Wagner v. National Indemnity Co.

422 A.2d 1061, 492 Pa. 154, 1980 Pa. LEXIS 822

• Court: Supreme Court of Pennsylvania
• Decided: September 22, 1980
• Docket: 54
• Status: Published

Opinions

OPINION OF THE COURT

O’BRIEN, Chief Justice.

The facts of the instant case are not in dispute. Edward S. Wagner, deceased, was a truck driver for Shreiner Trucking Company. The decedent was killed on January 26,1977, when a company-owned tractor-trailer he was driving ran off the road and overturned. At the time of the accident, decedent did not own a car and thus, had no insurance of his own. Because the accident occurred during the course of decedent’s employment, decedent’s family has been and continues to receive benefits pursuant to the Workmen’s Compensation Act.¹

Appellant, the Estate of Edward S. Wagner, through Mary P. Wagner, Administratrix, filed a claim with appellee, National Indemnity Company, the no-fault carrier of decedent’s employer. Mrs. Wagner sought to obtain the difference between the Workmen’s Compensation benefits and her “survivor’s benefits” and decedent’s “work loss benefits” as provided in the Pennsylvania No-Fault Motor Vehicle Insuranee Act.² National Indemnity denied the claim, asserting that it was entitled to the employer’s immunity from suit by an employee. 77 P.S. § 481(a) (Supp.1979-80). Appellant then filed a complaint in assumpsit in the Court of Common Pleas of Dauphin County, alleging that decedent had been covered by Shreiner Trucking’s no-fault policy. The trial court sustained National Indemnity’s preliminary objections and dismissed appellant’s complaint based on Turner v. Southeastern Pennsylvania Transit Authority, 256 Pa.Super. 43, 389 A.2d 591 (1978). The Superior Court affirmed, Wagner v. National Indemnity Co., 266 Pa.Super. 110, 403 A.2d 118 (1979), and we granted appellant’s petition for allowance of appeal.

Section 303 of the Workmen’s Compensation Act provides:

“The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death ... or occupational disease... ”. As amended, Act of December 5, 1974, P.L. 782, No. 263, § 6, 77 P.S. § 481(a) (Supp.1979-80). (Emphasis added).

This section, which was enacted five months after passage of the No-Fault Act admits no exception; the liability of an employer to an employee is limited to the Workmen’s Compensation Act.

Appellant argues, however, that two sections of the No-Fault Act evince the legislature’s intention to create an exception to Section 303 of the Workmen’s Compensation Act. Appellant believes that Sections 204 and 206 of the No-Fault Act must be read to allow recovery by appellant under no-fault on the instant facts. We do not agree.

Section 204 provides:

“(a) Applicable security.-The security for the payment of basic loss benefits applicable to an injury to:

“(1) an employee, or to the spouse or other relative of any employee residing in the same household as the employee, if the accident resulting in injury occurs while the victim or deceased victim is driving or occupying a motor vehicle furnished by such employee’s employer, is the security for the payment of basic loss benefits covering such motor vehicle or, if none, any other security applicable to such victim;

“(2) an insured is the security under which the victim or deceased victim is insured;

“(3) the driver or other occupant of a motor vehicle involved in an accident resulting in injury who is not an insured is the security covering such vehicle;

“(4) an individual who is not an insured or the driver or other occupant of a motor vehicle involved in an accident resulting in injury is the security covering any motor vehicle involved in such accident. For purposes of this paragraph, a parked and unoccupied motor vehicle is not a motor vehicle involved in an accident unless it was parked so as to cause unreasonable risk of injury; and

“(5) any other individual is the applicable assigned claims plan.” 40 P.S. § 1009.204 (Supp.1979-80).

Further, Section 206 provides:

“... Except as provided in section 108(a)(3) of this act, all benefits or advantages (less reasonably incurred collection costs) that an individual receives or is entitled to receive from social security (except those benefits provided under Title XIX of the Social Security Act and except those medicare benefits to which a person’s entitlement depends upon use of his so-called ‘life-time reserve’ of benefit days) workmen’s compensation, any State-required temporary, nonoccupational disability insurance, and all other benefits (except the proceeds of life insurance) received by or available to an individual because of the injury from any government, unless the law authorizing or providing for such benefits or advantages makes them excess or secondary to the benefits in accordance with this act, shall be subtracted from loss in calculating net loss.” 40 P.S. § 1009.206(a) (Supp.1979-80).

We do not believe, however, that either of the above-quoted sections creates any exception to the exclusivity of remedy section of the Workmen’s Compensation Act.

