Sunday, May 24, 2009

City Can Subrogate Heart & Lung Act Claim Against Third Party Recovery

In City of Wilkes-Barre vs. Robert P. Sheils, Jr., Trustee in Bankrupcy, George W. Cole, Debtor the Third Circuit Court of Appeals held a municipality that pays Heart and Lung Act benefits has a subrogation interest against a third party recovery. The District Court held the subrogation claim was barred by Section 1720 of the Motor Vehicle Financial Responsibility Law.

The Third Circuit identified Brown v. Rosenberger and Coca-Cola Bottling Company as the controlling precedent of the Commonwealth Court and held the 1993 repeal of Section 1720 and 1722 as they relate to workers' compensation benefits also was a repeal as to Heart & Lung Act benefits. The Court looked at the identity of these payments and the inequity of not allowing recovery against a third-party tort-feasor for all losses sustained.

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