Opposition Brief — Miller v. Keystone Insurance

Supreme Cond, WLS

FIiItELD

>) | AUG 26 1994

No. 94-188 | OFFICE OF THE GLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1994

MARY C. MILLER, Administratrix of the

Estate of JOHN R. MILLER, Deceased,

and all others similarly situated,

Petitioners,

KEYSTONE INSURANCE COMPANY,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF PENNSYLVANIA

BRIEF IN OPPOSITION

JEFFREY A. LEss

(Counsel of Record)

A. RICHARD FELDMAN

BAZELON & LESS

1515 Market Street,

7th Floor

Philadelphia, PA 19102

(215) 568-1155

Attorneys for Respondent,

Keystone Insurance Company.

| eShop I RRA ESE ARSE NR ESTE AE LEBEN REARDON UOT

Washington, 0.C. © THIEL PRESS «© (202) 328-3286

August 26, 1994

(3)

QUESTIONS PRESENTED

1. Whether petitioner failed to raise any federal ques-

tion in the state court proceedings below?

2. Whether this Court lacks jurisdiction to review a

decision of a state court on a matter of state law where

the only federal question alleged is that the decision

overruled a prior state court precedent in violation of the

doctrine of stare dectsts?

(ii)

TABLE OF CONTENTS =e

QUESTIONS PREGEINE BE. cece ccccccccscccsccscecs i

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i ee eo i a wed ee 6 awe ene anee iii

GN iad i, ek i a a ea eo & 6a eae 1

STATEMENT OF JURISDICTION .. occ ccccccccsccceces 2

et ee SS co ob d ee eeevaseeenanas 2

See Ga SET, 4% 6-6 a be 2 0 66S wow ee 5

RE i. ea a ee eee ee ene 6 6b eee es 5

I. PETITIONER FAILED TO RAISE ANY FED-

ERAL ISSUE IN THE STATE COURTS ............ 5

II. THIS COURT LACKS JURISDICTION TO

REVIEW THE DECISION OF THE PENN-

SYLVANIA SUPREME COURT, SINCE

PETITIONER HAS FAILED TO IDENTIFY

ep NA ee ee 7

III. THE PENNSYLVANIA SUPREME COURT’S

DECISION WAS CONSISTENT WITH STARE

SEGRE 0 9 6.0 6 666 eAa OSE HERR ewe eeewees 9

IV. THE PETITION FOR WRIT OF CERTIORARI

MISSTATES THE RECORD .........2..22cee0- 12

CHILD ccc cc eccceeseeecnesewseecsesesees 14

APPENDICES:

— APPENDIX A — Plaintiff’s Exhibit 1 In Oppo-

sition to Defendant’s Motion for Summary

BO POC ee CEE OREO la

— APPENDIX B — Plaintiff’s Exhibit 2 in Oppo-

sition to Defendant’s Motion for Summary

BEES EP EE SO CA ea a ar 3a

— APPENDIX C — Appellees’ Application For

Reargument in Supreme Court of Pennsyl-

vania, Middle District, Miller, et al. v.

Keystone Insurance Company .........-0++2+e05: 4a

(itt)

Page

TABLE OF AUTHORITIES

Cases:

Allstate Insurance Co. v. Heffner, 491 Pa. 447, 421

pe. Ee re rr. ee ee 2-3

Bankers Life and Casualty Co. v. Crenshaw, 486 US.

ee) ere eee ere fa ee ee 7

Board of Directors of Rotary International v. Rotary

Club of Duarte, 481 US. 537 (1987) ............ 5-6, 7

Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 US.

ie o 3 EP SPS aa aa eee ene aa ae 7,8,9

Central Land Company of West Virginia v. Laidley,

i ois Se fy | ee eee Te ee ee ceah ee) 7

D’Ambrosio v. Pennsylvania National Mutual Casualty

Insurance Company, 494 Pa. 501, 431 A.2d 966

2 ee er er Se i ee eee 11

Dercoli v. Pennsylvania National Mutual Insurance

Co., 520 Pa. 471, 554 A.2d 906 (1989).......... 4, 8-12

Freeze v. Donegal Mutual Insurance Company, 504

Pe, Bi Oe Pe EET oo cv et esi w cence. 4

Great Northern Ry. Co. v. Sunburst Oil & Refining

i ee Os RUUD no i bene eb eee cccc veces 7,8

Patterson v. Colorado, 205 US. 454 (1907) ............ 7,8

Sachritz v. Pennsylvania National Mutual Casualty

Insurance Co., 500 Pa. 167, 455 A.2d 101

po MES ar i ee eae 11

Smith v. Harleysville Insurance Company, 494

ly Wes WO PR OUR 6 cbc ccs ence ee ceses 11

Taglianetti v. Workmen’s Compensation Appeal Board,

508 Pa. 270, 469 A.2d 548 (1988) ............2226. 11

Webb v. Webb, 451 US. 493 (1981) .... 2... eee ee ee eee 6

Willoughby v. City of Chicago, 235 US. 45 (1914) ........ 7

(wv)

Constitutions:

ee ys eg be wae ewes eee

NN PS ea ae

Statutes:

ee es ec Od Cc nee wha eh 4 ee eee

Act of February 12, 1984, P.L. 26, No. 11.........

Pennsylvania No-Fault Motor Vehicle Insurance Act,

40 PS. §1009.101, et seg. (repealed, Act of

February 12, 1984, P.L. 26, No. 11 §8(a)) ......

§ 106(c)(1), 40 P.S. §1009.106(c)(1) ..........

§ 202(b), 40 P.S. §1009.202(b)..............

Rules:

Rules of the Supreme Court of the United States

WOE ino has ah ek RRA Ss 8

No. 94-188

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1994

MARY C. MILLER, Administratrix of the

Estate of JOHN R. MILLER, Deceased,

and all others similarly situated,

Petitioners,

KEYSTONE INSURANCE COMPANY,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF PENNSYLVANIA

BRIEF IN OPPOSITION

OPINION BELOW

The decision of the Pennsylvania Supreme Court in

this case is reported at 535 Pa. 531, 636 A.2d 1109

(1994).

2

STATEMENT OF JURISDICTION

This Court does not have jurisdiction over this case

pursuant to 28 U.S.C. §1257(a), or any other statute

or rule. The reasons why this is so are set forth, infra.

STATEMENT OF THE CASE

This is an action, styled as a class action, for insurance

benefits under the Pennsylvania No-Fault Motor Vehicle

Insurance Act, 40 P.S. §1009.101, et seg. (repealed,

Act of February 12, 1984, P.L. 26, No. 11, §8(a) (“‘No-

Fault Act’’).)

Petitioner Mary C. Miller brought suit in state court

on August 11, 1986 in her capacity as the administratrix

of the estate of John R. Miller. John Miller, an insured

of respondent Keystone Insurance Company (“Key-

stone”)! , had died in an automobile accident six years

before, on August 12, 1980.

