Court Finds in Favor of Insurance Company in Fire Loss Case

In the case of State Farm Fire & Cas. Co. v. Russell, Feb. Term 2023, No. 0070 (C.P. Phila. Co. June 13, 2025 Garcia, J.), the trial court issued a Rule 1925 Opinion requesting that the Superior Court uphold the trial court’s denial of a Defendant’s post-trial motions in a property damage fire loss subrogation case.

According to the Opinion, the Defendant appealed the trial court’s judgment in favor of a Plaintiff property insurance company in a subrogation action for damages sustained to the insured’s property as a result of a fire.

In this case, the Plaintiff’s insured owned a property adjacent to the Defendant’s property. The Defendant had hired a neighborhood handyman to fix a hole in the roof of the Defendant’s property.

During the repair, a tenant in the Plaintiff’s insured’s property observed individuals on the roof of the Defendant’s property using an open flame while working. Shortly thereafter, the tenant saw smoke coming from the Defendant’s property. The fire department then arrived and extinguished a fire centered around the Defendant’s skylight.

The Defendant acknowledged the existence of the fire, which had resulted in smoke and water damage to the Plaintiff’s insured’s property. The Plaintiff insurance company paid for the property damages sustained by its insured, along with lost rent, and then sought reimbursement from the Defendant through this subrogation action.

In this matter, the trial court found that the Defendant had failed to exercise reasonable care in hiring a competent and careful contractor for work involving significant risk if not skillfully handled, all as articulated by §411 of the Restatement (Second) of Torts.

The court emphasized that the Defendant knew that the handyman was not a qualified roofer, and that the handyman’s lack of skill, necessary precautions, and failure to have proper equipment all increased the risk of a fire during a hazardous roof repair involving an open flame. The evidence otherwise demonstrated that precaution to prevent or minimize fire damage were not taken.

As such, the trial court entered judgment in favor of the Plaintiff insurance company and awarded damages. The Defendant filed a post-trial Motion, arguing lack of evidence regarding negligence. That Motion was denied.

As noted, with this Rule 1925 Opinion, the trial court requested the appellate court to affirm the trial court’s denial of the Defendant’s post-trial Motions.

Anyone wishing to review a copy of this decision may click this LINK.


Source: The Legal Intelligencer Common Pleas Case Alert, www.Law.com (Sept. 25, 2025).

No Subrogation Allowed Against Third Party Tort Recovery Where Heart and Lung Benefits Were Paid

In the Commonwealth Court case of Kenney v. WCAB (Lower Pottsgrove Twp.), No. 845 C.D. 2018 (Pa. Cmwlth. Aug. 2, 2019)(Op. by Leavitt, P. J.), the Court held that there is no subrogation allowed against a third party tort recovery by a Plaintiff in a motor vehicle accident case when the benefits that were previously paid to the injured Plaintiff by the lienholder were Heart and Lung Benefits.  The Court ruled that this is so even if the benefits are paid out of a Trust.

In so ruling, the Commonwealth Court followed the Pennsylvania Supreme Court's decision in the case of Pennsylvania State Police v. WCAB (Bushta), 183 A.3d 958 (Pa. 2018)(Bushta II).

According to the Opinion, this matter arose out of a work-related car accident when the Plaintiff's police cruiser was struck by another vehicle.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law office of Schmidt Kramer for bringing this decision to my attention.

PA Supreme Court Reaffirms Rule that Workers' Compensation Carrier May Not Directly Enforce Its Subrogation Rights Against Tortfeasor

In the case of Hartford Ins. Grp. v. Kamara, No. 24 EAP 2017 (Nov. 21, 2018) (Op. by Baer, J.), the Pennsylvania Supreme Court addressed the issue of whether a workers’ compensation carrier could bring a third-party action against an alleged tortfeasor on behalf of an injured employee in order to recover the amount of money paid out in workers’ compensation benefits where that injured employee did not independently sue the tortfeasor, did not join in the carrier’s action, and did not assign her cause of action to the carrier.  

This matter arose out of an incident during which the Plaintiff was struck as a pedestrian while the Plaintiff was in the scope and course of her employment.   The Plaintiff had recovered workers’ compensation benefits through the Hartford Insurance Group.

