J-S84002-16
2017 PA Super 31
THE HARTFORD INSURANCE GROUP ON IN THE SUPERIOR COURT OF
BEHALF OF CHUNLI CHEN, PENNSYLVANIA
Appellant
v.
KAFUMBA KAMARA, THRIFTY CAR
RENTAL, AND RENTAL CAR FINANCE
GROUP,
Appellees No. 976 EDA 2016
Appeal from the Order of February 25, 2016
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): No. 1534
BEFORE: OLSON, SOLANO and FITZGERALD,* JJ.
OPINION BY OLSON, J.: FILED FEBRUARY 10, 2017
Appellant, The Hartford Insurance Group (“Hartford”) on behalf of
Chunli Chen, appeals from the order entered on February 25, 2016, which
sustained the preliminary objections filed by Kafumba Kamara, Thrifty Car
Rental, and Rental Car Finance Group (hereinafter, collectively “the
Defendants”). We respectfully vacate and remand.
Appellant instituted the current suit on September 15, 2015, by filing a
praecipe for a writ of summons. Within Appellant’s later-filed complaint,
Appellant declared, in the caption of the complaint, that the plaintiff was
“The Hartford Insurance Group on behalf of Chunli Chen.” Appellant’s
Complaint, 12/8/15, at Caption.
As Appellant averred, on October 10, 2013, Chunli Chen (hereinafter
“Chen”) “was standing in the parking lot of Thrifty Car Rental, waiting to rent
* Former Justice specially assigned to the Superior Court.
J-S84002-16
a car, when she was struck by a rental car operated by defendant, Kafumba
Kamara, and owned by defendant, Thrifty Car Rental, and/or defendant,
Rental Car Finance Group.” Id. at ¶ 12 (some internal capitalization
omitted). Appellant averred that the accident caused Chen extensive
injuries and Appellant alleged that the Defendants were negligent in causing
the accident. Id. at ¶¶ 18-23.
Further, within Appellant’s complaint, Appellant averred that, at the
time of the accident, Chen “was in the employ of Reliance Sourcing, Inc.”
and that Hartford “has paid $59,424.71 to date in medical and wage benefits
to [] Chen pursuant to a Workers’ Compensation insurance policy maintained
by her employer, Reliance Sourcing, Inc.” Id. at ¶¶ 8-9.
Appellant’s complaint contained two negligence counts and, in each
count, Appellant claimed that the particular defendant was “liable to Plaintiff,
[ ] Hartford, and to Chunli Chen for injuries caused to her by” the defendant.
The complaint was then verified by “Jaime Young[;] Workers’ Compensation
Subrogation Specialist[;] The Hartford” and the verification declared that
“[t]he averments and allegations of fact made in the foregoing civil
complaint are true and correct to the best of [Jaime Young’s] information
and belief.” Id. at Verification (some internal capitalization omitted).
On January 26, 2015, the Defendants filed preliminary objections to
Appellant’s complaint. The Defendants’ first preliminary objection was in the
nature of a demurrer and claimed that the entire complaint must be
dismissed because Hartford was “attempting to file suit to assert subrogation
-2-
J-S84002-16
rights directly against the alleged third-party tortfeasors.” The Defendants’
Preliminary Objections, 1/26/16, at ¶ 5. The Defendants argued:
While Pennsylvania law does allow for a workers’
compensation carrier to be subrogated to the rights of the
employee, the Pennsylvania Supreme Court has held, based
on long-standing precedent established by Pennsylvania’s
Superior Court[,] that “the right of action against a
third-party tortfeasor under Section 319 of the [Workers’
Compensation Act] remains in the injured employee, and
that the employer/insurer’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.” Liberty Mutual Insurance Co. v.
Domtar Paper Co., 113 A.3d 1230 (Pa. 2015).
The Defendants’ Preliminary Objections, 1/26/16, at ¶ 9.
