C. Alpini v. WCAB (Tinicum Twp.) ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Christopher Alpini, :
:
Petitioner :
:
v. : No. 92 C.D. 2020
: Submitted: August 28, 2020
Workers’ Compensation Appeal :
Board (Tinicum Township), :
:
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: July 19, 2021
Christopher Alpini (Claimant) petitions for review of the order of the
Workers’ Compensation Appeal Board (Board), which affirmed in part and reversed
in part the order of a workers’ compensation judge (WCJ) that granted Tinicum
Township’s (Employer) Petition for Modification of Benefits. The issue on appeal
is whether Employer is entitled to subrogation against Claimant’s third-party
settlement arising from his injuries. We affirm.
The facts of this case are not in dispute. Claimant was employed as a
police officer by Employer. On April 17, 2011, Claimant sustained work-related
injuries when a vehicle operated by Steven Warrington, who was intoxicated, struck
Claimant’s patrol car while he was on duty. Claimant suffered injuries to his spine,
ribs, and pelvis for which he continues to receive treatment.
Employer made payments to Claimant under the act commonly known
as the Heart and Lung Act.1 Employer also issued a Notice of Temporary
Compensation Payable, which converted by operation of law to a Notice of
Compensation Payable (NCP) under the Workers’ Compensation Act (Act).2
Claimant appeared regularly at Employer’s office to sign over the workers’
compensation payments to Employer as required by the Heart and Lung Act.
Claimant filed suit against the third parties responsible for the accident.
Claimant sued Steven Warrington (Driver) for negligence, which caused the
accident under the Motor Vehicle Financial Responsibility Law (MVFRL).3
Claimant also sued Sue-Deb, Inc. d/b/a Jimmy D’s and 500 Jansen Inc. d/b/a Lou
Turks (collectively, Tavern Owners), alleging that they served Driver alcohol while
he was visibly intoxicated, in violation of Section 493(1) of the Liquor Code,4
1
Act of June 28, 1935, P.L. 477, as amended, 53 P.S. §§637-638. The Heart and Lung Act
entitles certain enumerated state and local public safety personnel to receive benefits in the full
amount of their salary when they are injured in the performance of their duties rendering them
temporarily unable to work. See Section 2 of the Heart and Lung Act, 53 P.S. §637
2
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2710.
3
75 Pa. C.S. §§1701-1799.7.
4
Act of April 12, 1951, P.L. 90 as amended, 47 P.S. §4-493(1). Section 493(1) provides
in relevant part,
It shall be unlawful--
(1) Furnishing Liquor or Malt or Brewed Beverages to Certain
Persons. For any licensee, or any employe, servant or agent of such
licensee or of the board, or any other person to sell, furnish or give
(Footnote continued on next page…)
2
commonly referred to as the Dram Shop Act. Reproduced Record (R.R.) at 160a-
176a. On September 16, 2013, Claimant and his wife signed a General Release
Settlement (Settlement Agreement) of the claim for the total amount of
$1,325,000.00. The Settlement Agreement delineated the amounts due as
$25,000.00 from Driver and his insurer, Peerless Indemnity Insurance Company,
$375,000.00 from Lou Turks, and $925,000.00 from Jimmy D’s. R.R. at 177a-179a.
Claimant’s net recovery was $871,814.00 after deductions were made for attorney’s
fees in the amount of $435,906.00 and legal costs in the amount of $17,280.00. R.R.
at 180a-182a.
Employer filed a Modification Petition with the WCJ seeking
subrogation from Claimant’s third-party recovery from the Tavern Owners only.
Employer, through its insurance carrier, asserted a lien of $364,024.60, comprised
of $186,063.41 in indemnity benefits and $177,961.19 in medical benefits. The
WCJ granted Employer’s Modification Petition, from which both Claimant and
Employer appealed. The Board affirmed the WCJ’s decision, and remanded the
matter to the WCJ to determine the method by which Employer would be permitted
to recoup its lien.5
On remand, in an order dated August 7, 2018, the WCJ found Employer
met its burden to establish that it had a subrogable interest in Claimant’s third-party
settlement with the Tavern Owners. The WCJ concluded that Employer was entitled
any liquor or malt or brewed beverages, or to permit any liquor or
malt or brewed beverages to be sold, furnished or given, to any
person visibly intoxicated. . . .
