Defense Digest

Look Both Ways Before Crossing the Street:  The Effect of Automobile Limited Tort Liability Insurance on You as a Pedestrian

Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. § 1705, Limited Tort - The laws of the Commonwealth of Pennsylvania give you the right to choose a form of insurance that limits your right and the right of members of your household to seek financial compensation for injuries caused by other drivers. Under this form of insurance, you and other household members covered under this policy may seek recovery for all medical and other out-of-pocket expenses, but not for pain and suffering or other nonmonetary damages unless the injuries fall within the definition of "serious injury" as set forth in the policy…

(d) - Each person who elects the limited tort alternative remains eligible to seek compensation for economic loss sustained in a motor vehicle accident as the consequence of the fault of another person pursuant to applicable tort law. Unless the injury sustained is a serious injury, each person who is bound by the limited tort election shall be precluded from maintaining an action for any noneconomic loss….

Never before now has the thought of their child crossing the street sent a greater shudder up the backs of parents than after the recent Pennsylvania Superior Court ruling in L.S. v. Eschbach and Lowery v. Wilmer and Schellenberger, 2003 PA Super 128I. In 1997, a seventh grade girl stepped onto the sidewalk from her school bus and began to walk to the corner to cross the street. As she began to cross the intersection, she was struck by a passing automobile and suffered several abrasions, contusions, as well as multiple fractures. The prognosis from her doctor was that her injuries were not serious, and that her chances for recovery were excellent. The child's mother, a single parent, was a registered and insured vehicle owner who, when selecting her choice of insurance, opted for the limited tort coverage. When the child's mother sued for damages associated with her daughter's injuries, the court found that the little girl was bound by her mother's election of the limited tort coverage. Because her injuries were not "serious" in nature and there was no outstanding economic damages, the court held that the girl had not suffered a compensable injury and, therefore, her claim was dismissed. On appeal, the plaintiff argued that, as a pedestrian, she was outside the scope of the limited tort liability her mother had chosen and should, therefore, be allowed to recover. In March of this year, the Superior Court of Pennsylvania found otherwise.

The court reasoned that the statutory language is clear, that the limited tort liability named insured cannot recover for noneconomic damages when involved in an accident either as the driver, a passenger in the car of another, or as a pedestrian. The insurance election applies to, other insureds named under the policy, including minors, such as the little girl in this case. There are a few case exceptions spelled out by the statute where an individual bound by limited tort liability may recover damages as if they had elected full tort, such as accidents involving: drunk driving, the intent to hurt others or yourself, failure to maintain adequate insurance, a defect of the automobile due to design or repair, and being a rider on a non-private passenger vehicle. However, there is none for being a pedestrian in the accident. Unfortunately for this family, this case fell into none of those exceptions.

How can you apply the tort election of the insured vehicle when that vehicle wasn't involved in the accident? The tort liability follows the person, and all insureds under the policy are bound by that election. If the tort election follows a person when they are injured as a passenger in a friend's car, then there is no reason for the election not to follow a person when they are injured as a pedestrian in the crosswalk. An uninsured passenger in any car is considered an "insured" under the policy covering that vehicle; therefore, the injured uninsured passenger may be entitled to collect benefits under that car's policy. Under the statute, an "insured" is defined not simply as any car passenger, but the named policy holder and their household member.

The plaintiff's attorney argued that the statutory language itself indicated that the legislative intent was that pedestrians were exempt from the tort limitation because of the use of language such as "other drivers" and "vehicle in which the insured is an occupant." The court dismissed this idea, stating that "other drivers" did not mean you had to be in a car or a driver but simply referred to more than one driver. This language is intended to distinguish the different parties in a multi-car accident, which is almost the norm for vehicular accidents. The descriptive language, "an occupant" in a vehicle, was in the context of when more than one policy may apply to an individual. For example, if a passenger is injured in a car where the driver has elected full tort and the passenger has elected limited tort, the elected limited tort applies to the passenger. However, in cases where the injured person is not the occupant of a limited tort vehicle, the liability coverage defaults to full tort. In this case, the little girl did not have the conflicting tort option. The preceding exceptions or defaults did not apply to her because her mother had a single car insurance policy in which she elected limited tort liability.

Passed in 2002, the main goal of the Motor Vehicle Financial Responsibility Law ("MVFRL") was to help provide insurance relief to the car owners of Pennsylvania. Insureds were given options in their choices of coverage, and one option was paying lower premiums by limiting the recovery available to the insured in the case of an accident. This option made required insurance more affordable. Lower premiums are supposed to equal fewer policy claims. However, the language of the MVFRL does not inform purchasers of insurance that their choice of limited tort liability will limit their ability to recover damages if they are injured as a pedestrian. Now that the statute has been interpreted to apply to pedestrians, this could deter consumers from choosing the limited tort option and, therefore, undermine efforts to keep insurance premiums affordable for the average citizen. This ruling can have greater implications in regards to bicyclists, joggers, skateboarders, and roller-bladders. The application of this ruling could be great, which would force the Legislator to carve out more exceptions or clarify the law. So for now, before you cross the street, stop, look both ways, and don't forget to verify your choice in tort coverage.

*Matt is an associate in our Doylestown, PA office. He can be reached at (267) 880-2022 or mnoble@mdwcg.com.