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Poole v. Workers' Compensation Appeal Board11/20/2002
We granted Warehouse Club, Inc.'s, petition for allowance of appeal to determine whether proceeds from a legal malpractice action are subject to subrogation pursuant to Section 319 of the Workers' Compensation Act of June 2, 1915, P.L. 736, art. III § 319 as reenacted and amended, 77 P.S. § 671. For the reasons below, we hold that such proceeds are subject to subrogation and reverse the order of the Commonwealth Court.
William R. Poole, Jr., is the Appellee here and was the claimant in the initial workers' compensation action below. Poole sustained an injury during the course of his employment with Warehouse Club on March 8, 1989. On that date, Poole slipped and fell on ice in front of Warehouse Club's building. Poole received benefits under the Workers' Compensation Act for this injury from March 9, 1989, until his benefits were commuted by the Order of the Workers' Compensation Judge on September 26, 1996.
On May 6, 1995, Poole filed a civil complaint against his former legal counsel alleging that former counsel had been negligent in his representation of Poole, as Poole's third party complaint against the owner of the property where he fell had been filed against the wrong parties. Poole's former counsel's mistake resulted in the third party complaint being dismissed by the Westmoreland County Court of Common Pleas on May 27, 1992. Because the two year statute of limitations had expired, Poole was unable to refile his civil complaint against the proper third party defendants. On July 22, 1998, Poole filed a Praecipe to Settle and Discontinue the legal malpractice action, because that action had been settled.
Poole, through his current counsel denied requests for subrogation against any money received in the settlement between Poole and his former legal counsel from Warehouse Club and its insurer Travelers Insurance Company. On November 20, 1998, Warehouse Club and Travelers filed multiple petitions with the Workers' Compensation Judge alleging that they had a right to subrogation against any settlement that Poole had reached with his former counsel.
The Workers' Compensation Judge agreed with Warehouse Club and Travelers. Specifically, the WCJ found that a denial of subrogation would result in Poole receiving a double recovery and that Poole would not have been able to recover in the legal malpractice action unless he had established that he would have obtained a recovery in his third party action for the 1989 injury. Thus, the Workers' Compensation Judge ordered Poole to disclose the details of his financial settlement with his former legal counsel. The Workers' Compensation Appeal Board affirmed the pertinent portions of the Workers' Compensation Judge's order.
The Commonwealth Court reversed. Poole v. Workers' Compensation Appeal Board (Warehouse Club, Inc.), 770 A.2d 385 (Pa. Cmwlth. 2001)(en banc). Noting that this case was one of apparent first impression in the Pennsylvania Courts, the Commonwealth Court relied upon the rationale expressed by this Court in Dale Manufacturing Co. v. Bressi, 421 A.2d 653 (Pa. 1980). In Dale, an injured employee, otherwise covered by the Workmen's Compensation Act, was additionally, and subsequently, injured due to medical malpractice during the treatment for the injury that occurred within the scope of employment. We found that the employer who sought subrogation failed to support its position with independent evidence; rather it relied entirely upon the employee's third party complaint for medical malpractice. Because the employee's complaint against the third party did not establish that the subsequent medical treatment, needed to remedy the malpractice, was either an aggravation of the original work r
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