Freeze v. Donegal Mut. Ins. Co.
| Decision Date | 18 February 1992 |
| Parties | John G. FREEZE, Jr., Administrator of the Estate of John Goss Freeze, Deceased, Appellant, v. DONEGAL MUTUAL INSURANCE COMPANY. John G. FREEZE, Jr., Administrator of the Estate of John Goss Freeze, Deceased, v. DONEGAL MUTUAL INSURANCE COMPANY, Appellant. |
| Court | Pennsylvania Superior Court |
Pamela G. Shuman, Harrisburg, for appellant (at 699) and appellee (at 727).
Robert E. Kelly, Jr., Harrisburg, for appellant (at 727) and appellee (at 699).
Before WIEAND, MONTEMURO and KELLY, JJ.
Before us is a dispute emanating out of the Pennsylvania No-fault Motor Vehicle Insurance Act (No-fault Act), 40 P.S. §§ 1009.101-.701 (repealed 1984). Specifically, this is a consolidated appeal from an order awarding $8,850.00 in attorneys' fees to appellant's counsel for recovering interest due on work loss benefits. Appellant has appealed this award and asks that we determine: (1) whether the trial court erred in failing to award counsel fees for the entire fourteen year period of representation; (2) whether the trial court erred in its interpretation of the No-fault Act; and, (3) whether the trial court erred in calculating a reasonable rate of compensation for counsel. Appellee has also appealed from the award of attorneys' fees arguing that: (1) appellant is not entitled to an award of attorneys' fees; and, (2) that this court does not have jurisdiction to hear appellant's appeal with regard to section 1009.107(3) of the No-[412 Pa.Super. 308] fault Act. We affirm the award of counsel fees, but on a different basis than that relied on by the trial court.
The relevant facts of this never-ending dispute are as follows. On January 14, 1977, John G. Freeze, III, an eleven year old child, was killed by an automobile while sled riding near his home. At the time of his death, the decedent was insured under a no-fault automobile insurance policy issued by appellee, Donegal Mutual Insurance Company (Donegal).
Following the death of his son, John G. Freeze, Jr., the nominal appellant, was appointed administrator of his son's estate. In his capacity as administrator, appellant submitted an application for payment of no-fault benefits to Donegal. Subsequent to receipt of appellant's application, Donegal was contacted by appellant's counsel, Angino & Rovner (Angino), who requested that payment of postmortem work loss benefits be made to decedent's estate. Five days later, Donegal denied the claim for work loss benefits.
Appellant then brought suit seeking to recover work loss benefits for the minor-decedent's estate. Donegal filed preliminary objections in the nature of a demurrer asserting that under the No-fault Act, the estate of a minor who has never entered the work force is not entitled to work loss benefits. The York County Court of Common Pleas agreed and sustained the demurrer. Appellant then took an appeal to this court, wherein we reversed the trial court's decision and held that the estate of a never-employed minor is entitled to work loss benefits under the No-fault Act. 1 Our decision was later affirmed by the Pennsylvania Supreme Court. 2
Following the Supreme Court's decision, Donegal forwarded a check to Angino in the sum of $27,600.00. This amount represented $15,000 in work loss benefits plus interest of $12,600 calculated at the statutory rate of eighteen percent. See 40 P.S. § 1009.106(a)(2). Appellant returned this check to Donegal contending that it was entitled to stacked work loss benefits of $30,000 plus interest from the date of the initial application for benefits. On these issues, the parties remained deadlocked.
Eventually, appellant abandoned its claim for stacked benefits in light of our Supreme Court's decision in Antanovich v. Allstate Ins. Co., 507 Pa. 68, 488 A.2d 571 (1985). Now, it would appear that the only issue remaining for resolution is the proper calculation of interest. However, this was not to be.
On June 8, 1987, appellant filed a motion for summary judgement requesting interest calculated from February 23, 1977, plus attorneys' fees pursuant to 40 P.S. § 1009.107(1) and (3). By its order of April 29, 1988, the trial court granted the motion and ordered Donegal to pay appellant the $15,000 basic work loss benefit plus interest calculated from June of 1977. The order also required Donegal to pay Angino reasonable attorneys' fees and expenses pursuant to Section 1009.107(1), but "only as they relate to the particular sum awarded." (T.C.O. at 5). 3 If the parties were unable to agree as to the amount of fees and expenses, the order stated that the trial court would hold a hearing and determine the amount of fees to be paid. 4
In compliance with the above order, Donegal tendered a check to appellant in the amount of $44,475 representing payment of the work loss benefit plus interest, but not appellant's attorneys' fees. 5 Appellant accepted this sum and executed a release with Donegal.