Following the accident in 1980, Keystone had promptly

paid a variety of insurance benefits pursuant to John R.

Miller’s insurance policy. Keystone paid $1,500 in fun-

eral benefits on September 15, 1980, $5,652.97 in colli-

sion coverage benefits on October 1, 1980, and $5,000 in

survivor’s loss benefits over a period of time ending on

April 30, 1982. Petitioner did not request Keystone to pay

work loss benefits” to the estate and Keystone did not pay

1 Keystone is a wholly owned subsidiary of AAA Mid-Atlan-

tic Inc. and has two subsidiaries: Keystone Insurance Company of

New Jersey, and Keystone State Life Insurance Company.

2The No-Fault Act provided for work loss benefits in an

amount not to exceed $15,000, to be paid to an accident victim

for lost income resulting from the accident. 40 PS. §1009.-

202(b). Work loss benefits were determined to be payable for

income loss arising after death. Allstate Insurance Co. v. Heff-

[footnote continued]

3

any such benefits. (A. 5a.)°

In the trial court, Keystone moved for summary

judgment based on the statute of limitations. Under the

No-Fault Act, an action for work loss benefits was

untimely unless filed within four years of the accident

or within two years from the last payment of benefits.

40 P.S. §1009.106(c)(1).

In opposition to Keystone’ summary judgment

motion, petitioner did not present any testimonial evi-

dence, in the form of affidavit or otherwise. The sole

evidence submitted by petitioner in opposition to the

motion consisted of two documents from Keystone’s

files. One was a chart listing the various payments made

on the claim. (R.A. 3a.)* The other was a letter from

an independent claims adjuster to a Keystone claims

representative. (R.A. la.) (See A. 5a-6a.)

The trial court granted summary judgment in favor of

Keystone and against petitioner based on the statute

of limitations. (A. 57a.)

On appeal to the Superior Court of Pennsylvania, an

intermediate appellate court, petitioner contended (for

the first time) that the statute of limitations had been

tolled because Keystone had breached an alleged duty

of good faith and fair dealing that it owed to her. The

alleged breach consisted of Keystone’s failure to advise

petitioner that she had a potential cause of action against

ner, 491 Pa. 447, 421 A.2d 629 (1980). This kind of post-death

work loss benefit has been termed “post-mortem work loss bene-

fits.”’

The Appendix appended to the Petition for Writ of Cer-

tiorari will be cited as “‘A.”’

* Respondent's Appendix is appended hereto and will be

cited as “R.A.”

4

Keystone for post-mortem work loss benefits. At the

time that Keystone was interacting with petitioner, no

Pennsylvania appellate court had yet recognized a right

of estates of deceased victims to post-mortem work loss

benefits. Such a right was eventually established in Penn-

sylvania on December 30, 1983, when the Pennsylvania

Supreme Court decided Freeze v. Donegal Mutual Insur-

ance Company, 504 Pa. 218, 470 A.2d 958 (1983).

(See A. 13a n.10.)

The Superior Court reversed the summary judgment

in favor of Keystone and remanded for further pro-

ceedings. (A. 20a.) The Superior Court ruled that an

insurer under the No-Fault Act had a duty to advise an

unrepresented insured of potential claims that the insured

might bring against the insurer. The Superior Court fur-

ther implied that a failure to so advise an insured would

toll the statute of limitations. This was a novel ruling

in Pennsylvania law, which the Superior Court based on

the prior Supreme Court of Pennsylvania decision in

Dercoli v. Pennsylvania National Mutual Insurance Co.,

520 Pa. 471, 554 A.2d 906 (1989).

On appeal to the Pennsylvania Supreme Court, the

Superior Court’s decision was reversed and the summary

judgment in favor of Keystone was reinstated. The

Supreme Court held that petitioner’s claim was barred

by the No-Fault Act’s statute of limitations. In the

Supreme Court’s words, the Superior Court had “mis-

interpreted this Court’s holding in Dercoli and applied

it to a situation which is factually distinguishable.” (A.

4a.)

5

SUMMARY OF ARGUMENT

Petitioner failed to raise any federal questions in the

state court proceedings, and on this basis alone, the

petition should be denied.

Petitioner has failed to identify a federal question in

her petition and this Court accordingly lacks jurisdiction

over this case. The issue identified by petitioner —

whether the Pennsylvania Supreme Court’s decision

below overruled one of its prior decisions without due

regard for stare decisis — does not raise an issue of federal

law. Stare decisis is not a constitutional doctrine, and

numerous cases of this Court hold that no jurisdiction

exists to review state court decisions on the ground that

they overrule prior state court precedent.

In any event, the Pennsylvania Supreme Court did not

overrule any precedents. On the contrary, the Court

was careful to distinguish the case relied upon by peti-

tioner, and to show the consistency of its decision with

various other prior opinions.

Petitioner’s statement of facts contains several alle-

gations that are not true and not supported by record

evidence.

ARGUMENT

1.

PETITIONER FAILED TO RAISE ANY FEDERAL ISSUE

IN THE STATE COURTS.

“It is well-settled that this Court will not review a

final judgment of a state court unless ‘the record as a

whole shows either expressly or by clear implication

that the federal claim was adequately presented in the

state system.’ ” Board of Directors of Rotary Inter-

6

national v. Rotary Club of Duarte, 481 U.S. 537, 550

(1987), quoting Webb v. Webb, 451 U.S. 493, 496-97

(1981). Here, petitioner never raised below the fed-

eral issue which she now urges this Court to decide.

Accordingly, the petition for writ of certiorari must

be denied.®

The petition identifies as the sole federal question the

issue whether the Supreme Court of Pennsylvania’s

decision violated the “Rule of Law and stare dectsis”’

by overturning “years of precedent” (Petition at i),

a question which the petition treats as going to the

“constitutionality” of the state court’s conduct. (Jd.

at 2.) Assuming for the moment that the decision

below overturned precedent, and that overturning a

state law precedent could conceivably rise to the level

of a violation of the United States Constitution, the

petition would nonetheless fail because no federal con-

stitutional issue was ever argued or presented to the

state courts.

Petitioner filed an Application for Reargument with

the Pennsylvania Supreme Court following the decision

of which she complains. (R.A. 4a.) In that Application,

petitioner did assert the argument that the Pennsylvania

Supreme Court’s decision violated stare decisis. How-

ever, petitioner never identified the United States Con-

stitution as a source of law that had been violated, and

did not cite a single federal case in her Application.

Rather, the entire reargument petition was cast in terms

of state law. Given these facts, petitioner failed to pre-

5In violation of Rule 14(h) of the Rules of the Supreme

Court, petitioner has failed to identify where in the state court

proceedings she raised the alleged federal question that is the

subject of her petition.

