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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

PENN MILLERS INSURANCE CO. v. TILL et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:13-cv-06888 Search Pacer
ACE Group party(s): 
Court Type: 
Federal
US District Court: 
Eastern District of Pennsylvania
Date Filed: 
Nov 26 2013

COUNT I - PENNSYLVANIA WORKERS' COMPENSATION ACT,
SECTION 319 SUBROGATION CLAIM
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
36. Penn Millers incorporates by reference the allegations of paragraphs 1 through
35 and makes them a part hereof as though they were more fully set forth at length herein.
37. Section 319 of the Act provides, in pertinent part:
Where the compensable injury is caused in whole or part by the
act or omission of a third party, the employer shall be subrogated
to the right of the employe, his personal representative, his estate
or his dependents, against such third party to the extent of the
compensation payable under this article by the employer;
reasonable attorney's fees and other proper disbursements
incurred in obtaining a recovery or in effecting a compromise
settlement shall be prorated between the employer and employe....

38. Till was injured while in the course and scope of his employment and received
Workers' Compensation benefits from Perm Millers totaling $113,268.67.
39. Lutness and Silverman McDonald, on Till's behalf, instituted the Third Party
Action and negotiated the Third Party Release for the Third Party Settlement Sum.
40. The Act provides that Perm Millers shall be entitled to such proceeds "to the
extent of the compensation payable under this article." 77 P.S. 671.
41. Till received a portion of the Third Party Settlement Sum.
42. Lutness and Silverman McDonald received a fee and reimbursement of costs
from the Third Party Settlement Sum.
43. Till is in possession of funds to which Penn Millers is entitled under § 319 of the
Act.
44. Lutness and Silverman McDonald are in possession of funds to which Penn
Millers is entitled under § 319 of the Act.
45. Lutness and Silverman McDonald were aware of Perm Millers' subrogation
interest and, explicitly, implicitly (or both) agreed to recover same from the Third Party
Settlement Sum.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of
suit, reasonable attorneys' fees and such other, further and different relief as to this Court may
deem equitable, just and proper under the circumstances.

 

COUNT II - PENNSYLVANIA WORKERS' COMPENSATION ACT,
SECTION 435 PENALTIES CLAIM
Venn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
46. Perm Millers incorporates by reference the allegations of paragraphs 1 through
45 and makes them a part hereof as though they were more fully set forth at length herein.
47. Section 435 of the Act reads, in pertinent part:
The Department, the Board, or any Court which may hear any
proceedings brought under this Act shall have the power to
impose penalties as provided herein for violations of the
provisions of this Act or such Rules and Regulations or Rules of
Procedure:
(i) Employers and Insurers may be penalized to a sum not
exceeding ten per centum of the amount awarded in interest
accrued and payable: provided, however, that such penalty may
be increased to fifty per centum in cases of unreasonable or
excessive delays. Such penalties shall be payable to the same
person to whom the compensation is payable.
(ii) Any penalty of interest provided for anywhere in this Act
shall not be considered as compensation for the purposes of any
limitation on the total amount of compensation payable which is
set forth in this Act.
48. Defendants' failure to make payment pursuant to the Order entitles Perm Millers
to an additional penalty of 50% of all sums due and owing.
WHEREFORE, Plaintiff, Perm Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of
suit, reasonable attorneys' fees, a penalty of up to 50% of the compensation due Plaintiff and
such other, further and different relief as to this Court may deem equitable, just and proper
under the circumstances.

