Category Archives: Workers’ Compensation

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.

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Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery – “Part 3 – The War Story: Successes and Failures”

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Listen to the newest episode of the Subro Sessions podcast, available now! Join Brett Tishler and Michael Abed for the third installment of their three-part series, “Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery.”

Part 3 of the series is entitled:  The War Story: Successes and Failures.  In Part 3, Brett and Mike discuss some war stories to help show how working with claimant’s counsel can maximize an insurer’s lien recovery.

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Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery – “Part 2: The Investigation”

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This is the second part of the three-part series entitled “Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery.”

In “Part 2: The Investigation,” Partner Brett Tishler and Associate Michael Abed take a deeper dive into the crucial steps that subrogation professionals execute immediately after a workers’ compensation third party claim is filed. Some of the topics covered in this episode include, gathering facts from the insured/employer, talking to witnesses, gaining access to the premises and gathering information about the machine that caused the injury to boost lien recovery.

Mark your calendar to listen to Brett and Michael for “Part 3 – The War Story: Successes and Failures” on Tuesday, April 18th!

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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 , , , , , .

First-Dollar Risk Allocated to the Insured Is Not Subject to the Made Whole Doctrine

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Pursuant to the equitable made whole doctrine, where there are limited funds available, an insurer cannot pursue subrogation until the insured has been made whole – i.e., fully compensated – for its injuries. In City of Asbury Park v. Star Ins. Co., No. A-20, 083371, 2020 N.J. LEXIS 746, the Supreme Court of New Jersey (Supreme Court) addressed the question of whether the equitable made whole doctrine applies to first-dollar risk an insured takes on, such as a deductible or self-insured retention (SIR). More specifically, the Supreme Court considered whether the insured, here the City of Asbury Park, was entitled to recover all its $400,000 SIR before the insurer, Star Insurance Company (Insurer) could assert its subrogation rights. The court held that the made whole doctrine does not apply to first-dollar risk allocated to the insured. Continue reading

This entry was posted in Made Whole, New Jersey, 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.