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October 12, 1973


Fogel, District Judge.

The opinion of the court was delivered by: FOGEL

FOGEL, District Judge.

 This action against Liberty Mutual Insurance Company (Liberty Mutual), the Workmen's Compensation insurance carrier of plaintiff Alfred Pirocchi's employer, requires us to determine the nature and scope of the duty, if any, owed to a claimant who asserts that the failure to preserve physical evidence has destroyed his cause of action against a third party.

 Defendant Liberty Mutual seeks a judgment in its favor under Rule 56 of the Federal Rules of Civil Procedure, based on the record now before us, which includes the pleadings, affidavits and depositions.

 The undisputed facts which gave rise to this litigation are as follows: On August 6, 1970, plaintiff was injured in the course of his employment with the Marriott Corporation, Bala-Cynwyd, Pennsylvania, when a metal chair on which he was sitting collapsed, causing him to fall to the ground. Shortly after the accident, Harry Wagner, a claim adjuster for Liberty Mutual, took possession of the chair for the purpose of investigating a third party action against the chair manufacturer or other possible third party defendants. The law firm of Gold and Silverman was retained by plaintiff in September of 1970 to represent his interests, and the same firm was retained by Liberty Mutual to represent its subrogation interests. Some time thereafter, the chair, which was returned by Wagner to the Marriott, disappeared. On March 27, 1972, Alan Silverman of the firm of Gold and Silverman notified Pirocchi that in his opinion there was no third party liability action. Pirocchi subsequently retained his present counsel and filed this action against Liberty Mutual on July 13, 1972.

 Pirocchi's claim against Liberty Mutual is based on alleged negligent acts of its agent Wagner, leading to the loss of the chair after its return to Marriott. Wagner's negligence is said to consist of his failure, first, to place a tag or identification mark on the chair; second, to obtain a receipt from the secretary to whom he gave the chair; and, third, to take the steps necessary to place the chair in the custody of plaintiff's supervisor at the Marriott.

 Plaintiff's counsel at oral argument conceded that while Liberty Mutual, in the first instance, may have owed no duty to Pirocchi to preserve this piece of evidence to aid him in his pursuit of a third party action, a duty arose to use reasonable care to preserve this necessary evidence once Wagner took possession of the chair. Thus plaintiff's claim is based solely upon the alleged negligence of Liberty Mutual in failing to preserve the chair, and not upon the circumstances which gave rise to the initial injury which occurred when the chair collapsed. Plaintiff admits that Liberty Mutual made total compensation payments of $4,743.32, either directly to him or in his behalf.

 Defendant supports its motion for summary judgment on these grounds:

 (1) As the Workmen's Compensation carrier for plaintiff's employer, it is immune from common law liability from a work-related injury for which plaintiff was paid compensation.

 (2) It was under no duty to plaintiff to maintain in protective custody a chair it admittedly returned to its rightful owner, the Marriott Corporation.

 (3) Even if a duty did exist, its conduct establishes there was no breach of that duty as a matter of law.

 In considering defendant's contentions seriatim, we note that this is a diversity action, which is controlled by the substantive law of the Commonwealth of Pennsylvania. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938).

 I. Liability of Liberty Mutual as Workmen's Compensation Carrier for Plaintiff's Employer.

 It is, of course, conceded by plaintiff that under Pennsylvania law he cannot maintain an action for negligence against his employer for personal injury in the course of his employment because his rights are limited to the compensable element set forth in the Workmen's Compensation Act, 77 P.S. ยง 1 et seq. A number of cases have raised the issue of the extension of the employer's immunity and protection under the Act to its Workmen's Compensation insurance carrier. See Mays v. Liberty Mutual Ins. Co., 323 F.2d 174 (3rd Cir. 1963), and Brown v. Travelers Insurance Co., 434 Pa. 507, 254 A.2d 27 (1969). This question was resolved, however, by the Pennsylvania legislature in 1966, when the Workmen's Compensation Act was amended to give the Workmen's Compensation insurer the same immunity from an injured employee's ...

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