Court Opinion

ID: 6321948
Source: CourtListenerOpinion
Date Created: 2022-03-10 17:12:13.991182+00
Date Added: 2024-06-11T09:20:31.664501
License: Public Domain

J-A02024-22

                                   2022 PA Super 44

    MICHELE LOFTUS AND RICHARD                 :   IN THE SUPERIOR COURT OF
    LOFTUS, HER HUSBAND                        :        PENNSYLVANIA
                                               :
                                               :
                v.                             :
                                               :
                                               :
    KATRINA DECKER                             :
                                               :   No. 611 WDA 2021
                                               :
    APPEAL OF: EASTERN ALLIANCE                :
    INSURANCE GROUP                            :

                  Appeal from the Order Entered April 23, 2021
     In the Court of Common Pleas of Indiana County Civil Division at No(s):
                                11725 CD 2020

BEFORE: OLSON, J., MURRAY, J., and PELLEGRINI, J.*

OPINION BY PELLEGRINI, J.:                              FILED: MARCH 10, 2022

        Eastern Alliance Insurance Group (Eastern Insurance), a workers’

compensation carrier, appeals from an order of the Court of Common Pleas of

Indiana County (trial court) denying its petition to intervene in an action

commenced by a praecipe for writ of summons filed by Michele Loftus (Loftus)

and her husband, Richard Loftus (Richard) (collectively, the Loftuses) against

Katrina Decker (Decker). It sought to intervene and file a complaint on behalf

of Loftus to seek damages out of which it can satisfy its statutory lien for

compensation it paid on behalf of Loftus’s employer.

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
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                                        I.

      Because a praecipe for writ of summons contains no facts, the

allegations about what this case is about are taken from Eastern Insurance’s

petition to intervene. That petition alleges that Loftus, while in the course of

her employment as a bus driver for one of its insureds, sustained injuries in a

motor vehicle accident that was purportedly caused by Decker, the driver of

the other vehicle. As a result of that incident, it alleges that it paid Loftus on

behalf of her employer $196,093.34 in workers’ compensation benefits that is

a statutory lien against any recovery that Loftus may obtain from Decker.

      Loftus settled her workers’ compensation claim with Eastern Insurance

on May 14, 2020. The settlement agreement provided that:

      Employer/Carrier retains its absolute right to statutory
      subrogation pursuant to Section 319 of the Workers’
      Compensation Act, [77 P.S. § 671,] as amended. Claimant
      understands that in the event of a third-party recovery,
      Employer/Carrier is subrogated for all workers’ compensation
      benefits it paid to [Loftus] or on Claimant’s behalf, including the
      amount of this settlement, with no lien waiver as agreed upon by
      the Claimant. It shall be the responsibility of Claimant to notify
      [Appellant] of any third-party recovery either by settlement or
      trial and to satisfy [Appellant’s] statutory subrogation claim from
      the proceeds of any third-party recovery within thirty (30) days of
      receipt of any recovery.

Petition to Intervene, ¶ 17. Loftus has filed a writ of summons against Decker

and Eastern Insurance has notified both Loftus and Decker of its workers’

compensation subrogation lien.

      Even though only a praecipe for writ of summons has been filed, Eastern

Insurance contends that it should be permitted to intervene because it is

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necessary to protect its workers’ compensation lien because the Loftuses

refuse to take the $25,000 insurance policy that Decker’s insurance company

has offered and are threatening to “walk away” and not seek recovery against

Decker unless Eastern Insurance agrees to compromise its lien rights. Eastern

Insurance stated that it is necessary for it to intervene to “prosecute this

matter and protect its statutory lien rights, which are not adequately

represented by [the Loftuses] or [Decker].” Petition to Intervene, ¶ 23.

      Attached to the petition to intervene is a civil action complaint listing

Loftus alone as the plaintiff and sets forth allegations that Decker was legally

responsible for the accident and subject to damages. Eastern Insurance is not

named as a party to the action, only being listed in a fact paragraph in the

proposed complaint as a lien holder.

