On March 5, 2009 in George v. CIGNA Group Insurance Company, Judge Vanaskie in the Middle District of Pennsylvania granted the Motion for Summary Judgment of Life Insurance Company of North America (LINA) which sought to offset from its monthly disability payments the amount in wage loss benefits an insured was receiving under its plan after being insured in a non-work related car accident. Joseph George (George) was injured in a car accident in January of 2006 and was covered under a long term disability policy which provided a maximum benefit of $5000 per month. He also had wage loss benefits with his personal motor vehicle insurance carrier Liberty Mutual with a maximum of $1500 per month up to a total maximum of $25,000. He was to receive 60% of his monthly wages (which were $4,705.65) in long term disability which amounted to $2,823. He also received the $1500 in work loss benefits under the Liberty policy.

The disability plan then sought to offset $1500 from the $2,823 it was paying because it alleged the disability plan language provided for an offset of “other income benefits” that an insured is entitled to receive as a result of the accident. The Court finds that the wage loss benefits are within the “other income benefits” identified by the plan and allows the offset to occur. Thus, George will now receive $1,323 in long term disability benefits. Of note, the decision in this case is mainly the result of the long term disability policy language. A different policy language may have allowed for a different result of even an offset off of the maximum amount possible payable per month which was $5,000 instead of the $2,823. This is noted by the Court.

Scott B. Cooper
scooper@schmidtkramer.com
717-232-6300

On March 4, 2009 Judge O’Neill in the Eastern District of Pennsylvania granted Allstate Insurance Company’s Motion for Summary Judgment in Willett v. Allstate Insurance Company where the Estate of an insured was arguing that a claim for underinsured motorist (UIM) benefits was allowed even though the law in the state of Maine, where the decedent’s accident occurred, has a statutory cap on the amount of monies that can be recovered for non-economic damages in a wrongful death action.

David Willett (Willett) was killed in a car accident which occurred in Maine. At the time of the accident he resided in Pennsylvania with his mother and was insured under her Allstate policy which provided for $100,000 in UIM benefits unstacked. The third party had a total amount of coverage (liability and umbrella) of $1,250,000. Pursuant to the laws in Maine the Estate received only the statutory cap of $400,000 for non-economic damages and the total award, with the additional expenses, was $454,249. The Estate pursued the UIM claim in Pennsylvania against Allstate and was providing a full credit for the full $1,250,000. The District Court decision by Judge O’Neill holds that Allstate is not required to make any UIM payment because the application of the statutory cap in Maine precluded the UIM claim. He finds that the Pennsylvania Supreme Court decision in Cipolla v. Shaposka, 267 A.2d 854 (Pa. 1970) is controlling and on point. He distinguishes the Willett situation from the Pennsylvania Supreme Court decision in Kmonk-Sullivan v. State Farm Mutual Auto. Ins. Co., 788 A.2d 955 (Pa. 2001) because he writes that the Kmonk case (1) involved Pennsylvania accidents and not one from another state, (2) no party argued another state law was applicable, (3) there was no choice of law issue in Kmonk and (4) the Court in Kmonk did not cite, discuss or overrule Cipolla.

He holds that the statutory cap under the laws in Maine make the estate NOT “legally entitled” to recover UIM benefits and thus, no UIM monies are to be paid.

Scott B. Cooper
scooper@schmidtkramer.com
717-232-6300

Below is a link to the opinion from the Pennsylvania Superior Court on February 17, 2009 in Kiak v. Crown Equipment Corp., ___ A.2d ____, 2009 PA Super 32 (February 17, 2009) where the court reverses the trial court’s grant of Summary Judgment in favor of the Defendant. The Superior Court finds that the products liability case is not controlled by Arnoldy v. Forklift L.P., 927 A.2d 257 (Pa. Super. 2007)(holding state tort law preempted by OSHA regulation which burdens end user with selection of safety features and employer chose none), and the action was not precluded by federal preemption.

Mr. Kiak was injured by a forklift manufactured by Crown Equipment Corporation (“Crown”). He was pinned by the forklift, because he was unaware of its approach despite the presence of a strobe light, rearview mirrors, and a back up alarm. Unlike Arnoldy, Kiak alleged that the safety features selected by his employer were defective. The defect was the back up alarm would discontinue when the forklift was “coasting” backwards. The coasting was relevant, because the warehouse in which it was used included a guide wire steering system which allowed the operator to gain speed with the throttle engaged and then coast backwards remaining on course.

The question in this case is whether the audible back up alarm was defective when it discontinued sounding while the forklift coasted backwards, rather than whether the appropriate safety feature was actually included on the forklift by the manufacturer. The court ruled that the former is a question of state tort law, and the latter, as in Arnoldy, was a question preempted by OSHA’s federal regulations. Here the action was allowed to continue, and the plaintiff would need to prove, “Crown sold a defective product, the defect existed when the product left Crown’s hands, and the defect caused the plaintiff’s injuries.” Kiak, page 8 (citing Hadar v. AVCO Corp., 886 A.2d 225, 228 (Pa. Super. 2005)); Restatement 2d Torts § 402A.

http://www.superior.court.state.pa.us/opinions/A26013_08.pdf

D. Joseph Chapman

Attorney at Law