When the Plaintiff herself did not seek to recover damages against the third party tortfeasors, the workers’ compensation carrier sought to recover on its subrogation rights under the workers’ compensation act by filing a suit against the tortfeasors.  

After this case worked its way up to the appellate ladder, the Pennsylvania Supreme Court in this case reaffirmed the “well-settled proposition that the right of action against the tortfeasor remains in the injured employee.”   The Pennsylvania Supreme Court ruled that, unless the injured employee assigns her cause of action or voluntarily joins the litigation as a party Plaintiff, the workers’ compensation carrier may not enforce its statutory right to subrogation by filing an action directly against the tortfeasor.  

As such, the Supreme Court of Pennsylvania vacated the Superior Court’s judgment and reinstated the decision of the trial court which had sustained the Preliminary Objections filed by the tortfeasor which serve to dismiss the carrier’s Complaint with prejudice.  

Anyone wishing to review the Majority Opinion by Justice Baer may click HERE.

The Dissenting Opinion by Chief Justice Saylor can be viewed HERE.

The Dissenting Opinion by Justice Todd can be viewed at this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, Pennsylvania law firm of Schmidt Kramer for bringing this case to my attention.

Pennsylvania Supreme Court Rules Pennsylvania State Police Not Entitled to Subrogate Against Claimant's Tort Settlement

In the case of Pennsylvania State Police v. WCAB (Bushta), No. 14 WAP 2017 (Pa. May 29, 2018) (Op. by Todd, J.), the Pennsylvania Supreme Court affirmed the Commonwealth Court’s decision which held that the Pennsylvania State Police does not have a right of subrogation against a claimant’s tort settlement with a tortfeasor for benefits that the claimant received under the Heart and Lung Act.  

Anyone wishing to review a copy of this decision may click this LINK. 

I send thanks to the prevailing Plaintiff’s attorney, Bruce S. Zero, Esquire of the Scranton, PA firm of Powell Law for bringing this case to my attention.  

Superior Court Addresses Propriety of Worker's Compensation Carrier Suing Tortfeasor for Recovery of Lien

In the case of The Hartford Ins. Grp. v. Kamara, No. 976 EDA 2016 (Pa. Super. Feb. 10, 2017 Olson, Solano, Fitzgerald, JJ.)(Op. by Olson, J.), the court ruled that a a workers' compensation carrier could pursue claim against third-party tortfeasors by asserting the claim on behalf of the injured employee to establish the tortfeasors' liability to the injured employee, as opposed to bringing a subrogation claim.

The court rejected the argument by the defendants  that the Complaint should have been dismissed because appellant was attempting to assert subrogation directly against third-party tortfeasors in violation of the Workers' Compensation Act which provided that a right of action against tortfeasors remained in the injured employee such that an employer's/insurer's right of subrogation had to be achieved through an action brought in the name of the injured employee or joined by the injured employee.

The Superior Court held that the worker’s compensation carrier properly brought the action on behalf of the injured employee to establish the tortfeasors' liability to her. The Court reasoned that the Workers' Compensation Act did not require an injured employee to be party to a suit for an employer or insurer to be able to assert its subrogation rights, but merely required the suit to be brought on behalf of or in the name of the injured employee.

Anyone wishing to review this Opinion online may click HERE.

 

Source:  “Digests of Recent Opinions.” Pennsylvania Law Weekly (Feb. 28, 2017).

Pennsylvania Commonwealth Court Reaffirms That Heart and Lung Benefits Are Not Subject to Subrogation Under MVFRL

In a recent decision in the case of Pennsylvania State Police v. WCAB, No. 2426 C.D. 2015 (Pa. Cmwlth. Oct. 26, 2016), the Pennsylvania Commonwealth Court followed it prior decision in the case of Stermel v WCAB, 103 A.3d 876 (Pa. Cmwlth. 2014), and reaffirmed that Heart and Lung benefits are not subject to Subrogation pursuant to Section 1720 of the MVFRL. 

Stated otherwise, the court ruled that the employer, which in this case was the Commonwealth of Pennsylvania, was not entitled to subrogation from Claimant's third-party recovery in a motor vehicle accident case.