      The trial court denied Eastern Insurance’s intervention, reasoning that

since no complaint had been filed by the Loftuses, “there are no verified

allegations of facts supporting the cause of action, and, in fact, no cause of

action has been alleged.”    R. 211a.    Trial Court Order, 4/23/2021, at 1.

Additionally, the trial court noted that intervention could not be granted under

Pa.R.C.P. 2327 because, in the absence of a complaint, no judgment could be

entered in the action and it was, therefore, impossible for Eastern Insurance

to demonstrate the existence of a legally enforceable interest that intervention

would protect. See 1925(a) Opinion, 7/6/2021, at 1-3.

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      The trial court went on to opine that Eastern Insurance could not

establish a right to appeal the denial of intervention under Pa.R.A.P. 313(b),

which makes a collateral order immediately appealable where the denial of

the appeal would cause a right to be “irretrievably lost.” That is, without a

complaint or the possibility of an adverse judgment, Eastern Insurance was

“acting as a catalyst in the matter,” not protecting an extant right that could

be lost if the right to appeal was denied. Id. at 2-3.

      Eastern Insurance filed the instant timely appeal.           Both Eastern

Insurance and the trial court have complied with Pa.R.A.P. 1925.

                                       II.

      Because it implicates our jurisdiction, we must first address whether this

appeal should be quashed because it is an appeal from a collateral order

doctrine pursuant to Rule 313(b) of the Pennsylvania Rules of Appellate

Procedure. Pa.R.A.P. 341(b)(1) provides that “a final order is any order that

disposes of all claims and of all parties.” In general, “an appeal will not lie

from an order denying intervention, because such an order is not a final

determination of the claim made by the would-be intervenor.”                First

Commonwealth Bank v. Heller, 863 A.2d 1153, 1155 (Pa. Super. 2004)

(citation omitted).

      An appeal is still permitted if the order is an appealable collateral order.

Pa.R.A.P. 313(b) defines a collateral order as one that: “1) is separable from

and collateral to the main cause of action; 2) involves a right too important to

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be denied review; and 3) presents a question that, if review is postponed until

final judgment in the case, the claim will be irreparably lost.”          Absent

satisfaction of all three prongs of the collateral order test, this Court has no

jurisdiction to consider an appeal of an otherwise non-final order.          See

Spanier v. Freeh, 95 A.3d 342, 345 (Pa. Super. 2014). In Bogdan v. Am.

Legion Post 153 Home Ass’n, 257 A.3d 751, 755-756 (Pa. Super. 2021)

(citation omitted), we explained that:

      For the first prong of the analysis under Pa.R.A.P. 313(b), a court
      must determine whether the issue(s) raised in the order are
      separable from the central issue of the ongoing litigation. Under
      the second prong, in order to be considered too important to be
      denied review, the issue presented must involve rights deeply
      rooted in public policy going beyond the particular litigation at
      hand. An issue is important if the interests that would potentially
      go unprotected without immediate appellate review of that issue
      are significantly relative to the efficiency interests sought to be
      advanced by the final judgment rule. Furthermore, with regard to
      the third prong of the analysis, our Supreme Court explained that
      whether a right is adequately vindicable or effectively reviewable,
      simply cannot be answered without a judgment about the value
      interests that would be lost through rigorous application of a final
      judgment requirement.

      Eastern Insurance contends that it has met Pa.R.A.P. 313(b)(1)’s

standards for collateral review because (1) the denial of intervention, to

protect subrogation rights, is peripheral to the ultimate resolution of any claim

the Loftuses filed against Decker; (2) a workers’ compensation carrier’s right

of subrogation is protected by statute and its right to recover its statutory lien

is too important to be denied review; and (3) the averments of Eastern

Insurance’s petition to intervene, if credited, establish that intervention is the

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only way to protect Eastern Insurance’s subrogation rights because the

Loftuses threatened to abandon their cause of action, thereby defeating

Eastern Insurance’s subrogation rights.

