Mаry R. TUCCI, Appellee, v. STATE FARM INSURANCE COMPANY, Appellant. Arlene Anne CARR, Appellee, v. STATE FARM INSURANCE COMPANY, Appellant. Barbara SAUNDERS, Appellee, v. STATE FARM INSURANCE COMPANY, Appellant.
Nos. 35, 39, 41
Supreme Court of Pennsylvania
Decided Dec. 27, 1983
Reargument Denied Feb. 23, 1984
469 A.2d 1025 | 503 Pa. 447
HUTCHINSON, Justice
Argued Oct. 20, 1983.
Samuel Merovitz, Donald J. Klein, Philadelphia, for Tucci at No. 35.
Bernard M. Gross, Philadelphia, for Carr at No. 39.
Phillip Baer, Philadelphia, for Saunders at No. 41.
Richard C. Angino, Harrisburg, for Saunders and amicus.
Before ROBERTS, C.J., and NIX, LARSEN, FLAHERTY, MCDERMOTT, HUTCHINSON and ZAPPALA, JJ.
HUTCHINSON, Justice.
These three cases in which State Farm Mutual Automobile Insurance Company (State Farm) appeals by allowance involve the same issue and arise out of arbitration awards under no-fault policies. Therefore, we have consolidated them.
The awards were all made by the same arbitrator, confirmed by Philadelphia Common Pleas and affirmed by the
Each of these appellees received payment of her claim for economic loss or “special damages“, i.e. medical expenses and loss of earnings, under the basic loss coverage of her no-fault insurance. Each of them then claimed additional damages under the uninsured motorist coverage of her liability policy. These claims were submitted to the arbitrator who made the following awards:
- for Mary R. Tucci against State Farm in the amount of $12,500.00,
- for Arlene Carr against State Farm in the amount of $25,500.00,2
- for Barbara Saunders against State Farm in the amount of $9,987.00.
Each award specified the portion of the amount awarded attributable to noneconomic loss or “general damages“, i.e. pain and suffering, which would be recoverable in trespass under Section 301 of our
The
(a) No motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle
shall be delivered or issued for delivery in this State with respect to any motor vehicle registеred or principally garaged in this State, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death as are fixed from time to time by the General Assembly in section 1421 of article XIV of “The Vehicle Code,” act of April 29, 1959 (P.L. 58), under provisions approved by the Insurancе Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom, ....
In Harleysville Mutual Casualty Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968), we interpreted this act as follows:
The purpose of the uninsured motorist law is tо provide protection to innocent victims of irresponsible drivers. The amount of the coverage to be afforded by the uninsured motorist feature of the policy is set by the statute, but nowhere, explicitly or implicitly, does the act place a limit on the total amount a victim may reсover if he suffers a loss resulting from the negligence of an uninsured motorist.
In Pattani v. Keystone Ins. Co., 426 Pa. 332, 231 A.2d 402 (1967), we quoted with approval the language of Katz v. American Motorists Ins. Co. [244 Cal.App.2d 886], 53 Cal.Rptr. 669 (1966), that such statutes are “designed to give monetary protection to that ever changing and tragically large group of persons who while lawfully using the highways themselves suffer grave injuries through the negligent use of those highways by others.” We there declared for liberal construction of the statute in order to achieve the legislative intent, and we here adhere to that declaration.
Id., 429 Pa. at 395, 241 A.2d at 115.
Eleven years after the passage of the uninsured motorists act, the legislature attempted to establish “a
Hence, we are bound to assume that when the legislature indicated its intention to set up “a Statewide low-cost, comprehensivе, and fair system of compensating
Section 102(b) of thе No-Fault Act, states its purpose “to establish at reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims....” Under the definitions in Section 103, “loss” means “accrued economic dеtriment resulting from injury arising out of the maintenance or use of a motor vehicle consisting of, and limited to, allowable expense, work loss, replacement services loss, and survivor‘s loss.” “Basic loss benefits” are defined as “benefits provided in accordance with this act for the net loss sustained by a viсtim....” (Emphasis added.) If we then substitute the Section 103 definitions into Section 102(b), the latter section sets forth a purpose to establish a statewide system of prompt and adequate benefits for the net economic detriment sustained by a motor accident victim.
