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FMC CORP. v. HOLLIDAY

March 14, 1989

FMC CORPORATION, a corporation, Plaintiff
v.
CYNTHIA ANN HOLLIDAY, an individual, Defendant


Alan N. Bloch, United States District Judge.


The opinion of the court was delivered by: BLOCH

ALAN N. BLOCH, UNITED STATES DISTRICT JUDGE

 Plaintiff and defendant having agreed that the material facts of this action are uncontroverted, this matter is before the Court on cross-motions for summary judgment. The material facts are as follows.

 Defendant Cynthia Ann Holliday (Holliday) was seriously injured in an automobile accident in Indiana County, Pennsylvania, on January 16, 1987, when she was 15 years old. She required extensive medical treatment, costing in excess of $ 178,000.

 At all relevant times, Holliday's father was an employee of plaintiff FMC Corporation (FMC). As such, he subscribed to the FMC Salaried Health Care Plan (the Plan), a self-insured employee welfare benefit plan. Pursuant to the Plan, FMC paid a substantial amount in medical benefits toward Holliday's treatment.

 The Plan contained a coordination of benefits provision, pursuant to which it coordinated its benefits with those of other medical plans and "no-fault" auto insurance providing medical coverage. Thus, FMC did not pay any benefits until certain insurers, such as the Holliday's automobile insurance company, had paid the maximum amount that they would pay.

 
In addition, the Plan summary provides:
 
The FMC self insured benefit program is automatically assigned the right of action against third parties in any situation in which benefits are paid to employees or their dependents. If you bring a liability claim against any third party, benefits payable under this Plan must be included in the claim, and when the claim is settled you must reimburse the Plan for the benefits provided. You are obligated to avoid doing anything which would prejudice the Plan's rights of reimbursement, and you are required to sign and deliver documents to evidence or secure those rights. Unless you sign the Company's "third-party reimbursement form," the Claims Administrator will not process any claim where there is possible liability on behalf of a third party.

 (Plan summary, at 49). Gerald Holliday, defendant's father, had signed such a third-party reimbursement form.

 On April 20, 1987, Gerald Holliday, as parent and natural guardian of the defendant, commenced a negligence action in the Court of Common Pleas of Indiana County, Pennsylvania, against the driver of the vehicle in which defendant was a passenger at the time of the accident. FMC has notified defendant that it intends to exercise its subrogation rights with respect to any amounts obtained as a result of this lawsuit. Defendant Holliday contends that § 1720 of the Pennsylvania Motor Vehicle Financial Responsibility Law of 1984 (the Pennsylvania law), 75 Pa.C.S.A. § 1720, prohibits such subrogation. FMC argues that the Employee Income Retirement Security Act (ERISA) preempts the Pennsylvania law.

 This Court may grant summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The parties in this case have agreed that there is no genuine issue as to any material fact. This Court holds that the defendant is entitled to judgment as a matter of law.

 I. The Pennsylvania law applies to the Plan

 Initially, of course, this Court must determine whether the Pennsylvania law would apply to the Plan at all. If § 1720 would not prohibit FMC from obtaining subrogation, then this Court need not decide whether ERISA preempts that section. There would be no applicable Pennsylvania law which might be preempted.

 Section 1720 of the Pennsylvania law, 75 Pa.C.S.A. § 1720, provides:

 
In actions arising out of the maintenance or use of a motor vehicle, there shall be no right of subrogation or reimbursement from a claimant's tort recovery with respect to workers' compensation benefits, benefits available under section 1711 (relating to required benefits), 1712 (relating to availability of benefits) or 1715 (relating to availability of adequate limits) or benefits in lieu thereof paid or payable under section 1719 (relating to coordination of benefits).

 FMC clearly does not provide the required benefits or motor vehicle insurance referred to in §§ 1711, 1712 or 1715 of the Pennsylvania law, 75 Pa.C.S.A. §§ 1711, 1712, 1715. It does, however, provide the benefits referred to in § 1719. This section provides:

 
(a) General rule. -- Except for workers' compensation, a policy of insurance issued or delivered pursuant to this subchapter shall be primary. Any program, group contract or other arrangement for payment of benefits . . . shall be construed to contain a provision that all benefits provided therein shall be in excess of and not in duplication of any valid and collectible first party benefits provided in section 1711, 1712 or 1715 or workers' compensation.
 
(b) Definition. -- As used in this section the term "program, group contract or other arrangement" includes, but is not limited to, benefits payable by a hospital plan corporation or a ...

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