Travelers Ins. Co. v. Obusek ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
12-29-1995
Travelers Ins. Co. v. Obusek
Precedential or Non-Precedential:
Docket 94-3666
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 94-3666
TRAVELERS INSURANCE COMPANY
Appellant
v.
LISA ANN OBUSEK
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(Civil No. 88-1913)
Argued June 12, 1995
Before: STAPLETON, McKEE, Circuit Judges,
and SEITZ, Senior Circuit Judge
(Opinion filed: December 29, l995)
A. Richard Feldman, Esquire (Argued)
Jennifer L. Hoagland, Esquire
BAZELON & LESS
1515 Market Street, 7th Floor
Philadelphia, PA 19102-1907
Cheryl Esposito, Esquire
MARSHALL, DENNEHEY, WARNER,
COLEMAN & GOGGIN
USX Tower, 600 Grant Street
Pittsburgh, PA 15264
Attorneys for Appellant
Edward G. Shoemaker, Esquire (ARGUED)
408 Grant Building
1
Pittsburgh, PA 15219
Attorney for Appellee
OPINION OF THE COURT
McKEE, Circuit Judge
We are asked to decide if attendant care services are an
"allowable expense" under Section 103 of the Pennsylvania No-
Fault Motor Vehicle Insurance Act, 40 Pa. Con. Stats. Ann.
§1009.103 (repealed) ("No-Fault Act") when provided by
accredited, non-family, medical care providers.0 We must also
decide if, under the circumstances of this case, this question is
ripe for adjudication.
For the reasons that follow, we answer both inquiries in the
affirmative. While we thus agree with the district court’s
disposition of the two primary issues before it, we also conclude
that the district court’s judgment fails to clearly adjudicate
the issues that the parties are entitled to have resolved. We
will therefore reverse the district court’s judgment and will
0
The No-Fault Act, 40 Pa. Con. Stats. Ann. § 1009.101 et seq.,
was repealed on October 1, 1984, by the Motor Vehicle Financial
Responsibility Law, 75 Pa. Con. Stats. Ann. § 1701 et seq.
However, the terms of the No-Fault Act control the obligations of
insurers of victims of serious accidents which occurred while the
Act was in effect and who still suffer from injuries received in
those accidents. Drake v. Pennsylvania National Mutual Casualty
Ins. Co., 601 A.2d 797, 798 (Pa. 1992).
2
remand for further findings of fact and the entry of an
unambiguous judgment.
I. FACTUAL BACKGROUND
On October 19, 1979, at the age of 18, Lisa Ann Obusek
suffered a severe spinal cord injury while riding as a passenger
in an uninsured motor vehicle.0 Lisa's spinal cord was severed
at approximately the C5-C6 level causing her irreversible
neurological injury. She was initially treated at Mercy Hospital
and later transferred to St. Francis General Hospital in
Pittsburgh, Pennsylvania, where she underwent a rehabilitation
program. She was eventually discharged from St. Francis, and has
been living at home with her parents ever since.
Lisa can move her head and neck but has no use of her legs
and only limited movement of her arms. She has no grip in her
hands but is able to feed herself when equipped with a cuff and
splint. She has no control over her bowels or bladder and
urinates through a catheter. Her disabilities are potentially
life-threatening if not properly managed. Lisa's speech and
intellectual capacities were not affected by the accident.
A. Required Care
In a medical report dated September 21, 1989, James McCague,
M.D., set forth the extent of Lisa's physical limitations, and
noted that those limitations impaired her respiratory functions
thereby making her susceptible to choking. The report concluded
that this, along with her susceptibility to life threatening
0
In order to avoid confusion between Lisa Ann Obusek and her
mother, we will refer to Lisa Ann as "Lisa".
3
infection from bed sores, meant that she needed frequent
monitoring and inspection.
In July of 1988, Erie Independence House, ("EIH")0
performed a Health Care Evaluation of Lisa to determine what
products, services and accommodations she needed to achieve
maximum feasible physical, psychological, social and vocational
rehabilitation. The resulting Report was based upon a five day
evaluation at EIH, a review of Lisa's medical records, and an on-
site evaluation of her home. The EIH Evaluation made specific
recommendations as to those things EIH felt essential for Lisa's
rehabilitation and care, including functional equipment, housing
modification and adaptations, psychological counseling, physical
therapy and attendant care services. The services and
accommodations EIH recommended included a regimen of specific
exercises and hygiene. It also recommended that "Miss Obusek
should . . .receive Attendant Care for all activities of daily
living." EIH Evaluation at 7. EIH defined attendant care
services as including, but not limited to, "bowel routines;
bladder routines; bathing; dressing; weight shifts; transfers;
hygiene care; range of motion; house cleaning; exercise routines;
leisure time activities; and wheelchair maintenance, etc." Id.EIH recommended that the attendant care services be provided on a
twenty-four hour a day basis. Id. EIH also recommended that
Lisa:
1. [r]eceive 68.67 hours weekly . . . of
direct personal care assistance, with the
understanding that more hours may be
necessary if she should become ill.
