Title: Hayes v. Motorists Mut. Ins. Co.
Citation: 370 Pa. Super. 602, 537 A.2d 330
Docket Number: N/A
State: Pennsylvania
Issuer: Pennsylvania Supreme Court
Date: December 28, 1987

370 Pa. Superior Ct. 602 (1987) 537 A.2d 330 John L. HAYES, III, Nancy L. Hayes and John L. Hayes, IV, Individually and on behalf of all others similarly situated, Appellants, v. MOTORISTS MUTUAL INSURANCE COMPANY, Appellee. Supreme Court of Pennsylvania. Argued May 12, 1987. Filed December 28, 1987. Reargument Denied February 11, 1988. *603 Michael P. Malakoff, Pittsburgh, for appellants. David R. Johnson, Pittsburgh, for appellee. Before WIEAND, KELLY and POPOVICH, JJ. WIEAND, Judge: This is an appeal from an order denying class certification and directing that plaintiffs' action proceed as an individual action via compulsory arbitration. The trial court held that plaintiffs had failed to satisfy the adequacy of representation requirement[1] and that their action had failed to satisfy the commonality, typicality, and predominance requisites for class certification.[2] Plaintiffs appealed. We conclude that the trial court did not err or abuse its discretion by determining that the action failed to meet the commonality, *604 typicality, and predominance requirements for class certification. Therefore, we affirm. John Hayes, IV, (John) was injured in an automobile accident on June 16, 1984. He was insured under a policy of automobile insurance which had been purchased by John Hayes, III (Jack) and Nancy L. Hayes from Motorists Mutual Insurance Co. (Motorists). Because the policy contained a coordination of benefits clause, Motorists paid only that portion of John's medical bills which was not paid by the Hayes's major medical insurance carrier. This was approximately twenty (20%) percent of John's total medical bills. The Hayeses filed a class action suit against Motorists to recover the balance of John's medical bills. By the averments of the complaint, the Hayeses purported also to represent: A motion for summary judgment by Motorists, based on the language of the policy, was denied by the trial court. A hearing on the Hayes's request for class certification was thereafter held on May 29, 1986. This request was denied on July 11, 1986. The decision of a trial court "concerning class certification is a mixed finding of law and fact entitled to `appropriate deference' upon appeal." Janicik v. Prudential Insurance Co. of America, 305 Pa.Super. 120, 127, 451 A.2d 451, 454 (1982) (quoting with approval from Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 235, 348 A.2d 734, 739 (1975), on remand, 241 Pa.Super. 192, 360 *605 A.2d 681 (1976)). "`Trial courts are vested with broad discretion in determining definition of the class as based on commonality of the issues and the propriety of maintaining the action on behalf of the class.'" Janicik v. Prudential Insurance Co. of America, supra, quoting Klemow v. Time, Inc., 466 Pa. 189, 197, 352 A.2d 12, 16 (1975). Therefore, we may not disturb the trial court's order denying class certification "unless the court neglected to consider the requirements of the rules [of civil procedure] or abused its discretion in applying them." D'Amelio v. Blue Cross of Lehigh Valley, 347 Pa.Super. 441, 448, 500 A.2d 1137, 1141 (1985). Pa.R.C.P. 1702 sets forth the prerequisites which must be met in order to maintain a class action as follows: To further determine whether the representative parties will adequately represent the class under Pa.R.C.P. 1702(4), we must look to the criteria set forth in Pa.R.C.P. 1709, which provides: Finally, we must look to the criteria set forth in Pa.R.C.P. 1708 in order to determine whether a class action will, as required by Pa.R.C.P. 1702(5), provide a fair and efficient method to adjudicate the controversy. The relevant portion of Rule 1708, for purposes of this appeal, provides as follows: This Court has described the proof needed to satisfy the commonality requirement for class certification as follows: D'Amelio v. Blue Cross of Lehigh County, supra, 347 Pa.Superior Ct. at 452, 500 A.2d at 1142-1143. The commonality requirement was further described by this Court in Allegheny County Housing Authority v. Berry, 338 Pa.Super. 338, 487 A.2d 995 (1985), where we said: Id., 338 Pa.Superior Ct. at 342, 487 A.2d at 997. The dispute between plaintiffs and defendant in the instant case concerns the coordination of benefits clause in the policy. Specifically, the policy provides as follows: Generally, clauses of this type have been upheld by the courts. See: Hess v. Allstate Insurance Co., 614 F. Supp. 481 (W.D.Pa. 1985), aff'd, 804 F.2d 1248 (3d Cir. 1986); Banker v. Valley Forge Insurance Co., 363 Pa.Super. 