Court Opinion

ID: 4214681
Source: CourtListenerOpinion
Date Created: 2017-10-25 17:13:52.84011+00
Date Added: 2024-06-11T14:41:51.604231
License: Public Domain

J-E01003-17

                              2017 PA Super 340

CAROLYN RICKARD, ADMINISTRATRIX                IN THE SUPERIOR COURT OF
OF THE ESTATE OF WILLIAM RICKARD,                    PENNSYLVANIA
DECEASED,

                         Appellant

                    v.

AMERICAN NATIONAL PROPERTY AND
CASUALTY COMPANY,

                         Appellee                   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.

OPINION BY SHOGAN, J.:                            FILED OCTOBER 25, 2017

     Appellant, Carolyn Rickard, Administratrix of the Estate of William

Rickard, appeals from the order entered April 28, 2015, which denied her

November 18, 2014 Petition for Order of Distribution in a Wrongful Death

Action (“Distribution Petition”), for amounts secured through an insurance-

claim settlement. For the reasons that follow, we reverse and remand to the

common pleas court for proceedings consistent with this Opinion.

     On July 2, 2010, William Rickard (“the Deceased”) and Appellant

(collectively, “the Rickards”), filed for bankruptcy.   Distribution Petition,

11/18/14, Attachment (In re: William J. Rickard and Carolyn M.

Rickard,   Bankr.     No.   10-24821-JAD    (Bankr.     W.D.Pa.    10/20/14),
J-E01003-17

Memorandum Opinion (“Bankruptcy Court Memorandum”), 10/20/14, at 1).

On November 16, 2012, as he was on his way to work in his personal

vehicle, the Deceased was struck from behind, rendering him paraplegic.

Distribution Petition, 11/18/14, at unnumbered 1–2.          At the time of the

accident, the Deceased maintained a personal automobile insurance policy

that included $250,000 in underinsurance coverage through American

National Property and Casualty Company (“ANPAC”). Id. at 2. Because the

Deceased’s accident was work related, the Western Pennsylvania Teamsters

and Employers Welfare Fund (“the Welfare Fund”), a self-insured employee

benefit   plan   governed by ERISA1            that covered the    Deceased, paid

$279,498.03 in medical bills and disability payments.             Bankruptcy Court

Memorandum, 10/20/14, at 2.

       While the Deceased was alive, he made a claim for underinsured

benefits to ANPAC for the injuries he sustained in the accident. As noted,

the Rickards were debtors in bankruptcy at the time of the motor vehicle

accident.2    Upon petition, the bankruptcy court authorized appointment of

____________________________________________

1   Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq.

2  The record adduced below is sparse. Neither the ANPAC insurance policy
nor the operative Plan language was introduced into evidence or attached to
Appellant’s petition. The parties stipulated to the accuracy of the Plan
language before the bankruptcy court, however, and Appellant attached
excerpts of the language, as quoted in the bankruptcy court’s memorandum
opinion, to its petition. We have utilized a combination of attachments to
(Footnote Continued Next Page)

                                           -2-
J-E01003-17

separate counsel to pursue the accident litigation but, significant to the

disposition of this appeal, retained the right to approve the settlement while

the matter was in bankruptcy. Bankruptcy Court Memorandum, 10/20/14,

at 2. Appointed counsel had no authority to enter into a settlement without

the bankruptcy court’s approval.           ANPAC issued a settlement check for

$250,000 on January 13, 2014, and appointed counsel placed the check in

his safe.   Appellant’s Brief at 7. The Welfare Fund asserted a lien for the

medical benefits it paid for the Deceased’s treatment against any recovery

by the Deceased for personal injury sustained in the accident. Distribution

Petition, 11/18/14, at unnumbered 2.            The Rickards filed a Motion to

Approve Settlement of the Underinsured Motorist Claim in the Bankruptcy

Court, seeking a payment of “$100,000 (or 40% of the recovery) paid to

[Appellant’s counsel], payment of $1,000 to bankruptcy counsel for [the

Rickards], and payment of the remaining balance of $149,000 to Mr.

