No. 336 October Term, 1979, Appeal from Order entered February 6, 1979, Court of Common Pleas, Philadelphia County, Civil Action - Law, October Term, 1978, No. 3650.
Allen L. Feingold, Philadelphia, for appellant.
Donald B. Scace, Jr., Philadelphia, for appellee.
Price, Van der Voort and Wieand,*fn* JJ.
[ 275 Pa. Super. Page 247]
The issue in this appeal is whether an insurance company which improperly refuses to pay benefits under the Pennsylvania No Fault Motor Vehicle Insurance Act becomes liable for punitive damages. The trial court sustained the insurer's
[ 275 Pa. Super. Page 248]
preliminary objections and dismissed a count of the complaint which requested an award for punitive damages. The plaintiff appealed.
Brenda Smith alleged that she had sustained personal injuries while riding as a passenger in a vehicle which had been involved in an accident. In the first count of her complaint she alleged that Harleysville Insurance Company had refused to make payment to her of medical bills in the amount of $411.00. In the second count, she averred that the insurer's refusal to make payments was malicious and intended to harass her. No facts were alleged to support such a charge.
The law in Pennsylvania has always been that punitive damages cannot be recovered for breach of contract. Hoy v. Gronoble, 34 Pa. 9 (1859); Board v. Bell Telephone Co. of Pennsylvania, 43 Pa.Dist. & Co.2d 707 (1967); Wood v. Hahnemann Medical College & Hospital, 1 Pa.Dist. & Co.3d 674 (1976); Restatement, Contracts § 342.
It is also clear that the No Fault Act makes no provision for an award of punitive damages against an insurer who wrongfully withholds payment of a just claim. Instead, the statute provides for interest on overdue payments at the rate of 18 percent per annum. 40 P.S. § 1009.106(a)(2). It also provides that where a denial of a claim has been "without reasonable foundation", the claimant shall be entitled to be paid reasonable attorney's fees. 40 P.S. § 1009.107(3). An insurance statute which imposes a penalty or the payment of counsel fees must be strictly construed. Couch on Insurance, 2 ed. § 58.10; 46 C.J.S. 715, § 1406-09. A court should not rewrite a statute to provide penalties not deemed necessary by the legislature.
Appellant argues, however, that the insurer's failure to make payment constituted a malicious tort for which punitive damages may be assessed. We reject this contention. It would be improvident to permit a rule of law by which a breach of contract may readily be converted ...