Anyone wishing to review a copy of this decision may click this LINK

I send thanks to Attorney Bruce Zero of  Powell Law in Scranton, PA for bringing this decision to my attention.

PA Supreme Court Reaffirms No Direct Right of Action for Subrogation Held by Employer or Worker's Comp Carrier

In its recent decision in the case of Liberty Mut. Ins. Co. v. Dotmar Paper Co., 19 WAP 2014 (Pa. April 27, 2015)(Maj. Op. by Baer, J.)(Saylor, C.J., Dissenting), the Pennsylvania Supreme Court addressed the right of an employer, and/or the employer's worker's compensation carrier, to pursue a subrogation claim directly against a third party tortfeasor when the injured employee has not filed a claim against the tortfeasor or assigned his or her right to do so to another.

According to the Opinion, the injured employee was in the scope and course of his employment with Schneider National slipped and fell in the parking lot of the tortfeasor Defendant Dotmar Paper Company.  The employee was allegedly injured and was paid worker's compensation benefits by his employer's worker's compensation carrier.

When the injured employee did not sue the landowner, or otherwise assign his right to sue to anyone, the worker's compensation carrier took it upon itself to sue the landowner, seeking to recover the worker's compensation benefits it paid out to the injured employee.  The landowner defendant filed a demurrer essentially arguing that the worker's compensation carrier had no standing to bring such a suit under the law.

Both the Elk County trial court and the Pennsylvania Superior Court ruled that Section 319 of the Worker's Compensation Act did not permit such a claim and the insurer appealed.  The Pennsylvania Supreme Court affirmed the Superior Court's decision.

The Pennsylvania Superior Court reaffirmed the rule that, under Section 319 of the Worker's Compensation Act, a right of action is granted to the injured party employee.  The Court held that the employer's/worker's comp insurer's right of subrogation pursuant to Section 319 must be asserted through a single action brought in the name of the injured employee or included in any claim brought by the injured employee against the tortfeasor.

In this matter, the injured employee never pursued a case and the Pennsylvania Supreme Court ruled that the employer and/or the worker's compensation carrier could not otherwise pursue any subrogation claim for worker's compensation benefits paid out to the injured employee related injuries caused by the tortfeasor.

The Majority Supreme Court Opinion can be viewed HERE.

Chief Justice Saylor's Dissent can be viewed HERE.

Madame Justice Todd's Dissent can be viewed at this LINK.

 

I send thanks to Attorney Scott Cooper of the Harrisburg, PA office of Schmidt Kramer for bringing this case to my attention.

First Party Carrier's Subrogation Claim Against Workers' Comp Carrier Denied

In its recent decision in the case of Liberty Mut. Ins. Co. v. Excalibur Management Services, No. 1792 C.D. 2012 (Pa.Cmwlth. Nov. 8, 2013 Leadbetter, J.), the Pennsylvania Commonwealth Court addressed a first party auto carrier's subrogation rights against a workers' compensation carrier.

Liberty Mutual, the first party auto carrier, had paid out first party medical benefits to its insured as a result of a work-related motor vehicle accident.  The first party carrier was seeing reimbursement from the injured party's workers' compensation carrier for the medical benefits the first party carrier had paid out during times when the worker's compensation claim was in a denied status. 

The injured party eventually did secure workers' compensation benefits and that workers' compensation claim was eventually resolved by way of a compromise and release agreement.  Thereafter, the first party auto carrier filed suit on its subrogation/reimbursement claim against the workers's compensation carrier.

The worker's compensation carrier countered with preliminary objections putting forth the primary argument that the first party auto carrier had failed to exhaust its statutory remedies during the pendency of the worker's compensation matter and prior to filing this suit.

The Commonwealth Court ultimately ruled because Liberty Mutual, the injured claimant's auto insurer, failed to establish its subrogation or right of reimbursement interests for having paid its insured's medical bills during the pendency of its insured's workers' compensation claim, the trial court was correct in dismissing Liberty's complaint against the workers' compensation insurer.

The Commonwealth Court found that not only did Liberty pursue its claim in the wrong forum, it waited too long.  In so ruling the court stated that subrogation under the second paragraph of 77 P.S. § 671 is not self-executing.  Rather, the language in § 671 is clear and mandatory and, in applying this language, the Commonwealth Court found that Liberty Mutual had failed to exercise reasonable diligence in seeking reimbursement.  As such, the subrogation/reimbursement claim was dismissed.