COUNT III - PENNSYLVANIA WORKERS' COMPENSATION ACT, SECTION 440
UNREASONABLE CONTEST CLAIM
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
49. Penn Millers incorporates by reference the allegations of paragraphs 1 through
48 and makes them a part hereof as though they were more fully set forth at length herein.
50. Section 440 of the Act reads, in pertinent part:
(a) In any contested case where the insurer has contested
liability whole or part, including contested cases involving
Petitions to Terminate, Reinstate, Increase, Reduce or otherwise
Modify compensation awards, Agreements or other payment
agreements or to set aside final receipts, the employe or his
dependant, as the case may be, in whose favor at issue has finally
been determined in whole or in part shall be awarded, in addition
to the award for compensation, a reasonable sum for costs
incurred for attorney's fees, witnesses, necessary medical
examination, and the value of unreimbursed lost time to attend
the proceedings: provided, that cost for attorney fees may be
excluded when a reasonable basis for the contest has been
established by the employer or the insured.
(b) If counsel fees are awarded and assessed against the insure
or the employer, then the workers' compensation judge must
make a finding as to the amount and the length of time for such
counsel fees payable based upon the complexity of the factual and
legal issues involved, the skill required, the duration of the
proceedings and the time and effort required and actually
expended. If the insurer has paid or tendered payment of
compensation and the controversery relates to the amount of
compensation due, costs for attorney's fee shall be based only on
the difference between the final award of compensation and the
compensation paid or tendered by the insurer.
51. Defendants' failure to make payment pursuant to the Order entitles Penn Millers
to an award of attorneys' fees and litigation costs under § 440 of the Act.

WHEREFORE, Plaintiff, Perm Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of
suit, reasonable attorneys' fees and such other, further and different relief as to this Court may
deem equitable, just and proper under the circumstances.
COUNT IV - PENNSYLVANIA WORKERS' COMPENSATION ACT, SECTION 406.1
INTEREST CLAIM
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
52. Penn Millers incorporates by reference the allegations of paragraphs 1 through
51 and makes them a part hereof as though they were more fully set forth at length herein.
53. Section 406.1 of the Act reads, in pertinent part, that "(a) ... interest shall accrue
on all due and unpaid compensation at the rate of ten per annum."
54. Defendants owe interest of 10% per annum, running from November 5, 2012,
when Till executed the Third Party Release to the present.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of
suit, reasonable attorneys' fees and such other, further and different relief as to this Court may
deem equitable, just and proper under the circumstances.
COUNT V - BREACH OF CONTRACT
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till
55. Penn Millers incorporates by reference the allegations of paragraphs 1 through
54 and makes them a part hereof as though they were more fully set forth at length herein.

56. Pursuant to the C&R, Till acknowledged the validity of Perm Millers'
subrogation interest, under § 319 of the Act, against his third-party claim and agreed to
reimburse same.
57. Till expressly acknowledged Perm Millers was retaining its subrogation rights
and was entitled to be reimbursed all sums it expended should Till obtain a settlement in any
claim against third party tortfeasors arising from his work related injury during the hearing
before J. Hines on November 16, 2010.
58. Till settled his third party claim and failed to adequately or properly protect
Perm Millers' subrogation lien in breach of both his statutory and contractual obligations.
59. As a direct and proximate cause of Till's breach of his statutory and contractual
obligations, Penn Millers has suffered damage in an amount in excess of $113,268.67.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendant, Charles Till, in the amount of $113,268.67, together with interest,
costs of suit, reasonable attorneys' fees and such other, further and different relief as to this
Court may deem equitable, just and proper under the circumstances.
COUNT VI - BREACH OF CONTRACT
Penn Millers Insurance Company as subrogee of Meredith's Market v.
Brian Lutness, Esquire and Silverman McDonald and Friedman
60. Penn Millers incorporates by reference the allegations of paragraphs 1 through
59 and makes them a part hereof as though they were more fully set forth at length herein.
61. Lutness and Silverman McDonald were aware of Perm Millers' subrogation
interest and, explicitly, implicitly (or both) agreed to recover same from the Third Party
Settlement Sum.
62. Lutness and Silverman McDonald breached their oral and/or written agreement
to protect Perm Millers' subrogation interest.

