Court Opinion

ID: 9714181
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:32:33.143741+00
Date Added: 2024-06-11T18:23:24.109636
License: Public Domain

MONTEMURO, J.,
Dissenting:
¶ 1 The threshold inquiry here is whether application of the non-duplication provision of the Guaranty Act statute requires offset of the decedent’s life insurance proceeds against the settlement amount due from PIGA as a substitute for an insolvent insurer. Because I believe the reasoning which leads to the Majority’s negative response to this question is incorrect, I dissent.
¶ 2 The text of the non-duplication provision reads as follows:
§ 991.1817. Non-duplication of recovery
(a) Any person having a claim under an insurance policy shall be required to exhaust-first his right under such policy. For purposes of this section, a claim under an insurance policy shall include a claim under any kind of insurance, whether it is a first-party or third-party claim, and shall include, without limitation, accident and health insurance, worker’s compensation, Blue Cross and Blue Shield and all other coverages except for policies of an insolvent insurer. Any amount payable on a covered claim under this act shall be reduced by the amount of any recovery under other insurance.
¶ 3 The trial court reasoned that the Act concerns itself “with the insolvency of property and casualty insurance companies and not with the subject of insurance generally.” (Trial Ct. Op. at 3) And, although “[ejveryone dies, ... everyone does not have the kind of things happen which give rise to claims under accident and health insurance, workers compensation and things of that sort.” (Id. at 3-4). Thus, since life insurance differs in kind from the usual casualty loss, and since the statute does not specifically refer to life insurance, which the Legislature could have included had it wished to do so, what is meant in the clause by the phrase “any kind of insurance” is “any kind of property or casualty insurance.” (Id. at 4), This reading is buttressed by the specific exclusion of life insurance from among those coverages listed in the Act as property or casualty insurance. (Id.). See § 991.1802.
¶4 The first of the stated purposes of the Act is “[t]o provide a means for the payment of covered claims under certain property and casualty insurance policies, to avoid excessive delay in the payment of such claims and to avoid financial loss to claimants or policyholders as a result of the insolvency of an insurer.” 40 P.S. § 991.1801(1). In the instant case, the stated purpose of the statute appears to be pitted against the express limitations on recovery which appear in the language of § 991.1817. I believe that the Rules of Statutory Construction, 1 Pa.C.S.A. § 1901 et seq., as well as the principles of Pennsylvania jurisprudence, require that the statutory language be given precedence, and that in fact, the dissociation between theory and practice is apparent rather than real.
¶ 5 The well settled principle which compels my conclusion is reiterated in Blackwell v. Pennsylvania Insurance Guaranty Association, 390 Pa.Super. 31, 567 A.2d 1103 (1989). There a panel of this Court repeated in the context of a dispute over the meaning of the predecessor provision to the one under consideration, the axiom that “where the words of a statutory enactment are clear and unambiguous, the courts must construe the statute according to its plain and obvious meaning.” Id. at 1105; 1 Pa.C.S.A. § 1921(b). Nor is the “letter of [the statute] to be disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S.A. § 1921(b). Here, ’although the words themselves are not problematic, the trial court determined that they were inconsistent with the intent of the Legisla*205ture, and supplied meaning to correct what it saw as an inadvertent omission in the language of § 991.1817. The Majority, without reference to any supporting authority, adopts this position, finding that the plain meaning of the language leads to an “unjust, unreasonable and absurd result.” (Majority Op. at 202).
¶ 6 However, the Legislature’s repeated use in the subsection of inclusive language — “any kind of insurance,” “all other coverages,” and “any recovery” — persuades me that the words mean exactly what they say, that is, every kind of insurance “except for policies of an insolvent insurer” may be used to offset PIGA’s liability. Further, the Rules of Statutory Construction direct that in determining the intent of the Legislature, it is presumed that “the public interest is favored as against any private interest,” 1 Pa. C.S.A. § 1922(5); Pennsylvania Assigned Claims Plan v. English, 541 Pa. 424, 664 A.2d 84 (1995), which brings me to the purpose of the statute, noted above.
¶ 7 In reaching its conclusion that statutory intent is to be discerned by ignoring the express language of the Act, the Majority engages in a reductio ad absurdum, reasoning that the inevitable result of accepting the plain language of the statute would require a totally unrelated claim, such as a loss of property under a marine policy, to be used as an offset. Therefore there must be “some relationship between the claim against PIGA and the claim under other insurance that must be offset.” (Majority Op. at 208). The nature of the relationship must be such that the “claim to be offset must be for the same loss,” that is, the insurance to be used as an offset must be against the same risk. (Id.)
