Brubacher Excavating, Inc. v. Workers' Compensation Appeal Board

774 A.2d 1274, 2001 Pa. Commw. LEXIS 320

• Court: Commonwealth Court of Pennsylvania
• Decided: May 7, 2001
• Status: Published

Opinions

McGINLEY, Judge.

Brubacher Excavating, Inc. (Brubacher) seeks review of an order of the Workers’ Compensation Appeal Board (Board) that affirmed the Workers’ Compensation Judge’s (WCJ) denial of Brubacher’s petition for a subrogation lien.

The WCJ made the following pertinent findings of fact:

1. The claimant, James Bridges [Bridges], was employed by Brubacher ... on September 17, 1992 as a Master Mechanic.

2. On September 17,1992, Bridges suffered a back injury at a job site operated by Brubacher ... while lifting a cylinder head from an engine.

3. On September 18, 1882[sic], Bridges gave notice to his employer of the injury.

4. From September 18, 1992 to November 8, 1993, Bridges was receiving total disability benefits in the amount of $455.00 per week.

5. On November 8, 1993, Bridges began working for Diesel Services, Inc. [Diesel] ... as a Service Writer/Service Advisor.

6. In this position with Diesel ... Bridges was earning approximately $400 per week, as well as receiving partial disability benefits in the amount of $245.46 per week.

7. As a result of Diesel’s ... worker’s compensation insurance carrier’s refusal to extend coverage to Bridges, Bridges was terminated from his position at Diesel Services on November 22,1993.

8. On November 22, 1993, Bridges’ total disability benefits were reinstated.

9. Since November 22, 1993, Bridges has remained on total disability due to his back injury.

10. On or about February 2, 1995, Bridges filed a civil action in the United States District Court for the Eastern District of Pennsylvania to Docket No. 95 CV 0637, against Diesel ... under the Americans with Disabilities Act.

11. The above-referenced civil action alleged unlawful discrimination on the part of Diesel ... for its termination of Bridges based upon perceived disability.

12. The above-described federal civil action demands compensatory and punitive damages in excess of Fifty Thousand Dollars and °9ioo ($50,000.00).

13. Said civil action is currently pending in federal court, and is expected to be tried in or around November of 1995.¹

14. The two injuries (the back injury and the civil rights violation) are different in both type and causation.

15. Brubacher and Aetna do not have any right of subrogation against any recovery Bridges may obtain in the aforementioned civil action.

WCJ’s Decision, July 24, 1996, Findings of Fact Nos. 1-15.

The WCJ concluded that Brubacher and Insurer were not entitled to subrogation because “[tjhere is no provision whatsoever under the Pennsylvania Workmen’s Compensation Act which permits an employer a right of subrogation as against a recovery in an action for a wrong unrelated to the causation of the compensable injury.” WCJ’s Decision, Conclusions of Law No. 8.

The Board affirmed and concluded:

In this case, the compensable injury is the Claimant’s [Bridges] back injury. No action by Diesel caused the Claimant’s [Bridges] back injury and no action by Diesel contributed to the Claimant’s [Bridges] back injury. Rather, Diesel’s actions resulted in a new and different injury, a civil rights violation, separate and apart from the original and compen-sable injury so that Defendant [Bru-bacher] is not entitled to subrogation.

... [H]ere ... Diesel’s action in illegally firing the Claimant [Bridges] was a subsequent, separate event disassociated with the Claimant’s [Bridges] back injury. Although the Defendant [Brubacher] argues that Diesel’s actions are associated with the Claimant’s [Bridges] back injury in that it was because of the back injury Diesel refused to extend workers’ compensation coverage and instead illegally fired the Claimant [Bridges], we believe this is too attenuated to entitle the Defendant [Brubacher] to subrogation.

[Also], in this case there were two separate injuries and two separate causes of actions. The Claimant [Bridges] receives workers’ compensation benefits for his inability to work due to his back injury, and received a settlement from Diesel in restitution for his unlawful dismissal. The Claimant [Bridges] is not receiving a double recovery for one injury, but rather two recoveries for two separate injuries.