Rickard.”    Bankruptcy Court Memorandum, 10/20/14, at 3.                Because the

proposed settlement failed to offer distribution of any funds to the Welfare

Fund for its subrogated interest, the Welfare Fund objected to the Rickards’

motion. Id.

      On October 20, 2014, the bankruptcy court refused to approve the

settlement or distribution of the accident litigation proceeds, nor did it make
(Footnote Continued) _______________________

documents, briefs,       and    the   reproduced   record   in   order    to   provide
explanation.

                                          -3-
J-E01003-17

any distribution on its own, concluding that the Welfare Fund’s plan

documents3 “unequivocally provide that the Welfare Fund is to be paid its

subrogated interest first before payment to anyone else.” Bankruptcy Court

Memorandum, 10/20/14, at 8 (referencing an audio recording4 of a hearing

held in the bankruptcy court). The bankruptcy court further stated:

              The outcome of this case should not be construed as the
       [c]ourt concluding that counsel does not deserve his fee. In
       fact, the opposite is true. The record in this case is that counsel
       obtained an excellent result, worked diligently, competently, and
       professionally. Had the [c]ourt been writing on a clean slate, the
       [c]ourt surely would have concluded that counsel has earned his
       contingent fee.

Id. at 10. The order entered by the bankruptcy court provided: “And now,

this 20th day of October, 2014, for the reasons set forth in the Memorandum

Opinion filed herewith, the Motion to Approve Settlement of the

Underinsured Motorist Claim is denied.”              Bankruptcy Court Order,

10/20/14 (“Bankruptcy Court Order”) (italics in original; emphasis added).

Thus, there existed no settlement of the case.

       Two days later, October 22, 2014, the day Appellant’s counsel avers

she received the Bankruptcy Court Memorandum, William Rickard died,

____________________________________________

3  The bankruptcy court represented that “the complete plan (the “Plan”)
document is not of record, despite the fact that the parties filed a Stipulation
that avers that the Plan is attached to it.” Bankruptcy Court Memorandum,
10/20/14, at 4 (emphasis in original) (footnote omitted).

4  “Audio Recording of Hearing Held in Courtroom D, 8/29/14 (10:11
a.m.) . . . .” Bankruptcy Court Memorandum, 10/20/14, at 4.

                                           -4-
J-E01003-17

allegedly from the injuries he sustained in the accident.         Distribution

Petition, 11/18/14, at unnumbered 3; Appellant’s Brief at 7. The next day,

October 23, 2014, because there was no settlement, no distribution, and no

living payee, counsel for Appellant returned the ANPAC check. Appellant’s

Brief at 7.     The bankruptcy proceedings terminated one week later on

October 29, 2014, when the Rickards’ case was dismissed from bankruptcy

with no settlement or distribution having been made. Distribution Petition,

11/18/14, at unnumbered 3.

        Appellant then submitted a wholly new claim for underinsurance

benefits to ANPAC pursuant to the Pennsylvania Wrongful Death Act, 42

Pa.C.S. § 8301, on behalf of herself and the Deceased’s daughter, Sarah

Rickard.5 Exhibit E attached to Appellant’s “Brief in Support of the Wrongful

Death Claim of Decedent’s Widow and Minor Child” filed in the orphans’ court

is a letter from Appellant’s counsel to ANPAC. That letter states, in relevant

part:
____________________________________________

5  Once again, we lament the state of the certified record. While a brief by
the Welfare Fund is docketed as filed in the orphans’ court, the opposing
brief of Appellant in support of the wrongful death claim is not. Appended to
that brief are multiple documents that enhance understanding, indeed
confirm the existence, of various facts in the instant case. Because those
documents are shown as attachments in the Reproduced Record, we note
their existence and applicability. See Nicolaou v. Martin, 153 A.3d 383,
393 n.6 (Pa. Super. 2016) (citing Commonwealth v. Barnett, 121 A.3d
534, 546 (Pa. Super. 2015), appeal denied, 128 A.3d 1204 (Pa. 2015), cert.
denied sub nom., Barnett v. Pennsylvania, ___ U.S. ___, 136 S.Ct. 2391,
195 L.Ed.2d 766 (2016) (where the accuracy of a document is undisputed
and contained in the reproduced record, we may consider it)).

