Tubner v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 05 November 1981
• Parties: Eva TUBNER, Administratrix of the Estate of Jerry Amey, Deceased, Appellee. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.
• Court: Pennsylvania Supreme Court

Page 621

436 A.2d 621

496 Pa. 215

Eva TUBNER, Administratrix of the Estate of Jerry Amey Deceased, Appellee. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

Supreme Court of Pennsylvania.

Argued March 2, 1981.

Decided Nov. 5, 1981.

Charles J. Duffy, Jr., Weis & Weis, Pittsburgh, for appellant.

Mark B. Aronson, Behrend, Aronson & Morrow, Pittsburgh, for appellee.

Edward P. Zemprelli, Clairton, for amicus curiae Pa. Assigned Claims Plan, Philadelphia, Pa.

Richard C. Angino, Benjamin & Angino, P.C., Harrisburg, for amicus curiae Pa. Trial Lawyers Association.

Before O'BRIEN, C. J., and ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ.

OPINION

KAUFFMAN, Justice.

Before us is a question of first impression concerning the financial obligations of insurance companies under the No-Fault Motor Vehicle Insurance Act ("No-Fault Act"). ¹ At issue is whether a company designated to provide insurance coverage pursuant to the assigned claims plan of the No-Fault Act is required to pay not only "basic loss benefits," but also uninsured motorist benefits. ²

Appellee, Eva Tubner, is administratrix of the estate of Jerry Amey ("decedent"), who died of injuries he received in a motor vehicle accident while a passenger in an uninsured automobile. Decedent did not own a motor vehicle, and thus had no applicable insurance under the No-Fault Act. ³ Pursuant to the assigned claims plan, appellant, State Farm Mutual Insurance Co. ("State Farm"), was designated as the participating insurer, and it paid appellee basic loss benefits. ⁴

Contending, however, that she was also entitled to uninsured motorist benefits, appellee brought this action against State Farm in the Allegheny County Court of Common Pleas. State Farm argued that the assigned claims plan does not contemplate recovery of uninsured motorist benefits, and both parties moved for summary judgment. The trial court ruled in favor of State Farm. The Superior Court reversed; we granted allocatur, and now affirm the order of the Superior Court 280 Pa.Super. 38, 421 A.2d 392. ⁵

The Legislature's expressed purpose in adopting the No-Fault Act was to create a "low cost, comprehensive, and fair system" which uniformly would provide for "maximum feasible restoration" of all victims of motor vehicle accidents. ⁶ As defined in Section 108 of the No-Fault Act, the assigned claims plan departs from the prior system by providing for recovery when no source of insurance coverage otherwise exists. ⁷ Under Section 108(b), insurers are assigned to compensate motor vehicle accident victims for whom insurance is not carried as if a policy of basic loss insurance had been issued:

(2) The assigned claims bureau shall promptly:

(A) assign each claim for no-fault benefits to an assignee who shall be a participating insurer; ...

...The assignee thereafter has rights and obligations, as if he had issued a policy of basic loss insurance complying with this act applicable to the injury ....(Emphasis added). ⁸

Every policy of basic loss insurance issued in this Commonwealth must include all coverage mandated by the No-Fault Act and by the Insurance Department Regulations validly promulgated thereunder. Section 104(a) of the Act requires, inter alia, policy coverage for basic loss benefits and for indemnification in the event of liability for general damages. ⁹ Insurance Department Regulation 66.1-104(a) ("Regulation 66.1-104(a)") additionally requires uninsured motorist coverage providing for payment of general damages to an insured party injured by an uninsured motorist:

§§ 66.1-104(a). Required motor vehicle insurance.

(a) In addition to the coverage required in section 104(a) of the act (40 P.S. § 1009.104(a)), coverage shall include uninsured motorist coverage in limits of $15,000 per person, $30,000 per accident....

31 Pa. Code §§ 66.1-104(a). ¹⁰

Because assigned insurers are obligated precisely as if they had issued basic loss insurance policies, and because every policy of basic loss insurance issued in Pennsylvania must include uninsured motorist coverage, the right to uninsured motorist benefits under the assigned claims plan follows a fortiori from a straightforward reading of the statute and the regulation lawfully promulgated thereunder. ¹¹

Any other interpretation of appellee's statutory rights under the assigned claims plan would frustrate the Legislature's intention, expressed in Section 102 of this remedial legislation, to provide maximum feasible restoration to all accident victims in a comprehensive, fair, and uniform manner. ¹² Adoption of State Farm's view would have the discriminatory effect of affording recovery of general damages to all motor vehicle accident victims injured by uninsured motorists except those covered by the assigned claims plan, and thus would perpetuate many of the harsh results of the outdated fault system by denying general damages to innocent victims of irresponsible drivers. ¹³

Accordingly, we affirm the order of the Superior Court. ¹⁴

NIX, J., filed a dissenting opinion in which ROBERTS, J., joined.

