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filed: October 11, 1985.


Appeal from the Order of the court of Common Pleas, Allegheny County, Civil Division, at No. GD 83-04593.


Joseph M. Zoffer, Pittsburgh, for appellant.

Bradley Dornish, Pittsburgh, for appellee.

Brosky, Wieand and Lederer, JJ.*fn* Wieand, J., files a dissenting statement.

Author: Brosky

[ 348 Pa. Super. Page 44]

This appeal is from an order denying class certification. We conclude, inter alia, that the trial court erred in holding that precedent establishing liability is inconsistent with class status. Accordingly, we reverse and remand for the case to proceed as a class action.

Facts and Procedural History

Appellant, Julia A. Cambanis, is the administratrix of the estate of Louis Cambanis, her deceased husband. The decedent was struck by a motor vehicle operated by an insured of Nationwide Insurance Company, appellee. As a result, Louis Cambanis died two days later. At the time of his death he was 85 years old, retired and receiving Social Security benefits. The accident was covered, at least in part, by the provisions of Pennsylvania's No-Fault Motor Vehicle Insurance Act, Act of July 19, 1974, P.L. 489, No. 176, 40 P.S. § 1009.101 et seq.*fn1 Nationwide has paid survivor's loss, funeral and medical expense benefits to appellant.

Appellant submitted a claim for No-Fault work loss benefits, 40 P.S. §§ 1009.201, 202(b); and appellee denied liability for such benefits. Appellant then filed a complaint against appellee on behalf of the estate of her deceased husband and as representative of the class of all others who had been similarly wrongfully denied No-Fault work loss benefits. A hearing on the propriety of class certification was held, following which an opinion and order denying class certification were entered.*fn2

[ 348 Pa. Super. Page 45]

In Janicik, this Court explained the rationale for the low burden of proof.

[T]he stage of proceedings at which the class certification is to be initially determined and the trial court's extensive supervisory powers over class actions obviate the need for a strict burden of proof. A court may not make the initial class action determination until after the close of the pleadings to ensure that the class proponent is presenting a non-frivolous claim capable of surviving preliminary objections. Pa.R.Civ.P. 1707 . . . . Throughout the class action, the court has extensive powers to protect absent members and to ensure efficient conduct of the action. See, e.g., Pa.R.Civ.P. 1710 (subclasses and limiting issues); 1713 (conduct of actions); 1714 (approving settlements); 1716 (approving counsel fees) . . . . The court may alter, modify, or revoke the certification if later developments in the litigation reveal that some prerequisite to certification is not satisfied. Pa.R.Civ.P. 1710, 1711 . . . .

Janicik, supra, 305 Pa. Super. at 129, 451 A.2d at 455. (Citations omitted).

Trial Court Opinion

The opinion states that all prerequisites for certification but one were met. The trial court did not find that a class action would be a "fair and efficient method of adjudication," the last of the five prerequisites enumerated in Pa.R.Civ.P. 1702(5).*fn5

[ 348 Pa. Super. Page 47]

As the trial court saw it, liability on the part of appellee was a foregone conclusion. This followed from its interpretation of the 1983 Pennsylvania Supreme Court decision in Freeze v. Donegal Mutual Insurance Co., 504 Pa. 218, 470 A.2d 958 (1983). According to the trial court Freeze pronounced liability on the part of the insurance company to pay work loss benefits to estates such as appellant's. The trial court then concluded that "[t]he issue in this case is not one of liability." This was seen to reduce the issues in the case to one, damages. As such, it believed the case was not appropriate for class action treatment since it required separate hearings for each member of the class.

Consistent with the trial court's interpretation of Freeze, there were findings that there was no risk of varying adjudications due to the mechanical and routine processing of work loss benefits as set forth in the No-Fault Act; Nationwide would not be presented with incompatible standards of conduct; and class members' interests would not

[ 348 Pa. Super. Page 48]

    be foreclosed or impeded by individual work loss determinations.*fn6

The trial court also perceived an inconvenience in requiring estates from across the Commonwealth to litigate their claims in Allegheny County -- making the forum inconvenient and inappropriate.