As the Superior Court stated in Turner v. Southeastern Pennsylvania Transit Authority, supra, 256 Pa.Super. at 46, n. 2, 389 A.2d at 593, n. 2:

“Were we to decide that the Workmen’s Compensation Act and the No-fault Act were in any manner irreconcilable, the iron-clad exclusivity provision contained in the 1974 amendment to Section 303 would control. ‘Whenever the provisions of two or more statutes enacted finally during the same General Assembly are irreconcilable, the statute latest in date of final enactment irrespective of its effective date, shall prevail.’ Statutory Construction Act, Act of May 28,1937, P.L. 1019, art. IV, § 65, 46 P.S. § 565.

“We are of the opinion that if any exception had been created by the No-fault Act, the legislature would surely have seen fit to incorporate the exception when it amended Section 303 of the Workmen’s Compensation Act. ‘Any question as to the intention of the legislature that the remedy created by the Workmen’s Compensation Act be exclusive is removed by [the 1974 amendment].’ Greer v. United States Steel Corp., 237 Pa.Super. 597, 600, 352 A.2d 450, 451 (1975), rev’d on other grounds, 475 Pa. 48, 380 A.2d 1221 (1977).”

We agree with the Superior Court that if the applicable sections were irreconcilable, Section 303 of the Workmen’s Compensation Act would have to control for the reasons set forth by the Superior Court; we nonetheless shall try to reconcile the No-Fault Act and the Workmen’s Compensation Act.

Any analysis must start with the plain meaning of Section 303 of the Workmen’s Compensation Act which in clear and unambiguous words states that liability under workmen’s compensation is the exclusive liability of an employer to an employee for injury, death or occupational disease. As a broad, remedial statute, the act was passed to protect employees and their families by insuring a quick and certain payment for work-related injuries without having to resort to the courts. As the Superior Court stated in Greer v. United States Steel Corp., supra, 237 Pa.Super. 597 at 599, 352 A.2d 450:

“With the enactment of the first Workmen’s Compensation Act by the legislature in 1915, Act No. 338, June 2, 1915, P.L. 736, 77 P.S. § 1 et seq., and its companion, the Occupational Disease Act, Act of June 21, 1939, P.L. 566, No. 284, 77 P.S. § 1201, et seq., and the amendments made periodically thereto, it has been the clear legislative intent to provide an accessible, expert and easy forum for the handling of all claims for occupational injury and disease; to provide for prompt payment of all costs for all medical expenses and reasonable income loss payments to the employee or his dependents; to reduce the costs and delays of personal injury court trials and eliminate unnecessary payment of fee to lawyers, witnesses as well as time consuming trials and appeals; and to accomplish this without assessing fault to the employee or employer while the employer is freed from the threat of court suit.”

Thus, under the Workmen’s Compensation Act, both the employer and the employee relinquished certain rights to obtain other advantages. For the worker, he no longer had to prove negligence; in return, the employee had to accept a limited, though certain, recovery. The employer, on the other hand, guaranteed compensation to an injured employee in return for the exclusivity of the workmen’s compensation liability to its employees.

The Superior Court has wrestled with the problem that now confronts us. In Turner v. Southeastern Pennsylvania Transit Authority, supra, a bus driver was injured in a collision between his bus and another vehicle. Turner was denied workmen’s compensation benefits because he refused to submit to a physical examination. Turner then attempted to sue SEPTA, and obligated government under no-fault. 40 P.S. § 1009.104(b) and (c); 31Pa.Code § 66.1-104(a). Turner argued, as appellant argues instantly, that Sections 204 and 206 of the No-Fault Act created an exception to Section 303 of the Workmen’s Compensation Act. The court first discussed Section 204, in which the legislature stated that the first place to look for coverage is to an employer’s no-fault policy where the employee is driving a vehicle furnished by the employer. As the Court stated:

“[Section 204], we believe, was intended to complement the Workmen’s Compensation Act rather than supplant it. We interpret it to apply to situations other than the one where the employee is covered by Workmen’s Compensation, such as when an employee or his relatives are injured while driving a vehicle furnished by the employer for their private use.” Turner v. Southeastern Pennsylvania Transit Authority, supra, 256 Pa.Super. at 47, 389 A.2d at 593.

We are in basic agreement with the statement of the Superi- or Court, though we believe a minor refinement is in order.

