Author Archives: Robert M. Caplan

Workers’ Compensation Subrogation – Tales by the Water Cooler: Part II – We Got a New Claim, Now What?

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Brett Tishler, Partner, and Michael Abed, Associate, are back to host the newest episode of Subro Sessions. This is the second of a two-part #podcast series, entitled “Workers’ Compensation Subrogation – Tales by the Water Cooler: Part II– We Got a New Claim, Now What?” Brett and Michael are joined again by a surprise guest, Rob Caplan, Partner, to discuss a new workers’ compensation #subrogation case. Rob talks about a new loss and gives a critical look into the specifics into the investigation, experts, and other factors to determine if there is potential for recovery.

Check the all of our Subro Sessions podcast episodes.

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Workers’ Compensation Subrogation Tales by the Water Cooler: Part I – How to Handle a Case—AKA—What Are We Getting Ourselves Into?

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Brett Tishler, Partner, and Michael Abed, Associate, are back to host the newest episode of Subro Sessions. This is the first of a two-part podcast series, entitled “Workers’ Compensation Subrogation Tales by the Water Cooler: Part I – How to Handle a Case—AKA—What Are We Getting Ourselves Into?” Brett and Michael are joined by a special guest, Rob Caplan, Partner, to trade stories and discuss the many moving parts in workers’ compensation #subrogation—and the many moving parts to consider when dealing with a new claim in order to obtain a recovery.

Mark your calendar for Part 2, entitled: “Tales by the Water Cooler:  We Got a New Claim, Now What?” launching on Tuesday, December 19th.

Check the all of our Subro Sessions podcast episodes.

This entry was posted in Podcast, Subrogation, Workers' Compensation and tagged , , .
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The Right of Workers’ Compensation Reimbursement is Alive and Well in Indiana

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When the direct door to a subrogation recovery closes, the reimbursement door remains open.

The United States District Court for the Northern District of Illinois, construing Indiana law, recently clarified the distinction between workers’ compensation subrogation rights and workers’ compensation lien rights. Workers’ compensation subrogation professionals should always keep this critical difference between direct subrogation and reimbursement in mind when evaluating any claim. Continue reading

This entry was posted in Illinois, Indiana, Subrogation, Waiver of Subrogation, Workers' Compensation and tagged , , , , , .
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In New Jersey, Workers’ Compensation Liens Are No Longer Subject to the Verbal Threshold

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By: Robert M. CaplanFabianna Pergolizzi and Brett N. Tishler

The Superior Court of New Jersey, Appellate Division, recently held, in N. J. Transit Corp v. Sanchez, No. A-0761-17T3, 2018 N.J. Super. LEXIS 168 (December 4, 2018), that pursuant to N.J.S.A. 34:15-40(f) (Section 40) of New Jersey’s Workers’ Compensation Act (WCA), workers’ compensation carriers have, without question, the independent right to seek reimbursement from negligent tortfeasors for economic damages. The court’s ruling cleared up years of confusion regarding the scope of recoverability of workers’ compensation subrogation liens. As noted by the court, a carrier’s workers’ compensation lien is NOT affected by New Jersey’s verbal threshold and no-fault statutes. Continue reading

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“Bad Kamara/Good Karma” — Life After Hartford v. Kamara

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How the Pennsylvania Supreme Court’s Decision in Kamara Changes the Legal Landscape for Workers’ Compensation Subrogation and Successfully Moving Forward

On November 21, 2018, the Pennsylvania Supreme Court, in a 5-4 decision, reversed the Superior Court stating a right of action in Pennsylvania remains with the injured employee. Specifically, the court 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.” Continue reading

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Pennsylvania Supreme Court Declares Future Credit on Medical Benefits Dead

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On June 19, 2018, the Pennsylvania Supreme Court decided Whitmoyer v. WCAB (Mountain Country Meats), No. 52 MAP 2017, 2018 Pa. Lexis 2995. The decision reversed longstanding Pennsylvania law and the Commonwealth Court’s decision. The net result of this decision: an insurer can no longer assert a future credit on projected medical benefit payments when settling a third-party case. However, insurers may continue to assert a future credit on indemnity payments. Continue reading

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Recent Court Challenges Could Signal a Change for Special Arbitration

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Special Arbitration, a long-existing, highly efficient and cost-effective venue for resolving workers’ compensation subrogation liens, is being challenged as an appropriate forum in which to resolve lien disputes. As a result, Special Arbitration may soon be an unavailable forum for workers’ compensation insurance carriers and employers in some states.

