Justice McCAFFERY
This case raises the question whether an uninsured driver who is injured in a motor vehicle accident with an insured driver, may sue the insured driver in tort for economic damages. The question highlights a tension in the Motor Vehicle Financial Responsibility Law, ("MVFRL"), 75 Pa.C.S. §§ 1701-1799, and Pennsylvania decisional precedent, as perceived by the United States Court of Appeals for the Third Circuit. On the one hand, Section 1714 of the MVFRL prohibits uninsured drivers from recovering first-party benefits, which include medical and income loss benefits. Id. §§ 1702, 1714. On the other hand, Section 1705 of the MVFRL deems uninsured drivers to have chosen the limited tort alternative, which permits recovery of damages for economic loss sustained in a motor vehicle accident as the consequence of the fault of another person. Id. at § 1705. Economic loss, of course, is commonly understood as being comprised of damages for medical expenses and wage loss. Thus, it may appear as though the MVFRL both prohibits and permits insurance recovery to uninsured drivers for this category of damages or loss, and it is the resolution of this seeming contradiction that we address herein.
The facts underlying this matter are not in dispute. On February 6, 2006, Appellee, Mary Corbin, was driving south on Route 413 in Bristol, Pennsylvania, in her uninsured vehicle, while Appellant, Suresh Khosla, was driving his insured vehicle north on Route 413. As the vehicles approached each other, Appellant turned left onto State Road in front of Appellee. In the resulting motor vehicle accident, Appellee sustained bodily injury. Appellee maintained that the accident was Appellant's fault because she had the right of way through the intersection. Invoking diversity jurisdiction, Appellee sued Appellant in the United States District Court for the Eastern District of Pennsylvania, and sought both economic and non-economic damages.
Appellant filed a motion for partial summary judgment seeking the dismissal of Appellee's claims for economic damages under Section 1714 of the MVFRL because Appellee did not carry motor vehicle liability insurance as required by law. Appellant also sought a declaration that Appellee was precluded from claiming non-economic damages because she was subject to the limited tort option per Section 1705(a)(5). The district court ruled that Appellee was precluded from recovering non-economic damages under Section 1705. Relying, in part, on language set forth by this Court in Swords v. Harleysville Ins. Companies, 584 Pa. 382, 883 A.2d 562, 564 (2005), the district court further predicted that "the Pennsylvania Supreme Court would hold that a plaintiff can recover economic damages from an alleged third-party tortfeasor. A plaintiff would be prohibited, however, from recovering such damages from an insurance company." District Court Memorandum (Slomsky, J.), dated 12/15/08, at 3. The district court certified its ruling on the economic damages issue for immediate appeal, and the Third Circuit Court of Appeals granted Appellant's petition for permission to appeal. Orders, filed 2/9/09 and 3/20/09, respectively.
Upon review, the Third Circuit did not adjudicate the matter; instead, it concluded that the district court's determination raised a significant question as to which it believed there was no controlling decision
Petition for Certification of Question of Law, filed 3/29/10.
We begin our analysis by observing that the MVFRL requires all drivers in Pennsylvania to maintain financial responsibility, which is defined as "the ability to respond in damages for liability" in specified amounts resulting from motor vehicle accidents. 75 Pa.C.S. § 1702. Moreover, the MVFRL provides that "An owner of a currently registered motor vehicle who does not have financial responsibility ... cannot recover
Section 1705 further provides:
75 Pa.C.S. § 1705(d).
In Swords v. Harleysville Ins. Companies, supra, Bernell Swords ("Father") owned a vehicle insured by Pennland Insurance Company ("Pennland"). Swords's son ("Son"), who owned an uninsured vehicle, had an accident while driving Father's vehicle. Son sought to recover first-party benefits pursuant to Father's automobile insurance policy for the medical expenses he incurred. Pennland denied the claim and Father and Son sued Pennland for a declaratory judgment, alleging that Pennland "was statutorily mandated to cover these expenses[.]" Swords, 883 A.2d at 564. Pennland replied that it was not obligated to pay these benefits under Section 1714 because Son owned a registered but uninsured vehicle. Upon review, we agreed with Pennland, holding that "Section 1714 of the MVFRL clearly and unambiguously renders an owner of a currently registered motor vehicle ineligible to recover first party benefits when the owner fails to meet the requirements of financial responsibility as detailed in the MVFRL." Id. at 568. We held that "the MVFRL does not allow owners such as
We stated further, in dicta:
Id. at 569.
The facts underlying Swords are important here because the Swords scenario shows that a fundamental difference exists between a claim for first-party benefits and one for third-party liability damages. In Swords, Son did not sue a
The difference between a claim for first-party benefits and a claim against a third-party for damages has not been recognized consistently in Pennsylvania jurisprudence. Indeed, these separate categories of claims for compensation seem to have been equated and treated as one and the same in several decisions of the Superior Court. For example, in McClung v. Breneman, 700 A.2d 495 (Pa.Super.1997), the appellant, Marilyn McClung, was injured when her uninsured vehicle was struck by an insured vehicle whose driver had failed to properly yield the right-of-way. As a result of the accident, Ms. McClung suffered a fractured right wrist which required a cast for seven weeks, a four-inch cut on her right knee that required fourteen stitches, and a non-displaced fracture to one of her ribs. Id. at 496. Ms. McClung filed a third-party complaint for damages against the insured driver seeking non-economic damages for the injuries she sustained in the automobile accident, as well as reimbursement for her medical bills. Id. The trial court determined that because Ms. McClung had failed to maintain automobile insurance, she was not eligible to recover either non-economic damages or reimbursement for her medical bills, and dismissed the complaint on summary judgment. Id.
