Swords v. HARLEYSVILLE INS. COMPANIES

• Decision Date: 19 August 2003
• Citation: 831 A.2d 641
• Parties: Wayne SWORDS and Bernell Swords, Appellees, v. HARLEYSVILLE INSURANCE COMPANIES, Appellant.
• Court: Pennsylvania Superior Court

831 A.2d 641

Wayne SWORDS and Bernell Swords, Appellees, v. HARLEYSVILLE INSURANCE COMPANIES, Appellant.

Superior Court of Pennsylvania.

Argued June 23, 2003.

Filed August 19, 2003.

Robert E. Kelly, Harrisburg, for appellant.

Christian E. Eaby, Lancaster, for appellees.

BEFORE: DEL SOLE, P.J., JOHNSON, HUDOCK, MUSMANNO, LALLY-GREEN, KLEIN, BENDER, BOWES and GRACI, JJ.

OPINION BY KLEIN, J.:

¶ 1 Wayne Swords owned a registered but uninsured automobile. Swords was involved in an accident while driving a car owned by his father and insured by Pennland, a company related to the Harleysville Insurance Companies.¹ He sued for medical benefits and lost wages under 75 Pa.C.S.A § 1712.² The trial court allowed the benefits. We reverse and remand to the trial court for the entry of a declaration in favor of Harleysville.³ ¶ 2 In finding that Harleysville owed an obligation to Swords to provide medical and wage loss benefits, the trial court relied on Kafando v. State Farm Mutual Auto. Insurance Company, 704 A.2d 675 (Pa.Super.1998). Kafando, in turn, based its decision on language in Henrich v. Harleysville Insurance Companies, 533 Pa. 181, 620 A.2d 1122 (1993). On review, we believe Kafando misinterpreted Henrich and conflicts with several other published cases. The statute and the cases compel the result that an owner of a registered but uninsured car cannot recover medical and wage loss benefits under 75 Pa.C.S.A. § 1712 from anyone's policy. Therefore, we reverse the trial court, and, of necessity, overrule the holding in Kafando.

¶ 3 Henrich applies only to uninsured and underinsured motorists benefits. It leaves intact this Court's cases holding that because the legislative language is clear, an owner of an uninsured vehicle is precluded from recovering medical and wage loss benefits under any circumstances.

¶ 4 Section 1714 of the Motor Vehicle Financial Responsibility Law (MVFRL) provides: "An owner of a currently registered motor vehicle who does not have financial responsibility ... cannot recover first-party benefits."⁴ 75 Pa.C.S. § 1714. It would not have been necessary to include this language if the General Assembly did not intend to preclude recovery from some other policy, since one cannot recover medical and wage loss benefits from one's own policy that does not exist.

¶ 5 Because Henrich only refers to uninsured motorist's coverage, any discussion of medical and wage loss benefits is dictum. In addition, what Henrich held was that no benefits would be presumed to be taken away by the legislature "unless they were clearly spelled out." 620 A.2d at 1124. A line of Pennsylvania Superior Court cases have held that the legislative language is clear and states that an owner of an uninsured car is precluded from receiving any medical and wage loss benefits, without any exceptions. See Kresge v. Keystone Ins. Co., 389 Pa.Super. 548, 567 A.2d 739 (1989); DeMichele v. Erie Ins. Exch., 385 Pa.Super. 634, 561 A.2d 1271 (1989); Mowery v. Prudential Prop. & Cas. Ins., 369 Pa.Super. 494, 535 A.2d 658 (1988); Allen v. Erie Ins. Co., 369 Pa.Super. 6, 534 A.2d 839 (1987).

¶ 6 These cases all hold that the language of section 1714 is clear and deprives the owner of a registered but uninsured vehicle of any medical and wage loss benefits. This includes benefits when an owner of an uninsured car is a passenger in an insured car or even benefits when the uninsured car is inoperable and has been junked. Regardless of whether this is a harsh result, it is mandated by the unambiguous language of the legislature.

¶ 7 A closer view confirms this:

1. A line of cases correctly holds the section of the statute is clear: If someone owns a registered but uninsured car, that person cannot get medical and wage loss benefits under any circumstances whatsoever.

2. In Henrich, it is true that in strong language the Supreme Court holds that the owner of a registered but uninsured car can recover Uninsured Motorists/Underinsured Motorists (UM/UIM) benefits if he or she is a passenger in an insured car. In Henrich, the Supreme Court held that it would not attribute harsh motives to deprive one of benefits to the legislature, "unless they were clearly spelled out." 620 A.2d at 1124. The legislature did not spell out that UM/UIM benefits were not to be paid to owners of registered but uninsured cars. Therefore, recovery of UM and UIM benefits is not precluded.