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Pennsylvania: When Should Pennsylvania’s New Strict Products Liability Law Apply?

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Pennsylvania has maintained its own peculiar brand of strict products liability law ever since the Supreme Court decided Azzarello v. Black Bros. Co., Inc.[1] in 1978. Maligned by many as “absurd and unworkable,”[2] if “excessively” orientated towards plaintiffs,[3] Azzarello’s unique approach to the Restatement (Second) of Torts § 402A (1965)[4] has recently been judicially consigned to the dustbin of history.

In Tincher v. Omega Flex, Inc.,[5] decided on November 19, 2014, the Pennsylvania Supreme Court expressly overruled Azzarello leaving in its place a new alternative standards approach to proving a Section 402A claim. An injured worker or subrogated insurer[6] must still prove that the seller, whether a manufacturer or a distributor, placed the product on the market in a “defective condition unreasonably dangerous to the consumer.”[7] But now, under Tincher, a plaintiff must use either a “consumer expectation test” or a “risk-utility test” to establish that criterion.[8]

Of the many issues potential strict products liability litigants are left to ponder after Tincher, one of the most basic—and possibly overlooked—issues is “When should it apply?” Specifically, if a case were filed months or even years before Tincher was decided, and it remains pending, will Azzarello’s approach to Section 402A govern the case, or does the new Tincher approach apply?

Doctrinally, this issue is framed in terms of “retroactive” versus “prospective” application. The Pennsylvania Constitution neither mandates nor forbids retroactive or prospective application of a new decision.[9] The decision to apply a new rule of law is within the complete discretion of the court.[10] And although Pennsylvania courts generally apply the law in effect at the time of an appellate decision, affording parties whose cases are pending the benefit of changes in the law, they may deviate from this approach to further the interests of justice.[11] A “sweeping rule of retroactive application” has never been the law of the Commonwealth.[12]

The decision to apply a new rule of law retroactively or prospectively is generally informed by the tripartite Chevron[13] test, which the Pennsylvania Supreme Court adopted in 1977 in Schreiber v Republic Intermodal Corp.[14] Under the test, Pennsylvania courts consider: (1) whether the decision establishes a new principle of law; (2) the merits of the rule in question, its purpose and effect, and the potential impact of retroactive effect on its application; and (3) the equities involved as the case may be.[15]

In Tincher, the Supreme Court never reached this decision. It sent the issue of how to apply its new alternative standards approach to Section 402A back to the trial court.[16] Fortunately there are other sources of guidance on the issue. For example, certain voices of the Court in cases leading up to Tincher, including particularly that of the Commonwealth’s new Chief Justice, consistently favored a “purely prospective” move away from Azzarello.[17]

In Bugosh v. I.U. N. Am., Inc., for example, Chief Justice (then Justice) Thomas G. Saylor stated that, in favoring a prospective move away from Azzarello, “a predominant consideration is the settled expectations of those with accrued causes of action and a present entitlement to resort to the civil justice system.”[18] “Azzarello has been with us for too long,” then Justice Saylor added, “and too much settled jurisprudence has evolved around it, for it to be retroactively displaced without profound impact on vested entitlements.”[19]

If Tincher should apply only prospectively, i.e., not retroactively on cases that were pending when Tincher was decided, is there a cut-off point at which litigants’ “settled expectations” would no longer be spoiled by retroactive application? What about for causes of action which accrued before November 19, 2014, during Azzarello’s reign, but for which a lawsuit has not yet been commenced? Is this one of the issues the Pennsylvania Supreme Court, in its parting remarks in Tincher, intended to “develop within the proper factual context against the background of targeted advocacy?”[20]

