Heller v. Pennsylvania League of Cities & Municipalities

award, of the WCJ’s disfigurement very

Board well reach the same or a determination,

similar conclusion. That

however, upon is left Board to the remand.

ORDER NOW, June,

AND day this 4th

the Court vacates order of the Work- Compensation

ers’ Appeal Board and re-

mands purposes this matter for consistent

with the foregoing opinion. relinquished.

Jurisdiction is Beverly

Frank D. HELLER and A.

Heller, husband wife

PENNSYLVANIA LEAGUE OF CITIES

AND MUNICIPALITIES Penn t/d/b/a Pennsylvania

Prime Trust a/k/a

Pooled Municipal Risk

Entities, Appellants.

Commonwealth of Pennsylvania.

Argued May 2008.

Decided 2008. June

Reargument July Denied Gabriel, appel-

Brian P. Pittsburgh, for lants. appearance ap-

No entered on behalf of pellees. FRIEDMAN, Judge,

BEFORE: JUBELIRER, Judge, COHN COLINS, Judge. Senior Judge OPINION BY Senior COLINS. Pennsylvania Leagues Cities Municipalities, doing business as (Penn PRIME), con- municipal pertaining public policy a precedent Prime Trust insurer, appeals an of the Court of order siderations.2 Venango County Pleas that Common are not pertinent facts to our review The summary judgment granted a motion for as fol- disputed and can be summarized by Beverly filed Frank Heller in their and injured in an Frank Heller was lows. declaratory seeking action a de- judgment during course of accident automobile that a termination from trial a officer for police his as Su- employment provision Penn PRIME’S insurance garcreek Borough. Heller obtained agreement Sugarcreek Borough with that $25,000 from the maximum from its motorist excluded underinsured driver, per- own other and notified his (UIM) persons claims potential claim. sonal insurer of for would be otherwise expenses He has also received medical policy eligibility under the but for their for pay two-thirds of his benefits violates Borough pays The compensation benefits. challenges public policy.1 Penn PRIME salary. Heller Heller the remainder of his policy the trial that holding court’s sought UIM benefits persons exclusion of benefits for eli- As under its with Penn PRIME. gible for worker’s above, Penn PRIME denied cover- provision violates The B(3)(e) V, age upon Section based issue, part found relat- coverage under policy, which excludes such ing to underinsured and motor- uninsured presented. parties agreed the facts The V, B(3)(e), ists, as states follows: facts, provision applies 3. Exclusions. argued Heller before the trial court that apply This does to: provision public policy violates sought a declaration to effect and (e) Any by anyone eligible claim for provision on that basis. voiding order workers that are statutory obligation of Member. recognized trial that a court first MVFRL, repealed 75 Pa. section the following Penn PRIME raises compa- § prohibited C.S. (1) issues: Whether the trial court erred excluding nies from UIM benefits with concluding the UIM exclusion violates receiving regard persons worker’s com- public policy legislature where the chose Assembly pensation benefits. The General not mandate such benefits and ex the Act repealed in 1993 public policy clusion furthers the dominant 2,1993, as Act July P.L. also known containment; of cost and Whether the considered relying upon trial court erred in cases that Risks Insurance Co. Selected do not address considerations 130, 552 A.2d 1382 Thompson, by failing recognize the significance (1989). In that an insurance Fi of amendments to Motor Vehicle (MVFRL), operated six owned and Responsibility covered vehicles nancial Law 1701-1799.7, volunteer by municipal unincorporated § Pa.C.S. law or erred as a matter of the trial court 1. The trial court also denied cross-motion summary judgment filed Penn PRIME. Sicuro v. an abuse of discretion. committed (Pa.Cmwlth. Pittsburgh, City 684 A.2d 232 a trial 2. This Court’s standard of review of 1996). granting summary court’s of motion for judgment considering whether is limited department. provided fire The policy wage pain loss nor and suffer- coverage, uninsured motorist consequential nor ing, damages) other A the MVFRL. fireman was and a dollar-for-dollar set-off does not accident the course of his volunteer fourth, reality; recognize this there department duties and was unable against policy is no an individual job independent return his as an purchasing additional uninsured motor- truck driver. He received worker’s com- coverage ist protect himself his pensation benefits under the municipality’s shortfall, family against the which could policy. He then filed a claim with the result from a dependency on workmen’s department’s seeking auto insurer unin- compensation benefits. sured motorist benefits. The insurer ob- Id., 142-3, 520 Pa. 552 A.2d at 1388.

