Freeze v. Donegal Mutual Insurance ( 1982 )

CERCONE, President Judge:

The instant appeal¹ presents us with a question under that embattled statute, the Pennsylvania No-fault Motor Vehicle Insurance Act.² The operative facts are these. On January 14, 1977 John G. Freeze, III, was struck and killed by an automobile while sled riding near his home in Wrightsville, York County. The no-fault insurance coverage on the family automobile was carried by Donegal Mutual Insurance Company (appellee hereinafter); decedent was insured under the policy as a member of the household. At the time of his death decedent was eleven years old. Decedent’s father, John G. Freeze, Jr., (hereinafter appellant) acting as administrator of his son’s estate, requested and received the funeral benefits due under the insurance policy. Appellant also requested that appellee pay work loss benefits as defined by the No-fault Act. The latter request was refused. Appellant then instituted the instant action on behalf of his son’s estate in order to recover the work loss benefits.³ Appellee filed preliminary objections in the nature of a demurrer asserting that a decedent’s estate is not allowed to recover work loss benefits under the Act since such benefits may only be had by the statutorily defined class of “survivors.”⁴ Appellee also asserted that work loss benefits are neither due the survivors of a deceased eleven year old who had never worked, nor calculable. The lower court sustained appellee’s demurrer to the complaint’s sole cause of action, but sua sponte granted appellant leave to amend the complaint to allow appellant to seek survivors loss benefits and reimbursement for funeral expenses.⁵ Rather than amend the complaint appellant chose to file this appeal. By agreement of counsel, the original argument in this case was stayed pending our decision of Heffner v. Allstate Ins. Co., 265 Pa.Superior Ct. 181, 401 A.2d 1160 (1979).

I.

Before addressing the merits of the case, we must first surmount a crucial procedural hurdle. Because even an explicit agreement of the parties will not vest jurisdiction in a court where it otherwise would not exist, T. C. R. Realty, Inc. v. Cox, 472 Pa. 331, 372 A.2d 721 (1977); Giannini v. Foy, 279 Pa.Superior Ct. 553, 421 A.2d 338 (1980), we may raise sua sponte the issue of the appealability of a trial court’s order. Giannini v. Foy, supra; Davidyan v. Davidyan, 229 Pa.Superior Ct. 495, 327 A.2d 139 (1974).

At the time the instant appeal was filed this Court had jurisdiction over “all appeals from final orders of the courts of common pleas....” Act of July 9, 1976, P.L. 586, No. 142, § 2, 42 Pa.C.S. § 742. In ascertaining whether an order is final, we will look beyond the technical effect of the order and apply practical considerations in light of the order’s ramifications. See Giannini v. Foy, supra. And see Adoption of G. M., 484 Pa. 24, 398 A.2d 642 (1979); Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975). Ordinarily, an order which terminates litigation or disposes of the entire case is final, and an order is interlocutory and not final unless it effectively puts the litigant “out of court.” Giannini v. Foy, supra; Adoption of G. M., supra; T. C. R. Realty, Inc. v. Cox, supra; Alessandro v. State Farm Mutual Auto Ins. Co., 487 Pa. 274, 409 A.2d 347 (1979); Ventura v. Skylark Motel, Inc., 431 Pa. 459, 246 A.2d 353 (1968).

The lower court’s order denied the deceased’s estate the right to collect work loss benefits under the No-fault Act. Its stated reason for doing so was that appellant, as representative of his son’s estate, is essentially a “deceased victim,” and only survivors and “victims” can collect basic loss benefits. Thus, as far as work loss benefits are concerned the estate was “out of court,” and the litigation of appellant’s chosen cause of action for work loss benefits could proceed no further.