5
Claimant appealed the Board’s order to this Court, which dismissed the appeal as
interlocutory and directed the Board to remand the matter to the WCJ to determine the method by
which Employer could recoup its lien. See Alpini v. Workers’ Compensation Appeal Board
(Tinicum Township) (Pa. Cmwlth., No. 2019 C.D. 2016, filed March 23, 2017) (order granting
Employer’s motion to dismiss the petition for review as an appeal from an interlocutory order).
3
to a net recovery of $341,319.93. Because the balance of Claimant’s third-party
recovery exceeds Employer’s lien amount, the WCJ concluded that Employer was
also entitled to an appropriate grace period against future payments of medical and
indemnity payments, subject to Employer’s pro rata payment of fees and costs, until
such time that the balance of Claimant’s third-party recovery is exhausted. Based
on this finding, the WCJ calculated that Employer must pay $297.38 weekly, the pro
rata share, or 34.66%, of Claimant’s weekly total disability rate of $858.00.
Claimant then appealed to the Board. In a decision dated January 15,
2020, the Board affirmed in part and reversed in part the WCJ. The Board affirmed
the WCJ’s decision granting Employer’s subrogation rights against the Tavern
Owners, based on Stermel v. Workers’ Compensation Appeal Board (City of
Philadelphia), 103 A.3d 876 (Pa. Cmwlth. 2014). On the issue of subrogation
against the Tavern Owners, the Board reiterated its conclusion from its earlier
decision, as follows:
There appears to be no dispute that Claimant’s theory of
recovery against the two taverns was the Dram Shop Act,
not the MVFRL. Unlike the MVFRL, the Dram Shop Act
does not speak to subrogation or workers’ compensation
benefits. We conclude that [Employer] has the right to
subrogation of Claimant’s Heart and Lung benefits from
the settlement of his third[-]party action against the two
taverns, as this settlement was based on the Dram Shop
Act and not the MVFRL.
Board Opinion dated January 15, 2020, at 3 (footnote omitted).
The Board reversed the WCJ’s decision granting Employer the ability
to reduce future workers’ compensation weekly payments to account for future
medical costs, based on Whitmoyer v. Workers’ Compensation Appeal Board
(Mountain Country Meats), 186 A.3d 947 (Pa. 2018). The Board cited to the holding
4
in Whitmoyer that the employer may not seek reimbursement for future medical
expenses from the employee’s balance of recovery. Id. at 958. Board Opinion dated
January 5, 2020, at 7. The Board then concluded:
the WCJ erred in awarding [Employer] a credit against
future payment of medical benefits. [Employer] was
entitled to be reimbursed for indemnity and medical
benefits paid up to the date of the third[-]party settlement,
and is entitled to a credit against future payments of
indemnity benefits, but not for future medical expenses.
Board Opinion dated January 15, 2020, at 8. Claimant then appealed to this Court.6
The statutes relevant to the subrogation issue presented here are as
follows. First, Section 319 of the Act entitles Employer to subrogation of workers’
compensation payments paid to Claimant from settlement of third-party claims,
prorated to account for reasonable attorney’s fees and costs incurred in obtaining
settlement.7 Second, because Claimant’s third-party settlement involved a motor
6
This Court’s scope of review is limited to determining whether constitutional rights were
violated, whether the adjudication is in accordance with the law, or whether necessary findings of
fact are supported by substantial evidence. Commonwealth of Pennsylvania v. Workers’
Compensation Appeal Board (Piree), 182 A.3d 1082, 1086 n.8 (Pa. Cmwlth. 2018).