jected and the matter went to arbitration Act, However, under the Uniform Arbitration Pa. further noted that §§ question G.S. 7301-7362. The new, before a post-injury, statutory there was the arbitrator was whether the fireman supported that its basis conclusion that the $30,000 be would able to stack the per exclusionary provision At was invalid: vehicle uninsured insurance. A majority then-recently time the adopted Section approved that request, arbitrators provided 1735 of the MVFRL3 “[t]he granting thus maximum pay- amount required by coverages shall not [Act] able under subject be made reduc $180,000. tion in amount any because of worker’s compensation payable benefits aas result of the Supreme

One issues the § injury. same 1735.” considered Pa.C.S. was whether the uninsured mo- 520 Pa. at 552 A.2d at torist 1388. “should be reduced or ‘set- by off the amount of compensa- worker’s as noted the General tion benefits” the fireman received in ac- Assembly repealed Sections 1735 and 1737 cordance with the terms of the of the MVFRL in repeal, 1993. After that Court, noting The the deci- Court decided Gardner v. jurisdictions, sions of other voided the ex- Erie Company, clusionary provision, stating as follows: (1999), A.2d 1041 in which the issue raised rationale these courts is varied employee’s was “whether an receipt of certain common themes emerge: compensation relating worker’s benefits first, uninsured motorist injuries a driving sustained while co-em separate premium, and to ployee’s arising out automobile give the uninsured motorist carrier a wrongful third-party conduct bars him set-off based on the fortuitous existence recovering from uninsured motorist bene of a collateral would result in a source co-employee’s fits from the insurance car carrier; second, windfall to the unin- Id., rier.” 555 Pa. at 722 A.2d at 1041. sured motorist is mandated by driving statute and Gardner was car from that variations statutory co-employee owned when he was in- mandate should come from the third, jured legislature; accident the course of compensa- workmen’s his employment. tion of what other fled covers fraction tort driver damages cover scene. Gardner com- (e.g. would workmen’s obtained worker’s provide pensation does not 100% of benefits and also uninsured mo- 12, 1984, February 3. Added ofAct P.L. coverage. company The insurance $15,000 his