The order also granted appellant leave, however, to amend the complaint in order to seek survivors loss and funeral expenses. Arguably this sua sponte grant of leave to amend the complaint was an interlocutory order. This is so because generally speaking an order which sustains preliminary objections in the nature of a demurrer without dismissing the complaint or entering judgment or otherwise terminating the action between the parties is interlocutory and, therefore, lacks the requisite finality to be an appealable order. Sullivan v. Philadelphia, 378 Pa. 648, 107 A.2d 854 (1954). This general rule has been modified, however. If the order in effect, serves to terminate the action between the parties by so restricting the pleader with respect to further amendment of the pleading as to virtually put him out of court on the cause of action he seeks to litigate, it is a definitive and final order, and thus, appealable. Hudock v. Donegal Mutual Ins. Co., 438 Pa. 272, 264 A.2d 668 (1970); Local No. 163, Int’l Union of Brewery Workers v. Watkins, 417 Pa. 120, 207 A.2d 776 (1965); Sullivan v. Philadelphia, supra.

Appellant could have amended the complaint to seek survivors loss benefits—the funeral expenses question was moot at the time of the order since appellee had already reimbursed appellant for them—but this amendment would have altered the cause of action entirely. Appellant sought to litigate the question of whether an estate could recover work loss benefits, not whether recovery of survivors loss benefits is possible. Since this was not a case where appellant sought to recover on more than one cause of action where the court sustained demurrer only as to some of the causes of action advanced, see Giannini v. Foy, supra, but rather one where there was but a single cause of action alleged, appellant was “out of court” on his chosen cause of action. Practically speaking, then, the order sustaining appellee’s demurrer is final and appealable. Having, then, an appealable order before us we may proceed to the merits of the case.

II.

Our decision today is controlled by Allstate Ins. Co. v. Heffner, 491 Pa. 447, 421 A.2d 629 (1980) which sustained this Court’s orders in Heffner v. Allstate Ins. Co., supra, (suit brought by decedent’s widow) and Pontius v. United States Fidelity and Guaranty Co., (order of July 3, 1979, remanding case for disposition below in accord with Heffner v. Allstate Ins. Co.) (suit brought by the administration of the deceased’s estate).⁶

Appellee would have us overrule our decision in Heffner v. Allstate Ins. Co.,—a course which we are neither inclined to pursue nor one which is open to us in view of the Supreme Court’s recent decision in Allstate Ins. Co. v. Heffner—or that we construe Section 103 of the No-fault Act strictly and thereby limit the recovery of work loss benefits due under the Act to the statutorily defined class of “survivors” contained therein. This same argument was rejected in both this Court and the Supreme Court. Such an interpretation of the Act as advanced by appellee herein, and by Allstate in both Heffner cases, would abolish “the right of the deceased victim’s estate to recover from a tortfeasor the earnings the deceased victim would have contributed to his estate had he survived.” Heffner v. Allstate Ins. Co., 265 Pa.Superior Ct. at 191, 401 A.2d at 1164.⁷ In addressing this issue in Heffner v. Allstate Ins. Co., we stated:

. . . Section 301 . . . retains traditional tort liability against third persons for lost earnings to the extent that they exceed the monetary limits established by Section 202(b) of the Act, i.e., work loss benefits up to $1,000 per month and $15,000 total. Therefore, in order to recover damages for lost earnings in a survival action against a tortfeasor, the decedent’s estate must prove that the damages have exceeded the limits of its coverage under Section 202(b). Under Allstate’s analysis no decedent’s estate could ever prove this fact because the estate would never qualify for work loss benefits in the first place. The limits are never reached because the coverage is not afforded in any amount to survivors of deceased victims. Ergo, the net result is that the estate of a deceased victim can never recover monetary damages for lost earnings in a survival action.