2. [r]eceive 21.64 hours of ancillary
assistance weekly, to maintain her living
environment.
3. [h]ave an attendant available to her for
the remaining 77.69 hours weekly, after
personal care and ancillary services are
completed. These hours are necessary to
avoid problems, and give assistance
throughout the week should problems, based on
her physical disability occur.
Id. at 6.
0
Erie Independence House is a facility which offers attendant
care and support services to physically disabled,
mentally alert people.
4
EIH defines an attendant or personal assistant as a person
"who facilitates physical or social independency (sic) by doing
chores required by the disabled person." Id. at Attachment #10,
p. 100, quoting GEORGE NELSON WRIGHT, PH.D., TOTAL REHABILITATION at 74
(1st Ed. 1980). An attendant "is a paid employee who provides
regular, in-home personal care. . . . An attendant is often the
most important person in the life of a disabled individual.
Attendant care. . . reduces the necessity of institutionalizing
disabled persons." Id. at 101, quoting TOTAL REHABILITATION at 746-
747.0
Staff members of EIH testified that the daily attendant care
of quadriplegics can be, and usually is, provided by unskilled
lay persons. The only requirements for the job are a high school
diploma, a driver's license and having attained the age of 18. In
1989, EIH paid attendant care providers at the rate of $5.00 per
hour.
Gilbert Brenes, M.D., Director of the Spinal Cord Injury
Program at Harmarville Rehabilitation Center in Pittsburgh, and
the rehabilitation expert hired by Travelers, examined Lisa and
concluded that she did not require the services of a registered
or licensed practical nurse to provide the attendant care she
needs. He did, however, conclude that Lisa needed 16 hours a day
of attendant care. Additionally, he recommended that a licensed
0
See also Pennsylvania Attendant Care Services Act, 65 Pa. Con.
Stats. Ann. § 305 et seq. ("Attendant care services [are]. .
.those basic and ancillary services which enable an eligible
individual to live in his home and community rather than in an
institution and to carry out functions of daily living, self-care
and mobility. . . .")
5
practical nurse "be available to change the Foley catheter, to
supervise the attendant care so that is done effectively or at
any time that [Lisa] runs into respiratory, skin, autonomic or GU
complications.' Joint Appendix at 473a.
Lisa's mother, Anna Rose Obusek, is a high school graduate
who worked as a part-time bookkeeper before Lisa's accident. She
is not a registered nurse or a licensed practical nurse and she
does not have a license or certification in either medical or
rehabilitative care. However, hospital staff advised Mrs. Obusek
on Lisa's care in the months immediately following Lisa's
accident, and Mrs. Obusek has provided the attendant care and
services Lisa has needed to survive since then. This care
includes preparation of meals; setting-up of eating utensils;
cleaning-up after meals, assisting with drinking and taking
medication; transferring Lisa between bed and wheelchair;
dressing and undressing; assisting with Lisa's personal hygiene
and grooming; changing, emptying and cleaning the urine bags;
bowel stimulation; range-of-motion exercises; changing and
sterilizing the Foley catheter; cleaning the bedroom; assisting
in the use of exercise equipment; turning Lisa in bed at night;
doing laundry; and providing maintenance of wheelchairs.
B. Procedural History
Neither Lisa, nor the driver of the car she was riding in
had automobile insurance at the time of the accident. Therefore,
Lisa filed an application for no-fault benefits with
Pennsylvania's Assigned Claims Plan. The Assigned Claims Plan is
6
an entity created pursuant to section 108 of the No-Fault Act, 40
Pa.C.S.A. § 1009.108, (repealed), to provide basic no-fault loss
benefits to victims of motor vehicle accidents who have no other
source of basic loss benefit coverage. The Plan initially
assigned Lisa's claim to Allstate Insurance Company for
evaluation and processing. Lisa requested coverage for all
"products, services and accommodations" required for her "maximum
feasible restoration/rehabilitation" pursuant to the No-Fault
Act, including modifications to her parents' home, a modified van
to allow for transportation, and 24 hour a day attendant care
services.
Allstate initially denied Lisa's claim for basic loss
benefits, and she responded by suing Allstate in the Court of
Common Pleas of Allegheny County. Obusek v. Allstate Insurance
Company, No. G.D. 79-27948 (C.P. Alleg. Cty. 1979). That matter
was not litigated, however, because a settlement was reached
whereby Allstate agreed to pay a variety of benefits, including
the cost of building an addition to the Obusek home. Allstate
also agreed to pay $40.20 per day for the 24 hour attendant care
services provided by Mrs. Obusek and other family members. Those
payments were to continue for 18 months and the parties where
then to be free to negotiate further payments.
When the 18 month period expired in August of 1982, Allstate
agreed to continue paying at an increased per diem rate of
$45.79. The original agreement was extended in all other respects
for an additional two years, until August 25, 1984. At the
conclusion of that two year period, a third agreement was
7
negotiated wherein the per diem was increased to $125, or $45,625
per year, for a period of four years -- until August 25, 1988.
