Wagner v. National Indemnity Co.

KAUFFMAN, Justice,

dissenting.

The majority asserts that an employee injured in the course of his employment while occupying his employer’s motor vehicle cannot collect no-fault benefits from his employer’s no-fault carrier because of the exclusivity of workmen’s compensation as a remedy for the employer’s liability.1 But, despite the majority’s assumption to the contrary, liability of the employer is not the issue here. I would grant recovery on the basis of contract rights which accrue to the employee without regard to the interposition of the employer’s liability.

In recognition of the fact that certain rights flowed directly to employees and others from the employer’s contract with his no-fault carrier without regard to liability of the employer, the majority opinion concedes that the employee could have collected under his employer’s no-fault coverage had he been driving a company vehicle while outside the scope of employment.2

*173The contract guarantees that if certain circumstances arise the insurer will make payment, not on a theory of the employer’s liability but simply under the terms of the contract. An injury occurring in or by the employer’s vehicle triggers the insurance company’s duty to pay. The employer is not indemnified for “liability” arising out of any theory of the common law. A contract has been drawn to protect, regardless of the employer’s liability, the interests of a class of persons-i. e. “motor vehicle accident victims and the survivors of deceased victims” 3-which obviously includes employees whether acting in the course of employment or not.

The majority finds that “an insurer provides coverage for an employer’s possible liability and has no independent basis for liability on its own part.” (P. 1067) This is a theory of indemnification which is totally inconsistent with the law as explicated in the rest of the opinion. If the employee could recover from his employer’s no-fault carrier while using his employer’s vehicle for private, non-work related reasons (p. 1068), and if the employee’s wife could recover even if the vehicle were being used during the course of his employment (p. 1066), the basis for recovery clearly would not be the liability of the employer, but a direct and independent duty to pay contractually undertaken by the insurance company when it provided coverage.

The majority’s logic appears to be as follows: The relationship of the no-fault carrier to the employer is one of indemnification; the statute restricts the right of recovery against the employer to workmen’s compensation; if the employer cannot have any other liability, then there can be nothing to indemnify; thus the insurance company cannot *174have an obligation to pay. The indemnification theory is essential to bootstrap the rest of the argument. There is, however, no language in the no-fault statute to indicate that the indemnification theory is correct. And its application here suggests an artificial construction of the Workmen’s Compensation Act which I cannot believe was intended by the Legislature.

Moreover, the majority’s reasoning would completely thwart the purpose of no-fault insurance if taken to its logical conclusion. If I give an uninsured person permission to drive my car and that person falls asleep at the wheel and is injured when the car runs off the road, he can recover from my no-fault carrier, despite the fact that he would have no cause of action against me. Yet, under the theory of the majority, if consistently applied, since the insurance company’s liability would be predicated solely on my liability, the driver’s claim against the carrier would fail.4

In Mathis v. Interstate Motor Freight System, 408 Mich. 164, 289 N.W.2d 708 (1980), the Supreme Court of Michigan was faced with questions identical to those now before us. There, too, it was argued that recovery under the Michigan No-Fault Insurance Act (M.C.L. §§ 500.3101-500.3179) was restricted by the language of the Michigan Worker’s Disability Compensation Act (M.C.L. §§ 418.101-418.941). In rejecting this analysis, the Court held:

*175.... The exclusive remedy provision applies to actions against the employer. Here the cause of action is directly against the no-fault insurance carrier. Because the cause of action is not against the employer, the exclusive remedy provision of the WDCA is not applicable and is not a bar to the employee’s cause of action.5

The case relied upon by the Court below, Turner v. Southeastern Pennsylvania Transit Authority (“SEPTA”), 256 Pa. Super. 43, 389 A.2d 591 (1978), is quoted extensively in the majority opinion to support its conclusion that Sections 204 and 206 of the No-Fault Act6 do not create an exception to Section 303 of the Workmen’s Compensation Act. The Superior Court’s discussion in Turner, however, is essentially meaningless with regard to disposition of the issue before us.