However, in Pennsylvania our Constitution, Article III, Section 18 provides that the General Assembly may not limit “the amount to be recovered for injuries resulting in death, or for injuries to persons or property, and in the case of death from such injuries, the right of action, shall survive.. .. ” To be sure, in another context our Supreme Court found that the No-Fault Motor Vehicle Insurance Act did not violate a similar provision of our Constitution. In Singer v. Sheppard, 464 Pa. 387, 346 A.2d 897 (1975), the Court construed that part of Article III, Section 18 of the Constitution, which reads: “The General Assembly may enact [workmen’s compensation laws] but in no other cases shall the General Assembly limit the amount to be recovered . .. for injuries to persons...” [Emphasis added.] The Court concluded that nothing in that clause of Section 18 of the Constitution prohibited the abolition or modification of a cause of action for personal injuries, and that the effect of the threshold provisions of the No-Fault Act was the partial abolition of a cause of action for personal injuries, not the limitation of damages recoverable therefor. Thus, Singer v. Sheppard is distinguishable on several grounds. First, the language of Article III, Section 18 of the Constitution with which we are concerned herein is considerably broader than the clause the Singer court construed. Indeed Section 18 may prohibit even the partial abolition of a cause of action for wrongful death or survival. Second, as footnote [4], supra, and the text accompanying it indicate, it cannot be said with equal confidence in this case that a cause of action has been abolished, indeed Section 301(a)(5) of the No-Fault Act specifically exempts fatal accidents from the general abolition clause of Section 301(a). If Allstate’s argument were to prevail, it could only be concluded that the Act abolished only one aspect of damages in a survival action—economic loss. And, third, even the Court in Singer v. Sheppard perceived that the General Assembly intended to preserve all aspects of recovery for economic losses; the Court stated: “The No-fault Act, however, allows recovery for proven economic loss without limitation.” Id., 464 Pa. at 396, 346 A.2d at 901. This statement would surely be erroneous if Allstate’s interpretation of the Act prevail.

Id., 265 Pa.Superior Ct. at 191-193, 401 A.2d at 1165. (Footnotes omitted.) Strictly speaking the foregoing quotation was dictum to our opinion in Heffner v. Allstate Ins. Co. since the plaintiff in that case was the deceased victim’s widow and not the estate. However, the plaintiff in Pontius was the administrator of the deceased victim’s estate. In reversing the lower court’s decision in our order filed in Pontius we relied on our opinion in Heffner v. Allstate Ins. Co. Our Supreme Court never directly addressed the question of whether a deceased victim’s estate may recover under the No-fault Act, however, it did affirm both our decision in Heffner v. Allstate Ins. Co. and our order in Pontius. Furthermore, the Supreme Court adopted much of our opinion in Heffner v. Allstate Ins. Co. as its own. From the tenor of the Supreme Court’s opinion in Allstate Ins. Co. v. Heffner, supra, and from its affirmance sub silentio in that case of our decision in Pontius that a deceased victim’s estate may recover under the Act, we conclude that what was dictum in our earlier opinion must properly be applied to this case and become our holding. As we stated in Heffner v. Allstate Ins. Co.:

In any event, even if we were to conclude that the General Assembly could, consistent with our Constitution, abolish the recovery of damages for economic loss in a survival action, we could not conclude that the General Assembly so intended—at least not in the equivocal manner Allstate’s argument suggests. Such a reading of the Act would certainly forsake its stated objectives of being fair, comprehensive, and achieving “the maximum feasible restoration of all individuals injured and compensation of the economic losses of the survivors of all individuals killed” on our highways.

Id., 265 Pa.Superior Ct. at 193, 401 A.2d at 1165-66. (Emphasis in the original) (Footnote omitted). There, we termed the result advocated by the insurance company “untoward” and “legislatively unintended.” Id. We are no less convinced of the correctness of our position in Heffner v. Allstate Ins. Co. today than we were two years ago. Indeed, in light of Allstate Ins. Co. v. Heffner, supra, we stand the firmer yet behind our conviction that the Legislature intended no such result. We hold today that the estate of a deceased victim is entitled to recover work loss benefits under the No-fault Act.⁸

Finally, although the “deceased victim” in the instant case is a minor child who had never worked, we see no difficulty in calculating his work loss.⁹ Section 205(c) sets out the method by which the work loss of one not employed at the time of the accident is to be calculated:

