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Photo credit: Bigstock[/caption] The state is not entitled to subrogation of a workers’ compensation lien claimed in a third-party settlement agreement stemming from a case involving a former employee of the Attorney General's Office, the Commonwealth Court has ruled. A three-judge panel consisting of Judges Renée Cohn Jubelirer, P. Kevin Brobson and Dan Pellegrini upheld the Workers' Compensation Review Board's ruling declining to grant subrogation to the state. "The issue on appeal is whether employer, which is self-insured, is entitled to subrogation against claimant’s third-party settlement for those benefits he received during the time period in which he was receiving his full salary under the Heart and Lung Act. Because under our precedent, employer was not entitled to subrogation for the period in which claimant was eligible for both Heart and Lung and WC benefits, we affirm the board’s order so holding," Jubelirer said in the court's opinion. "This is so even though as part of his third-party settlement, he recovered the amounts employer would have received had it been entitled to subrogation," she continued. "However, because, as the board recognized, claimant has begun to receive benefits solely under the WC Act, this matter is remanded for a determination regarding employer’s subrogation rights related to those benefits." The claimant, Jeffrey Piree, was injured in a work-related car accident. According to Jubelirer, Piree obtained a third-party recovery in the amount of $1.255 million; there was an accrued workers' compensation lien in the amount of $311,824; the balance of recovery was $943,175.10; and the net lien amount was $204,672. After that, Piree and the state filed petitions to review compensation benefits, seeking a determination on whether the state was entitled to reimbursement of the $204,672. Piree requested the workers' compensation judge review the subrogation agreement to remove payments made pursuant to the Heart and Lung Act from the calculation of the lien. The OAG responded that the amounts included in the third-party settlement agreement were only the amounts payable under the the Workers' Compensation Act and claimed that it had not yet been paid its net WC lien, Jubelirer said. The parties submitted the third-party settlement agreement to the workers' compensation judge. The judge found that state had met its burden of proving that it had a valid subrogation lien as detailed in the agreement and that the lien had not yet been paid, according to Jubelirer. Piree appealed to the board, arguing that the judge erred in concluding the state was entitled to subrogation for benefits that were paid to him under the Heart and Lung Act. "The board reversed the WCJ’s determination based on this court’s decision in Stermel v. Workers’ Compensation Appeal Board (City of Philadelphia)," Jubelirer said. "This court, in Stermel, held that self-insured public employers compensating employees injured in motor vehicle accidents under both the WC Act and the Heart and Lung Act were excluded 'from subrogating any indemnity or medical expenses, regardless of how they were categorized' by the self-insured employer, 'because the claimant was still due full salary and benefits due to his coverage under the Heart and Lung Act.'” Bradley R. Andreen of O'Brien, Rulis & Bochicchio represents the state and Michael Dryden of Willig, Williams & Davidson represents Piree. Neither responded to requests for comment.