Lead Opinion
OPINION BY
Kаthy Smith, as Executrix of the Estate of Kenneth Smith and in her own right, appeals from the judgment entered in the Court of Common Pleas of York County following a jury verdict in a case arising out of an automobile accident between Kenneth Smith and Linda Rohrbaugh. Smith claims the trial court erred in molding the jury verdict to zero based upon the prior receipt of underinsured motorist benefits, improperly granted a $15,000.00 offset for work loss benefits, and improperly denied the request for $11,533.40 in costs. After a thorough review of the submissions
The basic facts and procedural history of this matter are simply related. On January 24, 2006, Kenneth Smith, now deceased, was involved in an automobile accident with Linda Rohrbaugh. Smith had stopped on West Market Street in York, Pennsylvania, when Rohrbaugh failed to stop her vehicle in time and struck the rear of Smith’s car. Smith claimed the force of the impact pushed his car into the car in front of him.
Subsequently, Smith filed a claim for underinsured motorist (UIM) benefits against his own automobile insurance policy. That claim settled with a payment of $75,000.00. Smith’s insurer, State Farm, also waived whatever subrogation rights it might have against any further payment from the alleged tortfeasor (Rohrbaugh).
Smith then instituted the instant lawsuit by writ of summons. A complaint was filed on February 19, 2008 claiming negligence, loss of consortium and punitive damages.
Trial of the case bеgan on June 15, 2009 and the jury verdict was entered on June 17, 2009. Negligence had been admitted prior to trial, but the jury was required to determine whether the negligence was a factual cause of Smith’s injuries. The jury did so determine and awarded damages in the amount of $50,036.00. This amount was specifically apportioned as $29,036.00 for medical expenses, $16,000.00 for lost wages, and $5,000.00 for pain and suffering. Kathy Smith received no award for loss of consortium. The verdict was molded to $35,036.00 because Smith had already received $15,000.00 in work loss benefits and the amount had been stipulated to by the parties.
On June 23, 2009, Rohrbaugh filed a post-trial motion asking to have the verdict molded to zero to reflect the $75,000.00 payment Smith had received prior to trial in UIM benefits. Rohrbaugh argued payment of the verdict would amount to an impermissible double recovery, as the jury verdict did not exceed the underinsured benefits Smith had already received.
On June 26, 2009, Smith filed a post-trial motion seeking reimbursement for costs of $11,533.40. Smith also claimed Rohrbaugh was only entitled to a $10,000.00 credit for work loss benefits, not the $15,000.00 awarded by the trial court.
The trial court denied Smith’s motions and granted Rohrbaugh’s motion to mold the verdict to zero. The trial court granted that motion on the basis of the then recently decided Superior Cоurt decision in Pusl v. Means,
Because we are reversing the trial court’s decision to mold the verdict to zero based on Smith’s receipt of UIM benefits, we will address that issue first.
Smith raises four arguments why the trial court erred in molding the verdict to zero: (1) the instant case is distinguishable from Pusl, therefore Pusl is not binding; (2) the trial court improperly rewrote the terms of the UIM settlement between Smith and State Farm; (3) even if Pusl is otherwise controlling law, it should оnly be given prospective application; and (4) Pusl was wrongly decided. We agree that Pusl was wrongly decided and now overrule that decision.
Pusl correctly states that Section 1722 prevents double collection of first-party benefits. However, Pusl then equates the payment of underinsured motorist benefits with first-party benefits and, as a result, concludes Section 1722 applies to UIM payments. This is a misinterpretation. Section 1722 states:
§ 1722 Preclusion of recovering required benefits
In any action for damages against a tortfeasor, or in any uninsured or under-insured motorist proceeding, arising out of the maintenance or use of a motor vehicle, a person who is eligible to receive benefits under the coverages set forth in this subchapter, or wоrkers’ compensation, or any program, group contract or other arrangement for payment of benefits as defined in section 1719 (relating to coordination of benefits) shall be precluded from recovering the amount of benefits paid or payable under this subchapter, or workers’ compensation or other arrangement for payment of benefits as defined in section 1719.
The “subchapter” referred to in Section 1722 is Subchapter B, regarding first-party benefits.
Despite the assertion in Pusl, underin-sured motorist benefits аre absent from the list of precludable first-party benefits described “under this subchapter.” While UIM benefits are not found in Subchapter B, we note that they are sometimes referred to as first-party benefits because they are typically provided by a claimant’s own insurance policy. However, colloquial reference to UIM as a first-party benefit does not mandate we add UIM to those benefits the legislature has specifically designated by statute as first-party benefits.