The trial court held that the issue of liability was, as governed by precedent, to be decided against appellee. At the time the trial court so held, this was not an accurate statement; for that issue had yet to be decided.*fn7

In concluding that appellee was liable to appellant, the trial court relied on the holding in Freeze v. Donegal Mutual Insurance Co., 504 Pa. 218, 470 A.2d 958 (1983) -- that an estate of a minor victim of a motor vehicle accident, otherwise covered by the No-Fault Act, was entitled to recover work loss benefits pursuant to the Act. The trial court erred in concluding that Freeze settled all issues of liability in this case and left only the issue of damages.

First, it was yet to be decided, for Freeze did not, whether the loss of the Social Security payments of a retired person was a compensable item in the No-Fault work loss calculation. It remained for our recent decision in Matza v. Allstate Insurance Co., 341 Pa. Super. 166, 491 A.2d 203 (1985) to hold that a decedent's pension and Social Security benefits are "probable income" which the retiree had a reasonable expectation of receiving and, accordingly, the reduction in such payments as a result of his death, if otherwise covered by No-Fault, is properly compensable as work loss.

[ 348 Pa. Super. Page 49]

Second, even if, as a matter of law, some people have a right to compensation, it would still have to be established, as a factual matter, that appellant is within that category. The case of Minear v. State Farm Mutual Automobile Insurance Co., 309 Pa. Super 53, 454 A.2d 1078 (1983) (holding that an estate of a retired person is entitled to claim No-Fault work loss benefits and, with proper proof, collect such benefits), and Matza, supra, (holding that loss of Social Security and pension benefits are to be included in calculating work loss benefits under No-Fault), merely set appellate precedent which should be followed by this Commonwealth's trial courts. This precedent does not "establish" liability in any particular case. This precedent is only part of the law which must be applied to the facts as found. In short, Matza*fn8 gives appellant the right to get into the ring; Matza alone does not deliver a knock-out punch.

When appellant's claim is denied, as here, then she and all others similarly situated have a right to commence an action to compel payment. Fox v. State Farm Mutual Automobile Insurance Co., 322 Pa. Super. 96, 469 A.2d 199 (1983). Under Matza, the potential for liability is now clear. Whether that potential will be realized must be determined by the court's application of the law to the facts as established. The issue of liability is, therefore, both unresolved and a common one shared by the class.

It is not enough that there are issues common to the class in order for class action treatment to be appropriate; those common issues must predominate. Pa.R.Civ.P. 1708(a)(1). The common, predominant issue sub judice is the propriety of appellee's practice of denying No-Fault work loss benefits to estates of retired persons who have lost Social Security payments due to the accident. In Nye v. Erie Insurance Exchange, 307 Pa. Super. 464, 453 A.2d 677 (1982), this Court considered a similar issue of commonality: where an insurer refused to pay under its No-Fault policy,

[ 348 Pa. Super. Page 50]

    we held that class action treatment was appropriate for such an issue.

If Nye is not permitted to maintain this suit, all the class members will be forced to file individual suits to vindicate their rights. To thrust numerous members of a class into separate actions would be an intolerable waste of judicial resources when the claims of all plaintiffs may be expeditiously settled in one suit. Class actions can be a fair and efficient method of resolving disputes and to subject the parties and the court system to the hazards of expensive separate litigation in this context would eviscerate the purpose of the class action as a "procedural device designed to promote efficiency and fairness in the handling of large numbers of similar claims."

Nye, supra, 307 Pa. Superior Ct. at 467, 453 A.2d at 678.*fn9

In Allessandro v. State Farm Mutual Insurance Co., 259 Pa. Super. 571, 393 A.2d 973 (1978), a case in many respects similar to the one at bar, we also held that a class action was proper. The cause of action was based on the reduction of uninsured motorist's payments by the insurer under the medical payments coverage. We can discern no valid ground for distinguishing the instant case from Nye or Allessandro.

The trial court also denied certification because separate hearings on damages would, in its opinion, defeat the efficiency of the class action. "Since the loss has to be established in each case, it would require separate hearings for each member of the class."

