CAROLYN RICKARD, ADMINISTRATRIX OF THE ESTATE OF WILLIAM RICKARD, DECEASED, Appellant
AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY, Appellee
from the Order Entered April 28, 2015 In the Court of Common
Pleas of Allegheny County Orphans' Court at No(s):
BEFORE: BENDER, P.J.E., BOWES, PANELLA, SHOGAN, LAZARUS,
OLSON, DUBOW, MOULTON, and SOLANO, JJ.
Carolyn Rickard, Administratrix of the Estate of William
Rickard, appeals from the order entered April 28, 2015, which
denied her November 18, 2014 Petition for Order of
Distribution in a Wrongful Death Action ("Distribution
Petition"), for amounts secured through an
insurance-claim settlement. For the reasons that follow, we
reverse and remand to the common pleas court for proceedings
consistent with this Opinion.
2, 2010, William Rickard ("the Deceased") and
Appellant (collectively, "the Rickards"), filed for
bankruptcy. Distribution Petition, 11/18/14, Attachment
(In re: William J. Rickard and Carolyn M. Rickard,
Bankr. No. 10-24821-JAD (Bankr. W.D.Pa. 10/20/14), Memorandum
Opinion ("Bankruptcy Court Memorandum"), 10/20/14,
at 1). On November 16, 2012, as he was on his way to work in
his personal vehicle, the Deceased was struck from behind,
rendering him paraplegic. Distribution Petition, 11/18/14, at
unnumbered 1-2. At the time of the accident, the Deceased
maintained a personal automobile insurance policy that
included $250, 000 in underinsurance coverage through
American National Property and Casualty Company
("ANPAC"). Id. at 2. Because the
Deceased's accident was work related, the Western
Pennsylvania Teamsters and Employers Welfare Fund ("the
Welfare Fund"), a self-insured employee benefit plan
governed by ERISA that covered the Deceased, paid $279,
498.03 in medical bills and disability payments. Bankruptcy
Court Memorandum, 10/20/14, at 2.
the Deceased was alive, he made a claim for underinsured
benefits to ANPAC for the injuries he sustained in the
accident. As noted, the Rickards were debtors in bankruptcy
at the time of the motor vehicle accident. Upon
petition, the bankruptcy court authorized appointment of
separate counsel to pursue the accident litigation but,
significant to the disposition of this appeal, retained the
right to approve the settlement while the matter was in
bankruptcy. Bankruptcy Court Memorandum, 10/20/14, at 2.
Appointed counsel had no authority to enter into a settlement
without the bankruptcy court's approval. ANPAC issued a
settlement check for $250, 000 on January 13, 2014, and
appointed counsel placed the check in his safe.
Appellant's Brief at 7. The Welfare Fund asserted a lien
for the medical benefits it paid for the Deceased's
treatment against any recovery by the Deceased for personal
injury sustained in the accident. Distribution Petition,
11/18/14, at unnumbered 2. The Rickards filed a Motion to
Approve Settlement of the Underinsured Motorist Claim in the
Bankruptcy Court, seeking a payment of "$100, 000 (or
40% of the recovery) paid to [Appellant's counsel],
payment of $1, 000 to bankruptcy counsel for [the Rickards],
and payment of the remaining balance of $149, 000 to Mr.
Rickard." Bankruptcy Court Memorandum, 10/20/14, at 3.
Because the proposed settlement failed to offer distribution
of any funds to the Welfare Fund for its subrogated interest,
the Welfare Fund objected to the Rickards' motion.
October 20, 2014, the bankruptcy court refused to approve the
settlement or distribution of the accident litigation
proceeds, nor did it make any distribution on its own,
concluding that the Welfare Fund's plan
documents "unequivocally provide that the
Welfare Fund is to be paid its subrogated interest first
before payment to anyone else." Bankruptcy Court
Memorandum, 10/20/14, at 8 (referencing an audio
recording of a hearing held in the bankruptcy
court). The bankruptcy court further stated:
The outcome of this case should not be construed as the
[c]ourt concluding that counsel does not deserve his fee. In
fact, the opposite is true. The record in this case is that
counsel obtained an excellent result, worked diligently,
competently, and professionally. Had the [c]ourt been writing
on a clean slate, the [c]ourt surely would have concluded
that counsel has earned his contingent fee.