This interpretation is supported by the fact that UIM covеrage is specifically designated as a separate available coverage by statute located in Subchapter C
Finally, our Supreme Court has stated the Legislature’s intent in enacting Section 1722 was to “shift a substantial share of the liability for injuries caused by uninsured and underinsured motorists from automobile insurance carriers to collateral source providers (many of which previously held subrogation interests), obviously with the aim to reduce motor vehicle insurance premiums.” Tannenbaum v. Nationwide Ins. Co.,
Therefore, regarding the application of Section 1722 to the present situation: (1) UM/UIM motorist coverage is not defined or regulated in Subchapter B, which specifically relates to first-party coverage. Rather, UM/UIM coverage is defined and regulated under Subchapter C; (2) Section 1722 does not specifically refer to UM/ UIM benefits as precludable; (3) case law recognizes UM/UIM benefits are not stat
Smith also argues that the trial court improperly voided the agreement between them and State Farm to waive subrogation rights. In essence, molding the verdict to zero granted State Farm the subrogation it waived. Because our resolution of the issue is based upon statutory interpretation, this argument is not dispositive. However, we note our agreement with Smith.
While subrogation rights are addressed in terms of Subchapter B first-party benefits, subrogation can be a matter of contract in adversarial actions. While there is always a legal right to subrogation, that right, like any, can be waived or modified by agreement of the parties. If an insurer waives its right to collect against the tortfeasor, we see no reason why the courts should interfere with that arrangement.
In the final issue,
“It is a general rule in our judicial system, stemming from the Statute of Gloucester,6 Edw. 1 , c. 1 (1275) that costs inherent in a law suit are awarded to and should be recoverable by the prevailing party.” De Fulvio v. Holst,239 Pa.Super. 66 ,362 A.2d 1098 , 1099 (1976). Important to our analysis of all Appellant’s issues is the distinction between record costs (such as filing fees) and actual costs (such as transcript costs and witness fees). Record costs are “the costs of proceeding in court, not those of preparation, consultation, and fees generally.” Id.
Zelenak v. Mikula,
Additionally, “[a]t law the general rule is that costs follow as a matter of course, and the court has no discretion to award or deny them.” Id. at 545.
Here, the trial court denied the payment of costs because Smith submitted
There is no dispute that the $134.00 (cost for filing suit), $33.21 (sheriff service York County), $26.00 (sheriff service Adams County), $23.75 (cost of five subpoenas), $26.60 (postage serving subpoenas, certified mail, return receipt), $4.75 (subpoena executed by court), and $2.70 (postage serving subpoena, certified mail, return receipt) are all properly considered record costs. These items total $251.01.
Additionally, the trial cоurt ordered the parties to supply it with certain items for a joint trial notebook pursuant to a preliminary trial order. See Order, 2/26/09. The parties had no discretion in this matter, therefore, the cost of supplying the materials needed for the trial court’s benefit are properly included as “costs of proceeding in court”, rather than as “preparation, consultation, and fees generally.” Zelenak, supra. These costs were listed by Smith as $40.07 (extra copies of exhibits for joint trial notebook), $22.50 (copy charges for joint trial notebook), and $26.35 (UPS fee to send joint trial notebook to trial judge). These non-discretionary costs, incurred pursuant to court order and for the trial court’s benefit, total $88.92.
The total amount of record costs incurred by Smith was $339.93. Therefore, we reverse the denial of all costs and direct Rohrbaugh to pay $339.93 in addition to the reinstated $35,036.00 molded verdict.
Judgment affirmed in part, reversed in part. Matter is remanded to the trial court for action consistent with this decision. Jurisdiction relinquished.
WECHT, J., files a Concurring Opinion.
Notes
. The claim for punitive damages was not submitted to the jury.
. In Pusl, in a similar factual scenario, the award of damages was molded to reflect the prior payment of UIM benefits to the plаintiff. The amount of UIM benefits paid, $75,000.00, was determined to be a double recovery by the plaintiff and therefore precluded pursuant to Section 1722 (preclusion of recovering required benefits). In concluding UIM benefits were subject to Section 1722 preclusion, Pusl relied on Tannenbaum v. Nationwide Ins. Co.,
. Subchapter B includes Sections 1711-1725.
. See 75 Pa.C.S. § 1712(l)-(6) respectively.
. Case law further supports this important differentiation between statutory definition and colloquial reference. Both Zappile v. AMEX,
. See Burstein v. Prudential Prop. & Cas. Ins. Co.,
. Subchapter C encompasses Sections 1731-1738.
. It was argued in plaintiffs answer to defendant's motion to mold the verdict, that subro-gation is not actually at issue in this matter because the UIM carrier and third-party insurer are the same. In the instant factual scenario, as a practical matter to the insurer, the problem may simply be one of accounting, because the tortfeasor and injured party are insured by the same company, but actually subrogation would be against the third-party tortfeasor, not the insurer.