The third agreement also provided that upon its expiration, the
parties would each:
have the right to request an increase or
decrease in these payments. . . . should the
parties be unable to reach such an agreement,
each party will have the right to seek to
resolve this issue through appropriate
litigation pursuant to the Pennsylvania No-
Fault Act.
Allstate also agreed to continue to pay the $125 per day,
augmented annually by the increase in the consumer price index in
the event of litigation.
In January of 1987, the Plan assigned Lisa's claim to
Travelers, and Travelers began making the attendant care services
payments. As of August, 1988, the insurance companies had paid
more than $239,800 to the Obuseks for the services provided by
Lisa's mother.
On August 28, 1988 (after the third agreement expired)
Travelers filed a declaratory judgment action under 28 U.S.C.
§2201 in the United States District Court for the Western
District of Pennsylvania, seeking a determination of whether
Travelers was obligated to pay Lisa for attendant care services
provided in her home by her mother. Travelers asserted three
reasons why it believed such services were not compensable.
First, Travelers contended that Mrs. Obusek's services were
not compensable because she was not a licensed health care
provider. Section 103 of the No-Fault Act, 40 Pa.C.S.A. §1009.103
8
stated that the insurer is "not obligated to provide basic loss
benefits for allowable expense for medical and vocational
rehabilitation services" if the providers of the services are not
accredited by the Department of Health of the Commonwealth of
Pennsylvania.
Second, Travelers contended that the services being provided
by Lisa's mother were custodial only, and not rehabilitative.
Section 103 also required that compensable rehabilitative
services "reduce disability and. . . restore the . . .
functioning of the victim."
Third, Travelers contended that the services were
replacement services and that Lisa had already been paid the
maximum allowable amount for replacement services under the No-
Fault Act. Section 103 defines "replacement services" as
"ordinary and necessary services in lieu of those the victim
would have performed, not for income, but for the benefit of
himself. . . if he had not been injured." The Act placed a cap
on the amount of benefits payable for replacement services and
that limit had been exceeded.
Lisa responded to Travelers' suit by filing a counterclaim
in which she also requested declaratory relief. She asked the
court to declare that:
(1) TRAVELERS is obligated to pay LISA for
attendant care provided by her family,
pursuant to the terms of the AGREEMENT
entered into between LISA and ALLSTATE on
10/9/84; and that
(2) The daily attendant care payments are to
be based upon the fair market value of such
services; and that
9
(3) TRAVELERS is to provide LISA with all the
products, services and accommodations
required for LISA's maximum rehabilitation --
and as set forth in the prior AGREEMENTS
between LISA, ALLSTATE and the PLAN, and as
stated in the attached EIH evaluation, and as
otherwise may be required;
(4) TRAVELERS is to pay LISA 18%
penalty/delay interest as to all products,
services and accommodations, or the fair
value thereof, not provided by TRAVELERS --
pursuant to the Pennsylvania No-Fault Act;
(5) TRAVELERS is to pay LISA for counsel fees
and costs incurred by LISA because of this
litigation and because of TRAVELERS' failure
to provide, of (sic) fully pay for, required
products, services and accommodations.
Lisa also demanded four types of home improvements and
approximately 30 pieces of equipment.
Travelers answered the counterclaim by admitting that it had
not conducted a recent examination of Lisa and conceding that it
therefore had no reports which refuted the recommendations
contained in the EIH evaluation. However, Travelers did raise as
a defense its contention that Lisa had never requested any of the
products or services which the EIH evaluation recommended as
necessary. Travelers therefore asserted that the issue of Lisa's
entitlement to the services and accommodations recommended by EIH
was not ripe for resolution. Additionally, Travelers contended
that it had never been provided with a copy of the EIH evaluation
until it was attached as an exhibit to the counterclaim.
After discovery was completed, the parties filed cross-
motions for summary judgment. After some delay, the district
10
court assigned the case to a magistrate judge who issued her
Report and Recommendation on May 11, 1993, recommending that
Travelers' summary judgment motion be granted and Lisa's be
denied. The magistrate judge based her recommendation on the
fact that Lisa's mother was not a licensed health care provider.
The magistrate judge reasoned that Travelers was therefore not
obligated to pay for Mrs. Obusek's services under the No-Fault
Act. Report and Recommendation at 7-8. However, the magistrate
judge further concluded that Lisa's claims for home improvements
and other equipment were not amenable to summary judgment. Id.
The district court adopted the Report and Recommendation
over the Obuseks' objections and Travelers stopped making monthly
payments. Thereafter, on January 7, 1994, at a status
conference, the parties reached a settlement on all of the home
improvement and equipment claims contained in Lisa's
counterclaim. That settlement was eventually reduced to writing
and approved by the district court.
