Court Opinion

ID: 7804531
Source: CourtListenerOpinion
Date Created: 2022-08-29 17:10:49.008825+00
Date Added: 2024-06-11T16:29:51.864385
License: Public Domain

J-A17031-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JOHN GLEASON AND ELAINE               :    IN THE SUPERIOR COURT OF
 GLEASON, H/W                          :         PENNSYLVANIA
                                       :
                                       :
              v.                       :
                                       :
                                       :
 ALFRED I. DUPONT HOSPITAL FOR         :
 CHILDREN, THE NEMOURS                 :    No. 1757 EDA 2021
 FOUNDATION, GENERAL ELECTRIC          :
 COMPANY, SODEXO CTM, INC.,            :
 SODEXO, INC., AND Z AND F             :
 CONSULTING                            :
                                       :
                                       :
 APPEAL OF: THE HARTFORD               :
 INSURANCE GROUP                       :

             Appeal from the Order Entered January 30, 2020
   In the Court of Common Pleas of Philadelphia County Civil Division at
                           No(s): 160502115,
                               170503992

 JOHN GLEASON AND ELAINE                :   IN THE SUPERIOR COURT OF
 GLEASON, H/W                           :        PENNSYLVANIA
                                        :
                                        :
              v.                        :
                                        :
                                        :
 HSC BUILDERS AND CONSTRUCTION          :
 MANAGERS AND PREFERRED                 :   No. 1758 EDA 2021
 ELECTRIC, INC.                         :
                                        :
                                        :
 APPEAL OF: THE HARTFORD                :
 INSURANCE GROUP                        :

             Appeal from the Order Entered January 30, 2020
   In the Court of Common Pleas of Philadelphia County Civil Division at
                           No(s): 160502115,
                               170503992
J-A17031-22

BEFORE:      PANELLA, P.J., NICHOLS, J., and COLINS, J.*

MEMORANDUM BY COLINS, J.:                           FILED AUGUST 29, 2022

        The Hartford Insurance Group (“Insurer”) appeals from the January 30,

2020 order of the trial court approving the petition for approval of settlement

filed by Plaintiffs John and Elaine Gleason (“Plaintiffs” or “the Gleasons”). We

affirm.

        In our prior decision in this matter, this Court summarized the relevant

history of this case as follows:

        Mr. Gleason was employed as an MRI Field Service Technician by
        Medical Imaging Group [(“MIG”)]. [Insurer] provides workers’
        compensation insurance to MIG. On May 29, 2015, while Mr.
        Gleason was performing maintenance on an MRI machine at
        Dupont Hospital, a fire and explosion occurred in the main
        distribution panel. Mr. Gleason’s hair, skin and clothing caught
        fire and he suffered severe burns, scarring, disfigurement and
        temporary blindness. The Gleasons filed two actions against
        various defendants in 2016 and 2017, alleging negligence and loss
        of consortium. The defendants answered the complaints and filed
        cross-claims and the actions were consolidated in February 2018.

        The Gleasons reached a proposed settlement agreement with the
        defendants and they filed a petition seeking the trial court’s
        approval of its terms on December 12, 2019. The agreement
        provided for a total settlement payment of $1.45 million dollars.
        That sum was allocated between the Gleasons, with $580,000 to
        Mr. Gleason and $870,000 to Mrs. Gleason for the loss of
        consortium claim. On December [24], 2019, all defendants joined
        in support of the Gleasons’ petition without taking a position on
        the allocation between the spouses.

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.

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Gleason v. Alfred I. Dupont Hospital for Children, 260 A.3d 256, 259 (Pa.

Super. 2021).

      Although Insurer was not then a party to the case, it filed a response to

the petition for approval of settlement. Insurer argued that the allocation of

60% of the total settlement amount to the loss of consortium claim was not

based upon sufficient evidence and would insulate a substantial portion of the

settlement from Insurer’s subrogation lien in light of the rule that a workers’

compensation insurer has no subrogation interest in a spouse’s recovery for

loss of consortium. See Thompson v. Workers’ Compensation Appeal

Board (USF&G Co.), 781 A.2d 1146, 1154-55 (Pa. 2001). After settling Mr.