Many questions remain post-Tincher. It is clear that the Azzarello decision made Pennsylvania one of the most favorable jurisdictions in the country to pursue strict product liability claims. Azzarello is no longer the law and Tincher now provides the framework for the new landscape which needs to be navigated. This framework is in its infancy and is malleable, providing litigants with a tremendous opportunity to shape the new law to advance their respective interests favorably in the strict product liability claims arena.

[1] 391 A.2d 1020 (Pa. 1978).

[2] John M. Thomas, Defining “Design Defect” in Pennsylvania: Reconciling Azzarello and the Restatement (Third) of Torts, 71 Temp. L. Rev. 217, 217 (1998) (citing James A. Henderson, Jr., Products Liability, 2 Corp. L. Rev. 246, 248 (1979)).

[3] Ellen Wertheimer, Azzarello Agonistes: Bucking the Strict Products Liability Tide, 66 Temp. L. Rev. 419, 420 n.9 (1993) (citing Sheila L. Birnbaum, Unmasking the Test for Design Defect: From Negligence [to Warranty] to Strict Liability to Negligence, 33 Vand. L. Rev. 593, 637 (1980)) (“[S]ome commentators take issue with what they view as Azzarello’s excessive orientation towards plaintiffs.”).

[4] “One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.”

[5] 104 A.3d 328 (Pa. 2014).

[6] The issue of whether a subrogated insurer has a direct right of recovery against a third party tortfeasor is currently pending before the Pennsylvania Supreme Court. Liberty Mut. Ins. Co. v. Domtar Paper Co., 92 A.3d 809 (Pa. 2014). An opinion is expected sometime this year, although vacancies on the Court may delay a ruling.

[7] See Edward A. Jaeger Jr. and William L. Doerler, Pennsylvania’s Supreme Court Clarifies Pennsylvania’s Strict Liability Standard, The Subrogation Strategist (Jan. 15, 2015), available here.

[8] See id. (“In other words, plaintiffs may prove a defective condition by showing either that (1) the danger is unknowable and unacceptable to the average or ordinary consumer, or that (2) a reasonable person would conclude that the probability and seriousness of the harm caused by the product outweigh the burden or costs of taking precautions.”) (internal quotation omitted).

[9] Blackwell v. Com., State Ethics Comm’n, 589 A.2d 1094, 1098 (Pa. 1991).

[10] Com. v. Grant, 813 A.2d 726, 738 (Pa. 2002) (subsequent history omitted) (citing Blackwell, 589 A.2d at 1098).

[11] Bugosh v. I.U. N. Am., Inc., 971 A.2d 1228, 1242 (Pa. 2009) (Saylor, J., dissenting, in which Castille, C.J., joins) (citations omitted). See also Blackwell, 589 A.2d at 1100 (quoting Gibson v. Com., 415 A.2d 80, 84 (Pa. 1980) (“The prime impetus behind th[e] occasional willingness not to give a decision full effect is the concern that a novel decision will unfairly prejudice those formerly advantaged by the old rules.”).

[12] Blackwell,589 A.2d at 1099.

[13] Named after Chevron Oil Co. v. Hudson, 404 U.S. 97 (1971).

[14] 375 A.2d 1285 (Pa. 1977).

[15] Bugosh, 971 A.2d at 1243 (Saylor, J., dissenting, in which Castille, C.J., joins) (internal quotations and citations omitted).

[16] Tincher v. Omega Flex, Inc., 104 A.3d 328, 410 (Pa. 2014).