torist own As- sought posited uninsured that the General insurer. Gardner then also Gardner co-employ- provided sembly’s repeal motorist benefits under of Section Erie Insurance. with authority conclude sufficient ee/owner’s request, Erie filed denied the Gardner that section had legislature, repealing declaratory action. In that judgment previously intended to make efficacious argued that re- proceeding, Erie Gardner’s exclusiv- prohibited ceipt essentially proclaim ity provision and subsequent his of bene- precluded receipt for prohibit- no existed reason plan. his insurance fits under co-worker’s exclusionary provisions. ing such distinguishing the factor between addressing in In the insurer’s reliance case, this this case and is that in Gardner the Su- upon points, these two Gardner sought employer’s Heller benefits from his decided first referenced cases preme Court policy, in the while the Gardner repeal the of Section 1735 before sought from the plaintiff UIM benefits UIM, including Those Selected Risks. driving co- owner of car he was —a noted, cases, employer involved the Court worker. upon exclusivity pro- an insurer reliance or the trial This distinction warranted 303(a) Com- of the Workers’ vision Section in to consider of provisions court Gardner 481(a), Act, pro- § which pensation 77 P.S. Act, Compensation Act of vides that amended, 2, 1915, 736, P.L. as June (a) under liability employer of an The 2501-2708, 1-1041.4, namely §§ P.S. Sec- place and in of this act shall be exclusive 72, § pertains tion which to P.S. liability to em- any and all other such liability employees of fellow in a work- any damages ... entitled ployees to context, compensation provides er’s on of action at law or otherwise account compensable ... disability that “if under any injury or death. act, person this shall be liable that: anyone Supreme at common Court stated law otherwise disability ... act account of such unitary reflecting addition person occurring or omission while such Act, under the scheme employ person was in the same as the immunity an contains wrong.” ... except disabled for intentional im- affording component, employer an upon The trial court in Gardner relied liabilities in a munity from common law Ducjai v. decision of our Court in grant limited manner similar (1995), Dennis, 540 Pa. 656 A.2d 102 co-employees pur- afforded to immunity employee in which the that an Court held 205. suant to Section theory damages recover on a tort 1043-4, n. Id., 555 Pa. at A.2d injured par- co-employee from a when a close analysis required The Court’s already receiving compensa- ty is worker’s Ducjai, reading its earlier decision in Gardner tion benefits. The trial court the re- a case decided after noted holding relating opined that the narrow The Court 1735and 1737. of Sections peal recovery damages tort in addition Court, Ducjai, as noted the Gardner im- was an compensation benefits worker’s of the sections as repeal regarded from the situation be- material distinction Assembly’s desire reflection of General it, employee an seeks recov- fore where exclusivity of the Work- money “proclaim” the damages er not tort but rather Act to effectuate third-party Compensation ers’ available under UIM (1) preclude Act, desire to passage from ob- Before the of that the law taining a “expressly recovery double for a work-relat- em- sanctioned” from (2) However, injury. ployer plans, ed Gardner uninsured motorist Sec- Ducjai noted that did not involve tion 1722 of the barred claimants funds, of uninsured motorist tort pro- actions and uninsured motorist rather arose in the ceedings recovering distinct context from obtained negligence brought against benefits, suit a co-em- that, ployee. employ- even in 1720 precluded Section Ducjai, recognized having Court had that Sec- er or a right insurer of subro- ques- tion 1735 did not in gation against any recovery. itself resolve the tort injured employee tion whether an following passage could of Act Section avail compensa- longer himself both worker’s requires 1722 no a reduction of tion benefits and uninsured ben- motorists from re- purpose efits. The recog- Section 1735 covered tort or uninsured motorist benefits nized prohibit both cases Section does not em- was to limit the ability compa- of insurance or ployer seeking subrogation insurer from nies to use benefits on the of basis worker’s ben- set-off, as a “not to determine an In injured employee. whether efits to an sum- insured compen- mary, claim to worker’s Court stated: sation benefits and uninsured motorist context, repeal Viewed this of Gardner, 66-7, benefits.” Pa. at 555 722 1735 Sections and 1737 be seen as 1044, Ducjai, A.2d at quoting 540 Pa. at an integrated aspect compre- of these 112, 656 A.2d at 106. changes, hensive rather than reflec- as specific legislative tive of a intent to reasoned, the Court because Sec- preclude recovery the dual of worker’s tion 1735 not authority the source of compensation and uninsured motorist recovery, for dual Assembly’s the General benefits. repeal of the regarded section could not be Id., 555 Pa. at 722 at as a revocation of the to A.2d right dual recov- However, ery. Id. because Gardner Finally, citing agreeing and with Travel- brought co-employ- volved against claims Indemnity ers Company v. Di- Illinois insurer, ee’s the Court noted that Section Bartolo, (3d Cir.1997), 131 F.3d 343 being repealed, before reflected the that Court stated claims, case, authorization for as this Having found it that ability clear against employer’s motor insur- vehicle employees dual obtain ance, but was not relevant to a involv- case and uninsured ing against claims a co-worker’s insurance judicially recog- motorist benefits was company. independent nized and of Sections 1735 the DiBartolo court consid- However, point more to the in this repeal ered the as irrel- those sections interplay is Court’s discussion evant to the determination of whether between the and the MVFRL Assembly pre- General intended Compensation Act. The Court noted injured clude a double repealed the Act that Sections 1735 employee. legisla- represented attempt tive to alter Although controlling, the scheme for coordi- not we find this nation of available to an it reasoning persuasive insofar as con- an automobile cerns limited implications accident. re- nothing ap- is an all or asserts that this peal of Sections and 1737. We policy that, proach practical makes little agree and 1737 since Sections 1735 point argument, of this obvi- sense. The exception to the exclu- did create that, ously, if the had elected immunity provisions of sivity and Sec- insurance, this 303(a) UIM motorist Act, tion 205 of their even be here. case would not repeal cannot construed evidenc- be public Penn PRIME also contends part on ing an intent of the General policy a scenario support would not Assembly exception to eliminate the pay it would which be exclusivity require that such or immuni- compensated. which it is not ty always now apply preclude should receipt uninsured motorist bene- resolving involving alleged questions To fits. the extent that dictum in provisions void contract Ducjai suggests contrary, to the we take basis, the courts have set forth opportunity it. disavow policy is to be ascertained ‘Public Gardner, 69-70, Pa. 722 A.2d at legal prece the laws and reference this guidance 1046. With from our Su- general dents and not from consider preme Court we to consider the proceed supposed public interest.’ ations presented. issues Co. Zer Guardian Life ance, 345, 354, argues PRIME first trial (citations omitted). It court erred in that the concluding exclu- given obviously when a is so sionary provision of its with the health, against mor safety, the Borough public policy. violates is a als or welfare that there virtual PRIME asserts the trial it, in unanimity opinion regard wrong reached the result because there a court constitute the voice of itself legislative require no the pro- mandate community [declaring the in what is or is vision of such benefits and cost because public policy].’ not in with Mam accord policy containment is more dominant 325, Genoe, 320, v. 17 A.2d lin require- concern than that in reflected the 407, phrase “public poli 409 The ment that an have the cy” has been used also when the courts ability to seek benefits under both work- interpreted broadly have statutes er’s laws auto- help legislative their intent. manifest mobile insurance. Co., 536 Pa. Paylor v. Insurance Penn PRIME first asserts the Hartford (1994) (ci- 583, 586-7, 1234, A.2d 640 1235 purchase MVFRL makes the of UIM in- omitted). tations optional, purchas- surance and also allows dis- ers to reduce uninsured motorist insurance Court’s most recent interplay between bodily injury regarding below the limits. cussion the insured’s argues, Penn PRIME the consider- this decision in to allow such the General ations in the insurance context arose choices reflects Pennsylvania Casualty Assembly’s permit flexibility intent to National Mutual Black, Pa. coverage. Company Accord- v. 591 purchase such (2007). ques- goes, That case involved ingly, argument UIM, in an provision have “a ‘set-off could elected not to tion whether unen- policy was chose to have such insurance extend automobile insurance against public policy.” persons who are not for work- forceable explained A.2d at 571. As er’s Penn PRIME Pa. benefits. Court, provisions cap coverage, such for a on total and com- placed allow of recovery reduction one available under mented that to allow under the part of a where been plaintiffs theory would result made part poli- under another of the same premi- plaintiff paid which the had cy, example, bodily Further, ums. fur- because set-off stated, Black, injury coverage. Briefly cost-containment, objective thered Black, parents pas- of Eric who was a the Court concluded that the did accident, senger who died in a fatal sued that public violate consideration. driver, company that insured the seek- Appeals federal Court Nation ing bodily benefits under the driver’s lia- Mutual Company wide Co bility coverage sought coverage and also senza, (3rd Cir.2001) 258 F.3d under the driver’s underinsured motorist many pronouncements of the Penn coverage provision, upon based the insuffi- sylvania espoused regard courts have with ciency of the insurance held the driver UIM, stating the purpose car other involved in the accident. “Pennsylvania especially courts have been the driver’s included attentive to the fact that UIM provision that defined underinsured motor purchased protect ‘to oneself from other way vehicle in such a as to exclude vehicles liability purchas drivers whose liability coverage for which provided ” ing beyond decisions are one’s control.’ policy, under also included the omitted.) (Citation Further, after subject “set-off’ reduced amendments to the MVFRL our liability limit of amount to an recognized that an insured insured for the same accident. purchase who elects to argued The insurer in that case that the really seeking to shift the risk of loss typically courts have not struck down caused underinsured driver to his or provisions surance on public policy Cosenza, her own insurer. 258 F.3d at grounds subject provision unless con- 209, citing Kmonk-Sullivan v. Farm State specific flicted with language in the Co., Mutual Auto. Insurance MVERL, provision and that the set-off did (Pa.Super.1999). an in when statutory not conflict with language, purchased coverage, sured has UIM to policy goal rather furthered the of Law recovery penalize could disallow insureds Court, regu- contain costs. The citing to a leading who did not create the risk to Insurance, lation of Department of injuries part and had no in negligent first concluded that the set-off underinsured driver’s insurance decisions. not any provisions did conflict with of the Cosenza. Law. The Court that next opined then the federal court that question required evaluation of two public Cosenza^ universally provi- held courts have not that policy considerations that are embodied (of dual prohibiting sions both provide coverage the Law: The concern to benefits) liability and UIM are unenforcea- injuries sustained an insured due to instance, involving ble. For cases negligence of an uninsured or underin- single tortfeasor rather than two tortfea- dampen- sured motorist and interest separate policies, and two insurance spiraling sors ing automobile insurance costs. agreed courts have that dual ex- The Court noted the distinction between permissible, compared to an exclusion of benefits and the set-off clusions were issue, to both parties types which the cases where victim seeks contract, agreed simply single policy, in their and which under a in which MVFRL made the Amendments to the policies evaluate the on a case the courts optional. The case-by-case purchase The Court stated: UIM basis.4 has not considered this “The rationale behind insurance is UIM context of cases, the MVFRL aspect inapplicable single tortfeasor exclusions. injured parties they can UIM where ensure adequate coverage simply pur- Court, the Although binding on this chasing adequate liability insurance. also consid Appeals federal Court are is These not cases where the victim predict had in which it to how ered case injured by liability someone whose insur- ques would decide our are con- beyond ance choices the victim’s a cor allows tion whether MVFRL trol.” Id. at 212. We believe coverage for its poration waive UIM aspect exclusionary provisions pol insurance employees company under significant the present case. Our Su- Indemnity Company Il icy. Travelers preme key ques- Court has stated that the (3rd DiBartolo, Cir. 171 F.3d linois analyzing tion in these cases is whether 1999) (considering appeal issues in follow change attempting insured above). Cit ing decision remand cited liability insurance into If UIM insurance. ing the federal court noted Paylor, so, attempt it then to convert and reflects the prohibition upheld. should be costs, goal escalating insurance control corporations thwarted if that would be reiterate un- We the observations purchase were derlying argument, PRIME’S company-owned for their vehicles. is a present there distinction between the purchasing individuals court noted post-amendment case and the Gardner de- are under the permitted such cision. This case of an arises out insur- reject coverage for dis Law to elect policy that ance includes families, them of their crete members compensa- UIM benefits where worker’s control over selves have no whether tion benefits are available. Gardner such cover opts purchase the insured no volved affirmative exclusion in the sub- third-party age. That DiBartolo was a Rather, ject question sole employer’s his beneficiary of exclusivity provisions whether the was a fact that the court found contract Compensation precluded Act re- court, irrelevant. As noted the federal covery third-party’s under a UIM benefit courts, having while not had Pennsylvania coverage. There is no indication that the question wheth particular the to decide poli- in Gardner involve an insurance facts coverage, can waive UIM corporation er cy provision excluding that included from not the employer, that the concluded coverage persons UIM covered who also v. Reli employee, is the insured. Caron compensation obtain worker’s (Pa.Su Co., ance arising from the same set of facts. per.1997). Supreme it is true that the Court While Thus, stand provisions although

