Collins v. Allstate Indem. Co.
| Decision Date | 12 July 1993 |
| Citation | 426 Pa.Super. 197,626 A.2d 1162 |
| Parties | , 41 Soc.Sec.Rep.Ser. 456 Andrew COLLINS, Individually and on Behalf of a Class of All Those Similarly Situated v. ALLSTATE INDEMNITY COMPANY, Appellant. Albert COOPERSMITH, Individually and on Behalf of a Class of All Those Similarly Situated v. COLONIAL PENN INSURANCE COMPANY, Appellant. Lucinda CONYERS, Individually and on Behalf of a Class of All Those Similarly Situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant. Clayre ABRAMSON, Individually and on Behalf of a Class of All Those Similar Situated v. LIBERTY MUTUAL INSURANCE COMPANY, Appellant. Albert COOPERSMITH, Ind. and on Behalf of a Class of All Those Similarly Situated v. COLONIAL PENN INSURANCE COMPANY, Appellant. Lucinda CONYERS, Individually and on Behalf of a Class of All Those Similarly Situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant. Jean PERSON, Administratrix of the Estate of Andrew Collins, Individually and on Behalf of a Class of All Those Similarly Situated, Appellant, v. ALLSTATE INSURANCE COMPANY. Clayre ABRAMSON, Individually and on Behalf of a Class of All Those Similar Situated v. LIBERTY MUTUAL INSURANCE COMPANY, Appellant. Ann BYRNE and Jane Nole, Executrices of the Estate of Ann Alkins, Individually and on Behalf of a Class of All Those Similarly Situated v. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY, Appellant. Ann BYRNE and Jane Nole, Executrices of the Estate of Ann Alkins, Individually and on Behalf of a Class of All Those Similarly Situated v. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY, Appellant. Elizabeth TUCKER, Ind. and on Behalf of Class of All Those Similarly Situated v. NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant. Elizabeth TUCKER, Ind. and on Behalf of Class of All Those Similarly Situated, Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY. |
| Court | Pennsylvania Superior Court |
Morris M. Shuster, Haverford, for appellants (at 330, 331, 333, 338, 443 and 2257) and appellees (at 69, 125, 146, 185, 332 and 2256).
James T. Moughan, Philadelphia, for appellants (at 125 and 146) and appellee (at 330 and 331).
Alan D. Windt, Philadelphia, for appellee (at 338).
William C. Foster, Philadelphia, for appellee (at 443).
James R. Kahn, Philadelphia, for appellant (at 2256) and appellees (at 2257).
James C. Haggerty, Philadelphia, for appellants (at 332) and appellees (at 333).
Gerard F. Lipsky, Philadelphia, for appellant (at 185).
Before McEWEN, BECK and HESTER, JJ.
The issue in these combined appeals is whether plaintiffs-appellees are entitled to recover no-fault insurance benefits for medical expenses previously paid by Medicare, interest accrued on the unpaid benefits, and attorneys' fees. We affirm the trial court and conclude that plaintiffs-appellees are entitled to the benefits and interest, but not attorneys' fees.
Individuals representing classes of similarly situated insureds brought these actions against appellants Allstate Insurance Company ("Allstate"), Liberty Mutual Insurance Company, Colonial Penn Insurance Company ("Colonial Penn"), State Farm Mutual Automobile Insurance Company, Southeastern Pennsylvania Transportation Authority ("SEPTA"), and Nationwide Mutual Insurance Company ("Nationwide"). The cases were submitted to the trial court on cross-motions for summary judgment with stipulated facts.
Each plaintiff was injured in a motor vehicle accident after December 5, 1980, and incurred certain medical expenses as a result. Each was eligible to receive basic loss benefits for medical treatment under a no-fault insurance policy, pursuant to the Pennsylvania No-Fault Motor Vehicle Insurance Act ("No-Fault Act"), 40 P.S. §§ 1009.101 et seq, since repealed. 1 In addition, each plaintiff was eligible to receive Medicare benefits, under 42 U.S.C. § 1395. It was agreed by the parties that all medical expenses submitted by the plaintiffs were reasonable and necessary and were for services provided by "participating" providers under Medicare who were "accredited" under the No-Fault Act.