According to the Defendants, since Chen was the injured employee
and since Chen neither assigned her cause of action to Hartford nor was a
party to the lawsuit, the entire complaint must be dismissed. Id. at ¶¶ 13-
16.
Second, the Defendants claimed that the complaint must be stricken
because Chen did not verify the complaint. The Defendants further claimed
that the individual who did verify the complaint – an employee of Hartford
named Jaime Young – “was not present at the scene of the alleged accident
and has no first-hand knowledge of the alleged accident from which to allege
the facts pleaded in [the] complaint.” Id. at ¶ 20.
Appellant responded to the preliminary objections and claimed that the
Supreme Court’s holding in Domtar Paper was inapplicable to the case at
bar because “[i]n the Domtar [Paper] case, Liberty Mutual filed suit ‘as
-3-
J-S84002-16
subrogee of’ [the injured employee, while, in the case at bar,] Hartford []
captioned the suit ‘on behalf of Chunli Chen’ to show [that Hartford is]
appropriately pursuing this action in the name of the injured employee.”
Appellant’s Response, 2/15/16, at ¶¶ 11 and 14. Further, Appellant claimed
that the verification in the complaint was proper because Jaime Young “has
knowledge of the facts contained in the complaint through her work on
[Chen’s] workers’ compensation claim.” Id. at ¶ 18 (some internal
capitalization omitted).
On February 25, 2016, the trial court entered an order that sustained
both of the Defendants’ preliminary objections and dismissed Appellant’s
complaint with prejudice. Trial Court Order, 2/25/16, at 1. Within the trial
court’s later-filed opinion, the trial court reasoned that the case was
controlled by our Supreme Court’s opinion in Domtar Paper and that, in
accordance with Domtar Paper, dismissal was proper because Hartford was
attempting to bring an independent cause of action against third-party
tortfeasors. As the trial court explained, “[u]nder Pennsylvania law, actions
against a third-party tortfeasor must be brought by the injured employee;
the workers’ compensation insurance carrier has no independent cause of
action against the tortfeasor under Section 319 of the Workers’
Compensation Act.” Trial Court Opinion, 6/23/15, at 4.
Further, the trial court held that Appellant did not properly verify the
complaint, as the complaint was not verified by Chen; rather, the complaint
was verified by Jaime Young, a Worker’s Compensation Specialist for
-4-
J-S84002-16
Hartford. Id. at 6. The trial court held that this verification was improper
because Jaime Young “was not present at the scene of the accident and did
not have first-hand knowledge of the incident” and the verification “did not
state the source of Young’s information or the reason why the verification
was not made by a party.” Id. Finally, the trial court stated that it did not
grant Appellant leave to amend the verification because Appellant “failed to
assert a legally cognizable cause of action against [the] Defendants; thus,
granting [Appellant] leave to attach a sufficient verification would have been
futile.” Id.
Appellant filed a timely notice of appeal and now raises two issues to
this Court:
1. Did the trial court err as a matter of law in dismissing
[Appellant’s] claim with prejudice when pursuant to Liberty
Mutual Insurance Company v. Domtar Paper Co., 113
A.3d 1230 (Pa. 2015), [Hartford] captioned the suit “The
Hartford Insurance Group on behalf of Chunli Chen” to show
that the action was appropriately brought in the name of
the injured employee[?]
2. Did the trial court err as a matter of law in dismissing
[Appellant’s] complaint for lack of a verification signed by
use party plaintiff, Chunli Chen, when the attached
verification was signed by a representative of [] Hartford
with knowledge of the claim; or in the alternative, did the
trial court err in dismissing the claim rather than allowing
[Appellant] to amend by attaching a verification signed by
Chunli Chen?
Appellant’s Brief at 3 (some internal capitalization omitted).
