J-A02024-22
2022 PA Super 44
MICHELE LOFTUS AND RICHARD : IN THE SUPERIOR COURT OF
LOFTUS, HER HUSBAND : PENNSYLVANIA
:
:
v. :
:
:
KATRINA DECKER :
: No. 611 WDA 2021
:
APPEAL OF: EASTERN ALLIANCE :
INSURANCE GROUP :
Appeal from the Order Entered April 23, 2021
In the Court of Common Pleas of Indiana County Civil Division at No(s):
11725 CD 2020
BEFORE: OLSON, J., MURRAY, J., and PELLEGRINI, J.*
OPINION BY PELLEGRINI, J.: FILED: MARCH 10, 2022
Eastern Alliance Insurance Group (Eastern Insurance), a workers’
compensation carrier, appeals from an order of the Court of Common Pleas of
Indiana County (trial court) denying its petition to intervene in an action
commenced by a praecipe for writ of summons filed by Michele Loftus (Loftus)
and her husband, Richard Loftus (Richard) (collectively, the Loftuses) against
Katrina Decker (Decker). It sought to intervene and file a complaint on behalf
of Loftus to seek damages out of which it can satisfy its statutory lien for
compensation it paid on behalf of Loftus’s employer.
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* Retired Senior Judge assigned to the Superior Court.
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I.
Because a praecipe for writ of summons contains no facts, the
allegations about what this case is about are taken from Eastern Insurance’s
petition to intervene. That petition alleges that Loftus, while in the course of
her employment as a bus driver for one of its insureds, sustained injuries in a
motor vehicle accident that was purportedly caused by Decker, the driver of
the other vehicle. As a result of that incident, it alleges that it paid Loftus on
behalf of her employer $196,093.34 in workers’ compensation benefits that is
a statutory lien against any recovery that Loftus may obtain from Decker.
Loftus settled her workers’ compensation claim with Eastern Insurance
on May 14, 2020. The settlement agreement provided that:
Employer/Carrier retains its absolute right to statutory
subrogation pursuant to Section 319 of the Workers’
Compensation Act, [77 P.S. § 671,] as amended. Claimant
understands that in the event of a third-party recovery,
Employer/Carrier is subrogated for all workers’ compensation
benefits it paid to [Loftus] or on Claimant’s behalf, including the
amount of this settlement, with no lien waiver as agreed upon by
the Claimant. It shall be the responsibility of Claimant to notify
[Appellant] of any third-party recovery either by settlement or
trial and to satisfy [Appellant’s] statutory subrogation claim from
the proceeds of any third-party recovery within thirty (30) days of
receipt of any recovery.
Petition to Intervene, ¶ 17. Loftus has filed a writ of summons against Decker
and Eastern Insurance has notified both Loftus and Decker of its workers’
compensation subrogation lien.
Even though only a praecipe for writ of summons has been filed, Eastern
Insurance contends that it should be permitted to intervene because it is
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necessary to protect its workers’ compensation lien because the Loftuses
refuse to take the $25,000 insurance policy that Decker’s insurance company
has offered and are threatening to “walk away” and not seek recovery against
Decker unless Eastern Insurance agrees to compromise its lien rights. Eastern
Insurance stated that it is necessary for it to intervene to “prosecute this
matter and protect its statutory lien rights, which are not adequately
represented by [the Loftuses] or [Decker].” Petition to Intervene, ¶ 23.
Attached to the petition to intervene is a civil action complaint listing
Loftus alone as the plaintiff and sets forth allegations that Decker was legally
responsible for the accident and subject to damages. Eastern Insurance is not
named as a party to the action, only being listed in a fact paragraph in the
proposed complaint as a lien holder.
The trial court denied Eastern Insurance’s intervention, reasoning that
since no complaint had been filed by the Loftuses, “there are no verified
allegations of facts supporting the cause of action, and, in fact, no cause of
action has been alleged.” R. 211a. Trial Court Order, 4/23/2021, at 1.
Additionally, the trial court noted that intervention could not be granted under
Pa.R.C.P. 2327 because, in the absence of a complaint, no judgment could be
entered in the action and it was, therefore, impossible for Eastern Insurance
to demonstrate the existence of a legally enforceable interest that intervention
would protect. See 1925(a) Opinion, 7/6/2021, at 1-3.
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The trial court went on to opine that Eastern Insurance could not
establish a right to appeal the denial of intervention under Pa.R.A.P. 313(b),
which makes a collateral order immediately appealable where the denial of
the appeal would cause a right to be “irretrievably lost.” That is, without a
complaint or the possibility of an adverse judgment, Eastern Insurance was
“acting as a catalyst in the matter,” not protecting an extant right that could
be lost if the right to appeal was denied. Id. at 2-3.
