Driscoll v. Travelers Insurance

ROWLEY, Judge: This case involves a claim for work loss benefits under the Pennsylvania No-fault Motor Vehicle Insurance Act (“No-fault Act”), 40 P.S. § 1009.101 et seq. (repealed 1984). The trial court ruled that the claim was time-barred, and granted summary judgment in favor of appellee, The Travelers Insurance Company. Appellant contends that the trial court erred in using a gross work loss calculation, rather than a net work loss calculation, in determining the date on which the statutorially mandated accrued work loss of $15,000 was achieved. Appellant also claims he is entitled to 18% interest on the denied benefits and an award of reasonable attorneys’ fees. We affirm. The facts are not in dispute. On August 16, 1980, appellant was injured while operating his employer’s tractor-trailer in the scope of his employment as a truck driver. At the time, appellant’s gross monthly salary was $2725.90. From August 17, 1980 until November 9, 1982, appellant was completely unable to work. However, appellant was compensated for a portion of his lost wages by his employer under the Pennsylvania Workmen’s Compensation Act, 77 P.S. §§ 1-1603. In addition, on May 2, 1985, appellant was awarded social security disability benefits for the period of — 78 — August 16, 1980 to May, 1983, with the exception of a five-month waiting period. At the time of the accident appellant did not own a car and was not otherwise insured under the No-fault Act. On April 11, 1984, he filed a claim for basic loss benefits with the Pennsylvania Assigned Claims Plan (“Plan”), 40 P.S. § 1009.204(a)(5). The Plan assigned appellant’s claim to appellee, which denied the claim on the ground that it was time-barred. Appellant commenced this action on May 15, 1984 by writ of summons and filed a complaint on January 25, 1985. Appellee filed a motion for summary judgment contending that appellant’s suit had been filed beyond the time allowed by the applicable statute of limitations. The trial court granted appellee’s motion, and this appeal followed. The statute of limitations on actions to recover benefits under the Nó-fault Act states, in pertinent part: (c) Time limitations on actions to recover benefits.— (1) If no-fault benefits have not been paid for loss arising otherwise than from death, an action therefor may be commenced not later than two years after the victim suffers the loss and either knows, or in the exercise of reasonable diligence should have known, that the loss was caused by the accident, or not later than four years after the accident, whichever is earlier. 40 P.S. § 1009.106(c)(1) (emphasis added); see Sachritz v. Pennsylvania National Mutual Casualty Insurance Co., 500 Pa. 167, 455 A.2d 101 (1982). Our Supreme Court has determined that the phrase, “suffers the loss,” in the context of work loss benefits, does not refer to the occurrence of the accident, but to the date the victim suffers work loss. Kamperis v. Nationwide Insurance Co., 503 Pa. 536, 469 A.2d 1382 (1983). The Court in that decision noted that “work loss” is “economic detriment resulting from inability to work and earn a living, e.g., loss of a paycheck. Id., 503 Pa. at 540, 469 A.2d at 1384. The Court further stated that the No-fault Act contemplates a continuing series of losses as paychecks are missed throughout the period that the — 79 — victim is unable to work. Id. In support of its position, the Court cited § 1009.106(a)(1) of the No-fault Act: “ ‘No-fault benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as ... work loss ... is sustained.’ ” Id., 503 Pa. at 540-41, 469 A.2d at 1384 (quoting 40 P.S. § 1009.106(a)(1)). Thus, in construing the statute of limitations for the No-fault Act, the Court concluded that: where as here no-fault benefits have not been paid for loss arising otherwise than from death, and the work loss was known to have been caused by the accident, an action to recover work loss benefits under the Act may be commenced (a) within two years from any time the victim suffers work loss as a result of the accident, ... (b) within two years after the victim’s accrued work loss equals the maximum amount recoverable under the Act for work loss, $15,000, 40 P.S. § 1009.202(b)(2) and (c) not later than four years after the accident. 503 Pa. at 541, 469 A.2d at 1384. It is not disputed that appellant commenced his suit within four years of the accident. However, we must determine whether, for the purpose of § 1009.106(c)(1), appellant commenced the action within two years after his accrued, work loss equaled $15,000, within the meaning of § 1009.106(a)(1). Because of the amounts involved in this case, we are called upon to decide whether the term “accrued work loss,” is to be calculated by net income loss, e.g. gross income minus work loss received from other sources and tax benefits, or gross work loss. To reiterate, appellant was injured on August 16, 1980, but did not commence this action until May 15, 1984. On the basis of foregone gross income of $2,725.90 per month, appellant’s cause of action would have accrued by February 1, 1981. Stipulation of Facts at 6. Thus, the suit would have been time-barred as of February 1, 1983, pursuant to § 1009.106(a)(1), (b). Utilizing a net loss analysis, however, by subtracting workers’ compensation, social security disability and tax benefits, appellant would not have reached the $15,000 threshold until the last week of May, 1984. — 80 — Consequently, appellant contends that the phrase “accrued the loss” refers to his net work loss, whereas appellee argues that “accrued work loss” refers to loss of gross income. In determining whether a gross income or net income approach is mandated, we look to three sources. First, we examine the language of the No-fault Act. Section 1009.