We have stated:
-5-
J-S84002-16
A preliminary objection in the nature of a demurrer is
properly [sustained] where the contested pleading is legally
insufficient. Preliminary objections in the nature of a
demurrer require the court to resolve the issues solely on
the basis of the pleadings; no testimony or other evidence
outside of the complaint may be considered to dispose of
the legal issues presented by the demurrer. All material
facts set forth in the pleading and all inferences reasonably
deducible therefrom must be admitted as true.
In determining whether the trial court properly sustained
preliminary objections, the appellate court must examine
the averments in the complaint, together with the
documents and exhibits attached thereto, in order to
evaluate the sufficiency of the facts averred. The impetus
of our inquiry is to determine the legal sufficiency of the
complaint and whether the pleading would permit recovery
if ultimately proven. This Court will reverse the trial court’s
decision regarding preliminary objections only where there
has been an error of law or abuse of discretion. When
sustaining the [preliminary objections] will result in the
denial of claim or a dismissal of suit, [the preliminary
objections may be sustained] only where the case [is] free
and clear of doubt.
Lugo v. Farmers Pride, Inc., 967 A.2d 963, 966 (Pa. Super. 2009)
(internal citations, quotations, and corrections omitted).
First, Appellant claims that the trial court erred in sustaining the
Defendants’ preliminary objection in the nature of a demurrer and in holding
that dismissal was required under Domtar Paper. As Appellant argues,
Hartford is not pursuing a subrogation claim directly against the third-party
tortfeasors, as was the case in Domtar Paper. Appellant’s Brief at 9.
Rather, Hartford filed suit “on behalf of Chen” – and is attempting to
establish the liability of the third-party tortfeasors to Chen. Id. Therefore,
Appellant claims, its lawsuit is proper under both the Workers’ Compensation
-6-
J-S84002-16
Act and Superior and Supreme Court precedent construing the Act. Id. We
agree with Appellant.
Section 319 of the Workers’ Compensation Act (“WCA”), codified at 77
P.S. § 671, furnishes the statutory basis for subrogation by a workers’
compensation carrier. Section 319 states, in relevant part:
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 . . . against such
third party to the extent of the compensation payable under
[the WCA] by the employer. . . .
77 P.S. § 671 (internal footnote omitted).1
As both this Court and the Pennsylvania Supreme Court have
continuously declared, “the right of action against a third-party tortfeasor
under Section 319 of the WCA remains in the injured employee, and [] the
employer/insurer’s right of subrogation under Section 319 must be achieved
through a single action brought in the name of the injured employee or
____________________________________________
1
Further, we note that Section 303(b) of the WCA is entitled
“[e]xclusiveness of remedy; actions by and against third party; contract
indemnifying third party” and provides:
In the event injury or death to an employe is caused by a
third party, then such employe, his legal representative,
husband or wife, parents, dependents, next of kin, and
anyone otherwise entitled to receive damages by reason
thereof, may bring their action at law against such third
party. . . .
77 P.S. § 481(b).
-7-
J-S84002-16
joined by the injured employee.” Domtar Paper, 113 A.3d at 1240; see
also Scalise v. F.M. Venzie & Co., 152 A. 90, 92 (Pa. 1930) (“[t]he right
of action [against a third-party tortfeasor] remains in the injured employee;
suit is to be brought in his name; the [WCA] employer may appear as an
additional party plaintiff . . . or, as use plaintiff . . . , may intervene for the
purpose of protection or he may . . . notify the tort-feasor of the fact of
employment and of the payments made or to be made. . . . The employer,
moreover, is not to be denied his right of suit because the employee does
not sue, but may institute the action in the latter’s name”); Motz v.
Sherwood Bros., 176 A. 842, 843 (Pa. Super. 1935) (“[t]he [WCA]
employer’s right of subrogation must be worked out through an action
brought in the name of the injured employee, either by joining the employer
as a party plaintiff or as a use plaintiff”) (internal citations omitted);
Reliance Ins. Co. v. Richmond Mach. Co., 455 A.2d 686, 690 (Pa. Super.