. We need not reach Smith’s argument that under the "common fund doctrine” she is entitled to a credit for the $5,000 in attorney’s fees incurred in collecting the $15,000 work loss benefits since the official record indicates the parties stipulated to the full $15,000 deduction. See N.T. Trial, 6/16/09, at 93, Wayda v. Wayda,
. In its December 9, 2009 Order and Opinion, the trial court awarded Smith delay damages on the full amount of the jury verdict, $50,036.00. This decisiоn does not alter that determination; Smith is entitled to delay damages pursuant to Pa.R.C.P. 238(2).
Concurrence Opinion
CONCURRING OPINION BY
I join the Majority’s disposition of all issues. I write separately to address two matters of concern.
Below, I comment first concerning what costs were taxable against Linda Rohr-baugh (“Appellee”). While I join the Majority in directing the entry of certain costs and fees, I believe that a portion of the award ultimately would stand on stronger footing if authorized expressly by our General Assembly or our Supreme Court.
Further, I elaborate briefly on my basis for joining the Majority’s reversal of the trial court’s erroneous application of 75 Pa.C.S. § 1722, which molded to zero the jury verdict entered in favor of Kathy Smith (“Appellant”). Although I believe the Majority’s analysis to be sufficient in itself to support this aspect of its ruling, I believe an additional consideration worth mentioning further buttresses the Majority’s disposition.
I take up these two issues in turn.
Taxable Costs
I agree with the Majority’s reading of our decision in Zelenak v. Mikula,
Appellant argues that the trial court erred in “seem[ing] to find that the only allowable litigation costs available to the prevailing party under 42 Pa.C.S. § 1726 are record or statutory costs set forth in 42 P.S. § 21071, which lists the fees that are charged by the prothonotary.” Brief for Appellant at 12. Appellant also refers to 42 Pa.C.S. § 5903 and older case law, which entitle witnesses who appear pursuant to subpoena to certain per diem compensation. Brief for Appellant at 18-20. I read Appellant’s argument to contain two principle assertions of error: 1) The trial court had the obligation to award taxable costs for all effectively mandatory expenses incurred by Appellant in satisfying the trial court’s directions regarding the presentation of evidence, qua record costs; 2) the trial court erroneously declined to award as taxable costs certain lay and expert witness fees Appellant incurred in establishing her case or authenticating evidence.
Appellee argues that, even if the Appellant was the prevailing party as a matter of lаw,
The trial court’s discussion of the entire matter of taxable costs is brief:
[Appellant claims reimbursement] for, inter alia, fees for expert witness reports and testimony, trial notebook preparation, and copies. We do . not view 42 Pa.C.S. § 1726 as authorizing anything more than record or statutory costs associated with a suit. Indeed, that section provides for the. Supreme Court to establish what items are “costs”, which it has done. See also 42 Pa.S.A. § 21071 and 42 Pa.C.S. § 1725.1. We conclude that [Zelenak ] is persuasive, if not binding on this Court, on the issues presented. The only allowable “costs” which are recoverable by a prevailing party are those authorized by court rule or statute.
*900 Accordingly, Defendant’s motion to strike the Bill of Costs will be granted. [Appellant] will be granted ten days within which to file an amended bill of costs in conformance with law.
Trial Court Opinion (“T.C.O.”), 12/9/2009, at 7 (citations modified).
The Majority reverses in part. First, and unproblematically in my view, the Majority reverses the trial court’s ruling to the extent it denied Appellant’s undisputed record costs, ie., filing fees and other docket costs, of $251.01. Maj. Op. at 898. Second, relying on Zelenak’s clear injunction against such expenses, the Majority correctly affirms the trial court’s refusal to award costs associated with expert witnesses and individuals who assisted with various technology-related aspects of the trial, which amounted to $8,866.42. Maj. Op. at 898.
It is the third aspect of the Majority’s holding on taxable costs thаt gives me pause. The Majority awards Appellant an additional $88.92 comprised of expenses associated with the preparation of a joint trial notebook, which the trial court required the parties to provide by pre-trial order. In so holding, the Majority implies that the same may hold true for costs associated with any documentary, eviden-tiary, or other labors that the law or an individual judge requires, rather than that which is produced as a strategic or tactical choice. While, ultimately, I join the Majority’s rationale, I am troubled that the Majority can cite no binding, on-point authority to support this аspect of its analysis.
Inasmuch as the trial court and the parties resort to 42 Pa.C.S. § 1726 to support their respective arguments, I begin by reviewing in full our Supreme Court’s recent discussion of the nature and effect of that provision:
Preliminarily, we must question the trial court’s reliance upon Section 1726(a) of the Judicial Code as setting forth “some standards for the imposition of costs.” Section 1726(a) does not purport to set forth governing substantive standards, but instead is directed at this Court (or an entity within the Unified Judicial System to which we delegate the authority), as the defined “governing authority,” when prescribing “general rules” on the subject of assеssing costs. See, e.g., Pa.R.A.P. 2744 & note (rule promulgated pursuant to 42 Pa.C.S. § 1726 permits appellate court to award costs “as may be just” to appellee in frivolous appeal). Laying aside any separation of powers issue that Section 1726 may present, the list of considerations enumerated in Section 1726(a) does not create any substantive right in a prevailing party to recover costs in Pennsylvania.