       We agree that Eastern Insurance has satisfied the first prong because

the denial of intervention seeking to protect subrogation “rights” is peripheral

to the ultimate resolution of any claim the Loftuses file against Decker. See,

e.g., Bogdan, 257 A.3d at 756 (concluding that an underwriter’s right to

intervene was peripheral to a declaratory judgment action that would resolve

coverage issues).       However, underlying its argument that it has met the

second and third prong is that it has a “right,” a “legally enforceable interest,”

to force Loftus to seek recovery against Decker, the third-party tortfeasor, to

protect its statutory subrogation rights. Because that issue is determinative

as to whether it meets the second and third prongs that must be met for there

to be an appealable collateral order is the same as whether there is a “legally

enforceable interest” justifying intervention,1 we will defer deciding whether

this is an appealable collateral order until we address that issue in the merits.2

____________________________________________

1 Pa.R.C.P. No. 2327 (4) provides that, “At any time during the pendency of
an action, a person not a party thereto shall be permitted to intervene therein,
subject to these rules if: (4) the determination of such action may affect any
legally enforceable interest of such person whether or not such person may
be bound by a judgment in the action.”

2 Eastern Insurance contends that the trial court erred without holding a
hearing required by Pa.R.C.P. 2329. Ignoring whether it failed to comply with
Rule L-211 of the Indiana County Local Rules of Civil Procedure (“Any
(Footnote Continued Next Page)

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                                           III.

                                               A.

       Eastern Insurance contends that the trial court erred in holding that until

a complaint is filed, intervention cannot be granted. It contends that because

Pa.R.C.P. 1007(1) provides that an action can be commenced by praecipe for

writ of summons, and Pa.R.C.P. 2327 provides that “[a]t any time during the

pendency of an action, a person not a party thereto shall be permitted to

intervene therein, . . . . ,” makes intervention allowable.

       A praecipe for writ of summons contains no facts and is filed by a plaintiff

with the Prothonotary containing a single sentence to the named defendant(s)

stating, “You are hereby notified that _ (Name(s) of Plaintiff(s)) has (have)

commenced an action against you.” Pa.R.C.P. No. 1351. It should be served

within 30 days of issuance of the writ. Pa. R.C.P. 401. Even if served, the

defendant is not required to respond. The only purpose of the praecipe is “to

provide certainty as to the commencement of an action and to remove a

subsequent failure to effect service from consideration in determining whether

the statute of limitations has been tolled.” Lamp v. Heyman, 366 A.2d 882,

886 (1976).

____________________________________________

contested motion requiring an evidentiary hearing shall be scheduled by the
Court Administrator at the request of a party.”) or that it failed to preserve
the issue of a hearing in its Statement of Matters Complained of on Appeal
filed with the trial court, the trial court decided the issue as a matter of law
requiring no factual hearing was necessary.

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       Because a writ of summons is only to serve that purpose and because

there are no facts contained in plaintiff’s one sentence writ of summons, we

agree with the trial court that there is insufficient facts for an analysis to be

made as to whether intervention is proper under Pa.R.C.P. 2327. To hold

otherwise would allow the proposed intervenor to plead what is plaintiff’s

cause of action(s), what facts support that cause of action and what relief

plaintiff is seeking, and then state why those facts that it alleged on behalf of

plaintiff justify its intervention based on the facts and interests it pleads. In

other words, if that were the case, it gets to deal the cards and play both the

house and the player’s hand.3

       Not only would an analysis of the intervention factors be impossible, it

would affect the orderly processing of the case in that the first “real” pleading

in the case would not be that of the plaintiff or defendant but of a stranger to

the action, not to mention how such intervention at such an early stage affects

the defendant’s rights. See III, infra.