1983) (“[w]e therefore hold that Section 319 is an exclusive remedy, and
that for an employer or its insurer to enforce its subrogation rights, it must
proceed in an action brought on behalf of the injured employee in order to
determine the liability of the third party to the employee. If such liability is
determined, then the employer or its insurer may recover, out of an award
to the injured employee, the amount it has paid in workers’ compensation
benefits”).
In Domtar Paper, our Supreme Court recently “reaffirm[ed]” the
above pronouncements. In Domtar Paper, George Lawrence was an
-8-
J-S84002-16
employee of Schneider National, Inc., who sustained a work-related injury
when he slipped and fell in a parking lot leased by the Domtar Paper Co. As
a result of this injury, Schneider’s workers’ compensation carrier, Liberty
Mutual, paid Mr. Lawrence thousands of dollars in workers’ compensation
benefits. Domtar Paper, 113 A.3d at 1232.
Mr. Lawrence did not sue Domtar Paper. Nevertheless, Liberty Mutual
instituted suit directly against Domtar Paper in pursuit of its subrogation
claim.2 Moreover, in the caption of the complaint, Liberty Mutual declared
that it was suing Domtar Paper “as Subrogee of George Lawrence.” Id.
(emphasis added).
The trial court sustained Domtar Paper’s preliminary objections and
dismissed Liberty Mutual’s complaint because, in contravention of
Pennsylvania law, Liberty Mutual was attempting to “pursue a subrogation
claim directly against the third-party tortfeasor when the compensated
employee who was injured ha[d] taken no action against the tortfeasor.”
See id. at 1234. This Court affirmed the trial court’s order. Id. at 1233.
On appeal to the Pennsylvania Supreme Court, the Supreme Court
held that a workers’ compensation insurer may not “pursue a subrogation
claim directly against a third-party tortfeasor when the compensated
____________________________________________
2
Liberty Mutual also sued various other entities; however, for ease of
discussion, we will collectively refer to the defendants in the case as “Domtar
Paper.”
-9-
J-S84002-16
employee who was injured ha[d] taken no action against the tortfeasor.”
Id. at 1232. Thus, the Supreme Court held, since Liberty Mutual was suing
the third-party tortfeasors “as subrogee of” the injured employee – and
since Liberty Mutual was simply attempting to pursue its own subrogation
claim directly against the third-party tortfeasors, Liberty Mutual’s complaint
was properly dismissed. Id. at 1238 and 1240 (emphasis added). As the
Domtar Paper Court reasoned, its holding was required because:
the right of action against the tortfeasor is indivisible and
remains in the employee who suffered the entire loss in the
first instance. We emphasize that in Pennsylvania, courts
disfavor splitting causes of action, and have frequently
remained true to this maxim in the context of workers'
compensation subrogation. . . . Preventing the
employer/insurer from asserting an independent cause of
action against the tortfeasor eliminates the possibility that
the third-party tortfeasor could be exposed to multiple suits
filed by both the employer and the injured employee, and
will preserve the preferred rights of the injured employee
who retains a beneficial interest in the cause of action
against the tortfeasor.
Id. at 1240.
The Domtar Paper Court then held:
Accordingly, we reaffirm that the right of action against a
third-party tortfeasor under Section 319 of the WCA
remains in the injured employee, and that the
employer/insurer'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 [Mr.] Lawrence did not commence an
action against [Domtar Paper], was not named in the action
filed by Liberty Mutual, and did not join the action filed by
Liberty Mutual, the Superior Court properly affirmed the
grant of [Domtar Paper’s] preliminary objections.
- 10 -
J-S84002-16
Id.