Generally, Pennsylvania adheres to the “American Rule,” which states that litigants are responsible for their own litigation costs and may not recover them from an adverse party “unless there is express statutory authorizаtion, a clear agreement of the parties, or some other established exception.”
Farnese,
In Zelenak, this Court rejected an Erie County local rule that identified certain deposition transcript costs as taxable against the losing party. In that case, we relied heavily on this Court’s prior decision in Stewart v. Owens-Corning Fiberglas,
Ultimately, I join the Majority in acknowledging Appellant’s efforts to recoup costs she bore as a consequence of trial court requirements, and in allowing her to do so. Because the trial court expressly ordered these efforts (i. e., the mandatory preparation of a joint trial notebook), the incurrence of these costs was not a function of Aрpellant’s discretion. Consequently, they are in the nature of record costs, and thus taxable. Plainly, the recovery of such costs should be authorized by law as a matter of sound public policy. The Majority herein makes just such a policy argument in brief support of its holding. And that, indeed, is the source of my unease. Policy considerations are for the General Assembly and the Supreme Court; like the courts of common pleas, we lack the authority to identify new exceptions to the American rule. Hence, while I join the Majority in allowing re-coupment of costs actually incurred at the express behest of thе trial court, I emphasize my concern that we perch precariously here at the outer boundary of our authority as an intermediate appellate court.
Consequently, I join the Majority in reversing the trial court’s ruling striking Appellant’s bill of costs as to those items that clearly are record costs — in this case, solely docketing costs. The Majority identifies these “undisputed” costs as totaling $251.01.
75 Pa.C.S § 1722 (Preclusion of Recovery of Required Benefits)
I turn now to address an additional reason why I believe that the Majority corrеctly held that the trial court erred in molding the Appellant’s verdict to $0 based upon its reading of 75 Pa.C.S. § 1722 of the Motor Vehicle Financial Responsibility Act (“MVFRL”), a provision designed to preclude double recovery by plaintiffs of certain categories of third-party benefits in automobile accident cases. I agree entirely with the Majority’s analysis. I write separately here to identify an additional consideration that supports our disposition of this issue.
As noted by the Majority, the difficulty arises principally from a degree of confusion, at least in casual reference, regarding whether underinsured motorist (“UIM”) claims are first-party or third-party benefits. Maj. Op. at 895-96. The Majority correctly notes that, although Pennsylvania courts, including this one, previously have suggested that UIM benefits are first-party benefits, see, e.g., Pusl v. Means,
Section 1722 precludes double recovery only of the first-party benefits taken up in Subchapter B, which Section 1722 specifically incorporates in identifying benefits that may be used to mold downward a duplicative jury verdict. By contrast, UIM coverage is designated as a “separate available coverage” in subchaptеr C of the MVFRL. Maj. Op. at 896; see 75 Pa.C.S. §§ 1731-38 (subchapter C). “By placing first-party benefits and UIM coverage in different subchapters,” the Majority explains, “the legislature was clearly designating the two as distinct entities. Therefore, references in Section 1722 to coverages available ‘under this subchap-ter,’ namely B, cannot rationally include coverage found in Subchapter C.” Maj. Op. at 896.
. The Majority does not address Appellee’s argument-that Appellant was not the prevailing party, and hence was entitled to no сosts at all. Brief for Appellee at 5-6. This argument is unavailing under cases such as that cited by Appellee herself, which identifies a "prevailing party” as "a party in whose favor a judgment is rendered, regardless of the amount of damages awarded,” extending even to when a party receives only "nominal relief.” Id. (quoting Zavatchen v. RHF Holdings, Inc.,
. Although I agree that these costs are not disputed in principle, Appellee contends in an aside that Appellant waived her claim to even these costs by failing to file the amended bill of costs ordered by the trial court in its order granting Appellee’s motion to strike Appellant’s bill of costs. Brief for Appellee at 8. Although it is imperative that parties make appropriate objections before the trial court to preserve them for appeal, Pa.R.A.P. 302(a), and although it is advisable always to follow the trial cоurt’s direction, I would not find
. "The spirit of liberty is the spirit which is not too sure that it is right....” Learned Hand, 'The "Spirit of Liberty” Speech' (delivered in 1944 on I AM an American Day), Bruun and Crosby, eds., Our Nation’s Archives: The History of the United States in Documents (Black Dog & Levanthal 1999).