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Insurer subrogation must start while work comp claim is pending: Court

Posted On: Nov. 11, 2013 12:00 AM CST

Liberty Mutual Insurance Co., as the underwriter of an automobile policy, failed to properly establish its subrogation interests regarding a workers compensation claim, a Pennsylvania appellate court ruled.

The ruling Friday by the Commonwealth Court of Pennsylvania in Liberty Mutual Insurance Co. v. Excalibur Management Services d/b/a/ Excalibur Insurance followed from a 2010 work-related auto accident involving Catherine Lamm, who worked for Luzerne County, Pa., at the time of the accident, court records show.

Ms. Lamm filed a workers comp claim as a result of the accident, and Luzerne County and her employer’s insurer, Excalibur, resolved the claim in 2011.

But a year later, Liberty Mutual filed a complaint in the Court of Common Pleas of Philadelphia County stating that it provided first-party medical benefits to Ms. Lamm pursuant to its automobile insurance policy. Liberty Mutual cited the primacy of work comp over automobile insurance benefits and argued that it was owed reimbursement from Excalibur and Luzerne County.

In response, the county and its workers comp insurer essentially argued that Liberty Mutual failed to exercise a statutory remedy requiring the insurer to secure its subrogation rights while the workers comp claim proceeded.

The Court of Common Pleas of Luzerne County agreed, and Liberty Mutual appealed.

On Friday an en banc panel of the appellate court unanimously ruled that there was “clear, mandatory language” stating that Liberty Mutual had to assert its subrogation interest at the time Ms. Lamm’s claim was proceeding through workers compensation hearings.

It affirmed the lower court’s finding.