Gleason’s workers’ compensation claim, Insurer paid a total of $988,474 in

workers’ compensation benefits, including indemnity and medical benefits, as

well as funding for a medical set-aside account for future medical expenses.

      The trial court scheduled oral argument on the petition for January 23,

2020. Prior to argument, Plaintiffs sought leave to present testimony and

submit documentary evidence.       Insurer opposed the request, and at the

hearing, the trial court only permitted the parties to submit exhibits—including

Mrs. Gleason’s deposition transcript, reports of Mr. Gleason’s doctors, and

records related to Mr. Gleason’s workers’ compensation benefits—and present

oral argument.

      The trial court entered its order approving the settlement on January

30, 2020.   Insurer filed an appeal that was quashed because cross-claims

among the defendants remained pending.         On August 28, 2021, following

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notation on the docket that all cross-claims had been resolved, Insurer filed

the instant appeal challenging the approval of the apportionment of the

settlement.1

       Insurer presents two issues for our review:

       1. Did the Trial Court procedure to address consortium allocation
       deny [Insurer] procedural rights necessary for a party whose
       substantive rights are being determined by the Court?

       2. Was the Trial Court Judge’s approval of 60% consortium
       apportionment to the spouse contrary to the weight of the
       evidence?

Insurer’s Brief at 4 (reordered for ease of disposition).

       We review a trial court’s order approving or denying a settlement

agreement for an abuse of discretion. Dauphin Deposit Bank and Trust

Co. v. Hess, 727 A.2d 1076, 1080 (Pa. 1999).         However, with respect to

questions of law, our review is plenary. Urmann v. Rockwood Casualty

Insurance Co., 905 A.2d 513, 518 (Pa. Super. 2006). We are bound by the

trial court’s factual findings when supported by competent evidence. Id. “The

evidence must be viewed in the light most favorable to the prevailing party.”

Id. “Thus, we will overturn the trial court’s decision only when the court’s

factual findings are contrary to the weight of the evidence or when its legal

conclusions are erroneous.” Id.
____________________________________________

1 The trial court did not direct Insurer to file a concise statement of errors
complained of on appeal, but instead, on March 4, 2021, issued a statement
pursuant to Pa.R.A.P. 1925(a) in which it indicated that it was relying on the
reasoning set forth in its June 3, 2021 opinion prepared in response to
Insurer’s earlier appeal.

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      “Subrogation has its roots in equity and was envisioned as a means to

place the ultimate burden of a debt on the primarily responsible party.” Arlet

v.   Workers’    Compensation       Appeal    Board     (Commonwealth        of

Pennsylvania), 270 A.3d 434, 441-42 (Pa. 2022).

      [W]hen an individual who has been indemnified for a loss
      subsequently recovers for the same loss from a third party, equity
      compels that the indemnifying party be restored that which he
      paid the injured party; thereby placing the cost of the injury upon
      the party causing the harm while preventing the injured party
      from profiting a “double recovery” at the indemnifying party’s
      expense.

Id. at 442 (citation omitted).

      Subrogation in the workers’ compensation context is governed by

Section 319 of the Workers’ Compensation Act (“Act”), which provides that

the employer, or its insurance carrier, shall have subrogation rights related to

a “compensable injury [] caused in whole or in part by the act or omission of

a third party . . . to the extent of the compensation payable under [the Act]

by the employer.” 77 P.S. § 671. The employer is responsible for payment

of “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.” Id. Section 319 is

recognized as establishing “an absolute right of subrogation” in the employer.

Thompson, 781 A.2d at 1151; see also Gleason, 260 A.3d at 260 n.3.