I send thanks to Attorney Bill Mabius of the Pennsylvania Association for Justice for bringing this case to my attention.

 

Anyone wishing to review this decision may click HERE.

U.S. Supreme Court Addresses Important Reimbursement of Liens Question

The United States Supreme Court has issued an important ERISA lien decision in a case it acquired out of the Third Circuit Court of Appeals.  The case is viewed as a defeat by those in the Plaintiff's bar in terms of liens owed in third party personal injury matters. 

Here is a LINK to the SCOTUS Blog's write up on the case, including a link to the actual Opinion.

Judge Nealon Addresses Carriers' Efforts to Subrogate Against a Plaintiff's Third Party Recovery

In his May 25, 2012 Opinion in the case of Housing and Redevelopment Insurance Exchange v. Michaels, No. 2011-Civil-6121 (C.P. Lacka. Co. May 25, 2012 Nealon, J.), Lackawanna County Court of Common Pleas Judge Terrence R. Nealon addressed issues that arose in a case where an insurer and a claims administrator, who had both paid medical expense benefits to a police officer injured in a motor vehicle accident, filed against the officer seeking to recover subrogation liens and claims against the officer’s third party settlement with the negligent motorist.

The injured police office filed Preliminary Objections seeking to dismiss the subrogation claims for benefits paid under the Worker’s Compensation Act on the grounds that the Court of Common Pleas lacked jurisdiction to decide workers’ compensation liens. The officer also filed a demurrer to any subrogation claim based upon the Heart and Lung Act since that lien was allegedly barred by §1720 of the Motor Vehicle Financial Responsibility Law, 75 Pa. C.S. §1720. The Defendant police officer also asserted that carriers' Complaint required more specificity with regards to the exact amount of the lien being claimed.

Judge Nealon ruled that the Court of Common Pleas courts do indeed retain jurisdiction to resolve subrogation lien disputes involving the injured party and the Workers’ Compensation Act and other state laws. The Court ruled that since the subrogation controversy revolved the construction of 75 Pa. C.S. §1720 as it related to the Workers’ Compensation Act (and in particular 77 P.S. §671), the Court held that it retained jurisdiction to decide this matter.

Judge Nealon also ruled that the police officer’s demurrer to the carrier’s subrogation claim for Heart and Lung payments should be sustained since §1720 did not grant to the municipal employer’s insurer a subrogation lien against the tort officer’s recovery in this context.

The Court did deny the Defendant police officer’s request for a more specific Complaint in that the Complaint adequately notified the police officer of the claims against which he must defend. With regards to the apparently unspecified gross amounts of any subrogation lien claimed for workers’ compensation benefits, Judge Nealon noted that there was a statutorily mandated method governing the computation of such subrogation interests. Judge Nealon found that more specific information in this regard could be ascertained during the course of discovery.

Anyone desiring a copy of Judge Nealon’s detailed Opinion in the case of Housing and Redeveloping Insurance Exchange vs. Michaels may click this link.

Pennsylvania Supreme Court Decides Important Property Damage Subrogation Issue

In what they termed a case of first impression, the Pennsylvania Supreme Court issued a decison on December 21, 2011 in the case of Jones v. Nationwide, No. 61 EAP 2010 (Pa. Dec. 21, 2011)(Majority Opinion by Baer, J.)(Eakin, J., concurring), affirming the practice of property damage carriers returning deductibles to insureds on a "pro rata" basis after a subrogation recovery against a third party tortfeasor.

The court rejected the plaintiff insured's contention that this practice violate the "made whole" doctrine which according to the plaintiff required that she receive her whole deductible back.  The Pennsylvania Supreme Court ruled that the "made whole" doctrine did not apply to the collision coverage at issue in this case.  Accordingly, the court dismissed the insured's class action.

The Majority Opinion (Baer, Castille, Saylor, Todd, McCaffery, Orie Melvin, JJ) can be viewed here.

The Concurring Opinion by Justice Eakin, agreeing with the Majority's holding but reaching it on different grounds, can be viewed here.

