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EVA TUBNER v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (11/05/81)

SUPREME COURT OF PENNSYLVANIA


decided: November 5, 1981.

EVA TUBNER, ADMINISTRATRIX OF THE ESTATE OF JERRY AMEY, DECEASED, APPELLEE.
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, APPELLANT

No. 80-1-189, Appeal from the Order of the Superior Court, No. 434 April Term 1979 dated July 25, 1980, reversing the Order of the Court of Common Pleas, Civil Division, of Allegheny County at No. GD 18397.

COUNSEL

Charles J. Duffy, Jr., Weis & Weis, Pittsburgh, for appellant.

Mark B. Aronson, Behrend, Aronson & Morrow, Pittsburgh, for appellee.

Edward P. Zemprelli, Clairton, for amicus curiae Pa. Assigned Claims Plan, Philadelphia, Pa.

Richard C. Angino, Benjamin & Angino, P.C., Harrisburg, for amicus curiae Pa. Trial Lawyers Association.

O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Nix, J., filed a dissenting opinion in which Roberts, J., joined.

Author: Kauffman

[ 496 Pa. Page 217]

OPINION

Before us is a question of first impression concerning the financial obligations of insurance companies under the No-Fault Motor Vehicle Insurance Act ("No-Fault Act").*fn1 At issue is whether a company designated to provide insurance coverage pursuant to the assigned claims plan of the No-Fault Act is required to pay not only "basic loss benefits," but also uninsured motorist benefits.*fn2

Appellee, Eva Tubner, is administratrix of the estate of Jerry Amey ("decedent"), who died of injuries he received in a motor vehicle accident while a passenger in an uninsured automobile. Decedent did not own a motor vehicle, and thus had no applicable insurance under the No-Fault Act.*fn3 Pursuant to the assigned claims plan, appellant, State Farm Mutual Insurance Co. ("State Farm"), was designated as the participating insurer, and it paid appellee basic loss benefits.*fn4

Contending, however, that she was also entitled to uninsured motorist benefits, appellee brought this action against

[ 496 Pa. Page 218]

State Farm in the Allegheny County Court of Common Pleas. State Farm argued that the assigned claims plan does not contemplate recovery of uninsured motorist benefits, and both parties moved for summary judgment. The trial court ruled in favor of State Farm. The Superior Court reversed; we granted allocatur, and now affirm the order of the Superior Court 280 Pa. Super. 38, 421 A.2d 392.*fn5

The Legislature's expressed purpose in adopting the No-Fault Act was to create a "low cost, comprehensive, and fair system" which uniformly would provide for "maximum feasible restoration" of all victims of motor vehicle accidents.*fn6 As defined in Section 108 of the No-Fault Act, the assigned claims plan departs from the prior system by providing for recovery when no source of insurance coverage otherwise exists.*fn7 Under Section 108(b), insurers are assigned to compensate motor vehicle accident victims for whom insurance is not carried as if a policy of basic loss insurance had been issued:

(2) The assigned claims bureau shall promptly:

(A) assign each claim for no-fault benefits to an assignee who shall be a participating insurer; . . .

[ 496 Pa. Page 219]

Every policy of basic loss insurance issued in this Commonwealth must include all coverage mandated by the No-Fault Act and by the Insurance Department Regulations validly promulgated thereunder. Section 104(a) of the Act requires, inter alia, policy coverage for basic loss benefits and for indemnification in the event of liability for general damages.*fn9 Insurance Department Regulation 66.1-104(a) ("Regulation 66.1-104(a)") additionally requires uninsured motorist coverage providing for payment of general damages to an insured party injured by an uninsured motorist:

§§ 66.1-104(a). Required motor vehicle insurance.

(a) In addition to the coverage required in section 104(a) of the act (40 P.S. § 1009.104(a)), coverage shall include uninsured motorist coverage in limits of $15,000 per person, $30,000 per accident . . . .

31 Pa. Code §§ 66.1-104(a).*fn10

Because assigned insurers are obligated precisely as if they had issued basic loss insurance policies, and because every policy of basic loss insurance issued in Pennsylvania must include uninsured motorist coverage, the right to uninsured motorist benefits under the assigned claims plan follows

[ 496 Pa. Page 220]

Accordingly, we affirm the order of the Superior Court.*fn14

NIX, Justice, dissenting.

I dissent. The majority incorrectly assesses the legislative intent underlying the Pennsylvania No-Fault Motor Vehicle Insurance Act (No-Fault Act)*fn1 in finding that a servicing insurance company under the assigned claims plan is required to pay, in addition to basic loss benefits, the uninsured motorist benefits.