      Our Supreme Court has held that, “because a loss of consortium claim

is derivative in nature and arises from the impact of the spouse’s physical

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injuries upon the marriage rather than from the injuries themselves, there is

no identity or equatability of funds and, thus, an employer has no subrogation

interest in a spouse’s recovery for loss of consortium.” Thompson, 781 A.2d

at 1154-55 (citing Darr Construction Co. v. Workmen’s Compensation

Appeal Board (Walker), 715 A.2d 1075 (Pa. 1998)). A loss of consortium

claim, which is based upon “a loss of services, society, and conjugal affection

of one’s spouse” or “an injury to marital expectations,” is “a separate and

distinct cause of action . . . from a claim for bodily injury.” Darr, 715 A.2d at

1080 (citation omitted). Because damages for loss of consortium have no

market value, economic evidence is not required to support the award, and

the amount awarded for such a claim is left to the sound judgment of the fact-

finder. Urmann, 905 A.2d at 520.

      In Darr, our Supreme Court “recognize[d] that a potential for abuse

exists in the structuring of loss of consortium settlements between a claimant

and a third party tortfeasor due to the lack of participation by the employer in

the proceeding” because a “claimant would have the opportunity to shield his

recovery from the employer’s subrogation interest by fraudulently attributing

an unwarranted amount of the damages to the spouse’s claim for loss of

consortium.” 715 A.2d at 1081. The Court advised that “[i]n the event the

settlement is unreasonably apportioned, an employer may always seek

recourse in the court of common pleas.” Id.

      Insurer first argues that “the process and hearing” of the trial court to

address Plaintiffs’ petition to approve the settlement was “an abbreviated

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process” that “was insufficient to protect [Insurer’s] rights” as subrogee to Mr.

Gleason’s claim against the defendants in this action. Insurer’s Brief at 17.

Insurer contends that the “parties to a Darr hearing should be afforded the

same procedural rights as any other party whose substantive rights are being

determined by the [trial c]ourt including rights to discovery, presentation of

witnesses and other evidence, trial if necessary, and an impartial finder of fact

on the important factual issue of apportionment of damages.” Insurer’s Brief

at 16-17.

      Insurer finds support for its argument that its due process rights were

violated in our decision in its earlier appeal in this matter, in which we held

that denial of intervention prevented Insurer from fully protecting its

subrogation rights and challenging the settlement. See Gleason, 260 A.3d

at 262-63. Insurer also objects to the fact that the trial court relied on a

January 14, 2020 report prepared by Mr. Gleason’s psychiatrist, Arlene P.

Bennett, M.D., which was produced after discovery concluded and following

settlement with defendants and Plaintiffs’ petition to approve the settlement

was filed.

      Insurer is entitled to no relief on its claim that its due process rights

were violated. First, we note that, while this Court previously ruled in Insurer’s

favor in reversing the trial court’s denial of Insurer’s motion to intervene,

Insurer did not file its motion until almost three months after the trial court

had already entered its order approving the settlement. See id. at 260, 262-

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63.2 Therefore, Insurer was not denied the opportunity to participate as a

party in the proceedings at issue here as it had not yet sought to intervene

when the settlement was approved.

       Furthermore, our review of the record reveals that Insurer did not at

any point lodge any objections in the trial court concerning the manner in

which the court conducted the hearing. “As a general matter, it is axiomatic

that issues not raised in lower courts are waived for purposes of appellate

review, and they cannot be raised for the first time on appeal.”      Trigg v.

Children’s Hospital of Pittsburgh of UPMC, 229 A.3d 260, 269 (Pa. 2020);

see also Pa.R.A.P. 302(a) (“Issues not raised in the trial court are waived and

cannot be raised for the first time on appeal.”).     “Requiring issues to be

properly raised first in the trial court ensures that trial judges have the

opportunity to consider a potential appellate issue and correct any error at the

first available opportunity.” Trigg, 229 A.3d at 269. Because Insurer did not

raise any purported procedural irregularities prior to or during the hearing at

issue in this appeal, we are constrained to find that Insurer’s due process

____________________________________________

2  Insurer filed its motion to intervene on April 20, 2020 after it had already
filed a notice of appeal of the trial court’s January 30, 2020 order approving
the settlement. The trial court denied intervention on May 14, 2020. After
this Court entered an order quashing Insurer’s initial appeal of the order
approving the settlement apportionment as interlocutory, Appellant filed a
second motion to intervene, which the trial court denied on August 21, 2020.
Appellant appealed from this order and we held in our earlier opinion that the
appeal was permissible under the collateral order doctrine and that the trial
court had abused its discretion by denying intervention. Gleason, 260 A.3d
at 261-63.