[17] See, e.g., Bugosh, 971 A.2d at 1241 (Saylor, J., dissenting, in which Castille, C.J., joins) (“I am on record as favoring prospective movement [away from Azzarello], and I remain of that position today, for the reasons I previously have stated.”) (citation omitted); Phillips v. Cricket Lighters, 841 A.2d 1000, 1012 (Pa. 2003), disapproved of by McGonigal v. Sears Roebuck & Co., 2009 WL 2137210 (E.D. Pa. July 16, 2009) (Saylor, J., concurring, in which Castille, C.J, and Eakin, J., join) (arguing for move away from Azzarello, “at least on a prospective basis”).

[18] 971 A.2d at 1242-43.

[19] Id. at 1243.

[20] Tincher, 104 A.3d at 410.

This entry was posted in Pennsylvania, Products Liability, Workers' Compensation.

Massachusetts: Appeals Court Upholds Vitality of Curry v. Great Am. Ins. Co., 954 N.E.2d 580 (Mass. App. Ct. 2011), Limiting Workers’ Compensation Insurers’ Lien Recovery Rights

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In a decision handed down yesterday,[1] the Appeals Court of Massachusetts upheld the vitality of Curry v. Great Am. Ins. Co., 954 N.E.2d 580 (Mass. App. Ct. 2011), which limits workers’ compensation insurers’ lien recovery rights. Under Curry, damages for conscious pain and suffering as well as for loss of consortium are not reimbursable to the insurer under G.L. c. 152, § 15.[2]

Such injuries, according to the Curry court, “are not compensable injuries,” and “entirely independent and distinct from the personal injury claims of the employee.”[3] For the court in Curry, “the primary goal of the workers’ compensation statute is wage replacement,”[4] which would obviously prevent an insurer’s lien from attaching to an employee’s damages for pain and suffering, among other injuries.

The Appeals Court in DiCarlo v. Suffolk Const. Co., 2013 WL 9854065 (Mass. App. Ct. Nov. 6, 2014) declared that Curry continues to be the “binding precedent” in Massachusetts, and, as such, “compensation for pain and suffering [is] not subject to the. . . insurer’s lien.”[5]

In DiCarlo, the injured worker suffered serious personal injuries as a result of an accident while working as an electrician at a construction site. He was out of work for two and one-half years and collected workers’ compensation benefits for his medical expenses ($48,431.16) and lost wages ($233,387.95) from his employer’s insurer. In March, 2007, pursuant to G.L. c. 152, § 15, the worker filed a third party action against the general contractor and owner of the property where the injury occurred.

The worker amended his complaint to add a loss of consortium claim on behalf of his wife. The parties participated in mediation and settled the worker’s lawsuit for $100,000, which was to be paid by the insurer of the defendants and third party defendant. Since the parties in DiCarlo reached a settlement, the lower court judge conducted an evidentiary hearing in which she allowed counsel to inquire of the worker and his spouse, as to their claims for pain and suffering and loss of consortium, respectively.[6]

The worker’s settlement proposal requested that approximately 35 % of the settlement be awarded to him for his pain and suffering, approximately 35 % be awarded to his wife for her loss of consortium, and approximately 30 % to the insurer to satisfy its lien, with each portion again assigned a pro rata share of the attorney’s fees and costs.[7] By contrast, the insurer proposed that it should receive no less than 90 % of the settlement and that no more than 10 % be awarded to the worker’s wife if the court found her claim for loss of consortium supported by the evidence.[8] The lower court judge in DiCarlo made detailed findings of fact in which she found the worker and his wife “to be credible in every particular,” and sided with the worker’s proposed allocation of the third party settlement proceeds.[9]

For the time being, Curry remains the law of Massachusetts. In the context of a settlement, this means that workers’ compensation insurers must move for a Superior Court judge to conduct an evidentiary hearing, just like in DiCarlo, to determine the merits of an injured worker’s proposed allocation limiting the pool of funds to which an insurer’s lien may attach.

Still, a rift in the Massachusetts court system appears to be growing increasingly wider, manifest in the impassioned concurrence in DiCarlo. Agreeing with the majority’s opinion in DiCarlo, “based solely on the doctrine of stare decisis,”[10] Judge Peter W. Agnes Jr. expressed concerns about whether Curry was decided correctly. To support his position that “the entire recovery is for the insurer,”[11] Judge Agnes directed to the DiCarlo majority’s attention a slew of Massachusetts Supreme Judicial Court opinions decidedly inconsistent with Curry.