Eastern Insurance filed the instant timely appeal. Both Eastern
Insurance and the trial court have complied with Pa.R.A.P. 1925.
II.
Because it implicates our jurisdiction, we must first address whether this
appeal should be quashed because it is an appeal from a collateral order
doctrine pursuant to Rule 313(b) of the Pennsylvania Rules of Appellate
Procedure. Pa.R.A.P. 341(b)(1) provides that “a final order is any order that
disposes of all claims and of all parties.” In general, “an appeal will not lie
from an order denying intervention, because such an order is not a final
determination of the claim made by the would-be intervenor.” First
Commonwealth Bank v. Heller, 863 A.2d 1153, 1155 (Pa. Super. 2004)
(citation omitted).
An appeal is still permitted if the order is an appealable collateral order.
Pa.R.A.P. 313(b) defines a collateral order as one that: “1) is separable from
and collateral to the main cause of action; 2) involves a right too important to
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be denied review; and 3) presents a question that, if review is postponed until
final judgment in the case, the claim will be irreparably lost.” Absent
satisfaction of all three prongs of the collateral order test, this Court has no
jurisdiction to consider an appeal of an otherwise non-final order. See
Spanier v. Freeh, 95 A.3d 342, 345 (Pa. Super. 2014). In Bogdan v. Am.
Legion Post 153 Home Ass’n, 257 A.3d 751, 755-756 (Pa. Super. 2021)
(citation omitted), we explained that:
For the first prong of the analysis under Pa.R.A.P. 313(b), a court
must determine whether the issue(s) raised in the order are
separable from the central issue of the ongoing litigation. Under
the second prong, in order to be considered too important to be
denied review, the issue presented must involve rights deeply
rooted in public policy going beyond the particular litigation at
hand. An issue is important if the interests that would potentially
go unprotected without immediate appellate review of that issue
are significantly relative to the efficiency interests sought to be
advanced by the final judgment rule. Furthermore, with regard to
the third prong of the analysis, our Supreme Court explained that
whether a right is adequately vindicable or effectively reviewable,
simply cannot be answered without a judgment about the value
interests that would be lost through rigorous application of a final
judgment requirement.
Eastern Insurance contends that it has met Pa.R.A.P. 313(b)(1)’s
standards for collateral review because (1) the denial of intervention, to
protect subrogation rights, is peripheral to the ultimate resolution of any claim
the Loftuses filed against Decker; (2) a workers’ compensation carrier’s right
of subrogation is protected by statute and its right to recover its statutory lien
is too important to be denied review; and (3) the averments of Eastern
Insurance’s petition to intervene, if credited, establish that intervention is the
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only way to protect Eastern Insurance’s subrogation rights because the
Loftuses threatened to abandon their cause of action, thereby defeating
Eastern Insurance’s subrogation rights.
We agree that Eastern Insurance has satisfied the first prong because
the denial of intervention seeking to protect subrogation “rights” is peripheral
to the ultimate resolution of any claim the Loftuses file against Decker. See,
e.g., Bogdan, 257 A.3d at 756 (concluding that an underwriter’s right to
intervene was peripheral to a declaratory judgment action that would resolve
coverage issues). However, underlying its argument that it has met the
second and third prong is that it has a “right,” a “legally enforceable interest,”
to force Loftus to seek recovery against Decker, the third-party tortfeasor, to
protect its statutory subrogation rights. Because that issue is determinative
as to whether it meets the second and third prongs that must be met for there
to be an appealable collateral order is the same as whether there is a “legally
enforceable interest” justifying intervention,1 we will defer deciding whether
this is an appealable collateral order until we address that issue in the merits.2
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1 Pa.R.C.P. No. 2327 (4) provides that, “At any time during the pendency of
an action, a person not a party thereto shall be permitted to intervene therein,
subject to these rules if: (4) the determination of such action may affect any
legally enforceable interest of such person whether or not such person may
be bound by a judgment in the action.”
2 Eastern Insurance contends that the trial court erred without holding a
hearing required by Pa.R.C.P. 2329. Ignoring whether it failed to comply with
Rule L-211 of the Indiana County Local Rules of Civil Procedure (“Any
(Footnote Continued Next Page)
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III.
A.
Eastern Insurance contends that the trial court erred in holding that until
a complaint is filed, intervention cannot be granted. It contends that because
Pa.R.C.P. 1007(1) provides that an action can be commenced by praecipe for
writ of summons, and Pa.R.C.P. 2327 provides that “[a]t any time during the
pendency of an action, a person not a party thereto shall be permitted to
intervene therein, . . . . ,” makes intervention allowable.
