Court Opinion

ID: 4551697
Source: CourtListenerOpinion
Date Created: 2020-07-29 14:11:23.614663+00
Date Added: 2024-06-11T13:05:37.344758
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Robert Arlet,                       :
                                    :
                         Petitioner :
                                    :
               v.                   : No. 1722 C.D. 2018
                                    : Argued: October 4, 2019
Workers’ Compensation Appeal        :
Board (Commonwealth of              :
Pennsylvania, Department of Labor :
and Industry, Bureau of Workers’    :
Compensation),                      :
                                    :
                         Respondent :

BEFORE:        HONORABLE MARY HANNAH LEAVITT, President Judge
               HONORABLE MICHAEL H. WOJCIK, Judge
               HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION BY JUDGE WOJCIK                                              FILED: July 29, 2020

               Robert Arlet (Claimant), on behalf of Acadia Insurance Company
(Insurer),1 petitions for review of the Workers’ Compensation Appeal Board’s
(Board) December 4, 2018 order insofar as it affirmed a Workers’ Compensation
Judge’s (WCJ) determination on remand that Insurer is not entitled to subrogation
under Section 319 of the Workers’ Compensation Act (Act).2 Upon review, we
affirm on other grounds.

      1
         Claimant’s counsel submitted into evidence a copy of a fee agreement between
Claimant’s counsel and Insurer. WCJ’s 5/16/17 Decision, Finding of Fact (F.F.) No. 22.

      2
          Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §671.
                                        I.     Background
               The facts are not in dispute. Claimant worked as a shipwright for
Flagship Niagara League (Employer)3 maintaining the U.S. Brig Niagara (Brig
Niagara). Insurer issued a Commercial Hull Policy to Employer. Generally, the
Commercial Hull Policy provided coverage for damages incurred by and damages
caused by the Brig Niagara, as well as Protection and Indemnity coverage for “17
crewmembers.” Reproduced Record (R.R.) at 45a. Employer obtained workers’
compensation insurance from State Workers’ Insurance Fund (SWIF).
               On March 9, 2011, Claimant was injured during the course and scope
of his employment when he fell on an icy sidewalk on Employer’s premises. Shortly
thereafter, Insurer paid Claimant “maintenance and cure” benefits pursuant to the
Protection and Indemnity Clauses of the Commercial Hull Policy.4
               On February 8, 2013, Claimant filed a petition seeking workers’
compensation benefits effective March 9, 2011, based on a weekly wage of $617.62.
Employer filed a timely answer admitting Claimant’s injury, but asserting that
Claimant’s remedy was governed by the Jones Act5 and that Claimant had fully
recovered from his injury as of May 12, 2011.

       3
          Employer is a non-profit educational associate organization of the Pennsylvania
Historical and Museum Corporation, responsible for the operation of the U.S. Brig Niagara and its
homeport, the Erie Maritime Museum. https://sailfnl.org (last visited July 28, 2020).

       4
         “A claim for maintenance and cure concerns the vessel owner’s obligation to provide
food, lodging, and medical services to a seaman injured while serving the ship.” Lewis v. Lewis
& Clark Marine, Inc., 531 U.S. 438, 441 (2001).

       5
         Section 33 of the Merchant Marine Act of 1920, 46 U.S.C. §688, is commonly known as
the Jones Act. It is part of the U.S.’s body of maritime law, and was enacted by Congress to provide
heightened protection to workers who are exposed to the perils of the sea. Chandris, Inc. v. Latsis,
515 U.S. 347, 354 (1995). In relevant part, it provides a “seaman” the ability to sue his employer

