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BLAIR AND JULIA CUNNINGHAM v. INSURANCE COMPANY NORTH AMERICA (08/14/87)

decided: August 14, 1987.

BLAIR AND JULIA CUNNINGHAM, ADMINISTRATORS OF THE ESTATE OF KATHLEEN B. CUNNINGHAM, DECEASED; AND ALL OTHERS SIMILARLY SITUATED, APPELLEES,
v.
INSURANCE COMPANY OF NORTH AMERICA, APPELLANT



Appeal from the Judgment Dated May 12, 1986, by the Superior Court of Pennsylvania, No. 175 Harrisburg, 1985, Reversing the Order Dated February 22, 1985, and Vacating the Judgment Dated March 15, 1985, by the Court of Common Pleas of Dauphin County, Pennsylvania, in No. 995 S 1984, and Remanding for Further Proceedings, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Larsen, J., files a dissenting opinion.

Author: Flaherty

[ 515 Pa. Page 487]

OPINION OF THE COURT

This is an appeal from an order of the Superior Court, 353 Pa. Super. 146, 509 A.2d 377, which reversed an order of the Court of Common Pleas of Dauphin County which in turn had revoked certification of a class in a class action proceeding

[ 515 Pa. Page 488]

    filed against the Insurance Company of North America (hereinafter INA). The class action proceeding had been instituted by Blair and Julia Cunningham, appellees herein, seeking recovery of post-mortem work loss benefits on behalf of their daughter's estate and on behalf of the estates of all other INA insureds who had been fatally injured in automobile accidents after the effective date of the No-Fault Motor Vehicle Insurance Act (Act of July 19, 1974, P.L. 489, No. 176, 40 P.S. § 1009.101 et seq., repealed by the Act of February 12, 1984, P.L. 26, No. 11, § 8(a)).

The accident responsible for the death of the Cunninghams' daughter occurred in January of 1979, and, more than five years later, in March of 1984, the instant action was filed. In response thereto, INA moved for summary judgment on grounds the claims of the representative plaintiffs were barred by the statute of limitations set forth in the No-Fault Act, 40 P.S. § 1009.106(c), which provides that suits must be brought within, at most, four years from the date of the accident. See Kamperis v. Nationwide Insurance Co., 503 Pa. 536, 469 A.2d 1382 (1983) (discussion of statute of limitations governing actions for post-mortem work loss benefits). The trial court determined that the individual claims of the Cunninghams were indeed barred by the statute of limitations but conditionally granted class certification with the proviso that counsel would be required to intervene new class representatives within twenty days. New class representatives were not, however, intervened, and, after the twenty day period and certain extensions granted with respect thereto had expired, the court granted a motion for decertification of the class.*fn1 Summary judgment in favor of INA was likewise granted.

An appeal was taken to the Superior Court, whereupon summary judgment was vacated and the order revoking certification of the class was reversed. The basis for the Superior Court's action was its determination that the running of the statute of limitations against the Cunninghams'

[ 515 Pa. Page 489]

    claim had been tolled during a period in which the Cunninghams had been putative class members in an earlier class action, seeking post-mortem work loss benefits, filed against a group of thirty-one insurance companies, including INA. The latter class action was commenced on November 15, 1979, but, with respect to INA and all but one other in the group of defendant insurance companies, was subsequently dismissed by the trial court on the basis of preliminary objections asserting that the representative plaintiff lacked standing to bring such an action. The Superior Court reversed, holding that adversarial standing was not required, and an appeal was taken to this Court, whereupon on December 30, 1983 the Superior Court's order was reversed and the class action was dismissed as to INA and twenty-nine of the other defendant insurance companies. Nye v. Erie Insurance Exchange, 504 Pa. 3, 470 A.2d 98 (1983). The basis for our dismissal of the Nye action against INA was that the class representative lacked the necessary standing to assert such a claim since the representative's interests had not been insured by INA.

In holding that the Cunninghams' claim in the instant action was not barred by the statute of limitations, the Superior Court reasoned that the running of the statute had been tolled for a period of approximately four years, to wit, from the time of commencement of the Nye action until its final dismissal by this Court. The issue presented by the instant appeal is, therefore, whether tolling of the statute of limitations occurred so as to prevent the Cunninghams' claim from becoming time-barred.

It is well established that upon the filing of a class action, the statute of limitations is normally tolled for all putative plaintiffs in the class. See Alessandro v. State Farm Mutual Automobile Insurance Co., 487 Pa. 274, 279 n. 9, 409 A.2d 347, 350 n. 9 (1979) (members of a class which is subsequently decertified "will not be time barred by the statute of limitations, as it is suspended during the time they are allegedly parties to the class action. American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct.

[ 515 Pa. Page 490756]

, 38 L.Ed.2d 713 (1974), [rehearing denied, 415 U.S. 952, 94 S.Ct. 1477, 39 L.Ed.2d 568 (1974)]."). See also Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350, 103 S.Ct. 2392, 2396, 76 L.Ed.2d 628, 633 (1983) ("The filing of a class action tolls the statute of limitations 'as to all asserted members of the class,' [ American Pipe & Construction Co., 414 U.S. at 554, 94 S.Ct. at 766, 38 L.Ed.2d at 727].").

Class actions in Pennsylvania emanate from Pa.R.C.P. 1701 et seq. Tolling of the statute of limitations is discussed in the Explanatory Note to Pa.R.C.P. 1701, following that rule's definition of the term "class action." A "class action" is defined in Pa.R.C.P. 1701 as "any action brought by or against parties as representatives of a class until the court by order refuses to certify it as such or revokes a prior certification under these rules." The Explanatory Note following that definition states,

This definition becomes important in determining the effect of the commencement of a class action as tolling the statute of limitations as to the members of the class other than the named representatives. It carries into effect the decision of the United States Supreme Court in American Pipe and Construction Company v. State of Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), in which the Court held that the commencement of an action as a class action suspends the applicable statute of limitations during the interim period from commencement until refusal to certify as to all putative members of the class who would have been parties if the action had been certified as such.

Thus, given that the statute of limitations is normally tolled upon the filing of a class action, there would, if this were a typical case, be no question that the statute was tolled during the period when the Cunninghams were putative class members in the earlier class action against INA. A difficulty arises, however, in that the earlier class action, i.e., the Nye case, was one in which the representative plaintiff lacked standing to maintain a suit against INA. The narrow issue presented, therefore, is whether that lack

[ 515 Pa. Page 491]

    of standing negated the tolling effect that would normally have accompanied ...


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