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HARLEYSVILLE MUTUAL INSURANCE COMPANY v. CATASTROPHIC LOSS TRUST FUND ET AL. (10/06/86)

decided: October 6, 1986.

HARLEYSVILLE MUTUAL INSURANCE COMPANY, HARLEYSVILLE, PENNSYLVANIA 19438 (VAN LAUFER MATTER), PETITIONER
v.
CATASTROPHIC LOSS TRUST FUND ET AL., RESPONDENTS. EMPLOYEE BENEFIT PLAN OF HARLEYSVILLE MUTUAL INSURANCE COMPANY, HARLEYSVILLE, PENNSYLVANIA 19438 (LYONS MATTER), PETITIONER V. CATASTROPHIC LOSS TRUST FUND ET AL., RESPONDENTS



Original Jurisdiction in the case of Harleysville Mutual Insurance Company, Harleysville, Pennsylvania 19438 (Van Laufer Matter) v. Catastrophic Loss Trust Fund and Catastrophic Loss Trust Fund Board and Robert Wilson, in his capacity as Acting Executive Director of the Catastrophic Loss Trust Fund and George F. Grode, in his capacity as Acting Insurance Commissioner of the Commonwealth of Pennsylvania and Chairman of the Catastrophic Loss Trust Fund Board, and in the case of Employee Benefit Plan of Harleysville Mutual Insurance Company (Lyons Matter) v. Catastrophic Loss Trust Fund et al.

COUNSEL

Jane Dalton Elliott, with her, James J. McCabe and Carolyn Mills, Duane, Morris & Heckscher, for petitioners.

Michael L. Harvey, Deputy Attorney General, with him, Allen C. Warshaw, Executive Deputy Attorney General, Chief, Litigation Section, and LeRoy S. Zimmerman, Attorney General, for respondents.

Judges Barry and Palladino, and Senior Judge Blatt, sitting as a panel of three. Opinion by Judge Barry.

Author: Barry

[ 101 Pa. Commw. Page 216]

Before us are preliminary objections filed by respondents, the Catastrophic Loss Trust Fund (CAT Fund), opposing the petitions for review filed in this court's

[ 101 Pa. Commw. Page 217]

    original jurisdiction by petitioners, the EMPLOYEE BENEFIT PLAN of Harleysville Mutual Insurance Company (BENEFIT PLAN) and Harleysville Mutual Insurance Company (HMIC), filing as a separate entity. The petitions seek a declaratory order that the CAT Fund is obligated to provide benefits to Mrs. Marion Lyons, an employee of HMIC and a member of its BENEFIT PLAN*fn1 and to Mr. DeForrest Van Laufer, a no-fault automobile insurance policyholder insured by HMIC; that both the petitioners are entitled to reimbursement from the CAT Fund for benefits due Mrs. Lyons and Mr. Van Laufer; and that a resolution adopted by the CAT Fund Board of Directors which orders the CAT Fund Administrator to deny benefits to no-fault automobile insurance policyholders is invalid. The petition further asks that we issue a writ of mandamus compelling the CAT Fund to reimburse petitioners.

In its preliminary objections the CAT Fund argues that the petition must be dismissed inasmuch as this matter is exclusively within the jurisdiction of the Insurance Commissioner and petitioners have failed to exhaust this remedy.

Facts

The Motor Vehicle Financial Responsibility Law

On February 12, 1984 the Motor Vehicle Financial Responsibility Law (Financial Responsibility Law), Act of February 12, 1984, P.L. 26, 75 Pa. C.S. §§ 1761-1769, was enacted, effective October 1, 1984. The Financial Responsibility Law contained the provisions

[ 101 Pa. Commw. Page 218]

    which established the CAT Fund and repealed the NO FAULT Act.*fn2 The Fund provides for catastrophic loss benefits to injured automobile accident victims. These benefits are defined under Section 1766 of the Financial Responsibility Law, 75 Pa. C.S. § 1766, as those reasonable and necessary expenses due to an injury arising out of the maintenance or use of a motor vehicle which exceed $100,000. In addition, the Financial Responsibility Law created and described the duties of the CAT Fund's Board of Directors and Administrator, appoints the Insurance Commissioner as the Chairman of the CAT Fund Board of Directors, 75 Pa. C.S. Section 1765, and provides that CAT Fund benefits are "primary to any other source of accident and health benefits." See Section 1766(c) of the Financial Responsibility Law.

Marion Lyons

Mrs. Marion Lyons was issued a no-fault policy prior to October 1, 1984, the effective date of the Financial Responsibility Law. This policy was still in effect at the time of Mrs. Lyons' accident on December 8, 1984. At that time, Mrs. Lyons was an employee of HMIC and a member of its medical benefits program. The BENEFIT PLAN has paid and continues to pay Mrs. Lyons' medical expenses. Under its terms, the BENEFIT PLAN is subrogated to Mrs. Lyons' right to recover from the CAT Fund. Mrs. Lyons filed a claim with the Fund for those benefits in excess of $100,000.*fn3 This claim was denied on the basis of a resolution of the CAT Fund dated June 26, 1985.*fn4 The BENEFIT PLAN itself

[ 101 Pa. Commw. Page 219]

    never filed a claim for benefits but, by letter dated September 26, 1985, expressed dissatisfaction with the denial of benefits to Mrs. Lyons and a desire to appeal that decision. On October 10, 1985 the Fund informed the BENEFIT PLAN that it did not qualify as a claimant for benefits, in effect dismissing the BENEFIT PLAN's request to appeal the denial of Mrs. Lyons' claim. By letter dated October 31, 1985, the CAT Fund ...


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