7

serve the alleged federal constitutional issue for this

Court’s review. Bankers Life and Casualty Co. v. Cren-

shaw, 486 U.S. 71, 79-80 (1988); Board of Directors of

Rotary International, supra, 481 U.S. at 550 & n.9.

Il.

THIS COURT LACKS JURISDICTION TO REVIEW THE

DECISION OF THE PENNSYLVANIA SUPREME COURT,

SINCE PETITIONER HAS FAILED TO IDENTIFY A

FEDERAL QUESTION.

This Court has certiorari jurisdiction to review state

court decisions only where a federal question is involved.

28 U.S.C. §1257(a). In this case, no jurisdiction exists,

since the only federal question identified by petitioner —

whether the Pennsylvania Supreme Court failed to

observe stare decisis — does not raise a federal question.

The fundamental problem with petitioner’s attempt

to invoke this Court’s certiorari jurisdiction is her inabil-

ity to show that a state court’s departure from stare

decisis on a matter of state law constitutes a violation

of the United States Constitution.

This Court has repeatedly held that no constitutional

violation occurs when a state court overrules a prior

precedent. See, e.g., Great Northern Ry. Co. v. Sun-

burst Oil & Refining Co., 287 U.S. 358, 364, 366 (1932);

Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 US.

673, 680-81 (1930); Willoughby v. City of Chicago, 235

U.S. 45, 50 (1914); Patterson v. Colorado, 205 U.S. 454,

460-61 (1907); Central Land Company of West Virginia

v. Laidley, 159 U.S. 103, 112 (1895). As Justice Bran-

deis explained: “the mere fact that a state court has

rendered an erroneous decision on a question of state

law, or has overruled principles or doctrines established

by previous decisions on which a party relied, does not

Da

8

give rise to a claim under the Fourteenth Amendment

or otherwise confer appellate jurisdiction on this court.”

Brinkerhoff-Faris Trust & Savings Co., supra, 281 U.S.

at 680 (footnote omitted).° “State courts, like this

Court, may ordinarily overrule their own decisions

without offending constitutional guaranties ....’’ Id.,

281 U.S. at 682 n.8.

In the words of Justice Holmes: “There is no consti-

tutional right to have all general propositions of law

once adopted remain unchanged.’’ Patterson, supra,

205 U.S. at 461. “[I]n general, the decision of a court

upon a question of law, however wrong and however

contrary to previous decisions, is not an infraction of the

14th Amendment merely because it is wrong or because

earlier decisions are reversed.” Id.

In short, this Court is “not at liberty, for anything

contained in the Constitution of the United States, to

thrust upon [state] courts a different conception either

of the binding force of precedent or of the meaning of

the judicial process.”” Great Northern Ry. Co., supra, 287

U.S. at 366 (Cardozo, J.).

The petition for writ of certiorari is accordingly

doomed for failure to raise a federal question. Stare

decisis is not a federal constitutional doctrine that con-

strains the decisions of state courts on matters of state

law. Even assuming that the Pennsylvania Supreme

6 Petitioner, it should be noted, does not contend that she

relied to any extent on the 1989 Dercoli decision, nor could she.

Petitioner commenced this litigation in 1986, based on events

that occurred in 1980-82. Dercoli was not decided until 1989.

Petitioner did not contend that Keystone had breached its so-

called duty of good faith and fair dealing until this case was pend-

ing on appeal from the trial court’s grant of summary judgment,

after Dercoli was decided.

9

Court “violated” stare decisis by overruling a prior

decision, no federal question reviewable by this Court

would be presented. And, in the absence of a federal

question, this Court lacks jurisdiction to review the

final decision of a state court. Brinkerhoff-Faris Trust

& Savings Co., supra, 281 U.S. at 680.’

Il.

THE PENNSYLVANIA SUPREME COURT’S DECISION

WAS CONSISTENT WITH STARE DECISIS.

As shown above, petitioner did not raise her pur-

ported federal issue in the state courts, and the issue

does not present a federal question in any event. How-

ever, even if it were assumed that petitioner could over-

come these hurdles, her petition would have to be denied

because her premise is false — the Pennsylvania Supreme

Court in this case did not overrule its prior decision in

Dercoli.

In Dercoli, the plaintiff sued two automobile insurers

for damages for breach of an alleged duty of good faith

and fair dealing. In her complaint, Mrs. Dercoli alleged

that she had been severely injured in an automobile acci-

dent in which her late husband had been at fault. She

further alleged that the insurer defendants had told her

that she did not need to retain counsel, and that they

would ensure that she received everything to which sive

was entitled. (A. 8a.)

’ Petitioner complains that the three justices who dissented

in Dercoli in 1989 comprised a majority in this case, decided

five years later. However, nothing in the United States Constitu-

tion prescribes the minimum number of judges for valid state

court decisions. And, as noted in the text, there is no constitu-

tional impediment to a state court reversing its direction.

10

While the insurers were adjusting Mrs. Dercoli’s claims,

the defense of interspousal immunity was abolished by

the Pennsylvania Supreme Court. This meant that Mrs.

Dercoli had a viable tort claim for negligence against her

late husband’s estate which was unquestionably covered

by the insurance policies’ liability coverage. Notwith- |

standing this fact, the insurers did not advise Mrs. Dercoli

of the potential tort claim or of the fact that the claim

was clearly covered by the policies. (/d.)

On appeal to the Pennsylvania Supreme Court, the

Dercoli case elicited three separate opinions. Four jus-

tices voted in favor of the plaintiff, deciding that her

complaint was sufficient to withstand the state pro-

cedural equivalent of a motion to dismiss for failure

to state a claim. Three justices dissented. In a concur-

ring opinion that commanded the allegiance of two

justices of the four-justice majority, Justice Papadakos

emphasized that the insurers had “knowingly and pur-

posefully talked the widow out of seeking independent

legal counsel” and had therefore “voluntarily placed

themselves in the position of protecting the widow

and obtaining for her all benefits that were reasonably

due under the facts and state of law known to the insur-

ers.” Dercoli, supra, 520 Pa. at 482, 554 A.2d at 911.

Justice Papadakos stressed that the Court's dec'sion

would not impose an affirmative duty on insurers:

“On the contrary,” he stated, “in this case the insurers

themselves voluntarily transformed themselves into legal

advisors to the widow.” Jd.

In the present case, the Pennsylvania Supreme Court

did not overrule its prior decision in Dercoli. On the

contrary, the Court made a “determination that [ Der-

coli] is not applicable to the instant case.” (A. 4a.)