Board’s Decision, March 5, 1999, at 3-5.

On appeal² Brubacher contends that it has a right of subrogation to the proceeds of Bridges settlement with Diesel of his civil action under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101.

Section 319 of the Workers’ Compensation Act (Act)³, 77 P.S. § 671 provides:

Where the compensable injury is caused in whole or in part by the act or. omission of a third party, the employer shall be subrogated to the right of the employe ... against such third party to the extent of the compensation payable under this article by the employer .... Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the émployer on account of any future installments of compensation, (footnote omitted).

Brubacher asserts that the fundamental policy for the promulgation of the subrogation language in Section 319 of the Act is to prevent double recovery by the claimant.

In Dale Manufacturing Co. v. Bressi, 491 Pa. 493, 421 A.2d 653 (1980), our Pennsylvania Supreme Court provided some insight concerning the rationale behind the right of subrogation. In Dale, Edith Bre:i-si (Bressi) had sustained a work-related injury to her back in the nature of a ruptured disc. Bressi underwent surgery for removal of the disc. “The parties entered into an open compensation agreement under which the claimant [Bressi] was to receive weekly compensation plus medical and hospital expenses.” Id. at 495, 421 A.2d at 654. After surgery, Bres-si developed an infection that prevented her surgical wound from healing. After Bressi underwent a second operation the doctor discovered that he failed to remove a “cottonbid pad” during the initial operation. Bressi brought suit and alleged that her doctor was negligent. Bressi’s doctor settled the claim in the amount of $30,000.

Pursuant to a compensation agreement, Dale Manufacturing Company (Dale) paid for the two operations and continued weekly compensation payments. On June 25, 1973, Dale filed a petition to suspend payments and to determine subrogation rights. Dale alleged that the doctor’s negligence had aggravated Bressi’s initial injury and that it was entitled to subrogation to recover previously paid compensation and medical expenses and also a credit for future payments. The WCJ agreed and directed subrogation. The Board reversed the WCJ and this Court affirmed on appeal. See Dale Manufacturing Co. v. Workmen’s Compensation Appeal Board, 34 Pa.Cmwlth. 31, 382 A.2d 1256 (1978).

Our Pennsylvania Supreme Court granted allocatur and noted:

Employer [Dale] correctly asserts that the rationale for the right of subrogation is threefold: to prevent double recovery for the same injury by the claimant, to insure that the employer is not compelled to make compensation payments made necessary by the negligence of a third party, and to prevent a third party from escaping liability for his negligence .... “[T]his result is just, because the party who caused the injury bears the full burden; the employee is made ‘whole,’ but does not recover more than what he requires to be made whole; and the employer, innocent of negligence, in the end pays nothing.” Thus where a third party’s negligent conduct causes injury to an employee actually engaged in the business of his employer, there is a clear, justifiable right to subrogation under Section 319 of the Act.

In the case at issue, however, the third party’s negligent conduct occurred subsequent to the original, compensable injury. In order for employer to establish a right of subrogation in this case, the Commonwealth Court has said, ‘the employer must show he is compelled to make payments by reason of the negligence of a third party and the fund to which he seeks subrogation was for the same compensable injury for which he is liable under the Act. Dale Manufacturing Company ..., 34 Pa.Cmwlth. at 35, 382 A.2d at 1259.

The above assertion is based upon the rationale behind Section 319 of the Act as we noted in Stark v. Posh Construction Company, [192 Pa.Super 409, 162 A.2d 9 (1960)], and the distinction drawn in Savage v. Jefferson Medical College Hospital, 7 Pa.Cmwlth. 35, 298 (1972). The court in Savage drew a distinction between new and independent injuries caused by a third party and those that aggravate or extend the initial compensable injury, holding that only the latter entitled an employer to subrogation rights....

In the present case, employer seeks to establish evidence from pleadings which were filed in an unrelated ease in' which he was not a party and where factual issues were never determined because the case was settled out of court .... (citations omitted).

Id. at 496-98, 421 A.2d at 664-55. The Supreme Court affirmed this Court’s determination that Dale failed to establish a right to subrogation under Section 319 of the Act.

