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THOMAS E. MYERS v. COMMERCIAL UNION ASSURANCE COMPANIES (12/20/84)

decided: December 20, 1984.

THOMAS E. MYERS
v.
COMMERCIAL UNION ASSURANCE COMPANIES, NICEL INDUSTRIES, INC., THE TRAVELERS INSURANCE COMPANIES, BRADLEY A. MILLER, AND THE CITY OF MCKEESPORT. APPEAL OF THE TRAVELERS INSURANCE COMPANIES AND BRADLEY A. MILLER AT NOS. 2 AND 4 W.D. APPEAL DOCKET, 1984. THE TRAVELERS INSURANCE COMPANIES V. COMMERCIAL UNION ASSURANCE COMPANIES. APPEAL OF THE TRAVELERS INSURANCE COMPANIES AND BRADLEY A. MILLER AT NO. 3 W.D. APPEAL DOCKET, 1984



Nos. 2, 3, and 4 W.D. Appeal Docket, 1984, Appeals from the Orders of the Superior Court of Pennsylvania at Nos. 114, 205, and 115 Pittsburgh, 1982, filed September 9, 1983, affirming in part and reversing in part the Judgments of the Court of Common Pleas of Allegheny County, Civil Division, at Nos. GD 80-02731 and GD 80-8732, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson and Papadakos, JJ. Zappala, J., did not participate in the consideration or decision of this case. Hutchinson, J., joins in this opinion and files a separate concurring opinion.

Author: Mcdermott

[ 506 Pa. Page 494]

OPINION

Thomas E. Myers, while upon the business of his Illinois employer, was involved in an accident in Pennsylvania. Injuries incurred rendered him quadriplegic. At the time of the tragic incident, Mr. Myers, like his employer, was a resident of Illinois. Mr. Miller, the other driver involved, was a Pennsylvania resident and insured under a no-fault policy issued by Travelers Insurance Company. As the no-fault carrier, Travelers, forthrightly paid $74,000 medical expenses, and $250,000 in settlement for non-economic loss to Mr. Myers.

Mr. Myers also filed a claim for benefits from his employer, Nicel Industries, under the Illinois Workmen's Compensation Law. Both Nicel Industries and their compensation carrier, Commercial Union Assurance Companies contested his claim. The contest was resolved on June 28, 1979, by the Industrial Commission of Illinois in favor of Mr. Myers. He was awarded medical benefits and $120.00 per week for life from Commercial Union. Mr. Myers did not receive medical benefits from Commercial Union from the date of the accident to the date of the award. Commercial Union contended they were not obliged because those expenses had already been paid by Travelers.

Mr. Myers filed for Declaratory Judgment in an action filed in Allegheny County, Pennsylvania. The action sought an adjudication of the rights and duties owed to and by the various parties: including Commercial Union's claim for subrogation of the workmen's compensation benefits it

[ 506 Pa. Page 495]

    paid, from the settlement that Myers received for non-economic loss. In a separate equity action Travelers sued Commercial Union for reimbursement of the medical benefits paid Mr. Myers as the no-fault obligor. All actions were consolidated and the case submitted on stipulated facts. The trial court, per the honorable S. Louis Farino, dismissed the respective claims of both insurance companies. They appealed: Commercial Union challenging the decision on its subrogation claim, and Travelers challenging the decision on its claim for reimbursement.

With regard to the claim of Commercial Union the court of common pleas had held that Pennsylvania law applied, and that Commercial Union had no basis under Pennsylvania law to support subrogation. On appeal the Superior Court reversed*fn1 and held that the correct law to be applied was that of Illinois, and that under the Illinois Workmen's Compensation Act*fn2 a compensation carrier has a right to full subrogation of amounts paid by way of workmen's compensation where the employee recovers from a third party tortfeasor.*fn3 See 48 Ill.St. § 138.5(b). The court's decision was based on its evaluation of the significant contacts which the state of Illinois had with the underlying dispute, and the lack of countervailing contacts by the Commonwealth of Pennsylvania. Their analysis was in accord with this Court's decision in Griffith v. United Airlines, Inc., 416 Pa. 1, 203 A.2d 796 (1964). Mr. Myers sought allowance to appeal from the Superior Court decision but we denied allocatur. 260 W.D.Alloc.Dkt. 1983.

With regard to the claim by Travelers for reimbursement, the trial court had held that application of Section 106(a)(3)

[ 506 Pa. Page 496]

    of the Pennsylvania No-Fault Act,*fn4 upon which Travelers' claim was based, was limited to claims by one Pennsylvania no-fault carrier against another. On appeal the Superior Court affirmed the order of the lower court, but not on the basis relied upon by Judge Farino. Rather, in an apparent effort to be consistent with its earlier analysis concerning Commercial Union's subrogation claim, the court concluded that any claim against the workmen's compensation carrier should be governed by the law of Illinois; and held that Section 106(a)(3) did not apply to benefits payable by the compensation carrier of an Illinois employer to an Illinois employee. Upon petition of Travelers we granted allocatur. We now reverse.

This Court in Griffith v. United Airlines, Inc., held that in resolving a potential conflict between the application of state laws we must consider the policies and interest underlying the particular issue before the court. Id., 416 Pa. at 21, 203 A.2d at 805. As further explained in McSwain v. McSwain, 420 Pa. 86, 215 A.2d 677 (1966), we must analyze the:

     extent to which one state rather than another has demonstrated, by reason of its policies and their connection and relevance to the matter in dispute, a priority ...


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