in Gardner does Risks found such Selected that, concerns, where a liable proposition that deci- for the violated poli- insurance employer, has an party, sion made the before the or Court liability invalidate exclusions that "bar elected not to Court in noted that Cosenza converting inexpensive UIM expensive purchase than an insured insurance is more insurance, liability expensive into the more one reason UIM and that this is 258 F.3d at 211. Id. why Pennsylvania have sometimes insurance.” courts benefits, cy providing for UIM collateral source would result in a wind- employees are not carrier; second, foreclosed the exclu- fall to the uninsured sivity provisions Compen- of the Workers’ coverage stat- motorist mandated obtaining sation Act from UIM benefits ute and variations from that statuto- third-party’s under a policy, ry legis- mandate from the should come even after the repeal Sections 1735 and lature; third, compensation workmen’s 1737 of Law. the Supreme only covers a fraction what dam- tort particular Court has never evaluated cover, ages (e.g. would com- workmen’s pur- after the allowing amendments pensation not provide does 100% of chasers not to obtain UIM where wage coverage, loss nor suffer- pain and an insured has in agreed the insurance ing, consequential damages) nor other policy that UIM benefits are not available and a dollar-for-dollar set-off does not persons compensa- obtain worker’s fourth, recognize reality; this there case, tion benefits. this if the employer public policy against no an individual purchase any had elected not to UIM cov- purchasing additional uninsured motor- erage, we engaging would not be in this protect ist himself and his out, analysis. As Penn PRIME points family against the shortfall which could analysis trial court’s in an results all-or- result from a dependency workmen’s nothing scenario in which an must insured compensation benefits. either elect UIM coverage that has no 142-3, 520 Pa. at 552 A.2d at 1388. worker’s forego or purchase entirely. UIM primarily We in note Selected repeat again We that the Gardner deci- Risks, pre-amendment sion is limited in application. As relied significant part previous on the question the true in that case was statutory mandate that insureds distinct from that presented this case. purchased Further, coverage. appears Gardner to stand for only the we not addressing ques- case are proposition exclusivity potential tion of a windfall to an insurance Compensation Workers’ Act did carrier that under entitled to a preclude injured employee from obtain- set-off. ing UIM benefits when the third-party as directed opted purchase insured has such cover- we must consider whether either age. simply question There was no Compensation concerning right Gardner of an in- provisions Act contains specifically sured to purchase coverage limited prohibit the inclusion of an exclusion to scope. Although Selected Risks involved upon receipt based Court’s decision strike benefits, not, if down a permitted set-off legal precedent whether a con- warrants upon reduction of benefits based re- covery benefits, clusion that the exclusion violates the Court policy. based that decision on various We note first that there are no present factors that are not specific provisions pro- this case: either law that coverage hibit the of UIM exclusion where first, emerge: common [C]ertain themes is able to obtain worker’s coverage paid uninsured motorist for Second, by a benefits. we note separate premium, give and to the legal precedent upon uninsured a the which motorist carrier set-off based on the fortuitous existence of a trial rely, court and the Hellers as dis- for Risk Insurance Pennsylvania Pooled address specifically does not cussed Municipal Entities. Although the Su- presented. the situation Gardner recognized preme Court Judge BY DISSENTING OPINION statutory as a presently applicable scheme FRIEDMAN. injured employees method which new majority I dissent. respectfully whole, may that decision does be made of Common Pleas holds that the Court pub- impact of concurrent address the court) (trial in con- Venango County erred insureds policy pronouncement lic it cluding that is a violation at may not to elect obtain UIM underinsured motorists to exclude from all. (UIM) coverage anyone a claim (WC) benefits.

