, Rutter filed a claim petition for workers’ compensation benefits as well as a suit in federal court that named Natan and Rivera as defendants. Natan later settled the federal claim with Rutter for $5,000. In January 2001, a workers’ compensation judge denied Rutter’s claim for benefits. In October 2001, just 10 days before the case was set to go to trial, Rivera’s lawyers moved to amend their answer to include a collateral estoppel defense, arguing that the denial of Rutter’s workers’ compensation claim precluded her from claiming damages for lost wages in her negligence action. Joyner denied the motion to amend and allowed Rutter to pursue lost wages at trial. The jury, in its verdict, awarded Rutter $71,000 and found that Rivera was 67 percent responsible for the accident. McNulty said Rutter testified that she was earning about $1,000 per week and had missed 26 weeks of work as a result of the accident. On appeal, Rutter’s lawyer, Thomas F. Sacchetta of Sacchetta & Baldino in Media, Pa., argued that Rivera is not entitled to a new trial because he failed to plead collateral estoppel in his answer and therefore waived that defense. But McNulty argued that Joyner had abused his discretion in denying Rivera’s motion to amend his answer. Gibson agreed, finding that Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend “shall be freely given when justice so requires” and embodies a liberal approach to the allowance of amendments. The 3rd Circuit has interpreted Rule 15(a) to “require the court to grant leave to amend even when the moving party has delayed in proposing the amendment, so long as the opposing party is not prejudiced by the delay,” Gibson wrote. Sacchetta argued that Joyner did not abuse his discretion because Rivera did not attempt to amend his answer until 10 months after the workers’ compensation judge denied Rutter’s claim for benefits. Gibson disagreed, saying, “Rutter could not have been unaware of or unfairly surprised by the judgment in her workers’ compensation claim. Rivera’s amendment would have introduced only a new question of law which would not have required Rutter to conduct any further discovery and would not have forced Rutter to put on evidence of any additional facts at trial.” Turning to the merits of the collateral estoppel defense, Gibson found that McNulty was correct in arguing that the decision by the workers’ compensation judge that Rutter was not disabled as a result of the accident effectively barred her from recovering any lost wages in her civil suit. Sacchetta argued that the workers’ compensation proceeding could not have resolved the issue of whether she was entitled to lost wages in her negligence action because the workers’ compensation judge found only that Rutter “did not sustain a work-related injury within the meaning of the act” and simply denied Rutter’s claim for benefits without specifying the grounds upon which this denial was based. But Gibson found that Pennsylvania courts “have given preclusive effect to specific conclusions of law in the opinion of the workers’ compensation judge.” In Rutter’s case, Gibson found, the workers’ compensation judge said he found “no indication that Rutter suffered an injury that would be disabling. As a result, Gibson concluded that “the issue decided in the workers’ compensation proceeding is identical to Rutter’s wage loss claim for purposes of collateral estoppel. The workers’ compensation judge, Gibson noted, “specifically concluded that Rutter ‘failed to meet her burden of proving that she sustained a work-related injury … from which she was disabled from performing her pre-injury position.’” By concluding that Rutter was not disabled as a result of the accident, Gibson said, the workers’ compensation judge decided that any injury Rutter may have suffered did not impair her capacity to perform in her pre-injury occupation as a computer network administrator. “This conclusion implies that any wage loss incurred by Rutter after the accident was not caused by that accident,” Gibson wrote. “Because Rutter must show that her wage loss was caused by Rivera’s negligence in order to recover lost wages in her negligence action, and the workers’ compensation decision effectively decided this element against her, Rutter was collaterally estopped from litigating her claim for lost wages in her negligence action against Rivera,” Gibson wrote.

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