The trial court was correct in its perception that separate damage determinations will be required; it erred, however, in concluding that this circumstance bars a class action.

It is well-established that questions as to the amount of individual damages do not preclude a class action. ABC Sewer Cleaning, 293 Pa. Super. 219, 438 A.2d 616 (1981);

[ 348 Pa. Super. Page 51]

    the estates, then the question of the amounts of individual damages will be considered.

Where damages may be determined by a mathematical or formula calculation and may be considered a mechanical task, then a class action may be proper. Windham, supra. We leave it to the trial court to determine how the damage issue should be handled, but not without observing that the insurance industry is in the business of creating and utilizing actuarial tables and routinely handles No-Fault work loss claims. The amount of damages due to each estate would appear to be a straight-forward calculation once liability is shown. The damage issue is, therefore, suitable for class action treatment.*fn16

The trial court was also concerned about concentrating the litigation in the Allegheny County Court of Common Pleas and thereby forcing estates located across the Commonwealth to come to Allegheny County to prove their individual damages.*fn17 The forum may, indeed, seem inconvenient, but, upon careful consideration, we conclude that it is not.

[ 348 Pa. Super. Page 53]

Proof of damages would primarily consist of a showing of documents and not extended testimony from numerous sources.*fn18 The trial court may also consider the use of Pa.R.Civ.P. 1006, allowing a change of venue for damage determinations should a party so move.*fn19

The trial court also supported its denial of certification on the ground that there was no risk of inconsistent adjudication in light of the Freeze decision, supra, and that there was no risk of other class members' interests being impeded or foreclosed. In Janicik, supra, this Court said that:

Finding such risks is not essential to certifying the class, but 'if they exist, they will be forceful arguments in support of the approval of the class action.' The court below held that the principle of stare decisis and proper application of fundamental contract principles would eliminate any risks of inconsistent adjudications. Such reasoning ignores the rule's exhortation to address this consideration "as a practical matter." Courts may, and often do, differ in resolving similar questions presenting issues of law or fact. The precedential effect of a decision, even if incorrect, may have a chilling effect on the assertion of similar claims, and, combined with the expiring of statutes of limitation, may often "substantially impair or impede" potential litigants' ability to protect their interests. Moreover, as with the related criteria concerning the complexity and expenses of litigation, Pa.R.Civ.P. 1708(a)(6), the court may consider the parties' circumstances and respective ability to pursue separate

[ 348 Pa. Super. Page 54]

    actions. Appellee conducts business statewide and may thus be subject to inconsistent standards of conduct. Many class members, especially those with smaller claims, may be unable to afford the costs of protecting their interest through separate actions. All claims arise from interpretation of virtually identical contract language, so that even a small risk of inconsistent adjudications is unnecessary. The class action, when compared to separate actions under this criterion, affords the speedier and more comprehensive statewide determination of the claim, and thus, the better means to ensure recovery if the claim proves meritorious or to spare appellee repetitive piecemeal litigation if it does not.

Janicik, supra, 305 Pa. Super. at 143-44, 451 A.2d at 462-463 (citations and footnote omitted.)

For the reasons set forth in Janicik, we conclude that there are risks of inconsistent adjudications where several trial courts may be faced with seemingly identical cases and the resolution of one case may have a chilling effect on others. Such risks can be avoided here by a class action.*fn20 Accord, Haft, supra.


In summary, we hold that common questions of law or fact predominate over any individual questions; there seems to be no size or management problems; separate actions could yield inconsistent adjudications and incompatible standards for appellee; and the forum is appropriate.

For these reasons we hold that a class action in this case would be a fair and efficient method of adjudication. Accordingly,

[ 348 Pa. Super. Page 55]

    we reverse, certify the class and remand for the case to go forward as a class action consistent with this opinion.


Accordingly, we reverse, certify the class and remand for the case to go forward as a class action consistent with this opinion.

WIEAND, Judge, dissenting:

*fn* Honorable William J. Lederer, Senior Judge, of the Court of Common Pleas of Philadelphia County, Pennsylvania, is sitting by designation.

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