for workers’ estab legal precedents As reasons, I agree. cannot following For a act a lished also that Court should not as 31, 2002, Frank D. Heller October On super-legislature redrafting contract (Heller) an auto accident injured documents on the sole of outcomes basis police Sugar- for working as a officer while general good, be desired Borough Borough (Borough). The brook expressed have also and as the courts to as a result paid WC benefits Heller company providing the accident. The contracting for such action distaste when other driver Heller for the surance party will bear the loss of be $25,000. policy limit of the driver’s risk, in the case of unanticipated insurers, coverage Borough up believe has premiums,5 loss we UIM $100,000 person per accident per conflicting policy considerations Pennsylvania League Cities fall on side of the insurer under the Penn Prime Municipalities, i/d/b/a circumstances, present and conclude that (Penn PRIME). The has Trust determining trial court erred through the State Workers’ WC in the exclusion (SWIF), sub- which Insurance Fund Borough’s contract with paid to lien on funds rogation UIM against public Penn void PRIME was Borough’s policy with Heller under will Accordingly, we reverse Penn PRIME. summary grant trial court’s decision Heller submitted April On in favor of Penn PRIME. judgment benefits. to Penn PRIME claim pursuant claim PRIME denied the ORDER which states that “[a]ny apply does June, 2008, NOW, day 4th AND eligible for bene- anyone [WC] claim ” Pleas of order of the of Common No. R.R. (Stipulations, .... fits summary County Venango is reversed 51a.) ¶ V.B.3(e), Hel- 18a; R.R. at Policy, granted appellants, judgment hereby that the declaratory judgment sought a ler anyone Munici- Pennsylvania League of Cities and from UIM as con- invalid eligible for WC Penn Prime Trust palities a/k/a t/d/b/a are may be Employees who be fits: can 5. We note that the exclusion apparently would Borough, under the Act even not disabled provide to the read a benefit this cover- relief under injuries be entitled obtain employee's consequential are if age. compensation bene- covered worker’s 372