All of the plaintiffs' medical and other accident-related expenses have been paid. Although the defendant insurers reimbursed plaintiffs for excess medical and non-medical "basic loss" expenses, they argue that Medicare was the primary insurer for the medical expenses. Consequently, the insurers made no payment for medical expenses until a Medicare disposition was received, and then only to the extent that Medicare had not paid. Plaintiffs brought these actions to recover the unpaid no-fault medical benefits, interest accrued thereon, and attorneys' fees.
Prior to December 5, 1980, no-fault benefits were indeed secondary to Medicare payments. Section 206 of the No-Fault Act provided, in pertinent part, as follows:
(a) General.--Except as provided in section 108(a)(3) of this act, all benefits or advantages ... that an individual receives or is entitled to receive from Social Security, ... workmen's compensation, any State-required temporary, nonoccupational disability insurance, and all other benefits ... received by or available to an individual because of the injury from any government, unless the law authorizing or providing for such benefits or 40 P.S. § 1009.206 (repealed) (emphasis added). This cost-cutting measure expressly provided for an automatic adjustment in the payment priority scheme if the law relating to government benefits were to change.
advantages makes them [426 Pa.Super. 203] excess or secondary to the benefits in accordance with this act, shall be subtracted from loss in calculating net loss.
On December 5, 1980, the federal government did make a change in the existing priority scheme when it enacted the Omnibus Reconciliation Act ("ORA"). Certain amendments enacted through the ORA made Medicare secondary or excess to no-fault benefits:
(1) Payment under this subchapter may not be made with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made (as determined in accordance with regulations), with respect to such item or service, under a workmen's compensation law or plan or the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance. Any payment under this subchapter with respect to any item or service shall be conditioned on reimbursement to the appropriate Trust Fund established by this subchapter when notice or other information is received that payment for such item or service has been made under such a law, policy, plan, or insurance....
42 U.S.C. § 1395y(b)(1) (additions underlined). The effective date of the ORA was the date of enactment, December 5, 1980, and its stated purpose was to effectuate "substantial savings in Fiscal Year 1981." 1980 U.S. Code Cong. & Ad. News 5526, at 5528.
The trial court, through the Honorable Bernard J. Goodheart, granted summary judgment in favor of the plaintiffs, and held that, inter alia: plaintiffs have standing to bring these actions; the ORA's changes in the priority of Medicare benefits were effective on December 5, 1980 and no later; the coordination of benefits clauses in the Allstate and Nationwide policies did not negate the effect of this federal statute; and the plaintiffs were entitled to interest on the overdue no-fault benefits. Judge Goodheart also held that plaintiffs were not entitled to attorneys' fees as a matter of law, although the parties did not raise this issue on their cross-motions for summary judgment. These timely appeals followed.
Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Pa.R.Civ.P. 1035(b). Because the parties stipulated to the relevant facts, this matter was ripe for summary judgment. With the exception of the trial court's conclusion that the federal government does not have a right of subrogation against the plaintiffs for the interest awarded, we affirm the order below. 2
The issues raised on appeal may be summarized as follows:
1. Are plaintiffs proper parties to maintain this action for no-fault benefits when:
(a) it is undisputed that all benefits allegedly due would belong to the United States, which paid Medicare benefits for the same expenses, and the United States also claims an interest in any ancillary amounts due;
(b) the United States is not a party to the action, has not authorized plaintiffs to maintain the action on its behalf, and has not agreed to be bound by the adjudication in this action; and
(c) plaintiffs are not aggrieved by defendants' failure to pay no-fault benefits because plaintiffs would be no better off had no-fault benefits, instead of Medicare 2. Did defendants properly subtract Medicare benefits from medical expenses to compute the loss payable to plaintiffs?
benefits, been paid for the medical expenses in question?
3. Are defendants liable for interest on overdue no-fault benefits where the accident victims did not suffer any delay in payment because Medicare paid the expenses in question?
4. Where a coordination of benefits endorsement was included in a policy, was the insurer required to pay no-fault benefits after Medicare, a collateral source, paid the medical expenses?
5. Is defendant SEPTA liable for interest under the Sovereign Immunity Act and Tort Claims Act?
6. Did the trial court err in deciding that attorneys' fees were not recoverable as a matter of law?
The insurers initially argue that this court need not reach the merits of this case because plaintiffs have no standing to bring...
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