In Gradler v. Prudential Property & Casualty Insurance Co., 464 F.Supp. 575 (W.D.Pa.1979), an employee was using a vehicle furnished by his employer and was involved in an accident; at the time, the employee was not using the vehicle for any work-related activity and thus was not covered by workmen’s compensation. As such, the District Court held that the employer’s no-fault carrier was liable to the employee under Section 204(a)(1) of the No-Fault Act.³ We believe, however, that an employer’s no-fault carrier could also be liable when the vehicle is being used for work-related purposes. Under Section 204(a)(1), an employee’s spouse or other relative residing in the employee’s household is covered. Thus, while an employee could only recover under workmen’s compensation where the accident occurred during the course of the employee’s employment, a spouse or relative injured while in the employer’s vehicle could recover from the employer’s no-fault carrier.⁴

Section .206 of the No-Fault Act provides that any workmen’s compensation benefits paid must be deducted from loss to determine “net loss”, the amount for which a no-fault carrier is liable. In Turner v. Southeastern Pennsylvania Transit Authority, supra, 256 Pa.Super. at 48, 389 A.2d at 594, the Court stated:

“The reference to workmen’s compensation in this section is admittedly not entirely clear. It may well be, as appellee argues, that Section 206 is intended to provide for subtraction of workmen's compensation benefits received from the employer, from any no-fault recovery obtained by the employee from the insurer of a vehicle owner other than the employer. This could only occur if the employee were injured while using his own car or that of a third party in the course of conducting his employer’s business. Thus Section 206 does not apply to a situation such as that presented in the instant case-i. e. when the employee is driving the employer’s vehicle while conducting the employer’s business.” (Emphasis in original.)

In Brunelli v. Farelly Brothers, 266 Pa.Super. 23, 28, 402 A.2d 1058, 1061, n.6 (1979), the Court withdrew somewhat from its position in Turner, stating:

“A word of caution is in order. The Pennsylvania Workmen’s Compensation Act, 77 P.S. § 481, provides that the liability of an employer to an employee shall be controlled exclusively by that act. The Workmen’s Compensation Act does not affect an employee’s cause of action against a third party tortfeasor, except for prohibiting the third party from recovering contribution from the employer for damages which the third party is required to pay to the employee-victim (77 P.S. § 481). No-fault applies to an action between the employee and the third party. Turner v. Southeastern Pennsylvania Transportation Authority, 256 Pa.Super. 43, 389 A.2d 591 (1978), did not contemplate the situation which now confronts us. Although the basic decision in Turner was correct, the dictum in Turner was incorrect insofar as it indicated that No-fault § 206(a) (providing for subtraction of workmen’s compensation benefits from ‘loss’ in calculating ‘net loss’) did not apply when an employee was driving the employer’s car.” (Emphasis in original).

We believe the later position is correct, though somewhat confusing with its reference to a third party tortfeasor.

Under no-fault, a party may not be sued in tort except where the victim’s basic loss benefits exceed the no-fault recovery limits. 40 P.S. § 1009.301 (Supp. 1979-80); Brunelli v. Farelly Brothers, supra. However, where an employee is injured in an accident and is covered by workmen’s compensation, this by no means precludes recovery under no-fault; Section 303 of the Workmen’s Compensation Act precludes recovery from the employer only. Thus, while no recovery is allowed under Section 204(a)(1) against the employer’s no-fault carrier because of the exclusivity section of workmen’s compensation, an insured employee could recover under Section 204(a)(2)-(5) if applicable. From this recovery, the workmen’s compensation benefits would be deducted as called for in Section 206 of the No-Fault Act.

Appellant argues that Turner v. Southeastern Pennsylvania Transit Authority, supra, is inapplicable because while Turner attempted to sue his employer, SEPTA, an obligated government (self-insurer), the appellant is instantly attempting to sue the employer’s no-fault carrier. We find the proposed distinction to have no legal relevance, for an insurer provides coverage for an employer’s possible liability and has no independent basis for liability on its own part. Further, the No-Fault Act provides that an “ ‘obligor’ means an insurer, self-insurer or obligated government providing no fault benefits in accordance with this act.” 40 P.S. § 1009.103 (Supp. 1979-80). The act mandates a motor vehicle owner to provide protection, either by providing self-insurance or by purchasing insurance and the liability under the act arises from the obligation to provide that protection.

Appellant further argues that the only class of insurers entitled to assert the immunity under Section 303 of the Workmen’s Compensation Act are those insurers that provide workmen’s compensation coverage. This argument, however, flies in the face of the clear and unambiguous language of Section 303 which states:

“The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action of law or otherwise on account of injury or death ... or occupational disease.... ” 77 P.S. § 481(a) (Supp. 1979-80).