NIX, Justice, dissenting.

I dissent. The majority incorrectly assesses the legislative intent underlying the Pennsylvania No-Fault Motor Vehicle Insurance Act (No-Fault Act) ¹ in finding that a servicing insurance company under the assigned claims plan is required to pay, in addition to basic loss benefits, the uninsured motorist benefits.

The ascertainment by a court of legislative intent is significantly circumscribed where the General Assembly has expressly set forth its purposes in the passage of the legislation. Commonwealth v. Pope, 455 Pa. 384, 317 A.2d 887 (1974); see also, Commonwealth v. Rieck Inv. Corp., 419 Pa. 52, 213 A.2d 277 (1965); Calvert Distillers Corp. v. Bd. of Finance & Revenue, 376 Pa. 476, 103 A.2d 668 (1954); Kusza v. Maximonis, 363 Pa. 479, 70 A.2d 329 (1950). In the performance of this function, it must be remembered that courts are not free to make their own policy judgments, but must defer to those made by the legislature. Mayhugh v. Coon, 460 Pa. 128, 331 A.2d 452 (1975); Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963); Altieri v. Allentown Officers & Emp. Ret. Bd., 368 Pa. 176, 81 A.2d 884 (1951); Petition of Salvation Army, 349 Pa. 105, 36 A.2d 479 (1944); Orawsky v. Jersey Central P. & L. Co., 472 F.Supp. 881 (E.D. Pa. 1977). Here, there is no question as to the constitutionality of the legislative action; we are being called upon simply to determine what the legislature did in this regard. Our judgment as to the wisdom of choices has no place in such an analysis Mayhugh v. Coon, supra.

The majority has focused upon that portion of the findings and purposes of the No-Fault Act which provides for "the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed in motor vehicle accidents on Commonwealth highways" while paying lip service to the Act's express purpose of creating a "low cost, comprehensive and fair system" of recovery. See Section 102(a)(3). Relying upon the former finding, the majority proceeds to conclude that "(b)ecause assigned insurers are obligated precisely as if they had issued basic loss insurance policies, and because every policy of basic loss insurance issued in Pennsylvania must include uninsured motorist coverage, the right to uninsured motorist benefits under the assigned claims plan follows a fortiori from a straightforward reading of the statute...." ante at 623.

However, a careful review of the legislative findings negates the majority's interpretation and clarifies the General Assembly's use of the phrase "maximum feasible restoration" in Finding Three (3). In Finding Four (4) the legislature recognized that "it is necessary and proper to have a Statewide low-cost, comprehensive and fair system...." Finding Six (6) identifies the need for a "basic system of motor vehicle accident and insurance law which: (A) assures every victim payment of all his basic medical and rehabilitation costs, and recovery of a reasonable amount of work loss, replacement services and survivor's loss; ...." In Finding Nine (9), the legislature again stressed the need for "a Statewide, low-cost, comprehensive and fair system..." and identified its objective as being to provide a system capable of "paying the cost of services so that every victim has the opportunity to: (A) receive prompt and comprehensive professional treatment; and (B) be rehabilitated to the point where he can return as a useful member of society...." Finally, in Finding Ten (10) the legislature noted again the need to provide insurance rates at a level so that "economically deprived individuals" would have access to them.

Following the above referred to findings, the legislature set forth in section 102(b) its purpose in passing the Act in question as being: "Therefore, it is hereby declared to be the policy of the General Assembly to establish at reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basis loss benefits for motor vehicle accident victims and the survivors of deceased victims."

From the foregoing it is obvious that the initial premise of the majority is an oversimplification of the legislature's perception of the needs and their proposed scheme to meet those needs. The term "maximum feasible restoration" must be construed in light of the stated intent to provide low-cost coverage accessible to the "economically disadvantaged" and to provide "adequate basic loss benefits." Within this context, we would agree that a liberal construction may be employed to find coverage consistent with this legislative intent.

However, in construing the No-Fault Act, like any other piece of legislation, the legislature is deemed to have intended that which it clearly stated, and it is not our function to extract an intent the legislature totally failed to convey. Commonwealth...