                                                 2
               Employer filed a joinder petition naming SWIF as an additional insurer,
arguing that should Claimant succeed with the workers’ compensation claim, SWIF
would be liable. SWIF filed an answer denying coverage. Employer’s policy with
SWIF had lapsed at the time of Claimant’s injury.
               In turn, Claimant filed an Uninsured Employers Guaranty Fund
(UEGF) claim petition, arguing that should he succeed, UEGF would be liable if
Employer failed to pay. UEGF filed an answer denying the material allegations of
the petition. The petitions were consolidated. The WCJ bifurcated the proceedings
to first determine if Claimant was a “seaman,” making the Jones Act his exclusive
remedy.
               Before the WCJ, Claimant argued that the Jones Act maintenance and
cure benefits were paid to him incorrectly because he was not a “seaman” based on
the nature of his employment. In rebuttal, Employer argued that Claimant was
injured while working on repairs to the Brig Niagara, and, while his job did not
involve sailing, Claimant was employed as a shipwright and was considered a
member of the crew. Therefore, his injuries would be covered under the Jones Act.
               Claimant testified that the work of a shipwright is similar to that of a
carpenter. Claimant maintained the wood of the ship, built masts, caulked decks,
repaired the hull, and performed dry dock procedures. Claimant testified that he
performed most of his work in the winter when the Brig Niagara was docked and

for negligence to recover for injuries sustained during the course of his employment. Id. Filing a
suit in negligence is a seaman’s only remedy; he has no remedy under workers’ compensation
laws. Id. at 355-56. Once an individual is found to be covered by federal maritime law, the state
workers’ compensation law is preempted. Hill v. Workmen’s Compensation Appeal Board (Spirit
of Philadelphia), 703 A.2d 74, 78-80 (Pa. Cmwlth. 1997). Additionally, where applicable, the Act
is “the exclusive remedy for an injured employee seeking redress for a work related injury from
his employer, [Section 303 of the Act,] 77 P.S. §481(a).” Vandervort v. Workers’ Compensation
Appeal Board (City of Philadelphia), 899 A.2d 414, 418 (Pa. Cmwlth. 2006).
                                                3
that he had not sailed on the ship since 2000. Claimant’s direct supervisor was the
captain of the Brig Niagara, and Claimant was assigned to work only on that vessel.
            After considering the testimony and other evidence presented, the WCJ
determined that “Claimant was a seaman for purposes of the Jones Act,” and
therefore, he was not entitled to workers’ compensation under the Act. R.R. at 174a.
As a result, the WCJ dismissed the petitions.
            Claimant appealed to the Board, challenging the determination that
Claimant was a “seaman” under the Jones Act. The Board agreed and reversed the
WCJ’s decision that Claimant was a “seaman” under the Jones Act, stating:

                   [T]he evidence reflects that Claimant currently
            works on the [Brig Niagara] only over the winter when it
            is in port or dry-docked, and we see no indication that he
            is ever exposed to the perils of the sea, we must conclude
            that he is not a seaman for purposes of the Jones Act.

                                       ***

                   Therefore, we must conclude as a matter of law that
            Claimant was a land-based employee and not a seaman
            pursuant to the Jones Act, and thus we cannot agree that
            an award of benefits pursuant to the Jones Act would be
            appropriate. Consequently, pursuant to Section 101 of the
            [Act, 77 P.S. §1], Claimant is entitled to seek an award of
            workers’ compensation benefits.
R.R. at 186a-87a (internal citations omitted). The Board reversed the WCJ’s
determination that Claimant was a “seaman” under the Jones Act and remanded the
case to the WCJ to proceed on the merits.
            On remand before the WCJ, Employer presented evidence regarding its
Commercial Hull Policy with Insurer, which was in effect from May 1, 2010, to May
1, 2011. The Commercial Hull Policy provided coverage for the Brig Niagara,
protection and indemnity liability coverage for the crewmembers, and a waiver of

                                         4
the right to subrogate “against affiliate, subsidiary or interrelated companies” of
Employer. R.R. at 45a, 48a, 53a.
             Employer also presented evidence regarding its workers’ compensation
insurance policy.   Employer had maintained workers’ compensation insurance
through SWIF from March 5, 2010, to March 5, 2011. Claimant’s injury occurred
on March 8, 2011, when Employer had no workers’ compensation insurance
coverage.
             The evidence reflected that after Claimant reported his injury to
Employer, Employer reported the claim to Insurer for payment pursuant to the
Commercial Hull Policy. Insurer paid Claimant maintenance benefits of $50 per day
for 92 days, as well as medical expenses, for a total of $46,833.36.
             After paying Claimant, Insurer recognized that its ability to subrogate
the claim may be foreclosed. Insurer’s employee, Lisa Marie Briggs (Ms. Briggs),
wrote in the claim file on July 27, 2012:

                   After thinking about the recovery on this file, I was
             not so sure that we could subrogate. Although the
             [C]laimant slipped and fell . . . that property is still owned
             by the Insured. Therefore, technically we would be
             subrogating against our own insured.