7
Section 319 of the Act states in relevant part:
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;
reasonable attorney’s fees and other proper disbursements incurred
in obtaining a recovery or in effecting a compromise settlement shall
be prorated between the employer and employe. . . . The employer
shall pay that proportion of the attorney’s fees and other proper
disbursements that the amount of compensation paid or payable at
the time of recovery or settlement bears to the total recovery or
settlement.
(Footnote continued on next page…)
5
vehicle accident, Sections 1720 and 1722 of the MVFRL are also relevant. Section
1722 precludes Claimant from recovering the amount of workers’ compensation
benefits in any action for damages against a tortfeasor or in any uninsured or
underinsured motorist proceeding “arising out of the maintenance or use of a motor
vehicle.”8 Section 1720 provides that Employer has no right of subrogation from
Claimant’s third-party recovery in an action “arising out of the maintenance or use
of a motor vehicle.”9 Although Sections 1720 and 1722 were expressly repealed in
1993 through the Act of August 31, 1993, P.L. 190, commonly referred to as Act 44,
insofar as they pertained to workers’ compensation benefits, the legislature did not
eliminate the prohibition against subrogation of Heart and Lung benefits.10
Several decisions are also relevant to the subrogation issue presented
here. In Stermel, this Court was presented with the question of whether the City of
Philadelphia was entitled to recover a portion of the Heart and Lung benefits that it
77 P.S. §671.
8
75 Pa. C.S. §1722. Section 1722 of the MVFRL states in relevant part:
In any action for damages against a tortfeasor, or in any uninsured
or underinsured motorist proceeding, arising out of the maintenance
or use of a motor vehicle, a person who is eligible to receive benefits
under the coverages set forth in this subchapter, or workers’
compensation. . . shall be precluded from recovering the amount of
benefits paid or payable under this subchapter, or workers’
compensation. . . .
9
75 Pa. C.S. §1720. Section 1720 of the MVFRL states in relevant part: “In actions arising
out of the maintenance or use of a motor vehicle, there shall be no right of subrogation or
reimbursement from a claimant’s tort recovery with respect to workers’ compensation benefits
. . . .”
10
See Piree, 182 A.3d at 1088-89.
6
paid to its police officer from the officer’s settlement of his third-party tort claim.
In Stermel, a police officer sustained injuries when a drunk driver rear ended his
police cruiser while it was parked along the side of the road for a traffic stop. The
City of Philadelphia, which is self-insured for workers’ compensation purposes,
issued an NCP accepting liability for the injuries and also paid Heart and Lung
benefits to the officer. The police officer pursued a third-party tort claim against the
driver and a claim against the tavern that served the driver alcohol when he was
visibly intoxicated. The police officer recovered a total of $100,000.00 from both
tortfeasors. The settlement was not broken down into components and did not
include the amounts representing either workers’ compensation benefits or Heart
and Lung benefits paid by the City of Philadelphia. The City of Philadelphia sought
subrogation rights against the officer’s third-party tort settlement to recoup Heart
and Lung benefits, arguing that part of these benefits represented workers’
compensation benefits. This Court held:
Simply, Section 1722 of the [MVRFL] did not allow [the
officer] to recover loss of wages from the tortfeasor
defendants because they were covered by the Heart and
Lung Act. The record does not disclose the elements of
the $100,000 [the officer] received from the tortfeasor. As
a matter of law, however, it was net of his Heart and Lung
benefits.
Stermel, 103 A.3d at 885.
In Pennsylvania State Police v. Workers’ Compensation Appeal Board
(Bushta), 184 A.3d 958 (Pa. 2018), our Supreme Court considered subrogation rights
when a state trooper was injured in a motor vehicle accident and recovered damages
from a third-party tortfeasor under the MVFRL. In Bushta, a state trooper suffered
numerous injuries when his police vehicle was hit by a tractor trailer. The State
7
Police, self-insured for workers’ compensation purposes, issued an NCP, which
included a notation stating, “Paid Salary continuation. Heart & Lung benefits by the
employer.” Id. at 962. The state trooper and his spouse sued the truck driver, the
driver’s employer, and other responsible parties for negligence under the MVFRL,
for which they received a settlement. The State Police argued that because workers’
compensation benefits were payable, if not actually paid, to the injured state trooper,
it should be entitled to subrogation of benefits from the state trooper’s third-party
settlement. The Supreme Court affirmed the decision of this Court, holding that the
State Police were not entitled to subrogation for benefits paid under the Heart and
Lung Act. Id. at 969.