In the case at bar, Appellant followed the above precedent and
instituted suit against the Defendants as “The Hartford Insurance Group on
behalf of” the injured employee, Chunli Chen. Within the complaint,
Appellant seeks to establish the liability of the third-party tortfeasors to
Chen – and Appellant seeks recovery in the full amount to which Chen is
entitled due to the Defendants’ alleged negligence. See Appellant’s
Complaint, 12/8/15, at ¶¶ 1-23. Therefore, in the case at bar, Hartford is
not attempting to “pursue a subrogation claim directly against a third-party
tortfeasor,” is not seeking to recover only the amount that it paid to Chen in
workers’ compensation benefits, and is not “splitting” Chen’s cause of action.
See Domtar Paper, 113 A.3d at 1234 and 1240. Rather, Appellant brought
“a single action [against the third-party tortfeasors] in the name of the
injured employee” and Appellant is attempting to recover the entire amount
to which Chen is entitled. Thus, the procedure Appellant employed in the
case at bar is the procedure our Supreme Court countenanced in Domtar
Paper. Id. at 1240 (emphasis added). As such, we respectfully conclude
that the trial court erred when it sustained the Defendants’ preliminary
objection in the nature of a demurrer.3
____________________________________________
3
In her dissent in Domtar Paper, Justice Todd declared that, where an
employer or workers’ compensation carrier brings suit in the name of the
injured employee in the capacity of a use plaintiff:
(Footnote Continued Next Page)
- 11 -
J-S84002-16
_______________________
(Footnote Continued)
it is critical that the actual plaintiff – here, the injured
employee – be served with a copy of the subrogee's
complaint so that the employee may, if he or she desires,
retain counsel and actively participate in the action. Such
service ensures the injured employee may actively
prosecute all claims he or she may possess, and not leave
the conduct of the litigation solely in the hands of the
subrogee.
Indeed, I deem this requirement to be particularly
important in cases such as this, inasmuch as a workers'
compensation subrogee is precluded by 77 P.S. § 319 from
recovering any damages in excess of what it paid to the
injured employee in workers' compensation benefits.
Consequently, the subrogee has no incentive to pursue
claims for additional damages which the injured employee
might ordinarily seek in his or her own capacity. Giving an
injured employee notice of a subrogee's suit is essential, as
it allows the injured employee to actively participate in and
direct the scope and course of discovery, trial preparation,
or the conduct of settlement negotiations in the proceeding
where the final fate of his or her claims is irrevocably
decided. To be sure . . . were Liberty Mutual's instant
action to be litigated to final judgment, any subsequent
action brought by Lawrence would be barred under the
doctrine of res judicata. . . .
[In his separate dissent,] Chief Justice Saylor observes that,
to avoid harm to the ability of Lawrence to be fully and
fairly compensated, the trial court could have required that
he be joined as a party. . . . However, in my view, such a
wholly discretionary process is insufficiently protective of
the important fundamental rights of the injured employee at
stake in these situations. It seems to me the better
practice, then, is to require the subrogee to provide notice
to the injured employee upon commencement of its action
as use-plaintiff. Requiring such notice would also be
consistent with the principle reaffirmed by the majority that
there should be no splitting of an injured employee's cause
of action against a third-party tortfeasor, in order to ensure
that the injured employee may still prosecute all causes of
(Footnote Continued Next Page)
- 12 -
J-S84002-16
Next, Appellant contends that the trial court erred in dismissing its
complaint for an improper verification, when the complaint was verified by
Jaime Young, “a representative of [] Hartford with knowledge of the claim.”
Appellant’s Brief at 10. Appellant claims that the verification was proper or,
in the alternative, Appellant claims that the trial court “should have allowed
[Appellant 20] days to attach a verification signed by Chunli Chen, rather
than dismissing [Appellant’s c]omplaint.” Id. at 10-11. The trial court held
that the verification was improper because Jaime Young “was not present at
the scene of the accident and did not have first-hand knowledge of the
incident” and because the verification “did not state the source of Young’s
information or the reason why the verification was not made by a party.”
Trial Court Opinion, 6/23/15, at 6. We respectfully conclude that the trial
court erred.
