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filed: December 9, 1987.


Appeal from the Judgment of the Court of Common Pleas of Philadelphia County, Civil at No. 4658 July Term 1982.


Alfred W. Putnam, Jr., Philadelphia, for appellant.

Charles W. Craven, Philadelphia, for appellee.

Cavanaugh, Rowley and Montemuro, JJ.

Author: Montemuro

[ 369 Pa. Super. Page 549]

This is an appeal by the Southeastern Pennsylvania Transportation Authority (hereinafter "SEPTA") from an order of the Court of Common Pleas of Philadelphia County, denying SEPTA's request for post trial relief from the trial court's initial order directing a verdict in favor of appellee Chubb and Sons, Inc. (hereinafter "Chubb") under Pennsylvania's No-fault Motor Vehicle Insurance Act.*fn1 (hereinafter "No-fault Act"). We affirm.

The events leading up to this action began on August 15, 1980 when Thomas McGilley, a cab driver, pulled into a line of cabs at a cab stand in front of the Warwick Hotel in Philadelphia. The cab that McGilley was driving was owned by Mar-Jan Taxi Company, which insured the cab under a policy with Chubb.*fn2 When Mr. McGilley pulled into the cab stand at approximately 10:25 in the morning, his plan was to pick up a short fare before meeting his partner, James Burns, for lunch at around noon. The rendezvous was to take place at a small restaurant approximately fifty (50) feet away from the Warwick Hotel, at which time, Mr. McGilley would exchange the cab for Mr. Burns' private

[ 369 Pa. Super. Page 550]

    automobile and proceed to take his family to the New Jersey shore.

After waiting in line for approximately twenty minutes, Mr. McGilley turned his ignition key to off, got out, and walked to the cab in front of his to "bum a cigarette" from the driver. As he was chatting with the driver about the day's business, a SEPTA bus approached from the rear. When warned by the driver of the other cab about the oncoming bus, Mr. McGilley attempted to make his way to the curb, but unfortunately to no avail. The bus struck him resulting in the loss of his leg.

Mr. McGilley filed an action in trespass against SEPTA which was settled.*fn3 However, the settlement with SEPTA excluded Mr. McGilley's medical expenses. Consequently, he filed a claim against the Mar-Jan Taxi Company, his employer, under the Workmen's Compensation Act.*fn4 Because Mar-Jan failed to carry such insurance, Mr. McGilley, who owned no car and therefore carried no automobile insurance of his own, filed suit under the No-fault Act against Chubb, Mar-Jan's no fault insurance carrier.*fn5 Alternatively, Mr. McGilley sued SEPTA, a self-insured entity, also under the No-fault Act.

[ 369 Pa. Super. Page 551]

A trial was held before a jury. Mr. McGilley was the sole witness presented and at the close of his testimony all parties moved for a directed verdict. The stipulation of facts between the parties*fn6 and the interim settlement agreement,*fn7 when read together, left a purely legal question, that is, whether SEPTA or Chubb was the obligor responsible for compensating Mr. McGilley under the priorities established in Section 204(a) of the No-fault Act. The trial court directed a verdict in favor of Chubb and against SEPTA, finding that under the No-fault Statute SEPTA was the obligor responsible for paying basic loss benefits to Mr. McGilley. SEPTA's post-trial motion was denied and this appeal followed.

The question before us today is whether the trial court properly concluded that SEPTA was responsible for the payment of basic loss benefits under the priority provisions of Section 204(a) of the No-fault Act, 40 P.S. § 1009.204(a). The resolution of this question requires us to determine: (1) Whether McGilley was "occupying" the cab at the time of the accident and (2) Whether the Act's definition of an "insured" preempts the definition of an "insured" found in the Chubb insurance policy for purposes of determining the applicable security under Section 204(a).

[ 369 Pa. Super. Page 552]

Initially, we note that our scope of review of a trial court's decision to direct a verdict is limited to a determination of whether there exists "an abuse of discretion or error of law which controlled the outcome of the case." Jozsa v. Hottenstein, 364 Pa. Super. 469, 528 A.2d 606 (1987), citing Page 552} McDevitt v. Terminal Warehouse Co., 304 Pa. Super. 438, 442, 450 A.2d 991, 993 (1982).

