Certification of Question of Law from the U.S. Court of Appeals for the Third Circuit
The opinion of the court was delivered by: Mr. Justice McCAFFERY
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.
This case raises the question whether an uninsured driver who is injured in a motor vehicle accident with an insured driver, may sue the insured driver in tort for economic damages. The question highlights a tension in the Motor Vehicle Financial Responsibility Law, ("MVFRL"), 75 Pa.C.S. §§ 1701-1799, and Pennsylvania decisional precedent, as perceived by the United States Court of Appeals for the Third Circuit. On the one hand, Section 1714 of the MVFRL prohibits uninsured drivers from recovering first-party benefits, which include medical and income loss benefits. Id. §§ 1702, 1714. On the other hand, Section 1705 of the MVFRL deems uninsured drivers to have chosen the limited tort alternative, which permits recovery of damages for economic loss sustained in a motor vehicle accident as the consequence of the fault of another person. Id. at §1705. Economic loss, of course, is commonly understood as being comprised of damages for medical expenses and wage loss. Thus, it may appear as though the MVFRL both prohibits and permits insurance recovery to uninsured drivers for this category of damages or loss, and it is the resolution of this seeming contradiction that we address herein.
The facts underlying this matter are not in dispute. On February 6, 2006, Appellee, Mary Corbin, was driving south on Route 413 in Bristol, Pennsylvania, in her uninsured vehicle, while Appellant, Suresh Khosla, was driving his insured vehicle north on Route 413. As the vehicles approached each other, Appellant turned left onto State Road in front of Appellee. In the resulting motor vehicle accident, Appellee sustained bodily injury. Appellee maintained that the accident was Appellant's fault because she had the right of way through the intersection. Invoking diversity jurisdiction, Appellee sued Appellant in the United States District Court for the Eastern District of Pennsylvania, and sought both economic and non-economic damages.
Appellant filed a motion for partial summary judgment seeking the dismissal of Appellee's claims for economic damages under Section 1714 of the MVFRL because Appellee did not carry motor vehicle liability insurance as required by law. Appellant also sought a declaration that Appellee was precluded from claiming non-economic damages because she was subject to the limited tort option per Section 1705(a)(5). The district court ruled that Appellee was precluded from recovering non-economic damages under Section 1705. Relying, in part, on language set forth by this Court in Swords v. Harleysville Ins. Companies, 883 A.2d 562, 564 (Pa. 2005), the district court further predicted that "the Pennsylvania Supreme Court would hold that a plaintiff can recover economic damages from an alleged third-party tortfeasor. A plaintiff would be prohibited, however, from recovering such damages from an insurance company." District Court Memorandum (Slomsky, J.), dated 12/15/08, at 3. The district court certified its ruling on the economic damages issue for immediate appeal, and the Third Circuit Court of Appeals granted Appellant's petition for permission to appeal. Orders, filed 2/9/09 and 3/20/09, respectively.
Upon review, the Third Circuit did not adjudicate the matter; instead, it concluded that the district court's determination raised a significant question as to which it believed there was no controlling decision from this Court. It noted the existence of several decisions from the Superior Court, not discussed in Swords, supra, suggesting that no recovery from third-party tortfeasors obtains in the type of factual scenario present here. The Third Circuit petitioned this Court for certification of the following question of law, which, upon review, we granted:
Does § 1714 of the Motor Vehicle Financial Responsibility Law preclude an uninsured motorist from recovering tort damages for economic losses from an alleged third-party tortfeasor. See Swords v. Harleysville Ins. Co., 883 A.2d 562 (Pa. 2005); Bryant v. Reddy, 793 A.2d 926 (Pa. Super. 2002), allocatur denied, 805 A.2d 518 (Pa. 2002); McClung v. Breneman, 700 A.2d 495 (Pa. Super. 1997).
Petition for Certification of Question of Law, filed 3/29/10.
We begin our analysis by observing that the MVFRL requires all drivers in Pennsylvania to maintain financial responsibility, which is defined as "the ability to respond in damages for liability" in specified amounts resulting from motor vehicle accidents. 75 Pa.C.S. § 1702. Moreover, the MVFRL provides that "An owner of a currently registered motor vehicle who does not have financial responsibility . cannot recover first party benefits." 75 Pa.C.S. § 1714 (emphasis added). First-party benefits are defined by the MVFRL as "[m]edical benefits, income loss benefits, accidental death benefits and funeral benefits." 75 Pa.C.S. § 1702. Although the MVFRL prohibits an uninsured driver from obtaining first-party benefits, it simultaneously provides that "An owner of a currently registered private passenger motor vehicle who does not have financial responsibility shall be deemed to have chosen the limited tort alternative." 75 Pa.C.S. § 1705(a)(5).
Section 1705 further provides:
(d) Limited tort alternative.-- Each person who elects the limited tort alternative remains eligible to seek compensation for economic loss sustained in a motor vehicle accident as the consequence of the fault of another person pursuant to applicable tort law. Unless the injury sustained is a serious injury, each person who is bound by the limited tort election shall be precluded from maintaining an action for any non-economic loss[.] 75 Pa.C.S. § 1705(d).*fn1
In Swords v. Harleysville Ins. Companies, supra, Bernell Swords ("Father") owned a vehicle insured by Pennland Insurance Company ("Pennland"). Swords's son ("Son"), who owned an uninsured vehicle, had an accident while driving Father's vehicle. Son sought to recover first-party benefits pursuant to Father's automobile insurance policy for the medical expenses he incurred. Pennland denied the claim and Father and Son sued Pennland for a declaratory judgment, alleging that Pennland "was statutorily mandated to cover these expenses[.]" Swords, 883 A.2d at 564. Pennland replied that it was not obligated to pay these benefits under Section 1714 because Son owned a registered but uninsured vehicle. Upon review, we agreed with Pennland, holding that "Section 1714 of the MVFRL clearly and unambiguously renders an owner of a currently registered motor vehicle ineligible to recover first party benefits when the owner fails to meet the requirements of financial responsibility as detailed in the MVFRL." Id. at 568. We held that "the MVFRL does not allow ...