3. The language in Henrich does carve out an exception if the preclusion of benefits is "clearly spelled out." We agree with several cases of this Court that have held that the preclusion of medical and wage loss benefits is "clearly spelled out."

¶ 8 Looking to the statute, section 1714 provides: "An owner of a currently registered motor vehicle who does not have financial responsibility ... cannot recover first-party benefits." 75 Pa.C.S.A. § 1714. This can only mean that the owners of uninsured cars are precluded from recovering medical and wage loss benefits when in someone else's car. Owners could not recover when driving their own car, since no insurance policy exists for that car.

¶ 9 Looking further into the Pennsylvania Supreme Court's opinion, the strongest language in Henrich does not indicate that owners of uninsured vehicles can recover medical and wage loss benefits when in an insured car. In fact, it stands for the opposite principle—they are not covered for medical and wage loss benefits. The language is:

Likewise, it is draconian to punish Ms. Henrich for failure to insure her own car when she was not injured in it or hurt by it. Indeed, she was not even driving it. We cannot attribute either such unrealistic or harsh motives to the legislature unless they were clearly spelled out.

Henrich, 620 A.2d at 1124 (emphasis added).

¶ 10 It was "clearly spelled out" in section 1714 that if one does not have insurance on their owned and registered vehicle, they are precluded from recovering any medical and wage loss benefits.

¶ 11 The language of the statute provides no exception allowing an owner of an uninsured vehicle to recover medical and wage loss benefits if a passenger in another's vehicle. Likewise, there is no exception to allow the recovery of medical benefits in excess of $5,000.⁵ Plain and simple, the legislation states a person who does not have insurance on a vehicle that they own cannot recover any medical and wage loss benefits.

¶ 12 As noted above, a number of cases hold that there is no exception. It should be noted that the cases cited were all decided before the 1990 amendments to the MVFRL. However, section 1714 has not been changed since 1984. Therefore, at the time of the 1990 amendments, the legislature was fully aware of the court's interpretation of that section yet made no changes to it. If the legislature had any disagreement with the notion that the owner of a registered uninsured vehicle is not entitled to receive any medical and wage loss benefits, it could well have changed the language of section 1714 to reflect that disagreement. The cases that have long held that section 1714 permits no exception include the following.

¶ 13 In Allen v. Erie Insurance Company, 369 Pa.Super. 6, 534 A.2d 839 (1987), we rejected a claim that if one was not driving his or her uninsured vehicle, but instead was a passenger in someone else's insured car, he or she could recover medical and wage loss benefits.

¶ 14 In Mowery v. Prudential Prop. & Cas. Ins., 369 Pa.Super. 494, 535 A.2d 658 (1988), this Court rejected a claim that a reasonable interpretation of the reference to "registered motor vehicle" would be to limit the phrase to an accident when the uninsured vehicle was involved.

¶ 15 In DeMichele v. Erie Ins. Exchange, 385 Pa.Super. 634, 561 A.2d 1271 (1989), this Court followed Mowery, saying, "The statute was created to ensure that one may not receive medical and wage loss benefits unless he has the ability to provide them to another. To enforce this desired result, the statute clearly requires that the owner of a registered vehicle insure the vehicle before he may be considered eligible for first-party benefits." Id. at 1273.

¶ 16 In Kresge v. Keystone Insurance Company, 389 Pa.Super. 548, 567 A.2d 739 (1989), the panel pointed to the clear language of section 1714 in holding that Kresge, an owner of an uninsured car, could not recover medical and wage loss benefits when a passenger in an insured car, although her car was inoperable and had been taken to a junkyard. Unfortunately for Kresge, she still had the car registered in her name. The panel cited a number of cases and declared the principle that:

Section 1714 is free from all ambiguity; the conspicuous absence of any exceptions must be deemed to have been intentional; and, in order to be eligible to receive first-party benefits a person must have the required insurance on any and every vehicle currently registered in that person's name in Pennsylvania at the time of the accident in question. The suggestion of an unwritten but purportedly intended exception to the unambiguous terms of Section 1714 is no more tenable here than were the similar suggestions soundly rejected in DeMichele, Mowery and Allen.

Id. at 740 (emphasis added).

¶ 17 Even after the Supreme Court's decision in Henrich, other published panel opinions of this Court continued to apply those aspects of section 1714 to bar claims by individuals who seek recovery of medical and wage loss benefits but have failed to maintain financial responsibility coverage for all of their registered vehicles. For example, in McClung v. Breneman, 700 A.2d 495 (Pa.Super.1997), we stated, "Where owners of registered motor vehicles do not have financial responsibility, they cannot recover first-party benefits, including medical bills." Id. at 497 (citations omitted).

¶ 18 Recently, a decision of this Court rejected another attempt by an owner of a registered but uninsured vehicle to recover medical and wage loss benefits. See...