During that status conference the parties debated whether
any issues remained outstanding for the court to decide. Lisa's
counsel contended that the district court only decided that
Travelers has no obligation to pay for attendant care services
provided by Lisa's mother but did not decide whether Travelers
had any obligation to pay for attendant care services that may be
provided by a licensed caregiver. Travelers disagreed and argued
that the summary judgment in its favor had resolved all of the
issues in the case.
11
Following briefing on this issue, the district court issued
a Memorandum Opinion and Judgment Order dated October 14, 1994,
in which it ruled that the issue of Travelers' obligation to pay
for attendant care services, if provided by a licensed care-
giver, was ripe for determination. The district court then
granted summary judgment in Lisa's favor, and held that attendant
care services, if "provided by accredited, non-family
professional medical treatment and care providers" constitute
"professional medical treatment and care" within the meaning of
the No-Fault Act, and therefore, attendant care services are an
"allowable expense" under the Act. Memorandum Opinion at 11.
Travelers subsequent motion for reconsideration was denied, and
this appeal followed. We have jurisdiction pursuant to 28 U.S.C.
§ 1291.
II. Discussion
Travelers submits that the only person providing daily care
services to Lisa is her mother, and that there is nothing in the
record which shows that Lisa has any plans or intentions to hire
anyone else to provide those services in the near future.
Additionally, Travelers contends that no one ever asked that it
pay for attendant care services provided by an accredited care-
giver. Travelers suggests that it is therefore entirely
"speculative whether anyone other than Mrs. Obusek will ever
provide attendant care services to her daughter." Brief of
Appellant at 19. Accordingly, Travelers argues that the issue of
its obligation to pay for attendant care services provided by a
licensed care-giver is not ripe for resolution.
12
A. Ripeness
The Declaratory Judgment Act provides, in relevant part, as
follows:
§ 2201. Creation of remedy
(a) In a case of actual controversy within
its jurisdiction,. . . any court of the
United States, upon the filing of an
appropriate pleading, may declare the rights
and other legal relations of any interested
party seeking such declaration, whether or
not further relief is or could be sought. Any
such declaration shall have the force and
effect of a final judgment or decree and
shall be reviewable as such.
28 U.S.C. § 2201(a). Of course, Article III, Section 2 of the
Constitution of the United States "limits federal jurisdiction to
actual 'cases' and 'controversies.'" Armstrong World Industries,
Inc. v. Adams, 961 F.2d 405, 410 (3d Cir. 1992). This
constitutional provision "stands as a direct prohibition on the
issuance of advisory opinions." Id. The existence of a "case or
controversy" is a condition precedent to the proper exercise of
judicial power by a federal court and the Declaratory Judgment
Act can not relax that constitutional requirement. Skelly Oil Co.
v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950). As the
Supreme Court explained in Maryland Casualty Co. v. Pacific Coal
& Oil Co.:
The difference between an abstract question
and a 'controversy' contemplated by the
Declaratory Judgment Act is necessarily one
of degree, and it would be difficult, if not
impossible, to fashion a precise test for
determining in every case whether there is
such a controversy. Basically, the question
in each case is whether the facts alleged,
under all the circumstances, show that there
13
is a substantial controversy, between parties
having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance
of a declaratory judgment.
312 U.S. 270, 273 (1941). We have previously noted that:
[t]o satisfy Article III's case or
controversy requirement, an action must
present (1) a legal controversy that is real
and not hypothetical, (2) a legal controversy
that affects an individual in a concrete
manner so as to provide the factual predicate
for reasoned adjudication, and (3) a legal
controversy so as to sharpen the issues for
judicial resolution.
Armstrong World Industries, Inc. v. Adams, 961 F.2d 405, 411
(3rd. 1992) (internal quotation marks omitted). As will be
discussed in greater detail infra, as part of our inquiry into
"ripeness", the instant controversy satisfies this requirement.
Federal jurisdiction is also limited by the doctrine of
"ripeness". "Ripeness" "determines when a proper party may bring
an action." Id. The function of the ripeness doctrine is to
prevent federal courts "through avoidance of premature
adjudication, from entangling themselves in abstract
disagreements." Abbott Lab. v. Gardner, 387 U.S. 136, 148
(1967). While we have noted that there is some disagreement as
to whether the ripeness doctrine is grounded in the case or
controversy requirement or is more properly viewed as a
"prudential limitation on federal jurisdiction," we recognize
that the doctrine is at least partially grounded in the case or
controversy requirement. Armstrong World Industries, Inc., 961
F.2d at 411 n. 12.
14
The parameters of "ripeness" are especially difficult to
define within the context of declaratory judgment actions. Step-
Saver Data Systems, Inc. v. Wyse Technology, 912 F.2d 643, 646
(3d Cir. 1990). This difficulty is due, in large measure, to the
fact that declaratory judgments are, of necessity, rendered
before an "accomplished" injury has been suffered. Id. at 647.