                                           -8-
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argument is waived. Id.; see also In Interest of A.W., 187 A.3d 247, 252-

53 (Pa. Super. 2018) (argument that trial court did not protect party’s due

process rights at hearing was waived because no timely and specific objection

was made).

      Even to the extent we would reach the issue, we would find that Insurer

was not prejudiced by any procedural error in this case. Although Insurer was

not a party to the case at the time the petition to approve the settlement was

filed, it was given notice of the petition, an opportunity to object, and a full

and fair opportunity to submit evidence and argue to the trial court why the

apportionment to Mrs. Gleason’s loss of consortium claim was improper. While

Appellant contends that it was denied discovery and the ability to present

witnesses, the record reveals that Insurer did not seek leave of the court to

conduct discovery and further that it was Insurer which opposed Plaintiffs’

request to present live testimony; the trial court sided with Insurer and

restricted the parties to only presenting documentary evidence at the hearing.

N.T., 1/23/20, at 5. In addition, Darr is unavailing to Insurer because, as the

trial court notes, our Supreme Court’s decision simply provides that a workers’

compensation employer or insurer shall have recourse in the court of common

pleas to challenge the allocation of a settlement to a consortium claim and

does not set forth a specific procedure that must be followed to resolve such

a dispute. Trial Court Opinion (“TCO”), 6/3/21, at 6; Darr, 715 A.2d at 1081.

Lastly, the trial court invited Insurer to engage in negotiations with Plaintiffs

and defendants regarding the settlement apportionment prior to the hearing,

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yet Insurer expressly declined to even participate in discussions until the

amount of consortium was determined by the court. See N.T., 1/23/20, at 3-

4.

      Insurer next argues that the apportionment of 60%, or $870,000, of the

$1.45 million dollars towards Mrs. Gleason’s loss of consortium claim was

against the weight of the evidence.      Insurer notes the evidence that was

presented at the settlement approval hearing regarding Mr. Gleason’s injuries,

showing that he sustained burns to his face, hands, and arm; his receipt of

extensive medical treatment, including 11 days in the burn unit and two

surgeries; and his resultant psychological issues, including nightmares,

flashbacks, depression, and PTSD. In addition, Insurer highlights the evidence

of Mr. Gleason’s economic damages, consisting of greater than $850,000 in

diminished lifetime earning capacity.

      Insurer contends that, by contrast, Mrs. Gleason’s damages were much

less severe, consisting of little more than working more hours, assuming more

household responsibilities, and assisting Mr. Gleason with wound care for a

few months after the accident.      In effect, Insurer asserts that the 60%

apportionment to the consortium claim was little more than “a ploy to shield

recovery from [Insurer’s] workers compensation subrogation lien” to which it

was statutorily entitled. Insurer’s Brief at 11.

      In its opinion, the trial court provided a thorough account of the

evidence presented by the parties at the hearing on the petition to approve

the settlement.   The court addressed the evidence submitted by Insurer,

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including a vocational report showing that Mr. Gleason had suffered a loss of

earning potential of over $30,000 annually from his $70,000 to $75,000 salary

prior to his injury.   TCO at 9; Ex. D-2, Report of Irene Mendelsohn, M.S.,

C.R.C., 2/7/19.    In addition, the trial court noted that an economist had

estimated Mr. Gleason’s lifetime loss in earning capacity in the range of

$854,551 and $893,338. TCO at 9; Ex. D-3, Report of Andrew Verzilli, M.B.A.,

5/5/19.

      The trial court also reviewed Mrs. Gleason’s deposition testimony that,

following her husband’s accident, she was forced to switch from part-time

work as a school aide to full-time work and she also picked up additional

summer hours to compensate for lost income.        TCO at 7-8; Ex. P-1, Mrs.

