INSURANCE LAW

Jurisdiction • Subrogation • Documentary Evidence • Employee Benefits

Young v. Workers’ Comp. Appeal Bd. (PICS Case No. 14-0441 (Pa. Commw. March 10, 2014) Jubelirer, J. (15 pages).

Petitioner Natasha Young appealed a lower court ruling requiring her to reimburse Respondents The Chubb Corp. and Federal Insurance Co. for workers’ compensation payments. The lower court was affirmed.

While in Delaware, Young, a Pennsylvania resident, was injured in a motor vehicle accident during the course and scope of her employment. Employer accepted Young’s injuries pursuant to a notice of compensation payable and began paying Young wage loss and medical benefits under the Workers’ Compensation Act. The parties engaged in workers’ compensation litigation and settled all future benefits in exchange for $85,000. Young subsequently filed a third-party action in Delaware against the Delaware driver and received $160,000 to settle said action.

Employer filed a review petition, asserting they were entitled to subrogation pursuant to Section 319 of the Act, 77 P.S. §671; said lien rights were incorporated into the parties’ settlement agreement. The petition was granted and Young was directed to pay employer $101,381.04 to satisfy employer’s workers’ compensation lien. Young appealed and the Workers Compensation Appeal Board affirmed. Young petitioned this court for review arguing the Board erred in applying Pennsylvania law instead of the more equitable Delaware law, failure of employer to meet it burden of proof in the subrogation amount, and ordering Young to reimburse employer.

The appellate court affirmed the ruling the board properly determined that Pennsylvania law applied and that the employer met its burden of proving its entitlement to subrogation. In its review petition, employer presented evidence consisting of a list of all payments it made to Young associated with the work-related injuries. The lower court held employer was entitled to subrogation under §319 of the Act because employer’s right to subrogation was absolute and employer did not agree to compromise the amount of its lien. The appellate court found said reasoning sound and affirmed the lower court.

In determining whether Pennsylvania law applied, the court reasoned that the state “which regulated the employer’s insurance policy under which the employer made workers’ compensation payments…pursuant to [that state's] Workers’ Compensation Law” has the most significant contacts and that state’s workers’ compensation law should apply to matters arising in that context. Byard F. Brogan, Inc. v. Workmen’s Comp. Appeal Bd. (Morrissey), 637 A.2d 689, 693 (Pa. Cmwlth. 1994).

Pennsylvania had more significant contacts with the underlying controversy than Delaware as Young was a Pennsylvania resident, employer does business in Pennsylvania and holds a Pennsylvania workers’ compensation policy, Young availed herself to Pennsylvania workers’ compensation law, employer paid benefits under said law, and all litigation occurred in Pennsylvania. Therefore the lower court was affirmed.