August 15, 2008

TO THE COMPANIES IN INTEREST:

You should be aware of a recent Pennsylvania Superior Court decision allowing a carrier?s subrogation recovery from a third-party settlement fund. United Parcel Service and Liberty Mut. Ins. Co. v. Hohider, 2008 Pa. Super. 148 (7/2008).

In the Hohider case the Claimant filed a workmen?s compensation action against his employer for work a related injury and received worker?s compensation benefits of over $67,000.00. In the meantime Claimant filed a third-party action, resulting in a recovery of $95,000.00.

The Workmen?s Compensation Judge ordered that Claimant was to reimburse his employer the workmen?s compensation benefits received out of the third-party recovery.

Claimant failed to pay the employer the sums due pursuant to the Workmen?s Compensation Judge?s Order. Accordingly the Employer filed a Praecipe in the Court of Common Pleas requesting that the Prothonotaryenter a Judgment in favor of the employer and against Claimant based on the Workmen?s Compensation Judge?s Order. Claimant then filed a Motion to Strike the Praecipe for Judgment, and the Court of Common Pleas granted the Claimant?s Motion to Strike. The Employer then filed an appeal to the Superior Court.

The Superior Court first emphasized that the employer had an absolute right to subrogation pursuant to §319 of the Worker?s Compensation Act. The Court then determined that the Order of the Workmen?s Compensation Judge was a final Order that required judicial recognition. Accordingly the Superior Court reversed the Order of the Court of Common Pleas striking the judgment lien and directed that judgment be entered in favor of the Employer and against Claimant on the Common Pleas Court docket.

Should you have any questions about the above, please do not hesitate to contact me. For other "Companies In Interest Letters", on the subject of subrogation, please visit our website at www.bbs-law.com.