A praecipe for writ of summons contains no facts and is filed by a plaintiff
with the Prothonotary containing a single sentence to the named defendant(s)
stating, “You are hereby notified that _ (Name(s) of Plaintiff(s)) has (have)
commenced an action against you.” Pa.R.C.P. No. 1351. It should be served
within 30 days of issuance of the writ. Pa. R.C.P. 401. Even if served, the
defendant is not required to respond. The only purpose of the praecipe is “to
provide certainty as to the commencement of an action and to remove a
subsequent failure to effect service from consideration in determining whether
the statute of limitations has been tolled.” Lamp v. Heyman, 366 A.2d 882,
886 (1976).
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contested motion requiring an evidentiary hearing shall be scheduled by the
Court Administrator at the request of a party.”) or that it failed to preserve
the issue of a hearing in its Statement of Matters Complained of on Appeal
filed with the trial court, the trial court decided the issue as a matter of law
requiring no factual hearing was necessary.
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Because a writ of summons is only to serve that purpose and because
there are no facts contained in plaintiff’s one sentence writ of summons, we
agree with the trial court that there is insufficient facts for an analysis to be
made as to whether intervention is proper under Pa.R.C.P. 2327. To hold
otherwise would allow the proposed intervenor to plead what is plaintiff’s
cause of action(s), what facts support that cause of action and what relief
plaintiff is seeking, and then state why those facts that it alleged on behalf of
plaintiff justify its intervention based on the facts and interests it pleads. In
other words, if that were the case, it gets to deal the cards and play both the
house and the player’s hand.3
Not only would an analysis of the intervention factors be impossible, it
would affect the orderly processing of the case in that the first “real” pleading
in the case would not be that of the plaintiff or defendant but of a stranger to
the action, not to mention how such intervention at such an early stage affects
the defendant’s rights. See III, infra.
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3 No case can be found where anyone has even attempted to intervene where
only a praecipe for writ of summons has been filed. However, though not
directly on point, it has been held that preliminary objections cannot be filed
to a writ of summons to challenge venue. Keller v. LaBarre, 311 A.2d 683,
684 (Pa. Super. 1973). That includes where the defendant is challenging a
defect in a writ of summons or its service; that can only occur when the
complaint is filed. Hoeke v. Mercy Hospital of Pittsburgh, 386 A.2d 71
(Pa. Super. 1978). See also Sikirica v. Nationwide Ins. Co., 416 F.3d 214,
223 (3d. Cir. 2005). A writ of summons is not the “initial pleading” that
triggers the 30–day period for removal under the first paragraph of 28 U.S.C.
§ 1446(b).
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Accordingly, the trial court did not abuse its discretion in denying
intervention because until the plaintiff files a complaint setting forth the cause
of action it wants to plead and making the intervention analysis required by
Pa.R.C.P. 2327-2328 possible, intervention is not permitted.
B.
While the above dealt with whether intervention in general is permitted
where only a praecipe for writ of summons has been filed, even if it were to
be permitted and the facts Eastern Insurance alleges in the petition to
intervene are taken as true, intervention is still not permissible.
There is no doubt that Eastern Insurance, as assignee of the employer,
has the right to subrogation to any amounts received from a third party who
caused the compensable work injury. Section 319 of the Workers’
Compensation Act, 77 P.S. § 671, provides:
Where the compensable injury is caused in whole or in part by the
act or omission of a third party, the employer shall be
subrogated to the right of the employe, his personal
representative, his estate or his dependents, against such third
party to the extent of the compensation payable under this
article by the employer; reasonable attorney’s fees and other
proper disbursements incurred in obtaining a recovery or in
effecting a compromise settlement shall be prorated between the
employer and employe, his personal representative, his estate or
his dependents. The employer shall pay that proportion of the
attorney’s fees and other proper disbursements that the amount
of compensation paid or payable at the time of recovery or
settlement bears to the total recovery or settlement. Any
recovery against such third person in excess of the compensation
theretofore paid by the employer shall be paid forthwith to the
employe, his personal representative, his estate or his
dependents, and shall be treated as an advance payment by the
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employer on account of any future installments of compensation.
(Emphasis added.)
However, that is not the right Eastern Insurance is advancing in this
case; what it is advancing is something different – it contends that it has a
legally enforceable interest that gives it the right to pursue litigation against
a third-party tortfeasor and obtain a judgment from which it can satisfy its
subrogation lien.
