argument that no brief or argument would be offered against this contention. On November 10, 1958, the Court of Common Pleas of Washington County, Pennsylvania, entered judgment for defendant on the pleadings. No appeal was taken.
On or about February 13, 1962, plaintiff engaged new counsel who presented a petition to the Washington County Court to open the judgment entered November 10, 1958. A Rule was issued on defendants to show cause why the judgment should not be opened. The petition for the Rule recited that plaintiff had received no notice of judgment; that the judgment was based on error since plaintiff was never an employee; and that the Workmen's Compensation Agreement had been obtained by fraud and misrepresentation while plaintiff was hospitalized suffering from shock and under sedation. Defendants filed an Answer to the petition denying its allegations and asking that the Rule be dismissed. No depositions were taken, the defendant opposing their taking. Finally after considerable argument between counsel the Common Pleas Court made the Rule absolute and opened the judgment on January 14, 1963. No explanation for this action was given by the Court. An appeal from this Order was made to the Pennsylvania Supreme Court on March 27, 1963.
The Pennsylvania Supreme Court remanded the proceedings to the Court below because the state of the record did not permit of a definitive disposition of the matter, no testimony or depositions having been taken in support of the allegations. 412 Pa. 576, 195 A.2d 362 (1963).
Thereafter the Common Pleas Court of Washington County, Pennsylvania, by an en banc court of three judges, (different from the personnel of the Court that had previously opened the judgment) considered extensive testimony by deposition and heard argument on the question of whether the judgment should be opened and the plaintiff allowed to answer the new matter and go to trial. The Court considered in detail the two contentions of the plaintiff that he was an independent contractor and that the Workmen's Compensation Agreement had been procured by fraud. An examination of the Opinion of that Court by Judge McCune, dated May 5, 1965 (Case No. 85 November Term, 1957), shows that the Court considered these allegations and the evidence in support of them thoroughly and found that there was no clear evidence that plaintiff was an independent contractor and no evidence that he was the victim of fraud. The Court dismissed the Rule and the judgment for defendant remained of record.
The second appeal to the Pennsylvania Supreme Court resulted in a finding that the Court below had now resolved the disputed facts and taken the action required by the resolved facts. The Court found no abuse of discretion or error of law and affirmed the decision. 419 Pa. 398, 214 A.2d 504 (1965).
This suit in the United States District Court followed. Plaintiff alleges that he pleads a new cause of action against a different party, and that the defense of res adjudicata is not applicable.
We do not believe that we have different party defendant before us. The present defendant is the insurer for the defendant in the State Court action, both for liability and for Workmen's Compensation coverage. Its agents secured the execution of the Workmen's Compensation Agreement on behalf of the employer, the defendant in the Court below. Its counsel appeared for the defendants in the trespass action in the State Court. All of these facts are alleged in plaintiff's present complaint.
An insurance carrier is in privity with its insured. Dally v. Pa. Thres. & F.Mut. Cas. Ins. Co., 374 Pa. 476, 97 A.2d 795 (1953). Particularly, under the Workmen's Compensation Act of Pennsylvania, the term "employer" includes his insurance carrier under the Act. 77 P.S. § 701.
The fraud which is alleged as the basis of the present action was litigated in the court below. It was pleaded in the petition to open judgment. Testimony in support of the allegations was taken by deposition and the points were argued by counsel and passed upon by the Court in denying the motion to open judgment. The decision of the Court was reported in an extensive Opinion, and the Pennsylvania Supreme Court reviewed and approved it.
"In Wallace's Estate, 316 Pa. 148, 153, 174 A. 397, 399, this court stated: 'Broadly stated, the rule of res judicata is, that when a court of competent jurisdiction has determined a litigated cause on its merits, the judgment entered, until reversed, is forever and under all circumstances, final and conclusive as between the parties to the suit and their privies, in respect to every fact which might properly be considered in reaching a judicial determination of the controversy, and in respect to all points of law there adjudged, as those points relate directly to the cause of action in litigation and affect the fund or other subject-matter then before the court.'
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