Besack v. Rouselle Corp.
Decision Date | 15 February 1989 |
Docket Number | Civ. A. No. 86-0572. |
Citation | 706 F. Supp. 385 |
Parties | Michael BESACK v. ROUSELLE CORP., et al. |
Court | U.S. District Court — Eastern District of Pennsylvania |
Lawrence R. Diamond, L. Bruce Hoffman, Philadelphia, Pa., for plaintiff.
Kathleen D. Wilkinson, Philadelphia, Pa., for Presses, Inc.
A. Peter Prinsen, Duane, Morris & Heckscher, Philadelphia, Pa., for Pennsylvania Ins. Guar. Ass'n.
Plaintiff Michael Besack, a Pennsylvania citizen, filed this action alleging that he was injured while operating a punch press in the course and scope of his employment with Pennsbury Manufacturing Company.1 Besack sought damages for medical expenses, wage loss, and pain, suffering and humiliation from the manufacturer of the punch press, Rouselle Corporation, a citizen of Illinois. At the time of the accident, Pennsbury received workmen's compensation insurance coverage from Harleysville Mutual Insurance Company; and Rouselle was insured under a comprehensive general liability policy issued by Ideal Mutual Insurance Company, with limits in excess of $300,000. Because Ideal was declared insolvent in February, 1985, Rouselle filed a claim for defense and indemnification with the Illinois Guaranty Fund, with which Ideal had a policy, and Besack sought recovery against the Pennsylvania Insurance Guaranty Association ("PIGA") under the Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.101 et seq.
To date, Harleysville has paid a total of $68,374.93 in workmen's compensation benefits to Besack. The parties have agreed to settle all claims against Rouselle Corporation and Presses, Inc.2 for $300,000. According to the stipulation entered by the parties, "the sum of $300,000.00 represents the full, fair and reasonable value of all claims against Rouselle Corporation and Presses, Inc. arising out of the occurrence of June 8, 1984 and includes the $68,374.93 paid to the plaintiff by Harleysville Mutual Insurance Company." Stipulation, at 4. Of this $300,000, Illinois Guaranty has contributed its statutory limit of $150,000, and PIGA has paid $81,525.07, representing the $300,000 less payments by Illinois Guaranty and Harleysville, as well as a $100 deductible.
The only issue remaining in the case concerns PIGA's payment. Besack asserts that PIGA cannot offset Harleysville's payment against the amount PIGA must pay Besack, and that PIGA therefore owes Besack an additional $68,374.93. PIGA contends that Besack's recovery from Harleysville is not a "covered claim" under the PIGA Act, so that PIGA already has paid its obligations in full. Although the Pennsylvania Supreme Court has not yet addressed this issue, I predict that it would find that Besack is not entitled to any further recovery from PIGA.
PIGA undertakes the obligations of insolvent insurers only to the extent that the obligations are "covered claims" under the PIGA Act. 40 P.S. § 1701.102. "Covered claims" are defined in 40 P.S. § 1701.103(5):
Besack's claim for an additional $68,374.93 from PIGA does not fit the definition of a "covered claim" in two respects: it is not an unpaid claim arising from the insurance policy of an insolvent insurer, since it represents the amount already paid by the solvent Harleysville Mutual Insurance Company; and if paid to Besack by PIGA, it would represent an amount due Harleysville as a subrogation recovery.
As noted above, the parties have stipulated that the $300,000 settlement encompasses all claims against Rouselle, the only party whose insurer is insolvent, so that Besack's "covered claim" under the PIGA Act can be no greater than $300,000. The parties also have stipulated that the $300,000 includes Harleysville's payment to Besack. That part of the $300,000 representing Harleysville's payment ($68,374.93) cannot be a covered claim because Harleysville actually paid the money, and Harleysville is not insolvent. As a result, PIGA's liability is for the part of the settlement figure not already paid by Harleysville or by Illinois Guaranty3, i.e. the amount which PIGA already has paid to Besack.
The parties also have stipulated that "plaintiff's claims for medical expense and wage loss in this lawsuit represent a subrogation claim to the extent of $68,374.93 in medical expense payments and wage loss payments (disability compensation) paid by Harleysville Mutual Insurance Company." Stipulation, at 4. If the parties had not settled, then, Harleysville would be entitled to recover the $68,374.93 from...
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...Ford is not an unpaid claim. It, therefore, is not a covered claim and should decrease Iowa's obligation. It cites Besack v. Rouselle Corp., 706 F.Supp. 385 (E.D.Pa.1989), Ferrari v. Toto, 9 Mass.App.Ct. 483, 402 N.E.2d 107 (1980), and Florida Ins. Guar. Ass'n v. Dolan, 355 So.2d 141 (Fla.D......
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Washington Ins. Guar. Ass'n v. Mullins, 26850-3-I
...system. The Federal District Court for the Eastern District of Pennsylvania adopted similar reasoning in part in Besack v. Rouselle Corp., 706 F.Supp. 385, 386 (E.D.Pa.1989). There the court held that a claimant who was paid benefits by a private worker's compensation insurer did not have a......
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Connecticut Ins. Guar. Ass'n v. State, 17538.
...that waivers, like the one in the present case, cannot have an effect on the association's obligations. Citing Besack v. Rouselle Corp., 706 F.Supp. 385 (E.D.Pa.1989), the association contends that, in the present case, the state, by virtue of the waiver, is, in essence, asserting the right......
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Rhode Island Insurers' Insolvency Fund v. New Prime, Inc., No. PC 04-1703 (R.I. Super 4/5/2007)
...Leaman, 436 N.E.2d 996 (Mass. App. 1982); Ventulett v. Maine Ins. Guar. Ass'n, 583 A.2d 1022, 1024 (Me. 1990); Besack v. Rouselle Corp., 706 F. Supp. 385, 387 (E.D. Pa. 1989); Proios v. Bokeir, 863 P.2d 1363, 1368-69 (Wash. App. 1993). These cases, however, are not directly on point. In sev......