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SHANER v. CATERPILLAR TRACTOR CO.

January 23, 1980

STANLEY SHANER and NANCY SHANER, his wife, Plaintiffs,
v.
CATERPILLAR TRACTOR COMPANY, t/a CATERPILLAR, Defendant and Third-Party Plaintiff, vs. NELLO L. TEER COMPANY, Third-Party Defendant.



The opinion of the court was delivered by: DIAMOND

Plaintiffs brought this diversity action to recover damages resulting from husband-plaintiff's employment-related injuries suffered as the alleged result of a defective product manufactured and sold by the defendant, Caterpillar Tractor Company t/a Caterpillar. The defendant joined the husband-plaintiff's employer, Nello L. Teer Co., (Teer) as a third-party defendant for contribution and indemnity. However, on motion of the third-party defendant, the judge to whom this case originally had been assigned, the Honorable Daniel J. Snyder, Jr., by an opinion and order filed on March 21, 1978, dismissed the third-party complaint.

Subsequently, Caterpillar moved for an order requiring the employer voluntarily to enter the case as a plaintiff, or, upon its refusal so to do, to be brought in as a defendant and thereafter be realigned as an involuntary plaintiff. Caterpillar stated as the basis for its motion that since the employer had subrogation rights under the Pennsylvania Workmen's Compensation Act, 77 Pa.C.S.A. § 671, it was a real party in interest under Rule 17(a), Fed.R.Civ.P., and a necessary and indispensible party under Rule 19, Fed.R.Civ.P. By an order entered on April 14, 1978, the court granted the motion routinely without stating its reasons.

 Teer declined to enter the case voluntarily, and was thereafter served as a defendant. We now have before us Teer's motion to dismiss on the grounds that Caterpillar has failed to state a claim upon which relief can be granted. For the reasons set forth below, we will grant the motion.

 The injuries which husband-plaintiff allegedly sustained occurred during the course of his employment in Pennsylvania. In his opinion of March 21, 1978, Judge Snyder set forth the law of Pennsylvania applicable to the joinder of an employer as a third-party defendant for the purpose of determining the employer's subrogation rights and the rights, if any, of a joint tortfeasor to credit for Pennsylvania Workmen's Compensation benefits paid by that employer to an employee allegedly injured by the sole or joint fault of another. It was the court's opinion that according to Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977), the only authority then in point, the 1974 amendment to § 303(b) of the Pennsylvania Workmen's Compensation Act barred such joinder. *fn1"

 If there was any doubt after Hefferin that the Pennsylvania legislature by its 1974 amendment to § 303(b) of the Pennsylvania Workmen's Compensation Act had effectively granted employers complete immunity from suit and had barred their joinder as additional parties in actions brought by injured employees against third parties, it was clearly dispelled in Bell v. Koppers Co., Inc., 481 Pa. 454, 392 A.2d 1380 (1978) and Arnold v. Borbonus, 257 Pa.Super. 110, 390 A.2d 271 (1978).

 Arnold was filed three months after Judge Snyder's April 14, 1978, order and after the instant case had been transferred to the undersigned. In it the Pennsylvania Superior Court affirmed the lower court, which had dismissed a third-party complaint seeking to add an employer as a third-party defendant for the purpose of ascertaining its subrogation rights and the rights of a joint tortfeasor to a credit equal to the workmen's compensation benefits paid by the employer. Precisely what defendant seeks to do here. In affirming the lower court's rejection of the joinder, Judge Hoffman speaking for the court stated at pp. 272-273.

 
In his Concurring Opinion in Hefferin, Judge VAN der VOORT addressed appellant's specific contention that joinder of the employer is not barred by § 303(b) if the joinder is intended to adjudicate the employer's subrogation rights:
 
"The amending Act creates many questions which it ignores, the most obvious of which questions are as follows:
 
"In the event judgment goes against the third party defendant, does he have a right of set-off or recoupment for the amount of compensation paid or to be paid to the injured plaintiff? . . .
 
"Does the employer have a right of subrogation against the third party, and if so, how is this to be determined? Since the employer can no longer be joined under the provisions of the Act, not only questions of procedure will arise, but also questions of collateral estoppel. Despite the shortcomings, I believe it is the intention of the Legislature to preclude the joining of the employer by an alleged third party tortfeasor." Supra at 370, 372 A.2d at 872.
 
We agree that the 1974 amendment to § 303(b) manifests a broad legislative intent to bar the joinder of an employer as an additional defendant. (fn. omitted) Therefore, we conclude that the lower court properly sustained appellee's preliminary objections. (emphasis supplied)

 In Bell, the Pennsylvania Supreme Court in holding that the 1974 amendment to § 303(b) involved the substantive law of Pennsylvania and, therefore, was to be given prospective effect only, summarized the effect of the amendment when it stated 392 A.2d at page 1382:

 
Section 303(b) of the Workmen's Compensation Act more than alters, it obliterates, a cause of action. Prior to this amendment, the third party defendant was able to join the employer and present evidence to a jury concerning the employer's negligence. This evidence might exonerate the third party from all liability by proving the employer's negligence alone had caused the injury or it might result in a determination that the employer and third party were jointly liable. However, the enactment of Section 303(b) has foreclosed the adjudication of the liability of the employer. Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977). (Emphasis supplied)

 It is clear from the foregoing, that under the substantive law of Pennsylvania an employer is absolutely and completely immune from suit as a party for any purpose in an action brought by an injured employee against a third party to recover damages arising out of employment-related injuries. Any such cause of action has been ...


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