The Supreme Court agreed with Keystone that the

‘

11

Superior Court had “misinterpreted this Court’s holding

in Dercoli and applied it to a situation which is factually

distinguishable.”’ (Jd. )

Specifically, the Pennsylvania Supreme Court held

that the Superior Court was mistaken in thinking that

Dercoli “impose[d] an affirmative duty upon an insurer

to advise and inform an insured of all potential claims

when the insurer assumes the responsibility for processing

the claim.” (A. 7a.) The Court characterized what the

Superior Court had done as “erroneously interpret[ing]

and impermissibly expand[ing] our limited holding in

Dercolt beyond its natural bounds... .”’ Id.

The Supreme Court in this case not only declined to

overrule Dercoli, it relied on stare decisis and several

prior precedents in reaching its decision to reinstate the

judgment in favor of Keystone. The Court cited favor-

ably its “factually similar” decision in Taglianetti v.

Workmen’s Compensation Appeal Board, 503 Pa. 270,

469 A.2d 548 (1983). (A. 9a.) In that case, the Court

had declined “‘in the absence of evidence of fraud, inten-

tional deception, or the making of misleading state-

ments,” to impose an “affirmative duty to apprise a

compensation claimant of any or all available benefits.”’

(A. 10a.)

The Court also “reaffirmed [its] earlier rulings” in

D’Ambrosio v. Pennsylvania National Mutual Casualty

Insurance Company, 494 Pa. 501, 431 A.2d 966 (1981),

and Smith v. Harleysville Insurance Company, 494 Pa.

515, 431 A.2d 974 (1981), “where [it] declined the

opportunity to create a judicial remedy for bad faith con-

duct which occurs under the No-Fault Act.” (A. 1la-

12a.) In addition, the Court relied upon its prior decision

in Sachritz v. Pennsylvania National Mutual Casualty

Insurance Co., 500 Pa. 167, 455 A.2d 101 (1982), for

_

12

the “fundamental and long-standing rule in Pennsyl-

vania... that a lack of knowledge, mistake or misunder-

standing does not operate to toll the statute of limita-

tions.”’ (A. 12a.)

In short, far from discarding the rule of stare decists,

as petitioner alleges, the Pennsylvania Supreme Court in

this case was careful to show that its decision was con-

sistent with its prior precedents. The Court did not over-

rule Dercoli, but simply distinguished it. Thus, even if

stare decisis were a federal doctrine on the basis of which

this Court could review state court decisions in purely

state law matters — which it is not — the petition for

writ of certiorari should not be granted in this case. The

doctrine of stare decisis was properly applied in the

proceedings below.

IV.

THE PETITION FOR WRIT OF CERTIORARI MISSTATES

THE RECORD.

The factual assertions contained in the Petition for

Writ of Certiorari are nearly all incorrect and not sup-

ported by record evidence. Although respondent does not

believe that these misstatements of the record are mater-

ial, respondent is nonetheless obliged to point them out.

It is not true and there is no record evidence that

Keystone made an open-ended promise “to pay the

no-fault benefits to which [the Millers] were entitled.”

(Petition at 8.) Keystone’s “promises” to John Miller

were set forth in their entirety in the insurance policy

Keystone issued to him. The policy was never intro-

duced into the record by petitioner.

It is not true and there is no record evidence that

petitioner “‘was determined to be a dependent sur-

13

vivor,”’ if what is meant by that is a judicial determin-

ation. While it is true that Keystone treated petitioner

in her individual capacity as a dependent survivor, and

paid her $5,000 in survivor’s loss benefits, the issue of

petitioner’s status as a dependent survivor was never

litigated. Moreover, the state courts determined that

petitioner instituted this action solely in her capacity

as the administratrix of her son’s estate, and not in her

capacity as her son’s survivor. (A. 25a-26a, n.2.)

It is not true and there is no record evidence that

petitioner “‘filed a claim form that said Keystone would

pay the no-fault benefits to which she was entitled.”

(Petition at 8.) The claim form filed by petitioner was

never submitted into evidence.

Finally, it is not true and there is no record evidence

for petitioner’s statement that “Keystone chose as its

corporate policy not to pay [work loss benefits] unless

specifically requested and not to tell insureds of their

entitlement.”’ (Petition at 8 (emphasis in original).)

Moreover, at the time Keystone was interacting with

petitioner, between August, 1980 and April, 1982, no

published Pennsylvania appellate decision had held

that estates were entitled to post-mortem work loss

benefits. (A. 13a, n.10.)

14

CONCLUSION

For the foregoing reasons, this Court should deny

the Petition for Writ of Certiorari.

Respectfully submitted,

JEFFREY A. LEss

(Counsel of Record)

A. RICHARD FELDMAN

BAZELON & LESS

1515 Market Street

7th Floor

Philadelphia, PA 19102

(215) 568-1155

Attorneys for Respondent,

Keystone Insurance Company.

la

APPENDIX A

ARTHUR REEHER COMPANY, INC.

Executive Offices

5721 JONESTOWN ROAD

P.O. Box 6215, HARRISBURG, PA 17112

PHONE (717) 545-3726

Please Reply To:

ARTHUR REEHER CO.

P.O. BOX 385

Your Claim No. Unknown YORK, PA 17405

Our File No. 02-ACI-7649

Policy No. 48105455

Assured Miller, John R.

Claimant Danner, Donald K.

D/L 8-12-80

Type of Loss Double Fatality

Date: 10-21-80

TO: Keystone Insurance Company

1401 West Mt. Royal Avenue

Baltimore, MD 21201

ATTN: MR. SAL LIBERTO,

CLAIMS MANAGER

Dear Mr. Liberto:

This will supplement our previous report dated

10-10-80 and acknowlege our Harrisburg Branch

cc of 10-16-80, and our phone conversation of

10-20-80 along with serving as our closing report.

2a

As you have indicated in our telephone conversa-

tion of 10-20-80 that Mary Miller (mother of the

deceased insured) would be entitled to survivors

benefits which according to your Philadelphia

office would involve a monthly check of $135.00

until the $5,000 survivors benefit is exhausted we

have notified Mrs. Miller that she will be receiving

monthly payments shortly in that regard. In addi-

tion, we made no mention to Mrs. Miller as dis-

cussed pertaining to possible benefits for lost

wages and will merely await developments in that

regard.

In light of the above, our activity in the York area

would now appear to be complete while our

Harrisburg Branch follows further in their inves-

tigation and handling. Thereofre, we are taking

the liberty of retirring out file and submitting

our service invoice for your consideration.

We again thank-you for allowing us to be of ser-

vice, and of course will retain this file in the event

that we can be of any further service in this area.

Very truly yours,

ARTHUR REEHER COMPANY

/s/ Joseph C. Kozlowski CONFIDENTIAL

Joseph C. Kozlowski John R. Miller, Dec.