63. As a direct and proximate cause of the breach of the oral and/or written
agreement by Lutness and/or Silverman McDonald to protect Perm Millers' subrogation
interest, Perm Miller has suffered damage in the amount of $113,268.67.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendants, Brian Lutness, Esquire and Silverman McDonald and Friedman,
jointly and severally, in the amount of $113,268.67, together with interest, costs of suit,
reasonable attorneys' fees and such other, further and different relief as to this Court may deem
equitable, just and proper under the circumstances.
COUNT VII - BREACH OF FIDUCIARY DUTY
Penn Millers Insurance Company as subrogee of Meredith's Market v.
Brian Lutness, Esquire and Silverman McDonald and Friedman
64. Penn Millers incorporates by reference the allegations of paragraphs 1 through
63 and makes them a part hereof as though they were more fully set forth at length herein.
65. Lutness is an attorney licensed to practice law in the State of Delaware and is
subject to the provisions of the Delaware Lawyers' Rules of Professional Conduct.
66. Silverman McDonald operates as a law firm and provides legal services to clients
the State of Delaware (and Commonwealth of Pennsylvania) and is subject to the Delaware
Lawyers' Rules of Professional Conduct.
67. Rule 1.15 of the Delaware Lawyers' Rules of Professional Conduct provides, in
pertinent part:
(a) A lawyer shall hold property of clients or third persons
that is in a lawyer's possession in connection with a
representation separate from the lawyer's own property...
(b) Upon receiving funds or other property in which a client
or third person has an interest, a lawyer shall promptly
notify the client or third person. Except as stated in this
Rule or otherwise permitted by law or by agreement with
the client, a lawyer shall promptly deliver to the client or

third person any funds or other property that the client or
third person is entitled to receive and, upon request by the
client or third person, shall promptly render a full
accounting regarding such property.
68. Under the Delaware Lawyers' Rules of Professional Conduct, Lutness and
Silverman McDonald owed Penn Millers a fiduciary duty to safeguard Perm Millers
subrogation lien.
69. The misappropriation of funds to which Penn Millers was entitled constituted a
breach of the fiduciary duty Lutness and Silverman McDonald owed to Penn Millers.
70. As a direct and proximate cause of the breach by Lutness and Silverman
McDonald of their fiduciary duty, Plaintiff has suffered damages in an amount in excess of
$113,268.67.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendants, Brian Lutness, Esquire and Silverman McDonald and Friedman,
jointly and severally, in the amount of $113,268.67, together with interest, costs of suit,
reasonable attorneys' fees and such other, further and different relief as to this Court may deem
equitable, just and proper under the circumstances.
COUNT VIII - UNJUST ENRICHMENT
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
71. Penn Millers incorporates by reference the allegations of paragraphs 1 through
70 and makes them a part hereof as though they were more fully set forth at length herein.
72. Defendants have benefited substantially by virtue of their failure and/or refusal
to remit the sums due and owing to Penn Millers as a result of their breach of their statutory,
contractual and fiduciary obligations.

73. Till received a portion of the Third Party Settlement Sum, all or some of which is
due and owing Perm Millers pursuant to § 319 of the Act.
74. Lutness and Silverman McDonald received a fee and reimbursement of costs
from the Third Party Settlement Sum.
75. Defendants have become unjustly enriched at Perm Millers' expense.
WHEREFORE, Plaintiff, Perm Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of
suit, reasonable attorneys' fees and such other, further and different relief as to this Court may
deem equitable, just and proper under the circumstances.
COUNT IX - CONVERSION
Penn Millers Insurance Company as subrogee of Meredith's Market v. Charles Till,
Brian Lutness, Esquire and Silverman McDonald and Friedman
76. Penn Millers incorporates by reference the allegations of paragraphs 1 through
75 and makes them a part hereof as though they were more fully set forth at length herein.
77. Defendants converted monies due and owed to Penn Millers to their own use
without justification or permission.
78. The deprivation by Defendants of Penn Millers' rights of ownership and
possession of its subrogation interest, without Penn Millers' permission or lawful justification,
constitutes common law conversion.
WHEREFORE, Plaintiff, Penn Millers Insurance Company, demands judgment in its
favor as against Defendants, Charles Till, Brian Lutness, Esquire and Silverman McDonald and
Friedman, jointly and severally, in the amount of $113,268.67, together with interest, costs of

suit, reasonable attorneys' fees and such other, further and different relief as to this Court may
deem equitable, just and proper under the circumstances.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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