Rickard, C. v. American National Property

J-E01003-17
2017 PA Super 340CAROLYN RICKARD, ADMINISTRATRIX IN THE SUPERIOR COURT OF
OF THE ESTATE OF WILLIAM RICKARD, PENNSYLVANIA
DECEASED
Appellant
v.
AMERICAN NATIONAL PROPERTY AND
CASUALTY COMPANY
No. 774 WDA 2015
Appeal from the Order Entered April 28, 2015
In the Court of Common Pleas of Allegheny County
Orphans' Court at No(s): 6805-2014
BEFORE: BENDER, P.J.E., BOWES, PANELLA, SHOGAN, LAZARUS, OLSON,
DUBOW, MOULTON, and SOLANO, JJ.
CONCURRING OPINION BY BOWES, J.: FILED OCTOBER 25, 2017
I reach the same result as the majority, but without reliance upon
what I perceive as Administratrix’s arbitrary characterization of the UIM
claim as one for wrongful death.1 In my view, the Plan simply failed to
establish a valid subrogation lien against the UIM proceeds that
Administratrix recovered.
____________________________________________
1 Administratrix did not file a formal wrongful death action against the
insurer seeking the UIM benefits. Nor do I believe that she could have. A
wrongful death claim is one statutorily authorized against a third-party
tortfeasor. The UIM claim herein was a contract claim pursuant to an
insurance policy.
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I agree with my distinguished colleagues that collateral estoppel is
inapplicable. The issue before the bankruptcy court was not identical to the
issue before us. The bankruptcy court found that the Plan had a lien against
Mr. Rickard’s projected UIM recovery based on his undisputed status as a
“Covered Individual,” his receipt of Plan benefits, and his concession that the
Plan’s interest in the UIM recovery was superior to his own. The real dispute
in that proceeding focused on whether counsel’s claim for attorney fees was
superior to the Plan’s lien. The bankruptcy court concluded it was not and
refused to approve the proposed UIM settlement. Mr. Rickard died two days
later without consummating the settlement or recovering the UIM funds.
Mrs. Rickard made a claim for the UIM benefits under the auspices of
the Wrongful Death Act, 42 Pa.C.S. § 8301, and ANPAC issued a check.
Although I do not believe the label she assigned to the claim controls or that
it is material to our disposition, the Plan did not challenge her
characterization of the claim as one for wrongful death. Consequently, this
Court addressed the question as framed by Administratrix: whether a
wrongful death beneficiary’s recovery is subject to subrogation for medical
benefits paid on behalf of the decedent during his lifetime. The majority
answers that question in the negative. I submit that the real issue is
whether UIM benefits recovered by Administratrix under the ANPAC policy
were subject to subrogation by the Plan, and arrive at the same negative
answer.
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Under either scenario, collateral estoppel does not apply. The
bankruptcy court did not determine whether the Plan was entitled to
subrogation against amounts recovered by Administratrix. Preliminarily, we
do not know whether the UIM benefits paid to Administratrix represent a
recovery to which she was entitled in her own right under the ANPAC policy,
or whether it represented payment on behalf of her deceased husband.
Since the ANPAC policy is not contained in the record, and that issue was not
developed, that question remains unanswered. In any event, the
bankruptcy court did not address whether Mrs. Rickard was a “Covered
Individual,” whether she received benefits from the Plan, or whether her
recovery of the UIM benefits was subject to subrogation, and thus, collateral
estoppel has no application.
The Plan argues, in the alternative, that under U.S. Airways v.
McCutchen, 133 S.Ct. 1537 (2013), the Plan documents controlled the right
to subrogation and that its lien attached to the UIM recovery at the moment
the bills were paid. However, we cannot verify that claim as the Plan
documents are not contained in the certified record. We know from the
bankruptcy court’s opinion, however, that the Plan documents provided that
the Plan was subrogated to “any sums recovered by the Covered
Individual or their representative either by judgment, settlement, or any
other means[.]” (emphasis added). Under the terms of the self-funded
ERISA Plan, it made no difference whether these sums were designated as
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wage loss, pain and suffering, or reimbursement for medical bills. The Plan
apparently stated that sums recovered “shall be applied first to reimburse
the [Plan] in full and therefore shall be deducted first from any recovery by
or on behalf of the Covered Individual.” The use of the term “sums
recovered” would tend to refute the Plan’s position that its lien attached to
the UIM benefits at the moment the bills were paid. In any event, it was the
Plan’s burden to establish that Administratrix recovered the UIM benefits
either as a covered individual or as a representative of a covered individual,
in order to be entitled to subrogation. It failed to do so.
Finally, the Plan cites Gillette v. Wurst, 937 A.2d 430 (Pa. 2007), for
the proposition that the surviving spouse in a wrongful death action cannot
avoid the payment of a valid subrogation lien. In contrast to the facts
herein, the surviving spouse in Gillette received workers’ compensation
death benefits and the insurer had a subrogation interest in any funds she
recovered thereafter. She subsequently settled a wrongful death action and
attempted to disclaim her interest in the recovery in order to defeat the
workers’ compensation insurer’s subrogation interest. The Supreme Court
held that she could not avoid the workers’ compensation insurer’s
subrogation interest in sums she recovered under the wrongful death act by
disclaiming her interest in favor of the remaining statutory beneficiaries.
In this case, as distinguished from Gillette, the Plan failed to prove
that Administratrix received Plan benefits, or that she was a “covered
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individual” or a covered individual’s representative under the Plan for
purposes of a subrogation lien. I submit that the ANPAC insurance policy
and the Plan documents, rather than the designation of the claim as one for
wrongful death, controlled whether the Plan had a valid subrogation lien
against the UIM proceeds recovered by Administratrix. The Plan did not
reference those documents in establishing its right to subrogation, nor did it
include them in the certified record. Since the Plan sought to enjoin the
proposed distribution, it had the burden to prove a valid subrogation lien,
which it failed to do. For these reasons, I concur in the result of the
majority.
Judges Olson, Dubow and Solano join this concurring opinion.
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