                    After speaking with the Agent, whom [sic] use [sic]
             to write the [general liability] for this insured, he stated
             that [Employer] has their [sic] own employees take care of
             winter maintenance. Therefore [Claimant] would be
             limited to [workers’ compensation], but since [Claimant]
             is a crewmember of the vessel, he would have to make a
             [maintenance and cure] claim. [Claimant] would only be
             owed [maintenance and cure] since the vessel was in no
             way responsible for [Claimant’s] slip and fall.
R.R. at 168a (emphasis added).

                                            5
             Based on the evidence presented on remand, the WCJ found that
Claimant was entitled to benefits under the Act. R.R. at 41a-42a. The WCJ granted
the claim petition and awarded Claimant total disability benefits at a weekly rate of
$411.75 from March 8, 2011, to August 19, 2011. Id. Additionally, the WCJ
concluded:

                    6. [Employer], being uninsured at the time of this
             injury, is responsible for payment of the difference
             between Workers’ Compensation benefits and
             Maintenance & Cure benefits. [] Employer provided
             insurance coverage for Claimant through the [Commercial
             Hull Policy]. [] Employer took steps to insure that
             []Claimant, as an employee, only worked in jobs that
             involved servicing the Brig Niagara thus providing
             coverage under the [Commercial Hull Policy]. [Insurer]
             correctly paid the benefits pursuant to [the Commercial
             Hull Policy]. [] Claimant is not entitled to double
             coverage, however, he is entitled to be made whole.
             [Employer], in not providing Workers’ Compensation
             benefits, is liable for the additional benefits afforded by
             the [] Act. In this case, this amounts to $5046.71 in wage
             loss benefits . . . and no medical benefits since these were
             paid in full.

                                        ***

                   8. There is no subrogation owed to [Insurer], since
             according to [its] own investigation, [it] correctly paid
             under [the Commercial Hull Policy]. Neither [] Claimant
             nor the medical providers are entitled to double recovery.

                    9. If [Employer] refuses or fails to make payment,
             the UEGF is required to pay the benefits owed, with leave
             to seek reimbursement from [Employer].
Id. Both Claimant and UEGF appealed to the Board.
             On appeal, UEGF argued that Claimant was a “seaman” and, therefore,
his sole remedy was under the Jones Act. Citing Shuster v. Workers’ Compensation

                                          6
Appeal Board (Pennsylvania Human Relations Commission), 745 A.2d 1282 (Pa.
Cmwlth. 2000), the Board explained that a “party is required to appeal from the
WCJ’s decision on remand, even if favorable on the remanded issue, and request
that the Board make its previous order final.” R.R. at 21a. Having previously
determined that Claimant was not a “seaman” for purposes of the Jones Act, the
Board declined to revisit that issue.
               Claimant argued that the WCJ erred in concluding that Insurer correctly
paid Jones Act benefits and was not entitled to subrogation. The Board affirmed the
WCJ’s determination that Claimant was covered by the Commercial Hull Policy,
based on its review of the Commercial Hull Policy’s provisions and principles of
contract interpretation.       The Board found that Insurer could have used the
terminology of the Jones Act if it had wished to do so, and construed the term
“member of the crew” in favor of the insured.6

      6
          The Board stated:

                       When the policy language is unambiguous, the court gives
               effect to that language. When a provision is ambiguous, the policy
               is to be construed in favor of the insured. Language of a contract is
               ambiguous if it is reasonably susceptible to different constructions
               and capable of being understood in more than one sense. The courts
               do not assume that contract language was chosen carelessly.

                       Subrogation is the right of one who [sic] has paid an
               obligation which should have been paid by another to be
               indemnified by the other.

