Pennsylvania Supreme Court Finally Hands Down Tannebaum Decision

On April 28, 2010, the Pennsylvania Supreme Court finally handed down its long awaited decision in the case of Tannenbaum v. Nationwide, No. 100 MAP 2007 (Pa. 2010).

Tannenbaum involved a doctor who was severely injured in a motor vehicle accident. Following the accident, he secured social security disability benefits, along with disability benefits from a group plan offered by his former employer-hospital, and additional benefits under two personal disability policies.

The doctor sued the tortfeasor and settled. He then turned to Nationwide for UIM benefits. A dispute arose between the parties as to whether or not Nationwide was entitled to an offset in the amount of the disability benefits against the wage loss claims being presented by the injured party.

In an Opinion authored by Justice Saylor, the Court held that §1722 of Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL) precluded the plaintiff from pleading, proving and recovering as damages in an underinsured motorist claim any items of income loss otherwise paid by the disability insurer.

In this case of first impression, the Court confirmed that MVFRL was designed to eliminate the collateral source rule in auto cases, thus preventing the plaintiff from receiving a double recovery with respect to income loss.

As such, the Court overruled the Superior Court and held that Nationwide was indeed entitled to an offset in the amount of the disability benefits previously received by the injured party.


Justice Saylor's Opinion may be viewed HERE.

A Dissent was filed by Justice Todd may be viewed HERE.