Wednesday, May 26, 2010

Auto Law Property Damage Subrogation Decision

In its recent decision in Jones v. Nationwide Ins. (Pa.Super. Bowes, J., Olson, J., and Fitzgerald J.), the Pennsylvania Superior Court issued an Opinion affirming the lower court's dismissal of class action Complaint in which it was claimed that Nationwide, the Plaintiff's auto insurer, violated Pennsylvania's "made whole" doctrine by issuing her a pro rata reimbursement of her deductible after Nationwide had made a subrogation recovery for the underlying property damage.

Nationwide's action was found to be consistent with an insurance regulation mandating pro rata distributions. Plaintiff argued that the regulation was invalid since the regulation was promulgated in violation of Pennsylvania's "made whole" law and because the insurance commissioner did not have the authority to issue such a regulation. Thus, by relying on the regulation Nationwide, according to Plaintiff, was liable for breach of contract, conversion and, amongst other things, bad faith.

The Superior Court, relying on the Opinion issued by a Federal District Court in Harnick v. State Farm, Slip Copy, 2009 WL 579378 (E.D.Pa. 2009), held that the regulation was valid and not in violation of the "made whole" doctrine. Accordingly, as Nationwide was following the regulation, the Plaintiff's claims against it were properly found to be devoid of merit.

Bennett, Bricklin & Saltzburg, LLC appeared in Jones v. Nationwide as counsel for the amici curiae, the National Association of Subrogation Professionals, the Pennsylvania Defense Institute and the Pennsylvania Insurance Federation. Thanks to Attorney Will Sylianteng of the Bennett Bricklin & Saltzburg firm for bringing this case to my attention.

A link to the opinion is noted below:
http://www.pacourts.us/OpPosting/Superior/out/a05017_10.pdf

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