For those of you in the plaintiff s practice who have noticed a recent roadblock in the ability to secure justice for your clients, the Pennsylvania Superior Court recently removed one roadblock they had previously put in place approximately 1 year ago. In the Smith vs. Rohrbaugh, the Pennsylvania Superior Court issued a decision on September 28, 2012, holding that its own previous decision in the case of Pusl vs. Means, 982 A.2d 550 (Pa. Super. 2009), was wrongly decided and therefore overruled.
In Pusl, the Pennsylvania Superior Court held that in a motor vehicle accident, when a plaintiff had an opportunity to secure recovery both from the tortfeasor who caused the accident and his or her own motor vehicle policy for underinsured motorist (UIM) benefits, there was a necessary priority of receipt of those monies. Under the Pennsylvania Motor Vehicle Code, where a person has UIM benefits, if they make a claim for those benefits on their own policy, their insurance carrier is entitled to a credit for any insurance that the person who caused the accident maintained on their motor vehicle. Historically, it had been the case that the tortfeasor, did not get that same credit from any UIM that the plaintiff may secure from his or her own policy. However, Pusl incorrectly changed that rule. The Superior Court in Pusl determined that if a plaintiff successfully secures monetary benefit from his or her UIM policy before resolving the claim against the tortfeasor, the tortfeasor would then be entitled to a credit for any UIM benefits secured. Specifically, under that analysis, the Superior Court compared the UIM to a first party benefit such as medical benefit or wage loss, where historically the tortfeasor would be entitled to a credit for those benefits paid under the plaintiff s own motor vehicle insurance policy.The Pennsylvania Superior Court revisited this issue in Smith vs. Rohrbaugh, 2012 Pa. Super 208 (Pa. Super. 9/28/2012). In that matter, the Superior Court noted that Pusl correctly decided that the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. §1722 ( MVFRL ) prevents a double recovery of first party benefits such as medical coverage and wage loss. However, the Smith Court specifically stated that UIM benefits are not first party benefits as defined in §1722 of the MVFRL. The Smith Court correctly analyzed the MVFRL and found that UIM benefits are specifically not listed in the defined first party benefits list of items and thus clearly fall outside of the scope of first party benefits. As such, the tortfeasor is not entitled to a credit for any benefits received from an underinsured motorist payment to the plaintiff.
This Smith decision by the Court has immediate beneficial ramifications in the litigation of automobile accidents.
Prior to this decision, under the Pusl standard, a plaintiff s lawyer was not able to pursue a successful resolution of an UIM until the tortfeasor portion of the case had been successfully concluded. Plaintiffs in that situation had the unfortunate risk that if they did secure benefits from their own insurance carrier, they would then have to give the person who caused the accident a credit for those benefits. This simply did not make sense and would provide an unfair benefit to the person causing the accident. Now, under the decision in Smith, plaintiffs are allowed to pursue claims against their own insurance carrier for underinsurance motorist benefits while pursuing the cause of action against the tortfeasor, who ultimately caused the accident.
Ultimately, this will allow plaintiff s lawyers to move more efficiently and effectively to help their clients secure the benefits to which they are entitled to in a swift and prompt manner. It simply made no sense before to give a credit to the tortfeasor for a benefit for which the plaintiff, himself paid. As such, in a rare occasion, the Pennsylvania Superior Court recognized its error and overturned its own decision.