I send thanks to Attorney Will Sylianteng of the Philadlephia office of Bennett, Bricklin & Saltzburg for bringing this case to my attention.

Important ERISA Reimbursement Decision from Third Circuit

In its recent November 16, 2011 decision in the case of U.S. Airways v. McCutchen, ___ F.3d ___,  2011 WL 5557411 (3d Cir. 2011Sloviter, Fuentes, and Vanaskie, JJ.)(Opinion by Fuentes, J.), the U.S. Court of Appeals for the Third Circuit just held that an insurer is not entitled to 100 percent reimbursement of paid medical expenses when an injured employee has recovered only a fraction of his damages from a third party. 

Commentators have noted that, with this decision, the Third Circuit became the first court in the country to place clear limits on employer-based insurers' ability to recover medical expenses from injury victims.

The plaintiff in U.S. Airways v. McCutchen was a mechanic for U.S. Airways who sustained serious injuries as result of a head-on collision that allegedly left him permanently disabled.

 U.S. Airways' health  insurer paid about $67,000 for the plaintiffs medical expenses.  The plaintiff thereafter recovered only a portion of his total alleged damages from third parties, including the driver who caused the accident.  The health insurer did not make any request for repayment during the pendency of the litigation.

Then a plaintiff's attorney's nightmare came true when the health insurer turned around and sued the injured party for all of the money the health insurer had paid out for the injured party's medical treatment, i.e., the carrier sought an ERISA reimbursement.

U.S. Airways' health insurance plan relied on contract language to argue that it was entitled to all of its money regardless of how much the plaintiff had recovered from third parties.   The health insurance plan refused a request to reduce its claim by the amount of attorney's fees and costs involved.

The Third Circuit rejected the health insurer's position under equitable principles of law and remanded the case back to the Federal District Court level for a further hearing on the appropriate amount of the reimbursement in light of this decision.

The U.S. Airways v. McCutchen decision can be viewed at this link:

 http://www.ca3.uscourts.gov/opinarch/103836p.pdf


I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer and Attorney Stephen Seach of the Drums, PA law firm of The Law Offices of Stephen Seach for bringing  this case to my attention.

Pennsylvania Supreme Court: Heart and Lung Benefits Not Subrogable

On January 28, 2011, the Pennsylvania Supreme Court issued a unanimous decision in the case of Oliver v. City of Pittsburgh, 2011 WL 255614 (Pa. 2011), in which it concluded that Heart and Lung Benefits are not subrogable in motor vehicle accident matters under Pennsylvania law.

The case involved a police officer who was injured in a car accident in 1996. The City of Pittsburgh argued that it was entitled to subrogation because the repeal of 75 Pa.C.S.A. 1720 in 1994 by Act 44 Section 25(b) allowed for subrogation in workers compensation matters. The City asserted that Heart and Lung benefits were a form of workers compensation.

In rejecting the City's argument, the Supreme Court opinion by Justice Saylor relied upon the plain language of Section 25(b) of Act 44, which repealed the anti-subrogation provision as it relates to "workers' compensation payment or other benefits under the Workers' Compensation Act."

Given the lack of any ambiguity in the language of the statute, the Court held that "Section 25(b) repealed Sections 1720 of the MVFRL 'insofar as [it] relate[d] to workers' compensation payments or other benefits under the Workers' Compensation Act .... By its plain terms, such provision does not impact any anti-subrogation mandates pertaining to HLA benefits."

Here is a link to the Opinion: http://www.pacourts.us/OpPosting/Supreme/out/J-73-2010mo.pdf

Atlantic Second Citation for Tannenbaum Decision

Here is the citation given to the Tannenbaum v. Nationwide case in case you need it sometime:

Tannenbaum v. Nationwide Ins. Co., 992 A.2d 859 (Pa. 2010)(Recovery of UM/UIM benefits can be offset by amount of insureds group plan and personal disability benefits).

Auto Law Property Damage Subrogation Decision

In its recent decision in Jones v. Nationwide Ins. (Pa.Super. Bowes, J., Olson, J., and Fitzgerald J.), the Pennsylvania Superior Court issued an Opinion affirming the lower court's dismissal of class action Complaint in which it was claimed that Nationwide, the Plaintiff's auto insurer, violated Pennsylvania's "made whole" doctrine by issuing her a pro rata reimbursement of her deductible after Nationwide had made a subrogation recovery for the underlying property damage.

