I. Standard for Summary Judgment
Summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). When ruling on a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-movant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). The Court must accept the non-movant's version of the facts as true, and resolve conflicts in the non-movant's favor. Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 122 L. Ed. 2d 659, U.S. , 113 S. Ct. 1262 (1993). The moving party bears the initial burden of pointing out the absence of genuine issues of material fact, see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986), but once it has done so, the non-moving party cannot rest on its pleadings, see Fed. R. Civ. P. 56(e). Rather, the non-movant must come forward with facts showing that a genuine issue exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
II. FACTUAL BACKGROUND
The following facts are undisputed. At the time of the accident, plaintiff Ronald Getek ("Getek") was a New Jersey resident who was employed by Princeton Biomedical Laboratories ("Princeton Biomedical") which had its principal place of business in Levittown, Pennsylvania. Princeton Biomedical also had an office in New Jersey. Getek was based at Princeton Biomedical's Levittown office. On January 27, 1990, Getek was instructed by his employer to make a delivery to a customer in New Jersey. Getek used his own car, which was registered in New Jersey and insured in accordance with New Jersey law, to make the delivery. While making the delivery, Getek was involved in an automobile accident in Orange, New Jersey.
Following the accident, Getek sought workers' compensation benefits through defendant Ohio Casualty Insurance Company ("Ohio Casualty"), the workers' compensation carrier for Princeton Biomedical. Princeton Biomedical's policy with Ohio Casualty provided coverage in accordance with the workers' compensation laws of both Pennsylvania and New Jersey. On March 20, 1990, Getek elected to receive his benefits in accordance with the workers' compensation laws of Pennsylvania. From approximately March 20, 1990 until March 9, 1994, Ohio Casualty paid Getek $ 52,137.89 in wage loss benefits, and $ 54,492.52 in medical expense payments.
On May 3, 1990, Getek filed a complaint in the Mercer County, New Jersey Superior Court against the driver of one of the other automobiles involved in the accident, seeking damages for the personal injuries that he suffered in the accident. The defendant in the New Jersey lawsuit was also a resident of New Jersey, and his car was also registered in New Jersey. The lawsuit was ultimately settled in March, 1993, for $ 100,000. Ohio Casualty asserted a subrogation lien against the settlement proceeds, which have yet to be distributed to either Getek or Ohio Casualty.
A. Conflict of Law Analysis: True or False Conflict
Defendant contends that New Jersey law applies to this case. Plaintiff disagrees, arguing that Pennsylvania law applies. Before engaging in choice of law analysis, however, the Court must determine whether there is a "false conflict" between the ostensibly competing bodies of law. A false conflict exists if only one jurisdiction's governmental interests would be impaired by the application of the other jurisdiction's law. In such a situation, the Court must apply the law of the state whose interests would be harmed if its law were not applied. See Lacey v. Cessna Aircraft Co., 932 F.2d 170, 187 (3d Cir. 1991).
New Jersey law allows workers' compensation carriers to assert a statutory lien against any recovery by an injured employee against a third party tortfeasor. See N.J. Stat. Ann. § 34:15-40 (West 1994).
At the time in question, however, Pennsylvania, prohibited it, thus creating a conflict between the policies of the two states regarding subrogation. See 75 Pa. Con. Stat. Ann. § 1720 (effective October 1, 1994) (repealed August 31, 1993).
Ohio Casualty argues that this apparent conflict is not what it seems because Section 1720, a part of the Pennsylvania Motor Vehicle Financial Responsibility Law (75 Pa. Con. Stat. Ann. §§ 1701 et seq.), which admittedly bars subrogation, should be read together with Section 1722 of the same statute which prohibits an injured employee from asserting a tort claim against a third party if the employee elected to receive workers' compensation benefits. See 75 Pa. Con. Stat. Ann. § 1722.
Read in this fashion, according to Ohio Casualty, there is no conflict since Pennsylvania, just as New Jersey, would allow an injured employee to collect either workers' compensation benefits or tort damages, but not both.
The Court disagrees that Section 1720 should be read in pari materia with Section 1722. Two statutes are said to be in pari materia "[if they] pertain to the same subject - and, under settled principles of statutory construction, should therefore be construed 'as if they were one law'". Erlenbaugh v. United States, 409 U.S. 239, 243, 34 L. Ed. 2d 446, 93 S. Ct. 477 (1972) (quoting United States v. Freeman, 44 U.S. 556, 564, 11 L. Ed. 724 (1845)). That two sections of the same legislative enactment relate to the same subject matter does not compel pari materia construction if the two sections in question were intended to serve significantly different purposes. Id. at 244. The Court finds that this is the case here. While both Section 1720 and Section 1722 are related, i.e., each defines some part of a claimant's rights under the Pennsylvania workers' compensation benefit scheme, the two sections, on their face, address different situations, and serve different functions. While Section 1720 bars a workers' compensation carrier from asserting the right to subrogation against the claimant, Section 1722, on the other hand, bars the claimant from collecting in a tort action against a third party if the claimant elected to receive workers' compensation benefits. Therefore, the Pennsylvania policy towards subrogation claims by a workers' compensation carrier is governed by Section 1720, which unambiguously prohibits it, and Section 1722, which defines the rights of a third party (not of the workers' compensation carrier) vis a vis a workers' compensation claimant, cannot be read to limit it or modify it in any way. See Carrick v. Zurich-American Ins. Group, 14 F.3d 907, 911 (3d Cir. 1994) (workers' compensation carrier has no "cognizable interest" to assert under Section 1722).
Since the application of Pennsylvania law, which bars subrogation, and of New Jersey law, which permits it, would result in different outcomes, there is a "true conflict" which the Court must resolve in this case.
B. Choice of Law Analysis: Pennsylvania Law Applies
In a diversity action, "the choice of law rules of the forum state [determine] which state's law will be applied." Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988) (citing Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1021, 85 L. Ed. 1477 (1941). Accordingly, the Court will apply Pennsylvania's choice of law rules.
In Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (Pa. 1964), the Pennsylvania Supreme Court abandoned the traditional lex loci delicti conflicts rule for "a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court." Id. at 805. In commenting on the development of the rule set forth in Griffith, the Third Circuit stated:
this new conflicts methodology has evolved into a hybrid approach that 'combines the approaches of both Restatement II (contacts establishing significant relationships) and "interest analysis" (qualitative appraisal of the relevant States' policies with respect to the controversy).'