Donnelly v. Bauer

683 A.2d 1242, 453 Pa. Super. 396, 1996 Pa. Super. LEXIS 3512
CourtSuperior Court of Pennsylvania
DecidedOctober 29, 1996
Docket00691; 00695
StatusPublished
Cited by18 cases

This text of 683 A.2d 1242 (Donnelly v. Bauer) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donnelly v. Bauer, 683 A.2d 1242, 453 Pa. Super. 396, 1996 Pa. Super. LEXIS 3512 (Pa. Ct. App. 1996).

Opinions

[398]*398CIRILLO, President Judge Emeritus:

In this appeal we are asked to determine the adequacy of limited tort waiver forms issued pursuant to Pennsylvania’s Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa.C.S.A. § 1701 et seq. The two consolidated cases before us are representative cases from a group of fifty-seven. In those fifty-seven cases, plaintiffs filed motions in limine seeking to preclude defendants from raising the limited tort waiver defense. In signing the limited tort waiver documents, plaintiffs restricted their rights to financial compensation for non-economic damages as a result of injuries caused by other drivers.

The Honorable Eugene E.J. Maier presided over these cases. Judge Maier granted the plaintiffs’ motions and precluded defendants from raising the limited tort waiver defense. Defendants appealed. Two representative cases were certified by the trial court for interlocutory review. This court granted permission to appeal, see Pa.R.A.P. 313, 1311, and consolidated the two cases herein for en banc review.1 See Pa.R.A.P. 513.

Appellants raise the following issues for our review:

1. When a personal injury claimant in an automobile accident case voluntarily selected the limited tort option by signing a notice form when he first applied for a new policy after July 1, 1990, and benefited from the lower limited tort premium, is the individual defendant in a subsequent automobile accident case precluded from raising the limited tort defense merely because the form did not state the premium differential between the full and limited tort options?
2. Where a personal injury claimant in an automobile accident case voluntarily selected the limited tort option by signing an Assigned Risk Plan Form PA-1000 when he applied for a new automobile insurance policy after July 1, [399]*3991990, and benefited from the lower limited tort premium, is the defendant in an automobile accident case precluded from raising the limited tort defense merely because Form PA-1000 did not state the premium differential between the full and limited tort options?
3. Did the lower court have jurisdiction over motions to invalidate tort selections forms approved by the Insurance Department and Commonwealth Court, when claimants failed to seek relief in the agency or in Commonwealth Court, and the insurer and Assigned Risk Plan were not parties?

In enacting the 1990 amendments2 to the Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa.C.S.A. § 1701 et seq., [hereinafter Act 6], the General Assembly sought to temper the rising cost of automobile insurance. As part of this plan, the legislature established rate reductions linked to the election of tort options. See 75 Pa.C.S.A. §§ 1705 and 1799.7(b)(1).

Under Act 6, an insured must choose either the full tort option or the limited tort option. Under the limited tort option, an insured remains eligible to seek compensation for economic loss as a result of a motor vehicle accident, but is restricted in his or her right to recovery of non-monetary damages.3 Election of this option carries a lower premium.

[400]*400The legislature recognized the proliferation of lawsuits as a major cause of escalating automobile insurance rates. Seeking to attack the root of the problem, the legislature provided insureds with a limited tort option. In return for relinquishing the right to seek recovery for non-monetary damages in certain cases, an insured who chose the limited tort option would pay a lower premium. The insured would benefit and, if the legislature’s objectives for control over litigation carried through, the benefit would reach all Pennsylvania insureds in the form of reduced insurance rates. Under this theory, the legislators could institute a plan of rate reductions, rate freezes, and lowered minimum coverage offerings, paid for, ultimately, by the restricted coverage in the limited tort option. See 75 Pa.C.S.A. §§ 1799.7(b), (d) and (e), 1711, and 1731.

The legislature sought to implement the rate reductions in two tiers: first, under section 1705 of the Vehicle Code, insurers were required to introduce the plan to existing policy holders, to notify them of the available tort options and inform them of the annual premium for each option; second, insurers were required under section 1791.1 to notify [401]*401new policy holders (those applying for original coverage on or after July 1, 1990) of the available tort options. 75 Pa.C.S.A. § 1791.1.

Section 1705, the first tier, pertains to policies in existence with first renewals due on or before July 1, 1990; the required section 1705 form provides a space for the insurer to indicate the comparative premiums for the limited and full tort options. Section 1791.1(b), the second tier, refers to original applications for new insurance; the required form provides no space for cost comparisons. This variance in notice requirements is the heart of this dispute.

Section 1705 reads as follows:

§ 1705. Election of tort options.
(a) Financial responsibility requirements.—
(1) Each insurer, not less than 45 days prior to the first renewal of a private passenger motor vehicle liability insurance policy on and after July 1, 1990, shall notify in writing each named insured of the availability of two alternatives of full tort insurance and limited tort insurance described in subsection (c) and (d). The notice shall be a standardized form adopted by the commissioner and shall include the following language:
NOTICE TO NAMED INSUREDS
A. “Limited Tort” Option — The laws of the Commonwealth of Pennsylvania give you the right to choose a form of insurance that limits your right and the right of members of your household to seek financial compensation for injuries caused by other drivers. Under this form of insurance, you and other household members covered under this policy may seek recovery for all medical and other out-of-pocket expenses, but not for pain and suffering or other nonmonetary damages as set forth in the policy or unless one of several other exceptions noted in the policy applies. The annual premium for basic coverage as required by law under this “limited tort” option is $-.
[402]*402B. “Full Tort” Option — The laws of the Commonwealth of Pennsylvania also give you the right to choose a form of insurance under which you maintain an unrestricted right for you and the members of your household to seek financial compensation for injuries caused by other drivers. Under this form of insurance, you and other household members covered under this policy may seek recovery for all medical and other out-of-pocket expenses and may also seek financial compensation for pain and suffering and other non-monetary damages as a result of injuries caused by other drivers. The annual premium for basic coverage as required by law under this “full tort” option is $-.

75 Pa.C.S.A. § 1705(a)(1) (emphasis added).

Section 1791.1(b) reads similarly, but does not include any language pertaining to a first

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Donnelly v. Bauer
683 A.2d 1242 (Superior Court of Pennsylvania, 1996)

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Bluebook (online)
683 A.2d 1242, 453 Pa. Super. 396, 1996 Pa. Super. LEXIS 3512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donnelly-v-bauer-pasuperct-1996.