Torres v. Pennsylvania Financial Responsibility Assigned Claims Plan

BECK, Judge:

Plaintiff-appellant Anselmo Torres appeals the order granting summary judgment in favor of the appellees, Pennsylvania Financial Responsibility Assigned Claims Plan (hereinafter “the Plan”) and Travelers Insurance Company (hereinafter “Travelers”). We affirm.

The facts of record are not in dispute. On April 15, 1989, Torres was walking across 16th and Wallace Streets in Philadelphia when he was struck by a vehicle owned by Harold Eugene Boyd and operated by Jose Vasquez. Torres’s investigation revealed that Boyd and Vasquez were uninsured motorists. Because of Torres’s own uninsured status, he filed a claim with the Plan’s assignee, Travelers, for benefits under Pennsylvania’s Motor Vehicle Financial Responsibility Law (hereinafter “MVFRL”).1

Appellant also filed an action against the alleged tortfeasors, Boyd and Vasquez, but not until several months after the applicable statute of limitations had run.2 Boyd and Vasquez could not be found and served in the usual manner, and appellant complied with alternate service requirements authorized by the court. Nonetheless, Boyd and Vasquez have failed to enter an appearance or raise any affirmative defenses to the lawsuit.

*328Appellees refused to provide coverage to appellant on the basis that appellant “fail[ed] to protect the[ir] subrogation rights” by failing to file a timely savings action against Boyd and Vasquez.3 See Appellees’ Answer and New Matter, Paragraphs 19 and 30. Appellees then filed a motion for summary judgment reiterating their defense that appellant failed to preserve the Plan’s subrogation rights rendering Torres ineligible for the Plan’s benefits. The trial court agreed and granted the appellees’ motion for summary judgment. This appeal followed.

In examining the propriety of the grant of summary judgment, this court is required to determine whether there are genuine issues of triable fact, or whether the moving party is entitled to judgment as a matter of law. Pa.R.Civ.P. 1035; Bowman v. Sears, Roebuck & Co., 245 Pa.Super. 530, 369 A.2d 754, 756 (1976). The sole issue posited for our review is whether Torres’s failure to file a timely savings action against the tortfeasors Boyd and Vasquez resulted in the impairment of the Plan’s subrogation rights, such that Torres is barred from recovering benefits under the Plan.

We conclude that Dyer v. The Travelers, 392 Pa.Super. 202, 572 A.2d 762 (1990) and Melendez v. Penna. Assigned Claims Plan, 384 Pa.Super. 48, 557 A.2d 767 (1989) dictate the result in this case, and we therefore affirm the trial court’s grant of summary judgment in favor of the appellees.

It is well established that the appellees’ right to subrogation against the actual tortfeasors, Boyd and Vasquez, is no greater than any right of recovery held by plaintiff-appellant Torres. Insurance Co. of N. America v. Carnahan, 446 Pa. 48, 284 A.2d 728 (1971) (statute of limitations runs against subrogee insurer as it does against the plaintiff-insured). *329Torres failed to file a timely action against the tortfeasors, and instead has attempted to collect insurance benefits from the appellees through the Plan. There is no doubt that Torres’s late action has substantially impaired the appellees’ ability to maintain a successful subrogation action. Id. at 51, 284 A.2d at 729.

Torres argues, however, that because the defense of the statute of limitations is waivable, the trial court ought not to have presumed that the tortfeasors will raise the defense, when and if they enter an appearance. In other words, the mere inchoate availability of a waivable statute of limitations defense does not mean that the Plan’s subrogation right has been “extinguished.” As a result, Torres argues that he should be permitted to pursue recovery of benefits from the appellees.

However, our cases establish that we need not find literal “extinguishment” of the Plan’s subrogation right in order to preclude recovery by a plaintiff. Instead, the relevant inquiry is whether the plaintiffs action or inaction has so impaired or prejudiced the subrogation right as to effectively extinguish it. Melendez, supra; Dyer, supra.