In Maitland Brothers Co., Inc. v. Workmen’s Compensation Appeal Board (Moser), 92 Pa.Cmwlth. 421, 499 A.2d 713 (1985), the claimant suffered a work-related injury to his back on May 9, 1990, and he received total disability benefits from that date. “On February 6, 1981, while driving his automobile, he was struck in the rear causing complaints for which he settled with this tortfeasor in the amount of $15,000.00.” Id. at 714. Maitland Brothers Co., Inc. (Maitland) sought a termination of compensation benefits and alleged that “its liability for Claimant’s continuing disability terminated or diminished by reason of the collision on February 6, 1981. . . .” Id. at 714. The referee [WCJ] concluded that “[t]he accident to Claimant’s back, in the very same place of the original accident ‘in part’ contributed to the cessation of thought of returning to work” and that “[ujnder the Act Defendant Carrier is subrogated to the right of the employee ... against such third party to the extent of the compensation payable under article 319 by the employer .... ” (emphasis in original). Id. at 715 citing the referee’s Conclusion of Law No. 5. The referee dismissed the termination petition and directed Maitland and Insurer to take a $15,000 credit and that upon exhaustion of the credit Maitland and Insurer were to resume paying disability benefits. The Board reversed.

On appeal this Court addressed the sub-rogation issue:

As our emphasis [referring to the term compensable injury in Section 319 of the Act] has indicated, subrogation may only be achieved through a third party recovery to the extent that the damage caused by such third party has contributed to the ‘compensable injury.’ We take it, therefore, that Section 319 does not permit reduction in compensation liability for the compensable injury because of some recovery that takes place after such injury is incurred, particularly if such subsequent injury is not ‘in whole or in part’ a contributing factor in the original ‘compensable injury.’ Thus, since subrogation may only result where the same injury, or ‘the compen-sable injury, ’ is the cause for the third paUy recovery, Section 319 may not afford relief here in the form of a credit to the employer as against its future liability for compensation payments. In fact, even where recoveries have been achieved against a third party for medical malpractice arising out of treatment for the original compensable injury, sub-rogation out of the malpractice recovery has been denied. Dale_

Since the negligent conduct of the third party in this case did not occur while the employee was actually engaged in the business of his employer and whatever injury was caused by the third party was separate and apart from the original compensable injury, we can find no error in the Board’s decision .... (emphasis in original and added; citations omitted).

Id. at 715-16.

Here, the WCJ found that Bridges sustained two separate and distinct injuries. Firstly, Bridges suffered a back injury while employed by Brubacher and second, Bridges was a victim of intentional discrimination incurred while employed by Diesel. The discriminatory conduct on the part of Diesel was totally unrelated to the performance of his duties as a master mechanic with Brubacher and we believe the discharge was separate and apart from his original back injury. Section 319 of the Act requires causation between the injury and the act or omission of a third party to facilitate subrogation. When the language of a statute is unambiguous this Court is precluded from resorting to other methods of statutory construction. Allegheny County Institution District v. Department of Public Welfare, 668 A.2d 252 (Pa.Cmwlth.1995), appeal denied 547 Pa. 757, 692 A.2d 567 (1997). The back injury was not caused by any act or omission of Diesel.⁴

Accordingly, we affirm.

ORDER

AND NOW, this 7th day of May, 2001, the order of the Workers’ Compensation Appeal Board in the above captioned matter is affirmed.

1 . On September 7, 1996, Bridges' ADA civil action was settled with Diesel for an undisclosed amount.

2 . This Court’s review is limited to a determination of whether constitutional rights were violated, whether an error of law was committed and whether necessary findings of fact are supported by substantial evidence. Boehm v. Workmen’s Compensation Appeal Board (United Parcel Services), 133 Pa. Cmwlth. 455, 576 A.2d 1163 (1990).

3 . Act of June 2, 1915, P.L. 736, as amended.

4 . We note that although Bridges was the victim of Diesel’s discriminatory conduct Bru-bacher did not incur any greater liability than if Bridges had not been hired by Diesel.