Adjuster Exhibit # 1

Enclosure: 1. One service invoice

cc: Harrisburg Branch Arthur Reeher Company

Your File #: 01-AP-14376

ATTN: MR. PAUL R. GREEN

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APPENDIX C

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

No. 84 M.D. APPEAL DOCKET, 1991

J-172-1992)

MARY C. MILLER, Administratrix of the

Estate of JOHN R. MILLER, Deceased

and all others similarly situated,

Appellees,

KEYSTONE INSURANCE COMPANY,

Appellant

APPELLEES’ APPLICATION FOR REARGUMENT

Appeal from the Judgment entered January 8, 1991,

by the Superior Court of Pennsylvania, No. 00304

NBG 1989, Vacating the Judgment dated June 2, 1989,

by the Court of Common Pleas of Dauphin County,

Pennsylvania in No. 26 S 1987, and Remanding

for Further Proceedings

RICHARD C. ANGINO, Esquire

I.D. No. 07140

ANGINO & ROVNER, P.C.

4503 North Front Street

Harrisburg, PA 17110

(717) 238-6791

Attorneys for Appellees

5a

TABLE OF CONTENTS

TABLE OF CITATIONS. ......cccccccccccscsscces iii

I. 3-2 SUPREME COURT DECISION.............--+--- 1

II. POINTS OF LAW OR FACT OVERLOOKED OR

MISAPPREHENDED BY A THREE PERSON

MAJORITY OF YOUR COURT.........------+05: 2

A. Principe of Stare Decitle. . oo occ ccc ct secs cccess 2

B. Despite Justice Flaherty’s statement in his Dercoli

dissent, insurance companies have always had a

fiduciary duty to their insured..............+-4-- 3

C. The legislature, by passing the Pennsylvania No-

Fault Act, mandated that insurance carriers

assume a fiduciary responsibility to their

insureds and pay them all benefits to which

they ame emtitled . 0. ccc cc ccc cc ecsccccccns 5

D. The Dercoli Minority/present Majority misappre-

hended the facts and law in their holding that Mrs.

Miller, from 1980 through 1984, had only a poten-

tial right to obtain work loss benefits ............-. 8

E. The three-justice Majority in the instant case mis-

apprehended the legal distinction between the

duty owed by a third party carrier or one’s

employer and the duty that an insurer owes

to its CpWR MISUTER 2 oc ct cect were ccc ssccece ‘ll

F. The holding in this case not only is contrary

to Your Court’s prior holdings as to first

party insurance law, but also will have

far-reaching application in many other insur-

ance cases with catastrophic results............+-- 13

TV. CONCLUSION 2c ccc ccc ster sccccwcccecesvecs 15

6a

Page

TABLE OF CITATIONS

Cases:

Banker v. Valley Forge Ins. Co., 401 Pa. Super. 367,

585 A.2d 504 (1991), alioc. denied 529 Pa. 615,

OOP AON Reiss ovo 0 ake re 1,14

Cowden v. Aetna Casualty and Surety Co., 389 Pa.

459, 470, 134 A.2d 223 een bs s Sah eb a eee :

Dercoli v. Pennsylvania Nat. Mut. Ins. Co., 420 Pa. 471,

SOS AOE PON NS 6 os Fk bos WK 1-4, 7,8, 10

Fedas v. Ins. Co. of the State of Penna., 300 Pa. 555,

i NS Pe Be ee 3,4

Freeze v. Donegal Mut. Ins. Co., 504 Pa. 218, 470

SP i a isis goss aoere a es ie 9

Gideon v. State Farm Mut. Auto. Ins. Co., 410 Pa. 55,

a. OR SES EIT ie ES ae dates 4

Gray v. Nationwide Mut. Ins. Co., 422 Pa. 500, 504,

See A Haws 4s Ree a eae occ 4

Heffner v. Allstate Ins. Co., 265 Pa. Super. 181, 401

A.2d 1160 (1979), aff'd, 491 Pa. 447,421 A2d

ssith nen PRE CS re rr eee 8,15

Nye v. Erie Ins. Exchange, No. 5349 §. 1979 (CP.

Dauph.), 307 Pa. Super 464, 453 A.2d 677

(1982), 504 Pa. 3,470 A.2d 98 PC os bs ce kk cas 9

Pontius v. U.S.F. & G., No. 2702 § 1977 (CP. Dauph.),

reversed by the Superior Court to No. 80 March

Term, 1978 (unreported), aff'd, 491 Pa. 447,

SRS Se ee GS ke welis eee) 8,15

Tagltanetti v. Workmen’s Compensation App. Bd., 503

Pa. 270, 469 A.2d 548 Ws Sat vv wiwecce ys 12,13

Statutes:

Motor Vehicle Financial Responsibility Law, 75 P.S.

POPE, RON, TPN ooo oo okiknk ik onc ccc 13

No-Fault Motor Vehicle Insurance Act, 40 PS.

Se oe co ueea te ot 5-8, 11-13

7a

Statutes, continued: Page

Statutory Construction Act, 1 Pa.CS.A. §1901,

8a

I.

3-2 SUPREME COURT DECISION.

The Order of Superior Court vacating the Order

of the trial court is reversed and the Order of the

Court of Common Pleas for Dauphin County

granting Appellant’s motion for Summary Judgment

on June 2, 1989, is reinstated.

Mr. Justice Larsen did not participate in the con-

sideration or decision of this case.

Mr. Justice McDermott did not participate in

the decision of this case.

Mr. Justice Cappy files a Dissenting Opinion in

which Mr. Justice Papadakos joins.

DATED: JANUARY 31, 1994

JUDGMENT ENTERED:

/s/ Shirley Bailey

CHIEF CLERK

(Emphasis supplied)

A copy of your Court’s Opinion dated January 31,

1994, is attached as Exhibit “‘A’’.

A copy of the Superior Court’s decision dated Jan-

uary 8, 1991, reported at 402 Pa. Super. 213, 586 A.2d

936 (1991) is attached as Exhibit “‘B”’; the trial court’s

Opinion and Order dated June 2, 1989, is attached as

Exhibit “C”’.

A copy of Dercoli v. Pennsylvania Nat. Mut. Ins. Co.,

520 Pa. 471, 554 A.2d 906 (1989) is attached as Exhibit

“D” and the Superior Court’s decision in Banker v.

Valley Forge Ins. Co., 401 Pa. Super. 367, 585 A.2d 504

(1991), alloc. denied 529 Pa. 615, 600 A.2d 532 (1991)

is attached as Exhibit “E”.

[1]

9a

Il.

POINTS OF LAW OR FACE OVERLOOKED OR MIS-

APPREHDED BY A THREE PERSON MAJORITY OF

YOUR COURT.

A. Principle of Stare Decisis.

Less than four years ago, a Majority of Your Court

consisting of Justices McDermott, Papadakos, Larson

and Stout held in Dercoli v. Pennsylvania Nat. Mut. Ins.