                                           -5-
J-E01003-17

           Enclosed please find a copy of the Short Certificate
     evidencing the granting . . . of Letters of Administration on the
     Estate of William J. Rickard to Carolyn Rickard on October 29,
     2014.

            As I previously informed you, on October 22, 2014, Mr.
     Rickard succumbed to the injury and illness suffered as a result
     of his automobile accident.

          Claim is hereby made, by Carolyn Rickard, Administratrix,
     under the Pennsylvania Wrongful Death Act, 42 Pa.C.S.A. § 8301
     and Pa.R.C.P. 2202(a) for the full amount of the underinsurance
     coverage under the Rickards’ auto policy.

Brief in Support of the Wrongful Death Claim of Decedent’s Widow and Minor

Child, Exh. E; Reproduced Record at 84A.

     Under this wrongful-death claim, ANPAC issued a check made payable

to counsel and Appellant. Upon receipt of the ANPAC check, Appellant filed

the within Distribution Petition before the orphans’ court division of the

common pleas court pursuant to Allegheny County Local Rule 2039 seeking

distribution of the underinsurance settlement funds. The orphans’ court, in

denying the Distribution Petition, determined that it was bound by collateral

estoppel because the “issue before it [is] virtually identical to the issue

decided by” the bankruptcy court.     Orphans’ Court Opinion, 4/28/15, at

unnumbered 2.    In the alternative, the orphans’ court concluded that the

Welfare Fund’s subrogated interest was superior to that of Appellant and her

counsel.

     Appellant filed a timely appeal.      The orphans’ court did not direct

Appellant to file a Pa.R.A.P. 1925(b) statement, and none was filed.

                                    -6-
J-E01003-17

Following oral argument, a panel of this Court, with one judge dissenting,

filed a memorandum opinion affirming the orphans’ court’s decision.

Rickard v. American National Property and Casualty Co., 774 WDA

2015 (Pa. Super. filed August 9, 2016) (unpublished memorandum).

Thereafter, Appellant filed an application for reargument en banc.          On

October 20, 2016, this Court granted en banc reargument and withdrew the

August 9, 2016 decision. Following the filing of new briefs, we entertained

oral argument on March 21, 2017. This matter is now ripe for disposition.

      Appellant raises the following three issues:

      1) Does the instant bankruptcy court order which does not
      address whether an ERISA Fund may extend its subrogation lien
      to a decedent’s wife and minor daughter serve as a basis to
      collaterally estop an orphans’ court claim for wrongful death
      damages made after the close of the bankruptcy matter?

      2) Are the wrongful death beneficiaries, spouse and minor child,
      precluded from recovering benefits for their separate and distinct
      injury by lien language in an ERISA Health and Welfare Plan,
      when neither the lien amounts nor lien language apply to either
      of the beneficiaries?

      3)    Does the Supreme Court’s holding in U.S. Airways v.
      McCutchen, 133 S.Ct. 1537 (2013) require that a subrogation
      lien on a decedent’s recovery for medical benefits paid out
      during a decedent’s lifetime, extend to his wife and minor
      daughter’s separate and distinct recovery in a wrongful death
      action?

Appellant’s Brief at 4 (issues reordered).

      The issue of whether the court applied the correct legal standard in

distributing the wrongful death proceeds raises a question of law, i.e.,

construction of the Welfare Plan’s subrogation and reimbursement clauses,

                                     -7-
J-E01003-17

which we review de novo. Moscatiello v. Hilliard, 939 A.2d 325, 327 (Pa.

