Persik v. Nationwide Mut. Ins. Co.

• Citation: 554 A.2d 930,382 Pa.Super. 29
• Parties: Julia C. PERSIK, Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY.
• Decision Date: 09 February 1989
• Court: Superior Court of Pennsylvania

Page 930

554 A.2d 930

382 Pa.Super. 29

Julia C. PERSIK, Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY.

Superior Court of Pennsylvania.

Argued June 13, 1988.

Filed Feb. 9, 1989.

Lee C. Swartz, Harrisburg, for appellant.

Jonathan M. Crist, Harrisburg, for appellee.

Before CIRILLO, President Judge, and WIEAND and DEL SOLE, JJ.

WIEAND, Judge.

The sole issue in this appeal is whether a person who is unemployed when a vehicular accident occurs may assert a claim under the income loss benefit provision of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL). ¹ The trial court held that an unemployed person cannot recover lost income and entered summary judgment in favor of the defendant insurance company. We reverse. An injured person may recover income loss benefit by showing that "but for" the accident, he or she would have worked and earned income.

On July 20, 1985, Julia C. Persik, while operating an automobile insured by Nationwide Mutual Insurance Company (Nationwide) on Route 641 East in Cumberland County, Pennsylvania, was struck in the rear by a truck. Due to permanent physical injuries resulting from the accident, Persik was rendered physically incapable of engaging in gainful employment. She had separated from her husband six weeks before the accident; and on or about July 1, 1985, she had begun seeking full-time employment to support herself and her minor daughter. Although she had made several inquiries regarding specific clerical positions, including a law firm for which she had acted as a temporary receptionist during the previous summer, appellant had not obtained full-time employment when the accident occurred.

Persik made a demand on Nationwide for income loss benefits allowed by the MVFRL. Nationwide denied the claim. Persik then filed this action. The trial court granted a motion for summary judgment in favor of Nationwide because Persik had not been earning income at the time of the accident and had been unemployed for twelve consecutive months prior thereto. This appeal followed.

A motion for summary judgment may properly be granted only if the moving party has shown that there is no genuine issue of material fact and that he or she is entitled to judgment as a matter of law. French v. United Parcel Service, 377 Pa.Super. 366, 370, 547 A.2d 411, 414 (1988); Thorsen v. Iron and Glass Bank, 328 Pa.Super. 135, 140, 476 A.2d 928, 930 (1984). Summary judgment should not be entered unless a case is clear and free from doubt. Weiss v. Keystone Mack Sales, Inc., 310 Pa.Super. 425, 430, 456 A.2d 1009, 1011 (1983); Dunn v. Teti, 280 Pa.Super. 399, 402, 421 A.2d 782, 783 (1980).

Under the provisions of the old, now repealed No-Fault Act, ² certain recoveries were allowed by the courts which had not been anticipated by the legislature. Thus, the old law was interpreted to permit the recovery of work loss benefits accruing after the death of a victim, Allstate Ins. Co. v. Heffner, 491 Pa. 447, 421 A.2d 629 (1980), and even to permit recovery of post-mortem work loss benefits by the estate of a deceased victim who had been a minor at the time of death, Freeze v. Donegal Mutual Ins. Co., 504 Pa. 218, 470 A.2d 958 (1983). This caused Representative Michael Mathew Dawida to say during the House Debate on MVFRL that:

The escalation of costs has come in a number of ways: one, from court decisions that could never have been foreseen by those in the legislature 9 years ago who passed the no-fault law, court cases that allowed a 2-year-old to receive work loss benefits. I assure you, the members of the legislature did not intend that, and the costs that have been encumbered on the constituents from those court cases are a serious and particularly appalling part of the cost escalation.

See: House Debate, December 14, 1983, Legislative Journal 2244. In response to these and other problems, the No-Fault Act was repealed and the MVFRL was enacted. See generally: J. Ronca, L. Sloane, J. Mundy, Pennsylvania Motor Vehicle Insurance: An Analysis of the Financial Responsibility Law, 11-16 (1986).

The new statute provides:

An insurer issuing or delivering liability insurance policies covering any motor vehicle of the type required to be registered under this title, except recreational vehicles not intended for highway use motorcycles, motor-driven cycles or motorized pedalcycles or like type vehicles, registered and operated in this Commonwealth, shall make available for purchase first party benefits with respect to injury arising out of the maintenance or use of a motor vehicle as follows:

* * *

(2) Income loss benefit.--Includes the following:

(i) Eighty percent of actual loss of gross income.

