Boris v. Liberty Mut. Ins. Co.

• Citation: 515 A.2d 21,356 Pa.Super. 532
• Parties: Charles BORIS and Deborah Boris, H/W, Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY and Penna. Trial Lawyers Assoc. (AMICUS CURIAE).
• Decision Date: 18 September 1986
• Court: Superior Court of Pennsylvania

Page 21

515 A.2d 21

356 Pa.Super. 532

Charles BORIS and Deborah Boris, H/W, Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY and Penna. Trial Lawyers Assoc. (AMICUS CURIAE).

Superior Court of Pennsylvania.

Argued May 12, 1986.

Filed Sept. 18, 1986.

Mary L. Schmidt, Philadelphia, for appellants.

Lawrence L. Robinson, Philadelphia, for appellee.

Before CIRILLO, President Judge, and CAVANAUGH, BROSKY, McEWEN, DEL SOLE, BECK, TAMILIA, KELLY and JOHNSON, JJ.

CIRILLO, President Judge.

Is an employee who collects workmen's compensation benefits following a work-related motor vehicle accident precluded from obtaining uninsured motorist benefits under his employer's fleet policy?

Appellant Charles Boris (his wife, Deborah, is co-appellant) was driving a truck for his employer, Buckley and Company, when he was run off the road by an uninsured motorist. He suffered injuries to his knee and back. Despite extensive medical treatment, he continues to suffer from the pain of those injuries.

Buckley and Company carries both workmen's compensation and uninsured motorist insurance through appellee Liberty Mutual Insurance Company. Under the latter policy, each of Buckley's 67 vehicles is insured to the extent of $30,000.00 against injuries caused by uninsured motorists; if there is a dispute between the insurer and insured over coverage liability, a standard arbitration clause in the contract dictates that the controversy be submitted to arbitration. This clause was invoked when Mr. Boris sought uninsured motorist benefits, and pursuant to that clause, the third arbitrator on the panel was appointed by the court, since the parties could not agree on one. The subsequent arbitration resulted in an $841,569.00 award to appellant.

Upon petition by Liberty Mutual, the Honorable Alfred J. DiBona of the Philadelphia Court of Common Pleas reviewed the award and concluded the panel made an egregious error of law in awarding uninsured motorist benefits to Mr. Boris. Judge DiBona found workmen's compensation to be the sole remedy, ¹ and accordingly vacated the award. This is an appeal from that order. In support of appellant's position, the Pennsylvania Trial Lawyers Association has filed a separate brief as amicus curiae.

Initially, we consider appellants' contention that Liberty Mutual waived its defense of workmen's compensation as sole remedy. In appellants' view, Liberty Mutual improperly waited until the arbitration hearing to present the defense; it should have first been raised under a "new matter" hearing in an answer to Mr. Boris' petition seeking appointment of an arbitrator.

It is true that Pa.R.Civ.P. 1030 requires all affirmative defenses to be set forth in a responsive pleading. We also agree that Liberty Mutual's defense is an affirmative one, although it is not one of "immunity", as appellants suggest. ² Nonetheless, Liberty Mutual did not waive its defense because Rule 1030 cannot control here. Appellants seek to impose a duty to plead new matter in response to a petition for appointment of an arbitrator. The petition does not set forth any substantive legal arguments, and pursuant to Pa.R.Civ.P. 1007 is not a "pleading" which can properly commence a civil action. It would be anomalous to impose the pleading burdens of a civil action on a party responding to a mere petition, especially since there is no duty to answer such a petition in the first instance. In reaching this conclusion, we observe that the policy itself states only that the proceedings shall be conducted in accordance with the Arbitration Act of 1927, and makes no mention of the applicability of the civil procedure rules. Compare Cassidy v. Keystone Insurance Company, 322 Pa.Super. 168, 469 A.2d 236 (1983) (rules of civil procedure applied to service of process in arbitration setting because insurance policy expressly required such compliance with service rule).

In the alternative, appellants argue that Liberty Mutual, its defense being one of "immunity", should have simply objected to the petition for appointment of an arbitrator. In other words, the defense was waived because Liberty Mutual submitted to the court's jurisdiction. This contention is meritless, because the defense is not truly one of immunity, despite the fact that even Liberty Mutual itself refers to it as such in its brief. As Black's Law Dictionary defines the term, immunity is a "freedom from duty or penalty" such as governmental tort immunity. Here, Liberty Mutual is not patently immune from the duty to pay benefits; to the contrary, it is only relieved of such obligation if its defense is accepted as valid. Thus, a lack of jurisdiction argument would be fruitless. ³

In the final prong of their multi-faceted waiver argument, appellants maintain that by including an arbitration clause in the insurance policy, Liberty Mutual tacitly admits that employees are entitled to uninsured motorist benefits. Again, we disagree. This position overlooks the fact that at some point in time one of Buckley's vehicles might be operated by a non-employee who is ineligible for workmen's compensation.