2007) (questions of law are subject to de novo review, and scope of review

is plenary).   The basis for the orphans’ court’s denial of Appellant’s

Distribution Petition was that “it [was] barred by the doctrine of collateral

estoppel,” Orphans’ Court Opinion, 4/28/15, at unnumbered 2, which the

court, without analysis, held applicable. We disagree.

      Collateral estoppel applies if (1) the issue decided in the prior
      case is identical to one presented in the later case; (2) there was
      a final judgment on the merits; (3) the party against whom the
      plea is asserted was a party or in privity with a party in the prior
      case; (4) the party or person privy to the party against whom
      the doctrine is asserted had a full and fair opportunity to litigate
      the issue in the prior proceeding and (5) the determination in
      the prior proceeding was essential to the judgment. Collateral
      estoppel, sometimes referred to as issue preclusion, operates to
      prevent a question of law or an issue of fact which has once
      been litigated and adjudicated finally in a court of competent
      jurisdiction from being relitigated in a subsequent suit. Kituskie
      v. Corbman, 452 Pa. Super. 467, 682 A.2d 378, 382 (1996)
      (citations and quotation marks omitted). The decision to allow
      or to deny a prior judicial determination to collaterally bar
      relitigation of an issue in a subsequent action historically has
      been treated as a legal issue. As such, this Court is not bound
      by the trial court’s conclusions of law and we may draw our own
      conclusions from the facts as established. Meridian Oil & Gas
      Enters., Inc. v. Penn Cent. Corp., 418 Pa. Super. 231, 614
      A.2d 246, 250 (1992), appeal denied, 534 Pa. 649, 627 A.2d
      180 (1993).

Westfield Ins. Co. v. Astra Foods Inc., 134 A.3d 1045, 1049–1050 (Pa.

Super. 2016), appeal denied, 102 EAL 2016, 2016 WL 5844709 (Pa.

September 30, 2016).

      In the present case, bankruptcy counsel asked the bankruptcy court to

approve the settlement involving a living client in receipt of medical benefits

                                     -8-
J-E01003-17

from the Welfare Fund, but the bankruptcy court refused. In re: William J.

Rickard and Carolyn M. Rickard, Bankr. No. 10-24821-JAD (Bankr. W.D.

Pa., filed October 20, 2014).    Thus, there was no settlement.     Moreover,

there currently is no bankruptcy action pending. William Rickard has died.

Appellant and the Deceased’s minor daughter have discrete claims under the

Pennsylvania Wrongful Death Statute, and these claims did not accrue until

after the bankruptcy court’s memorandum and order.

      The issue before us is whether a wrongful death beneficiary’s recovery

under the Pennsylvania Wrongful Death Act is subject to a subrogation claim

for benefits paid on behalf of the decedent for medical treatment during the

decedent’s lifetime.   This issue was not before the bankruptcy court, nor

could it have been, as all of the relevant bankruptcy proceedings occurred

during the Deceased’s lifetime. Thus, under the first prong of the test for

collateral estoppel, the issue decided in the bankruptcy court is not identical

to that presented herein.

      The second prong requires a final adjudication on the merits.          A

motion to approve settlement was before the bankruptcy court, and the

court denied it. The Deceased’s death two days later gave rise to a wholly

new claim, and seven days later, the debtors’ case was dismissed from

bankruptcy.   There was no settlement, no determination on disbursement,

and the bankruptcy court did not address the merits of whether the Welfare

Fund’s subrogation lien attaches to a wrongful death recovery.

                                     -9-
J-E01003-17

      The third prong requires that the party against whom the doctrine is

asserted was a party or in privity with a party in the prior case.       Sarah

Rickard, the Deceased’s minor daughter, was not a party to the bankruptcy

proceedings.   As a statutory beneficiary, her right to recovery is separate

and distinct from her mother’s claim.