456, 526 A.2d 434 (1987). See also: Pennsylvania No-Fault Motor Vehicle Insurance Act, Act of July 19, 1974, P.L. 489, No. 176, § 1009.203(b) and (c), repealed by the Act of February 12, 1984, P.L. 26, No. 11, § 8(a) effective October 1, 1984.[3]*608 They permit the insured to pay a reduced premium for automobile insurance coverage by coordinating medical benefits payable under the policy with primary medical coverage provided by a medical insurance carrier. Although there is then full coverage for medical expenses incurred in a motor vehicle accident, the vehicle insurance carrier is required to pay only those costs not reimbursed by the medical insurance carrier. See: Steppling v. Pennsylvania Manufacturers' Ass'n. Insurance Co., 328 Pa.Super. 419, 427, 477 A.2d 515, 519 (1984). If the Hayes's action involved nothing more than an interpretation of the "coordination of benefits" clause of their insurance policy, the presence of a common issue would be relatively clear. "Claims arising from interpretations of a form contract generally give rise to common questions." Janicik v. Prudential Insurance Co. of America, supra 305 Pa.Super. at 133, 451 A.2d at 457. The Hayes's claim, however, does not involve solely an interpretation of the "coordination of benefits" clause of the policy. Indeed, the language thereof is unambiguous and relatively straightforward. Instead, the Hayeses seek to avoid the limiting effect of this clause on grounds that, in the sale of the policy, the "coordination of benefits" clause was not explained to them and because the declarations page of their policy made no reference to the "coordination of benefits." According to appellants, they did not want a "coordination of benefits" clause in their policy and did not know it had been included. This caused the trial court to conclude as follows: We have painstakingly reviewed the record and observe that the trial court carefully considered all the evidence *610 presented at the class certification hearing and properly concluded that the Hayeses had failed to demonstrate the existence of a common question of law or fact which predominated over the individual circumstances surrounding the purchase of the Hayes's policy of automobile insurance. It necessarily follows that the Hayeses also failed to satisfy the typicality requirement of Pa.R.C.P. 1702(3). With respect thereto, the trial court said: For these reasons, we affirm the trial court's order denying appellants' request for class certification. Appellants *611 failed to meet the commonality and typicality requirements for class certification. Because of this decision, we find it unnecessary to decide whether the trial court erred in concluding that appellants failed to show an ability to represent the class adequately. We observe, however, that while the Hayeses did not appear in person at the certification hearing, the deposition testimony of Nancy Hayes was offered to the court and other evidence was presented to show that the Hayeses would be able to represent the class. This is in sharp contrast to the facts of Miller v. Federal Kemper Ins. Co., 352 Pa.Super. 581, 508 A.2d 1222 (1986), upon which the trial court relied. There, the plaintiff had relied solely upon the conclusory allegations of the complaint. On the other hand, we recognize that the specific circumstances relied upon by appellants to avoid the coordination of benefits clause in their policy would make it more difficult to represent the interests of other assureds whose policies were purchased under different circumstances. Order affirmed. [1] See: Pa.R.C.P. 1702(4) and 1709(2) and (3). [2] See: Pa.R.C.P. 1702(2), 1702(3) and 1708(a)(1). [3] Section 203 of the former Pennsylvania No-Fault Motor Vehicle Insurance Act, entitled "collateral benefits" provided as follows: (b) The owner or operator of a motor vehicle may elect to provide for security in whole or in part for the payment of basic loss benefits through a program, group, contract or other arrangement that would pay to or on behalf of the victim or members of his family residing with him or the survivor of a deceased victim, allowable expense, loss of income, work loss, replacement services loss and survivors loss. In all such instances, each contract of insurance issued by an insurer shall be construed to contain a provision that all basic loss benefits provided therein shall be in excess of any valid and collectible benefits otherwise provided through such program, group, contract or other arrangement as designated at the election of the owner or operator which shall be primary. (c) An insurer providing basic loss benefits and tort liability in accordance with the provisions of subsection (b) above shall reduce the cost of such contract of insurance to reflect the anticipated reduction in basic loss benefits payable by the insurer by reason of the election of the owner or operator to provide substitute security.