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GETEK v. OHIO CAS. INS. CO.

November 30, 1994

RONALD GETEK, Plaintiff,
v.
OHIO CASUALTY INSURANCE CO., et al., Defendants.



The opinion of the court was delivered by: EDUARDO C. ROBRENO

 EDUARDO C. ROBRENO, J.

 NOVEMBER 30, 1994

 Plaintiff is a New Jersey resident who is employed in Pennsylvania, and was injured in an automobile accident in New Jersey while in the scope of his employment. As a result of the accident, plaintiff collected workers' compensation benefits under his employer's Pennsylvania workers' compensation policy. Also as a result of the accident, plaintiff brought and later settled for $ 100,000 a personal injury action in New Jersey Superior Court against the driver of one of the other vehicles involved in the accident. The insurance carrier who provided coverage to plaintiff's employer under the Pennsylvania workers' compensation law now claims that it is entitled to a subrogation claim against the $ 100,000 settlement of the New Jersey personal injury action for the money paid to plaintiff under the workers' compensation policy. The plaintiff has filed this declaratory judgment action seeking an adjudication of his rights to the settlement proceeds. Both the defendant insurance company and the plaintiff have moved for summary judgment. For the reasons that follow, the plaintiff's motion will be GRANTED and the defendant's motion will be DENIED.

 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.

 III. DISCUSSION

 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). *fn1" 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). *fn2" 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. ...


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