Independence Blue Cross, Subroger, and E. Cubbage (deceased) and M. Cubbage (Widow), Subrogee v. WCAB (City of Philadelphia, Fire Department)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Independence Blue Cross, Subroger, :
and Elwood Cubbage (deceased) and :
Mary Cubbage, (Widow), Subrogee, :
Petitioners :
:
v. :
:
Workers’ Compensation Appeal Board, :
(City of Philadelphia, Fire Department), : No. 535 C.D. 2016
Respondent : Submitted: October 7, 2016
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JOSEPH M. COSGROVE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE COSGROVE FILED: February 6, 2017
Independence Blue Cross (Petitioner) petitions for review of a
decision of the Workers’ Compensation Appeal Board (Board) which granted a
motion of the City of Philadelphia (Respondent) to quash Petitioner’s appeal on the
basis that Petitioner lacked standing to appeal the decision of the Workers’
Compensation Judge (WCJ). Upon review, we affirm.
On December 6, 2011, Mary Cubbage (Claimant) filed a Fatal Claim
Petition pursuant to Act 46 of 2011,1 alleging an entitlement to death benefits as a
1
Act 46 of 2011 amended Section 108 of the Workers’ Compensation Act (Act) by
further defining the term “occupational disease” to include cancer suffered by a firefighter
caused by exposure to a known carcinogen recognized as a Group 1 carcinogen by the
result of the death of Elwood Cubbage (Decedent) from multiple myeloma on
December 8, 2008. Claimant then filed a Lifetime Claim Petition on February 14,
2012, alleging Decedent developed multiple myeloma on January 7, 2008 due to
exposure to IARC Group 1 carcinogens while working as an EMT/firefighter for
Respondent. The lifetime Claim Petition initially limited the alleged entitlement to
payment of medical bills; however, this Petition was later amended to include an
allegation of wage loss from January 7, 2008 to December 7, 2008.
Petitioner appeared before the WCJ on May 21, 2013, and asserted its
right to subrogation. Respondent objected on the basis that retroactive application
of Act 46 to medical expenses incurred prior to the effective date of that Act was
unconstitutional. That specific issue was briefed by the parties, and the WCJ
issued an interlocutory order on July 1, 2013, finding in favor of Respondent.
On March 20, 2014, a hearing was held before the WCJ to amend the
Fatal Claim Petition and seek approval of a Compromise and Release Agreement
(C&R). By the terms of the C&R, Claimant and Respondent agreed there were no
wage loss, specific loss, or medical benefits at issue in the litigation of the Fatal
Claim Petition. (Reproduced Record (R.R.) at 15a.) Claimant agreed to waive her
right to collect weekly death benefits for the remainder of her life in exchange for a
one-time lump sum payment of $175,000.00. Id. Claimant further waived her
right to collect any benefits as the beneficiary of the estate of Decedent resulting
from the lifetime Claim Petition. (R.R. at 16a.) Claimant and Respondent entered
into the agreement to resolve all outstanding issues between the parties due to the
uncertainty of litigation. Id. Section 11 of the C&R indicates the parties were not
International Agency for Research on Cancer (IARC). Act of June 2, 1915, P.L. 736, as
amended, 77 P.S. §27.1(r).
2
aware of any actual or potential lien for subrogation under Section 319.2 (R.R. at
15a.)
The WCJ incorporated the interlocutory order from July 2013 into a
decision issued on July 10, 2014. In that decision, the WCJ found no benefits were
at issue and denied and dismissed the lifetime Claim Petition. (R.R. at 9a.) The
WCJ declined to render a decision on the issue of whether Petitioner had standing
to continue litigation of the lifetime Claim Petition. Id. at 8a.
Petitioner appealed to the Board, whereupon Respondent filed a
Motion to Quash the appeal on the basis that Petitioner lacked standing to appeal
the decision of the WCJ. The Board granted Respondent’s motion and Petitioner
appealed to this Court.3
On appeal, Petitioner raises the following issues:
1. Whether the Board erred in ruling Petitioner lacks
standing to file an appeal of the decision of the WCJ?
2. Whether the Board erred in finding Claimant waived
her rights to pursue wage loss and/or medical
benefits?
DISCUSSION
Petitioner argues it has standing on the basis of having been aggrieved
by the decision of the Board and through application of Section 319 of the Act.
2
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §671.
3
This Court’s standard of review of an order of the Board is limited to determining
whether the necessary findings of fact are supported by substantial evidence, whether Board
procedures were violated and whether constitutional rights were violated or an error of law was
committed. World Kitchen, Inc. v. Workers’ Compensation Appeal Board (Rideout), 981 A.2d
342, n. 5 (Pa. Cmwlth. 2009).
3
Except where the right of appeal is enlarged by statute, any party who
is aggrieved by an appealable order may appeal therefrom. Pa.R.A.P. 501.
Respondent argues Petitioner is not aggrieved and therefore lacks standing to
appeal. A determination of whether an individual is aggrieved and thus has
standing to appeal is made on a case-by-case basis. Byfield v. Workers’
Compensation Appeal Board (Philadelphia Housing Authority), 143 A.3d 1063,
1068 (Pa. Cmwlth. 2016). In order to be aggrieved, a party must have a direct,
substantial, and immediate interest in the subject matter of the litigation. Interstate
Gas Marketing, Inc. v. Pennsylvania Public Utility Commission, 679 A.2d 1349,
1354 (Pa. Cmwlth. 1996).