In McMullin v. Dallago, 353 Pa. Super. 527, 510 A.2d 787, (1986), we explained the purpose behind the enactment of Pennsylvania's No-fault Insurance Act, as well as the types of insurance coverage required on vehicles registered in the Commonwealth:

The stated purpose of the Pennsylvania No-fault Motor Vehicle Insurance Act was "to establish at reasonable cost to the purchaser of insurance a Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims and the survivors of deceased victims." 40 P.S. § 1009.102(b). To accomplish this purpose, the Act required every vehicle registered or operated in Pennsylvania to be insured, either by a policy of insurance, or by self-insurance. 40 P.S. § 1009.104. This insurance had to provide for the payment of basic loss benefits and for the payment of statutorily-designated sums which the owner or authorized operator may be liable to pay as damages for personal injury to any one person and for property destruction. 40 P.S. § 1009.104(a); Tierney v. Pennsylvania Assigned Claims Plan, 319 Pa. Super. 299, 466 A.2d 168 (1983). Thus, an owner or authorized operator, driving an insured vehicle, who was injured in an automobile accident was to be paid basic loss benefits by his insurer whether he was at fault or not. At the same time he was covered up to the limits of his insurance policy for any tort liability he may have incurred. 40 P.S. § 1009.111.

Id., 353 Pa. Superior Ct. at 530-31, 510 A.2d at 789-90.

Section 201 of the No-fault Act entitles any "victim"*fn8 of an accident or survivor of a deceased victim to recover "basic loss benefits"*fn9 in accordance with the provisions of the Act. 40 P.S. § 1009.201.

[ 369 Pa. Super. Page 553]

Section 204 of the No-fault Act establishes "categories and priorities as between insurers responsible for payment of benefits" to the victims of motor vehicle accidents. 40 P.S. § 1009.204; Tyler v. Insurance Co. of North America, 311 Pa. Super. 25, 29, 457 A.2d 95, 96 (1983) (citations omitted). Section 204(a), entitled "Source of Basic Restoration Benefits," provides:

(a) Applicable Security. -- The security for the payment of basic loss benefits applicable to an injury to:

(1) An employee, or to the spouse or other relative of any employee residing in the same household as the employee, if the accident resulting in injury occurs while the victim or deceased victim is driving or occupying a motor vehicle furnished by such employee's employer, is the security for the payment of basic loss benefits covering such motor vehicle or, if none, any other security applicable to such victim;

(2) an insured is the security under which the victim or deceased victim is insured;

(3) the driver or other occupant of a motor vehicle involved in an accident resulting in injury who is not an insured is the security covering such a vehicle;

(4) an individual who is not an insured or the driver or other occupant of a motor vehicle involved in an accident resulting in injury is the security covering any motor vehicle involved in such accident. For purposes of this paragraph, a parked and unoccupied motor vehicle is not a motor vehicle involved in an accident, unless it was parked so as to cause an unreasonable risk of injury; and

(5) any other individual is the applicable assigned claims plan.

40 P.S.A. § 1009.204(a).

It is well-settled that in order to determine the applicable source of basic loss benefits under the priority provisions of

[ 369 Pa. Super. Page 554]

Section 204(a), each preceding subsection in the hierarchy must be excluded before the next subsection may be considered, with the security provided by the assigned claims plan applicable only as a last resort. McCabe v. Prudential Property and Casualty Insurance Company, 356 Pa. Super. 223, 227, 514 A.2d 582, 584 (1986); Tyler, supra 311 Pa. Super. at 30, 457 A.2d at 97.

In the case sub judice it is undisputed that Mr. McGilley is a "victim" within the meaning of the Act and entitled to basic loss benefits. The only question is who is responsible for payment of these benefits under the priority provisions of Section 204(a). If Section 204(a)(1) or (a)(2) or (a)(3) is deemed applicable to the facts of this case, then Chubb, the insurer of the Mar-Jan cab, would be responsible for payment of basic loss benefits to Mr. McGilley. If none of the preceding sections apply, then SEPTA is the applicable security under 204(a)(4) since its bus was "a motor vehicle involved in an accident resulting in injury."

Because Mr. McGilley was not driving at the time of the accident, in order for either Section 204(a)(1) or 204(a)(3) to apply, making the security covering the Mar-Jan cab responsible, McGilley must have been "occupying" the cab at the time of the accident.

We first addressed the scope of the concept of occupancy under Section 204(a) in Tyler, supra. In Tyler, the plaintiff was a passenger on a bus owned by a transit company. She was struck by a motorcycle passing on the right as she was stepping off the bus. Neither the plaintiff nor any member of her household had applicable no-fault coverage. Therefore, she filed a claim against the transit company's no-fault carrier, which denied liability, claiming that plaintiff was a pedestrian and not an occupant of the bus at the time of the accident. In finding that the plaintiff was occupying the bus at the time of the accident, we stated:

In general, it can be said that a person who is alighting from a vehicle is still an occupant thereof. He continues to 'occupy' the motor vehicle until he severs all connection with it. That point of severance is reached when he

[ 369 Pa. Super. Page 555]

    becomes highway oriented as opposed to being vehicle oriented. Until then, the alighting passenger continues to be an occupant of the bus. Until such a person is on his or her own without reference to the bus, the person has not ceased to be a passenger or occupant.

