Court Opinion

ID: 8927935
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:53:13.846369+00
Date Added: 2024-06-11T17:09:27.492687
License: Public Domain

GIBBONS, Circuit Judge,
dissenting:
I join in Parts I, II and III of the opinion of the court. Because I believe the trial court erred in holding that the Travelers Insurance Company may deduct from Warner Bell’s no-fault benefits the entire amount paid to him under the Federal Employee’s Compensation Act (FECA), 5 U.S.C. §§ 8101, et seq. (1982), I dissent from the judgment in Travelers’ favor in that respect.
The dispute between Bell and Travelers arises because of two seemingly inconsistent provisions of the Pennsylvania No-Fault Motor Vehicle Insurance Act. Travelers relies on 40 Pa.Cons.Stat.Ann. § 1009.108(a)(3) (Purdon Supp.1984), which provides that “all benefits or advantages that [an] individual receives or is entitled to receive ... shall be subtracted from loss in calculating net loss.” Travelers concludes from this provision that when it calculates net loss it is permitted to subtract all FECA payments to which Bell is entitled. Bell asserts that Travelers’ position conflicts with Section 111(a)(1)(A) of the Act, which provides that “an obligor ... does not have and may not contract, directly or indirectly, in whole or in part, for a right of reimbursement from or subrogation to the proceeds of a victim’s ... cause of action for noneconomic detriment ____” 40 Pa. Cons.Stat.Ann. § 1009.111(a)(1)(A) (Purdon Supp.1984). This provision is included in the statute because the No-Fault Act compensates victims only for economic loss. Therefore, the carrier may be subrogated to the victim’s claims for economic loss (such as medical bills or lost pay) against other parties. Claims for noneconomic loss (such as pain and suffering) may not be subrogated because the no-fault insurance carrier does not compensate the claimant for this loss.
*504FECA compensates federal employees only for economic loss. The Supreme Court has held, however, that Congress intended to allow the United States to be subrogated to claims for noneconomic loss as well as economic loss. United States v. Lorenzetti, — U.S. —, 104 S.Ct. 2284, 81 L.Ed.2d 134 (1984). The result of the Lorenzetti holding in this case is that Bell receives a specified compensation for economic loss under FECA; any additional damages Bell may receive for noneconomic loss are returned to the United States, under the statutory lien, to the extent that the United States has paid compensation. Bell’s FECA benefits are effectively reduced by the amount of his recovery for noneconomic loss. Therefore, those FECA payments recouped by the federal government under Lorenzetti are not a “benefit” to Bell at all. Bell’s net recovery does not change. The award for noneconomic loss in reality benefits the government, not Bell. Thus it does not fall within the language of section 108(a)(3).
In contrast with congressional intent in enacting FECA (at least the intent found by the Supreme Court in Lorenzetti), the Pennsylvania legislature clearly did not intend that no-fault insurance companies be subrogated to, or be reimbursed for proceeds of a victim’s cause of action for non-economic losses such as pain and suffering. In this case, deduction of all FECA payments in calculating net loss would effectively reimburse Travelers for Bell’s recovery of damages for such noneconomic loss. If, as Travelers urges, all FECA payments are deducted from Bell’s no-fault recovery, Bell probably will collect no damages for noneconomic loss in addition to the no-fault compensation for economic loss. He will be barred from any compensation for pain and suffering, unless the award for pain and suffering exceeds the total of his FECA benefits.
Section 108(a)(3), which provides for deduction of benefits in calculating net loss, can be read in a way that is consistent with legislative intent to allow claimants to recover for noneconomic loss. Under section 206(a) “all benefits or advantages ... shall be subtracted from loss in calculating net loss.” Travelers and the majority incorrectly equate “benefits” with “payments.” The words “benefits or advantages” should be given their plain meaning. The “benefit” received by Bell in this case is not the entire FECA payment, but only that which is beyond what Bell would have received anyway. Since Bell’s receipt of noneconomic damages against Callahan and Wis-tar is unrelated to his receipt of FECA payments, “benefit” should be measured by subtracting an amount equal to the statutory lien, a “benefit” only to the United States.
Thus I would reverse the judgment appealed from insofar as it permits Travelers to deduct from its no-fault obligation amounts recovered from Callahan and Wis-tar for the benefit of the United States.