____________________________________________

3 No case can be found where anyone has even attempted to intervene where
only a praecipe for writ of summons has been filed. However, though not
directly on point, it has been held that preliminary objections cannot be filed
to a writ of summons to challenge venue. Keller v. LaBarre, 311 A.2d 683,
684 (Pa. Super. 1973). That includes where the defendant is challenging a
defect in a writ of summons or its service; that can only occur when the
complaint is filed. Hoeke v. Mercy Hospital of Pittsburgh, 386 A.2d 71
(Pa. Super. 1978). See also Sikirica v. Nationwide Ins. Co., 416 F.3d 214,
223 (3d. Cir. 2005). A writ of summons is not the “initial pleading” that
triggers the 30–day period for removal under the first paragraph of 28 U.S.C.
§ 1446(b).

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      Accordingly, the trial court did not abuse its discretion in denying

intervention because until the plaintiff files a complaint setting forth the cause

of action it wants to plead and making the intervention analysis required by

Pa.R.C.P. 2327-2328 possible, intervention is not permitted.

                                       B.

      While the above dealt with whether intervention in general is permitted

where only a praecipe for writ of summons has been filed, even if it were to

be permitted and the facts Eastern Insurance alleges in the petition to

intervene are taken as true, intervention is still not permissible.

      There is no doubt that Eastern Insurance, as assignee of the employer,

has the right to subrogation to any amounts received from a third party who

caused the compensable work injury.            Section 319 of the Workers’

Compensation Act, 77 P.S. § 671, provides:

      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, his personal
      representative, his estate or his dependents, 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, his personal representative, his estate or
      his dependents. 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.        Any
      recovery against such third person in excess of the compensation
      theretofore paid by the employer shall be paid forthwith to the
      employe, his personal representative, his estate or his
      dependents, and shall be treated as an advance payment by the

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      employer on account of any future installments of compensation.
      (Emphasis added.)

      However, that is not the right Eastern Insurance is advancing in this

case; what it is advancing is something different – it contends that it has a

legally enforceable interest that gives it the right to pursue litigation against

a third-party tortfeasor and obtain a judgment from which it can satisfy its

subrogation lien.

      Our Supreme Court, in two rather recent cases, has addressed that issue

and held that Section 319 of the Workers’ Compensation Act does not give a

party any right, directly or indirectly, to take any action against a third-party

tortfeasor because Section 319 provides that only the employee can bring or

decide to seek damages against the tortfeasor. Simply, an insurer has no

right to seek a recovery, nor can it force an employee to seek recovery to

satisfy a workers’ compensation statutory lien.

      The first of the cases holding that Eastern Insurance has no right to

bring any proceeding to attempt to protect its statutory lien and where an

employee is under no such obligation to do so is Liberty Mutual Ins. Co. v.

Domtar Paper Co., 113 A.3d 1230 (Pa. 2015). In that case, the employee

did not pursue a claim against the third-party tortfeasor, refusing all attempts

both by employer and its insurer for him to do so. The employer then directly

filed a complaint against the third-party tortfeasor alleging negligence

resulting in injury to the employee. In response, the third-party tortfeasor

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asserted that the insurer had no right to file an independent claim for damages

on behalf of the injured employee who did not file an action.

       Affirming this court,4 our Supreme Court held that under Section 319,

an   insurance      carrier    has    “no      independent   cause   of   action   for

indemnification/contribution from the negligent party who caused the

insurance carrier to pay the injured employee benefits.” Id. at 1239. Citing

with approval cases previously decided by this court,5 it held that the action

against the third-party tortfeasor must be brought by the injured employee.

It then stated:

       Section 319 of the Workers’ Compensation Act does not allow
       carriers the right to bring a direct cause of action against a third-
       party tortfeasor in order to pursue subrogation. Instead, a
       carrier’s right of subrogation under Section 319 must be
       achieved through a single action brought in the name of the
       injured employee or joined by the injured employee.
       Because the claimant did not file suit against the third-party
       tortfeasor and because the carrier did not name the claimant in
       the underlying third party action, the carrier’s action was
       dismissed. (Emphasis added.)

