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Dyer v. Travelers
Citations: 572 A.2d 762; 392 Pa. Super. 202; 1990 Pa. Super. LEXIS 771
Court: Supreme Court of Pennsylvania; April 3, 1990; Pennsylvania; State Supreme Court
Under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL), the Assigned Claims Plan insurer is not liable to a claimant who has obtained an arbitration award against the tortfeasor without releasing the tortfeasor. In the case of Stacy Dyer, who sustained injuries from an accident involving uninsured parties, she received a $10,000 arbitration award against the tortfeasors Timothy Brown and Leonard Ta Deo, while the arbitration panel ruled in favor of John Field. Dyer subsequently sought recovery from The Travelers, the Assigned Claims Plan's designee. The trial court granted summary judgment for The Travelers, concluding that the arbitration award extinguished their subrogation rights. On appeal, Dyer argued that the arbitration award did not prejudice The Travelers' subrogation rights since it could be assigned to them and that the award solely compensated her for pain and suffering, leaving economic claims intact. Both arguments were rejected, as subrogation rights of the Assigned Claims Plan are statutorily authorized, and the trial judge found that the arbitration outcome indeed prejudiced these rights, referencing previous case law. The appellate court upheld the trial court's decision, emphasizing that summary judgment is appropriate when there are no genuine issues of material fact. The Superior Court determined that section 1756 of the MVFRL aligns with section 2000(e)(2) of the Uninsured Motorists Act, which denies benefits if a claimant pursues a judgment against a potentially liable party without the insurer's written consent. Claimants seeking recovery from the Assigned Claims Plan forfeit their rights if they impair the insurer's subrogation rights against the tortfeasor. In this case, the appellant obtained an arbitration award against the tortfeasors but did not release them. The court ruled that by pursuing arbitration without The Travelers' consent, the appellant extinguished The Travelers' subrogation rights, precluding her recovery under the Plan. The right of subrogation allows an insurer to assert the claimant's rights against the tortfeasor, and the insurer's control over proceedings is essential to protect the Assigned Claims Plan's funds. The court emphasized that allowing the Plan to absorb the consequences of a claimant's actions taken without consent would undermine public policy. The appellant's argument that damages were limited to pain and suffering was dismissed, as the arbitration award did not support this assertion, and any economic claims would be barred by the finality of the arbitration award. The court affirmed the order.