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Thompson v. Workers' Compensation Appeal Board

Where employee received workers' compensation and medical benefits from employer and a settlement in a product liability action, order finding that employer was not entitled to statutorily mandated right of subrogation vacated; employer's statutory subrogation right was not subject to avoidance upon ad hoc equitable grounds.

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ARGUED: September 11, 2000

OPINION OF THE COURT

Appellee John L. Thompson, who suffered work-related injuries while in the employ of appellant Craig Welding and Equipment Rental (“Craig”), received workers’ compensation and medical benefits through Craig and its workers’ compensation carrier, appellant USF&G Company (“USF&G”). Thompson also filed and settled mid-trial a product liability action against the entities who manufactured, distributed and/or owned the equipment on which he was injured. Following the settlement, appellants filed a Petition to Suspend Compensation and Enforce Subrogation Lien pursuant to � 319 of the Worker’s Compensation Act, 77 P.S. � 671. A workers’ compensation judge granted the petition and the Workers’ Compensation Appeal Board affirmed, both adjudicative bodies finding that the statutory right of subrogation was absolute. A divided Commonwealth Court panel reversed in a published opinion, finding that the “equities” it perceived defeated the employer’s statutorily mandated right of subrogation. This Court granted review to consider the proper scope of the right of subrogation provided by � 319. For the reasons that follow, we vacate the order of the Commonwealth Court and remand for proceedings consistent with this Opinion.

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