Court Opinion

ID: 9746468
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:17:58.012206+00
Date Added: 2024-06-11T07:25:13.520116
License: Public Domain

PANELLA, J.,
dissenting:
¶ 1 The issue in this case is whether Burks, as a purported medical payment claimant, is an intended third party beneficiary under the insurance contract. If Burks, as a claimant for medical payments, is a third party beneficiary, then she has the accompanying right to proceed directly against Federal for its refusal to pay medical benefits due under the contract. Unlike the Majority, I find that Burks is an intended third party beneficiary, and therefore, has a cause of action against Federal. Accordingly, I respectfully dissent.
¶ 2 On April 6, 2001, Burks fell inside a branch office of PNC Bank, N.A., and sustained injuries to her left wrist and lower back. At the time of Burks’ fall, the bank carried general liability insurance provided by Federal. The bank’s insurance included a medical payments provi*1093sion which provided a coverage limit on medical expenses of $10,000.00.
¶ 3 Following her fall, Burks filed suit against the bank alleging negligence seeking to recover damages for injuries she sustained as a result of the fall. A jury trial was held on October 30, 2003, after which, Burks was awarded $30,000.00 in damages. The jury found the bank to be 60% negligent and Burks 40% comparatively negligent. As Burks was found 40% negligent in causing her fall, the damage award was molded to take into account her negligence, and thus, Burks received $18,000.00 in damages from the bank.
¶4 Burks filed suit against Federal on December 23, 2003, alleging that under the insurance contract’s medical payments provision she was an intended third party beneficiary to the bank’s insurance contract with Federal.2 As such, Burks contended that she was entitled to collect, in addition to the $18,000.00 she already received, the $10,000.00 policy limit for medical expenses incurred as a result of the injuries she sustained in the fall.
¶5 Thereafter, on January 21, 2004, Federal filed preliminary objections to Burks’ complaint, which included a demurrer. Specifically, Federal argued that Burks was not an intended third party beneficiary to the insurance contract. The trial court agreed and dismissed Burks’ complaint on February 5, 2004.
¶ 6 The standard of review where there is a challenge to the sustaining of preliminary objections in the nature of a demurrer is well-settled: The material facts set forth in the complaint and all inferences reasonably deducible therefrom are admitted as true. See Price v. Brown, 545 Pa. 216, 221, 680 A.2d 1149, 1151 (1996). “The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it.” Id. (citation omitted).
¶7 The purpose of the medical payments provision “is to grant peace of mind and create a fund for the payment of medical services so that those injured [e.g., the insured’s customers] will not necessarily be contemplating how to impose liability upon the insured.” Harper v. Wausau Insurance Co., 56 Cal.App.4th 1079, 1090, 66 Cal.Rptr.2d 64 (1997) (quoting 8A Ap-pleman & Appleman, Insurance Law and Practice (1981) § 4902, pp. 228-229). Moreover,
[mjedical payment clauses are considered to constitute separate accident insurance coverage. Such coverage is divisible from the remainder of the policy, and creates a direct liability to the contemplated beneficiaries.... Such provision is the separate obligation of the insurer, independent of its obligation to pay sums of money as damages under the liability features of the contract.... Nor is liability for such payment in any way dependent upon negligence of the insured ....
Id., at 1090, 66 Cal.Rptr.2d 64 (quoting 8A Appleman & Appleman, Insurance Law and Practice (1981) § 4902, pp. 228-229).
¶ 8 With the foregoing in mind, our Supreme Court adopted Section 302 of the Restatement (Second) of Contracts in Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983), and held that the inquiry into third *1094party beneficiary status is examined under the following two part test:
(1) the recognition of the beneficiary’s right must be appropriate to effectuate the intention of the parties, and (2) the performance must satisfy an obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.
Id., at 60, 459 A.2d at 751 (internal quotation marks omitted). The first part of the test sets forth a standing requirement which permits the trial court to determine whether third party beneficiary status is appropriate in a particular case. See Clifton v. Suburban Cable TV Co. Inc., 434 Pa.Super. 139, 642 A.2d 512, 514 (1994), appeal denied, 538 Pa. 664, 649 A.2d 667 (1994), cert. denied, 513 U.S. 1173, 115 S.Ct. 1152, 130 L.Ed.2d 1110 (1995). The second part of the test defines the two types of claimants who may be intended as third party beneficiaries. Id. If a claimant does not satisfy the two part test, the claimant is an incidental beneficiary and, as such, has no right to enforce the agreement. See Weavertown Transport Leasing, Inc. v. Moran, 834 A.2d 1169, 1173 (Pa.Super.2003), appeal denied, 578 Pa. 685, 849 A.2d 242 (2004). If, however, a claimant satisfies the two part test, the claimant is an intended third party beneficiary and has the same rights and limitations in the contract as those of the original contracting parties. See Miller v. Allstate Insurance, Co., 763 A.2d 401, 405 n. 1 (Pa.Super.2000).
¶ 9 With these principles in mind, one must examine the medical payments provision to determine whether Burks was an intended third party beneficiary to the contract between the bank and Federal. The medical payments provision provides as follows:
Subject to the applicable Limits of Insurance, we will pay each person who sustains bodily injury caused by an accident all medical expenses incurred and reported to us within three years from the date of the accident.
The accident must take place during the policy period and the bodily injury must arise out of premises or operations for which you are afforded bodily injury liability coverage under this contract. The injured person must submit to examination, at our expense, by physicians of our choice as often as we reasonably require.