Co., 520 Pa. 471, 554 A.2d 906 (1989) that a first party

carrier, the insured’s own carrier, is. liable when it fails

to “deal with the [insured] on a fair and frank basis,

and at all times, to act in good faith.”” According to the

Majority in Dercolt, the insurer failed in its “duty of

full and complete disclosure as to all of the benefits and

every coverage that is provided by the applicable policy

or policies along with all requirements, including any

time limitations for making a claim.” Dercolt, 554 A.2d

at 909. Also see, Justice Papadakos, concurring opinion,

554 A.2d at 911 in which Justice McDermott joined.

Justice Flaherty dissented:

I dissent. Until today an insurance company on

the facts pleaded in this case has had no fiductary

duty to an insured, even when it advised tts insured

that he does not need a lawyer. But if, under the

guise of “fair dealing and good fatth,” we are now

to decide that insurance companies have a fiduciary

duty to advise of every possible claim, surely insur-

ance companies will cease even to talk to claimants

for fear of breaching this new judicially declared

duty.

* * *

As much as we all would like to see unfortunate

victims of automobile accidents compensated fully,

[2]

10a

such compensation cannot be achieved at the cost

of dismantling the insurance industry. It has always

been the case that insurance companies, insureds

and claimants are potential adversanes.

Dercoli, 554 A.2d at 911-912 (Emphasis supplied) (Zap-

pala, J., joins in this Dissenting Opinion; Nix, C.J. separ-

ately dissented).

Less than four years later in the instant case, with

Justice Larson and Justice McDermott not participating,

the Dercoli dissent of three has become a majority of

three. The legal principle of “stare decisis,” the adher-

ence to precedent, requires that the rule of law should

not change so quickly merely because half of the Major-

ity in Dercoli did not and/or could not participate in the

instant case. Because of the importance of this issue for

all insurance consumers in Pennsylvania, reargument

should be granted so that the full court can decide the

direction of insurance law in Pennsylvania.

B. Despite Justice Flaherty’s statement in his Der-

coli dissent, insurance companies have always had

a fiduciary duty to their insured.

Long before the legislative mandates established in the

No-Fault Act and accompanying Insurance Department

Regulations, Your Court consistently recognized an

insurer’s important duty of fair dealing toward an insured.

Your Court, more than half a century ago, declared in

Fedas v. Ins. Co. of the State of Penna., 300 Pa. 555,

151 A. 285 (1930):

The utmost fair dealing should characterize the

transactions between an insurance company and the

insured. If the insurer, having knowledge of a loss,

by any act throws the insured off his guard as to

the necessity of performing some duty enjoined by

[3]

asic ans pata iar Rn iat se sates

Pee ee Loe

lla

the policy, the insurer should not be permitted to

take advantage of the failure to act.

Fedas, 300 Pa. at 559.

The duty of “utmost fair dealing” was repeatedly

expressed by Your Court in cases which followed Fedas.

See, Cowden v. Aetna Casualty and Surety Co., 389 Pa.

459, 470, 134 A.2d 223 (1957) (“the insurer must

accord the interest of its insured the same faithful consid-

eration it gives its own interest”); Gideon v. State Farm

Mut. Auto. Ins. Co., 410 Pa. 55, 59, 188 A.2d 320

(1963) (“the insurer assumes a fiduciary position towards

the insured and becomes obligated to act in good faith

and with due care in representing the interests of the

insured”); Gray v. Nationwide Mut. Ins. Co., 422 Pa.

500, 504, 223 A.2d 8 (1966) (“the insurer assumes

a fiduciary position towards the insured and becomes

obligated to act in good faith and with due care in rep-

resenting the interests of the insured’’); Dercolt v. Penn-

sylvania National Mut. Ins. Co., 520 Pa. 471, 554 A.2d

906, 909 (1989) (it has long been recognized that “the

utmost fair dealing should characterize the transactions

between an insurance company and the insured’).

The decision of the three-justice Majority in the instant

action vitiates the long years of precedent set forth above

by requiring that the insurer make “knowing and pur-

poseful misrepresentations” and undertake to act “as

the insured’s counsel” before any breach of duty occurs.

See, Slip Opinion, p. 7 (attached as Exhibit “A”).

[4]

12a

C.The legislature, by passing the Pennsylvania [5]

No-Fault Act, mandated that insurance carriers

assume a fiduciary responsibility to their insureds

and pay them all benefits to which they are

entitled.

A basic tenet of statutory construction is that judges

and justices must put aside their own philosphies and fol-

low the public policy of the community as expressed in

the constitution, legislation, and established precedent.

Judges and justices may have the power when they cease

to be a minority and become a majority, but they do not

have the right to ignore legislative intent and public pol-

icy expressed in properly-passed statutes. The Statutory

Construction Act, 1 Pa. C.S.A. §1901, et seg., demands

that courts seek out and follow the legislative intent in

all statutory construction.

The particular statute involved in this case is the now-

repealed No-Fault Motor Vehicle Insurance Act, 40

P.S. §1009.101, et seg. The expressed Findings and Pur-

poses included:

(a) Findings—

*x* * *

(3) the maximum feasible restoration of all

individuals injured and compensation of the econ-

omic losses of the survivors of all individuals

killed. ...

* * *

(5) exhaustive studies . . . have determined that

the present basic system of motor vehicle accident

and insurance law... is not such a low-cost, com-

prehensive, and fair system;

(6) careful studies . . . have demonstrated that a

basic system . . . which:

ieee

13a

(A) assumes every victim payment of all his

basic medical and rehabilitation costs, and recov-

ery of a reasonable amount of work loss .. . is

such a low-cost . .. system; [6]

* * *

(b) Purpose. — Therefore, it is hereby declared to

be the policy of the General Assembly to estab-

lish . . . a Statewide system of prompt and adequate

basic loss benefits for motor vehicle accident victims

and the survivors of deceased victims.

40 F.S. §1009.102.

The innovative insurance scheme contemplated by the

legislature and enacted in 1974 envisioned a system

whereby an insured and hts insurer were partners, not

adversaries.

Following the passage of the No-Fault Act, the Penn-

sylvania Insurance Department, by regulation, mandated

that all insurance companies and their insureds the fol-

lowing notice:

C. LAWSUITS.

You will not need a lawyer to collect your No-

Fault benefits. If you are injured, [contact your

insurance company or your insurance agent] to

get claims forms. You should be paid within 30

days after the company receives completed forms

from all related parties (you, your employer, the

hospital, etc.).

31 Pa. Code §66.4, Transition Procedures.

After an accident when the insured went to his insurer

in person or by phone, he was given an application to

complete that stated at the top:

l4a

TO ENABLE US TO DETERMINE IF YOU ARE

ENTITLED TO BENEFITS UNDER THE PER-

SONAL INJURY PROTECTION LAW, PLEASE

COMPLETE THIS FORM AND RETURN IT

PROMPTLY.

No-Fault Application, Exhibit “F’’ (Emphasis supplied).