(c) Not employed.—The work loss of a victim who. is not employed when the accident resulting in injury occurs 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, if any, the victim would reasonably have been expected to realize income during the accrual period;

40 P.S. § 1009.205(c). Because the victim was never employed the “probable annual income” referred to in Section 205(c)(1) will be “the average annual gross income of a production or nonsupervisory worker in the private nonfarm economy in the state in which the victim is domiciled for the year in which the accident resulting in injury occurs” as required by Section 205(d)(C) of the Act. 40 P.S. § 1009.-205(d)(C). See Marryshaw v. Nationwide Mut. Ins., 13 Pa.D. & C.3d 172 (1979).¹⁰ In addition, it has been suggested that the fact that the victim never worked creates a problem about determining the proper “accrual period” to be utilized in fixing the work loss amount; we think the existence of such a problem illusory. The “accrual period,” instantly, the number of years the deceased victim would have worked had he survived the accident, can be readily established by reference to actuarial tables and other relevant statistical compilations. This is true even though the deceased victim was never actually given the chance to work and that, therefore, we cannot precisely fix the date of his entry into the working world.

The order is reversed and the case remanded for disposition not inconsistent with this opinion.

HESTER, J., filed a dissenting opinion.

1 . This case was originally argued before a panel of this Court. It was ordered reargued before the Court en banc because of the importance of the questions presented.

2 . Act of July 19, 1974, P.L. 489, No. 176, 40 P.S. §§ 1009.101 et seq. (Supp. 1980-81) hereinafter referred to as the Act or the No-fault Act.

3 . In his reargument brief appellant asserts the right to “stack” work loss benefits because there were two vehicles insured under the policy. The lower court did not reach the question (if indeed the question was ever presented to it) because it was precluded from going further once it had sustained the preliminary objections and dismissed the complaint. Accordingly, we need not address the question ourselves.

On the stacking question see Wilson v. Keystone Ins. Co., 3822 November Term, 1979, (Phila. Co., May 7, 1981). Accord, McNemee v. Farmers Insurance Group, 228 Kan. 211, 612 P.2d 645 (1980); Petty v. Allstate Ins. Co., Minn., 290 N.W.2d 763 (1980); Wasche v. Milbank Mutual Ins. Co., Minn., 268 N.W.2d 913 (1978); Cooke v. Safeco Ins. Co. of America, 94 Nev. 745, 587 P.2d 1324 (1978); Travelers Ins. Co. v. Lopez, 93 Nev. 463, 567 P.2d 471 (1978); Carey v. Electric Mut. Liability Ins. Co., 500 F.Supp. 1227, 1234 (1980) (Footnote 2). Cf., State Farm Mut. Auto. Ins. Co. v. Williams, 481 Pa. 130, 392 A.2d 281 (1978); Harleysville Mut. Cas. Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968); Sones v. Aetna Cas. & Surety Co., 270 Pa. Superior Ct. 330, 411 A.2d 552 (1979). And see, Zittrain, Whose Fault Is No-Fault?: The Pennsylvania No-fault Motor Vehicle Insurance Act, 41 U.Pitt.L.Rev. 27, 58-67 (1979).

4 . 40 P.S. § 1009.103 defines survivor as “(A) spouse; or (B) child, parent, brother, sister or relative dependent upon the deceased for support.”

5 . For the propriety of the court’s sua sponte grant of leave to amend the complaint see Delgrosso v. Gruerio, 255 Pa. Superior Ct. 560, 389 A.2d 119 (1978) and Keller v. Cook, 69 York Leg.Rec. 161 (1956).

6 . In Pontius v. United States Fidelity & Guaranty Co., the parties jointly petitioned this Court to reverse the lower court’s order denying work loss benefits to the deceased victim’s estate. The reason for the petition was the parties’ desire to have the case consolidated on appeal with the Allstate Ins. Co. v. Heffner. Judge Wieand’s order in Pontius read:

NOW, this 3rd day of July, 1979, upon request of counsel for the parties that a summary disposition of the appeal be made consistently with the decision of this court in Heffner v. Allstate Insurance Company ..., which decision is presently the subject of a petition for allowance of appeal to the Supreme Court of Pennsylvania, the judgment of the lower court is hereby reversed and remanded without prejudice to the appellee’s right to petition for allowance of appeal to the Supreme Court of Pennsylvania.

