Myers v. Commercial Union Assur. Companies

• Decision Date: 20 December 1984
• Docket Number: No. 3,Nos. 2 and 4,s. 2 and 4,3
• Citation: 485 A.2d 1113,506 Pa. 492
• Parties: Thomas E. MYERS v. COMMERCIAL UNION ASSURANCE COMPANIES, Nicel Industries, Inc., The Travelers Insurance Companies, Bradley A. Miller, and the City of McKeesport. Appeal of the TRAVELERS INSURANCE COMPANIES and Bradley A. Miller atW.D. Appeal Docket, 1984. The TRAVELERS INSURANCE COMPANIES v. COMMERCIAL UNION ASSURANCE COMPANIES. Appeal of the TRAVELERS INSURANCE COMPANIES and Bradley A. Miller atW.D. Appeal Docket, 1984. 2 W.D. App. 1984, 3 W.D. App. 1984, 4 W.D. App. 1984
• Court: Pennsylvania Supreme Court

Page 1113

485 A.2d 1113

506 Pa. 492

Thomas E. MYERS v. COMMERCIAL UNION ASSURANCE COMPANIES, Nicel Industries,

Inc., The Travelers Insurance Companies, Bradley

A. Miller, and the City of McKeesport.

Appeal of the TRAVELERS INSURANCE COMPANIES and Bradley A.

Miller at Nos. 2 and 4 W.D. Appeal Docket, 1984.

The TRAVELERS INSURANCE COMPANIES v. COMMERCIAL UNION ASSURANCE COMPANIES.

Appeal of the TRAVELERS INSURANCE COMPANIES and Bradley A.

Miller at No. 3 W.D. Appeal Docket, 1984.

2 W.D. App. 1984, 3 W.D. App. 1984, 4 W.D. App. 1984

Supreme Court of Pennsylvania.

Argued Sept. 12, 1984.

Decided Dec. 20, 1984.

[506 Pa. 493] William K. Herrington, Pittsburgh, for appellants.

Jeffrey S. Weiss, Pittsburgh, for Thomas E. Myers.

Fred C. Trenor, Louis C. Long, Pittsburgh, for Commercial Union Assur. Companies, Nicel Industries, Inc.

Seymour A. Sikov, Pittsburgh, for City of McKeesport.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON and PAPADAKOS, JJ.

OPINION

McDERMOTT, Justice.

Thomas E. Myers, while upon the business of his Illinois employer, was involved in an accident in Pennsylvania. Injuries incurred rendered him quadriplegic. At the time of the tragic incident, Mr. Myers, like his employer, was a resident of Illinois. Mr. Miller, the other driver involved, was a Pennsylvania resident and insured under a no-fault policy issued by Travelers Insurance Company. As the no-fault carrier, Travelers, forthrightly paid $74,000 medical expenses, and $250,000 in settlement for non-economic loss to Mr. Myers.

Mr. Myers also filed a claim for benefits from his employer, Nicel Industries, under the Illinois Workmen's Compensation Law. Both Nicel Industries and their compensation carrier, Commercial Union Assurance Companies contested his claim. The contest was resolved on June 28, 1979, by the Industrial Commission of Illinois in favor of Mr. Myers. He was awarded medical benefits and $120.00 per week for life from Commercial Union. Mr. Myers did not receive medical benefits from Commercial Union from the date of the accident to the date of the award. Commercial Union contended they were not obliged because those expenses had already been paid by Travelers.

Mr. Myers filed for Declaratory Judgment in an action filed in Allegheny County, Pennsylvania. The action sought an adjudication of the rights and duties owed to and by the various parties: including Commercial Union's claim for subrogation of the workmen's compensation benefits it paid, from the settlement that Myers received for noneconomic loss. In a separate equity action Travelers sued Commercial Union for reimbursement of the medical benefits paid Mr. Myers as the no-fault obligor. All actions were consolidated and the case submitted on stipulated facts. The trial court, per the honorable S. Louis Farino, dismissed the respective claims of both insurance companies. They appealed: Commercial Union challenging the decision on its subrogation claim, and Travelers challenging the decision on its claim for reimbursement.