The correlation between this purpose of the No-Fault Act and that of the Uninsured Motorist Act has been perceptively articulated by Judge Teitelbaum in Carnevale v. Sentry Insurance, A Mutual Company, 469 F.Supp. 681 (W.D.Pa. 1979):
The purpose of Pennsylvania‘s no-fault law is to create a first party contractual right of action against one‘s own insurer for economic loss and to preserve the common law cause of action for non-economic loss where certain threshold conditions have been met.1 Uninsured motorist coverage is designed to provide protection against being
left with a worthless cause of action against the uninsured driver for non-economic loss.2 Absent the set-off provision, plaintiff is reimbursed for his economic losses under the no-fault coverage and reimbursed for his non-economic losses up to the policy limit by the uninsured motorist coverage. In this manner, the legislatively intended distinction between economic and non-econоmic losses is preserved. Public policy is also furthered in that premiums paid for uninsured motorist coverage will provide protection against non-economic losses occasioned by an uninsured motorist‘s actions.
1 ....
2 There could be no other purpose since economic losses are paid by one‘s own insurer without regard to whether or not the other driver is insured.
The rationale of Tubner v. State Farm Mutual Auto Insurance Co., 496 Pa. 215, 436 A.2d 621 (1981) broadly supports correlation between the two acts. In Tubner, a majority of this Court held that a person entitled to basic loss benefits under the No-Fault Act‘s assigned claims plan was also entitled to recovery under the uninsured motorists act for general (noneconomic) damages not recoverable under no-fault (basic loss) protection. See especially the majority‘s footnote 13, 496 Pa. at 220, 436 A.2d at 623 citing Carnevale with approval. See also Brader v. Nationwide Mutual Insurance Co., 270 Pa.Superior Ct. 258, 411 A.2d 516 (1979), similarly cited with approval in Tubner in footnote 13. In Brader, the Superior Court said: “In such situations the insured should be allowed to recover under the uninsured motorists provisions of his insurance policies (up to the policy limits) those actual damages suffered which exceed the amount of no-fault benefits received or owing.” 270 Pa.Superior Ct. at 265, 411 A.2d at 519.
Hence, Tubner is not inconsistent with our conclusion here that these uninsured motorists provisions do not
In Carnevale the court refused to enforce a set-off provision in the plaintiff‘s no-fault policy which would have permitted the deduction of $48,000.00 in no-fault payments for hospital аnd medical treatment from the $15,000.00 uninsured motorist coverage for noneconomic loss. Allowing such set-off would have effectively denied the minor plaintiff any recovery for pain and suffering. Judge Teitelbaum‘s analysis seems to us in accord with both common sense and the provisions of the two substantivе acts we here interpret, as well as those of our Statutory Construction Act. It creates out of the two acts a coherent and comprehensive system of compensating and restoring motor vehicle accident victims.
The instant three appeals present the simple obverse of Carnevale. Here instead of setting off no-fault economic losses against uninsured motorists noneconomic losses, the arbitrators have awarded the same economic losses for a second time. Such a result would equally frustrate the legislative intent expressed in the No-Fault Act. Moreover, it is contrary to the policy we articulated in Harleysville Mutual Casualty Co. v. Blumling, supra, where we said:
We do not wish to imрly that injured parties may be permitted to pyramid separate coverages so as to recover more than the actual loss. Such a ruling is not necessary to the decision of this case and we do not make it. We do hold, however, as did the court in Sellers, supra, [Sellers v. U.S.F. & G. Co., 185 So.2d 689 (Fla.1966)] that where the loss exceeds thе limits of one policy, the insured may proceed under other available policies up to their individual limits or to the amount of the actual loss.
The insured may recover uninsured motorists benefits:
- If the injured party paid the premiums of the policy and was the named insured; and
- If the recovery under the second uninsured motorist coverage wаs limited to actual damages; and
- If the recovery is not limited by the statutory exclusions.
Id., 481 Pa. at 143, 392 A.2d at 287. In both of these cases, we permitted the insured to recover uninsured motorists benefits under more than one uninsured motorist coverage “[i]f the recovery under the second uninsured motorist coverage was limited to actual damages.” Id. Because the arbitrаtor explicitly awarded damages for economic detriment already compensated by appellees’ basic loss coverage under no-fault, we now hold those portions of his awards to be against the law. The order of Superior Court, 297 Pa.Super. 593, 441 A.2d 790, is vacated and the record remаnded to Philadelphia Common Pleas for further proceedings consistent with this opinion.
NIX, J., concurs in the result.
LARSEN, J., files a dissenting opinion.
LARSEN, Justice, dissenting.
I dissent and would affirm based upon the opinions of the Superior Court. See Saunders v. State Farm Insurance Company, 294 Pa.Super. 424, 440 A.2d 538 (1982) (opinion by Cavanaugh, J.); Tucci v. State Farm Insurance Company, 297 Pa.Super. 593, 441 A.2d 790 (1982) (memorandum opinion); Carr v. State Farm Insurance Company, 297 Pa.Super. 576, 441 A.2d 781 (1982) (memorandum opinion).