-106(c)(1), quoted above, does not specifically refer to the terms “work loss” or “net loss.” It merely refers to “loss.” However, “sections of statutes are not to be isolated from the context in which they arise such that an individual interpretation is accorded one section which does not take into account the related sections of the same statute.” Commonwealth v. Revtai, 516 Pa.Super. 53, 63, 532 A.2d 1, 5 (1987). In the definitions section of the No-fault Act, the term “loss” is defined as “accrued economic detriment resulting from injury arising out of the maintenance or use of a motor vehicle consisting of, and limited to, allowable expense, work loss, replacement services loss, and survivor’s loss.” 40 P.S. § 1009.103 (emphasis added). In the same section, “work loss” is defined as “loss of gross income of a victim, as calculated pursuant to the provisions of section 205 of this act.” Id. (emphasis added). Finally, section 205 states in relevant part: § 1009.205. Work Loss (a) Regularly employed.—The work loss of a victim whose income prior to the injury was realized in regular increments shall be calculated by: (1) determining his probable weekly income by dividing his probable annual income by fifty-two; and (2) multiplying that quantity by the number of work weeks, or fraction thereof, the victim sustains loss of income during the accrual period. (d) Definitions.—As used in this section: “Probable annual income” means, absent a showing that it is or would be some other amount, the following: — 81 — (A) twelve times the monthly gross income earned by the victim from work in the month preceding the month in which the accident resulting in injury occurs ... 40 P.S. § 1009.205 (emphasis added). Thus, a straightforward reading of the No-fault Act leads to the incontrovertible conclusion that the legislature intended to equate “loss,” and thus “work loss,” with “gross income” for purposes of the statute of limitations. For this reason, we can find no justification for appellant’s position that a net income calculation should be used. Second, there exists support for the gross income approach from the Pennsylvania Supreme Court. In Kamperis v. Nationwide Insurance Co., 503 Pa. 536, 469 A.2d 1382 (1983), discussed above, the Pennsylvania Supreme Court was called upon, as here, to address the timeliness of an action to recover work loss benefits under the No-fault Act. In interpreting the term “loss,” as used in § 106(c)(1), the Court applied the definitions of “loss” and “work loss” found in 40 P.S. § 1009.103. The Court found that “[t]he pertinent provision of the Act defines ‘work loss’, in the case of a victim who is not self-employed, as ‘loss of gross income.’ ” Id., 503 Pa. at 540, 469 A.2d at 1384. Thus, for us to hold that the statute of limitations should be calculated under a net income method, would be to directly contravene the Supreme Court’s interpretation of the term “loss.” Third, we look to the panel decision of this Court in Miller v. Prudential Property and Casualty Insurance Co., 344 Pa.Super. 28, 495 A.2d 973 (1985), allocatur denied, in which it was held that for purposes of the statute of limitations, the No-fault Act mandates usage of a gross income analysis.1 While we recognize that the portion of the trial court’s decision which is quoted in Miller contains flawed legal reasoning,2 the holding is sound. — 82 — We are faced, nevertheless, with a conflicting decision by a panel of this Court in Augostine v. Pennsylvania Nat’l Mut. Casualty Ins. Co., 338 Pa.Super. 15, 487 A.2d 828 (1984), allocatur denied. In that case, the victim of an accident sought no-fault benefits from his no-fault insurer. The trial court granted summary judgment in favor of the insurer on the ground that the victim’s claim was filed more than two years after he had suffered the loss. This Court reversed, concluding that the victim’s claim had been timely under the Kamperis rule. Id., 338 Pa.Superior Ct. at 19, 487 A.2d at 830. Justice Roberts, writing for the panel, concluded that “[ejxcusive of workers’ compensation benefits he has received, appellant’s accumulated work loss reached the $15,000 statutory maximum on January 1, 1978. Under Kamperis, this date may be treated as the date on which appellant’s work loss claim accrued.” Id. (emphasis added). The panel in Augostine, without explanation or analysis, subtracted workers’ compensation benefits in determining when the appellant’s accrued work loss reached $15,000 for purposes of the statute of limitations under the No-fault Act. This was clearly error. Thus, to the extent that Augostine is in conflict with Kamperis, our decision today, and the unambiguous provisions of the No-fault Act, it is hereby overruled. We have no doubt that there are compelling reasons why a net loss analysis might be preferable to a gross loss analysis in computing the time of limitation for bringing the action. The loss for which a victim seeks recovery, for example, is a net work loss, as computed pursuant to § 1009.206. However, such a modification is for the legislature to make. In construing any legislative enactment the primary objective of the court is to ascertain and effectuate the intention of the legislature. Borysowski v. State Farm Mutual Automobile Insurance Co., 368 Pa.Super. 399, 534 A.2d 496 (1987); 1 Pa.C.S. § 1921(a). The intention of the legislature is that a gross loss analysis be applied in computing the time period, for statute of limitations purposes. Summary judgment affirmed. — 83 — BROSKY, J., files a dissenting opinion. MONTEMURO, J., files a dissenting opinion in which CIRILLO, President Judge, and McEWEN, J., join. Footnotes [1] We would note that this case followed the Supreme Court’s decision in Kantperis by three years. The panel specifically refers to Kamperis in its decision. The Supreme Court had an opportunity to review Miller, but chose not to grant allocatur. [2] The trial court incorrectly concluded that 40 P.S. § 1009.206 applies only to social security provisions.