Turner, as cited in the majority opinion, indicates that Section 303 would control if it were irreconcilable with the No-Fault Act. Further, it says that if an exception were created by the No-Fault Act, it would have been incorporated into the language of Section 303. The simplest and, to me, most persuasive view of the application of the No-Fault Act when workmen’s compensation is available, is that the Legislature did not make itself more explicit because it did not regard the pertinent sections as “irreconcilable”. Thus it was unnecessary for one act to create an exception to the other.7

Turner suggests that Section 204 was intended to “complement” the Workmen’s Compensation Act rather than *176supplant it. 256 Pa.Super. 47, 389 A.2d 593. I agree. But I do not see how the application of no-fault in the present case could in any way vitiate the operation of the Workmen’s Compensation Act. To the contrary-what the Superior Court in Turner and the majority here conclude necessarily causes the Workmen’s Compensation Act to supplant Section 204.8

The Turner Court created an otherwise non-existent problem out of needless speculation about possible conflict between the statutes. Similarly, in the instant case, the majority’s effort to juxtapose Sections 204 and 206 of the Pennsylvania No-Fault Act with Section 303 of the Workmen’s Compensation Act is superfluous. The plain meaning of Section 206 is consistent with Section 303.9

Section 303 deals only with the employer’s liability to the employee for work-related injuries. It substitutes the statutory remedy for all common law remedies. It nowhere suggests that by its operation a party with a contractual relationship to the employer (a relationship which has as its object, inter alia, the protection of employees) is suddenly freed from its obligations on that contract. Nor has the majority opinion indicated that such an exclusion appeared in the no-fault contract or anywhere else.

The same conclusion was reached by the New York Court of Appeals in Ryder Truck Lines, Inc. v. Antonio Maiorano, *17744 N.Y.2d 364, 370, 405 N.Y.S.2d 666, 670, 376 N.E.2d 1311, 1315 (1978):

We find nothing in the no-fault insurance law itself, or in the legislative circumstances surrounding its adoption, which suggest that with the general replacement of former tort liability by first-party benefits (to the extent of basic economic loss as defined by the new statute) it was intended that the benefits of the new program should not be available to employees injured in the course of their employment. Indeed it is argued that the implications of the no-fault law are to the contrary; basic economic loss is expressly defined to exclude (and thus to be in addition to) workmen’s compensation benefits (Insurance Law, § 671, subd. 2, par. [b]).

The New York Court went on to say, “we do not find evidence of legislative integration of the new no-fault program with the existing workmen’s compensation program. ... Rather the evidence is that both programs are self standing... ”10

The majority here makes a needless effort to adjudicate statutory matters which the New York and Michigan courts correctly dismissed as uncognizable.11

*178I would hold that an employee who suffers accidental bodily injury in the course of his employment while occupying his employer’s motor vehicle is entitled to collect no-fault benefits from his employer’s no-fault carrier, and is not limited to workmen’s compensation as his sole remedy. I believe that the holding of the majority barring recovery is based upon an unnecessarily strained interpretation of the No-Fault Act and the Workmen’s Compensation Act. Accordingly, I would reverse and remand to the Court of Common Pleas for determination of appellant’s survivor’s benefits.

LARSEN, J., joins in this dissenting opinion.

. Section 303 of the Workmen’s Compensation Act (Act of June 2, 1915, P.L. 736, Art. I, § 101 et seq., as amended, 77 P.S. § 1 et seq.) (77 P.S. § 481).

. The majority, referring to coverage of the employee’s family, further suggests that “the no-fault carrier could also be liable when the *173vehicle is being used for work related purposes.” (P. 1066). “Thus,” continues the majority, “while an employee could only recover under workmen’s compensation where the accident occurred during the course of the employee’s employment, a spouse or relative injured while in the employer’s vehicle could recover from the employer’s no-fault carrier.” (P. 1066).

. No-Fault Motor Vehicle Insurance Act, Act of July 19, 1974, P.L. 489, No. 176, Art. I, § 102; 40 P.S. § 1009.102 (Supp. 1979-80).

