Kuney v. PMA Insurance

578 A.2d 1285, 525 Pa. 171, 1990 Pa. LEXIS 156
CourtSupreme Court of Pennsylvania
DecidedAugust 22, 1990
Docket128 E.D. Appeal Docket 1989
StatusPublished
Cited by55 cases

This text of 578 A.2d 1285 (Kuney v. PMA Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kuney v. PMA Insurance, 578 A.2d 1285, 525 Pa. 171, 1990 Pa. LEXIS 156 (Pa. 1990).

Opinions

[173]*173OPINION OF THE COURT

FLAHERTY, Justice.

We must decide whether an employer’s immunity from tort actions, guaranteed by the Pennsylvania Workmen’s Compensation Act, 77 P.S. § 1 et seq., protects its insurance carrier if the insurer is alleged to have engaged in fraud and deceit to deprive an injured employee of his workers’ compensation benefits.

The underlying workers’ compensation claim arose as follows. Mr. Kuney, the appellee, was employed by Continental Data Systems, and on February 4, 1985, he was injured on the job. He filed a claim petition, and PMA Insurance Company, his employer’s compensation carrier, refused to pay any benefits, despite its alleged knowledge that he was clearly entitled to some compensation. Moreover, Kuney alleges that PMA decided to deny benefits but to conceal this decision from him in order to defeat his rights under the Workmen’s Compensation Act and the federal and state constitutions.

On February 10,1987, the referee decided that Mr. Kuney had sustained a compensable work-related injury on February 4, 1985, and was entitled to total disability benefits. The referee awarded interest on all past-due compensation and ordered PMA to pay Mr. Kuney’s litigation expenses and counsel fees, due to the referee’s conclusion that PMA had no reasonable basis to contest the claim. PMA appealed the decision, and continued to withhold payment, allegedly in order to impose extreme financial hardship on the appellee without any legal justification. The Workmen’s Compensation Appeal Board (W.C.A.B.) reversed that part of the referee’s decision which concluded that PMA had had no reasonable basis to contest the compensation claim. On appeal, the Commonwealth Court reversed the W.C.A.B., reinstating the award of the appellee’s counsel fees, holding that PMA had failed to establish that it had a reasonable' basis for contesting the claim petition. Kuney v. Work[174]*174men’s Compensation Appeal Board, 127 Pa.Cmwlth. 628, 562 A.2d 931 (1989).

Concurrently with the litigation of the workers’ compensation claim, the appellee filed this civil action against PMA, seeking damages for injuries allegedly sustained by him as a result of PMA’s fraudulent handling of his compensation claim. PMA filed preliminary objections which were sustained by the trial court, due to its holding that the appellee’s sole remedy for injuries stemming from PMA’s conduct in processing his compensation claim is provided by the Workmen’s Compensation Act. On appeal, the Superior Court reversed and remanded for further proceedings, holding that the Workmen’s Compensation Act did not bar the appellee’s lawsuit against his employer’s workers’ compensation insurance carrier. 379 Pa.Super. 598, 550 A.2d 1009. We granted allocatur to consider whether a common law tort action is proper under these circumstances.

The exclusivity clause of the Workmen’s Compensation Act, 77 P.S. § 481(a):

is a version of the historical quid pro quo employers received for being subjected to a no-fault system of compensation for worker injuries. That is, while the employer assumes liability without fault for a work-related injury, he is relieved of the possibility of a larger damage verdict in a common law action.

Lewis v. School District of Philadelphia, 517 Pa. 461, 471, 538 A.2d 862, 867 (1988) (citations omitted). The statute therefore deprived workers of some rights in exchange for surer benefits, and immunized employers from common law actions in order to make benefits available to workers who were theretofore without practical remedies. Kline v. Arden H. Verner Co., 503 Pa. 251, 255, 469 A.2d 158, 160 (1983).

The employer’s immunity from tort action extends to its workers’ compensation insurance carrier, protecting the insurer to the full extent of the employer’s protection. Title 77 P.S. § 501 states, inter alia: “Such insurer shall assume the employer’s liability hereunder and shall be entitled to [175]*175all of the employer’s immunities and protection hereunder ____” (Emphasis added.) See Jadosh v. Goeringer, 442 Pa. 451, 275 A.2d 58 (1971). An employer’s liability for work-related injuries is governed solely by the Workmen’s Compensation Act, and the same is true of a compensation insurance carrier. Injuries not covered by the act, of course, are not subject to tort immunity.

In determining whether the appellee’s alleged injury is subject to the exclusive remedies of the Workmen’s Compensation Act or whether it is remediable in tort, we must examine the scope of the statute and its remedies to determine the intent of the legislature. One salient feature of the statute is its statutory penalty provisions. The appellant argues that permitting a tort action would be inconsistent with the fact that the compensation statute provides a comprehensive system for adjudicating workers’ compensation disputes, including specific remedies for the alleged injury. The statute provides for ten percent interest on due and unpaid compensation, 77 P.S. § 717.1, as well as for penalties up to ten percent for violations of the act, for violations of rules and regulations promulgated thereunder, or for violations of rules of procedure, and the penalties may be increased to twenty percent in cases of unreasonable or excessive delay, 77 P.S. § 991. The statute allows attorneys fees and costs to be assessed against an insurer which contests, without a reasonable basis, a compensation claim. 77 P.S. § 996. The appellant would have us apply the principle that “where statutory remedies are provided, the procedure prescribed by the statute must be strictly pursued, to the exclusion of other methods of redress.” Interstate Traveller Services, Inc. v. Commonwealth, Department of Environmental Resources, 486 Pa. 536, 542, 406 A.2d 1020, 1023 (1979) (Opinion in Support of Affirmance), quoting Erie Human Relations Comm’n ex rel. Dunson v. Erie Insurance Exchange, 465 Pa. 240, 245, 348 A.2d 742, 744 (1976).

The cited cases support the conclusion that the comprehensive system of substantive, procedural, and remedial [176]*176laws comprising the workers’ compensation system should be the exclusive forum for redress of injuries in any way related to the workplace. This principle was established as long ago as 1950. This Court stated: “A reading of this statute and its many amendments makes it manifest that the legislation relating to workmen’s compensation was designed and intended to establish exclusive jurisdiction, practice and procedure in all matters pertaining to such subject matter.” American Casualty Co. v. Kligerman, 365 Pa. 168, 172, 74 A.2d 169, 172 (1950). When the allegations of a claim have as their ultimate basis an injury compensable under the Workmen’s Compensation Act, the claim must be considered within the framework of the statute.

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Cite This Page — Counsel Stack

Bluebook (online)
578 A.2d 1285, 525 Pa. 171, 1990 Pa. LEXIS 156, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kuney-v-pma-insurance-pa-1990.