Tanner v. Allstate Ins. Co.
| Decision Date | 04 November 1983 |
| Docket Number | 934. |
| Citation | 321 Pa.Super. 132,467 A.2d 1164 |
| Parties | Hermine E. TANNER, Administratrix of the Estate of Alicia Marie Tanner, Deceased and Hermine E. Tanner, Willie Tanner and Gloria Tanner v. ALLSTATE INSURANCE COMPANY, Appellant. |
| Court | Pennsylvania Superior Court |
Argued May 18, 1983.
Alexander Kerr, Philadelphia, for appellant.
George J. O'Neill, Philadelphia, for appellees.
Before HESTER, BROSKY and BECK, JJ.
This appeal arises from a denial of Allstate Insurance Company's motion to amend its pleadings in an action initiated by Hermine E. Tanner et al. for benefits under the Pennsylvania No-Fault Motor Vehicle Insurance Act. For the reasons that follow, we modify the lower court's order in order to allow one of the requested amendments.
Alicia M Tanner died in an automobile accident on March 14, 1977, in which her parents Hermine and Willie Tanner, and her sister Gloria Tanner were also injured. The Tanners' insurance carrier, Allstate, paid $5,785.70 to the estate of Alicia for funeral, medical and hospital expenses. The last payment with respect to Alicia was made on May 5, 1978.
More than two years after this last payment, on June 24, 1980, an action was initiated by Hermine E. Tanner as administratrix of the estate of Alicia, and Hermine E. Tanner, Willie Tanner and Gloria Tanner individually, for work loss benefits survivors' benefits, attorney fees, interest, and punitive damages against Allstate. Allstate filed an answer and new matter denying liability on August 19, 1980. A reply from the Tanners followed on August 22, 1980.
On February 3, 1981, a little less than six months after filing the initial answer and new matter, Allstate filed a motion to amend its pleadings. The motion states that after the original answer had been filed, the Supreme Court issued on September 22, 1980 its decision in Allstate Insurance Company v. Heffner, 491 Pa. 447 421 A.2d 629 (1980), affirming this Court in Heffner v. Allstate Insurance Company, 265 Pa.Super. 181, 401 A.2d 1160 (1979). Heffner allowed both work loss benefits and survivors' benefits to survivors of a person fatally injured in an automobile accident. Allstate wished to amend its pleadings to assert certain defenses not presented in its original answer or new matter. Specifically, Allstate wanted to include the following in its amended pleadings:
(1) The Heffner decisions are not retroactive and do not apply to the instant case in which the plaintiff died before these decisions were filed.
(2) The Tanners are not survivors within the meaning of 40 Pa.S. § 1009.103 and are therefore not entitled to No-Fault basic loss benefits.
(3) Allstate acted reasonably with respect to the Tanners' claims, and therefore the Tanners are not entitled to eighteen per cent interest as a penalty, nor to an award of attorney fees.
(4) The Tanners' claim is barred by the applicable statute of limitations.
The trial court denied Allstate's motion. [1] The sole issue before this Court is whether Allstate should have been furnished an opportunity to file an amended pleading.
Pa.R.C.P. 1033 states:
A party, either by filed consent of the adverse party or by leave of court, may at any time change the form of action, correct the name of a party or amend his pleading. The amended pleading may aver transactions or occurrences which have happened before or after the filing of the original pleading, even though they give rise to a new cause of action or defense. An amendment may be made to conform the pleading to the evidence offered or admitted.
The decision to permit an amendment to pleadings is a matter of judicial discretion. We find that in the instant case the denial of the motion to amend was an abuse of discretion as applied to the defense of the statute of limitations.
The policy of Pennsylvania courts is that amendments to pleadings should be liberally allowed in order to secure a determination of cases on their merits, except in those instances where surprise or prejudice to the other party would result, or where the proposed amendment is against a positive rule of law. Posternack v. American Casualty Company of Reading, 421 Pa. 21, 218 A.2d 350 (1966); Gregg v. Gacon Construction Company, 249 Pa.Super. 377, 378 A.2d 344 (1977); Sands v. Forrest, 290 Pa.Super. 48, 434 A.2d 122 (1981); Puleo v. Broad Street Hospital, 267 Pa.Super. 581, 407 A.2d 394 (1979); Connor v. Allegheny General Hospital, --- Pa. ---, 461 A.2d 600 (1983).
