In Corbin vs. Khosla, an opinion is authored by Justice McCaffery, the Pennsylvania Supreme Court has addressed the issue of whether an uninsured driver, injured in a motor vehicle accident with an insured driver, can then sue the insured driver in tort for economic damages, highlighting the tension in the Pennsylvania Motor Vehicle Financial Responsibility Law in decisional precedence that had been rendered by the U.S. Court of Appeals for the Third Circuit.
On the one hand, Section 1714 of the MVFRL prohibits uninsured drivers from recovering first-party benefits, inclusive of both medical and income loss benefits.
However, Section 1705 of the MVFRL deems uninsured drivers to have chosen the limited tort alternative, which permits the recovery of damages for economic losses, sustained in motor vehicle accidents caused by third parties.
Economic losses are, of course, commonly understood to be damages for both medical expenses and wage loss, often characterized as “special damages”.
The tension between Sections 1714 and 1705 would appear to both prohibit and permit insurance recoveries to uninsured drivers, establishing a seeming contradiction, resolved by the Supreme Court.
The facts in Corbin were not in dispute.
Corbin was injured in a February 6, 2006 motor vehicle accident. Corbin was injured in the accident.
Invoking diversity jurisdiction, Corbin sued the other driver, Khosla, in the United States District Court for the Eastern District of Pennsylvania, seeking both economic and non-economic damages.
In Federal Court, the defendant sought partial summary judgment, seeking to dismiss the claims for economic damage, in reliance upon Section 1714 of the MVFRL as the Plaintiff did not carry motor vehicle liability insurance coverage, as required by law.
However, the Federal District Court ruled in favor of the Plaintiff, holding that she was precluded from recovering non-economic damages, under Section 1705, but ruling that she was not precluded from recovering economic damages, under Section 1714, predicting that the Pennsylvania Supreme Court would permit a Plaintiff to recover economic damages from a third party tortfeasor, even if the Plaintiff would be prohibited from recovering those damages from an insurance company.
The Federal District Court’s rulings were appealed to the Third Circuit which concluded that theFederal District Court’s determination raised a significant State Law question, for which no controlling decisions had been rendered by the Pennsylvania Supreme Court. For that reason, the Third Circuit petitioned the Pennsylvania Supreme Court, to certify the following question of law to be addressed:
Does Section 1714 of the Motor Vehicle Financial Responsibility Law preclude an uninsured motorist from recovering tort damages for economic losses from an alleged third-party tortfeasor. See Swords vs. Harleysville Insurance Company., 883A.2d 562 (Pa. 2005); Bryant vs. Reddy, 793 A.2d 926 (Pa. Super. 2002), allocatur denied, 805 A.2d 518 (Pa. 2002); McClung vs. Breneman, 700 A.2d 495 (Pa. Super. 1997).
Addressing this question of Law, the Pennsylvania Supreme Court noted that there were no clear decisions inPennsylvaniajurisdiction, distinguishing a claim for first party benefits from a claim for third-party damages. The Supreme Court noted that several decisions by the Superior Court seemed to treat the categories of damages as one, rather than distinguishing their independent root bases.
Tracking the Federal District Court’s disposition of this issue, the Supreme Court agreed with the Federal District Court’s analysis in its decisions in McClung, Bryant and in Swords, in terms of the Pennsylvania Supreme Court agreeing with the Federal District Court prediction that the Supreme Court would hold the Section 1714 bars recovery, by uninsured drivers, for first-party benefits, but permits recovery, for uninsured drivers, of economic damages under Section 1705.
In summary, the Pennsylvania Supreme Court has held, in Corbin, that “Section 1714 of the MVFRL does not preclude an uninsured motorist from recovering tort damages for economic loss from an alleged third-party tortfeasor under the tortfeasor’s liability recovery.”
This holding expressly abrogates any decisions by lower Pennsylvania Courts ruling to the contrary.
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By Kevin L. Connors
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