General Liability Contract, 9/1/00-9/1/01, Schedule of Forms, referencing Form No. 17-02-3080 (ed. 4/95) (emphasis added).
¶ 10 After review, I find that Burks is an intended third party beneficiary under the insurance policy’s medical payments provision. A reading of the plain language of the provision and the purpose behind its inclusion in the policy demonstrates that the parties intended to benefit injured third parties such as Burks. For instance, the provision broadly states that the insurer “will pay each person who sustains bodily injury” and such payment, it should be noted, is made regardless of fault. See, e.g., Garcia v. Lovellette, 265 Ill.App.3d 724, 203 Ill.Dec. 376, 639 N.E.2d 935, 939 (2nd Dist.1994) (“The insurer’s obligation is in no way dependent upon the negligence of the policyholder.”). I also find that the third party beneficiary relationship was within the bank’s and Federal’s contemplation at the time of contracting. After all, the insurer drafted incredibly broad policy language with respect to the medical payments provision and the bank opted for such coverage in its insurance contract-the very purpose of which was to *1095benefit individuals, like Burks, who are injured on the premises.
¶ 11 The provision is not designed to protect the insured from its legal liability, but rather to insure the payment of the injured third party’s medical expenses. See, e.g., Harper v. Wausau Insurance Co., 56 Cal.App.4th 1079, 1091, 66 Cal.Rptr.2d 64 (Cal.Ct.App.1997) (medical payments provision’s purpose is to provide payment of injured party’s medical expenses and not for protection of insured against legal liability). The fact that the bank requested that Burks forward to it her medical bills for payment by Federal, is simply further evidence which clearly demonstrates that Burks was part of a limited class of persons intended to benefit from the agreement between Federal and its insured.3 Therefore, I would find that Burks is an intended third party beneficiary, and thus, has a cause of action against Federal.
¶ 12 I also note that my conclusion that Burks is an intended third party beneficiary is in accord with the vast majority of jurisdictions that have considered this issue. Across the country, courts that have addressed this issue have held that injured claimants are intended third party beneficiaries under medical payments provisions. See, e.g., Donald v. Liberty Mutual Insurance Co., 18 F.3d 474, 481 (7th Cir.1994); United States v. Nationwide Mutual Insurance Co., 499 F.2d 1355, 1358 (9th Cir. 1974); United States v. United Services Auto. Association, 1991 WL 152793, *3 (D.Kan.1991); Holmes v. Federal Insurance Co., 353 Ill.App.3d 1062, 289 Ill.Dec. 750, 820 N.E.2d 526, 529-530 (5th Dist. 2004); Prince v. Louisville Municipal School District, 741 So.2d 207, 212 (Miss.1999); Harper v. Wausau Insurance Co., 56 Cal.App.4th 1079, 1090, 66 Cal.Rptr.2d 64 (Cal.Ct.App.1997); Hunt v. First Insurance Company of Hawaii, Ltd., 82 Hawai'i 363, 922 P.2d 976, 981 (Ct.App.1996); Garcia v. Lovellette, 265 Ill.App.3d 724, 203 Ill.Dec. 376, 639 N.E.2d 935, 940 (2nd Dist.1994); Desmond v. American Insurance Co., 786 S.W.2d 144, 146-147 (Mo.Ct.App.1989); Roach v. Atlas Life Insurance Co., 769 P.2d 158, 161 (OHa.1989); Maxwell v. Southern American Fire Insurance Co., 235 So.2d 768, 770 (Fla.Dist.Ct.App.1970); Beschnett v. Farmers Equitable Insurance Co., 275 Minn. 328, 146 N.W.2d 861, 865 (1966); Nagy v. Lumbermens Mutual Casualty Co., 100 R.I. 734, 219 A.2d 396, 398 (1966). But see Schmalfeldt v. North Pointe Insurance Co., 469 Mich. 422, 670 N.W.2d 651, 654-655 (2003) (per curiam) (concluding that medical payments provision does not specificaUy designate injured patrons as intended third party beneficiaries of the medical payments provision); Trouten v. Heritage Mutual Insurance Co., 632 N.W.2d 856, 862 (S.D.2001) (citing Zegar v. Sears Roebuck and Co., 211 Ill.App.3d 1025, 156 Ill.Dec. 454, 570 N.E.2d 1176, 1179 (1st Dist.1991) and declining to find that injured claimant under medical payment provision is an intended third party beneficiary); Zegar, 156 Ill.Dec. 454, 570 N.E.2d at 1179 (noting that while injured claimant under medical payment provision “may be viewed as a third party beneficiary” that the “coverage provisions *1096of an insurance policy are primarily for the benefit of the contracting parties and only incidentally for injured claimants”).4
¶ 13 Lastly, I cannot agree with the Majority’s conclusion “that a jury has already compensated Appellant for the payment of her medical expenses.” Majority Opinion, at 13. The Majority’s conclusion stems from Federal’s argument that Burks has already received a satisfaction in damages for her medical expenses resulting from her injuries, and thus, is barred from recovering those same expenses again. See, e.g., Rossi v. State Farm Automobile Insurance Co., 318 Pa.Super. 386, 465 A.2d 8, 10 (1983) (“An injured party cannot recover twice for the same injury.”). In support of its argument, Federal directs this Court’s attention to the verdict slip from Burks’ suit against the bank. The verdict slip, however, is a general liability verdict slip, and, as such, does not apportion damages for medical expenses; it simply states that Burks’ damages were for $30,000.00. Thus, I cannot ascertain from the verdict slip whether the damages represent compensation for pain and suffering and medical expenses, for example, or simply for one or the other. Likewise, I disagree with the Majority that we can simply infer that an attorney would “not seek to recover medical expenses in a personal injury action.” Majority Opinion, at 1092.
¶ 14 In short, there is nothing in the certified record which discloses whether Burks included a claim for medical expenses in her suit against the bank. Thus, I am unable to conclude that Burks is barred from recovering her medical expenses.