Our Supreme Court, in two rather recent cases, has addressed that issue
and held that Section 319 of the Workers’ Compensation Act does not give a
party any right, directly or indirectly, to take any action against a third-party
tortfeasor because Section 319 provides that only the employee can bring or
decide to seek damages against the tortfeasor. Simply, an insurer has no
right to seek a recovery, nor can it force an employee to seek recovery to
satisfy a workers’ compensation statutory lien.
The first of the cases holding that Eastern Insurance has no right to
bring any proceeding to attempt to protect its statutory lien and where an
employee is under no such obligation to do so is Liberty Mutual Ins. Co. v.
Domtar Paper Co., 113 A.3d 1230 (Pa. 2015). In that case, the employee
did not pursue a claim against the third-party tortfeasor, refusing all attempts
both by employer and its insurer for him to do so. The employer then directly
filed a complaint against the third-party tortfeasor alleging negligence
resulting in injury to the employee. In response, the third-party tortfeasor
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asserted that the insurer had no right to file an independent claim for damages
on behalf of the injured employee who did not file an action.
Affirming this court,4 our Supreme Court held that under Section 319,
an insurance carrier has “no independent cause of action for
indemnification/contribution from the negligent party who caused the
insurance carrier to pay the injured employee benefits.” Id. at 1239. Citing
with approval cases previously decided by this court,5 it held that the action
against the third-party tortfeasor must be brought by the injured employee.
It then stated:
Section 319 of the Workers’ Compensation Act does not allow
carriers the right to bring a direct cause of action against a third-
party tortfeasor in order to pursue subrogation. Instead, a
carrier’s right of subrogation under Section 319 must be
achieved through a single action brought in the name of the
injured employee or joined by the injured employee.
Because the claimant did not file suit against the third-party
tortfeasor and because the carrier did not name the claimant in
the underlying third party action, the carrier’s action was
dismissed. (Emphasis added.)
Id. at 1240.
Next, in Hartford Ins. Group on behalf of Chunli Chen v. Kamara,
199 A.3d 841 (Pa. 2018), our Supreme Court again addressed the issue of
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4Liberty Mut. Ins. Co. v. Domtar Paper Co., 77 A.3d 1282 (Pa. Super.
2013).
5 See Whirley Indus., Inc. v. Segel, 462 A.2d 800 (Pa. Super. 1983);
Reliance Insurance Company v. Richmond Machine Company,455 A.2d
686 (Pa. Super. 1983).
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whether an insurer could bring an action against a third-party tortfeasor if it
did not file it directly but filed the action on behalf of the employee. Once
again, it held, “that unless the injured employee assigns her cause of action
or voluntarily joins the litigation as a party plaintiff, the insurer may not
enforce its statutory right to subrogation by filing an action directly against
the tortfeasor.” Id. at 841.
In that case, an employee of a rental car company was hit by a car
driven by a third-party driver while standing in her employer’s parking lot.
The employee did not want to participate in a third-party case against the
driver. Because Domtar left open the possibility that an insurer could pursue
a viable cause of action against a third-party tortfeasor if the insurer initiated
litigation “in the name of” or “on behalf of” a claimant, the insurer filed its
complaint against the third-party tortfeasor as “The Hartford Insurance Group
on behalf of [the claimant]” and captioned the plaintiff in the complaint as
“The Hartford Insurance Group on behalf of [employee.].” We held that
because the carrier captioned the complaint “on behalf of” the employee
rather than “as insurer of” the employee, the carrier was permitted to continue
to pursue its claims against the third-party tortfeasor. Kamara.
In reversing our decision, our Supreme Court held that an insurer’s
subrogation rights against a third-party tortfeasor remain “in the injured
employee” unless the injured employee “assigns her cause of action or
voluntarily joins the litigation as a party plaintiff or the contractual assignment
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of her claim.” 199 A.3d at 841. It went on to state that, “an employer or
workers’ compensation carrier cannot seize the injured employee’s cause of
action against the tortfeasor by merely captioning the complaint on behalf of
the employee and/or by including in the complaint independent claims of the
employee in addition to the claim for subrogation of workers’ compensation
benefits.” Id. at 849. It stated the right of recovery flows exclusively through
the employee’s decision alone, and a claim must be brought with the
employee’s “participation” and that there is no “authority, statutory or
otherwise, permitting an [insurer] to pursue [employee’s] cause of action
against Tortfeasor without [employee’s] voluntary participation as a party
plaintiff or the contractual assignment of her claim.” Id. In concluding, it
stated:
Under these circumstances, we find it apparent that sanctioning a
workers’ compensation carrier to pursue litigation of the injured
employee merely by captioning the complaint as “on behalf of” the
employee and including a bald assertion seeking any recovery due
the employee, contravenes the very jurisprudence establishing
that it is the injured worker who retains the cause of action against
the tortfeasor. It is for these reasons that we reiterate our holding
in Domtar Paper and clarify that absent the injured employee’s
assignment or voluntary participation as a party plaintiff, the
insurer may not enforce its Section 319 right to subrogation by
filing an action directly against the tortfeasor.