. Appellant argued that should a no-fault carrier be allowed to assert the Section 303 immunity, an insurer providing life insurance benefits could likewise avoid liability under Section 303. The majority summarily dismissed this argument by stating the following non-sequitur: “Appellant overlooks the fact that employers must provide no-fault coverage and workmen’s compensation coverage. Any fringe benefits, such as life insurance or disability insurance, are voluntarily bargained for and have an independent contractual vitality. The employer or his insurance carrier for these fringe benefits would be, in our view, precluded from asserting the Section 303 immunity”. (P. 1067) The “voluntary” aspect of life insurance or disability insurance benefits is totally irrelevant to the issue of liability under Section 303. That the employer has a statutory mandate to provide no-fault coverage on his vehicles has nothing to do with immunity under Section 303, nor is it an element of the majority’s theory barring recovery under no-fault in the instant case.

. 289 N.W.2d at 714. The majority here concedes that, “Section 303 of the Workmen’s Compensation Act precludes recovery from the employer only.” (P. 1067) (Emphasis supplied). This necessarily follows from the language of Section 303 which expressly limits the exclusivity of remedy to “[t]he liability of the employer”. (Emphasis supplied).

. 40 P.S. § 1009.204, § 1009.206 (see note 3, supra).

. The Michigan Court in Mathis, supra, found it unnecessary to adjudicate whether one act constituted an exception to the other by noting:

The Worker’s Disability Compensation Act (WDCA) and the No-Fault Insurance Act are complete and self-contained legislative schemes addressing discrete problems____ 289 N.W.2d at 712.

. The Turner Court’s confusion about the meaning of these statutes becomes apparent from the majority’s own citation (p. 1066). A key aspect of Turner’s reasoning with respect to the applicability of the No-Fault Act (Turner, supra, 256 Pa.Super. at 48, 389 A.2d 593)-

"... Section 206 does not apply to a situation such as that presented in the instant case-i. e., when the employee is driving the employer’s vehicle____” (Emphasis in original)-

was overturned (with the approval of the majority in the present case) by Brunelli v. Farelly Brothers, 266 Pa.Super. 23, 402 A.2d 1058 (1979) (p. 1067).

. Section 206 provides: “... [A]ll benefits ... an individual receives ... from workmen’s compensation ... shall be subtracted from loss in calculating net loss”. Appellant here sought only the difference between workmen’s compensation benefits and no-fault benefits.

. 44 N.Y.2d at 372, 405 N.Y.S.2d at 671, 376 N.E.2d at 1316.

. Turner v. SEPTA, supra, did, however, present a matter which requires additional scrutiny. When an employer is self-insured, as in Turner, the no-fault claim must be prosecuted against the very party whose liability is expressly limited to Workmen’s Compensation by Section 303. It would be anomalous to allow a cause of action under no-fault to stand or fall on the arbitrary basis of the carrier’s identity. This problem was addressed in both Mathis, supra, and Ryder, supra. The Michigan Court reasoned:

An employee may have ties with an employer other than the employer-employee relationship. They may be landlord and tenant; trustee and beneficiary; vendor and vendee and so on. We look to the laws governing the particular relationship involved to determine rights and obligations of the parties. The fact that the parties are also employer-employee does not automatically trigger the operation of the exclusive remedy provision of the WDCA. The exclusive remedy provision applies only to employers where conditions of liability under the WDCA pertain.
The injured person in Mathis is seeking no-fault benefits from an insurer who happens to be his employer. Any liability to pay *178no-fault benefits is based on the status of being an insurer under the No-Fault Act. 289 N.W.2d at 714-715.

The New York Court summarily stated the same conclusion. 44 N.Y.2d at 372, 405 N.Y.S.2d at 670, 376 N.E.2d at 1316. The short answer, then, is that there can be no escape from a duty to pay on a no-fault policy by the fortuitous coincidence of being both employer and insurer.