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ROMAN MATUSZ v. SAFEGUARD MUTUAL INSURANCE COMPANY (03/08/85)

filed: March 8, 1985.

ROMAN MATUSZ, APPELLEE,
v.
SAFEGUARD MUTUAL INSURANCE COMPANY, APPELLANT



No. 03256 Philadelphia, 1983, Appeal from Order, Court of Common Pleas, Civil Division, Philadelphia County, No. 4282 August Term, 1977

COUNSEL

James T. Moughan, Philadelphia, for appellant.

David E. Robbins, Broomall, for appellee.

Cavanaugh, Beck and Tamilia, JJ.

Author: Cavanaugh

[ 340 Pa. Super. Page 117]

At issue is the question of whether the Pennsylvania Insurance Guaranty Association is liable for attorney's fees, costs and interest assessed against an insurance company which was later suspended from its business operations as the result of an order of the Pennsylvania Insurance Commissioner.

Appellee, Roman Matusz, sought personal injury protection benefits from Safeguard Mutual Insurance Company and received an award in arbitration for lost wages and medical expenses, as well as counsel fees and costs. Thereafter, on May 29, 1979, the Insurance Commissioner of Pennsylvania issued an order which suspended the business operations of Safeguard, and at the same time sought an order directing him to liquidate the company. This was contested and it was not until April 21, 1982 that the order declaring Safeguard insolvent was entered by the Commonwealth

[ 340 Pa. Super. Page 118]

Court. Safeguard thereby became an "insolvent insurer" under The Pennsylvania Insurance Guaranty Association Act, Act of November 25, 1970, 40 P.S. § 1701.103(6). The Association (PIGA) thus assumed certain obligations with respect to claims against Safeguard. Thereafter, counsel for Matusz pursued his claim against PIGA. While PIGA agreed to pay the amount of medical expenses and wage losses, they refused to pay the amount awarded for attorney's fees and costs and also resisted the claim for interest at eighteen percent calculated from the period of thirty days after the due submission of supporting documentation for the work loss and medical expense claims. The trial court heard this dispute on a stipulated set of facts and awarded the counsel fees and expenses and interest to appellee. The present appeal is from this determination.

The claim for eighteen percent interest is made pursuant to the "overdue" provision of the No-fault Motor Vehicle Insurance Act of 1974, 40 P.S. § 1009.106(a)(2) and the attorney's fees and costs were awarded pursuant to § 1009.107 of the same Act. There is no present quarrel with the assessment of these ancillary awards as against Safeguard -- the issue relates only to PIGA's responsibility.

There is nothing in the Pennsylvania Insurance Guaranty Association Act which explicitly bears upon the entitlement of the claimant to interest or attorney's fees and costs properly assessed under the No-fault Act. The purpose of the PIGA is stated, in part:

§ 1701.102 Purposes

The purposes of this ...


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