[1] DiCarlo v. Suffolk Const. Co., 2013 WL 9854065 (Mass. App. Ct. Nov. 6, 2014).

[2] 954 N.E.2d at 582-84.

[3] Id. at 583-84 (citation and internal quotation omitted).

[4] Id. at 584 (citation omitted).

[5] 2013 WL 9854065 at *3.

[6] Id. at *2.

[7] Id. at *2 n.10.

[8] Id.

[9] 2013 WL 9854065 at *2.

[10] The doctrine of stare decisis means that courts should follow their own precedent.

[11] 2013 WL 9854065 at *4 (Agnes, J., concurring in result only) (citing Rhode v. Beacon Sales Co., 616 N.E.2d 103, 106 (Mass. 1993) (emphasis in original).

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North Carolina: While There Is No Classic “Future Credit” In North Carolina, Courts Must Consider Workers’ Compensation Insurers’ Future “Exposure.”

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The North Carolina workers’ compensation subrogation statute does not permit employers or their compensation insurers to claim a “future credit” against future exposure.1  In this respect, North Carolina departs from the classic rule in the overwhelming majority of jurisdictions.2

Despite this minority position as to future credit, however, the North Carolina Workers’ Compensation Act does require courts to consider workers’ compensation insurers’ future “exposure” when determining if and how much of the insurer’s lien will be paid back.3  An insurer’s future exposure represents just one of the many factors courts are bound by statute to consider when determining the appropriate amount of the insurer’s lien.4

But let’s take a step back. The process of determining the appropriate amount of the insurer’s lien generally involves two layers of analysis. The process, naturally, is commenced at the time a third party settlement is reached or judgment is awarded.5

Settlement or judgment in hand, the injured worker and the insurer are encouraged to agree on how to reimburse the insurer’s lien.6  But if mutual agreement breaks down, either the worker or the third party tortfeasor can petition the appropriate Superior Court judge to determine the insurer’s recovery, after an opportunity for all parties to be heard on the merits.7  Under the latter scenario, the insurer’s consent is irrelevant since the Superior Court judge decides the issue.8

The first layer of analysis for the judge is determining the lien amount, “whether based on accrued or prospective workers’ compensation benefits[.]”  If any benefits have been paid at the time of the settlement or judgment, the judge takes a snapshot to determine the lien amount.10  An insurer’s future exposure for purposes of this first layer of analysis is, therefore irrelevant, unless at the time of the settlement or judgment, for whatever reason, benefits have not yet been paid.

An insurer’s future exposure only becomes relevant in the second layer of analysis, whereby the judge takes the lien snapshot and determines how much of the lien, if any, will actually be paid back.11  At this level of analysis, judges weighing the subsection (j) factors are given virtually unassailable discretion to either reduce or eliminate an insurer’s lien,12  “even if the result is a double recovery for the plaintiff.”13

There is, of course, no magic mathematical formula for the trial court to consider in making its lien reimbursement determination.14  The exercise of discretion simply requires the court to “make a reasoned choice, a judicial value judgment, which is factually supported.”15

If a workers’ compensation insurer has only paid minimal benefits, but has tremendous future exposure, it would stand to reason that the insurer should be able to secure full reimbursement of its lien.16  This is only fair since the insurer’s future exposure will go, as a matter of law, unreimbursed. But if the worker’s injuries are catastrophic, and the worker has to self-fund a decades-long life-care program, for example, one would be hard-pressed to find a North Carolina judge willing to exalt an insurer’s lien over the worker’s personal, financial obligations.

Thus while there is no future credit in North Carolina, the court’s obligation to consider a workers’ compensation insurer’s future exposure may, depending on the factual circumstances, serve as a safeguard against unfair lien reduction or outright elimination.

