Case Title: Grant v. Travelers Ins. Co.

Citation: 343 Pa. Super. 310, 494 A.2d 862

Docket Number: 

State: pennsylvania

Court: Pennsylvania Supreme Court

Date: 1985-06-14T00:00:00Z

Document:
343 Pa. Superior Ct. 310 (1985) 494 A.2d 862 Susan GRANT, Appellee, v. TRAVELERS INSURANCE COMPANY, Appellant. Supreme Court of Pennsylvania. Argued March 13, 1985. Filed June 14, 1985. *311 Kevin J. Sommar, Lansdale, for appellant. *312 Steven H. Kitty, Philadelphia, for appellee. Before MONTEMURO, ROBERTS and BLOOM,[*] JJ. MONTEMURO, Judge: This is an appeal from the entry of summary judgment, on February 28, 1984, in favor of appellee, Susan Grant. Appellee is an uninsured motorist claiming basic loss benefits pursuant to the Pennsylvania No-fault Motor Vehicle Insurance Act ["Act"].[1] The sole issue presented by the instant appeal, and one which we perceive to be of first impression, is: Whether the value of Health Maintenance Organization ["HMO"] entitlements, which have in fact been denied due to a claimant's failure to act in accordance with the requirements of his/her HMO plan, may be subtracted from "loss" in calculating the basic loss benefits to be paid by an assigned claims plan assignee. As noted in the opinion of the court below, filed on July 31, 1984, the respective parties agree that the material facts of this matter are not in dispute. Those facts are set forth therein as follows: Lower court opinion at 1-2. Initially, we note that, in analyzing the issue presently before us, we have been keenly mindful of former President Judge Cercone's sagacious admonishment: Heffner v. Allstate Insurance Company, 265 Pa.Super. 181, 184, 401 A.2d 1160, 1161 (1979), aff'd, 491 Pa. 447, 421 A.2d 629 (1980). The Pennsylvania Assigned Claims Plan ["PACP"] is contained within section 108 of the Act. The PACP affords recovery of basic loss benefits to motor vehicle accident victims when no basic loss insurance policy has been issued to cover the claim. 40 P.S. § 1009.108(a). "Basic loss benefits" are generally defined in the Act as "benefits provided in accordance with this act for the net loss sustained by a victim, subject to any applicable limitations, exclusions, deductibles, waiting periods, disqualifications, or *314 other terms and conditions provided or authorized in accordance with this act." 40 P.S. § 1009.103 (emphasis added). Significantly, the general assigned claims plan provisions state, at subsection 108(a)(3): (emphasis added). See generally Killeen v. Travelers Insurance Company, 721 F.2d 87 (3d Cir. 1983). Appellant argues that, because appellee was "entitled to receive" HMO benefits for the injuries she sustained as a result of her accident, those benefits are properly deductible from the amount of appellee's overall loss in computing the basic loss benefits recoverable from appellant under the PACP. Appellee argues responsively that, (1) her HMO benefits have been denied and therefore she is not "entitled" to those benefits, and (2) an HMO is not a traditional insurance carrier and therefore is not the type of provider of "benefits or advantages" envisioned by subsection 108(a)(3). We are in agreement with the conclusion reached by appellant. Appellee's first argument begs the question in that, although she is indeed unentitled to her HMO benefits, she sacrificed her entitlements by failing to act in accordance with the terms of her HMO plan. Had appellee actually received the benefits afforded by her HMO, appellant would have possessed an indisputable right of set-off for the amount of the benefits received, pursuant to subsection 108(a)(3). To now deny appellant a set-off right because of appellee's own wilful failure to properly secure her HMO entitlements, appears to us to be an unreasonable result. *315 Regarding appellee's argument that an HMO is not a traditional provider of "benefits or advantages" to which section 108(a)(3) is applicable, we note that the regulations promulgated by the Insurance Department state that any HMO, approved by the Insurance Department, qualifies as a source of "collateral benefits" for the purposes of an insured's primary coverage election. 