Nonetheless, we have developed a method of analysis that focuses
upon three factors to aid in determining if and when a
declaratory judgment action is ripe. We examine the "adversity
of the interest" between the parties to the action, the
"conclusiveness" of the declaratory judgment and "the practical
help, or utility" of the declaratory judgment. Id. If we are
satisfied that all three elements are present, the declaratory
judgment action is ripe.
1. Adversity of Interests
Parties' interests are adverse where harm will result if the
declaratory judgment is not entered. Although the action cannot
be based on a contingency, Id. at 647-648, the party seeking
declaratory relief need not wait until the harm has actually
occurred to bring the action. Armstrong World Industries, Inc.
v. Adams, 961 F.2d at 412. Thus, in an appropriate circumstance,
a litigant can seek a declaratory judgment where the harm is
threatened in the future. However, the plaintiff must
demonstrate that the probability of that future event occurring
is real and substantial, "'of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.'" Salvation Army
v. Department of Community Affairs, 919 F.2d 183, 192 (3d Cir.
15
1990) (quoting Steffel v. Thompson, 415 U.S. 452, 460 (1974)).
Accordingly, a party need not decide between attempting to meet
the nearly insurmountable burden of establishing that the
relevant injury is a mathematical certainty to occur, nor must a
party await actual injury before filing suit. Erecting such
barriers would eviscerate the Declaratory Judgment Act and render
the relief it was intended to provide illusory. However,
ripeness requires that the threat of future harm must remain
"real and immediate" throughout the course of the litigation. Id.(quoting Steffel v. Thompson, 415 U.S. 459 n. 10).
Here, Travelers has taken the position that attendant care
services are custodial in nature and that it therefore has no
obligation under the No-Fault Act to pay for those services.
Lisa, of course, contends otherwise. There is, therefore, a very
real and immediate adversity of interests. This adversity is not
negated merely because Travelers' own expert agrees that
attendant care services are an absolute necessity, and that Lisa
cannot do without them. That consideration is, however, relevant
to the eventual resolution of the adversity of interests.
2. Conclusiveness
The declaratory judgment must also be conclusive. That is,
the legal status of the parties must be changed or clarified by
the declaration. Step-Saver Data Systems, Inc. v. Wyse
Technology, 912 F.2d at 648. This portion of the analysis is
part and parcel of the constitutionally mandated inquiry into the
existence of a case or controversy. The "contest must be based
on a 'real and substantial controversy admitting of specific
16
relief through a decree of a conclusive character, as
distinguished from an opinion advising what the law would be upon
a hypothetical state of facts.'" Id. at 649 (quoting Aetna Life
Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937)). An integral part
of the conclusiveness inquiry is the necessity that the court be
presented with a set of facts from which it can make findings.
Without a concrete set of facts, the court cannot engage in its
required fact-finding role and declare the parties' rights based
on those facts. Without the necessary facts, the court is left
to render an advisory opinion. Id.; Armstrong World Industries,
Inc., F.2d at 412.
Nonetheless, there are situations where the need for
complete factual development is not absolutely essential. For
instance, where the question presented is "predominately legal",
such as a question of federal preemption, a factual record is not
as crucial as in a case where the question is whether there has
been an unconstitutional taking of private property. Armstrong
World Industries, Inc., at 412. There are also situations where
a declaratory judgment can be issued absent proof of a necessary
fact. For example, if a future event is "certain to occur, such
as enforcement of an existing statute or the death of a life-
tenant or the future expiration of a contract, franchise or
lease”, a judgment declaring rights is appropriate." Step-Saver
Data Systems, Inc., 912 F.2d at 649 n. 7 (quoting EDWIN BORCHARD,
DECLARATORY JUDGMENTS at 37-38 (2d Ed. 1941).
The conclusiveness of resolution of the instant controversy
is closely related to the utility of resolving it. A declaration
17
will conclusively establish Lisa's right to receive payment for
attendant care if that care is given by an appropriate health
care professional. Lisa ought not to have to risk incurring the
financial obligation of such care before knowing if Travelers is
obligated to pay for it, and the question is primarily a legal
one involving interpretation of the applicable legislation.
3. Utility
Finally, the declaratory judgment must have utility. It
must be of some practical help to the parties. The Declaratory
Judgments Act was enacted "to clarify legal relationships so that
plaintiffs (and possibly defendants) could make responsible
decisions about the future." Step-Saver, at 650.
The idea behind the Act was to clarify legal
relationships so that [parties] cold make
responsible decisions about the future. As
Congressman Gilbert remarked in debate,
'[u]nder the present [pre-Declaratory
Judgment Act] law, you take a step in the
dark and then turn on the light to see if you
have stepped in a hole. Under the
declaratory judgment law you turn on the
light and then take the step.'
Id. at 649-50.
