Right to subrogation for medical bill payments not waived by failing to properly preserve issue at all stages of litigation, including appellate stage, and appeal not subject to immediate dismissal due to technical defect promptly and properly cured.
Wayne Deloatch filed a Claim Petition, pursuant to Section 108(r) of the Act, alleging he suffered from non-small cell lung cancer, resulting from direct exposure to Group 1 carcinogens while working as a firefighter for the employer. The petition was initially denied by Workers’ Compensation Judge Timm. It was then reversed by the Workers’ Compensation Appeal Board and remanded to Judge Timm for findings regarding an award of benefits and whether Independence Blue Cross (the insurer) was entitled to a lien reimbursement for its payment of medical bills. On remand, Judge Timm granted the petition and determined the insurer was entitled to subrogation in the amount of $124,680.22 in medical benefits paid.
The employer appealed to the Appeal Board, which reversed. Deloatch then appealed to the Commonwealth Court, and they reversed the Board in a decision of January 3, 2020.
After Deloatch passed away, the claimant filed a Fatal Claim Petition, seeking benefits for Deloatch’s death due to lung cancer on September 25, 2019. Workers’ Compensation Judge Lawrence determined the Commonwealth Court’s January 3, 2020, opinion established that Deloatch’s lung cancer was work-related, and since the Supreme Court denied the employer’s Petition for Allowance of Appeal, the work-related lung cancer was compensable. Judge Lawrence, therefore, granted the Fatal Claim Petition, awarding the claimant benefits plus reimbursement of funeral expenses and litigation costs.
Subsequently, the insurer filed a penalty petition, alleging the employer failed to pay the subrogation lien as ordered by Judge Timm. Judge Lawrence granted this petition. The employer appealed to the Appeal Board and filed a request for supersedeas the same day.
However, the employer filed their appeal and supersedeas request under a prior dispute number. Additionally, the employer attached a copy of Judge Lawrence’s original April 2021 decision granting the Claim Petition, not his September 2021 decision granting the penalty petition. The Appeal Board affirmed Judge Lawrence’s September 2021 decision. According to the Board, although in 2018 they reversed the granting of the Claim Petition and the medical benefit award, including reimbursement of the insurer’s subrogation lien, their opinion was subsequently reversed in full by the Commonwealth Court in January 2020, thereby triggering the employer’s obligation to reimburse the insurer for medical bill payments.
The employer and the insurer cross-appealed to the Commonwealth Court. The court rejected the insurer’s argument that the employer failed to properly perfect its appeal because it did not attach the correct decision to it, as required by the Board’s rules. The court noted there was no prejudice to the insurer because the employer promptly cured the defect once it was raised by the Board itself.
The court also rejected the employer’s argument the insurer waived its right to subrogation by failing to properly preserve the issue at every stage of the legal proceedings. According to the court, the insurer properly established its subrogation lien during litigation of the original Claim Petition before Judge Timm and, once the court reinstated the granting of the Claim Petition by reversing the Board’s denial, the insurer’s lien for payment of medical expenses was reinstated as well.
The court further held the workers’ compensation judge did not err in ordering the employer to pay interest on the subrogation lien as of October 21, 2014, the date it was introduced before Judge Timm.
What’s Hot in Workers’ Comp, Vol. 29, No. 2, February 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.