      Regarding the fourth prong, it is clear that no right to recovery of

wrongful death benefits had accrued either to Appellant or Sarah Rickard

prior to the entry of the bankruptcy court’s order.      Therefore, neither one

had any opportunity to litigate the issue of whether the Welfare Fund’s lien

attached to their recovery.

      The issue the Welfare Fund sought to preclude the common pleas

court from deciding was not before the bankruptcy court, could not have

been brought before the bankruptcy court, and therefore, was not decided

by the bankruptcy court.      Thus, there is no foundation for the doctrine of

collateral estoppel to have been applied in this case.

      The alternative basis cited by the orphans’ court was its similarly

conclusory pronouncement that pursuant to U.S. Airways v. McCutchen,

133 S.Ct. 1537 (2013), “the provisions of the [Welfare] Fund’s plan

documents control.”    Orphans’ Court Opinion, 4/28/15, at unnumbered 2.

Once again, we disagree.      Because this question encompasses Appellant’s

issues two and three, we address them in tandem.

                                     - 10 -
J-E01003-17

       Pennsylvania courts have long recognized that a wrongful death action

is separate and distinct from a survival action.    Pisano v. Extendicare

Homes, Inc., 77 A.3d 651 (Pa. Super. 2013).         “[W]hile wrongful death

actions are derivative of decedent’s injuries, they are not derivative of

decedent’s rights, and therefore belong to the decedent’s beneficiaries as

opposed to the deceased individual.”     MacPherson v. Magee Memorial

Hosp. for Convalescence, 128 A.3d 1209, 1226 (Pa. Super. 2015) (citing

Pisano, 77 A.3d at 660). A survival claim and a wrongful death claim are

separate and distinct even though they originate from the same wrongful

act.   As we explained in Pisano, under the Pennsylvania wrongful death

statute, recovery passes to the limited group of beneficiaries defined in 42

Pa.C.S. § 8301(b), “the spouse, children or parents of the deceased.” Id.

       An action for wrongful death may be brought by the personal
       representative of those persons entitled to receive damages for
       wrongful death under the statute.       Tulewicz v. S.E. Pa.
       Transp. Auth., 529 Pa. 588, 596, 606 A.2d 427, 431
       (1992). . . . Wrongful death damages are established for the
       purpose of compensating the spouse, children, or parents of a
       deceased for pecuniary loss they have sustained as a result of
       the death of the decedent. Tulewicz, 529 Pa. at 597, 606 A.2d
       at 431. . . .

             A survival action, on the other hand, is brought by the
       administrator of the decedent’s estate in order to recover the
       loss to the estate of the decedent resulting from the tort.
       Tulewicz, 529 Pa. at 597, 606 A.2d at 431. . . .

              These two actions are designed to compensate two
       different categories of claimants[,] the spouse and/or members
       of the decedent’s family for wrongful death of the decedent, and
       the decedent herself through the legal person of her estate.
       Tulewicz, 529 Pa. at 597, 606 A.2d at 431

                                    - 11 -
J-E01003-17

Kiser v. Schulte, 648 A.2d 1, 4 (Pa. 1994) (some citations omitted). Thus,

in a wrongful death suit, claims are brought for and on behalf of the

statutory beneficiaries to obtain compensation for their loss resulting from

the deceased’s death.        A wrongful death claim belongs exclusively to the

decedent’s beneficiaries and is meant to cover pecuniary and emotional loss

suffered by those beneficiaries as a result of the death.      By contrast, a

survival claim is simply the action the decedent could have brought for the

injuries he suffered prior to his death and is generally for the benefit of the

estate.    Because the claims are separate and distinct, and because the

wrongful death action “bears no relation to the damages recoverable by a

decedent who sues for the injury while living,” Stegner v. Fenton, 40 A.2d

473, 475 (Pa. 1945), we cannot agree that the Deceased’s contractual

obligation to the Welfare Fund transferred to the wrongful-death claim.6

____________________________________________

6 We note that we concur with Appellant’s position that ANPAC’s initial draft
represented an offer to settle that was not accepted by the Deceased.
Appellant’s Brief at 26.     The draft was returned to ANPAC after the
Deceased’s death. The Deceased never obtained title to any settlement
funds; indeed, ANPAC is the only entity that held title to proceeds available
under the Rickards’ personal automobile insurance policy, as evidenced by
ANPAC’s ability to issue a second draft in offer of settlement of the wrongful
death claim. Id.