In this case, Claimant argues that the Board erred in granting
Employer’s subrogation of a proportional amount of his recovery because his third-
party settlement concerned a motor vehicle accident. Claimant suggests that the
facts of Stermel and Bushta apply squarely to this case, and, therefore, bar
Employer’s subrogation rights against Heart and Lung benefits Claimant received
as a result of a motor vehicle accident. Claimant believes that the Board incorrectly
interpreted and distinguished Stermel, in which the third-party settlement was not
broken down into components and did not include the amount representing workers’
compensation and Heart and Lung benefits. Claimant argues that his settlement does
not break down what portion of the settlement is allocated to a particular claim and,
therefore, Stermel should govern to prevent subrogation. Claimant further argues
the Board erred in not addressing Bushta, which he argues should also act to bar
subrogation in this case.
Employer responds that the Board properly applied Stermel and
Pennsylvania State Police. Employer argues that it is entitled to subrogation for
8
Claimant’s third-party recovery for the amounts attributable only to the Tavern
Owners’ violations of the Dram Shop Act. Employer did not seek subrogation for
Claimant’s recovery attributable to Driver for negligence under the MVFRL.
Employer argues that the Tavern Owners’ liability was a separate theory of recovery
from Driver’s, and that the recovery was specifically apportioned among the
tortfeasors. As such, the MVFRL subrogation restrictions for damages or recovery
“arising out of the maintenance or use of a motor vehicle” do not apply to damages
or recovery arising out of negligence under the Dram Shop Act.
We hold the Board did not err as a matter of law when it decided that
Employer could subrogate payments made under the Act and the Heart and Lung
Act from Claimant’s third-party settlement stemming from Dram Shop Act liability.
Claimant’s complaint against the tortfeasors clearly sought damages from Driver
under the MVFRL and from the Tavern Owners under the Dram Shop Act. R.R. at
160a-176a. The Settlement Agreement specifically described the amounts allocated
to Driver and to the Tavern Owners. Id. at 177a-179a. Neither Claimant’s third-
party complaint nor the Settlement Agreement sought to impose liability on the
Tavern Owners for negligence arising from their use of a motor vehicle, but rather
because they served Driver while visibly intoxicated. Driver then caused the auto
accident injuring Claimant. Employer did not seek subrogation from the portion of
the third-party settlement attributable to Driver’s negligence under the MVFRL, and
that amount correctly remains unavailable for subrogation. Although Claimant’s
recovery generally concerned or involved the use of a motor vehicle, the Tavern
Owners’ liability did not arise from the use of a motor vehicle, but from their
negligence in serving alcohol to a visibly intoxicated patron. As the MVFRL,
Stermel, and Bushta make clear, when a third-party settlement or recovery arises
9
from the use of a motor vehicle, Employer may not seek subrogation for workers’
compensation benefits paid or Heart and Lung Act reimbursement. Those
restrictions do not apply to recovery under a different cause of action not arising
under the MVFRL.
Claimant also argues the Board erred when it applied Whitmoyer to the
issue of calculating Employer’s credit against future indemnity benefits. Claimant
argues that because Whitmoyer did not involve Heart and Lung benefits, the
MVFRL, or a motor vehicle accident, the Board erred in applying Whitmoyer’s
holding to this case. Employer responds that Claimant’s objections to the
application of Whitmoyer are mistaken because the MVFRL is not applicable to the
Dram Shop Act recovery.