Id. at 10. The order entered by the bankruptcy court
provided: "And now, this 20th day of October,
2014, for the reasons set forth in the Memorandum
Opinion filed herewith, the Motion to Approve
Settlement of the Underinsured Motorist Claim
is denied." Bankruptcy Court Order, 10/20/14
("Bankruptcy Court Order") (italics in original;
emphasis added). Thus, there existed no settlement of the
days later, October 22, 2014, the day Appellant's counsel
avers she received the Bankruptcy Court Memorandum, William
Rickard died, allegedly from the injuries he sustained in the
accident. Distribution Petition, 11/18/14, at unnumbered 3;
Appellant's Brief at 7. The next day, October 23, 2014,
because there was no settlement, no distribution, and no
living payee, counsel for Appellant returned the ANPAC check.
Appellant's Brief at 7. The bankruptcy proceedings
terminated one week later on October 29, 2014, when the
Rickards' case was dismissed from bankruptcy with no
settlement or distribution having been made. Distribution
Petition, 11/18/14, at unnumbered 3.
then submitted a wholly new claim for underinsurance benefits
to ANPAC pursuant to the Pennsylvania Wrongful Death Act, 42
Pa.C.S. § 8301, on behalf of herself and the
Deceased's daughter, Sarah Rickard. Exhibit E attached
to Appellant's "Brief in Support of the Wrongful
Death Claim of Decedent's Widow and Minor Child"
filed in the orphans' court is a letter from
Appellant's counsel to ANPAC. That letter states, in
Enclosed please find a copy of the Short Certificate
evidencing the granting . . . of Letters of Administration on
the Estate of William J. Rickard to Carolyn Rickard on
October 29, 2014.
As I previously informed you, on October 22, 2014, Mr.
Rickard succumbed to the injury and illness suffered as a
result of his automobile accident.
Claim is hereby made, by Carolyn Rickard, Administratrix,
under the Pennsylvania Wrongful Death Act, 42 Pa.C.S.A.
§ 8301 and Pa.R.C.P. 2202(a) for the full amount of the
underinsurance coverage under the Rickards' auto policy.
in Support of the Wrongful Death Claim of Decedent's
Widow and Minor Child, Exh. E; Reproduced Record at 84A.
this wrongful-death claim, ANPAC issued a check made payable
to counsel and Appellant. Upon receipt of the ANPAC check,
Appellant filed the within Distribution Petition before the
orphans' court division of the common pleas court
pursuant to Allegheny County Local Rule 2039 seeking
distribution of the underinsurance settlement funds. The
orphans' court, in denying the Distribution Petition,
determined that it was bound by collateral estoppel because
the "issue before it [is] virtually identical to the
issue decided by" the bankruptcy court. Orphans'
Court Opinion, 4/28/15, at unnumbered 2. In the alternative,
the orphans' court concluded that the Welfare Fund's
subrogated interest was superior to that of Appellant and her
filed a timely appeal. The orphans' court did not direct
Appellant to file a Pa.R.A.P. 1925(b) statement, and none was
filed. Following oral argument, a panel of this Court, with
one judge dissenting, filed a memorandum opinion affirming
the orphans' court's decision. Rickard v.
American National Property and Casualty Co., 774 WDA
2015 (Pa. Super. filed August 9, 2016) (unpublished
memorandum). Thereafter, Appellant filed an application for
reargument en banc. On October 20, 2016, this Court
granted en banc reargument and withdrew the August
9, 2016 decision. Following the filing of new briefs, we
entertained oral argument on March 21, 2017. This matter is
now ripe for disposition. Appellant raises the following
1) Does the instant bankruptcy court order which does not
address whether an ERISA Fund may extend its subrogation lien
to a decedent's wife and minor daughter serve as a basis
to collaterally estop an orphans' court claim for
wrongful death damages made after the close of the bankruptcy
2) Are the wrongful death beneficiaries, spouse and minor
child, precluded from recovering benefits for their separate
and distinct injury by lien language in an ERISA Health and
Welfare Plan, when neither the lien amounts nor lien language
apply to either of the beneficiaries?