Contrary to Travelers’ suggestion, we think that the record,
at least implicitly, reflects that, if her mother’s services are
not compensable, Lisa Obusek wishes to employ the a licensed
health care giver to provide the attendant care services that she
needs. She need to know whether attendant care services are an
allowable expense under the No-Fault Act if they are administered
by a licensed health care professional. She should not have to
blindly take the step of incurring an expense that Travelers may
18
be legally obligated to assume before being told if she has
stepped in a hole.
B. Plaintiff's Prior Requests For Attendant Care.
We do not agree with Travelers' contention that Lisa has
never asked Travelers to pay for attendant care services provided
by non-family, accredited care givers. The EIH Health Care
Evaluation was attached to her counterclaim and, as recited
above, the Evaluation recommended attendant care services. The
counterclaim specifically requested that the court declare that
"TRAVELERS is to provide LISA with all the products, services and
accommodations required for LISA's maximum rehabilitation -- as
set forth in the prior AGREEMENTS between LISA, ALLSTATE and the
PLAN, and as stated in the attached EIH evaluation, and as
otherwise may be required;. . ." (emphasis added).
We find that the above-quoted prayer for relief in the
counterclaim and the EIH Evaluation attached to the counterclaim
is a clear and unequivocal demand for attendant care services
under the No-Fault Act.
Finally, it is obvious that a declaratory judgment here will
be of practical help to the parties. When the question of
Travelers' obligation to pay for attendant care services provided
by an accredited care-giver is finally resolved, Lisa and her
family can make decisions about the future and Travelers will
know the extent of its liability.
Accordingly, the issue of Travelers' obligation under the
No-Fault Act to pay for attendant care services provided by an
accredited care-giver is ripe for resolution.
19
C. Allowable Expenses
The No-Fault Act allowed persons injured in automobile
accidents to recover "allowable expense[s]." The Act defined
such expenses in relevant part, as follows:
"Allowable expense" means reasonable charges
incurred for, or the reasonable value of
(where no charges are incurred), reasonably
needed and used products, services and
accommodations for:
(A) professional medical treatment and care;
(B) emergency health services;
(C) medical and vocational rehabilitation
services;
(D) expenses directly related to the funeral,
burial, cremation, or other form of
disposition of the remains of a deceased
victim, not to exceed one thousand five
hundred ($1,500) dollars;. . .
40 Pa.C.S.A. § 1009.103 (repealed). The parties agree that the
attendant care in dispute here does not fall under the category
of "emergency health services.”0 Lisa does contend, however,
that her attendant care needs do fit within the definition of
“professional medical treatment and care” and “medical
rehabilitation services.”0
0
"Emergency health services" refer to emergency services
administered by emergency medical personnel. Id.
0
Although Lisa is arguing that her attendant care requirements
are medical rehabilitation services, we note that to the extent
that attendant care would not reduce Lisa’s disability or restore
her functioning, the cost for those services would not be
recoverable as “medical and vocational rehabilitation services”
under the No-Fault Act. Reilly v. SEPTA, 489 A.2d 1291 (Pa.
1985). Whether or not attendant care services which would tend
to reduce disability or to restore functioning are recoverable
20
The district court concluded that the Pennsylvania Supreme
Court's decision in Drake v. Pennsylvania National Mutual
Casualty Ins. Co., 601 A.2d 797 (Pa. 1992), controlled its
analysis. The court held that, under Drake, attendant care
"provided by accredited non-family, professional medical
treatment and care providers" is an allowable expense under
Section 103 of the Act, Memorandum Opinion at 11, and therefore
granted summary judgment to Lisa on her attendant care claim.0
Travelers argues that Drake is not controlling; that
attendant care services are not an allowable expense under the
Act even if provided by accredited care-givers; and that it
therefore has no obligation to pay for such services. In Drake,
Millard Fertig suffered serious spinal injuries when the
automobile he was driving was struck from behind by another car.
As a result of the injuries, Fertig was rendered quadriplegic. He
received in-patient hospital care for approximately two months
and then was released to his home with special equipment and
nursing care. However, within a year of the accident, he was
admitted to a nursing home where he remained until his death
approximately 5 years later.
Fertig's automobile was covered by insurance under the No-
Fault Act and his carrier paid all of the costs of his medical
treatments. However, approximately three years before his death,
under the Act as “medical and vocational rehabilitation services”
appears to be an open question under Pennsylvania law and is a
question which we do not decide today.
0
We exercise plenary review over the district court's grant of
summary judgment. Nathanson v. Medical College of Pennsylvania,
926 F.2d 1368, 1380 (3d Cir. 1991).
21
the carrier filed a state-court declaratory judgment action to
determine its obligation to pay for Fertig's room charges in the
nursing home under the No-Fault Act. The carrier argued that it
was not liable for the room charges because Fertig "was receiving
only custodial care at the home rather than medical or
rehabilitative treatment." Drake, 601 A.2d 797, 798-799.
