Submitted: March 17, 2017
BEFORE: HONORABLE P. KEVIN BROBSON, Judge HONORABLE ANNE E.
COVEY, Judge HONORABLE JOSEPH M. COSGROVE, Judge
KEVIN BROBSON, Judge
Anthony Kalmanowicz (Claimant) petitions for review of an
order of the Workers' Compensation Appeal Board (Board).
The Board affirmed the decision of Workers' Compensation
Judge Howard Spizer (WCJ), concluding that Eastern
Industries, Inc. (Employer) is entitled to subrogation of
Claimant's workers' compensation benefits. We now
1, 2009, during the course of his employment as a truck
driver for Employer, Claimant was injured in a motor vehicle
accident, resulting in a chest wall contusion, a wrist
contusion, and post-traumatic stress disorder (PTSD).
Claimant filed a claim petition on April 26, 2010, which was
assigned to Workers' Compensation Judge Patrick J.
Cummings (WCJ Cummings). On or around April 27, 2011,
Claimant entered into a settlement agreement with a
third-party involved in the June 1, 2009 motor vehicle
accident in the amount of $15, 000.00, with a net recovery
(after attorneys' fees and costs) of $9, 498.25. On
October 11, 2011, after holding a hearing and receiving
briefs from the parties, WCJ Cummings granted Claimant's
claim petition, awarding benefits for the injuries, including
PTSD, sustained during the June 1, 2009 accident. The October
11, 2011 decision and order also required Employer to pay
Claimant's reasonable and necessary medical expenses.
(Reproduced Record (R.R.) at 104a.)
13, 2012, Employer filed a petition to modify or suspend
Claimant's benefits (Suspension Petition), alleging that
Claimant had failed to reimburse Employer a subrogation lien
as required by Section 319 of the Workers' Compensation
By opinion and order circulated on June 10, 2013, the WCJ
concluded that, at the time of Claimant's settlement of
the third-party claim, Employer had not sought subrogation or
accepted Claimant's work injuries. Thus, the WCJ held
that there were no funds available to Employer for
subrogation and denied Employer's Suspension Petition.
Employer appealed the June 10, 2013 order to the Board.
opinion and order dated September 10, 2015, the Board
reversed, concluding that Section 319 of the Act granted
Employer an absolute right to subrogation, which could only
be abrogated by consent. The Board explained that there was
"no indication that [Employer] sought to relinquish or
waive its right to subrogation and, to the contrary, it
clearly argued for subrogation." (R.R. at 60a.)
Accordingly, the Board reversed the order of the WCJ and
remanded for further proceedings to take evidence and make
findings on Employer's entitlement to subrogation.
remand, by order and opinion dated May 13, 2016, the WCJ
disposed of the matter by adopting and incorporating by
reference a stipulation of facts agreed to by the parties. In
pertinent part, the parties' stipulation provided that
"the subrogation amount being sought by [Employer]
equals $9, 498.25. . . . Claimant agrees [Employer] is
entitled to take a credit of $65.00 per week against the
Claimant's ongoing receipt of indemnity benefits until
such time that the $9, 498.25 subrogation lien is paid in
full." (R.R. at 84a.) The stipulation also provided that
"nothing in this [s]tipulation of [f]acts will prevent
either party from filing an appeal from [the WCJ's order
dated May 13, 2016]." (Id.) Thus, the WCJ
concluded that Claimant was entitled to workers'
compensation benefits subject to deductions as set forth in
the parties' stipulation of facts. Claimant appealed from
the WCJ's May 13, 2016 order.
appeal to the Board, Claimant argued that Employer was not
entitled to subrogation because Employer was contesting
Claimant's claim petition at the time the third-party
settlement funds were distributed. By order and opinion dated
October 5, 2016, the Board affirmed the WCJ's order,
concluding that it had previously addressed the issue raised
by Claimant in its September 10, 2015 opinion and order. The
Board also noted that Claimant had followed proper procedure
to preserve his claim for further appellate review. Claimant
subsequently filed the instant petition for review, asserting
this claim of error by the Board. 
workers' compensation matters, subrogation serves several
goals: (1) it prevents a claimant's double recovery for
the same injury; (2) it protects an employer from incurring
liability for the negligence of a third party; and (3) it
prevents a third party from evading liability for his
negligent conduct. Dale Mfg. Co. v. Bressi, 421 A.2d
653, 654 (Pa. 1980). Section 319 of the Act provides that an
employer is entitled to recover its expenses when a third
party causes the work injury "in whole or in part."