Id. at 1240.

       Next, in Hartford Ins. Group on behalf of Chunli Chen v. Kamara,

199 A.3d 841 (Pa. 2018), our Supreme Court again addressed the issue of

____________________________________________

4Liberty Mut. Ins. Co. v. Domtar Paper Co., 77 A.3d 1282 (Pa. Super.
2013).

5 See Whirley Indus., Inc. v. Segel, 462 A.2d 800 (Pa. Super. 1983);
Reliance Insurance Company v. Richmond Machine Company,455 A.2d
686 (Pa. Super. 1983).

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whether an insurer could bring an action against a third-party tortfeasor if it

did not file it directly but filed the action on behalf of the employee. Once

again, it held, “that unless the injured employee assigns her cause of action

or voluntarily joins the litigation as a party plaintiff, the insurer may not

enforce its statutory right to subrogation by filing an action directly against

the tortfeasor.” Id. at 841.

      In that case, an employee of a rental car company was hit by a car

driven by a third-party driver while standing in her employer’s parking lot.

The employee did not want to participate in a third-party case against the

driver. Because Domtar left open the possibility that an insurer could pursue

a viable cause of action against a third-party tortfeasor if the insurer initiated

litigation “in the name of” or “on behalf of” a claimant, the insurer filed its

complaint against the third-party tortfeasor as “The Hartford Insurance Group

on behalf of [the claimant]” and captioned the plaintiff in the complaint as

“The Hartford Insurance Group on behalf of [employee.].”            We held that

because the carrier captioned the complaint “on behalf of” the employee

rather than “as insurer of” the employee, the carrier was permitted to continue

to pursue its claims against the third-party tortfeasor. Kamara.

      In reversing our decision, our Supreme Court held that an insurer’s

subrogation rights against a third-party tortfeasor remain “in the injured

employee” unless the injured employee “assigns her cause of action or

voluntarily joins the litigation as a party plaintiff or the contractual assignment

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of her claim.” 199 A.3d at 841. It went on to state that, “an employer or

workers’ compensation carrier cannot seize the injured employee’s cause of

action against the tortfeasor by merely captioning the complaint on behalf of

the employee and/or by including in the complaint independent claims of the

employee in addition to the claim for subrogation of workers’ compensation

benefits.” Id. at 849. It stated the right of recovery flows exclusively through

the employee’s decision alone, and a claim must be brought with the

employee’s “participation” and that there is no “authority, statutory or

otherwise, permitting an [insurer] to pursue [employee’s] cause of action

against Tortfeasor without [employee’s] voluntary participation as a party

plaintiff or the contractual assignment of her claim.” Id. In concluding, it

stated:

      Under these circumstances, we find it apparent that sanctioning a
      workers’ compensation carrier to pursue litigation of the injured
      employee merely by captioning the complaint as “on behalf of” the
      employee and including a bald assertion seeking any recovery due
      the employee, contravenes the very jurisprudence establishing
      that it is the injured worker who retains the cause of action against
      the tortfeasor. It is for these reasons that we reiterate our holding
      in Domtar Paper and clarify that absent the injured employee’s
      assignment or voluntary participation as a party plaintiff, the
      insurer may not enforce its Section 319 right to subrogation by
      filing an action directly against the tortfeasor.

Id. at 853.

      What Domtar and Kamara teach us is that:

      •    Section 319 of the Workers’ Compensation Act only permits
      an employee to bring an action against a third-party tortfeasor;

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     •     under the aforesaid provision, the employee is under no
     obligation to protect an employer’s lien rights;

     •     the employer cannot bring a civil action in its own name or
     “in the name of the employee” to satisfy its statutory lien unless
     the employee “voluntarily” participates in the action; and

     •     an employer may be able to have an employee’s rights
     against a third party as part of a compromise and release
     agreement to settle a workers’ compensation claim.