At trial, the carrier presented medical testimony that
Fertig had reached the point in his rehabilitation where he was
no longer a candidate for physical therapy "and was receiving
only maintenance and supportive care." Id. at 799. However, one
physician testified that Fertig needed periodic review of his
bladder and bowel functions, that he required skilled nursing
care or his condition could regress, and that even though he was
not a candidate for rehabilitation he needed medical and nursing
care because of his condition. Id.The trial court found that Fertig's medical condition
required the care he was receiving at the nursing home and that
Fertig's no-fault carrier had to pay that cost under the Act.
Accordingly, the trial court ordered the carrier to pay for all
of Fertig's charges at the nursing home including that portion of
the charges that resulted from only custodial care.
On appeal, the Pennsylvania Superior Court reversed, holding
that under Reilly v. SEPTA, 489 A.2d 1291 (Pa. 1985), no-fault
carriers have no obligation to pay for expenses that are merely
custodial. See Pennsylvania National Mutual Casualty Ins. Co. v.
Fertig, 555 A.2d 208 (Pa. Super. 1989). In so deciding, the
Superior Court quoted Reilly stating: "[s]ervices which do not
22
reduce the disability of the victim or restore his functioning,
being custodial in nature, would not be recoverable under the No-
Fault Act. . . ." 555 A.2d at 209, (quoting Reilly, 489 A.2d at
1303). The Pennsylvania Supreme Court then granted allocatur:
[t]o consider whether such custodial care
might be 'medical care' payable by the
insurer as an allowable expense under 40 P.S.
§ 1009.103 even though Reilly held that it
was not the responsibility of the insurer
because it was not "rehabilitation" under
§103.
601 A.2d at 799.
The Pennsylvania Supreme Court ruled that the Superior
Court's reliance on Reilly had been misplaced and reversed. 601
A.2d at 800. The court reasoned that Reilly only held that
custodial care that was not rehabilitative was not recoverable as
"medical and vocational rehabilitation services." However, "[i]t
was never suggested that custodial, non-rehabilitative care might
nonetheless be 'medical care' recoverable from a no-fault carrier
as another type of allowable expense, namely 'professional
medical treatment and care.'" Id.
The Court noted that the purpose of the No-Fault Act was to
provide prompt and adequate basic loss benefits to victims of
motor vehicle accidents and to guarantee that accident victims
receive prompt and comprehensive professional treatment. Id. The
court also noted that under Pennsylvania's Statutory Construction
Act, 1 Pa.C.S.A. § 1928(c), the No-Fault Act "must be liberally
construed to effectuate its purposes, erring in favor of coverage
23
for the insured in close or doubtful cases." Id. (emphasis
added).
The court ruled that Fertig's nursing home accommodations
would be covered under the No-Fault Act if the accommodations
were necessary either as "professional medical treatment and
care" or "medical and vocational rehabilitation services." The
court concluded that if the cost of Fertig's nursing home
accommodations was an allowable expense, then the room charges,
i.e., custodial care charges, were covered as well. Id. at 801.
Although Reilly precluded no-fault coverage for non-
rehabilitative custodial care, the court determined "that
entitlement for the cost of 'professional medical treatment and
care' may include medically necessary nursing services even if
the services may be characterized as custodial." Id. Thus,
Fertig's nursing home accommodations were payable by his no-fault
carrier as "professional medical treatment and care," and
constituted an allowable expense under the Act even if some of
the services included in those charges were custodial in nature
as long as the custodial services were "necessary due to
accident-related injuries." Id.
The analysis in Drake was based, in part, on language
contained in Fertig's no-fault policy with the carrier. That
policy covered reasonable charges incurred for "professional
medical treatment and care" which included "hospital and
professional nursing services for diagnosis, care, and recovery.
. . ." Id. Here, there is no insurance policy because Lisa's
claim was processed under the Assigned Claims Plan. Nonetheless,
24
we do not believe that the absence of a policy which defines
"professional medical treatment and care" is crucial to the
resolution of this case. The Drake court noted that the No-Fault
Act does not define "professional medical treatment and care".
Additionally, the court noted that neither the No-Fault Act nor
31 Pa. Code § 66.102 (which sets forth a sample No-Fault
insurance policy) excludes custodial care from the definition of
"professional medical treatment and care." Drake at 801.
Under Drake, custodial services that are administered as
part of professional medical treatment and care are an allowable
expense under the No-Fault Act so long as they are required
because of accident-related injuries. See also, American
Motorists Insurance Co. v. Farmers Bank and Trust Co. of Hanover,
644 A.2d 1232 (Pa. Super. 1994).
In Farmers Bank and Trust Co., American Motorists, the no-
fault carrier, filed a petition for declaratory judgment seeking
to be relieved of its obligation to pay for nursing home services
which it characterized as "custodial care". Id. at 1233. Farmers
Bank, the guardian of the estate of the person injured in the
automobile accident, filed an answer and then moved for judgment
on the pleadings, alleging that it was entitled to judgment as a
matter of law because the no-fault carrier failed to raise the
issue of whether the nursing home care was related to the
accident. The trial court granted the motion for judgment on the
pleadings and the no-fault carrier appealed.