With regard to the claim of Commercial Union the court of common pleas had held that Pennsylvania law applied, and that Commercial Union had no basis under Pennsylvania law to support subrogation. On appeal the Superior Court reversed ¹ and held that the correct law to be applied was that of Illinois, and that under the Illinois Workmen's Compensation Act ² a compensation carrier has a right to full subrogation of amounts paid by way of workmen's compensation where the employee recovers from a third party tortfeasor. ³ See 48 Ill.St. § 138.5(b). The court's decision was based on its evaluation of the significant contacts which the state of Illinois had with the underlying dispute, and the lack of countervailing contacts by the Commonwealth of Pennsylvania. Their analysis was in accord with this Court's decision in Griffith v. United Airlines, Inc., 416 Pa. 1, 203 A.2d 796 (1964). Mr. Myers sought allowance to appeal from the Superior Court decision but we denied allocatur. 260 W.D.Alloc.Dkt. 1983.

With regard to the claim by Travelers for reimbursement, the trial court had held that application of Section 106(a)(3) of the Pennsylvania No-Fault Act, ⁴ upon which Travelers' claim was based, was limited to claims by one Pennsylvania no-fault carrier against another. On appeal the Superior Court affirmed the order of the lower court, but not on the basis relied upon by Judge Farino. Rather, in an apparent effort to be consistent with its earlier analysis concerning Commercial Union's subrogation claim, the court concluded that any claim against the workmen's compensation carrier should be governed by the law of Illinois; and held that Section 106(a)(3) did not apply to benefits payable by the compensation carrier of an Illinois employer to an Illinois employee. Upon petition of Travelers we granted allocatur. We now reverse.

This Court in Griffith v. United Airlines, Inc., held that in resolving a potential conflict between the application of state laws we must consider the policies and interest underlying the particular issue before the court. Id. at 21, 203 A.2d at 805. As further explained in McSwain v McSwain, 420 Pa. 86, 215 A.2d 677 (1966), we must analyze the:

extent to which one state rather than another has demonstrated, by reason of its policies and their connection and relevance to the matter in dispute, a priority of interest in the application of its rule of law.

Id. at 94, 215 A.2d at 682. Furthermore, in evaluating the interests of one jurisdiction over another, we must view the factors qualitatively as opposed to quantitatively, Cipolla v. Shaposko, 439 Pa. 563, 267 A.2d 854 (1970).

Turning to the present situation, it is important to note that although both actions arose from the same incident this case is wholly distinct from the companion subrogation case. In the latter all significant contacts were clearly in Illinois: the case involved an Illinois resident who, as an employee of an Illinois corporation, claimed coverage under a policy issued by an Illinois insurance carrier; and the issue was simply whether an Illinois carrier was entitled to recover funds from an Illinois resident which it, the carrier, had been required by Illinois statute to pay. However, as we describe below, the factors and interests implicated in the present controversy are significantly different.

At the time of the accident in question the insurance claims of Mr. Myers were governed by the now repealed No-Fault Act. That Act had as its primary purpose the establishment "at reasonable cost ... a statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims and the survivors of deceased victims." (Emphasis added.) 40 P.S. § 1009.102(b). Pursuant thereto the Act specifically provided that claimed benefits would be considered "overdue if not paid within thirty days after the receipt by the obligor of each submission of reasonable proof of the fact and amount of loss sustained..." (Emphasis added.) 40 P.S. § 1009.106(a)(2). The Act also provided that if the accident resulting in injury occurs in this Commonwealth, "any victim or any survivor of a deceased victim is entitled to receive basic loss benefits in accordance with the provisions of this act." (Emphasis added.) 40 P.S. § 1009.201(a).

These provisions permitted Mr. Myers to file a claim for medical benefits against Travelers, and demand payment within thirty days of his claim, despite the fact that he was never a client of Travelers.

Such an anomaly was not totally unanticipated by the legislature. To partially correct this the legislature provided that in some instances collateral benefits, including workmen's compensation benefits, "shall be subtracted from loss in calculating net loss." 40 P.S. § 1009.206(a). However, this ameliorative provision was circumscribed by Section 106(a)(3) of the Act, which provided:

(3) A claim for no-fault benefits shall be paid without deduction for the benefits or advantages which are to be subtracted from loss in calculating net loss if such benefits or advantages have not been paid or provided to such claimant prior to the date the no-fault benefits are overdue or the no-fault benefits claim is paid. The obligor is thereupon entitled to recover reimbursement from the person obligated to pay or provide such benefits or advantages or from the claimant who actually receives them.

(Emphasis added.) 40 P.S. § 1009.106(a)(3). This section in conjunction with the above cited sections, mandated the result which occurred below, i.e., that Travelers was required to pay the entire cost of Mr. Myers medical bills from the time of the accident up until the award of workmen's compensation, six months later, without ever having received...