     Eastern Insurance does not dispute that it cannot independently seek to

recover its statutory lien against the third-party tortfeasor to satisfy its

workers’ compensation lien, absent an assignment of rights from the injured

worker, which it admittedly does not have. Instead, it contends that it can

intervene and file a complaint because it is not independently seeking to

recover its liens but is just intervening in the existing action commenced by

the Loftuses’ praecipe for writ of summons.

     By making this argument, Eastern Insurance is attempting to obfuscate

that it is using the guise of intervention to mask that it is impermissibly

attempting to “seize” the litigation and is seeking independently to bring an

action to recover its lien. That argument is directly contrary to both Domtar

and Kamara for the following reasons.

     First, as Eastern Insurance acknowledges, an employer/carrier has no

right to independently bring an action against a third-party tortfeasor and

cannot bring such an action “in the name of the third-party.”        Eastern

Insurance proposes to file a complaint in the employee’s name, but this is in

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effect    no   different   than   filing   a   complaint   “in    the   name   of”   the

employee/plaintiff, which Kamara expressly prohibits.

         Second, the effect of allowing intervention naming Loftus as the plaintiff

is the same as allowing the insurer to maintain an independent action in its

own name to recover the lien.               Pa.R.C.P. 2330(a) provides that, “the

intervener shall have all the rights and liabilities of a party to the action,”

which means that it had filed the complaint in its own name, which Domtar

prohibited.

         Third, Kamara requires the employee to “voluntarily” participate in any

litigation directed at satisfying a subrogation lien.            In this case, there is

anything but voluntary participation on the part of the Loftuses, who have

exercised their right to file nothing but a praecipe containing no claims or

factual allegations; Eastern Insurance is attempting to highjack the litigation

by filing a complaint naming the Loftuses as the plaintiffs over their objection

and alleging facts that the Loftuses have not certified.

         Fourth, Eastern Insurance’s argument that intervention is necessary to

protect its statutory lien because Loftus is threatening to abandon the

litigation is unavailing because both Domtar and Kamara held that an

employee under Section 319 is under no obligation to protect an insurance

carrier’s subrogation lien.

         Finally, in both Domtar and Kamara, it was third-party tortfeasors

opposing those insurers bringing an action against them to collect their

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workers’ compensation lien.         In those cases, it held that because only the

employee controls the action, it must be brought by the employee or with his

or her voluntary participation. In this case, Eastern Insurance’s petition is a

functional equivalent of filing a rule by the defendant tortfeasor to file a

complaint. The net effect is not only is Eastern Insurance seeking to take

away the Loftuses’ control of litigation, it is also seeking to take from Decker

her rights under the Rules of Civil Procedure to rule or not rule for the Loftuses

to file a complaint, possibly subjecting her to liability where there may be none

if the Loftuses do not file a complaint. Just as only the employee has the right

to bring the action, only the defendant has the right to force that a complaint

be filed.6

       As we stated in our discussion in Part II, whether Eastern Insurance had

a “right” that needed to be protected for it to be an appealable collateral order

was dependent on whether it had a “legally enforceable interest” to intervene.

Because we have determined that it does not have a legally enforceable

interest to file on its own behalf or otherwise force an employee to force a

complaint against a third-party tortfeasor to protect its subrogation order, the

____________________________________________

6 Pa.R.C.P. 1037 (a) provides that, “If an action is not commenced by a
complaint, the prothonotary, upon praecipe of the defendant, shall enter a
rule upon the plaintiff to file a complaint. If a complaint is not filed within
twenty days after service of the rule, the prothonotary, upon praecipe of the
defendant, shall enter a judgment of non pros.”

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order denying intervention is not an appealable collateral order. Accordingly,

Eastern Insurance’s appeal is quashed.

     Judge Olson joins the opinion.

     Judge Murray files a dissenting opinion.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/10/2022

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