The ascertainment by a court of legislative intent is significantly circumscribed where the General Assembly has expressly set forth its purposes in the passage of the legislation. Commonwealth v. Pope, 455 Pa. 384, 317 A.2d 887 (1974); see also, Commonwealth v. Rieck Inv. Corp., 419 Pa. 52, 213 A.2d 277 (1965); Calvert Distillers Corp. v. Bd. of Finance & Revenue, 376 Pa. 476, 103 A.2d 668 (1954); Kusza v. Maximonis, 363 Pa. 479, 70 A.2d 329 (1950). In the performance of this function, it must be remembered that courts are not free to make their own policy judgments, but must defer to those made by the legislature. Mayhugh v. Coon, 460 Pa. 128, 331 A.2d 452 (1975); Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963); Altieri v. Allentown Officers & Emp. Ret. Bd., 368 Pa. 176, 81 A.2d 884 (1951); Petition of Salvation Army, 349 Pa. 105, 36 A.2d 479 (1944); Orawsky v. Jersey Central P. & L. Co., 472 F.Supp. 881 (E.D. Pa. 1977). Here, there is no question as to the constitutionality of the legislative action; we are being called upon simply to determine what the legislature did in

[ 496 Pa. Page 222]

    this regard. Our judgment as to the wisdom of choices has no place in such an analysis Mayhugh v. Coon, supra.

The majority has focused upon that portion of the findings and purposes of the No-Fault Act which provides for "the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed in motor vehicle accidents on Commonwealth highways" while paying lip service to the Act's express purpose of creating a "low cost, comprehensive and fair system" of recovery. See Section 102(a)(3). Relying upon the former finding, the majority proceeds to conclude that "[b]ecause assigned insurers are obligated precisely as if they had issued basic loss insurance policies, and because every policy of basic loss insurance issued in Pennsylvania must include uninsured motorist coverage, the right to uninsured motorist benefits under the assigned claims plan follows a fortiori from a straightforward reading of the statute . . . ." ante at 623.

However, a careful review of the legislative findings negates the majority's interpretation and clarifies the General Assembly's use of the phrase "maximum feasible restoration" in Finding Three (3). In Finding Four (4) the legislature recognized that "it is necessary and proper to have a Statewide low-cost, comprehensive and fair system . . . ." Finding Six (6) identifies the need for a "basic system of motor vehicle accident and insurance law which: (A) assures every victim payment of all his basic medical and rehabilitation costs, and recovery of a reasonable amount of work loss, replacement services and survivor's loss; . . . ." In Finding Nine (9), the legislature again stressed the need for "a Statewide, low-cost, comprehensive and fair system . . ." and identified its objective as being to provide a system capable of "paying the cost of services so that every victim has the opportunity to: (A) receive prompt and comprehensive professional treatment; and (B) be rehabilitated to the point where he can return as a useful member of society . . . ." Finally, in Finding Ten (10) the legislature noted again the need to provide insurance rates at a level so

[ 496 Pa. Page 223]

    that "economically deprived individuals" would have access to them.

Following the above referred to findings, the legislature set forth in section 102(b) its purpose in passing the Act in question as being: "Therefore, it is hereby declared to be the policy of the General Assembly to establish at reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basis loss benefits for motor vehicle accident victims and the survivors of deceased victims."

From the foregoing it is obvious that the initial premise of the majority is an oversimplification of the legislature's perception of the needs and their proposed scheme to meet those needs. The term "maximum feasible restoration" must be construed in light of the stated intent to provide low-cost coverage accessible to the "economically disadvantaged" and to provide "adequate basic loss benefits." Within this context, we would agree that a liberal construction may be employed to find coverage consistent with this legislative intent.

However, in construing the No-Fault Act, like any other piece of legislation, the legislature is deemed to have intended that which it clearly stated, and it is not our function to extract an intent the legislature totally failed to convey. Commonwealth v. Pope, supra; Commonwealth v. Rieck Inv. Corp., supra. Nor is it proper for us to create an ambiguity when under a fair common sense reading of the language none exists. For the reasons that follow I am satisfied that the legislature has clearly expressed its intention in this case and that judgment may not be ignored regardless of how appealing the alternatives offered may be.

There is no dispute that the broad purpose of the No-Fault Act was to provide a comprehensive scheme to protect innocent victims of motor vehicle accidents. This broad purpose, however, fails to support the proposition that uninsured motorist benefits be payable under the assigned claims plan. The No-Fault Act makes no reference to the Uninsured Motorist Act. Rather, the two Acts are free-standing

[ 496 Pa. Page 224]

    acts, adopted more than ten years apart, and evidence no intent that their remedial measures, though in instances complimentary, must be co-extensive in all situations.*fn2 Moreover, the financial impact of the majority's ruling will have serious ramifications as to the possibility of providing the low-cost coverage sought to be achieved under the No-Fault Act.