Nationwide's action was found to be consistent with an insurance regulation mandating pro rata distributions. Plaintiff argued that the regulation was invalid since the regulation was promulgated in violation of Pennsylvania's "made whole" law and because the insurance commissioner did not have the authority to issue such a regulation. Thus, by relying on the regulation Nationwide, according to Plaintiff, was liable for breach of contract, conversion and, amongst other things, bad faith.

The Superior Court, relying on the Opinion issued by a Federal District Court in Harnick v. State Farm, Slip Copy, 2009 WL 579378 (E.D.Pa. 2009), held that the regulation was valid and not in violation of the "made whole" doctrine. Accordingly, as Nationwide was following the regulation, the Plaintiff's claims against it were properly found to be devoid of merit.

Bennett, Bricklin & Saltzburg, LLC appeared in Jones v. Nationwide as counsel for the amici curiae, the National Association of Subrogation Professionals, the Pennsylvania Defense Institute and the Pennsylvania Insurance Federation. Thanks to Attorney Will Sylianteng of the Bennett Bricklin & Saltzburg firm for bringing this case to my attention.

A link to the opinion is noted below:
http://www.pacourts.us/OpPosting/Superior/out/a05017_10.pdf

Recent Automobile Law Cases of Note

The following recent automobile law cases of note were identified in the August 31, 2009 Case Digests of the Pennsylvania Law Weekly. Copies of the cases may be obtained for a small fee by calling the Law Weekly at 1-800-276-7427 and giving the PICS Case Numbers noted below:

Proximate Causation in Chain Reaction Accident

Ensor v. Slaybaugh, PICS Case No. 09-1474 (C.P. Centre Aug. 20, 2009) Kistler, J. (6 pages).
This case involved a multi-vehicle chain reaction accident. The Plaintiff was stopped in his vehicle waiting to make a left at an intersection. Defendant Slaybaugh was stopped right behind the Plaintiff, in close proximity to the rear of the Plaintiff's vehicle. The Co-Defendant, Engleman, then came along and struck Defendant Slaybaugh's vehicle in the rear, propelling it into the Plaintiff's vehicle. The Plaintiff sued both Defendants.

Defendant Slaybaugh, the operator of the middle vehicle moved for summary judgment, arguing that he had done nothing wrong.

The court held that a driver has no duty to stop his car at a traffic light far enough from the car in front of him to avoid the possibility of a telescopic accident, one in which being struck from behind drives one’s car forward into another vehicle in front. As such, the court granted summary judgment to Defendant Slaybaugh in this case.

The court noted that the Plaintiff argued that this case was analogous to the famous decision by Justice Cardozo, studied by all in law school regarding proximate causation--Palsgraf v. Long Island Railroad Co., 162 N.E.99 (N.Y. 1922). However, the court in Ensor rejected this argument by noting that the Plaintiff failed to understand that Justice Cardozo ruled that where there is a causal chain that was too attenuated, there was no proximate cause. Here, too, no such proximate cause was found to exist.

That is, Defendant Slaybaugh's actions of bringing his vehicle to a stop very close to the rear of the Plaintiff's vehicle without striking the Plaintiff's vehicle could not be said to have been a proximate cause of the Plaintiff's injuries when Defendant Slaybaugh's vehicle was propelled into the rear of the Plaintiff's vehicle by the negligence of another driver. Accordingly, the court granted summary judgment.

Anyone wishing to review this decision may click this LINK.


Subrogation

City of Wilkes-Barre v. Sheils, PICS Case No. 09-1445 (3d Cir. Aug. 25, 2009) Smith, J. (14 pages).
This case involved a police officer who was injured in 1996 when a Luzerne County vehicle struck his cruiser. He was unable to return to work for nine years, during which he drew benefits under the Heart and Lung Act. He also sued Luzerne County for the injuries he suffered, and during the pendency of that action filed a Chapter 7 bankruptcy action.

In 2005, the Middle District of Pennsylvania approved a settlement of the personal injury action, after which the city sought subrogation, or a pay back, of the benefits it had paid to the injured police officer. The Bankruptcy Court rejected the city's subrogation claim, and the Middle District Court agreed on the grounds that the city’s right of subrogation was barred by the Motor Vehicle Financial Responsibility Law (MVFRL).