                                              ***

                       [Claimant] argues that because at the time of injury
               [Claimant] was not a seaman pursuant to the Jones Act, he could not
               be a member of the crew under the terms of the policy. Clearly, the
               insurer could have incorporated the terminology of the Jones Act if

                                                7
               Having previously determined that Claimant was not a seaman for
purposes of the Jones Act, after remand the Board held that “Claimant was a member
of the crew for purposes of the [Commercial Hull Policy].” R.R. at 25a. Thus, the
Board concluded that Insurer was not entitled to subrogation under Section 319 of
the Act. The Board affirmed the WCJ’s decision, and Claimant petitioned this Court
for review on December 31, 2018.7 Employer intervened.

               it had so wished. The policy language does not incorporate the
               language of the Jones Act. We do not assume that the contract
               language was chosen carelessly.

                       Because the term “member of the crew” in the policy is
               reasonably susceptible to different constructions, it is ambiguous
               and is to be construed in favor of the insured.

                                                ***

                      In the present matter, the [Commercial Hull Policy] covered
               hospital, medical or other expenses necessarily and reasonably
               incurred in respect to injury to a member of the crew. Any payments
               made by [Insurer] to, or on behalf of Claimant were [Insurer’s]
               responsibility under the [Commercial Hull Policy]. [Insurer] did not
               pay any obligation which should have been paid by another.
               Accordingly, [Insurer] is not entitled to subrogation.

R.R. at 21a-22a; 24a-25a (citations omitted).

       7
         Our scope of review in a workers’ compensation appeal is limited to determining whether
an error of law was committed, whether constitutional rights were violated, or whether necessary
findings of fact are supported by substantial evidence. Bloom v. Workmen’s Compensation Appeal
Board (Keystone Pretzel Bakery), 677 A.2d 1314, 1317 n.4 (Pa. Cmwlth. 1996). Substantial
evidence means such relevant evidence as a reasonable mind might accept as adequate to support
the conclusions reached. Bethenergy Mines, Inc. v. Workmen’s Compensation Appeal Board
(Skirpan), 612 A.2d 434, 436 (Pa. 1992).

                                                 8
                                           II.       Issues
               On appeal, Claimant first argues that the “law of the case” doctrine
compels this Court to vacate the Board’s December 4, 2018 decision because the
Board had previously determined Claimant was not a “seaman” pursuant to the Jones
Act.    Second, Claimant argues that the Board’s decision is not supported by
substantial evidence. Employer counters that, in the event this Court reverses the
Board, Insurer is not entitled to subrogation because it cannot subrogate against its
own insured.8

                                        III.     Discussion
                                  Law of the Case Doctrine
               As a preliminary issue, we address the applicability of the “law of the
case” doctrine. Claimant argues that the “law of the case” doctrine applies and
requires the Board to find that Claimant was not a “crewmember” under the
Commercial Hull Policy because the Board had previously determined that Claimant
was not a “seaman.” Claimant asserts the terms “crewmember” and “seaman” are
interchangeable and that the Board’s December 4, 2018 decision disregards its prior
determination that Claimant was not a “seaman.” Employer counters that the law of
the case doctrine is inapplicable in cases where the second order does not reverse the
first order and that there indeed was no reversal of the determination that Claimant
was not a “seaman.” Rather, the Board determined that, under the Commercial Hull
Policy’s “member of the crew” language, Claimant was covered.

       8
          Employer further argues that it is entitled to a credit for the workers’ compensation
benefits it paid to Claimant under the second WCJ order. However, Employer has failed to identify
where it has raised this argument before the WCJ or the Board. Therefore, the issue is not properly
before this Court.
                                                 9
               The law of the case doctrine is a body of rules regarding the concept
that a court involved in the later phases of a litigated matter should not reopen
questions previously decided by another judge of the same or a higher court in an
earlier phase of the matter. Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa.
1995). Specifically, the doctrine includes the following relevant rules:

               (1) Upon remand for further proceedings, a trial court may
               not alter the resolution of a legal question previously
               decided by the appellate court in the matter; [or] (2) upon
               a second appeal, an appellate court may not alter the
               resolution of a legal question previously decided by the
               same appellate court[.]
Id. Claimant cites no persuasive authority supporting application of the law of the
case doctrine to decisions rendered entirely within the workers’ compensation
system, and we decline Claimant’s invitation to do so here.9

                                     Substantial Evidence
               Next, Claimant argues that the Board’s decision is not supported by
substantial evidence. Claimant explains that where the evidence demonstrates that
he is not a “seaman” under the Jones Act, the same evidence cannot support a finding
that he is a “crewmember” under the Commercial Hull Policy because the two terms
are interchangeable.