Appellant argues that should a no-fault carrier be allowed to assert the Section 303 immunity, an insurer providing life insurance benefits could likewise avoid liability under Section 303. Appellant overlooks the fact that employers must provide no-fault coverage and workmen’s compensation coverage. Any fringe benefits, such as life insurance or disability insurance, are voluntarily bargained for and have an independent contractual vitality. The employer or his insurance carrier for these fringe benefits would be, in our view, precluded from asserting the Section 303 immunity.

Appellant next asserts that the following section of the No-Fault Act evidences the legislature’s intention to create an exception to Section 303:

“(a) Findings.-The General Assembly hereby finds and declares that:

* * * * * *

“(3) the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed in motor vehicle accidents on Commonwealth highways, in intrastate commerce, and in activity affecting intrastate commerce is essential to the humane and purposeful functioning of commerce;

“(6) careful studies, intensive hearings, and some State experiments have demonstrated that a basic system of motor vehicle accident and insurance law which:

“(A) assures every victim payment of all his basic medical and rehabilitation costs, and recovery of a reasonable amount of work loss, replacement services and survivor’s loss; and

“(B) eliminates the need to determine fault except when a victim is very seriously injured, is such a low-cost, comprehensive, and fair system;

“(7) adoption of the system described in paragraph (6) in place of the system described in paragraph (5) would remove an undue burden on commerce;

“(b) Purposes.-Therefore, it is hereby declared to be the policy of the General Assembly to establish at reasonable cost to the purchaser of insurance, a Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims and the survivors of deceased victims.” 40 P.S. § 1009.102 (Supp. 1979-80).

As we noted, because Section 303 was amended after passage of the No-Fault Act, and Sections 204 and 206 of the No-Fault Act do not create an exception to Section 303, we are loath, and in fact are unable, to find the above-quoted prefatory section compels a different result.

Appellant finally argues that by denying the instant appellant no-fault coverage, we would unconstitutionally discriminate against professional drivers in that they would be denied the full coverage applicable to all other drivers. As previously mentioned, a professional driver would be limited to workmen’s compensation benefits only in a situation identical to the instant one; i. e., where the driver carries no insurance of his own on his own vehicle and no other vehicle is involved in the injury-producing accident. Further, when confronted with the instant situation, we can perceive no unconstitutional discrimination, for we believe the legislature reasonably can determine that an injured employee such as the decedent in the instant case should be treated no differently than an employee suffering a similar injury while working in his employer’s factory; both are limited to workmen’s compensation benefits. Section 303 provides that workmen’s compensation affords the exclusive remedy to an employee injured while at work unless the employer voluntarily relinquishes the protection of the limited liability. Because no-fault coverage is statutorily mandated, there is no such voluntary relinquishment by the employer by providing no-fault coverage.

In sum, an employee injured in the scope of his employment while driving his employer’s vehicle may recover only workmen’s compensation benefits from his employer or the employer’s workmen’s compensation carrier; such a result is compelled by Section 303 of the Workmen’s Compensation Act. The injured employee may, if applicable, proceed against any of the applicable security mentioned in Section 204(a)(2)-(5). Should the employee recover no-fault benefits, workmen’s compensation benefits must first be deducted from any no-fault benefits to be paid. Should an employee be using his employer’s vehicle for private non-work related reasons, the employee could recover from his employer’s no-fault carrier. As none of Section 204(a)(2)-(5) applies to the instant case, appellant must be denied payment under no-fault.

Order of Superior Court is affirmed.

EAGEN, C. J., concurs in the result. NIX, J., joins in the opinion of the court and files a separate concurring opinion. LARSEN, J., files a dissenting opinion in which KAUFFMAN, J., joins. FLAHERTY, J., files a dissenting opinion. KAUFFMAN, J., files a dissenting opinion in which LARSEN, J., joins.

1 . Act of June 2, 1915, P.L. 736, art. I, § 101, et seq., as amended, 77 P.S. § 1, et seq.

2 . Act of July 19, 1974, P.L. 489, No. 176, art. I, § 101, et seq., 40 P.S. § 1009.101, et seq. (Supp.1979-80).

3 . The Court held that the employer’s no-fault carrier was liable despite the fact that a friend of the employee was driving the vehicle.

4 . While § 303 of the Workmen’s Compensation Act appears to apply to spouses and relatives of the employee, our reading indicates that the bar applies only when the spouse or relative attempts to claim through the employee for a work-related injury.