¶8 The marine insurance example supplies no valid analogue to the case at bar. Despite the Majority’s refusal to recognize it as such, there is “some relationship” here — a death, covered by life insurance, the payment of which arose through an act conceded to impose liability upon an insured holding a policy issued to cover such acts. We are thus not confronted with the necessity of determining whether totally unconnected events fall within the ambit of the statute. Rather, the Majority has posited the necessity for duplication of facts as prophylaxis against duplication of payment.
¶ 9 If the Majority’s gloss on the requisite nature of a (compensable) relationship is accepted, its reasoning would dictate that only casualty insurance, specifically, insurance against possible injury suffered at the hands of a negligent medical practitioner, would be available as an offset, since that is, under the Majority’s schema, the sole coverage against the “same risk.” Despite the argument that this is the only sort of insurance that could have been intended by the prohibition against duplication in the statute, such a result assaults not only logic and common sense, but suggests that the expansive language of the statute be disregarded altogether, and replaced with words of restriction. Even assuming for argument’s sake the desirability of such a course, it is for the Legislature, not the courts.
¶ 10 PIGA is an entity constituted by the Legislature specifically to stand in the shoes of insolvent insurers, Bethea v. Forbes, 519 Pa. 422, 548 A.2d 1215 (1988); § 991.1803(b)(1)®, and to facilitate payment due from such insurers to claimants who would otherwise be forced to seek redress though involvement in the liquidation process. The Act was intended to circumvent the delay involved in pursuing a proof of claim in this manner. Its funds are derived from a levy against its insurer members, § 991.1808, and are finite. This court observed in Blackwell, supra, that “a claimant will never be placed in a better position by virtue of the existence of PIGA than he would have been had the insurance company not become insolvent. However, it is equally clear that the Legislature did not intend, in enacting the Insurance Guaranty Act, that in all cases a claimant would be placed in the same position he would have been in had the insurance com*206pany- remained solvent.” Id. at 1106 (emphasis in original). Despite some differences in the statute involved in Blackwell and here, this cardinal principle remains unchanged.
¶ 11 The statute is intended to protect both insureds and claimants from the insolvency of insurers, and to pay such amounts, limited by a $300,000 cap, § 991.1803(b)(l)(I)(B), as cannot be covered by proceeds from elsewhere. Because the statute includes both first and third party coverages, the fact that the decedent derived no benefit from his policy is not material to the inquiry. What the nonduplication of recovery provision prevents is a situation in which an insured collects the amount of the total loss from one insurance company and then receives an additional sum from the PIGA, reducing the funds available for claimants with no recourse other than to PIGA. That this is true can be seen from the language of the statute.
¶ 12 A covered claim under the Act is “[a]n unpaid claim ... submitted by a claimant, which arises out of and within the coverage and is subject to the applicable limits of an insurance policy to which this article applies issued by an insurer if such an insurer becomes an insolvent insurer after the effective date of this article.” 40 P.S. § 991.1802. The insurance policy to which “this article” applies is the malpractice coverage issued to Appellant Bainbridge and his group. PIGA stands in the shoes of the insolvent insurer, but only to the extent of the cap and the restrictions imposed by the Act. Neither the language of the statute nor the intent of the Legislature garnered from that language promises absolute dollar for dollar replacement of losses represented by the claims. In considering the purpose clause of the prior Act, 40 P.S. § 1701.102(1), which is repeated verbatim in the current statute, 40 P.S. § 1802(1), the Pennsylvania Supreme Court in Bethea points out, as has already been noted, that the Act is intended to provide “a measure of protection to policyholders and claimants,” Id. at 424, 548 A.2d at 1216 (emphasis added), not total replacement coverage. Had it been otherwise, the words “unpaid loss” would have been used instead of “unpaid claims.” The insolvency of the insurer is compensated only to the extent permitted by the limitations already noted. The trial court’s reading supplies the deficiency. However, neither this Court nor the trial court is empowered to make the insertions contemplated by the Majority. See Kusza v. Maximonis, 363 Pa. 479, 70 A.2d 329 (1950); Key Savings and Loan Association v. Louis John, Inc., 379 Pa.Super. 226, 549 A.2d 988 (1988), appeal denied, 523 Pa. 632, 564 A.2d 1260 (1989).
¶ 13 The circumstances of Appellees’ claim cannot be characterized as other than tragic, and their dissatisfaction with any diminution of their recovery is understandable. However, I believe, consistent with Bethea, Blackwell and the intent of the Legislature as demonstrated by its unequivocal language, that life insurance is “any kind of insurance” available for offset against proceeds due from PIGA. Accordingly, I dissent.