Gleason Deposition Transcript, 5/22/18, at 12-13, 28, 57-58. As the court

explained, Mrs. Gleason testified that the accident resulted in changes to the

couple’s relationship as she had to deal with her husband’s increased

irritability and anger and a loss of intimacy. TCO at 8; Ex. P-1 at 37, 39-40.

Mrs. Gleason stated that she “was in denial that [the accident] totally changed

[her] life” as a result of Mr. Gleason’s personality changes and she was forced

to “walk[] on eggshells around” her husband. TCO at 8; Ex. P-1 at 43-44.

The trial court further related that Mr. Gleason’s injury had led to frequent

fights between the couple regarding family finances; their teenage daughter

had experienced stress-related “stomach issues” because “[s]he doesn’t want

to see [her parents] fight.” TCO at 8; Ex. P-1 at 40, 54-55, 69.

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      The trial court further recounted that Mr. Gleason had made an excellent

recovery from his injury by 2019, with his neurosurgeon reporting that his

chronic pain was well-controlled and he no longer was in need of pain

medications and Dr. Bennett, Mr. Gleason’s psychiatrist, stating that he was

responding well to therapy and had reconnected with friends, church, and

coaching youth sports. TCO at 10; Ex. P-2, Clinical Update of Dr. Bennett,

6/8/19, at 2; Ex. P-3, Progress Notes of Gaurav Jain, M.D., 3/20/19, at 1, 3.

However, the trial court noted that Dr. Bennett had also observed stresses in

the couple’s marriage, including a complete loss of intimacy, regular disputes

regarding finances, a lack of any social life together, and the absence of any

shared relationship with their church, even though they were individually

observant. TCO at 8-9; Ex. P-2, Clinical Update of Dr. Bennett, 1/14/20, at

1-2. Dr. Bennett concluded that:

      The Gleasons are coming to grips with how their relationship has
      deteriorated since [Mr. Gleason’s] accident. He described them
      as being like strangers moving around in the same house.
      Following one of their attempts to communicate, I was surprised
      to get an e-mail from his wife explaining how much their
      relationship had changed after [Mr. Gleason’s] injury and how
      awful she was still feeling. I have offered to find a reputable
      counselor near their home . . . and I hope that she will pursue
      counseling.

TCO at 9; Ex. P-2, Clinical Update of Dr. Bennett, 1/14/20, at 2.

      The trial court found that the exhibits submitted by Plaintiffs

demonstrated Mr. Gleason’s substantial recovery from his physical and mental

injuries,   while   Mrs.   Gleason’s   “emotional   and   mental   health   [had]

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deteriorated” as she attempted to cope “with the sudden and prolonged loss

of her husband’s companionship and disruption to her family life.” TCO at 10.

The trial court noted that nothing in the evidence submitted by Insurer

contradicted the account of Mrs. Gleason’s harm.        Id.   The court thus

concluded that “considering both the lingering psychic harm to M[r]s. Gleason

and Mr. Gleason’s positive recovery, the evidence amply supports [the]

conclusion that the allocation of 60% of the total settlement to the loss of

consortium claim in this third-party action is reasonable.” Id. The trial court

further determined that there was no support for Insurer’s claim that the

allocation was “an attempt to thwart its subrogation rights” as there was no

evidence offered “from which it can be inferred that the Gleasons entered the

settlement with a bad motive.” Id. at 10-11.

      Upon our review of the record, we discern no abuse of discretion in the

trial court’s approval of the apportionment of the settlement between Mr.

Gleason’s negligence claim and Mrs. Gleason’s loss of consortium claim. The

evidence before the trial court showed that Mrs. Gleason suffered significant

emotional injuries and her quality of life and marriage had markedly declined

after her husband’s injury. Insurer’s evidence did not in any way rebut the

findings of the harm to Mrs. Gleason. Moreover, Insurer offered no evidence

to show that the apportionment of the settlement constituted a “ploy” to evade

the subrogation lien. As we find that Insurer has not shown that the trial

court’s grant of Plaintiffs’ petition to approve the settlement was against the

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weight of the evidence set forth at the hearing below, we affirm the trial

court’s January 30, 2021 order.

     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/29/2022

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