Friday, September 28, 2012

PUSL OVERTURNED!!

In its September 28, 2012 decision in the case of Smith v. Rohrbaugh, No. 91 MDA 2010, 2012 Pa. Super. 208 (Pa.Super. Sept. 28, 2012 Stevens, P.J., Bender, J., Panella, J., Donohue, J., Allen, J., Mundy, J., Olsen, J., Ott, J., and Wecht, J.)(Opinion by Ott, J.), the Pennsylvania Superior Court held that its previous decision in the case of Pusl v. Means, 982 A.2d 550 (Pa.Super. 2009) was wrongly decided and therefore overruled.

In its prior decision in the case of Pusl v. Means, the Superior Court basically held that, where a Plaintiff first obtained a UIM recovery in a motor vehicle accident case, the defendant tortfeasor in the third party case was entitled to a credit against the verdict of the UIM amounts already received by the Plaintiff so as to prevent a double recovery in violation of Pennsylvania's Motor Vehicle Financial Responsibility Law.

In this Smith v. Rohrbaugh case, the trial court applied that Pusl UIM credit against a verdict entered against the tortfeasor defendant driver after a trial on the liability side of the case. 

On appeal, the Superior Court noted that the Pusl v. Means decision had been based, in part, on the Superior Court's prior decision in the case of Tannenbaum v. Nationwide Ins. Co., 919 A.2d 267 (Pa.Super. 2007), which decision had since been overruled by the Pennsylvania Supreme Court.  See 992 A.2d 859 (Pa. 2010).

The Smith v. Rohrbaugh court noted that Pusl correctly decided that the MVFRL, 75 Pa.C.S.A. Section 1722, prevents a double recovery of first party benefits.  The Smith v. Rohrbaugh court states, however, that the Pusl decision then equated UIM benefits with first party benefits and, as a result, incorrectly concluded that Section 1722 applied to UIM payments.

Looking at the provisions and definitions noted in the MVFRL, the Smith v. Rohrbaugh court concluded that UIM benefits were not listed among those first party benefits subject to this prohibition against a double recovery.  The court noted that while UIM benefits are usually referred to as first party benefits, since the legislature did not specifically list UIM benefits in this regard in the MVFRL, Pusl was incorrect in its analysis that a credit was due to the tortfeasor defendant for previously paid UIM benefits to a Plaintiff as a means to prevent a double recovery of first party benefits.  To rule otherwise, would represent an impermissible rewriting of the MVFRL.

As such, the Pusl credit no longer exists and it appears that a Plaintiff may now secure UIM benefits prior to proceeding on a claim against the third party tortfeasor on the liability side.

It remains to be seen whether this case will be appealed up to the Pennsylvania Supreme Court and, if so, whether that court will grant allocatur to hear the appeal.  It is noted that the Pennsylvania Supreme Court denied allocatur in the Pusl case when that case appeared at their door.

Anyone wishing to review the Smith v. Rohrbaugh decision may click this LINK.

I send thanks to Attorney Paul Oven of the Moosic, PA office of Dougherty, Leventhal & Price, and Attorney Scott Cooper of the Harrisburg, PA office of Schmidt Kramer for publicizing this decision.

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