Predictably, Donegal and Angino were unable to come to terms and the trial court scheduled a hearing to put the attorneys' fee issue to rest. Prior to the hearing, Angino filed an affidavit with the trial court detailing the credentials of Attorney Angino, the hours spent resolving the instant dispute and requesting attorneys' fees in the amount of $348,152. A hearing was then held before the Honorable Joseph E. Erb.
Following the hearing, Judge Erb entered an opinion and order awarding $8,850.00 to Angino as a reasonable fee for resolving the dispute over the amount of interest owed to appellant. In making this award, the trial court determined that Angino had spent forty-four and a quarter hours resolving this issue and that it was entitled to a reasonable fee calculated at the rate of $200 per hour. Dissatisfied with this determination, both parties have taken timely appeals.
Before enacting the No-fault Act, our General Assembly studied the then existing motor vehicle accident insurance system and found:
(3) the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed in motor vehicle accidents ... is essential to the humane and purposeful functioning of commerce;
(4) to avoid any undue burden on commerce ..., it is necessary and proper to have a Statewide low-cost, comprehensive, and fair system of compensating and restoring motor vehicle accident victims and the survivors of deceased victims;
(5) ... the present [fault based] system of motor vehicle accident and insurance law ... is not such a low-cost, comprehensive, and fair system;
(6) careful studies, intensive hearings, and some State experiments have demonstrated a basic system of motor vehicle accident and insurance law which ... eliminates the need to determine fault ..., is such a low-cost, comprehensive system.
40 P.S. § 1009.102(a). Prompted by these findings, the General Assembly enacted a comprehensive scheme of no-fault motor vehicle insurance with the stated purpose of establishing "at [a] reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims and the survivors of deceased victims." 40 P.S. § 1009.102(b).
Considering the extensive findings and the sound purpose to be attained, it is evident that recovery under the No-fault Act is to be had without turning to the judicial process, including retention of counsel. See 31 Pa.Code § 66.121. 6 To ensure the prompt and adequate compensation of accident victims, the No-fault Act contains penal provisions which punish an insurance carrier who either delays paying no-fault benefits due or unreasonably denies a legitimate claim. 40 P.S. § 1009.107(1), (3).
Specifically, section 1009.107(1) provides that:
[i]f any overdue no-fault benefits are paid by the obligor after receipt by the obligor of notice of representation of a claimant in connection with a claim or action for the payment of no-fault benefits, a reasonable attorney's fee (based on actual time expended) shall be paid by the obligor to such attorney. No part of the attorney's fee for representing the claimant in connection with such claim or action for no-fault benefits shall be charged or deducted from benefits otherwise due to such claimant and no part of such benefits may be applied to such fee.
And, section 1009.107(3) provides that:
[i]f, in any action by a claimant to recover no-fault benefits from the obligor, the court determines that the obligor has denied the claim or any significant part thereof without reasonable foundation, the court may award the claimant's attorney a reasonable fee based upon actual time expended.
The resolution of the instant dispute rests upon the proper interpretation of these penal provisions.
When we analyze and interpret a statute, we do so with the goal in mind of ascertaining and giving effect to the intent of the General Assembly. 1 Pa.C.S.A. § 1921(a). To aid us in this task, we are guided by the Statutory Construction Act of 1972, 1 Pa.C.S.A. §§ 1501-1991, which requires that we construe a statute in such a manner as to give effect to all of its provisions. When we so construe a statute, we must follow the letter of the statute if its words are unambiguous, 1 Pa.C.S.A. § 1921(b), but when the words are not explicit, we must ascertain the General Assembly's intent by looking to:
(1) The occasion and necessity of the statute.
(2) The circumstances under which it was enacted.
(3) The mischief to be remedied.
(4) The object to be obtained.
(5) The former law, if any, including other statutes upon the same or similar subjects.
(6) The consequences of a particular interpretation.
(7) The contemporaneous legislative history.
(8) Legislative and administrative interpretations of such statute.
Generally, we interpret an insurance statute liberally to effectuate its purpose. Antanovich...
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