We have held that "subrogation is automatic and by its
terms, admits no express exceptions, equitable or
otherwise." Serrano v. Workers' Comp. Appeal Bd.
(Ametek, Inc.), 154 A.3d 445, 450 (Pa. Cmwlth. 2017). An
employer bears the burden to establish its right to
subrogation by demonstrating "that it was compelled to
make payments due to the negligence of a third party and that
the fund against which the employer seeks subrogation was for
the same injury for which the employer is liable under the
Act." Young v. Workers' Comp. Appeal Bd. (Chubb
Corp.), 88 A.3d 295, 302 (Pa. Cmwlth.), appeal
denied, 97 A.3d 746 (Pa. 2014).
does not suggest that Employer failed to meet the first prong
of the test set forth in Young by failing to
demonstrate that it was compelled to make payments due to the
negligence of a third party. Claimant argued before the Board
that because the third-party settlement funds were
distributed prior to Employer accepting Claimant's
work-related injury, there was no "fund against which
[E]mployer [may] seek subrogation, " but Claimant does
not raise this argument on appeal to this Court. See
Young, 88 A.3d at 302. Instead, Claimant
contends that Employer effectively waived its right to
subrogation by contesting Claimant's claim petition. We
are very narrow circumstances in which a court may find that
an employer waived its right to subrogation under the Act. An
employer may agree via contract to waive its right to
subrogation of accrued liens as well as future third-party
settlements. Fortwangler v. Workers' Comp. Appeal Bd.
(Quest Diagnostics), 113 A.3d 28, 35 (Pa. Cmwlth. 2015).
Such a contract, however, must expressly waive the right to
subrogation. Id. at 36 (concluding that settlement
contract did not include waiver of future subrogation rights
because such rights were not expressly provided for in
contract). We have held that a party's failure to
exercise "due diligence" in pursuing a
claim-i.e. failing to raise a claim for subrogation
until fourteen months after a claimant settled his or her
claim-may constitute waiver of the right to subrogation.
Independence Blue Cross v. Workers' Comp. Appeal Bd.
(Frankford Hosp.), 820 A.2d 868, 872 (Pa. Cmwlth. 2003).
Absent bad faith or "dereliction of duty, " we have
never concluded that an employer has waived its right to
subrogation under the Act without an express agreement to
waive that right. Glass v. Workers' Comp. Appeal Bd.
(City of Philadelphia), 61 A.3d 318, 326 (Pa. Cmwlth.
2013), (quoting Thompson v. Workers' Comp. Appeal Bd.
(USF & G), 781 A.2d 1146, 1154 (Pa. 2001)).
cites no precedent to support his argument that an employer
consents to forego subrogation by contesting a claim
petition. Instead, Claimant asserts that he and others
similarly situated would be "held hostage with regard to
the settlement and distribution of third[-]party claims when
their employer refuses to accept a work[-]related injury
claim." (Claimant's br. at 10.) Claimant develops no
argument other than his bald assertion that an employer may
not recover a subrogation lien if a third party settles the
claim prior to an employer accepting liability for the
asserted injury. To the contrary, such a conclusion would
hold an employer "hostage" by forcing them to
accept any injury alleged by a claimant when a third party is
involved in the incident. Any employer failing to accept a
claim would expose itself to the possibility that a Claimant
may protect a third-party settlement from subrogation by
settling the third-party claim while the employer contests
the claim petition. Furthermore, Employer was well within its
rights to contest Claimant's claim petition and was under
no obligation to accept the work-relatedness of any injury
Claimant sustained in the June 1, 2009 motor vehicle
instant case, we discern no evidence that could support a
conclusion that Employer acted in bad faith or failed to
exercise due diligence in enforcing its subrogation rights,
and we decline to expand our definition of conduct by which
an employer may implicitly waive its absolute right to
subrogation. See Thompson, 781 A.2d at 1151. Thus,
Employer did not waive ...