In Melendez, the plaintiff was foreclosed from recovering from the Plan after she compromised her claim against the tortfeasors through settlement and release, thereby effectively eliminating the possibility of success of any subrogation action the Plan might have pursued. In Dyer, the plaintiff also was prohibited from recovery against the Plan, because she had participated in an arbitration and obtained an award against the tortfeasors without the knowledge or consent of the Plan. In each of these cases, the plaintiff had failed to protect the Plan’s subrogation right, contrary to the policy goal of allowing the Plan “to decide how to proceed against a tortfeasor in order to best preserve the funds in the Plan.” Dyer, 392 Pa.Super at 206, 572 A.2d at 764. See also Melendez, 384 Pa.Super at 50, 557 A.2d at 768. There can be no question that, by failing to file a timely savings action against Boyd and *330Vasquez, appellant Torres has so prejudiced the Plan’s right of subrogation as to effectively extinguish it.

Nevertheless, Torres claims that because the statute of limitations defense at issue in this case is waivable, Melendez and Dyer are not applicable. We note that the defenses of arbitration and award (in Dyer) and release (in Melendez) also are waivable. Pa.R.Civ.P. 1030, 1032. See Ruhe v. Kroger Co., 425 Pa. 213, 228 A.2d 750 (1967) (defense of release must be pleaded in new matter); Samuel J. Marranca Gen. Con. Co. v. Amerimar Cherry Hill Lim. Partnership, 416 Pa.Super. 45, 610 A.2d 499 (1992) (defense of arbitration and award must be pleaded in new matter or waived). The waivability of these defenses did not affect this court’s analysis of the viability of the Plan’s subrogation right.4 Therefore, in accordance with this court’s previous holdings in Melendez and Dyer, we affirm the trial court’s grant of summary judgment.

Order affirmed.

POPOVICH, J., files a Dissenting Opinion.

. Travelers is the assigned insurer under the Plan. Travelers evaluates and handles assigned applications for benefits in accordance with the MVFRL. See Appellees' Answer and New Matter, Paragraph 3, citing 75 Pa.C.S. § 1701 et seq.

. The statute of limitations in this case is two years. 42 Pa.C.S. § 5524. With Torres’s injury arising on April 15, 1989, his instituting suit against Boyd and Vasquez in September 1991 clearly exceeds the period within which to bring a timely action. Appellant filed the suit against the tortfeasors only after notification by appellees that appellees would not pay his claim.

. Travelers’ right of subrogation, as the Plan’s assignee, is authorized by statute:

The Assigned Claims Plan or its assignee is entitled to recover, in accordance with the tort liability law of the Commonwealth, reimbursement for benefits or coverages paid, loss adjustment costs and any other sums paid to an eligible claimant under this subchapter.

75 Pa.C.S. § 1756 (Supp.1993).

. Moreover, Dash v. Wilap Corp., 343 Pa.Super. 584, 495 A.2d 950 (1985) and Sykes v. Southeastern Penna. Trans. Auth., 225 Pa.Super. 69, 310 A.2d 277 (1973), the cases relied upon by the dissent for the proposition that the trial court ought not to have raised the statute of limitations defense prematurely, are inapplicable to our facts. Both Dash and Sykes involved the amendment of complaints after the applicable statute of limitations had run on the proposed amended cause of action. We held in these cases that the statute of limitations, a waivable’defense, would not be presumptively applied to prohibit the amendments. In other words, the trial court should not act as the defendant-tortfeasors’ advocate by proffering a defense on their behalf. Dash, 343 Pa.Super. at 596, 495 A.2d at 956.

Although this reasoning is correct within the context of Dash and Sykes, it does not apply to the trial court’s actions in this case. The operative issue here is whether the Plan's subrogation right has been impaired by the plaintiff's actions; the availability of the statute of limitations defense, as the availability of the arbitration/award and release defenses in Melendez and Dyer, surely will prejudice the Plan in its pursuit of subrogation.

Nor would the entry of default judgment against Boyd and Vasquez cure the prejudice against the appellees under the circumstances of this case. The late filing of the lawsuit would provide a basis for opening the judgment, thereby allowing the tortfeasors to assert their affirmative defenses to the action.