Appeal from the Order of the Superior Court No. 00386, Philadelphia, 1985, March 11, 1986 Affirming the Decision and Order of the Court of Common Pleas of Philadelphia County No. 4036, October Term 1981.
Michael D. Rubin, Philadelphia, for appellant.
Alan Dion, Philadelphia, for appellee.
Nix, C.j., and Larsen, Flaherty, McDermott, Zappala and Papadakos, JJ.
The issue in this appeal is whether settlement of a lawsuit between an insurance company and a physician who provided medical services to an insured constitutes a payment of benefits to the insured within the meaning of section 106(c)(1) of the Pennsylvania No-fault Motor Vehicle Insurance Act.*fn1 Appellant Linda Sender was injured in an automobile accident on July 27, 1978. She received medical treatment for injuries sustained in the accident from Dr. Seymour Shlomchik, who was authorized by Mrs. Sender to collect payment for the medical treatment from her insurance carrier, State Farm Insurance Company ("State Farm"). Dr. Shlomchik submitted claims for payment to State Farm, which paid $645 of the claims submitted on Mrs. Sender's behalf. It is undisputed that the last uncontested payment was a disbursement of $80 made to appellant via Dr. Shlomchik on February 9, 1979. A balance of $240 remained unpaid on that date.
On October 27, 1981, appellant commenced suit against appellee for further benefits for work loss and medical treatment allegedly attributable to the July 1978 accident. State Farm interposed as its defense to the action the statute of limitations provision in the No-fault Act, 40 P.S. 1009.106(c)(1), which Act was in effect at the commencement of the lawsuit.*fn2 The pertinent provision of the statute reads as follows:
If no-fault benefits have been paid for loss arising otherwise than from death, an action for further benefits, other than survivor's benefits, by either the same or another claimant, may be commenced not later than two years after the last payment of benefits.
40 P.S. 1009.106(c)(1). State Farm asserted that since their last payment of benefits was made on February 9, 1979, Mrs. Sender's action, instituted more than two years after that date, was time-barred.
Appellant attempted to bring her action within the limitations period by proving that on October 26, 1981, State Farm settled a lawsuit instituted by Dr. Shlomchik against the insurance company in 1979 for payment of approximately three hundred medical bills, including appellant's, then outstanding. Dr. Shlomchik was authorized by each of these patients to collect payment directly from State Farm for medical services rendered. When the insurance carrier refused to pay the claims presented by the physician, he aggregated the claims and brought suit. Dr. Shlomchik accepted $26,000 in full ...