31 Pa.Code § 66.53(c)(4)(v). We are unable to discern any reasonable rationale for differentiating HMO benefits from other types of "benefits or advantages" for the purposes of subsection 108(a)(3). Indeed the language of that subsection impliedly lends itself to a liberal interpretation of "all benefits or advantages" in computing net loss. Compare 40 P.S. § 1009.206(a). Appellee additionally directs our attention to subsection 106(a)(3) of the Act, which states: See generally Bell v. United States Department of Labor, 560 F. Supp. 515 (E.D.Pa. 1983), aff'd, 754 F.2d 490 (3d Cir. 1985). In construing this subsection, one commentator has posited, by way of an example: Subsection 106(a)(3) clearly requires the prompt payment of full no-fault benefits without a permissible set-off for collateral benefits or advantages, if those benefits or advantages have not been realized by the claimant. However, integral to the proper functioning of this provision is the claimant's ultimate rightful entitlement to those benefits or advantages. In the absence of such entitlement, there exists no fund of collateral benefits or advantages from which the obligor, having paid full no-fault benefits, may recover reimbursement. Because appellee is not entitled to her HMO benefits, we decline to find subsection 106(a)(3) applicable to the instant case. If we were to accept appellee's invitation to apply subsection 106(a)(3) herein, we would be frustrating the clear intent of the legislature in enacting that provision, to appellant's severe detriment.[3] Appellant's assertion that the set-off provision of subsection 108(a)(3) should be plainly read to apply to the instant facts due to appellee's entitlement to HMO benefits "as a result of" her injuries is, we believe, in accordance with the apparent legislative intention in enacting subsection 108(a)(3). We interpret that intention to have been to preserve and protect the PACP benefits resource from unwarranted payments. Any depletion of that resource directly affected the cost of motor vehicle insurance to the law-abiding majority of citizens in this Commonwealth who opted to comply with the express mandate of the Act in providing security coverage for their vehicles. See 40 P.S. § 1009.104. We are of the opinion that, in light of the specific circumstances before us, appellee should not be granted access to the PACP resource. *317 We are bolstered in our resolve to so dispose of this appeal by the language in subsection 108(a)(4)(A), which states: As the owner/operator of an admittedly uninsured motor vehicle, appellee's claim is rendered subject to this provision. One of the "optional deductibles and exclusions" envisioned by subsection 108(a)(4)(A) appears at subsection 203(b), stating: See 31 Pa.Code § 66.53. The application of subsection 108(a)(4)(A) in conjunction with subsection 203(b) instructs us to consider appellee's posture, by analogy, as though she possessed a valid no-fault insurance policy and had exercised the available election, designating her HMO plan as primary coverage. Recently, in an opinion by our esteemed colleague, Judge Beck, this court held that, when a no-fault insured has designated an HMO plan as primary coverage and then, *318 following injury, fails to properly act to secure the HMO entitlements, the no-fault insurer shall not be held liable for the foregone HMO benefits. Carr v. Erie Insurance Company, 342 Pa.Super. 429, 493 A.2d 97 (1985). Therefore, pursuant to subsections 108(a)(4)(A) and 203(b), appellant herein cannot be found to bear the financial burden for benefits that were available from appellee's HMO. Mindful of the pertinent standards and scope of our review of the entry of a summary judgment, see Just v. Son's of Italy Hall, 240 Pa.Super. 416, 368 A.2d 308 (1976), and based upon the foregoing discussion, we reverse the order of the court below entering judgment in favor of appellee and we remand this case for the entry of judgment in favor of appellant. Reversed and remanded. Jurisdiction is relinquished. [*] Judge LOUIS A. BLOOM, Senior Judge, of the Court of Common Pleas, of Delaware County, Pennsylvania, is sitting by designation. [1] Act of July 19, 1974, P.L. 489, No. 176, arts. I-VII, §§ 101-701, 40 P.S. §§ 1009.101-701 (repealed). [2] Specifically, it appears from the briefs and the record before us that the HMO's denial of coverage was predicated upon appellee's failure to obtain her medical treatment from physicians and/or facilities approved by the HMO. [3] We note that, in appellee's brief, she inexplicably relies upon §§ 108(a)(1)(E) and 108(a)(2) of the Act. Even a casual reading of those subsections demonstrates their inapplicability to the instant facts and we see no need for further comment.