1 N.C. GEN. STAT. § 97-10.2.

2 See, e.g., Bailey v. Reliance Ins. Co., 94 Cal.Rptr.2d 149, 153 (Cal. Ct. App. 2000) (observing that under CAL. LABOR CODE §§ 3858 and 3861 subrogated workers’ compensation insurer was “entitled to a credit against future benefits based on the amount the third parties paid” to injured worker).

3 See N.C. GEN. STAT. § 97-10.2(j) (“The judge shall consider the anticipated amount of prospective compensation the employer or workers’ compensation carrier is likely to pay to the employee in the future, . . .”).

4 See id. at 97-10.2(j) (listing lien reimbursement factors).

See Leggett v. AAA Cooper Transp., Inc., 678 S.E.2d 757, 760 (N.C. Ct. App. 2009) (“[Section 97-10.2(j)] grants limited jurisdiction to the superior court to determine the amount of the employer’s lien in the event the employee receives compensation from a third-party judgment or settlement.”).

6 N.C. GEN. STAT. § 97-10.2(h).

7 Id. at § 97-10.2(j). Curiously, as one federal district court reviewing the North Carolina Workers’ Compensation Act has observed: “There is no provision in § 97-10.2(j) recognizing a separate cause of action by an employer to determine the subrogation amount, and no North Carolina state court cases have addressed the ability of an employer to bring a separate cause of action in state court pursuant to this provision. Thus, there appears to be an unresolved question of state law. . . .” Safety Nat. Cas. Ins. Corp. v. City of Burlington, 2006 WL 399675, *5 (M.D.N.C. 2006).

8 See id. (“After notice to the employer and the insurance carrier, after an opportunity to be heard by all interested parties, and with or without the consent of the employer, the judge shall determine, in his discretion, the amount, if any, of the employer’s lien. . . .”) (emphasis added).

9 Id. at § 97-10.2(j).

10 Compare Johnson v. Southern Indus. Constructors, Inc., 495 S.E.2d 356, 359 (N.C. 1998) (Lake, J., for the majority) (“[The] wording [of N.C. GEN. STAT. § 97-10.2(j)] clearly indicates that the comparison between the compensation benefits paid and the judgment is to be made at the precise time the “judgment is obtained.”), with id. at 362 (Frye, dissenting) (“The carrier’s right to subrogation does not cease to accrue at the precise moment that the judgment is obtained. Rather, it continues as to all benefits to be paid in the future by the employer under award of the Industrial Commission. It is therefore inequitable to deny the existence of that component of the subrogation claim. . . .”) (emphasis in original).

11 See, e.g., Wynter v. County of Wake, 2011 WL 2462669, *5 (N.C. Ct. App. 2011) (concluding that Superior Court properly considered workers’ compensation insurer’s future exposure to determine that such insurer was entitled to full reimbursement of its subrogation lien).

12 See N.C. GEN. STAT. § 97-10.2(j) (providing Superior Court judges catch-all “just and reasonable” discretion when determining lien reimbursement). See also Leggett v. AAA Cooper Transp., Inc., 678 S.E.2d 757, 761 (N.C. Ct. App. 2009) (citation omitted) (“The trial court may reduce or completely eliminate a workers’ compensation lien if warranted by the facts, and this Court may not interfere absent an abuse of discretion.”).

13 Estate of Bullock v. C.C. Mangum Co., 655 S.E.2d 869, 874 (N.C. Ct. App. 2008) (citation omitted).

14 In re Biddix, 530 S.E.2d 70, 71 (N.C. Ct. App. 2000).

15 Cook v. Lowe’s Home Centers, Inc., 704 S.E.2d 567, 570 (N.C. Ct. App. 2011) (quoting Allen v. Rupard, 397 S.E.2d 330, 333 (N.C. Ct. App. 1990)).

16 See generally Wynter v. County of Wake, 2011 WL 2462669 (N.C. Ct. App. 2011).

This entry was posted in North Carolina, Workers' Compensation.