No. 60 W.D. Appeal Dkt. 1982, Appeal from Order entered September 4, 1981 in the Superior Court of Pennsylvania, No. 758 Pittsburgh 1980, Affirming the Order entered July 1, 1980 in the Court of Common Pleas of Allegheny County, Civil Division at G.D. No. 80-05285, 297 Pa. Superior Ct. 25, 443 A.2d 280 (1981)
David P. Helwig, Sharlock, Repcheck, Engel & Mahler, Gary F. Sharlock, Pittsburgh, for appellant.
Dennis C. Harrington, Harrington & Schweers, Pittsburgh, for Loran Palmer, et al.
Richard S. Dorfzaun, Pittsburgh, for U.S. Fidelity and Guar. Co.
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Nix, J., files a concurring opinion. McDermott, J., files a dissenting opinion in which Larsen and Zappala, JJ., join.
This case presents a single question: does Pennsylvania have the minimal contacts due process requires to exercise personal jurisdiction over a non-resident liability carrier in a suit brought by a Pennsylvania no-fault assigned risk carrier? In this suit for a declaratory judgment the local no-fault carrier asserts the non-resident liability carrier is responsible for Pennsylvania no-fault benefits arguably due the foreign carrier's insureds.*fn1
The insureds' claim to Pennsylvania no-fault benefits resulted from an auto accident in Pennsylvania. The claimants reside in the same state as the liability carrier. That state does not provide no-fault benefits. Their liability carrier is not authorized to do business in Pennsylvania, but did contract to indemnify its insureds against liability to the extent required by the financial responsibility laws of any state, including Pennsylvania.
Under these circumstances we hold the insureds' Indiana liability carrier is not subject to direct action in Pennsylvania for Pennsylvania no-fault benefits. Specifically, we determine that appellant, an Indiana insurance company, does not have contacts with Pennsylvania of a quantity and quality sufficient for a Pennsylvania court to assert jurisdiction within the limits set by the due process clause of the Fourteenth Amendment.
This Court does not believe a carrier who promises to indemnify and provide a defense against liability could reasonably foresee that those obligations would subject it to direct action for foreign no-fault benefits. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Here the foreign company's only contact with Pennsylvania is an automobile accident involving its insureds under a liability insurance policy. That policy contains nothing more than a provision for compliance with state financial responsibility laws. By itself, that contact is insufficient to confer jurisdiction in a declaratory judgment action brought by a Pennsylvania no-fault assigned risk carrier where the fundamental nature of the action requires determination of the contractual obligations of a foreign insurer to a foreign insured under an insurance contract executed in a foreign state. By promising to indemnify its insured in accord with the minimum requirements of financial responsibility laws the foreign insurer could not anticipate being haled into court in a sister state to litigate whether it is obligated to provide that state's no-fault benefits to its insureds. To hold otherwise would permit a state to impose its no-fault policy on a foreign carrier domiciled in a state which does not provide no-fault coverage for auto accidents involving its residents.
On March 26, 1976, the Palmer family was involved in an automobile accident on Interstate Route 80 in Mercer County, Pennsylvania.*fn2 At the time of the accident they were residents of Jeffersonville, Indiana. They have remained
Indiana residents to the present. Four members of the family sustained injuries in the accident. The fifth victim, Loran Palmer's mother-in-law, was killed. The four injured members of the family, including the driver, filed claims for no-fault benefits under the Assigned Claims Plan of the Pennsylvania No-Fault Act.*fn3 In accordance with the Assigned Claims Plan, 40 P.S. § 1009.108, United States Fidelity and Guarantee Company (hereinafter U.S.F. & G.), a carrier authorized to write automobile insurance policies in Pennsylvania, was assigned to administer appellees' claims. U.S.F. & G. refused to pay no-fault benefits and asserted that any benefits to which appellees were entitled were owed by United Farm Bureau Mutual Insurance Company (hereinafter United Farm), an Indiana insurance company, which had issued a liability policy to Loran Palmer in Indiana.
The Palmers filed an action in assumpsit against U.S.F. & G. to recover Pennsylvania no-fault benefits.*fn4 U.S.F. & G. then filed a Petition for Declaratory Judgment seeking a determination that under the terms of the policy issued to Loran Palmer by United Farm and the provisions of the No-Fault Act, any amounts payable to the Palmers are owed by United Farm or, in the alternative, benefits under the No-Fault Act are not owed to the Palmers.*fn5
United Farm filed preliminary objections asserting lack of personal jurisdiction and forum non conveniens.*fn6 For purposes of this appeal from the dismissal of its objections we must assume United Farm's factual averments are true.
Thus, we know United Farm is a mutual insurance company incorporated and licensed in the state of Indiana and does business exclusively in that state. It is not incorporated under the laws of Pennsylvania or qualified as a foreign corporation in Pennsylvania. United Farm has no offices or agents in Pennsylvania, nor has it authorized its agents to transact business in the Commonwealth. It has never consented to the exercise of jurisdiction by the courts of Pennsylvania. Based on these facts United Farm contends that it has never contracted to insure any person, property or risk located within the Commonwealth of Pennsylvania. See 42 Pa.C.S.A. § 5322(a)(6)(i).
As stated, United Farm's preliminary objections were dismissed. Upon motion by counsel for United Farm, the order dismissing the preliminary objections was amended to state that the preliminary objections raised a substantial issue of jurisdiction. On appeal*fn7 Superior Court affirmed. United States Fidelity and Guaranty Co. v. United Farm Bureau Mutual Insurance Co., 297 Pa. Superior Ct. 25, 443 A.2d 280 (1981). Since the case presents an important question of first impression ...