A comparison of uninsured motorist coverage*fn3 and of the assigned claims plan reveals that the legislature was addressing different concerns and that the policy considerations were not necessarily the same. Before passage of the Uninsured Motorist Act, an insured accident victim seeking compensation could proceed only in tort. If the negligent driver was uninsured the victim would ordinarily receive no

[ 496 Pa. Page 225]

    compensation for his injuries. The purpose and intent of the Uninsured Motorist Act was to assure widespread availability to the public of insurance protection against financial loss caused by negligent financially irresponsible motorists and thereby placing the insured in the same position he would have been if the uninsured motorist had minimum liability insurance coverage. Thus, uninsured motorist coverage was provided "for the protection of persons insured under a policy of motor vehicle liability insurance, 40 P.S. § 2000(a) (emphasis added) who are promised that with payment of an additional premium they will have available to them limited coverage from their insurance carrier if they become involved in an accident with a negligent uninsured motorist." No such promise is made to the uninsured person whose sole source of recovery is under the assigned claims plan.

In contrast, the thrust of section 108 of the No-Fault Act is to provide limited compensation to an accident victim without regard to fault when there is no insurance applicable to the accident. The fact that the legislature under the terms of the assigned claims plan of the No-Fault Act, Section 108, deemed it advisable to permit recovery of benefits thereunder without the issuance of a policy or the payment of premiums does not reflect a decision to discard the requirement of an existent policy and payment of premiums for the recovery of uninsured motorist benefits. Nor can we say that the situations are so similar that there are no policy considerations that would justify different results. Such a significant change in the law relating to entitlement for uninsured motorist benefits should be clearly announced and not inferred from a contrived ambiguity.

All of the arguments advanced in support of the result reached by the majority begin with the premise that the legislature, in enacting the No-Fault Act, intended to create a comprehensive system coordinating no-fault as well as uninsured motorist benefits. This premise is offered even though there is no direct reference to the earlier Uninsured

[ 496 Pa. Page 226]

Motorist Act at any place in the No-Fault Act. Moreover, the premise ignores that the No-Fault Act set forth explicit findings and its purpose, Section 102, without reference to this presumed intent to coordinate the two Acts. Nor is there any expressed conflict between the provisions of the two Acts which would necessitate an attempt on our part to reconcile the two pieces of legislation.

The No-Fault Act sets forth in detail the benefits conferred thereunder, see Sections 103, 104, 201, 203, 205 and the circumstances under which those benefits are payable. See Sections 106, 108, and 204. Again, there is no direct reference to the benefits recoverable under the earlier Uninsured Motorist Act. The arguments supporting the view that the No-Fault Act also authorizes payment of uninsured motorist benefits, even though there would be no entitlement under the terms of the Uninsured Motorist Act itself,*fn4 stem from the use of the phrase "a policy of basic loss insurance" once in the entire Act, in section 108. The significance of this terminology, as urged, was obviously not perceived by the legislature who made no effort to define it or to specify its importance. From this single departure from the term "basic loss benefits" which is defined and used throughout the Act the majority concludes that the assigned loss claim section, Section 108, requires the payment of uninsured motorist benefits in addition to no-fault even though no policy for such coverage existed nor premiums paid for such protection.

[ 496 Pa. Page 227]

A close reading of Section 108 indicates the legislature intended the benefits available under the assigned claims plan to be limited to "basic loss benefits." That section specifically provides that the insurance carrier to whom the claim is assigned "has rights and obligations as if he had issued a policy of basic loss insurance complying with this Page 227} act." Section 108(b) (emphasis added). The italicized words clearly reflect that the benefits being referred to at this point were benefits set forth in the No-Fault Act itself. This is manifestly incompatible with the conclusion that the legislature intended to refer to the provisions of some other Act.

An analysis of Section 108 reveals that the legislature did use other terms when it was unquestionably referring to "basic loss benefits." For instance, it used "basic benefits," "basic restoration benefits," and "no-fault benefits." It is obvious the legislature's use of the term "basic loss insurance" was again nothing more than an equivalent for "basic loss benefits."

The majority also seeks to reinforce its conclusion by asserting the Insurance Commission Regulation, Section 66.1-104(a) which provides that in addition to coverage required in Section 104(a) of the No-Fault Act, coverage shall include uninsured motorist coverage. Even in this aspect the argument is specious. The mere fact the Insurance Commissioner sought to coordinate the provisions of the two Acts regarding the requirements for the issuance of a policy of motor vehicle insurances does not in any way reflect a legislative judgment to dispense with an issued policy and the payment of premiums for the recovery of uninsured motorist benefits. The regulation merely coordinated the No-Fault Act with the Uninsured Motorist Act regarding the requirements for the issuance of a policy of motor vehicle insurance. It did not intend to effectuate such a significant change in the law through such an oblique method. It is a well established principle that statutes are not presumed to make changes in the rules or principles of prior existing law beyond what is expressly declared in their provisions. Commonwealth v. Miller, 469 Pa. 24, 27-28, 364 A.2d 886, 887 (1976); Rahn v. Hess, 378 Pa. 264, 270, 106 A.2d 461 (1954); Gratz v. Insurance Co. of North America, 282 Pa. 224, 234, 127 A. 620 (1925).

[ 496 Pa. Page 228]

Accordingly, the Order of the Superior Court should be reversed and the summary judgment entered by the trial court reinstated.


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