Defense Digest

The Limiting Of Limited Tort: LS v. Eschbach

In the case of LS v. Eschbach, 874 A.2d 1150 (Pa. May 25, 2005), LS, a minor, left her school bus and, while attempting to cross the street, was struck by a motor vehicle driven by William Hosler. Fortunately, she did not suffer serious injuries as a result of the accident.

LS brought suit against Hosler, along with the driver of the bus, Brenda Lowery, and the bus company, David Eschbach, Inc. However, her mother had chosen limited tort on her motor vehicle policy. Before trial, the defendants filed a motion for summary judgment arguing that because her injuries were minor, LS did not reach the full-tort threshold and was bound by her parents' election of limited tort. Therefore, there was no compensable injury. In response, LS argued that she was not bound by her mother's election of limited tort because she was a pedestrian and because she was still an "occupant" of the bus.

The trial court agreed with the defendants that LS was bound by her mother's election of limited tort and dismissed the lawsuit. On appeal, the Pennsylvania Superior Court affirmed the decision. LS appealed to the Pennsylvania Supreme Court, which reversed.

In reversing, the Court looked at the language of the limited tort statute, which provides that each person who selects limited tort may only recover economic damages, and not non-economic damages, for injuries suffered "in a motor vehicle accident." In addition, resident relatives are bound by the selection of limited tort if there are no other policies in place for that household. The Court was troubled by the fact that the statute was silent when it came to pedestrians. The Court reasoned that if the Legislature wanted to include pedestrians among those being bound by limited tort, it would have done so expressly. Therefore, the Court stated that it would refrain from "judicially expanding" the limited tort statute to presume the Legislature meant to include pedestrians. The Court also concluded that it would not support the public policy of the motor vehicle law, i.e. reducing the escalating cost of insurance, by limiting the rights of pedestrians. As a result, the Court found it improper for the "innocent pedestrian" to be bound by limited tort.

The Pennsylvania Supreme Court's decision is troubling both for the rationale it employed in order to reach its decision and for its potential impact on future cases addressing the scope of the limited tort statute. The main focus of the Court was the fact that, while limited tort was designed to apply for injuries "from a motor vehicle accident," the statute never says it applies to pedestrians. The Court considered it unfair to apply the statute to pedestrians since it was never clearly spelled out.

The problem with this reasoning is that there is no need for the statute to spell out specifically that it applies to pedestrians. The statute also does not spell out that it applies to passengers or drivers. It just states that it applies to those injured in a motor vehicle accident. There would be no reason for the Legislature to specifically single out pedestrians. The only question should have been whether a pedestrian struck by a motor vehicle is a person who suffered injuries "in a motor vehicle accident" as the statute requires.

Common sense dictates that an accident between a person and an automobile should be considered a motor vehicle accident, but we need not rely on common sense alone. The Court states that there would be no way to know that pedestrians were included within the motor vehicle law. Yet, the very next sub-chapter of the law (the section regarding first-party benefits) includes pedestrians among those covered by the law. Pedestrians are singled out in the first-party benefits sub-chapter simply because there is a priority scheme as to which policy applies, while the limited tort statute does not face the same issue (because the statute provides that full tort will apply if there are two policies covering the same person). Therefore, the Legislature clearly recognized that pedestrians can be involved in "a motor vehicle accident."

Another flaw in the Court's rationale is that, if the Legislature did intend to create an exception from limited tort status for pedestrians, it would have made more sense to state so expressly. The Act includes several exceptions where, even if a person has chosen limited tort, it does not apply. For example, if a limited tort insured is involved in an accident with an uninsured or in an out-of-state accident, the limited tort insured is entitled to full tort. Would it not make more sense to include pedestrians as exceptions in this section, as opposed to interpreting silence in the statute as implicitly creating an exception for pedestrians? Accordingly, a straightforward reading of the statute leads to the conclusion that those who have chosen to pay a reduced premium and be bound by limited tort should be bound by that selection even when they are pedestrians.

Of course, in this case, we are not talking about the person who actually chose limited tort but that person's daughter, who is bound by her mother's selection. This should not change the analysis. The Court refers to her as an "innocent pedestrian." However, the daughter would be bound by limited tort had she been a passenger in her mother's vehicle and suffered minor injuries in an accident. Thus, an "innocent passenger" suffers the restrictions of limited tort. The fact that she was a pedestrian does not change the fact that her mother chose to limit her family's ability to collect damages in motor vehicle accidents in favor of a reduced premium. Moreover, the rationale employed by the Court does not hinge upon the fact that this was not the person who made the tort selection. In other words, had the mother who had chosen limited tort been involved in this accident instead of her daughter, based upon this Court's holding, she would also be entitled to full tort coverage.

Beyond the flaws with the Court's decision, the other problem that results from this case is its impact on future cases. As mentioned above, based upon the Court's rationale, most likely any future claimant who is a pedestrian (or a bicyclist) will be entitled to full tort coverage regardless of their election. Moreover, this decision shows a clear and continuing pattern by the Court the place severe limitations on the circumstances in which limited tort will apply.

The industry as a whole creates a reduction in premiums for those who choose limited tort, helping to maintain affordable insurance, even though its potential benefits may be limited. When limited tort applies to fewer and fewer circumstances, the industry will not be able to offer as great a reduction, as it will be obligated to pay full tort damages in a greater and greater number of cases. As a result, premiums cannot be reduced and quite possibly would be raised to account for this unknown risk, and the motor vehicle law, which was designed to curb escalating insurance costs, cannot accomplish its goal.

*Eric is an associate in our Philadelphia, PA office. He can be reached at (215) 575-2620 or ebrown@mdwcg.com.