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FRED A. BRUNELLI AND FRED A. BRUNELLI v. FARELLY BROTHERS AND LUIS AVILES. APPEAL CNA/INSURANCE (05/04/79)

SUPERIOR COURT OF PENNSYLVANIA


decided: May 4, 1979.

FRED A. BRUNELLI AND FRED A. BRUNELLI, TO THE USE AND BENEFIT OF CNA/INSURANCE
v.
FARELLY BROTHERS AND LUIS AVILES. APPEAL OF CNA/INSURANCE

No. 1675 October Term, 1977, Appeal from the Order of the Court of Common Pleas, Civil Action, Law, of Delaware County, at No. 76 -- 7132.

COUNSEL

William F. Sweeney, Philadelphia, for appellant.

Michael A. Paul, Upper Darby, for appellee Brunelli.

John J. Baulis, Philadelphia, for appellees Farelly Brothers and Aviles.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Spaeth, J., concurs in the result. Jacobs, and Watkins, former President Judges, and Hoffman, J., did not participate in the consideration or decision of this case.

Author: Van Der Voort

[ 266 Pa. Super. Page 24]

On August 6, 1975, Frederick A. Brunelli, an employee of Cobb and Lawless, was injured in a collision with an automobile driven by Luis Aviles, an employee of Farelly Brothers. At the time of the accident, Mr. Brunelli was operating a motor vehicle furnished by his employer, within the scope of

[ 266 Pa. Super. Page 25]

    his employment. A complaint in trespass was filed on August 27, 1976 by Fred A. Brunelli against Farelly Brothers and Luis Aviles. On December 14, 1976, CNA Insurance Company, the workmen's compensation insurer for Cobb and Lawless, filed a Petition to Intervene as Use Plaintiff, alleging subrogation rights (to the extent of workmen's compensation paid and payable) to any recovery by plaintiff from the defendants. The lower court denied the petition by order dated April 28, 1977, and CNA appealed to our Court, arguing that the lower court improperly ruled that the Pennsylvania No-fault Motor Vehicle Insurance Act*fn1 implicitly repealed the subrogation provision of the Pennsylvania Workmen's Compensation Act,*fn2 and also that the lower court improperly determined that the No-fault statute prohibits subrogation by a workmen's compensation carrier for money paid to an employee injured in an automobile accident while acting within the scope of his employment. Although the No-fault statute does not specifically prohibit subrogation by a workmen's compensation insurer, a careful analysis of that convoluted, ungrammatical statute leads us to the conclusion that the workmen's compensation insurer is not subrogated, at least under the facts of the case before us, to any recovery by the injured employee.

Under No-fault § 111(b), the no-fault insurer (or "obligor", to use the term employed in the Act) must pay the injured insured (the employee Brunelli in this case) "basic loss benefits", regardless of who was responsible for causing the accident. "Basic loss benefits", according to No-fault § 103, are paid to a victim to compensate him for his "net loss". According to No-fault § 103, "net loss" is calculated by subtracting "benefits" and "advantages" (terms which are not specifically defined in No-fault) from "loss". "Loss" is defined in No-fault § 103 as "accrued economic detriment resulting from injury arising out of the maintenance or use

[ 266 Pa. Super. Page 26]

    of a motor vehicle consisting of, and limited to, allowable expense, work loss, replacement services loss, and survivor's loss". (The latter terms are defined in No-fault § 103).*fn3 Although "benefits" and "advantages" are not defined in No-fault's definition section, section 206(a) of the Act provides that (except when certain "assigned claims" are involved) all benefits and advantages which an individual receives or is entitled to receive from workmen's compensation shall be subtracted from "loss" and in calculating "net

[ 266 Pa. Super. Page 27]

    loss".*fn4 The effect of the foregoing sections is that the workmen's compensation insurer must pay all that it is required to pay under the provisions of the workmen's compensation statute before the no-fault insurer's financial obligations begin to accrue.*fn5

As noted previously, the no-fault insurer is obligated to pay "basic loss benefits" to the victim. Under No-fault § 301, the tortfeasor's tort liability for economic damage is abolished, except for amounts in excess of money paid to the victim as "basic loss benefits". (Section 301 contains other exceptions not applicable here). The victim may recover from the tortfeasor for amounts in excess of the "basic loss benefits", and if the victim's no-fault insurance policy provides for "added loss benefits" (benefits in excess of "basic loss benefits"), under No-fault § 111(a)(2) the no-fault insurer will be subrogated to the victim's right to recover from the tort-feasor, but only for economic damages which exceed the "basic loss benefits" amounts. In other words, the no-fault insurer must pay "basic loss benefits" to the victim, and perhaps additional benefits (if specified in the contract of insurance), but may recover from the tortfeasor only for amounts paid to the victim in excess of "basic loss benefits".

We turn now to the question of whether the workmen's compensation insurer may recover for amounts paid to the victim under the terms of the Pennsylvania Workmen's

[ 266 Pa. Super. Page 28]

Compensation Act. The Pennsylvania Workmen's Compensation Act provides, 77 P.S. § 671, that "[w]here the compensable injury is caused in whole or in 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 . . . ." Since No-fault has abolished the tort liability of a tortfeasor involved in an automobile accident except for amounts in excess of "basic loss benefits", and since workmen's compensation benefits are not amounts in excess of "basic loss benefits" (as determined earlier in this opinion), neither the employee-victim nor the workmen's compensation insurer, his would-be subrogee, has a cause of action against the third party tortfeasor for the sum paid or payable to the employee as workmen's compensation benefits.*fn6

The order of the lower court denying the workmen's compensation insurer permission to intervene as use plaintiff is affirmed.


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