We turn now to the substantive issues before us. Liberty Mutual, in urging that workmen's compensation is the sole remedy available, relies primarily on Wagner v. National Indemnity Company, 492 Pa. 154, 422 A.2d 1061 (1980), and Turner v. Septa, 256 Pa.Super. 43, 389 A.2d 591 (1978). These cases and others cited hold that insofar as workmen's compensation was created to replace suits by employees for damages caused by possibly negligent employers, such litigation will not be allowed when the employee has obtained workmen's compensation. Further, as the Workmen's Compensation Act, 77 Pa.S. § 1, specifically provides, the employer's insurer shall enjoy the same freedom from suit as does the employer-insured. Additionally, Liberty Mutual asserts that the Workmen's Compensation Act was enacted after the Uninsured Motorist Act, 40 Pa.S § 2000, yet nonetheless stated that workmen's compensation was an exclusive remedy, making no mention of a possible Uninsured Motorist Act recovery. We reject Liberty Mutual's contentions, for they misconstrue the purpose and scope of the Workmen's Compensation Act.

In the face of a proliferation of suits initiated by injured employees, the Workmen's Compensation Act was enacted to provide an efficient means of compensating aggrieved workers without litigating the issue of employer negligence. Recovery under the Act is a complete replacement for suit against the employer; the employee receives the statutory recompense for his work-related injury, and may not then seek to litigate those same damages. See generally U.S. v. Demko, 385 U.S. 149, 87 S.Ct. 382, 17 L.Ed.2d 258 (1966); 42 Pennsylvania Law Encyclopedia 1 (1975). Further, the Act specifically provides that the employer's insurance carrier shall enjoy the same freedom from suit as does the employer itself. 77 Pa.S. § 501. This is entirely logical as it relates to the carrier of no-fault insurance benefits, for such coverage ultimately results in litigation of the employer's negligence despite the fact that the employer was not sued directly by the employee.

However, the employer's freedom from suit under the Workmen's Compensation Act does not logically extend to the carrier of uninsured motorist benefits. The injured employee who seeks such coverage asserts only that he was injured at the hands of some third party who was not adequately insured. The employer cannot be implicated in such wrongdoing in the slightest. Indeed, the law is clear that when an employee seeks to recover damages from some third party, the employer may not be joined as an additional defendant or involuntary plaintiff. Heckendorn v. Consolidated Rail Corp., 502 Pa. 101, 465 A.2d 609 (1983); Anskis v. Fischer, 326 Pa.Super. 374, 474 A.2d 287 (1984); Bartley v. Concrete Masonry Corp., 322 Pa.Super. 207, 469 A.2d 256 (1983); Kelly v. The Carborundum Company, 307 Pa.Super. 361, 453 A.2d 624 (1982), aff'd 504 Pa. 238, 470 A.2d 969 (1984).

Naturally, the Workmen's Compensation Act makes no mention of recovery under the earlier-passed Uninsured Motorist Act. A claim submitted under the latter is wholly unrelated to the employer's activities and gives no cause for the employer to assert any sort of "immunity". In turn, there is no freedom from suit for the uninsured motorist carrier to "borrow" in this context. In sum, the fact that an employee's claim for uninsured motorist benefits only addresses the wrongs of a third party, and not the employer, takes a claim for such benefits outside the scope of the "immunity" created by the Workmen's Compensation Act. Insofar as Turner and Wagner, supra, addressed workmen's compensation as it relates to a no-fault claim (which can involve litigation of employer negligence), appellee's reliance on those cases is entirely misplaced.

In reaching our decision, we keep in mind that the Workmen's Compensation Act is not as exclusive as Liberty Mutual would have us believe. For example, the Act was never intended to strip from an injured employee the right to maintain an action against a third party tortfeasor. See Gillespie v. Vecenie, 292 Pa.Super. 11, 436 A.2d 695 (1981). Indeed, an action can lie against the employer itself if it harmed its employee through an intentional wrongful act. See Jones v. P.M.A. Insurance Company, 343 Pa.Super. 411, 495 A.2d 203 (1985); see generally Higgins v. Clearing Machine Corp., 344 Pa.Super. 325, 496 A.2d 818 (1985); Annot., 96 A.L.R.3d 1064 (1980). These considerations bolster our conclusion that the "exclusivity" of the workmen's compensation remedy cannot be read as anything more than a realization that the employee cannot "have his cake and eat it, too"; he obtains the more efficient and expeditious statutory remedy to the exclusion of a suit against his employer. This does not mean he has given up the right to seek redress from an unrelated third party. C...