The meaning of prejudice and surprise in the context of Rule 1033 amendments to pleadings has been developed in a number of opinions. In Bata v. Central-Penn National Bank of Philadelphia, 448 Pa. 355, 293 A.2d 343 (1972), cert. denied 409 U.S. 1108, 93 S.Ct. 910, 34 L.Ed.2d 689 (1973) (allowing an amendment to a complaint after the trial court's decree was entered) the Court wrote:
All amendments have this in common: they are offered later in time than the pleading which they seek to amend. If the amendment contains allegations which would have been allowed inclusion in the original pleading (the usual case), then the question of prejudice is presented by the time at which it is offered rather than by the substance of what is offered. The possible prejudice, in other words, must stem from the fact that the new allegations are offered late rather than in the original pleading, and not from the fact that the opponent may lose his case on the merits if the pleading is allowed.... (448 Pa. at 380, 293 A.2d at 357) (Emphasis in original; footnote omitted).
In Sands v. Forrest, supra, our Court explained that prejudice must be something more than a detriment to the other party, for to make an advantage operate as a bar to amendment would be "to destroy the right to amend except in cases when the moving party would have no reason to amend" (290 Pa.Super. at 53, 434 A.2d at 125, quoting Cellutron Products Corp. v. Stewart, 223 Pa.Super. 391, 394, 300 A.2d 900, 901-902 [1972] ).
Allstate's motion to amend was filed within six months after the original complaint was filed, about four months after the decision by the Supreme Court in Heffner, and before the instant case was listed for trial. The Tanners do not show that they have suffered prejudice or surprise by this lapse of time; i.e. they do not argue that they were lulled into inactivity by Allstate's assertion of these defenses subsequent to the filing of the original answer rather than immediately. See Posternack, supra. We conclude that there was no reason to deny the motion on the grounds of prejudice or surprise.
In addition to the standard of prejudice or surprise, the law is also well established that a proposed amendment may be denied when it is against a positive rule of law. If the proposed amendment is against a positive rule of law, its allowance would be futile. It would cause delay and waste the resources of the court and the opposing party in having to defend against the proposed amendment. Otto v. American Mutual Insurance Company, 482 Pa. 202, 393 A.2d 450 (1978); Associates of Philipsburg v. Hurwitz, 292 Pa.Super. 406, 437 A.2d 447 (1981); Chapman v. City of Philadelphia, 290 Pa.Super. 281, 424 A.2d 753 (1981).
When Allstate filed its appellate brief, there were seven cases pending before this Court which addressed issues arising from the Heffner decision, including its retroactivity and the award of attorney fees. Decisions in these cases have now been filed, and are binding in the instant case. In Baker v. Aetna Casualty & Surety Company, 309 Pa.Super. 81, 454 A.2d 1092 (1982) [2] we reiterated the principle of Daniels v. State Farm Mutual Automobile Insurance Co., 283 Pa.Super. 336, 423 A.2d 1284 (1980), and held that Heffner was a case of statutory construction, not new law. It was applicable, therefore, in cases where the cause of action accrued before Heffner but the complaint was filed after Heffner, providing the claim was not barred by the applicable statute of limitations.
Heffner is retroactive, Baker, supra; therefore any amendment challenging its retroactivity is futile and will be denied. Instantly the cause of action arose prior to Heffner (Alicia's death occurred in 1977) and the Tanners' complaint was filed in June 1980, after our Court decided Heffner, although prior to its affirmance by the Supreme Court. We conclude that the issue of retroactivity has been determined and Allstate cannot raise the question again. There is no reason to allow an amendment to plead this issue because the matter is now against a positive rule of law.
The question of whether the Tanners are survivors within the meaning of § 1009.103 has also been decided since Allstate filed its motion to amend. This amendment is now also against a positive rule of law and must be denied. Allstate relied on Midboe v. State Farm Mutual Automobile Insurance Company, 495 Pa. 348, 433 A.2d 1342 (1981) where a divided Supreme Court held that a child, parent, brother or sister, as well as any other relative, must establish economic dependency on the deceased to qualify as a survivor under the No-Fault Act. Subsequently, however, our Court decided Chesler v. Government Employees Insurance Company, 302 Pa.Super. 356, 448 A.2d 1080 (1982). Taking note that Midboe was decided by a three to three vote of the Supreme Court and therefore carried no weight as precedent, an en banc panel of this Court held that a child, parent, brother or sister did not have to establish economic dependency on the deceased in order to qualify as a survivor (although any other relative would have to prove economic dependency). [3] For the same reason as in the question of Heffner's applicability, we deny the motion to amend on the question of qualification as survivors.
We turn now to the last of Allstate's...
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