Pennsylvana Supreme Court holds that Heart and Lung benefits are not subrogable against an injured worker’s recovery from a third party tortfeasor.

The Supreme Court disagreed and affirmed the decision of the Commonwealth Court that, because Stermel v. WCAB (City of Philadelphia), 103 A.3d. 870 (Pa. Cmwlth. 2014) was law at the time the stipulation was signed, the claimant was not bound by the concessions in it and voided the stipulation. The court noted that the Heart and Lung Act requires the employee to turn over to the employer all workers’ compensation benefits “received or collected.” It follows that, in cases where the employee does not actually receive or collect workers’ compensation benefits, there is no basis for subrogation. The Supreme Court further rejected the employer’s argument that the mere acknowledgment of a work injury in a Notice of Compensation Payable and a specification of the amount of benefits an injured employee would be entitled to under the Act, does not transform an injured employee’s Heart and Lung benefits into workers’ compensation benefits under the MVFRL.

_{Case Law Alerts, 4^th Quarter, October 2018}

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