       9
         Claimant cites two cases in support of his argument that the law of the case doctrine is
applicable. Both are distinguishable. Madden v. Workers’ Compensation Appeal Board (Gutter
Guard) (Pa. Cmwlth., No 2218 C.D. 2012, filed May 20, 2013) (Madden II), involved a case that
was appealed to this Court, remanded to the WCJ, and then again appealed to this Court. In the
second appeal, this Court held that the law of the case doctrine prevented the reconsideration of
the Court’s prior decision. Id. However, in this case, there has not yet been an appeal and decision
outside of the workers’ compensation system. Claimant also cites Krouse v. Workers’
Compensation Appeal Board (Barrier Enterprises, Inc.), 837 A.2d 671 (Pa. Cmwlth. 2003), which
contemplates the impact of res judicata and collateral estoppel, not the law of the case doctrine.
                                                10
              Employer argues that the determination that Claimant is not a “seaman”
for purposes of the Jones Act does not preclude a finding that he is a “crewmember”
and therefore covered under the Commercial Hull Policy. Employer contends that
if Insurer wanted to limit the Commercial Hull Policy’s coverage to “seaman” or if
it intended for the terms “member of the crew” and “seaman” to be interchangeable,
it could have defined them as such.
              Exactly who qualifies as a “seaman” under the Jones Act has been
refined through more than 75 years of case law. “[T]he question of who is a ‘member
of the crew,’ and therefore who is a ‘seaman’ is a mixed question of law and fact.”
Chandris, Inc. v. Latsis, 515 U.S. 347, 354 (1995).
              In Chandris, the U.S. Supreme Court reduced the class of individuals
who are “seamen” to the following test: (1) the employee’s duties must contribute
to the function of the vessel or the accomplishment of its mission; and (2) the
employee must have a connection to a vessel or vessels in navigation that is
substantial in both its duration and its nature. 515 U.S. at 355-56. The second
requirement narrows the field of employees who are “seamen” by distinguishing
land-based workers who only have a “transitory or sporadic connection to the vessel
in navigation.” Id.
              Under relevant case law, the terms “crewmember” and “member or
master of the crew” have been held to be synonymous with “seaman.” In Chandris,
the Court observed that the Longshore and Harbor Workers’ Compensation Act
(LHWCA),10 which provides the exclusive remedy for injuries sustained by a range
of land-based maritime workers, explicitly excludes from its coverage a “member of
a crew of any vessel.” Chandris, 515 U.S. at 355 (citing 33 U.S.C. §902(3)(G)).