The application that the insured completed unequiv-

ocally stated that it was the responsibility of the insur-

ance carrier — “us . . . to determine if you are entitled

to benefits under the Personal Injury Protection Law.”’ [7]

Although Justice Flaherty in his Dercoli dissent

references the mandated notice that insureds will not

need to consult lawyers, he goes on to answer that

insureds should realize that they needed lawyers because

insurance companies are their enemies. This may be

Justice Flaherty’s philosophy, but it certainly was not

the legislative intent.

The No-Fault Act was designed to revolutionize the

prior adiversarial relationships between insurer and

insured. No longer. re claimant and company to be

enemies. Instead, they were to be partners, with claim-

ant providing basic information and insurer deciding the

benefits due and paying them. Nor did the insured

have to make a claim for each individual category of

benefits he sought. The application asked for basic

information, but it did not include any space where

the insured had to denominate the benefits for which

he was making a claim. That responsibility was on the

insurer. In fact, Section 106(a)(5) affirmatively required

that insurance carriers who were going to deny benefits

to which the insureds might be entitled must “give to the

claimant written notice of the rejection promptly, but in

no event more than thirty days after the receipt of

reasonable proof of the Joss” 40 P.S. §1009.106(a}({5).

—————

15a

Further, the No-Fault Act incorporated penalty pro-

visions, including counsel fees, 40 P.S. §1009.107, and

interest, 40 P.S. §1009.106(a)(2), to sanction insurance

carriers that did not perform their statutorily mandated

duties.

There is no question, therefore, that the Dercoli

three-member Minority that is the present three-member

Majority in this case ts clearly wrong in holding that an

insurance carrier does not have an affirmative duty to

pay benefits and inferentially advise its insured as to his

or her right to such benefits.

D.The Dercoli Minority/present Majority misappre-

hended the facts and law in their holding that

Mrs. Miller, from 1980 through 1984, had only a

potential right to obtain work loss benefits.

The federal studies, proposed federal act, other studies

and various state experiments references in the No-Fault

Act virtually all provided for “‘work loss’’ benefits to be

paid to survivors of deceased victims. The Pennsylvania

No-Fault Act defines ‘‘work loss” as “loss of gross

income of victim”; “victim’’ includes all who sustain

injuries including ‘“‘deceased victim”; and “injury”

includes death (see, Section 103, “‘Definitions’’).

The Superior Court in 1979, with one dissent, and

Your Court unanimously on September 22, 1980, held

in two consolidated cases that survivors and estates of

deceased victims were entitled to “work loss’’ benefits.

Heffner v. Allstate Ins. Co., 265 Pa. Super. 181, 401

A.2d 1160 (1979), aff'd, 491 Pa. 447, 421 A.2d 629

(1980) and Pontius v. U.S.F.&G., No. 2702 S 1977

(C.P. Dauph.), reversed by the Superior Court to No.

80 March Term, 1978 (unreported), aff'd, 491 Pa. 447,

421 A.2d 629 (1980).

[8]

16a

In the instant case, Mrs. Miller lost her son. Keystone

paid survivor’s loss benefits to her based on her depend-

ency on her son. There is, therefore, no question that

when Mr. Miller applied for benefits and gave a state-

ment to Keystone in October, 1980, she was entitled,

and the insurance company knew she was entitled, to

“work loss”’ benefits.

Present counsel, anticipating that insurance carriers

would not perform their legislatively mandated duty to

inform and pay benefits, in 1979 commenced a class

action entitled Nye v. Erie Ins. Exchange, No. 5349 S

1979 (C.P. Dauph.), 307 Pa. Super 464, 453 A.2d 677

(1982), 504 Pa. 3, 470 A.2d 98 (1983), which included

31 of the larger insurance companies in Pennsylvania

including Keystone Ins. Co., the Defendant in the

instant case. Although successful before the Superior

Court, Your Court held that Nye did not have standing

to sue any carrier other than his own.

As counsel anticipated, the Defendant in this case

followed a policy of keeping secret from its insureds

their right to $15,000 of work loss and, obviously, not

voluntarily paying same See, Confidential Memo refer-

enced on page 3 of Majority Opinion (Exhibit “G”’)

which states:

“In addition, we made no mention to Mrs. Miller

as discussed pertaining to possible benefits for

lost wages and will merely await developments in

that regard.”

Although Keystone and the majority in this case refer-

ence Freeze v. Donegal Mut. Ins. Co., 504 Pa. 218, 470

A.2d 959 (1983) for the proposition that the law was

uncertain until Freeze, it is clear that the law was une-

quivocal as to survivors and estates of deceased victims

where there was dependency in 1980, and Freeze merely

[9]

[10]

17a

confirmed that the law also applied to 11-year-old child-

ren who were not in the work force.

What Keystone did in the instant case amounts to

fraud. Although Keystone entered into a contract with

Mr. Miller to pay the benefits due, and although Mrs.

Miller signed a claim form which had a heading that

Keystone would determine and pay the benefits to which

she was entitled, Keystone kept Mrs. Miller’s money as it

might have kept her money from an overpayment of pre-

mium or by failing to pay medical bills or funeral

expenses. Do not insurance companies, like tellers at

banks, clerks at department stores, and/or sellers of

goods, have a legal duty to provide benefits, goods or

services for money paid? Does the Supreme Court

intend to sanction the retention of money, goods, ser-

vices or benefits so long as the insured, customer or

client does not realize that he is entitled to same? Would

such a requirement of good faith or honesty result in the

“dismantling of the insurance industry”? (Justice Fla-

herty’s dissent in Dercolt). Are not insurance companies

in business to pay benefits?

The Majority on numerous occasions draws signifi-

cance from its own conclusion that the insured only had

“potential claims”! for post mortem work loss benefits

where, in reality, there is no doubt that in 1980, and for

the next four years until the statute of limitations

expired, Mrs. Miller had a real claim.

Repeating the word “potential” as the Majority does

cannot change the fact that Mrs. Miller was entitled to

1 See, Slip Op. p. 3 (‘potential entitlements” and “possible

wage loss benefits’); p. 3 n.2 (“‘possible benefits for lost wages) ;

p. 5 (“potential claims,” “potentially entitled,” and “knowledge

of the possibility”), p. 6 (“potential claims”), p. 10 (‘any or all

available benefits”); p. 11 (“‘potentially entitled”).

[11]

18a

work loss benefits and only the statute of limitations

precludes her from recovering same. The statute of limi-

tations was intended to protect defendants who are not

aware that they did something wrong or might be called

upon to defend themselves for something that happened

years before of which they had no notice. The statute

of limitations was not intended to protect a carrier that

knew it had a responsibility to provide benefits for

premiums received and who, instead, perpetrated a fraud

upon its insured.

E.The three-justice Majority in the instant case

misapprehended the legal distinction between

the duty owed by a third party carrier or one’s

employer and the duty that an insurer owes to

its own insured.