      When the bankruptcy court denied the motion to approve settlement
of the underinsured motorist claim, there was no settlement. Appointed
counsel had no authority to enter into a settlement; any proposed
settlement had to be approved by the bankruptcy court, which withheld
approval. Nor could there have been a settlement, in light of the facts of
(Footnote Continued Next Page)

                                          - 12 -
J-E01003-17

      Relatedly, we also reject applicability of McCutchen.           That case

involved a plan’s right to recover from a living plan participant’s bodily-injury

settlement, medical benefits paid on his behalf, and is therefore inapplicable

to the instant case; the funds at issue were obtained on behalf of statutorily

enumerated beneficiaries pursuant to the Pennsylvania Wrongful Death Act.

      Lacking relevant interpretive Pennsylvania case law, we look to

illustrative cases in other jurisdictions. In cases decided after McCutchen in

other jurisdictions, courts have refused to allow ERISA liens seeking

reimbursement for medical benefits paid during a decedent’s lifetime to

extend to his wrongful death beneficiaries after death.        For example, in

Estate of Shackelford, 63 N.E.3d 584 (Ohio Ct. App. 2016), Jerry

Shackelford received medical treatment for injuries he sustained when

another vehicle ran a red light and struck his motorcycle. At the time of the

accident, Shackelford was a participant in an ERISA-qualified self-funded

health plan that paid over $30,000 in medical benefits for treatment

stemming from the accident. Id. at 586. The plan included subrogation and

reimbursement clauses entitling the plan to recover for all amounts it has

(Footnote Continued) _______________________

this case, due to Mr. Rickard’s nearly contemporaneous demise. During the
time between the issuance of the first ANPAC check and the bankruptcy
court’s denial of settlement, there merely existed a draft—a piece of paper—
representing bodily injury funds, that Appellant was not permitted to accept.
Thus, due to the tight factual circumstances and time frame, when Mr.
Rickard passed away, an entirely new claim arose. The ensuing wrongful
death cause of action vested in the Deceased’s wife and daughter.

                                         - 13 -
J-E01003-17

paid as a result of an injury to a covered person, “up to and including the full

amount the Covered Person receives from any Responsible Party.” Id. The

plan also provided for the imposition of an automatic lien “to the extent of

benefits paid by the Plan for treatment of injury for which the Responsible

Party is liable. The lien shall be imposed upon any recovery whether by

settlement, judgment, or otherwise related to treatment for any injury for

which the Plan paid benefits.” Id.

      Jerry Shackelford died at the hospital without regaining consciousness

after the crash. Mrs. Shackelford, the administratrix of his estate, obtained

a settlement for both wrongful death and survival claims.            Estate of

Shackelford, 63 N.E.3d at 587. Mrs. Shackelford then filed an application

to approve the settlement and distribution of wrongful death and survival

claims in the probate court. The sole survival claim asserted at the hearing

concerned Jerry Shackelford’s medical expenses incurred as a result of the

accident that were paid by the plan. The ERISA plan objected and claimed

first priority repayment for the medical benefits it paid. The probate court,

relying on McCutchen, permitted the plan to assert its lien against the

unallocated gross settlement of both the wrongful death and survival

actions. Id.