In this decision, the Third Circuit Court of Appeals vacated the lower court's decision and remanded the case for further proceedings. The Court analogized Heart and Lung Benefits as being similar to Worker's Compensation Benefits. Given that the Motor Vehicle Responsibility Law allowed for subrogation of Worker's Compensation Benefits, the Third Circuit ruled that Pennsylvania law likewise should be construed to allow for an employer to assert his subrogation rights in the Heart and Lung Benefits context.

Accordingly, the Third Circuit has ruled that an employer may seeking to recover, or be paid back, from the plaintiff's verdict or settlement those payments the employer previously paid out under the Heart and Lung Act as a result of the accident.

It therefore follows, under Sections 1720 and 1722 of the Motor Vehicle Financial Responsibility Act, that a plaintiff may plead and present at trial the dollar amount of such benefits he or she received in an effort to convince the jury to award that additional amount to its verdict.

Pennsylvania Association For Justice Puts On Excellent Seminar at the 27th Annual Pennsylvania Automobile Law Program in Philadelphia

Yesterday (May 27, 2009), I attended excellent presentations on the current status of Pennsylvania automobile law at the 27th Annual Pennsylvania Automobile Law Seminar put on by the Pennsylvania Association of Justice.

Attorney Leonard Sloane did a great job as the moderator, keeping the program moving and providing his own insight on the many topics covered.

The following is a recap of some of the highlights of the seminar.


Update of First Party, Third Party Liability, Limited Tort, and Coverage Issues

Attorney David Lutz's thorough recap of the case updates confirmed that there were not too many earth-shattering opinions handed down recently. Many of the cases reviewed were the ones that have been summarized in previous posts to this blog, such as the excess insurance case of Kropa v. Gateway Ford case and others.

Attorney Lisa Woodburn provided some nice tips on the inter-play between workers comp law and the auto law arena. Also, Frank J. Wesner, Jr. Esquire took part in discussion of the updates in bad faith law.

Later in the seminar, Attorney Lutz also provided tips or reminders to improve one's trial performance and results, which are always good to hear. Here are the ten tips covered and suggested to keep in mind:

1. Failure to clearly develop a powerful theme.

2. Failure to file appropriate motions in limine.

3. Failure to use a legal assistant during voir dire (to assist you in writing down juror's answers and info).

4. Failure to ask open-ended questions and follow-up questions during voir dire.

5. Failure to use demonstrative exhibits during opening statement.

6. Failure to properly prepare Plaintiff for cross-examination.

7. Failure to properly prepare treating doctor's testimony concerning causation and prognosis opinions.

8. Failure to use the internet for cross-examination of the Defendant witnesses, especially the defense expert witnesses.

9. Failure during closing argument to clearly convey that "the goal is money."

10. Failure to have a legal assistant properly conduct a jury debriefing after a verdict.


Update on Subrogation

Jason E. Matzus, Esquire from Pittsburgh presented his update on subrogation issues. If a passion is needed to become and expert on this topic and bring it to life during a seminar, this guy has it.

Of particular note, were his written materials and presentation on the impending Medicare Set-Aside issue. Attorney Lutz reviewed the Medicare, Medicaid and SCHIP Extension Act of 2007 which is to become effective on July 1, 2009. This Act, which is apparently directed at the liability industry and not plaintiff's attorneys, has the bar up in a tizzy about whether or not Medicare Set-Asides, common in worker's compensation cases, will be required in third party liability cases.

The purpose of the Medicare Set-Aside provision is to ensure that the primary payers (liability carriers) bear the cost of future medical expenses so that Medicare does not have to pay them down the road. The provision works by requiring that money be set aside from a settlement and be kept at the ready for the payment of future medical expenses. The Act also provides for hefty penalties if the provisions are not followed.

In his presentation and materials, Attorney Lutz explains while there is a growing movement to expand this program of Set-Asides from the worker's comp arena to the litigation arena, it is currently only a rare occurence in Pennsylvania that the issue is raised in the litigation context. However, if Medicare's budgetary problems continue, it is anticipated that the Set-Asides may become a mandatory requirement in third party matters.

