Armour v. Concord Mutual Insurance

PROCEDURAL BACKGROUND

Defendant, Concord Mutual Insurance Company (Concord Mutual), the automobile liability insurance carrier for plaintiff, Patricia C. Armour (Armour), has filed prehminary objections to plaintiffs complaint in equity. By her complaint, plaintiff seeks rehef for payment of lost wages, medical expenses incurred, 18 percent interest thereon, attorney’s fees, as well as an order directing future payment of losses and expenses, plus punitive damages.

Concord Mutual’s prehminary objections are: (a) motion to strike, contending that plaintiff has “a full, complete, and adequate non-statutory [sic] remedy at law based upon the No-Fault Act [Pennsylvania No-fault Motor Vehicle Insurance Act of July 19, 1974, P.L. 489, 40 P.S. §1009.101 et seq.] and the insurance contract with defendant”; and in the alternative, (b) demurrer for alleged failure to state a cause of action for punitive damages under the No-fault Act which, defendant contends, is “the sole and exclusive remedy for the nonpayment of No-Fault Benefits by an insurer, that is, the imposition of attorneys fees and interest at 18% per annum.”1

Plaintiffs complaint in equity contends, in brief summary, that “defendant advised plaintiff that in order to obtain insurance from defendant, she was required to sign a certain paper” and “[r]elying on defendant’s integrity, plaintiff signed a paper *122which attempted to indicate that plaintiff was purchasing ‘Option B’ yet “[pjlaintiff never received an endorsement from defendant or any other person which indicated what ‘Option B’ was in fact.”2 Plaintiff also contends that “[djefendant has in the past engaged in a course of conduct. . . to thwart the intent of the ‘No-Fault Laws of Pennsylvania’ by issuing a majority of automobile policies with ‘Option B’ or other inferior options as part of their policies” and “in an attempt to deceive. . . their policyholder, consistently issued policies. . . without attaching endorsements to said policies.”3

In addition, plaintiff contends that “defendant has not made prompt payments in this and in other matters in a concerted effort to coerce plaintiff and other injured persons to accept lesser sums than are properly due from defendant.”4

DISCUSSION

1. Demurrer

Defendant’s demurrer challenging plaintiff’s claim for punitive damages5 is directed to the question of whether or not the No-fault Act’s provisions *123for attorney’s fees and 18 percent interest provide “the sole and exclusive remedy.” For reasons referred to below, we cannot agree with defendant’s position.

Section 106(a)(1) of the No-fault Act provides for payment of benefits within 30 days “after the receipt by the obligor [insurer] of each submission of. . . proof of. . . loss sustained, ...” after which the provision for interest at 18 percent per annum is triggered as well as a possible claim for “reasonable attorney’s fee” under section 107. Such inducements are consistent with the stated policy of the No-fault Act, “to establish. . . a Statewide system of prompt. . . benefits for motor vehicle accident victims. . . section 102(b). (Emphasis supplied.) Thus, under the No-fault Act, a penalty for late payment of benefits would be imposed even without any fault on the part of the obligor-insurer.

Further, under section 106(a)(2) the obligorinsurer may discharge its obligation “by making direct payment to the supplier or provider of products, services or accommodations,” namely, to third parties, to whom the provisions relating to 18 percent interest and attorney’s fees would also be available.6 Thus to equate the inducements for prompt payment with relief giving rise to punitive *124damages7 is inconsistent with both the stated policy of the No-fault Act as well as the interrelationship of the provisions of the act.

2. Adequate Remedy at Law

Whereas plaintiff voices fears that defendant has refused, and will continue to refuse to pay benefits as they accrue,8 defendant argues in its brief that plaintiff has an adequate remedy at law based upon the insurance contract.9 In this respect, we must agree with defendant.

Upon conclusion of the current litigation, the losing party would be collaterally estopped from contesting issues resolved in this litigation: Davis v. O’Brien, 230 Pa. Superior Ct. 449, 326 A. 2d 511 (1974); absent, of course, change of a material fact in the interim: Moskowitz v. Prudential Insurance Co., 355 Pa. 30, 47 A. 2d 648 (1948). However, if there were a change in material facts the mere fact that the proceedings had been on the equity side of the court would not obviate the need for further legal proceedings.

Also, in passing, it is to be noted that plaintiff has available to her the broad amending provisions of *125Pa.R.C.P. 1033, which would be available into the very midst of trial itself.

Wherefore, there is hereby entered the following

ORDER

And now, January 8, 1979, upon consideration of the preliminary objections (in the nature of a motion to strike and, in the alternative, demurrer) filed by defendant, Concord Mutual Insurance Company, and directed to the complaint in equity filed by plaintiff, Patricia C. Armour, — as well as consideration of the latter’s response thereto, — it is hereby adjudged, ordered and decreed that defendant’s demurrer is dismissed, and defendant’s motion to strike, amended toread as amotion to certify to the law side, is granted and this action is certified to the law side of the court. Defendant shall have leave to file answers within 30 days from date hereof, or such other time as the parties, acting by their counsel, may agree in writing.