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Kathy Smith, As Executrix For the v. Linda Rohrbaugh

September 28, 2012

KATHY SMITH, AS EXECUTRIX FOR THE ESTATE OF KENNETH SMITH, DECEASED, AND KATHY SMITH, INDIVIDUALLY APPELLANT
v.
LINDA ROHRBAUGH APPELLEE



Appeal from the Judgment Entered of January 12, 2010 In the Court of Common Pleas of York County Civil Division at No(s): 2007-SU-5093 Y01

The opinion of the court was delivered by: Ott, J.:

J-E02001-12

BEFORE: STEVENS, PJ., BENDER, J., PANELLA, J., DONOHUE, J., ALLEN, J., MUNDY, J., OLSON, J., OTT, J., and WECHT, J.

OPINION BY OTT, J.:

Kathy Smith, as Executrix of the Estate of Kenneth Smith and in her own right, appeals from the judgment entered in the Court of Common Pleas of York County following a jury verdict in a case arising out of an automobile accident between Kenneth Smith and Linda Rohrbaugh. Smith claims the trial court erred in molding the jury verdict to zero based upon the prior receipt of underinsured motorist benefits, improperly granted a $15,000.00 offset for work loss benefits, and improperly denied the request for $11,533.40 in costs. After a thorough review of the submissions by the parties, the official record, and relevant law, we affirm the trial court's decisions regarding the work loss benefits. We affirm in part and reverse in part on the issue of costs. Finally, we agree with Smith that the trial court erred in molding the jury award to zero based upon Smith's prior receipt of underinsured motorist benefits. Therefore, we reverse on that issue and reinstate the molded verdict of $35,036.00.

The basic facts and procedural history of this matter are simply related. On January 24, 2006, Kenneth Smith, now deceased, was involved in an automobile accident with Linda Rohrbaugh. Smith had stopped on West Market Street in York, Pennsylvania, when Rohrbaugh failed to stop her vehicle in time and struck the rear of Smith's car. Smith claimed the force of the impact pushed his car into the car in front of him.

Subsequently, Smith filed a claim for underinsured motorist (UIM)

benefits against his own automobile insurance policy. That claim settled with a payment of $75,000.00. Smith's insurer, State Farm, also waived whatever subrogation rights it might have against any further payment from the alleged tortfeasor (Rohrbaugh).

Smith then instituted the instant lawsuit by writ of summons. A complaint was filed on February 19, 2008 claiming negligence, loss of consortium and punitive damages.*fn1 Smith alleged the accident caused him various damages including bodily injuries to his back, neck, shoulders, and a concussion. See Complaint, 2/19/08, at ¶ 13. He also claimed the injury to his neck required surgery. Id.

Trial of the case began on June 15, 2009 and the jury verdict was entered on June 17, 2009. Negligence had been admitted prior to trial, but the jury was required to determine whether the negligence was a factual cause of Smith's injuries. The jury did so determine and awarded damages in the amount of $50,036.00. This amount was specifically apportioned as $29,036.00 for medical expenses, $16,000.00 for lost wages, and $5,000.00 for pain and suffering. Kathy Smith received no award for loss of consortium. The verdict was molded to $35,036.00 because Smith had already received $15,000.00 in work loss benefits and the amount had been stipulated to by the parties.

On June 23, 2009, Rohrbaugh filed a post-trial motion asking to have the verdict molded to zero to reflect the $75,000.00 payment Smith had received prior to trial in UIM benefits. Rohrbaugh argued payment of the verdict would amount to an impermissible double recovery, as the jury verdict did not exceed the underinsured benefits Smith had already received.

On June 26, 2009, Smith filed a post-trial motion seeking reimbursement for costs of $11,533.40. Smith also claimed Rohrbaugh was only entitled to a $10,000.00 credit for work loss benefits, not the $15,000.00 awarded by the trial court.

The trial court denied Smith's motions and granted Rohrbaugh's motion to mold the verdict to zero. The trial court granted that motion on the basis of the then recently decided Superior Court decision in Pusl v. Means, 982 A.2d 550 (Pa. Super. 2009). *fn2 The Pusl decision held that UIM benefits were precluded as double recovery in a tortfeasor action pursuant to 75 Pa.C.S. § 1722. A panel of our Court subsequently affirmed the trial court's decision in the instant matter; however, that decision was withdrawn when Smith's petition for en banc review was granted.

Because we are reversing the trial court's decision to mold the verdict to zero based on Smith's receipt of UIM benefits, we will address that issue first.

Smith raises four arguments why the trial court erred in molding the verdict to zero: (1) the instant case is distinguishable from Pusl, therefore Pusl is not binding; (2) the trial court improperly rewrote the terms of the UIM settlement between Smith and State Farm; (3) even if Pusl is otherwise controlling law, it should only be given prospective application; and (4) Pusl was wrongly decided. We agree that Pusl was wrongly decided and now overrule that decision.

Pusl correctly states that Section 1722 prevents double collection of first-party benefits. However, Pusl then equates the payment of underinsured motorist benefits with first-party benefits and, as a result, concludes Section 1722 applies to UIM payments. This is a misinterpretation. Section 1722 states: § 1722 Preclusion of recovering required benefits

In any action for damages against a tortfeasor, or in any uninsured or underinsured motorist proceeding, arising out of the maintenance or use of a motor vehicle, a person who is eligible to receive benefits under the coverages set forth in this subchapter, or workers' compensation, or any program group contract or other arrangement for payment of benefits as defined in section 1719 (relating to coordination of benefits) shall be precluded from recovering the amount of benefits paid or payable under this subchapter, or workers' compensation or other arrangement for payment of benefits as defined in section 1719.

The "subchapter" referred to in Section 1722 is Subchapter B, regarding first-party benefits.*fn3 The "other programs" referred to as defined in Section 1719 are the statutorily defined benefits found in Sections 1711, 1712 and 1715, as well as workers' compensation benefits and hospital plans or professional health service plans. The benefits defined in Section 1712 are medical benefits up to $100,000.00 in coverage, income loss benefits, accidental death benefits, funeral benefits, combination benefits (a combination of available benefits), and extraordinary medical benefits exceeding $100,000.00.*fn4 Section 1711 requires every liability insurance policy issued to a motor vehicle registered under this title to provide $5,000.00 in medical benefits. Section 1715 sets the maximum coverage available for each of the defined first-party benefits.

Despite the assertion in Pusl, underinsured motorist benefits are absent from the list of precludable first-party benefits described "under this subchapter." While UIM benefits are not found in Subchapter B, we note that they are sometimes referred to as first-party benefits because they are typically provided by a claimant's own insurance policy. However, colloquial reference to UIM as a first-party benefit does not mandate we add UIM to those benefits the legislature has specifically designated by statute as first-party benefits.*fn5 To do so would usurp the legislature's power and improperly rewrite the statute.*fn6

This interpretation is supported by the fact that UIM coverage is specifically designated as a separate available coverage by statute located in Subchapter C*fn7 of the Motor Vehicle Financial Responsibility Law ("MVFRL"). Subchapter C is entitled, "Uninsured And Underinsured Motorist Coverage." By placing first-party benefits and UIM coverage in different subchapters, the legislature was clearly designating the two as distinct entities. Therefore, references in Section ...


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