trary 1990, public policy. legislature The trial court Also in amended agreed, section 1722 of the MVFRL3 to that a state appeal and Penn PRIME filed an person eligible who to receive bene- WC with this court. precluded recovering fits shall be from My analysis begins awith brief histori- pro- amount of those benefits in a UIM cal of applicable review the law. In Select- words, ceeding. perhaps In other reac- Company ed Risks Insurance Thomp- holding, tion to the Selected Risks son, 130, (1989), 520 Pa. 552 A.2d 1382 our legislature allowed take a UIM insurers to supreme court held that a UIM Moreover, set-off for WC benefits. issued insurer in 1981 was void as legislature of amended section 1720 being contrary it because MVFRL to state that WC carrier shall gave the insurer a set-off for WC benefits. right subrogation respect have no with supreme gave Our four reasons for to certain benefits recovered under the holding pointed its but also out that sec- MVFRL.4 This court has noted that the legislative tion obvious intent to place 1735 the new Motor Vehicle was Finan- ultimate burden (MVFRL)1 for benefits cial WC Responsibility specifi- Law carrier rather than the auto cally states that UIM coverage “shall not surance carrier. Updike v. Com- subject be made to an exclusion or reduc- pensation Appeal (Yeager Supply, Board tion in of any amount because Inc.), (Pa.Cmwlth.1999). 740 A.2d 1193 payable benefits aas result Risks, injury.” same Selected The legislature legislative altered this (bold 143, Pa. at emphasis passage July 552 A.2d at scheme with the of the act added). 1993, 190, Thus, P.L. known as Act 44. Act 44 when Risks Selected was 2. repealed sections 1735 and 1737 of the 1989, against public poli- decided in it was and repealed sections 1720 and cy anyone, to exclude 1722 of the MVFRL as they relate to WC benefits, reduce receipt based on the Thus, 44, employ benefits. under Act benefits. WC ee’s from UIM carrier is no 7, year, by The next February the act of longer reduced the amount of ben WC 1990, 11, legislature P.L. added section efits; however, the WC carrier now has 1737 to the MVFRL.2 Section 1737 stated right subrogation respect with that, notwithstanding anything in the WC the UIM claimant. statute, no employee who is eli- otherwise Hannigan Compensation Ap v. Workers’ gible precluded shall be (O’Brien peal Board Ultra Service Sta of UIM from employer’s motor tion), (Pa.Cmwlth.2004), ap 1990, vehicle it was denied, 712, peal 872 A.2d 174 against public policy (2005). for a UIM insurer to explained court has This that Act employer’s exclude from an 44 shifted the ultimate burden for benefits anyone employers was WC benefits. from innocent and their WC MVFRL, formerly repealed § 1. Section 3. 75 Pa.C.S. 1722. Act 44 section 1735, § Pa.C.S. was added the act of only Feb- 1722 of the MVFRL as it relates WC ruary repealed by P.L. benefits. 25(a) 2, 1993, July section act P.L. 44. known Act § repealed 4. 75 Pa.C.S. 1720. Act 44 section 1720 of the MVFRL as it relates WC Formerly § 75 Pa.C.S. 1737. Like section benefits. MVFRL, 1735 of the section 1737 was re- pealed by Act 44 in 1993. being prevents Heller from exclusion and the WC responsible tortfeasors carriers exclusion Because the WC stead. Id. made whole. pay insurers who their prevents the Penn PRIME’S UIM point- regard, supreme In our agree with I public policy, fulfillment ed out Selected Risks WC exclusion is trial court that WC damages avail- cover fraction of invalid. cover- employee able to UIM By shifting the bur-

