Pennsylvania Ins. Guar. Ass'n v. Trabosh

• Decision Date: 23 December 1992
• Docket Number: Civ. A. No. 90-2295.
• Citation: 812 F. Supp. 522
• Parties: PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION, Plaintiff, v. Brad TRABOSH, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

812 F. Supp. 522

PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION, Plaintiff, v. Brad TRABOSH, Defendant.

Civ. A. No. 90-2295.

United States District Court, E.D. Pennsylvania.

December 23, 1992.

John J. Coffey, Marshall, Dennehey, Warner, Coleman & Goggin, Philadelphia, PA, for plaintiff.

David S. Katz, Norristown, PA, for defendant.

MEMORANDUM

HUYETT, District Judge.

On May 21, 1989 Defendant sustained serious permanent injuries in a traffic accident that occurred at the intersection of Route 3012 and Route T517 in Upper Macungie Township, Lehigh County, Pennsylvania. The accident was caused by a negligent third party. At the time of the accident, Defendant was driving a tractor trailer owned by his employer, Centerport Milk Hauling Cooperative (Centerport). Defendant was acting within the scope of his employment and received workers' compensation benefits as a result of his injuries. Defendant also received $50,000 from the third party's insurer and $100,000 from the insurance policy covering his personal vehicle. Defendant then sought to recover from Centerport's motor vehicle insurer, American Universal Insurance Group (AUIG). That policy covered all drivers, of which Defendant is one, and contained limits of liability of $500,000 and underinsured motorist benefits of $35,000. According to Defendant, however, at no time was any waiver executed by Centerport which waived the equal limitation requirement mandated by the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa. Cons.Stat.Ann. §§ 1701-1799 (Supp.1992) (MVFRL). Defendant filed for arbitration pursuant to the AUIG policy.

AUIG commenced this declaratory judgment action against Defendant. AUIG asked the Court to declare that Defendant was not entitled to recover underinsured motorist benefits under the AUIG policy because the exclusivity provision of the Pennsylvania Workmen's Compensation Act, Pa.Stat.Ann. tit. 77, § 481(a) (1992) prevented an employee from recovering against the employer's automobile policy. In the alternative, AUIG asked the Court to declare that AUIG's limit of coverage to Defendant was $35,000 pursuant to the underinsured motorist provisions of the policy.

On cross-motions for summary judgment, the Court granted AUIG's motion and denied Defendant's motion. The Court declared that, under the facts of the case, the exclusivity provision of the Pennsylvania Workmen's Compensation Act, Pa.Stat. Ann. tit. 77, § 481(a) (1992) precluded Defendant from bringing a claim against AUIG for underinsured motorist benefits under the motor vehicle insurance policy written by AUIG for Defendant's employer, Centerport, for damages sustained in the May 1989 accident. The Court, therefore, did not reach AUIG's second argument that its liability under the policy should be limited to $35,000. American Universal Ins. Group v. Trabosh, No. 90-2295 (E.D.Pa. Feb. 26, 1992).

Defendant appealed the Court's order. In the meantime, AUIG had become insolvent and the Pennsylvania Insurance Guaranty Association (PIGA) assumed all of AUIG's rights, duties, and obligations pursuant to the Pennsylvania Insurance Guaranty Association Act, Pa.Stat.Ann. tit. 40, §§ 1701.101-.605 (1992) (PIGAA). PIGA moved the court of appeals to substitute PIGA for AUIG as the real party in interest and to remand the case to this Court because of postdecision developments in state law. The court of appeals granted PIGA's motion. American Universal Ins. Group v. Trabosh, No. 92-1255 (3d Cir. June 25, 1992).

On remand from the Third Circuit, this Court held that the Motor Vehicle Financial Responsibility Law takes precedence over the Workmen's Compensation Act's exclusivity provision and that, therefore, pursuant to section 1735 of the MVFRL, Defendant is entitled to recover both workers' compensation benefits and underinsured motorist benefits via his employer's motor vehicle insurance policy. Pennsylvania Insurance Guaranty Association v. Trabosh, No. 90-2295, slip op. at 3-4 (E.D.Pa. Oct. 30, 1992). The Court further held that pursuant to the language of the arbitration clause of the motor vehicle insurance policy and the Pennsylvania Arbitration Act, 42 Pa.Cons.Stat.Ann. §§ 7301-7320 (1982), the parties shall proceed with arbitration to settle the dispute over Defendant's recovery of underinsured motorist benefits. The Court, therefore, denied Plaintiff's motion for summary judgment and granted Defendant's motion for summary judgment. Id. at 4-7.

Plaintiff PIGA has filed a motion for reconsideration of the Court's October 30, 1992 Order. Plaintiff asks this Court to declare that the limit of coverage under the policy issued by the insolvent insurer, AUIG, is $35,000. Plaintiff argues that "because the real party in interest is now the Guaranty Association and not the insolvent insurer, public policy requires that the issue raised herein be addressed by this Court and that the matter not be submitted to arbitration." Pl.Mem. of Law at 4.

A motion for reconsideration of a final judgment will generally be construed as a motion under Federal Rule of Civil Procedure 59(e) to alter or amend the judgment if the motion does not cite a specific federal rule. Koshatka v. Philadelphia Newspapers, Inc., 762 F.2d 329, 333 (3d Cir.1985). Here, Plaintiff has not cited a specific rule and thus the Court will consider its motion under Rule 59(e).¹ According to the Third Circuit, the purpose of a motion for reconsideration, under Rule 59(e), is to "correct manifest errors of law or fact or to present newly discovered evidence." Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985). Motions for reconsideration should be granted sparingly because of the interests in finality and conservation of scarce judicial resources.

Plaintiff PIGA argues that because it is not an insurance carrier, but rather a creature of statute, public policy requires that the Court, and not an arbitration panel, determine the limit of PIGA's obligations to Defendant before referring the matter to arbitration. Nothing in the Pennsylvania Insurance Guaranty Association Act (PIGAA) or the case law cited by Plaintiff, however, compels this conclusion. While it is true that PIGA's obligation to an insured is no more than $300,000 less a deductible of $100, regardless of the coverage limitations contained in the insurance policy issued by the insolvent insurer, PIGGA § 1701.201(b)(1)(i), nothing in the act states that a court should ignore an arbitration clause in the insurance policy that states that disputes regarding an insured's entitlement to damages or disputes regarding the amount of damages are subject to arbitration.

Furthermore, the cases cited by Plaintiff do not convince this Court that Plaintiff is entitled to the relief that it seeks. Schreffler v. Pennsylvania Insurance...