Petitioner contends it is aggrieved because it has not received the
relief requested. Simply not receiving requested relief cannot make one aggrieved
or confer standing upon a party. Petitioner must also have an interest in the subject
matter of the litigation, and we conclude it does not. There is no litigation in
which Petitioner can claim to have a direct, substantial, and immediate interest.
Claimant waived her right to receive any further benefits in exchange for a lump-
sum payment. The WCJ denied and dismissed the lifetime Claim Petition. As a
result, benefits were never awarded. While Petitioner has named Claimant as a
party in each step of the appellate process, Claimant is represented by her own
counsel and has not separately appealed the denial and dismissal of her lifetime
Claim Petition. Indeed, the C&R makes it clear Claimant resolved all outstanding
issues with Respondent due to the uncertainty inherent in litigation. (R.R. at 16a.)
In a closing statement made to the WCJ, Claimant’s counsel stated “[Claimant]
waived her right to take benefit. She’s not going to receive any benefit from [the
lifetime Claim Petition] and I’m out of it. You know that we’re out of it.” (R.R. at
38a.)
4
Petitioner further argues it has standing and a right to subrogation
under the plain language of Section 319 of the Act. Our Supreme Court has held
that subrogation under Section 319 is automatic when the subrogation interest
arises in an injured employee’s recovery against a third-party tortfeasor.
Thompson v. Workers’ Compensation Appeal Board (USF&G Co.), 781 A.2d
1146, 1151 (Pa. 2001). However, the Court in Thompson only addressed the first
paragraph of Section 319.
The instant matter involves subrogation under the second paragraph of
Section 319. That paragraph provides as follows:
Where an employe has received payments for the disability or medical
expense resulting from an injury in the course of his employment paid
by the employer or an insurance company on the basis that the injury
and disability were not compensable under this act in the event of an
agreement or award for that injury the employer or insurance
company who made the payments shall be subrogated out of the
agreement or award to the amount so paid, if the right to subrogation
is agreed to by the parties or is established at the time of hearing
before the referee or the board.
77 P.S. § 671.
Subrogation under this paragraph is neither automatic nor absolute.
Independence Blue Cross v. Workers’ Compensation Appeal Board (Frankford
Hospital), 820 A.2d 868, 872 (Pa. Cmwlth. 2003). Subrogation arising pursuant to
the second paragraph is subject to statutory conditions and arises if agreed to by
the parties or established at the time of the hearing. Id.
It is undisputed that Decedent did not receive any payments for
disability or medical expenses as Claimant did not file her Fatal Claim Petition
until three years after Decedent’s death. Claimant received a lump-sum payment
5
in exchange for waiving her right to ongoing death benefits and her right to collect
any benefit resulting from the lifetime Claim Petition. Claimant answered in the
affirmative when asked if she understood that she was waiving her right to take
any money from the lifetime Claim Petition and that, should the WCJ grant that
petition, she could not receive any portion of it. (R.R. at 29a.)
There was no explicit agreement by the parties that Petitioner be
allowed to proceed with its subrogation claim. Respondent clearly did not agree at
the March 20, 2014 hearing, arguing in closing that Petitioner’s subrogation rights
were dependent upon Claimant’s ability to pursue a claim. (R.R. at 39a.) While
Counsel for Claimant made it clear the petition was left open pending a decision by
the WCJ, Petitioner was responsible to “fight for their [sic] right to subrogation.”
Id. at 38a. Claimant would take nothing from the lifetime Claim Petition, but the
lifetime Claim Petition would be decided. Id. at 40a.
Petitioner continued to assert its right to subrogation pursuant to
Section 319 at the March 20, 2014 hearing. However, the plain language of
Section 319 requires that payments be made before an employer or insurance
company can be subrogated. As discussed infra, neither the Decedent nor the
Claimant received any payments pursuant to a lifetime Claim Petition and
Claimant forever waived her right to collect them.
Petitioner’s second argument, that Claimant only waived her right to
collect benefits and not the right to pursue those benefits, has no merit. In
subrogation, in the context of a workers’ compensation claim, the insurer stands in
the shoes of the injured employee. Frazier v. Workers’ Compensation Appeal
Board (Bayada Nurses, Inc.), 52 A.3d 241, 248 (Pa. 2012). In the case sub judice,
there are no shoes in which to step. If Claimant cannot collect from the lifetime
petition, no other person or entity can collect on her behalf.
6
For these reasons, the Order of the Board granting Respondent’s
Motion to Quash is hereby affirmed.
___________________________
JOSEPH M. COSGROVE, Judge
7
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Independence Blue Cross, Subroger, :
and Elwood Cubbage (deceased) and :
Mary Cubbage, (Widow), Subrogee, :
Petitioners :
:
v. :
:
Workers’ Compensation Appeal Board, :
(City of Philadelphia, Fire Department), : No. 535 C.D. 2016
Respondent :
ORDER
AND NOW, this 6th day of February, 2017, the Order of the
Workers’ Compensation Appeal Board dated March 8, 2016, is affirmed.
___________________________
JOSEPH M. COSGROVE, Judge