In Whitmoyer, our Supreme Court held that when an employer is
entitled to a lien against a third-party recovery, the lien must be calculated at the
time of settlement, and that the employer is permitted a credit against future
indemnity benefits but not against future medical benefits. Whitmoyer, 186 A.3d at
957-958. The Supreme Court analyzed Section 319 of the Act, and held “the General
Assembly intended the excess recovery to be paid to the injured employee and to be
treated as an advance payment only on account of any future disability payments.”
Id. at 957. The Supreme Court further held that Section 319 of the Act requires the
employer to pay that proportion of attorney’s fees and costs that the amount of
compensation paid or payable at the time of recovery or settlement bears to the total
third-party recovery or settlement. Id.
In this case on remand, the WCJ directed how Employer would be
permitted to recoup the lien amount and then calculated the proportional reduction
of future indemnity and medical benefits. On appeal, the Board specifically found
10
the WCJ erred in including future medical benefits beyond the date of settlement in
its calculations, concluding that Whitmoyer governed. “As such, we reverse the
portion of the WCJ’s Decision and Order granting [Employer] a credit against future
payment of medical benefits from Claimant’s balance of recovery.” Board Opinion
dated January 15, 2020, at 8. Claimant’s argument that Whitmoyer does not apply
to this case is misplaced. Claimant is correct that Whitmoyer did not involve Heart
and Lung benefits, the MVFRL, or a motor vehicle accident. However, Whitmoyer
is applicable to this case on the issue of whether a lien against a third-party settlement
shall include a credit for future indemnity benefits and future medical benefits.
Whitmoyer held an employer is entitled to a credit against a third-party settlement
for future indemnity benefits and not for future medical benefits, as required by
Section 319 of the Act. As Employer points out, Whitmoyer was decided while this
case was pending before the Board, hence the Board’s exclusion of future medical
benefits from the calculation is proper.
Claimant further argues that if the Court concludes that Employer is
entitled to subrogation, and even if Whitmoyer applies, the Board affirmed an
incorrect subrogation amount. Employer responds Claimant failed to question the
subrogation amount before the WCJ and the Board. The Board addressed this issue
and found that Claimant waived it by not presenting specific argument or
calculations to either the WCJ or to the Board. The Board concluded:
We acknowledge that Claimant generally argues that the
WCJ erred in considering incorrect calculations on the
third[-]party settlement agreement. Claimant has not
articulated which calculations were incorrect or how they
were incorrect, and has not further developed this issue in
his brief. Therefore, we do not address it further.
Board Opinion dated January 15, 2020, at 6, n.8.
11
After careful review, we agree that Claimant failed to present or
preserve the issue of the recalculation of benefits, and, therefore, the issue is waived.
The record reveals Claimant did not present this issue to the WCJ or to the Board,
raising it for the first time in his brief filed with this Court. An issue will be
considered waived if a party fails to provide specific evidence below, so that the
agency can consider it and make an appropriate finding. A party may not raise an
issue for the first time on appeal to this Court, as we are limited to reviewing the
record made below. The law is clear that failure to raise an issue on appeal to the
Board constitutes a waiver of that issue.11
For the foregoing reasons, we affirm the Board’s order.
MICHAEL H. WOJCIK, Judge
Judge Fizzano Cannon did not participate in the decision of this case.
11
See Fiorentino v. Workmen’s Compensation Appeal Board (Concrete Industries,
Inc.), 571 A.2d 554, 556 (Pa. Cmwlth. 1990) (the mere filing of an appeal does not preserve issues
that are not specifically raised); see also 34 Pa. Code §111.11(a)(2) (which states that “[g]eneral
allegations which do not specifically bring to the attention of the Board the issues decided are
insufficient”).
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Christopher Alpini, :
:
Petitioner :
:
v. : No. 92 C.D. 2020
:
Workers’ Compensation Appeal :
Board (Tinicum Township), :
:
Respondent :
ORDER
AND NOW, this 19th day of July, 2021, the order of the Workers’
Compensation Appeal Board dated January 15, 2020, is AFFIRMED.
__________________________________
MICHAEL H. WOJCIK, Judge