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TONY VESPAZIANI AND VIOLA VESPAZIANI v. PETE INSANA (07/11/83)

decided: July 11, 1983.

TONY VESPAZIANI AND VIOLA VESPAZIANI, HIS WIFE
v.
PETE INSANA, INDIVIDUALLY AND T/D/B/A PETE INSANA AUTO BODY REPAIR AND TOWING, AND RICHARD INSANA. APPEAL OF TRANSPORT INSURANCE COMPANY



No. 33 W.D. Appeal Docket, 1982, Appeal from the Order of Superior Court of Pennsylvania at No. 270 Pittsburgh 1980, affirming the Order of the Court of Common Pleas of Washington County, Civil Division, at No. 376 January Term, 1979, 293 Pa. Super. Ct. 117, Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ.

Author: Flaherty

[ 501 Pa. Page 613]

OPINION OF THE COURT

Plaintiff Vespaziani sustained injuries in a motor vehicle accident occurring in the course of his employment by Eastern

[ 501 Pa. Page 614]

Express, Inc. Under the Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, § 101 et seq., as amended, 77 P.S. §§ 1 et seq., Eastern's insurance carrier, Transport Insurance Company (herein Transport), has paid to Vespaziani over $31,000 in workmen's compensation "work loss" benefits. In addition, Vespaziani instituted an action in trespass against Pete Insana individually and Pete Insana Auto Body Repair and Towing and Richard Insana under the provisions of the No-Fault Motor Vehicle Insurance Act, Act of July 19, 1974, P.L. 489, No. 176, § 101 et seq., 40 P.S. § 1009.101 et seq. Transport petitioned for leave to intervene as use-plaintiff, based on its claim to subrogation under the Workmen's Compensation Act, Section 319, 77 P.S. § 671. The Court of Common Pleas of Washington County denied Transport's petition, whereupon Transport appealed to the Superior Court, which affirmed, Vespaziani v. Insana, 293 Pa. Superior Ct. 117, 437 A.2d 1234 (1981). We granted allocatur to address the question of the effect of the No-Fault Motor Vehicle Insurance Act on the employer's claim to subrogation under the Workmen's Compensation Act.

The Pennsylvania Workmen's Compensation Act, Section 319, provides for an employer's, hence the employer's insurer's, claim to subrogation to the extent of compensation payable. Section 319 provides in pertinent part:

Where 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.

77 P.S. § 671.

Were this not a vehicular negligence case, Transport could assert its statutory subrogation interest to recover from a third party the amount of its liability for workmen's compensation benefits. However, this case presents the question whether the No-Fault Act's partial abolition of tort liability for injury arising from a motor vehicle accident has modified the employer's claim of subrogation under the Workmen's Compensation Act.

[ 501 Pa. Page 615]

In order to address this question, a review of the basic organization of the pertinent articles of the No-Fault Act is required. Article II addresses the obligation of a no-fault "obligor," i.e., insurer, under the Act. Under Article II, the no-fault obligor is required to provide "basic loss benefits" without any inquiry regarding fault. Basic loss benefits are defined as benefits payable for the "net loss" sustained, 40 P.S. § 1009.103. Section 206(a) of Article II concerns the calculation of "net loss." Under this section, workmen's compensation benefits are to be deducted from the victim's "loss" in determining the amount payable by the no-fault obligor:

[A]ll benefits or advantages . . . that an individual receives or is entitled to receive from social security . . . workmen's compensation, any State-required temporary, nonoccupational disability insurance, and all other benefits . . ., shall be subtracted from loss in calculating net loss.

40 P.S. § 1009.206(a) (emphasis supplied). Thus, the rights of the insured to basic loss benefits from the no-fault obligor are controlled by these net loss provisions providing for payment of benefits from the no-fault obligor to compensate loss not covered by ...


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