Id., 311 Pa. Superior Ct. at 31, 457 A.2d at 97.

Subsequently our supreme court, in Utica Mutual Insurance Co. v. Contrisciane, 504 Pa. 328, 473 A.2d 1005 (1984), expanded the test laid down in Tyler. In that case the claimant, Mr. Contrisciane, was standing approximately ninety-seven (97) feet from his vehicle giving information to a police officer after he was involved in a minor accident. The vehicle he was operating was owned and insured by his employer, Future Cars, Inc. While Mr. Contrisciane was standing beside the police cruiser, he was struck and killed by an uninsured motorist. His estate filed a claim against Utica Mutual Insurance Company, the insurance carrier for Future Cars, Inc., alleging that Mr. Contrisciane was "occupying" the insured vehicle at the time of the accident. Our supreme court rejected a strict definition of the term "occupying", requiring physical contact with the vehicle, and adopted a liberal approach which focuses on whether the "claimant was performing an act normally associated with the immediate use of the vehicle."*fn10 Id., 504 Pa. at 335, 473

[ 369 Pa. Super. Page ]

Page 556Pete's" to purchase a pack of cigarettes and meet Mr. Burns, his partner, for lunch.*fn11 After dividing the fares, Mr. McGilley was planning to exchange the cab for Mr. Burns' car and take his family to the beach. The SEPTA bus struck Mr. McGilley just after he obtained a cigarette from the driver in front of him. We conclude that these facts demonstrate that Mr. McGilley had severed his relationship with his cab at the time of the accident. Consequently Mr. McGilley was "highway" rather than "vehicle" oriented at the time he was injured.

We also conclude that Mr. McGilley was not involved in a transaction essential to the use of the vehicle at the time of the accident. The present case is distinguishable from Contrisciane, supra, 504 Pa. at 328, 473 A.2d at 1005. The court's determination that Mr. Contrisciane was occupying his employer's vehicle, even though he was situated ninety-seven (97) feet away exchanging information with a police officer, rested on two considerations. First, Mr. Contrisciane's fiance remained in the vehicle during the entire time, indicating that they anticipated resuming their journey following the exchange of information. The court also relied on the fact that it was only because a statute required Mr. Contrisciane to stop his vehicle and exchange information and the police officer requested production of an owner's card that Mr. Contrisciane found himself out of physical contact with his vehicle. Unlike Mr. Contrisciane, Mr. McGilley's presence outside the cab was not necessitated by duties or obligations incident to his use of the taxi cab. At the time of the accident Mr. McGilley had effectively terminated his association with the taxi cab and was in pursuit of his own personal needs. We find that leaving a vehicle for the primary purpose of securing a cigarette is not a transaction "essential to the use of the vehicle."*fn12

[ 369 Pa. Super. Page 558]

Because of our determination that Mr. McGilley was not an "occupant" of the cab insured by Chubb, neither Section 204(a)(1) nor (a)(3) are applicable. As a result, unless the facts of the instant case fall within Section 204(a)(2), SEPTA will be the applicable security under Section 204(a)(4).

Section 204(a)(2) provides that the applicable security "to an injury to . . . an insured is the security under which the victim or deceased victim is insured." 40 P.S. § 1009.204(a)(4). SEPTA claims that the trial court erred in applying the statutory definition of "insured", rather than the more liberal definition of "insured" contained in the policy issued by Chubb to the Mar-Jan Taxi Company. Section 103 of the No-fault Act provides in pertinent part that:

Insured means (a) an individual identified by name as an insured in a contract of basic loss insurance complying with this Act; and (b) spouse or other relative of a named insured, and a minor in the custody of a relative of a named insured if

(i) not identified in any other contract of basic restoration insurance complying with this act; and

(ii) in residence in the same household with a named insured . . . .

40 P.S. § 1009.103 (emphasis added). However, the insurance policy issued by Chubb contains a broader definition of "persons insured." The policy provides as follows:

[ 369 Pa. Super. Page 559]

Each of the following is an insured under this insurance to the extent set forth below:

(a) the named insured;

(b) any partner or executive officer thereof, but with respect to a temporary substitute automobile only while such automobile is being used in the business of the named insured;

(c) any other person while using an owned automobile or a temporary substitute automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other person shall be an insured only if he is:

(1) a lessee or borrower of the automobile or

(2) an employee of the named insured of such lessee or borrower;

(d) any other person or organization but only with respect to his or its liability because of acts or omissions of an insured under (a), (b) or (c) above.