      The Ohio Court of Appeals reversed, concluding that reliance on

McCutchen was misplaced because that case did not involve the death of a

                                     - 14 -
J-E01003-17

plan participant, and thus, was factually distinguishable.   Significantly, the

court observed:

      In support of its decision, the probate court also and primarily
      relied on the Plan’s subrogation and reimbursement clause.
      However, a close reading of the clause shows that its provisions
      only relate to (1) payment, settlement, or judgment received by
      a covered person for injury to the covered person, (2) the
      covered person’s damages, and (3) the covered person’s conduct
      in abstaining from prejudicing the Plan’s subrogation or recovery
      interest.   The clause does not relate to any payment,
      settlement, or judgment received by statutory wrongful
      death beneficiaries for injury they sustained as a result of
      the wrongful death of the covered person; nor does it
      relate to damages of the statutory wrongful death
      beneficiaries. Other provisions of the clause such as the Plan’s
      lien rights must necessarily be read in conjunction with the
      overall clause which is restricted to medical expenses paid for
      the treatment of the covered person and settlements or
      judgments received by the covered person.

Estate of Shackelford, 63 N.E.3d at 589 (emphasis added).           Thus, the

Ohio court concluded that the right to recover for wrongful death was not a

right that ever belonged to Jerry Shackelford or to his estate, but solely to

his statutory beneficiaries.   Id. at 589.   The case was remanded to the

probate court with instructions that it “first allocate the settlement proceeds

between the wrongful death and survival claims, and then and only then,

apply the Plan’s subrogation and reimbursement clause to the amount of the

proceeds allocated to the survival claim.” Id. at 591.

      We also examine MedCath Incorporated Employee Health Care

Plan v. Stratton, 79 F.Supp.3d 1046 (D. Ariz. 2015). The plan therein was

an ERISA-governed self-funded employee welfare benefit plan.               Ms.

                                    - 15 -
J-E01003-17

Stratton, an employee of MedCath Incorporated, and her four children as

dependents, received health benefits under the plan. In July of 2011, Ms.

Stratton filed a negligence action related to medical care she had received

under the plan.    The plan asserted a lien and claimed it paid medical

expenses totaling over $500,000 arising from the negligence alleged by Ms.

Stratton. When Ms. Stratton passed away, the case was converted into a

wrongful death action brought on behalf of Ms. Stratton’s children, and the

health plan maintained its lien against any recovery.

      The Stratton Court determined that the plan’s contractual rights of

subrogation and reimbursement did not apply to Ms. Stratton’s children, and

therefore, its right to recovery could not transfer to their wrongful death

claim.   Stratton, 79 F.Supp.3d at 1052.       The court reasoned that Ms.

Stratton’s children did not incur healthcare expenses, paid for by the plan,

for which a third party was responsible, nor did they receive compensation

for Ms. Stratton’s injuries. Id. at 1053.

      Having concluded that collateral estoppel does not apply herein and

that this case is not controlled by McCutchen, the two bases relied upon by

the common pleas court, we must reverse and remand.         We agree with

Appellant that neither she nor her daughter received any benefits from the

Welfare Fund related to the Deceased’s injuries. Any contractual obligation

relating to subrogation or reimbursement that the Deceased may have owed

the Welfare Fund does not transfer to any distinct wrongful-death recovery

                                    - 16 -
J-E01003-17

of Appellant and her daughter.7           For these reasons, the matter must be

remanded to the common pleas court for proceedings consistent with this

Opinion.

       Order reversed. Case remanded. Jurisdiction relinquished.

       Judges Olson, Dubow, Moulton, and Solano join this Opinion.

       Judge Bowes joins this Opinion with separate writing and files a

Concurring Opinion in which Judges Olson, Dubow, and Solano join.

       P.J.E. Bender files a Dissenting Opinion in which Judges Panella and

Lazarus join.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/25/2017

____________________________________________

7   We note our agreement with that portion of the Concurrence that
concludes the Plan had the burden of proving a valid subrogation lien and
that it failed to do so. Thus, on that basis as well, we conclude the Plan’s
claim lacks merit.

                                          - 17 -