Id. at 853.
What Domtar and Kamara teach us is that:
• Section 319 of the Workers’ Compensation Act only permits
an employee to bring an action against a third-party tortfeasor;
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• under the aforesaid provision, the employee is under no
obligation to protect an employer’s lien rights;
• the employer cannot bring a civil action in its own name or
“in the name of the employee” to satisfy its statutory lien unless
the employee “voluntarily” participates in the action; and
• an employer may be able to have an employee’s rights
against a third party as part of a compromise and release
agreement to settle a workers’ compensation claim.
Eastern Insurance does not dispute that it cannot independently seek to
recover its statutory lien against the third-party tortfeasor to satisfy its
workers’ compensation lien, absent an assignment of rights from the injured
worker, which it admittedly does not have. Instead, it contends that it can
intervene and file a complaint because it is not independently seeking to
recover its liens but is just intervening in the existing action commenced by
the Loftuses’ praecipe for writ of summons.
By making this argument, Eastern Insurance is attempting to obfuscate
that it is using the guise of intervention to mask that it is impermissibly
attempting to “seize” the litigation and is seeking independently to bring an
action to recover its lien. That argument is directly contrary to both Domtar
and Kamara for the following reasons.
First, as Eastern Insurance acknowledges, an employer/carrier has no
right to independently bring an action against a third-party tortfeasor and
cannot bring such an action “in the name of the third-party.” Eastern
Insurance proposes to file a complaint in the employee’s name, but this is in
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effect no different than filing a complaint “in the name of” the
employee/plaintiff, which Kamara expressly prohibits.
Second, the effect of allowing intervention naming Loftus as the plaintiff
is the same as allowing the insurer to maintain an independent action in its
own name to recover the lien. Pa.R.C.P. 2330(a) provides that, “the
intervener shall have all the rights and liabilities of a party to the action,”
which means that it had filed the complaint in its own name, which Domtar
prohibited.
Third, Kamara requires the employee to “voluntarily” participate in any
litigation directed at satisfying a subrogation lien. In this case, there is
anything but voluntary participation on the part of the Loftuses, who have
exercised their right to file nothing but a praecipe containing no claims or
factual allegations; Eastern Insurance is attempting to highjack the litigation
by filing a complaint naming the Loftuses as the plaintiffs over their objection
and alleging facts that the Loftuses have not certified.
Fourth, Eastern Insurance’s argument that intervention is necessary to
protect its statutory lien because Loftus is threatening to abandon the
litigation is unavailing because both Domtar and Kamara held that an
employee under Section 319 is under no obligation to protect an insurance
carrier’s subrogation lien.
Finally, in both Domtar and Kamara, it was third-party tortfeasors
opposing those insurers bringing an action against them to collect their
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workers’ compensation lien. In those cases, it held that because only the
employee controls the action, it must be brought by the employee or with his
or her voluntary participation. In this case, Eastern Insurance’s petition is a
functional equivalent of filing a rule by the defendant tortfeasor to file a
complaint. The net effect is not only is Eastern Insurance seeking to take
away the Loftuses’ control of litigation, it is also seeking to take from Decker
her rights under the Rules of Civil Procedure to rule or not rule for the Loftuses
to file a complaint, possibly subjecting her to liability where there may be none
if the Loftuses do not file a complaint. Just as only the employee has the right
to bring the action, only the defendant has the right to force that a complaint
be filed.6
As we stated in our discussion in Part II, whether Eastern Insurance had
a “right” that needed to be protected for it to be an appealable collateral order
was dependent on whether it had a “legally enforceable interest” to intervene.
Because we have determined that it does not have a legally enforceable
interest to file on its own behalf or otherwise force an employee to force a
complaint against a third-party tortfeasor to protect its subrogation order, the
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6 Pa.R.C.P. 1037 (a) provides that, “If an action is not commenced by a
complaint, the prothonotary, upon praecipe of the defendant, shall enter a
rule upon the plaintiff to file a complaint. If a complaint is not filed within
twenty days after service of the rule, the prothonotary, upon praecipe of the
defendant, shall enter a judgment of non pros.”
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order denying intervention is not an appealable collateral order. Accordingly,
Eastern Insurance’s appeal is quashed.
Judge Olson joins the opinion.
Judge Murray files a dissenting opinion.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/10/2022
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