(emphasis added.) Consequently, if the Act's definition of insured is controlling, Mr. McGilley would not be an insured because he was neither named in the policy nor a spouse or relative of a named insured in the policy. But, if the policy provision is applicable, then Mr. McGilley would fall within subsection (c) of the definition since he was injured while using the cab with the permission of the named insured.*fn13

[ 369 Pa. Super. Page 560]

Our analysis of this issue begins with an oft-cited principle of statutory construction:

[W]hen the words of a statute are clear and free from all ambiguities, the letter of it is not to be disregarded under the pretext of pursuing the spirit.

1 Pa. C.S.A. § 1921(b). As with any statute, in construing the No-fault Act we look first to the express language of the statute to determine the intent of the legislature. If the language of the statute is unclear we may then look to external sources as an aid to interpretation. However, where the statute expressly defines what a term means, the legislature has created its own dictionary and the meaning of the term as defined excludes any other meaning. Colautti v. Franklin, 439 U.S. 379, 392 n. 10, 99 S.Ct. 675, 684 n. 10, 58 L.Ed.2d 596 (1979); Hughes v. School District of Pittsburgh, 379 Pa. 145, 148, 108 A.2d 698, 699 (1954).

Our legislature expressly declared that one of the major purposes in enacting the Pennsylvania No-fault Motor Vehicle Insurance Act was to provide "a statewide low-cost comprehensive and fair system of compensating and restoring motor vehicle accident victims and the survivors of deceased victims." 40 P.S. § 1009.102(a)(4) (emphasis supplied). As an integral part of this comprehensive system, Section 204(a) sets forth the general rules for determining the source of basic loss benefits for injuries arising out of a motor vehicle accident. In order to ensure that the No-fault Statute operated to effectuate the legislature's intent, Section 103 was incorporated into the Act. Section 103 is comprised of a series of definitions which are to be applied throughout the statutory framework.*fn14

SEPTA maintains that while the terms of an insurance contract may not restrict the coverage required by the Act, the carrier may provide broader coverage than the Act

[ 369 Pa. Super. Page 561]

    requires. As a result SEPTA contends that the definition of "insured" contained in the Chubb policy should be incorporated into Section 204(a)(2), making Chubb the applicable security.

SEPTA's argument fails for several reasons. First, the No-fault statute was designed to provide an effective remedy for the victims of motor vehicle accidents. This remedy was created by our legislature and is properly interpreted by applying statutory and constitutional principles rather than contractual principles. 3 A. Corbin, Corbin on Contracts § 551 (1951). Consequently, the statutory definition of "insured" must be interpreted in accordance with the intention of the legislature. That the parties to an insurance contract may have intended a different meaning is of no consequence in our analysis. Moreover, contrary to SEPTA's contention, coverage would not be extended in the present case by reading the broad policy definition of "insured" into Section 204(a)(2). Section 204(a) creates a procedural*fn15 hierarchy which is applied to determine which insurance policy will pay basic loss benefits to the claimant. See Tyler, supra, 311 Pa. Superior Ct. at 30, 457 A.2d at 97. While reading the policy definition of "insured" into the Act would change the party responsible for paying basic loss benefits to Mr. McGilley, it would not extend the coverage provided under the Act. This is not a case where the question is whether a given claimant is entitled to basic loss benefits under the Act. Under such circumstances our analysis would require us to consider the Act in light of its remedial purpose of providing prompt compensation to victims. See Bills v. Nationwide Insurance Company, 317 Pa. Super. 188, 463 A.2d 1144 (1983) (courts should err in favor of coverage in construing No-fault Act). The question here is which of the two insurers is responsible for compensating a victim who is entitled to receive basic loss

[ 369 Pa. Super. Page 562]

    benefits.*fn16 We conclude that in such a situation the terms of the statute control. Because Mr. McGilley was not named in the Chubb insurance policy, he does not fit the definition of "insured" provided in Section 103 of the Act. As a result Section 204(a)(2) is inapplicable.*fn17

Our elimination of the applicability of Sections 204(a)(1), (2) and (3) requires us to examine Section 204(a)(4) as required by Tyler, supra and it progeny. Because Mr. McGilley is not an "insured" or a "driver or other occupant" of a motor vehicle, the applicable security under Section 204(a)(4) is "the security of any motor vehicle involved in an accident." The SEPTA bus which injured Mr. McGilley clearly fits within this definition, making SEPTA responsible for payment of Mr. McGilley's basic loss benefits.

We find that the trial court properly resolved the questions of law in this case. Accordingly, the order of the trial court directing a verdict for Chubb and against SEPTA is affirmed.

Order affirmed.


Order affirmed.

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