On appeal, the Superior Court affirmed, based upon its interpretation of Section 1722 of the MVFRL.
McClung, 700 A.2d at 497.
The McClung panel did not discuss the import or effect of Section 1705, which deems uninsured drivers to have elected the limited tort option and directs that such drivers remain eligible to seek compensation for
In the instant matter, the United States District Court recognized that first-party benefits are distinct from third-party coverage. It framed the issue as "whether the bar against an uninsured motorist recovering first-party benefits set forth in Section 1714 is restricted to a suit by an uninsured motorist against an insurance company as opposed to a suit against an alleged third-party tortfeasor." District Court Memorandum (Slomsky, J.), dated 12/15/08, at 3. The court analyzed McClung, Bryant, and the relevant statutory provisions in light of the decision of
We have thoroughly reviewed the briefs and arguments of both parties and their amici. Moreover, in our order granting the petition of the Third Circuit for certification of a question of law, we invited the Insurance Commissioner of Pennsylvania to file an amicus curiae brief. Corbin v. Kholsa, 607 Pa. 88, 3 A.3d 666 (2010). Counsel for the then—Acting Commissioner and for the Insurance Department accepted our invitation and has filed a brief in this matter which suggests that a plain reading of the relevant provisions of the MVFRL shows no statutory ambiguity, and that claims for first-party benefits and claims for economic damages are clearly separate and distinct claims.
To support our determination that first-party coverage and third-party coverage are distinct, we first look to the structure and plain language of the MVFRL. In subchapter A, the General Assembly has mandated that all owners of currently registered private passenger motor vehicles in Pennsylvania must maintain the ability to
In subchapter B of the MVFRL, the General Assembly has mandated that all motor vehicle insurance policies issued in Pennsylvania must include a first-party medical benefit in the minimum amount of $5000. 75 Pa.C.S. § 1711. Additionally, all insurers must make available for purchase additional first-party medical benefits, income loss benefits, accidental death benefits, funeral benefits, combined benefits, and extraordinary medical benefits. 75 Pa.C.S. 1712. Significantly, there is
Considering the subchapters and sections together, there is no ambiguity. A straightforward reading and analysis shows that, in addition to the potential loss of driving privileges and fines, Pennsylvania attempts to deter motorists from driving without insurance in two ways. First, such motorists are limited in the recovery of non-economic damages by virtue of defaulting to limited tort. Second, such motorists are precluded from making claims for first-party benefits against any policies under which they might have otherwise been eligible for benefits as an insured, a named insured, or the occupant of an insured vehicle. Clearly, Section 1714 precludes uninsured drivers from participating in the first-party benefit system as a sanction or penalty for driving without insurance. This preclusion deprives the uninsured driver of speedy payment of medical and wage loss benefits from any first-party carrier through a direct claim against a policy for no-fault benefits. It does not, however, preclude an uninsured motorist from making a claim for economic damages in tort. Indeed, the MVFRL expressly deems an uninsured motorist to have elected the limited tort option. Thus, the relevant provisions of the MVFRL remove uninsured drivers from any potential participation in the first-party no-fault system, and thrust the uninsured driver into the uncertainty, time and expense required to sue the tortfeasor, establish fault, and recover payment limited to economic damages (and non-economic damages in the event of serious injury) from the tortfeasor's insurance company under the third-party liability provisions of the insured's policy.
In sum, we answer the question posed by the Third Circuit in the negative: 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 coverage. We now expressly abrogate any decisions of the lower courts that have ruled to the contrary.
Accordingly, having answered the certified question, we relinquish jurisdiction.
Justice SAYLOR files a concurring opinion in which Chief Justice CASTILLE and Justice ORIE MELVIN join.
Justice SAYLOR, concurring.
I join the majority opinion. I write separately only to offer the following observations.
By permitting an uninsured motorist to recover damages from within the category of those the uninsured motorist was responsible to insure himself—and, in particular, the $5,000 minimum first-party coverage required for medical benefits, see 75 Pa.C.S. § 1711(a)—the tortfeasor appears to be placed in a worse position, vis-à-vis an uninsured motorist, then he would have been had the plaintiff complied with the law and purchased the required coverage.
That said, and as the majority explains, the MVFRL's distinction between first-party benefits and recovery of economic loss from third parties is plain enough, and I am particularly persuaded by the statute's placement of uninsured drivers in the same class as motorcycle operators, in terms of the availability of first-party benefits. See Majority Opinion, at n. 5 (citing 75 Pa.C.S. § 1714). Thus, while I recognize the incongruity, from a tortfeasor's perspective, in disadvantaging him (or, ultimately, his insurer) on account of a plaintiff's failure to maintain mandatory coverage, this appears to me to be a consequence of the legislative design and a matter inherently within the control of the General Assembly (subject only to constitutional considerations and constraints).
Chief Justice CASTILLE and Justice ORIE MELVIN join this concurring opinion.
75 Pa.C.S. § 1722.
Id. at 5-6.