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In this case, the claimant sustained a severe injury while using a stone crusher that malfunctioned. The employer accepted liability for the injury through a notice of compensation payable (NCP). Eventually, the claimant was adjudicated an incapacitated person, and a Guardian was appointed. The Guardian filed a product liability lawsuit in 2014, resulting in a substantial settlement. After distribution of the settlement proceeds was ordered by the trial court, a Special Needs Trust (Trust) was established, and the parties signed a Third-Party Settlement Agreement (TPSA). The TPSA said the employer was responsible for 33.7% of the claimant’s future weekly wage loss and medical benefits.

In June of 2018, the Pennsylvania Supreme Court decided Whitmoyer v. WCAB (Mountain Country Meats), 186 A.3d 947 (Pa. 2018), holding that § 319 of the Act precludes employers from subrogating future medical benefits after a TPSA is executed. Two months after Whitmoyer, the Guardian filed a petition to review, seeking to recover all the medical benefits paid from the Trust after the TPSA was executed and relief from the Trust’s obligation to pay any future medical benefits. The Workers’ Compensation Judge granted the petition and concluded that the employer was obligated to reimburse the Trust for any medical expenses the Trust paid as of the date of the Whitmoyer decision and not as of the date of the TPSA. The parties filed appeals with the Workers’ Compensation Appeal Board, which affirmed. The parties then filed appeals with the Commonwealth Court.

The court affirmed the judge and the Board, concluding Whitmoyer was retroactive to the date it was decided and not as of the date of the TPSA. In doing so, the court rejected the employer’s arguments—that the judge erred by applying Whitmoyer since Whitmoyer was before the Board at the time the TPSA was signed and that the judge erred in applying Whitmoyer retroactively. According to the court, it was proper for Whitmoyer to be applied since the TPSA was not a final resolution of the claim, thereby permitting the judge to review, modify or set it aside under § 413 (a) of the Act. The court also held that the status of the TPSA’s terms for future medical expense subrogation was not “pending on direct appeal” at the time Whitmoyer was decided; therefore, the court declined to apply Whitmoyer retroactively to the date of the TPSA’s origination. Because § 319 of the Act is an existing statute which the Pennsylvania Supreme Court had not yet interpreted, Whitmoyer did not establish a new rule of law. The court noted that the TPSA was not a final resolution of the claim and was, therefore, subject to review under § 413 of the Act. The court further noted that the Guardian preserved the issue of Whitmoyer’s application to the TPSA by raising it at the earliest point and was, thus, entitled to the benefit of the Whitmoyer ruling as of the date it was decided.

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