Vickodil v. Pennsylvania Ins. Guar. Ass'n

• Decision Date: 03 September 1986
• Citation: Vickodil v. Pennsylvania Ins. Guar. Ass'n, 514 A.2d 635, 356 Pa.Super. 325 (Pa. Super. Ct. 1986)
• Parties: Jean R. VICKODIL v. The PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION, Appellant
• Court: Pennsylvania Superior Court

Page 635

514 A.2d 635

356 Pa.Super. 325

Jean R. VICKODIL v. The PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION, Appellant.

Superior Court of Pennsylvania

Argued June 4, 1986.

Filed Sept. 3, 1986.

Joseph M. Hankins, Philadelphia, for appellant.

Lester E. Zittrain, Pittsburgh, for appellee.

Before ROWLEY, DEL SOLE and CERCONE, JJ.

CERCONE, Judge:

This case presents for our determination two narrow and clearly-defined issues: whether the Pennsylvania Insurance Guaranty Association (the Association) is obligated to pay the loss of consortium judgment entered in favor of appellee, Jean R. Vickodil, as a "covered claim" under the Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.101 et seq. (the Act). ¹ And, if it is, is the Association obligated to pay interest on the judgment entered against Amram Enterprises, the insured of an insolvent insurance company, beginning on the date of the judicial declaration of insolvency, or on a date ninety (90) days following therefrom. The parties submitted these issues to common pleas court in an amicable action on a case stated basis. The court determined that the Association was obligated to pay on the loss of consortium judgment as a separate claim of Mrs. Vickodil and that, also, interest should be computed from the date of the judicial declaration of insolvency of the insurer. The Association appealed.

The facts of this case are as follows: On October 31, 1979, Appellee's husband, William J. Vickodil, Sr., was seriously injured when the pick-up truck he was operating in Beaver County, Pennsylvania, was struck by another vehicle which had been proceeding in the opposite direction and which crossed over to the wrong side of the roadway and crashed into the Vickodil vehicle. The vehicle which struck the Vickodil pick-up truck was being operated by an employee of the owner of the truck, Amram Enterprises.

The Amram vehicle was covered by bodily injury liability insurance as follows: primary coverage was by Aetna Insurance Company to limits of $100,000 per person and $300,000 per accident; first excess coverage was by Northeastern Insurance Company to $900,000 single limit as excess over the underlying Aetna coverage; and second excess coverage by Lexington Insurance Company to a $4,000,000 single limit as excess over the $1,000,000 underlying coverage provided by Aetna and Northeastern.

To recover damages arising from the accident, suit was filed on behalf of Mr. and Mrs. Vickodil against Amram Enterprises, the insured of the three companies. Mrs. Vickodil's only claim was for loss of consortium. A jury verdict of $1,398,928.10 was rendered in favor of Mr. Vickodil against Amram Enterprises, and a separate verdict of $75,006 resulted in favor of Mrs. Vickodil on her loss of consortium claim. The verdict was reduced to judgment on April 2, 1984. That same month, Aetna paid its $100,000 primary coverage limit to the Vickodils. Lexington paid $473,934.10, which represents the amount which the total verdicts exceeded the combined $1,000,000 underlying coverage provided by Aetna and Northeastern. On June 1, 1984, Commonwealth Court declared Northeastern an insolvent insurer and ordered it liquidated and dissolved. Northeastern had never paid any of its applicable $900,000 first excess coverage limits to appellee or her husband. Proof of claim forms were submitted to the liquidators of Northeastern on behalf of the Vickodils as follows: the respective shares of the total jury verdict of $1,473,934.10 were 94.91% or $1,398,928.10 for William and $75,006 or 5.09% for Jean; thus, of the $900,000 claim under the Northeastern policy, the amount of William's claim was $854,190 (94.91%) and Jean's was $45,810 (5.09%).

These claims were referred to the Pennsylvania Insurance Guaranty Association for payment under the Act. The Association paid the maximum allowed under the Act of $300,000 less a $100 deductible or $299,900 to Mr. Vickodil. ² However, it is the refusal of the Association to pay the $45,810 claim of Jean Vickodil which is the subject of this appeal.

The Act defines "covered claim" in 40 P.S. § 1701.103(5):

(5) (a) "Covered claim" means an unpaid claim, including a claim for unearned premiums, which arises under a property and casualty insurance policy of an insolvent insurer and is:

(i) The claim of a person who at the time of the insured event resulting in loss or liability was a resident of this Commonwealth, or

(ii) A claim arising from an insured event resulting in loss or liability to property which was permanently situated in this Commonwealth.

(c) A covered claim shall not include any amount in excess of the applicable limits of the policy under which it arises.

The Association, in support of its denial to pay for the loss of Mrs. Vickodil's consortium claim because it is derivative of Mr. Vickodil's and not a separate covered claim, cites the language of the underlying Northeastern policy which incorporates the policy of Aetna, which in pertinent part provided:

Bodily Injury Liability Coverage: The limit of bodily injury liability stated in the declarations as applicable to "each person" is the limit of the company's liability for all damages, including damages for care and loss of services, because of bodily injury sustained by one person as the result of any one occurrence; but subject to the above provision respecting "each person", the total liability of the company for all damages, including damages for care and loss of services, because of bodily injury sustained by two or more persons as the result of any one occurrence shall not exceed the limit of bodily injury liability stated in the declarations as applicable to "each occurrence".

The Association then argues that this bodily injury liability limitation in the Aetna Policy was applicable to all damages which resulted from Mr. Vickodil's bodily injury, including the loss of consortium claim of appellee. Thus, According to appellant, Northeastern was obligated to pay a maximum of $900,000 for all damages arising from the ...