Ascher v. PENNSYLVANIA INS. GUAR. ASS'N
| Decision Date | 21 December 1998 |
| Parties | Mary Ann ASCHER, Administratrix of the Estate of Greg Waller Ascher, Appellee, v. PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION Properly Known as Pennsylvania Property and Casualty Insurance Guaranty Association, Appellant. (Two Cases). |
| Court | Pennsylvania Superior Court |
G. Wayne Renneisen, Philadelphia, for appellant.
Pamela G. Shuman, Harrisburg, for appellee.
Before McEWEN, President Judge, and DEL SOLE and TAMILIA, JJ.
While the procedural and factual history of these consolidated appeals, which arise from a dispute as to the nature of appellant Pennsylvania Insurance Guaranty Association's liability for claims against an insolvent insurer, is unusually lengthy and complex, the pivotal issue for resolution by this Court is: What did our legislature intend when it provided that "as to any covered claims arising from a judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend an insured, the association ... may apply to have such judgment set aside ... and SHALL BE permitted to defend against such claim on the merits." 40 P.S. § 1701.602(b) (emphasis supplied).
The Pennsylvania Property and Casualty Insurance Guaranty Association, formerly known as the Pennsylvania Insurance Guaranty Association (hereinafter "PIGA")1, has taken the appeal at No. 535 Harrisburg 1997, from the order entered in this class action on April 30, 1997, which (1) granted summary judgment in favor of the representative plaintiff, appellee, Mary Ann Ascher, and against appellant, PIGA, (2) denied the motion for summary judgment filed by appellant, PIGA, and (3) ordered appellant to pay the attorneys' fees and expenses incurred by appellee. The appeal at No. 1060 Harrisburg 1997, has been taken from the order entered on September 19, 1997, as amended September 26, 1997, which awarded appellee interest and additional attorneys' fees in the amount of $77,902.50. For reasons appearing hereinafter, we are constrained to vacate and remand.
Appellee, Mary Ann Ascher, commenced the instant class action litigation against the Pennsylvania Insurance Guaranty Association (PIGA) by writ of summons filed on January 5, 1995. Appellee is the administratrix of the estate of her son, Gary Waller Ascher ("insured decedent"), who died on April 23, 1982, in a motor vehicle accident. At the time of the accident, Gary Ascher, a resident of Pennsylvania, was an insured under an insurance policy issued by State Automobile Insurance Association ("State Auto") in conformity with the provisions of the now repealed No Fault Act. Appellee filed the instant class action against PIGA to recover unpaid judgments and counsel fees awarded in a prior class action suit against State Auto for the recovery of postmortem work loss benefits, namely, Ebersole v. State Auto Insurance Assn. (No. 2939 S 1986 C.P. Dauph.).
The Ebersole case was commenced by the filing of a complaint in Dauphin County on August 20, 1986. On July 10, 1987, the distinguished Judge Warren G. Morgan granted the motion for class certification with David W. Ebersole as representative plaintiff and designated two subclasses of plaintiffs, both comprised of the estates of decedents that had not received work loss benefits. By order dated November 24, 1987, Judge Morgan granted the motion of State Auto for summary judgment against plaintiff Ebersole, finding that the claim of plaintiff Ebersole was barred by the statute of limitations since it had not been filed within two years of the last payment of no fault benefits arising other than from death. The court found that plaintiff Ebersole had received the last payment of no fault benefits on July 10, 1979, and had failed to file his claim prior to July 10, 1981, as required by 40 P.S. § 1009.106(c)(1)(repealed effective October 1, 1984). However, Judge Morgan entered a further order on November 24, 1987, granting the motion of Mary Ann Ascher to intervene as representative plaintiff. The court ruled that, despite the fact that the accident involving Mrs. Ascher's son had occurred more than four years before the Ebersole suit had been filed, the statute of limitations as to plaintiff Ascher had been tolled by the filing of the complaint in Gabovitz v. State Auto. Insurance Ass'n., 362 Pa.Super. 