25
A panel of the Pennsylvania Superior Court affirmed the
trial court's grant of the motion for judgment on the pleadings.0
In reaching that decision, the court commented as follows:
In Drake v. Pennsylvania Nat. Mut. Cas.
Ins. Co.,. . ., our supreme court held that,
under the No-Fault Act, there is no per se
exclusion for expenses related to medical and
nursing care which is custodial; and that the
cost of custodial care was an allowable
expense under the applicable no-fault
automobile policy under the No-Fault Act, so
long as it was necessary due to accident
related injuries. Thus, the fact that the
insured is receiving custodial care does not,
of itself, relieve the insurer of the
responsibility of the cost of his care.
Rather, the insurer must, in terms of a
motion for judgment on the pleadings, allege
not only that the care is custodial, but also
that the care in unrelated to the accident,
in order to be relieved of the financial
responsibility for the costs of this type of
care.
644 A.2d at 1235 (citations omitted). Accord, Gallagher v.
Harleysville Mutual Insurance Co., 617 A.2d 790, (Pa. Super.,
1992) ("custodial services are compensable under § 1009.103 as an
allowable expense of a professional medical treatment or care.")
Travelers is arguing that custodial care in the form of
attendant care is not compensable under the Act even if
administered by accredited health care professionals.
0
Although the Superior Court affirmed the trial court's grant of
the motion for judgment on the pleadings in regard to the
carrier's failure to plead that the care was unrelated to the
accident, the Superior Court reversed the trial court on the
trial court's finding that the four year statute of limitations
for declaratory judgment actions barred the no-fault carrier from
amending its complaint. 644 A.2d at 1235.
26
It is beyond dispute that if Lisa were institutionalized in
a rehabilitation center or nursing home Travelers would be
obligated to pay the cost of custodial care that she received.
See Drake, supra. Travelers' argument here is merely a
restatement of the position that the Pennsylvania Supreme Court
ruled against in Drake. The only distinction we perceive between
Drake and its progeny on the one hand, and Lisa's claim on the
other hand, is that Lisa has chosen to remain at home rather than
be institutionalized. That choice cannot defeat her claim for
No-Fault benefits. She needs attendant care because of her
accident-related injuries, and Travelers cannot argue otherwise.
Travelers' own expert opined that Lisa should have a licensed
practical nurse available to her to change her Foley catheter and
to supervise the attendant care "so that it is done effectively
or any time she runs into respiratory, skin, autonomic, or GU
complications." Joint Appendix at 473a. In addition to nursing
supervision of her general attendant care, Lisa needs review of
her bowel functions, including periodic artificial stimulation.
This attention to bowel and bladder functions is similar to the
kind of care Fertig was receiving in the nursing home in Drake
and is, we believe, the kind of care that led the Pennsylvania
Supreme Court to find that Fertig's nursing home accommodations
were "professional medical treatment and care."
A contrary conclusion would mean that Lisa can only receive
the attendant services she needs if she is taken from her own
home and placed in a professional care facility such as a nursing
home. Yet, such a result would not benefit either party to this
27
dispute. It would add to Travelers' costs, and relegate Lisa to
an institution. Accordingly, we find that the attendant care
services needed by Lisa are an allowable expense under Section
103(A) of the No-Fault Act.0
Nevertheless, after a careful review of the record, we are
concerned that the district court did not adequately address the
exact nature and type of attendant care services Lisa requires.
It appears that the district court assumed that Lisa would need
the attendant care services outlined in the EIH Evaluation,
however the court never made a finding to that effect. See
Memorandum Opinion at 5 n. 3.0 It is, of course, entirely
possible that the district court intended that the "attendant
care services" at issue are those set forth in the comprehensive
and detailed EIH recommendation attached to the counterclaim and
a formal finding to that effect may, therefore, be all that is
necessary. In its order dated October 14, 1994, the court simply
declared that Lisa was entitled to payment for all "'allowable
expenses' under the Pennsylvania No-Fault Motor Vehicle Insurance
Act . . . and [Drake]." However, declaring that Travelers is
liable for all payments required by law does not provide either
side to this dispute the clarification the parties are entitled
0
Because we hold that attendant care services are an allowable
expense under Section 103(A) of the No-Fault Act, it is
unnecessary to consider Travelers' argument that the attendant
care services are "replacement services" and therefore subject to
the statutory limit for payment for replacement services that has
already been met.
0
Travelers apparently assumed for purposes of this appeal that
the attendant care services needed by Ms. Obusek are the same
services that her mother has been providing to her since
1980. Brief of Appellant at 22 n. 10.
28
to. Accordingly, we will remand for a determination of the
nature and type of attendant care services which are appropriate
for Lisa's needs. If the district court concludes that those
services are sufficiently set forth in the EIH report it may, of
course, make a finding of fact to that effect.
IV.
For the above reasons, we will reverse the district court’s
judgment and remand for a determination of the nature and type of
attendant care services required by Lisa.
29