age. Risks. Selected I affirm. Accordingly, would carrier to the paying den from the WC an uninsured carrier cases where UIM third tortfeasor has party

or underinsured injury, legisla-

caused work-related employee

ture to be made has enabled Indeed, recovering only instead of

whole. expenses wages

medical and loss benefits, employee can

through WC all from the applicable damages recover BY BOR- Re: CONDEMNATION un- representing the uninsured or carrier LAND and HANOVER OF OUGH OF derinsured tortfeasor. Owned Hanover Interests in Land course, Of if a UIM carrier excludes sometimes District also Public School Borough anyone eli- from its UIM who is known the Hanover benefits, gible for carrier cannot WC WC District and School District School subrogation against Borough assert a interest UIM in Hanover Hanover County, Pennsylvania payments employee Borough, and an cannot recover York applicable damages. Municipal Purposes all This defeats For (1) shifting two-pronged public policy of: paying burden of carriers to WC Appeal of: of Hanover. un-

UIM carriers where an uninsured or Pennsylvania. Commonwealth Court party derinsured third tortfeasor causes injury; enabling work-related April Argued applicable recover all dam- ages. 6, 2008. Decided June carrier, SWIF,

Here, Borough’s WC subrogation lien UIM bene- Borough’s

fits to Heller under the As a mat- with Penn PRIME. public policy,

ter Penn PRIME is for paying

bear the burden of Heller’s injury injury was

work-related because the party third an underinsured

caused However, the of Penn effect

tortfeasor. anyone

PRIME’S keep WC injury on paying for the work

burden Moreover, Heller to the extent that

SWIF. damages other than

may have suffered expenses wages, the

medical and loss of

Case Details

Case Name: Heller v. Pennsylvania League of Cities & Municipalities

Court Name: Commonwealth Court of Pennsylvania

Date Published: Jun 4, 2008

Citation: 950 A.2d 362

Docket Number: 1853 C.D. 2007

Court Abbreviation: Pa. Commw. Ct.