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Justices: Heart and Lung Benefits Preclude Subrogation Under MVFRL

Friday, June 8, 2018   (0 Comments)
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The Legal Intelligencer

by Zack Needles

 

Justices: Heart and Lung Benefits Preclude Subrogation Under MVFRL

 

The Pennsylvania Supreme Court has limited the ability of some self-insured public employers to recover money paid out to workers injured in motor vehicle accidents and, in the process, cleared up an unsettled area of law.

The justices unanimously ruled May 29 in Pennsylvania State Police v. Workers’ Compensation Appeal Board (Bushta) that where a public employee is injured in a motor vehicle accident and receives Heart and Lung Act benefits, those benefits “subsume” any Workers’ Compensation Act benefits and the employer has no right of subrogation against the employee’s recovery from a third party.

The high court affirmed a Commonwealth Court ruling barring the Pennsylvania State Police from seeking a piece of Trooper Joseph Bushta’s $1 million settlement with several defendants over injuries he sustained when his police vehicle was hit by a tractor-trailer.

Bushta was out of work for about 16 months following the accident and during that time collected his entire salary under the Heart and Lung Act, according to the opinion penned by Justice Debra Todd. However, the PSP issued a notice of compensation payable to Bushta that, along with his Heart and Lung Act benefits, listed the amount he was entitled to under the WCA.

After Bushta reached his settlement with the third-party tortfeasors, the PSP sought to recover about $109,000 in WCA benefits it said had been paid to Bushta.

But both the Commonwealth Court and the Supreme Court rejected the idea that there could be a hybrid payment of WCA and Heart and Lung Act benefits, instead finding that all of the benefits Bushta received were paid under the Heart and Lung Act and were therefore not subrogable.
“PSP offers no support for its suggestion that, because the NCP issued to claimant identified a weekly compensation rate of $858.08 under the WCA, and did not specifically provide that the Heart and Lung benefits provided to claimant were in lieu of workers’ compensation benefits, the benefits provided to claimant must be considered, at least in part, WCA benefits for the purposes of the MVFRL anti-subrogation provision,” Todd said, adding, “We find no basis upon which to conclude that a mere acknowledgement in an NCP of a work injury, and the specification of the amount of benefits to which an injured employee would be entitled under the WCA, transforms an injured employee’s Heart and Lung benefits into WCA benefits under the MVFRL.”

Todd was joined by Chief Justice Thomas Saylor and Justices Max Baer, Christine Donohue, Kevin Dougherty, Sallie Updyke Mundy and David Wecht.

The high court’s decision relied heavily on the Commonwealth Court’s 2014 ruling in Stermel v. WCAB (City of Philadelphia), which held that the MVFRL’s anti-subrogation provision includes Heart and Lung Act benefits.

“Indeed, here, as in Stermel, claimant was precluded from recovering his lost wages and medical benefits from the tortfeasors under the MVFRL because claimant’s wages and medical benefits were fully covered by the Heart and Lung Act,” Todd said. “We agree with the Stermel court that, for purposes of the MVFRL, Heart and Lung benefits subsume WCA benefits, and thus subrogation of such benefits is barred.”

The PSP argued that because Bushta’s medical bills were paid using the “re-pricing” formula set forth in the WCA, those payments constituted workers’ compensation benefits, but again the justices were not swayed.

“Payment of a claimant’s medical care and treatment is required under the Heart and Lung Act, and, regardless of the pricing schedule utilized, such payment constitutes a Heart and Lung benefit,” Todd said.

Counsel for Bushta, Bruce Zero of Powell Law in Scranton, said he was “thrilled” for his client.

“It’s an important decision for policemen and firefighters, who have dangerous professions and are injured in the line of duty in automobile accidents,” Zero said. “It’s important their Heart and Lung benefits go to them and that their employer doesn’t have a right to subrogation.”

Scott Cooper of Schmidt Kramer in Harrisburg, who helped pen an amicus brief on behalf of the Delaware Valley Workers’ Compensation Trust, said the decision established a much-needed bright-line rule governing which benefits are subrogable in these types of cases.

Cooper said that, in the past, the issue of whether an employer could assert a lien for Heart and Lung Act benefits often “bogged down” settlement negotiations in motor vehicle accident cases as the parties argued over whether those benefits should be factored into the overall settlement amount.

“This is an easy rule to apply,” Cooper said of the Bushta holding.

Counsel for the PSP, Bradley Andreen of O’Brien, Rulis & Bochicchio in Pittsburgh, could not be reached for comment.


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