3) Does the Supreme Court's holding in U.S. Airways
v. McCutchen, 133 S.Ct. 1537 (2013) require that a
subrogation lien on a decedent's recovery for medical
benefits paid out during a decedent's lifetime, extend to
his wife and minor daughter's separate and distinct
recovery in a wrongful death action?
Appellant's Brief at 4 (issues reordered).
issue of whether the court applied the correct legal standard
in distributing the wrongful death proceeds raises a question
of law, i.e., construction of the Welfare Plan's
subrogation and reimbursement clauses, which we review de
novo. Moscatiello v. Hilliard, 939 A.2d 325,
327 (Pa. 2007) (questions of law are subject to de
novo review, and scope of review is plenary). The basis
for the orphans' court's denial of Appellant's
Distribution Petition was that "it [was] barred by the
doctrine of collateral estoppel, " Orphans' Court
Opinion, 4/28/15, at unnumbered 2, which the court, without
analysis, held applicable. We disagree.
Collateral estoppel applies if (1) the issue decided in the
prior case is identical to one presented in the later case;
(2) there was a final judgment on the merits; (3) the party
against whom the plea is asserted was a party or in privity
with a party in the prior case; (4) the party or person privy
to the party against whom the doctrine is asserted had a full
and fair opportunity to litigate the issue in the prior
proceeding and (5) the determination in the prior proceeding
was essential to the judgment. Collateral estoppel, sometimes
referred to as issue preclusion, operates to prevent a
question of law or an issue of fact which has once been
litigated and adjudicated finally in a court of competent
jurisdiction from being relitigated in a subsequent suit.
Kituskie v. Corbman, 452 Pa. Super. 467, 682 A.2d
378, 382 (1996) (citations and quotation marks omitted). The
decision to allow or to deny a prior judicial determination
to collaterally bar relitigation of an issue in a subsequent
action historically has been treated as a legal issue. As
such, this Court is not bound by the trial court's
conclusions of law and we may draw our own conclusions from
the facts as established. Meridian Oil & Gas Enters.,
Inc. v. Penn Cent. Corp., 418 Pa. Super. 231, 614 A.2d
246, 250 (1992), appeal denied, 534 Pa. 649, 627
A.2d 180 (1993).
Westfield Ins. Co. v. Astra Foods Inc., 134 A.3d
1045, 1049-1050 (Pa. Super. 2016), appeal denied,
102 EAL 2016, 2016 WL 5844709 (Pa. September 30, 2016).
present case, bankruptcy counsel asked the bankruptcy court
to approve the settlement involving a living client in
receipt of medical benefits from the Welfare Fund, but the
bankruptcy court refused. In re: William J. Rickard and
Carolyn M. Rickard, Bankr. No. 10-24821-JAD (Bankr. W.D.
Pa., filed October 20, 2014). Thus, there was no settlement.
Moreover, there currently is no bankruptcy action pending.
William Rickard has died. Appellant and the Deceased's
minor daughter have discrete claims under the Pennsylvania
Wrongful Death Statute, and these claims did not accrue until
after the bankruptcy court's memorandum and order.
issue before us is whether a wrongful death beneficiary's
recovery under the Pennsylvania Wrongful Death Act is subject
to a subrogation claim for benefits paid on behalf of the
decedent for medical treatment during the decedent's
lifetime. This issue was not before the bankruptcy court, nor
could it have been, as all of the relevant bankruptcy
proceedings occurred during the Deceased's lifetime.
Thus, under the first prong of the test for collateral
estoppel, the issue decided in the bankruptcy court is not
identical to that presented herein.
second prong requires a final adjudication on the merits. A
motion to approve settlement was before the bankruptcy court,
and the court denied it. The Deceased's death two days
later gave rise to a wholly new claim, and seven days later,
the debtors' case was dismissed from bankruptcy. There
was no settlement, no determination on disbursement, and the
bankruptcy court did not ...