7 . See Heffner v. Allstate Ins. Co., 265 Pa. Superior Ct. at 191 n.25, 401 A.2d at 1164 n.25 where we said:

“The other elements of damages for wrongful death and survival appear to have been preserved. With respect to wrongful death actions, the present value of the victim’s services to his dependents is recoverable by reading Sections 301(a)(4), 202(d) and 103 together, and funeral expenses are recoverable by reading Sections 301(a)(4), 202(a) and 103 together. Similarly, in survival actions, damages for pain and suffering are recoverable under Section 301(a)(5), and medical expenses may be recouped pursuant to Sections 301(a)(4), 202(a) and 103.”

8 . See, e.g. Bulgin v. Pennsylvania Assigned Claims Plan, 655 Civil 1981 (Cumb. Co., Sept. 21, 1981); Smith v. Motorist Mut. Ins. Co., 129 P.L.J. 389 (Alle. Co., 1981); Tubner v. State Farm Mut. Auto. Ins. Co., 129 P.L.J. 387 (Alle. Co., 1981). Cf. Sachritz v. Pennsylvania Nat. Mut. Cas. Ins. Co., 293 Pa. Superior Ct. 483, 439 A.2d 678 (per Hoffman, J., (1981); Daniels v. State Farm Mut. Auto. Ins. Co., 283 Pa. Superior Ct. 336, 423 A.2d 1284, 1288 (1981).

In Sachritz, Judge Hoffman denominated these benefits as “post mortem work loss benefits.”

Interestingly enough, in Pontius v. United States Fidelity & Guaranty Co., on remand from the Supreme Court, the Dauphin County Court of Common Pleas came to the conclusion that the Heftier opinions, supra, did not stand for the proposition that an estate may collect work loss benefits. See Pontius v. United States Fidelity & Guaranty Co., 102 Dauph. 432 (1981).

9 . Since the only question properly presented is the propriety of awarding work loss benefits to the deceased eleven year old’s estate we need not address the issue of dependency, the latter being more properly a question concerning survivor’s loss benefits.

10 . In Marryshaw v. Nationwide Mut. Ins., 13 Pa. D. & C. 3d 172 (1979) the court held that a nineteen-year-old college student who had never worked, could collect work loss benefits under Section 205(c) of the Act based on the Pennsylvania Insurance Department’s calculation of “the average annual gross income of a production or nonsupervisory worker in the private nonfarm economy in” Pennsylvania. As the court cogently stated there, [the insurance company’s] view [that such benefits are not conferrable] fails to take into consideration the established principle of Pennsylvania tort law that impairment of earning capacity resulting from physical or mental injury caused by an accident is a legitimate element of damages, and that proof of this element does not depend upon showing that, at some time the victim was gainfully employed. Accordingly, such damages have been awarded to a three-year-old child; Campbell v. Philadelphia, 252 Pa. 387, 97 Atl. 456 (1916); to minors, each seven years old; Fedorawicz v. Citizens’ Electric Illuminating Co., 246 Pa. 141, 92 Atl. 124 (1914); O’Hanlon v. Pittsburgh Railways Co., 256 Pa. 394, 100 Atl. 972 (1917); to an eight-year-old girl, Brzyski v. Schreiber, 314 Pa. 353, 171 Atl. 614 (1934); to a ten-year-old boy; Allen v. Buffalo, R. & P. Ry., 274 Pa. 518, 118 Atl. 490 (1922); and to a high school student, 18 years old at the time of the accident; Fisher v. Schlegel, 26 Berks 57 (1933), affirmed 315 Pa. 390, 172 Atl. 658 (1934).

Id. at 175-176. (Emphasis in original).