(ii) Reasonable expenses actually incurred for hiring a substitute to perform self-employment services thereby mitigating loss of gross income or for hiring special help thereby enabling a person to work and mitigate loss of gross income.

Income loss does not include loss of expected income for any period following the death of an individual or expenses incurred for services performed following the death of an individual. Income loss shall not commence until five working days have been lost after the date of the accident.

75 Pa.C.S. § 1712. By this enactment the legislature made several obvious changes. First, it abandoned specific methods of calculating work loss for persons who were regularly employed, seasonally employed, and not employed, see No-fault Act § 205(a), (b), and (c), 40 P.S. § 1009.205(a), (b), and (c), now repealed, and instead adopted a singular, broad, nonspecific definition of income loss. Second, it expressly excluded the recovery of income loss benefits accruing after the death of a victim, and thus legislatively reversed the decision in Allstate Ins. Co. v. Heffner, supra. Finally, it provided for a cost-reducing waiting period of five working days before any income loss would be paid.

Although the legislature expressly excluded recovery of post-mortem income loss, it did not expressly provide that currently unemployed persons who could show that they would have been earning income "but for" a vehicular accident should be denied income loss benefits. The old, No-fault Act had specifically defined "loss of income" as "gross income actually lost by a victim." No-fault Act, § 103, 40 P.S. § 1009.103, now repealed. The Act had also provided that the work loss benefit for a victim who was not employed at the time of the accident should be calculated by "determining his probable weekly income." No-fault Act § 205(c), 40 P.S. § 1009.205(c), now repealed. Under these provisions, work loss benefits were held to be recoverable where a victim who had been unemployed at the time of the accident would have earned income but for the injuries received in the accident. See, e.g.: Marryshow v. Nationwide Mutual Ins. Co., 306 Pa.Super. 233, 452 A.2d 530 (1982); Erie Ins. Exchange v. Roule, 279 Pa.Super. 40, 420 A.2d 733 (1980).

The MVFRL has not purported to change this. Recovery of income loss benefits based upon "actual loss of gross income" requires only that the loss of income be "real," that is that it have "a valid objective existence as opposed to that which is merely theoretical or possible." See: Black's Law Dictionary (5th ed. 1979). Under this standard, there can be no recovery for lost income merely because there has been a loss of earning capacity. Rather, the recovery allowed by the statute must be based upon a real, actual loss of income which would have been earned "but for" injuries received in the accident. A recovery for the loss of actual income, however, does not necessarily exclude recovery by one who, on the date of the accident, was unemployed. It excludes lost income benefits only for a claimant who, in any event, would not have earned actual income. Whether a claimant would have earned actual income but for injuries received in a vehicular accident is a matter of proof.

Like its predecessor statute, the MVFRL is to be liberally construed. Wolgemuth v. Harleysville Mutual Ins. Co., 370 Pa.Super. 51, 62, 535 A.2d 1145, 1151 (1988); 1 Pa.C.S. § 1928(c). The legislature, although aware of appellate court decisions interpreting the prior statute, made no affirmative attempt to disallow the recovery of actual income losses by persons who were unemployed on the date of the accident. Inasmuch as the legislature made no attempt to disallow the recovery of actual income loss by a person who was unemployed at the time of the accident causing injury, we perceive no valid reason for the judiciary to legislate a requirement that a victim be employed before he or she can recover for actual loss of gross income.

To impose such a requirement would not only fail to give the MVFRL the liberal construction which it is entitled to receive, but it would also permit results which would be both unfair and absurd. Such an interpretation, for example, would make it impossible for an employee to recover lost income benefits if he or she were temporarily on strike, or if he or she had been temporarily laid off. Under such an interpretation, a recent college graduate who was injured in an automobile accident immediately prior to accepting his first job offer would be unable to recover income loss benefits; whereas, another graduate who was injured in the same accident but who had started working the day before the accident would be able to recover 80% of the income which he would have earned had the injury not occurred. In our judgment, the legislature did not intend such an absurd result.

We hold, therefore, that the right to recover income loss benefits does not depend upon whether the claimant was employed on the date of the accident. It depends, rather, upon whether there has been an "actual loss of gross income." To prove an actual loss of income it is necessary to show that income would have been earned but for the injury caused by the accident. Because this appears to be...