Wade Clark Mulcahy LLP

Recently, the Pennsylvania Supreme Court denied allocatur in the case of <a href="http://pdf.wcmlaw.com/pdf/smith1.pdf"><em>Smith v. Rohrbaugh</em></a> wherein the defendant-appellant contended that underinsured motorist (“UIM”) benefits should constitute first-party payments for the purposes of calculating double recovery under 75 Pa. C.S. § 1722. As a result, the Supreme Court implicitly affirmed the intermediate appellate court’s overruling of <em>Pusl v. Means</em> which had previously insulated defendants from jury verdicts less than the benefits received under a plaintiff’s own policy.
In <em>Smith</em>, the plaintiff was rear-ended when the defendant failed to stop her vehicle in time, causing various damages including physical injuries and lost wages. The plaintiff initially filed a claim for UIM benefits against his own automobile policy and settled for $75,000 before instituting a lawsuit against the defendant. Following a jury trial in which the plaintiff was awarded roughly $50,000, however, the defendant filed a motion to mold the verdict to zero in consideration of the UIM benefits received by plaintiff. While the trial court granted the motion, the Pennsylvania Superior Court ultimately declined to equate the UIM benefits to first-party payments.
Specifically, the Superior Court recognized that its previously controlling decision in <em>Pusl v. Means</em> was wrongly decided insofar as § 1722 of the Pennsylvania Code does not apply to UIM benefits. According to the court, § 1722 provides an exhaustive list of statutorily defined benefits that limit further recovery at law. Included among these benefits are “first-party payments” that are not statutorily defined as incorporating UIM benefits despite the courts’ colloquial tendency to use the terms interchangeably. As a result, the Superior Court expressly overruled its precedent in <em>Pusl</em> and thus removed safeguards that traditionally inoculated defendants from judgments not in excess of UIM benefits received.
Although the Superior Court’s decision in <em>Smith</em> was rendered during the latter part of 2012, the Supreme Court’s recent denial of allocatur tacitly affirms the shift below and should caution defendants against relying exclusively on the double recovery rule as a means of limiting liability.
Thanks to law clerk Adam Gomez for his contribution to this post. If you have any questions or comments, please email Paul at <a href="mailto: pclark@wcmlaw.com">pclark@wcmlaw.com</a>