Case Law Update | Fortwangler v. WCAB (Pa. Cmwlth. 1085 C.D. 2014, filed March 31, 2015) | PA Work Injury

March 31, 2015

Written by our expert brief writer, Attorney Susan Nanes

 

Claimant was hurt (cervical strain) in work-related motor vehicle accident on 1/25/07.  Employer accepted liability via NCP.  On 12/5/08, Claimant signed 3d party settlement agreement with Insurer for lump sum of $100K.  That agreement recognized net lien of nearly $19K owed to Employer, stated that payment of $19.5K represented “full satisfaction” of rights to subrogation, and that: “The employer specifically waives its right to subrogation against future benefits payable to or on behalf of the claimant in exchange for and in consideration of the monies paid to employer in excess of the net lien to which the employer is entitled.”

 

On 1/7/09, Claimant signed a “corrected” agreement to include an additional medical bill.  The corrected agreement accounted for further indemnity benefits paid by Employer that were not contained in the 12/5/08 agreement, resulting in a slightly higher net lien of $19,818.14, payment of which would result in “full satisfaction” of Employer/Insurer’s subrogation rights against the 3d party settlement.  Crucially, the specific and express waiver language in the original agreement was not replicated in the corrected agreement.  On 11/17/10, Claimant filed a petition to reinstate/review, alleging that based on the settlement, Employer was paying her benefits at an incorrect (too low) rate and taking a credit to which it was not entitled. 

 

WCJ determined in Claimant’s favor (after hearings) that even though the original waiver language was not in the corrected agreement, Employer was bound by that language in the prior because the “only purpose” of the corrected agreement was to account for the additional medical bill and adjust the figures.  WCAB reversed on basis that even though Claimant may have credibly “understood” that the corrected version still entailed waiver of Employer’s future subrogation rights, she had insufficient evidence to support her burden of proof (she was petitioner below) that Employer’s original waiver of its future subrogation rights was still in effect even though corrected agreement did not so state.

 

Cmwlth Ct: Affirm.  Corrected agreement susceptible to more than one reasonable interpretation. To Claimant, retained “full satisfaction” language encompasses prior specific waiver; to Employer, without specific and express language, waiver cannot be implied from presence of “full satisfaction” alone, without more.  So, court may look outside four corners to evidence of record, particularly Claimant’s “understanding,” based on what her former counsel told her, that waiver was still in effect.  Claimant was legally obligated to pay the net accrued lien of $19,818.14, to which Employer was entitled.  But here, there was no consideration paid to Employer for any waiver of future subrogation rights, absent the express and specific waiver  language that had been in the original agreement.  “Thus, there is substantial extrinsic evidence in the record to support” WCAB interpretation of the corrected agreement to mean that “Employer did not waie its future subrogation rights.”

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