. In her complaint against Federal, Burks alleges, and we must accept it as true, that the bank requested her medical bills so that they could be forwarded to Federal for payment and that Burks complied with the bank’s request. The complaint, however, does not allege when the bank made its request.

. I note that the insurance contract at issue contains a “no direct action" clause, but that it prohibits only "a suit asking for damages from an insured.” General Liability Contract, 9/1/00-9/1/01, Schedule of Forms, referencing Form No. 17-02-3080 (ed. 4/95). It is well-established in other jurisdictions, however, that “[a] suit to collect under the medical expenses provision is not a suit asking for damages from the insured.” Holmes v. Federal Insurance Co., 353 Ill.App.3d 1062, 289 Ill.Dec. 750, 820 N.E.2d 526, 529 (5th Dist.2004).

. The Majority cites Zegar as supporting its conclusion that application of the medical payments provision is discretionary with the insured. See Majority Opinion, at 9-10. As noted, two other Illinois Appellate Districts have specifically refused to follow Zegar. See Holmes v. Federal Insurance Co., 353 Ill.App.3d 1062, 289 Ill.Dec. 750, 820 N.E.2d 526, 529-530 (5th Dist.2004); Garcia v. Lovellette, 265 Ill.App.3d 724, 203 Ill.Dec. 376, 639 N.E.2d 935, 940 (2nd Dist.1994).