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JOHN LEE v. SAFEGUARD MUTUAL INSURANCE COMPANY (09/19/88)

filed: September 19, 1988.

JOHN LEE, JR., APPELLANT,
v.
SAFEGUARD MUTUAL INSURANCE COMPANY, APPELLEE



Appeal from Judgment entered January 28, 1988, in the Court of Common Pleas of Philadelphia County, Civil, No. 152 September Term 1978.

COUNSEL

Allen L. Feingold, Philadelphia, for appellant.

Wayne A. Schieble, Philadelphia, for appellee.

McEwen, Olszewski, and Cercone, JJ.

Author: Olszewski

[ 379 Pa. Super. Page 105]

This case involves the question of a claimant's recovery for attorney fees under section 107 of the Pennsylvania No-fault Motor Vehicle Insurance Act ("No-fault Act").*fn1 Finding the record incomplete to support a claim for counsel fees under section 107(3) of the No-fault Act, the trial court denied appellant's claim. Appellant contends that the trial court erred in failing to award attorney's fees pursuant to sections 107(1) and 107(3) of the No-fault Act. We find the record lacks evidentiary support for recovery of attorney's fees under either section and, consequently, affirm the judgment.

On September 4, 1976, appellant was injured in an automobile accident. Appellant, at the time of the accident, was insured by appellee, Safeguard Mutual Insurance Company. On May 29, 1979, the insurance commissioner suspended appellee and, on April 21, 1982, the Commonwealth Court declared appellee insolvent. Subsequently, the Pennsylvania Insurance Guarantee Association ("PIGA") handled the file on behalf of appellee.

In 1978, appellant filed his first action for no-fault benefits in which he demanded judgment for itemized medical bills totaling $1,087.00, claiming that those bills were "incomplete and continuing," and demanded judgment for lost

[ 379 Pa. Super. Page 106]

    wages "together with penalties, attorney's fees, interest and costs thereon." Appellant also sought punitive damages. In 1980, appellant filed another action for no-fault benefits arising out of the same car accident, adding a request for payment of uninsured motorist benefits for "pain and suffering."

On December 4, 1984, after PIGA assumed appellee's file, an arbitration panel, with respect to the 1978 action, found in favor of appellant in the amount of the itemized bills, namely $1,087.00. The panel also assessed interest at the rate of 18% per year, for a total award of $2,296.29. The panel rejected appellant's claim for lost wages, any additional medical bills, and attorney's fees. With respect to the 1980 action, an arbitration panel entered an award in favor of appellant in the amount of $1,722.50. Appellant and PIGA appealed the panel decisions resulting from the 1978 action and the 1980 action, respectively. Both appeals were consolidated for purposes of trial.

Prior to trial by jury, pursuant to a motion in limine, the trial court ruled that all claims for punitive damages and previously adjudicated uninsured motorist matters would be barred from the lawsuit.*fn2 The court also ruled that the claim for counsel fees would be severed and determined by the court after the jury decided the claim for the underlying no-fault benefits. At trial, PIGA's counsel made the following opening statement during which appellant's counsel at various points moved for a directed verdict:

[PIGA's counsel]: Yes, your Honor. I simply mean to put before the jurors the matters which I do not dispute that [appellant] is entitled to . . . .

When this accident occurred, they were notified by [appellant], and they received one bill from St. Joseph's Hospital . . . .

[ 379 Pa. Super. Page 107]

Saint Joe's Hospital, had a bill, for [appellant], in the amount of Seven Hundred Seventy-Nine Dollars net. We'll prove in this case by virtue of . . . cancelled check that we received from the liquidator, in the Pennsylvania Insurance Commissioner's Department, that Safeguard paid that bill, June one, 1977 . . . .

To Doctor Freedman, One Hundred Five Dollars. Doctor Anday, Seventy-five Dollars. Doctor Nelson, One Hundred Dollars. And Gemedco Supply, Twenty Five Dollars.

He also encloses in that letter and makes demand for payment to Saint Joseph's Hospital bill that that had been paid more than a year before.

So that you have the Saint Joe's Hospital bill . . . that's been paid, he submits that again, and a total of Three Hundred Five Dollars more in medical bills.

Also, there's made a demand for wage payment, but as to the exact amount of the wage losses, any documentation to prove the wage losses, you'll see there is not anything submitted to Safeguard at all.

Under the law, it's true that when an attorney presents reasonable proof of an outstanding bill and documentation to support that there was a reasonable bill and it was for services actually rendered and bills outstanding, the insurance company has to generally pay within thirty days or at least come up for a reason not to dispute. In this case, Safeguard is presented with a bill, one of which they find out has previously been paid by looking through their check file, and they are presented with literally no documentation for the rest.

Unfortunately, what happened, Safeguard went bankrupt, . . . [s]o, between 1979 and 1982, nobody can make complaints against them, any lawsuits against them were suspended[.] . . .

[ 379 Pa. Super. Page 108]

[Appellant's counsel] filed this first lawsuit . . . in September of 1978. Since that time until this date, at least since the Insurance Guaranty Association got the files in L982 (sic), we have not contested that we'll pay this Three Hundred Five Dollar bill.

[PIGA's Counsel]: As these are not in dispute, ladies and gentleman, when you go out, we ask you to award this three hundred five dollars to the claimant, because we have no disputes he is entitled to this.

[Appellant's counsel]: (INTERPOSING.) Your honor, I ask for a directed verdict for those amounts.

THE COURT: You will get it in time.

[Appellant's counsel]: Thank you.

[PIGA's counsel]: (CONTINUES TO ADDRESS JURY.) Unfortunately, you have got a lawsuit, however, by this time, there are additional claims made that we do dispute. We dispute the exact amount, and we are willing to pay reasonable wages for the two months, eight weeks or so -- you will see that the plaintiff has indicated in statements to us, and handwritten and signed statements, that his wage loss is Two Hundred Dollars a week for that eight-week period, and sixteen hundred dollars wages. We don't dispute that.

[Appellant's counsel]: Your Honor, Also notation for directed verdict for the sixteen hundred dollars.

[PIGA's counsel]: So we are now and have been willing, the Guaranty Association, since we got these files, I guess in '82 or '83, to pay that wage, despite the lack of documentation at this point -- we don't even care -- to pay these bills. We are here not to waste your time, the ...


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