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Ford v. Exel

December 17, 2008

CALVIN FORD, PLAINTIFF,
v.
EXEL, INC, DEFENDANT,
v.
RANSTAD NORTH AMERICA, THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM AND ORDER

Before this Court is Third Party Defendant, Randstad North America's, Motion to Dismiss the Third Party Complaint (Doc. No. 18) and Defendant, Exel Inc.'s, Response in Opposition (Doc. No. 21).

Background

Plaintiff Calvin Ford, an employee of Randstad North America ("Randstad"), filed a Complaint in the Court of Common Pleas of Philadelphia against Defendant Exel Inc. ("Exel"), claiming that an employee of Exel had caused him personal injury by negligently operating a forklift. Defendant Exel then removed the action to this Court on April 11, 2008, on the basis of diversity, this Court having jurisdiction over the action pursuant to 28 U.S.C. § 1332(a). After removing the case, Exel filed an answer with affirmative defenses, including that Plaintiff Ford was contributorily and/or comparatively negligent. On September 15, 2008, Exel filed a Third Party Complaint against Randstad, joining them in the action based upon the U.S. Standard Temporary Services Agreement ("the Agreement"), a contract between Randstad and Exel in effect at the time of the accident. Based on two separate contract provisions contained therein, Defendant Exel has brought a Third Party Complaint against Randstad asking that this Court (I) direct that any and all claims by way of subrogation for payment made by or on behalf of Randstad North America with respect to Calvin Ford's claim for worker's compensation benefits be waived and order Randstad to defend and, if necessary, indemnify Exel from any subrogation claim made by or on behalf of any insurance carrier for Randstad; and (II) require Randstad to defend and, if necessary indemnify, Exel from any and all claims and/or damages arising out of the incident. Randstad filed a Motion to Dismiss the Complaint for failure to state a claim for which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6) and Exel responded in opposition.

Standard

In response to a pleading, under Federal Rule of Civil Procedure 12(b)(6), a Defendant may assert by motion that the Plaintiff's complaint "[fails] to state a claim upon which relief can be granted." In analyzing a Rule 12(b)(6) motion to dismiss, we "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citations omitted). "To survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a right to relief above the speculative level . . . .'" Id. at 232 (quoting Bell Atl. Corp. v. Twombley, 127 S.Ct. 1955, 1965, 167 L.Ed. 929, 940 (2007)). In other words, the plaintiff must provide "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s]" of a particular cause of action. Id. at 234. In ruling on a Rule 12(b)(6) motion to dismiss, the court may consider documents "integral to or explicitly relied upon in the complaint." In re Rockefeller Sec. Lit., 184 F.3d 280, 287 (3d Cir. 1999).

As this case was removed to this Federal District Court from the Court of Common Pleas of Philadelphia based on to diversity, the substantive state law of the Commonwealth of Pennsylvania will apply. Erie R.R. v. Tompkins, 304 U.S. 64, 78-79 (1938).

Discussion

Count I: Subrogation

Exel asks that this Court waive any claims that Randstad or its insurer may have by way of subrogation and find that Ranstad is required to defend and if necessary, indemnify, Exel for "claims made by or on behalf of any insurance carrier for Randstad . . . arising out of or relating to any claim made by or on behalf of plaintiff Calvin Ford." Exel claims that an alleged worker's compensation lien arising out of the incident "indirectly qualifies as an action for Ranstad's insurers to Worker's Compensation benefits." Def. Oppos. Brf. In support of this contention, Exel offers the subrogation clause of the Agreement which reads as follows:

With respect to the insurance set forth in this paragraph 4.8, Supplier [Randstad], for itself and its insurers, waives all rights to claims (whether asserted by way of subrogation or otherwise) against Exel Inc. for any loss or damages covered thereby and shall defend and indemnify Exel Inc. from any such actions by its insurers with respect thereto.

Def. Oppos. Brf., Exhibit D at ¶4.8. Exel offers no further support for its claim that the lien is an indirect action by Randstad's insurer. Randstad, however, argues that there has been no claim for subrogation against Exel and, as such, that Randstad has no present duty to defend or indemnify Exel.

Generally a lien constitutes a "legal right or interest that a creditor has in another's property" and, in the case of a worker's compensation lien, would constitute a legal right or interest that the worker's compensation insurer has in the proceeds that a plaintiff might recover in an action against a tortfeasor. Black's Law Dictionary 941 (8th ed. 2004). At this time, it does not appear to this Court that there is any action against Exel "by [Randstad's] insurers" and, as such, the subrogation provision would not appear to be at issue. This Court, however, finds that to dismiss Count I at this stage would be inappropriate, as dismissing the count would require this Court to decide whether a worker's compensation lien constitutes a subrogation action within the meaning of the contract, a question not fully discussed by either party. Additionally, some courts appear to have used the terms subrogation lien, worker's compensation lien and subrogation claim interchangeably and this Court finds further investigation as to this issue is needed. See Ortiz v. Duff-Norton Co., 975 F. Supp. 713 (E.D. Pa. 1997) (using the three terms to describe similar items or activities). Finally, evidence of the alleged worker's compensation lien has not been provided to this Court and this Court is unable to determine whether it has been made and what impact it might have upon the case. Defendant Exel claims that "according to plaintiff's counsel and plaintiff's responses to Exel's request for production of documents, medical benefits and lost wages have been paid by the worker's compensation carrier." However, only the cover sheet for "Exhibit E" is contained in Defendant's appendix, while the document itself is missing. Further, Exel, without providing the statute, argues that there is a "statutory lien" to recover in Pennsylvania. In Pennsylvania, insurers do have a right for subrogation against a third party toftfeasor.

77 Pa. Cons. Stat. Ann. ยง 671 (2008). However, as no evidence of an actual lien has been presented, it appears that the Defendant is arguing that a claim for subrogation can be inferred after the worker's compensation insurer has paid medical benefits and wage losses arising out of a qualifying incident, and that the carrier does not have to affirmatively file a claim for subrogation to fall under the subrogation clause of the Agreement. Further argument and discovery are needed to determine if such a "statutory lien" ...


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