Two Major UM/UIM Decisions Handed Down by Pennsylvania Supreme Court

Earlier this week, the Pennsylvania Supreme Court handed down two important decisions on major UM/UIM issues both of which opinions where written by Justice Orie Melvin.

The issues involved in the separate cases included (1) whether those eligible for workers' compensation benefits may also collect underinsured motorist benefits, and (2) whether underinsured motorist coverage on a police officer's personal vehicle can be extended to a police vehicle when the cop's law enforcement agency does not provide such insurance.


Heller v. Pennsylvania League of Cities and Municipalities


In the case of Heller v. Pennsylvania League of Cities and Municipalities, a 2-1 Commonwealth Court panel previously ruled that a person receiving workers' compensation benefits may be subject to an insurance exclusion and was thereby precluded from also recovering underinsured motorist benefits.  This decision was reversed by the Supreme Court. 

The Heller case involved a declaratory judgment complaint that was brought against a municipal insurer seeking a judicial declaration that the exclusion at issue violated public policy. The underlying claim involved a police officer who had been injured in a motor vehicle accident during the course of his employment and received worker's compensation benefits.

This lower court decision was reversed by the Pennsylvania Supreme Court in its decision earlier this week under Heller v. Pennsylvania League of Cities and Municipalities.2011 WL 4953432 (Pa. Oct. 19, 2011 Orie Melvin, J.)(Saylor, J.,dissenting  ). 

The majority of the Supreme Court basically ruled in Heller that although the workers' compensation exclusion in the employer's liability policy did not violate any express provisions of the Pennsylvania Motor Vehicle Financial Responsibility law or the Workers' Compensation Act, the "workers' compensation exclusion in an employer-sponsored insurance policy violates public policy and is, therefore, unenforceable." 

More specifically, the majority found that to enforce the exclusion would render the purchased coverage illusory.  In a strong dissent, Justice Saylor cautions against the judicial re-writing of insurance contracts and noted that the judicial striking of clear contractual provisions should be the exception rather than the rule lest the floodgates be opened based upon public policy arguments.  Justice Saylor suggests that these types of issues should be left for the Legislature or administrative agencies to struggle with.

The Supreme Court's majority opinion by Justice Orie Melvin in Heller can be read here. 
 
The dissenting opinion in Heller by Justice Saylor can be read here.



Williams v. GEICO

In the separate matter of Williams v. GEICO, the injured party police officer was injured in a car accident on the job and presented a UIM claim to his own personal insurance carrier, GEICO because the Pennsylvania State Police did not carry UM/UIM coverage on its vehicles. GEICO applied the "regular use" exclusion under its policy to deny coverage. In this case, the injured party police officer was challenging that exclusion and GEICO's denial.

In its decision in Williams v. GEICO, 2011 WL 4953433 (Pa. Oct. 19, 2011 Orie Melvin, J.)(Concurring Opinions by Todd, Baer, and Saylor, JJJ.), the Supreme Court affirmed the lower courts' decisions that  the “regular-use” exclusion contained in a personal automobile insurance policy is valid to preclude payment of underinsured motorist (“UIM”) benefits to a police officer injured in the course of employment while operating a police vehicle for which the officer did not have the ability to obtain UIM coverage.

In so ruling, the Pennsylvania Supreme Court relied upon the all-American principle that you can't get something for nothing.  In other words, since the police officer did not pay a premium to GEICO for UIM coverage on the police car he was driving at the time of the accident, the officer could not recover UIM benefits for injuries sustained as a result of an accident involving the police vehicle.

The decision by the Supreme Court obviously has a major impact on all first responders, from police officers, EMTs, and firefighters, who may all be driving out there without any UIM coverage under the current status of the law.

The majority opinion in Williams v. GEICO by Justice Orie Melvin can be viewed here.

The concurring opinion by Justice Todd can be viewed here.

The concurring opinion by Justice Baer can be viewed here.

The concurring opinion by Justice Saylor can be viewed here.


I send thanks to Attorney Suzanne Tighe of the Scranton office of Swartz Campbell and Attorney Joseph Hudock of the Pittsburgh office of Summers McDonnell for giving me a heads-up on these decisions.  I also note that Attorney Joseph Hudock was the prevailing defense attorney in the Williams v. GEICO case.