There has always been a distinction between the duty

that an insurance carrier owes to its own insured and the

absence of any duty to third parties. Prior to the passage

of the No-Fault Law, when an individual was injured or

killed in a motor vehicle accident, it was generally the

tortfeasor or third party carrier that had the responsibil-

ity to pay medical bills, property damage, funeral bills,

and lost wages. There was no question that such a car-

rier was an adversary, and there was a need to hire one’s

own attorney to represent oneself.

The No-Fault Act, however, changed the situation so

that an insured went to and recovered substantial benefits

from his own insurance carrier, was told that he did not

need a lawyer in dealing with his own carrier, and that his

own insurance company would provide any and all bene-

fits to which the insured was entitled.

The three-justice Majority, by relying upon Taglianetti

v. Workmen’s Compensation App. Bd., 503 Pa. 270,

[12]

19a

469 A.2d 548 (1983) misapprehends that the relationship

between an insured and insurer is vastly different than

that between employee and employer.

In Taghanetti, an unidentified female in the personnel

office of the University of Pennsylvania Hospital misin-

formed the surviving widow of a deceased employee that,

apart from life insurance and the death gratuity, she had

no othe widow’s benefits. Taglianetti, 469 A.2d at

549-550. The information turned out to be incorrect

because the surviving widow was entitled to Workers’

Compensation death benefits under 77 P.S. §602.

Taghanettt, 469 A.2d at 549. Your Court in Taglia-

nettt, citing exclusively Workers’ Compensation cases and

statutes, concluded that because there was no evidence

that the unidentified female in the personnel office

“intentionally deceived” the surviving widow and because

the surviving widow’s attorney conceded that an

employer has no affirmative duty to provide information

of possible benefits, it would not “impose a duty upon

an employer where none exists.’’ Taglanetti, 469 A.2d

at 550.

The present case is not a Workers’ Compensation case,

an employment case, nor any other third party insur-

ance or relationship type case. It is a no fault/first party

case and, under such cases, an insurance carrier has a

fiduciary duty to its insured.

[13]

20a

F. The holding in this case not only is contrary to

Your Court’s prior holdings as to first party

insurance law, but also will have far-reaching

application in many other insurance cases with

catastrophic results.

Although the legislature repealed the No-Fault Law, it

adopted in 1984 and amended in 1990, the Motor

Vehicle Financial Responsibility Law, 75 P.S. §1701,

et seg., (MVRFL). The MVFRL continues to require a

close relationship between an insured and insurer in

obtaining first party benefits which include medical

expenses, wage losses, funeral expense, death benefits,

and uninsured and underinsured motorist coverage. The

legislature requires that insurance carriers provide their

insureds with Section 1791 “important notices’’ to

advise their insureds as to their potential rights to pur-

chase coverage. Insurance carriers must explain cover-

ages and obtain signatures and dates to specific forms

to select limited tort, reject ininsured/underinsured

coverage or stacking of same. See, e.g., Section 1731,

1738. Also see, Section 1734 requiring a written waiver,

particularly under the 1984 law. Surely, the three-

justice decision in this case flies in the face of such

legislation.

The Superior Court recently decided Banker v. Valley

Forge Ins. Co., 401 Pa. Super. 367, 585 A.2d 504 (1991),

alloc.denied, 529 Pa. 615, 600 A.2d 532 (1991), that

emphasizes the duty of an insurance company to deal

with an insured fairly and in good faith, which includes

the duty of full and complete disclosure as to all of the

benefits and every coverage that is provided by the

applicable policy or policies.

The decision of the three-member Majority in this case

gives a clear signal to insurers that they should merely

Fi ancmanieeenemataiatinial

[14]

2la

accept claims information, pay some nominal amount,

and sit back and wait for the statute of limitations to

run. Unsophisticated consumers will, like Mrs. Miller,

assume they have received all to which they are entitled.

Others will hire attorneys to litigate their claims; clogging

out already over-crowded court system. The effects will

be felt in all areas of insurance — life, health, home-

owners, fire and theft, and automobile. What the Major-

ity does in this case is give a license to insurers to ignore

insurance statutes and contractual obligations in favor

of higher profits for insurance companies and illusory

coverage for everyone. Reargument before the full

court is essential to correct this outrageous decision that

may affect every man, woman and child in Pennsylvania.

IV.

CONCLUSION

In 1980, Keystone received premiums from the Millers

and, in return, promised to pay the no-fault benefits to

which they were entitled. Your Court unanimously

decided Heffner and Pontius, holding that dependent

survivors were entitled to receive post mortem work loss

benefits. Mr. Miller died and Mrs. Miller was determined

to be a dependent survivor. She filed a claim form that

said Keystone would pay the no fault benefits to which

she was entitled. Knowing from Heffner, Pontius and

Nye that Mrs. Miller was entitled to post mortem work

loss benefits, Keystone chose as its corporate policy

not to pay same unless specifically requested and not

to tell insureds of their eneitltment. Keystone closed

its file, waited four years and claimed the statute of

limitations as a defense. That is out and out fraud in

[15]

22a

addition to the breach of its statutorily mandated duty.

Your Court cannot sanction such conduct and should

grant reargument.

Respectfully submitted,

ANGINO & ROVNER, P.C.

/s/ Pamela G. Shuman for Richard C. Angino

RICHARD C. ANGINO, Esquire

I.D. No. 07140

ANGINO & ROVNER, P.C.

4503 North Front Street

Harrisburg, PA 17110

(717) 238-6791

Attorneys for Appellees

Dated: February 10, 1994

23a

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

NO. 84 M.D. APPEAL DOCKET, 1991

MARY C. MILLER, Administratrix of

the Estate of JOHN R. MILLER, Deceased

and all others similarly situated,

Appellees

KEYSTONE INSURANCE COMPANY,

Appellant

PROOF OF SERVICE

I hereby certify that on this 10th day of February,

1994, a true and correct copy of the foregoing PETI-

TION FOR REARGUMENT was served upon the fol-

lowing persons and in the manner indicated below

which services satisfies the requirements of Pa. R.A.P.

121:

Service by First Class United States Mail,

postage prepaid:

A. Richard Feldman, Esquire Carl A. Solano, Esquire

BAZELON & LESS Steve D. Shadowen

Fifth Floor SCHNADER, HARRISON,

Packard Building SEGAL & LEWIS

15th & Chestnut Streets 240 N. Third Street,

Philadelphia, PA 19102 Ste. 1300

Harrisburg, PA 17101

24a

ANGINO & ROVNER, P.C.

/s/ Pamela G. Shuman for Richard C. Angino

Richard C. Angino, Esq.

I.D. No. 07140

4503 North Front Street

Harrisburg, PA 17110-1799

(717) 238-6791

Counsel for Appellees

39612/SKS