Currently, it does not appear to Attorney Lutz that there are any express requirements that Plaintiff's attorneys create any Medicare Set-Aside plans (MSAs) to date. As long as a liability settlement does not specifically delineate some of the monies to future medical care, then no amount of the settlement would appear to be covered by Medicare's efforts to recover for future medical expenses.

Attorney Lutz cautiously concludes, however, that since we are proceeding in "unchartered waters" in the absence of any specific guidance from the applicable law, there is no "safe harbor" course of conduct currently established for litigants to avoid Medicare's reach on this issue.


Update on Bad Faith Law

The hot topic in the bad faith arena is the settlement of a class action lawsuit out of the Miller County trial court in Arkansas involving UM/UIM policies under Allstate and CNA auto policies. The case involved allegations that, between January 1, 1994 and February 19,2009, those companies underpaid claimants by using computer programs such as Colossus, Claims Outcome Advisor, and/or Injury IQ to evaluate cases. Despite settling the suit, the carriers denied that they underpaid claims and asserted that their use of these computer programs was proper.

More detailed information on this settlement, and whether a claim you previously concluded may be covered by it, can be found at http://www.cazaressettlement.com/.


James Ronca, Esquire on 18 Wheels and 2 Wheels--Some insights into non-automobile vehicle cases

The always energetic and entertaining Attorney James Ronca provided some nice, informative samples on conducting depositions in trucking accident cases. He also provided primers on how to handle and approach bicycle accident cases and motorcycle accident cases. Many great tips were gathered from his presentation.


Koken Update, UM/UIM Update

The case updates in the Koken area confirmed that there have not been any more recent significant cases handed down recently other than those cases reviewed in the blogs noted below, particularly with respect to the trial courts allowing UIM and third party cases to proceed in a consolidated fashion under one caption under the rationale of judicial economy.

During this portion of the program, noted Plaintiff's attorney Scott Cooper and noted defense attorney James Haggerty faced off with varying points on the important UM/UIM cases over the past year or two, such as the Sackett cases, the Generette case, and others. As these two attorneys were personally involved in the cases discussed, they were able to to an excellent job explaining the ins and outs of how these cases came to be as well as the implications of those decisions on future UM/UIM cases in a readily understandable way.

A highlight of the Koken portion of the program was a presentation by Judge Robert Colville of the Allegheny County Court of Common Pleas and Plaintiff's attorney Sean Carmody who worked one of state's first post-Koken-like cases. The defense counsel was unable to make it to the discussion.

The UM claim that they tried before a jury involved an out-of-state State Farm policy that did not have an arbitration clause.

The judge noted that he viewed the case as a contract dispute between a carrier and its insured, with the case having many tort concepts to consider. With the agreement of counsel, the court openly and honestly explained to the jury the nature of the contract dispute between the claimant and State Farm Insurance Company as a defendant. The court advised the jury that the carrier had a duty to provide the coverage or benefits available under the insurance policy where warranted.

During voir dire, defense counsel was permitted to ask basis questions such as whether the jurors had ever had a claim against a carrier and whether their experience was good or bad.

Plaintiff's attorney was allowed to present a theory of the case during the opening statement of corporate vs. the little guy, insurance company vs. the little insured, etc., as well as argue the claimant's position that he had paid an premium for these UM benefits and that the claimant felt that he was entitled to an award under the circumstances presented in this case involving a DUI tortfeasor. Plaintiff's counsel noted that the defense counsel took pains to separate State Farm from the DUI tortfeasor (who was not present at the trial).

Plaintiff's counsel noted that the defense went through the trial with an empty chair and the claims rep in the back of the courtroom. Plaintiff's counsel only called the claims rep as a witness for a brief and limited purpose during trial.

The issue of the declarations page, or other information on the available limits, did not come into play given the plaintiff's counsel's strategy of not offering that info to the jury in order to avoid any potential preconceived notions as to the value based upon the coverage.

I believe it was indicated that the verdict came back in the high six figures range, but that would have to be confirmed.


All in all, it was a very informative day with six CLE credits in the bank, followed by a few innings of the Phillies at the Citizen's Bank Stadium under a perfect night for baseball.