       10
          33 U.S.C. §§901-950. Neither party has raised the argument that Claimant was covered
under the LHWCA.
                                             11
                    As the [U.S. Supreme] Court has stated on several
             occasions, the Jones Act and the LHWCA are mutually
             exclusive compensation regimes: “master or member of
             the crew” is a refinement of the term “seaman” in the Jones
             Act; it excludes from LHWCA coverage those properly
             covered under the Jones Act. Indeed, it is odd but true that
             the key requirement for Jones Act coverage now appears
             in another statute.
Chandris, 515 U.S. at 355-56 (internal quotations and citations omitted).
             In Foulk v. Donjon Marine Company, Inc., 144 F.3d 252 (3d Cir. 1998),
the Third Circuit Court of Appeals held that the term “master or member of the crew”
is a refinement of the term “seaman” in the Jones Act. Id. at 258. Further, the court
elaborated that an individual’s status as a seaman, based on the test enunciated in
Chandris, requires the court to analyze the totality of the circumstances. Id. at 260.
             In Hill v. Workmen’s Compensation Appeal Board (Spirit of
Philadelphia), 703 A.2d 74 (Pa. Cmwlth. 1997), the claimant appealed an order of
the Board affirming the dismissal of his claim petition for lack of jurisdiction. The
claimant was a deckhand on a ship and his duties included cleaning the deck and
general household work aboard the ship. Id. at 75-76. The claimant was injured on
shore while taking out the trash. Id. at 76. The Court reiterated that to determine
whether the claimant’s injury was compensable under the Act, it must first determine
whether the claimant was a seaman under the Jones Act. Based on the totality of the
facts, the Court concluded that the claimant was a seaman, injured in the course of
his employment, and his exclusive remedy was under the Jones Act. Id. at 80.
             Because, as a matter of law, the term “crewmember” is interchangeable
with “seaman” for purposes of the Jones Act, Foulk, 144 F.3d at 259, Hill, 703 A.2d
at 78, and the remedies under both statutes are exclusive, the Board erred in
concluding that Claimant was entitled to Jones Act maintenance and cure benefits
and workers’ compensation benefits for the same injury.
                                         12
                                     Subrogation
             Nevertheless, we affirm the Board’s December 4, 2018 order because
Insurer is unable to subrogate its own insured. It is well-settled that an insurer cannot
subrogate against its own insured. Keystone Paper Converters, Inc. v. Neemar, Inc.,
562 F. Supp. 1046, 1048 (E.D. Pa. 1983) (“there exists a large body of law to the
effect that an insurer may not subrogate against its own insured.”); Employers of
Wausau v. Purex Corp., 476 F. Supp. 140, 142 (E.D. Pa. 1979). “By definition,
subrogation can arise only with respect to the rights of an insured against third
persons to whom the insurer owes no duty.” Remy v. Michael D’s Carpet Outlets,
571 A.2d 446, 447 (Pa. Super. 1990). For an insurer to prevail against its own
insured in a subrogation action contravenes public policy. Employers of Wausau,
476 F. Supp. at 143.
             There is no dispute that Employer is the named insured under the
Commercial Hull Policy, pursuant to which Insurer paid “maintenance and cure”
benefits to Claimant. R.R. at 195a-96a. Insurer is now attempting to recover from
its own insured the sums paid to Claimant under the Commercial Hull Policy.
Insurer, as Ms. Briggs noted in the claim file, is unable to subrogate against its own
insured. See Employers of Wausau, 476 F. Supp. at 142; R.R. at 168a. To permit
subrogation in this case would be a direct violation of the well-settled rule that an
insurer is unable to subrogate against its own insured.          See; Keystone Paper
Converters, 562 F. Supp. at 1048; Employers of Wausau, 476 F. Supp. at 142.

                                           13
                                     IV.    Conclusion
              Although the Board erred in holding that Claimant was entitled to
   benefits under two statutes providing exclusive remedies, we conclude that
   Insurer is not entitled to subrogation against Employer. Accordingly, we affirm
   the Board’s order.11

                                           MICHAEL H. WOJCIK, Judge

       11
          We “may affirm on other grounds where grounds for affirmance exist.” Kutnyak v.
Department of Corrections, 748 A.2d 1275, 1279 n.9 (Pa. Cmwlth. 2000); accord Sloane v.
Workers’ Compensation Appeal Board (Children’s Hospital of Philadelphia), 124 A.3d 778, 786
n.8 (Pa. Cmwlth. 2015).
                                            14
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Robert Arlet,                       :
                                    :
                         Petitioner :
                                    :
               v.                   : No. 1722 C.D. 2018
                                    :
Workers’ Compensation Appeal        :
Board (Commonwealth of              :
Pennsylvania, Department of Labor :
and Industry, Bureau of Workers’    :
Compensation),                      :
                                    :
                         Respondent :

                                  ORDER

            AND NOW, this 29th day of July, 2020, the December 4, 2018 order of
the Workers’ Compensation Appeal Board in the above-captioned matter is hereby
AFFIRMED.

                                    __________________________________
                                    MICHAEL H. WOJCIK, Judge