Pennsylvania Rule of Civil Procedure 1024 declares, in relevant part:
_______________________
(Footnote Continued)
action in the manner he or she sees fit, even if the subrogee
commences suit first.
Domtar Paper, 113 A.3d at 1243-1244 (Todd, J., dissenting) (emphasis in
original).
However, in the case at bar, the Defendants did not raise any issue
concerning lack of service to Chen. Therefore, any such issue is not properly
before this Court. See id. at 1244 n.1 (Todd, J., dissenting) (“any issue
regarding [] lack of service was not raised in the lower courts, and, thus, is
not preserved for our review in the present appeal”); Pa.R.A.P. 302(a)
(“[i]ssues not raised in the lower court are waived and cannot be raised for
the first time on appeal”).
- 13 -
J-S84002-16
(a) Every pleading containing an averment of fact not
appearing of record in the action or containing a denial of
fact shall state that the averment or denial is true upon the
signer's personal knowledge or information and belief and
shall be verified. The signer need not aver the source of the
information or expectation of ability to prove the averment
or denial at the trial. A pleading may be verified upon
personal knowledge as to a part and upon information and
belief as to the remainder.
...
(c) The verification shall be made by one or more of the
parties filing the pleading unless all the parties (1) lack
sufficient knowledge or information, or (2) are outside the
jurisdiction of the court and the verification of none of them
can be obtained within the time allowed for filing the
pleading. In such cases, the verification may be made by
any person having sufficient knowledge or information and
belief and shall set forth the source of the person's
information as to matters not stated upon his or her own
knowledge and the reason why the verification is not made
by a party.
Pa.R.C.P. 1024.
In the case at bar, Hartford is a party to this action because the
injured employee, Chunli Chen, did not bring suit against the third-party
tortfeasors and Hartford thus brought suit “on behalf of” Chen. Further,
Hartford has a real interest in this lawsuit because it has a statutory right of
subrogation to Chen’s recovery against the third-party tortfeasors, “to the
extent of the compensation payable under [the WCA] by [Hartford].” 77
P.S. § 671; see also Thompson v. W.C.A.B. (WSF&G Co.), 781 A.2d
1146, 1151 (Pa. 2001) (holding that Section 319 of the WCA “is written in
mandatory terms and, by its terms, admits of no express exceptions,
equitable or otherwise. Furthermore, it does more than confer a ‘right’ of
- 14 -
J-S84002-16
subrogation upon the employer; rather, subrogation is automatic”). Finally,
since Chen has not sued the third-party tortfeasors, Hartford is the entity
that is controlling this litigation. Therefore, Hartford is a party to this
litigation and Jaime Young, as a representative of Hartford, properly verified
the complaint. See Pa.R.C.P. 1024(c) (“[t]he verification shall be made by
one or more of the parties filing the pleading . . .”).
Further, although Jaime Young does not have personal knowledge of
the accident, Jaime Young did not state as much in the verification. Rather,
within the verification, Jaime Young averred that “[t]he averments and
allegations of fact made in the [] civil complaint are true and correct to the
best of my information and belief.” Appellant’s Complaint, 12/8/15, at
Verification (some internal capitalization omitted) (emphasis added); see
also 2 Goodrich Amram 2d § 1024(a):7 (“[if a] signer knows of [the facts
averred in the pleading] because others have informed him or her of them,
the verification should be upon ‘information and belief’”); Pa.R.C.P. 1024(a)
(“[t]he signer need not aver the source of the information or expectation of
ability to prove the averment or denial at the trial”). Therefore, in the case
at bar, the verification was proper and the trial court erred when it sustained
the Defendants’ preliminary objection in the nature of a motion to strike.
We thus conclude that the trial court erred when it sustained the
Defendants’ preliminary objections and dismissed Appellant’s complaint with
prejudice. We respectfully vacate the trial court’s order and remand for
further proceedings.
- 15 -
J-S84002-16
Order vacated. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/10/2017
- 16 -