17, 523 A.2d 403 (Pa.Super.1987),allo. denied, 516 Pa. 634, 533 A.2d 92 (1987), which had been filed on June 22, 1982, and terminated on October 26, 1987.2 State Auto filed a motion for stay of proceedings on October 18, 1991, based on the order of the Department of Insurance of the State of Indiana entered October 15, 19913, which placed it in receivership under the supervision of a rehabilitator. This motion was subsequently denied4, and counsel for State Auto was permitted to withdraw by order of the learned Judge Herbert A. Schaffner on October 24, 1991. This order also removed the Ebersole case from the November, 1991, civil trial list. The case proceeded to trial, however, in January of 1992, and it is undisputed that defendant State Auto, which was then in receivership, was not represented by counsel at trial. Jury verdicts were returned setting forth the amount of work loss benefits and interest due each class member. The eminent Judge Jeannine Turgeon, by order of February 7, 1992, ordered (1) that the verdicts from trial be recorded by the prothonotary, and (2) that plaintiffs pay pro rata the paralegal and out-of-pocket expenses of plaintiffs' counsel. A few weeks thereafter, on February 26, 1992, Judge Turgeon ordered State Auto to pay $346,854.00 in plaintiffs' attorneys' fees. It is not disputed that ten months later State Auto was declared insolvent by the Indiana Insurance Commissioner on December 22, 1992.
As noted above, the instant action against PIGA was commenced on January 5, 1995, by writ of summons, with Mary Ann Ascher, who had been named representative plaintiff in Ebersole, again acting as representative plaintiff. Appellee Ascher filed a motion for class action certification on October 18, 1996. Prior to any ruling on the motion for class certification, appellant PIGA filed a motion for summary judgment on November 26, 1996, and a brief in support thereof on December 16, 1996. PIGA argued, essentially, that the claim of plaintiff Ascher for work loss benefits had not been filed within the two-year state of limitations which began to run under the No Fault Act on November 4, 1982, the date of the last payment of benefits for loss arising other than from death. PIGA further asserted that the Gabovitz action did not serve to toll the statute of limitations as to plaintiff Ascher, since the complaint in Gabovitz was invalid on its face since the averments therein revealed that the action was time barred. Appellee Ascher filed a cross-motion for summary judgment on January 3, 1997, in which she argued that the claims at issue had been finally litigated against State Auto and that PIGA had a statutory obligation to pay those claims with accrued interest and attorneys' fees.
The distinguished Judge Lawrence F. Clark, Jr., by order dated February 5, 1997, granted the motion of appellee for class certification, and the cross-motions for summary judgment were argued before an en banc panel of the Court of Common Pleas of Dauphin County on March 27, 1997. That court, on April 30, 1997, issued an order and opinion in which it (1) incorporated the opinion granting class certification, (2) granted the motion for summary judgment of appellee Ascher and (3) denied the motion for summary judgment filed by appellant PIGA. The parties were directed to comply with the orders of Judge Turgeon of February 7, 1992, and February 26, 1992, and appellee was granted leave to submit requests for additional interest, attorneys' fees and costs. Appellee filed a motion for additional interest, attorneys' fees and costs on May 19, 1997, and by order dated September 19, 1997, and amended September 26, 1997, Judge Clark ordered PIGA to pay interest at the rate of 18% per annum on the amount of the verdicts in Ebersole from the dates determined by the jury up to the date of payment, excluding the period of State Auto's receivership from October 15, 1991, until it was declared insolvent on December 22, 1992. The court also ordered PIGA to pay additional attorneys' fees in the amount of $77,902.50.
The order of April 30, 1997, granting summary judgment in favor of appellee is the subject of the appeal at No. 535 Harrisburg 1997, and the orders of September 19, 1997, and September 26, 1997, providing for interest and attorneys' fees, are the subject of the appeal at No. 1060 Harrisburg 1997.
Pennsylvania Insurance Guaranty Association ("PIGA"), appellant at No. 535 Harrisburg 1997, has framed the following questions for our review:
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