Opinion
C.A. No. 99C-09-046 WCC
Submitted: January 10, 2001
Decided: April 30, 2001
On Plaintiff Prudential Property and Casualty Insurance Company's Motion for Summary Judgment. Granted.
On Defendant State Farm Mutual Automobile Insurance Company's Motion for Summary Judgment. Denied.
James P. Hall, Esquire, Attorney for Plaintiff.
Kenneth M. Doss, Esquire, Attorney for Defendant State Farm Mutual Automobile Insurance Company.
OPINION
This action arose from an automobile accident. Plaintiff Prudential Property and Casualty Insurance Company ("Prudential"), the injured party's insurance company, paid Personal Injury Protection ("PIP") benefits to its insured and then demanded subrogation of all such paid benefits from Defendant State Farm Mutual Automobile Insurance Company ("State Farm"), the tortfeasor's insurance carrier. When State Farm denied responsibility, a complaint was filed for subrogation. The parties made cross motions for summary judgment on whether the three-year statute of limitation bars the suit. For the reasons set forth below, the Court grants Prudential's motion and denies State Farm's motion.
FACTS
The following facts are undisputed. On March 20, 1996, Frank and Sandra DeMasi ("DeMasi") were involved in a motor vehicle accident with Karen J. Melvin ("Melvin") when Melvin rear-ended DeMasi's vehicle. Prudential provided automobile insurance coverage to DeMasi, and State Farm provided automobile insurance coverage to Melvin. As a result of her injuries, Prudential paid PIP benefits in the amount of $43,415.50 to its insured, Sandra DeMasi. Prudential's first payment was made on April 24, 1996, and the last payment under the PIP claim was made on April 22, 1999. On or about February 15, 1999, DeMasi settled their tort litigation against State Farm, Melvin's insurance carrier. On June 10, 1999, Prudential made a demand upon State Farm for subrogation of all PIP benefits paid to DeMasi, which was denied. As such, Prudential filed a complaint on September 3, 1999 against State Farm seeking subrogation for all paid PIP benefits. The parties have filed cross motions for summary judgment. The issue is whether the three-year statute of limitations bars this action.
A partial stipulation was filed dismissing Melvin with prejudice.
The benefits broke down to medical expenses totaling $33,686.82 and lost wages totaling $9,728.68.
State Farm does not concede any issues of material fact concerning liability, proximate cause or payments for damages allegedly related to the underlying accident.
STANDARD OF REVIEW
Summary judgment will be granted when, in viewing the record in the light most favorable to the non-moving party, the movant has shown that no genuine issues of material fact exist and that the movant is entitled to judgment as a matter of law. In a case involving cross motions for summary judgment, such as presented here, the parties implicitly concede the absence of material factual disputes and acknowledge the sufficiency of the record to support their respective motions.
Super. Ct. Civ. R. 56(c).
Browning-Ferris, Inc. v. Rociclord Enters, Inc., Del. Super., 642 A.2d 820 (1993).
DISCUSSION
There is no dispute that due to the statutory right of subrogation, the three-year statute of limitations under 10 Del. C. § 8106 applies to Prudential's cause of action against State Farm. The question is when did this cause of action accrue. The Delaware Supreme Court, in answering the question as to the length of the statute of limitations in Harper v. State Farm Mutual Automobile Insurance Company, held that a"cause of action for the PIP insurer's statutory right of subrogation, against the tortfeasor's liability insurer, does not accrue until the PIP benefit is paid to or for its insured." But, the Court never specifically elaborated on the meaning of the phrase, "until the PIP benefit is paid to or for its insured", which lies at the heart of this motion. As such, the Court must determine the meaning of the phrase and, applying it to the specific facts of this case, determine whether the statute of limitations would bar this litigation.While Harper does not directly address the issue, there are comments and clues in the opinion, which the Court finds persuasive. First, in support of its ruling, the Court cites to Chesapeake Utilities Corporation v. Chesapeake and Potomac Telephone Company of Mayland. This case involved an indemnification action, and the Court found that for purposes of statute of limitations, the statute begins to run not at the time of the injury, but rather, the action accrues "only when the cause of action for indemnity arises, or the indemnitee's liability is fixed and discharged." Secondly, in addressing whether the date of the accident was the accrual point for subrogation, the Harper Court stated the following:
Del. Super., 401 A.2d 101 (1979).
Id. at 102.
An analysis of the present statute reflects why the PIP insurer's cause of action for subrogation against the tortfeasor's liability insurer does not accrue until PIP payments are made. In some circumstances, the PIP insurer must pay benefits more than two years after the date of the accident. For example, the statute provides that certain bills for medical treatment may be presented to the PIP carrier more than 90 days after the two-year anniversary date of the accident. Additionally, surgical bills incurred more than the two years after the accident are compensable as PIP benefits, if a doctor certifies their necessity within two years of the accident date.
If the accrual of a PIP insurer's cause of action for subrogation began on the date of the accident, rather than upon payment of PIP benefits , the PIP insurer could not pursue subrogation regarding certain claims submitted pursuant to 21 Del. C. § 2118(a)(2)i, or with regard to surgical and dental procedures incurred in compliance with Section 2118(a)(2)a.3. That construction would make the amended statute unworkable. Consequently, the General Assembly could not have intended that the PIP insurer's cause of action for subrogation rights would accrue on the date of the accident.
Harper, 703 A.2d at 141 (emphasis added) (citations omitted).
The Court finds that the plural tense of the emphasized words is significant.
While the Court concedes that the concluding paragraph setting forth Harper's holding only refers to "benefit" in the singular, the Court finds that the earlier language reflects an intent by the Supreme Court to establish the accrual date as the date all PIP payments have become fixed, discharged, and paid to the insured. As such, this Court finds that the statute of limitations began to run upon Prudential's payment of the final PIP benefit. Since the parties have agreed that the last payment was made on April 22, 1999, the statute of limitations would not run until 2002. Because this litigation was filed on September 3, 1999, it is within the applicable statute of limitations and may continue.
It is important to note that this decision is based on this Court's reading of the Harper decision and what it believes was the intent of that decision. While support clearly exists for State Farm's position, and generally, statute of limitations will be computed when the present right to a remedy exists or when the action could first be brought, the Court finds that the Harper decision establishes the bright line at the final payment.
See Motor Vehicle Accident Indemnification Corp. v. Aetna Casualty Surety Co., N.Y. Supr., 674 N.E.2d 1349 (1996) (holding that the three-year statute of limitations began to run upon the initial payment of no-fault benefits to the claimants).
Mergenthaler v. Asbestos Corp. of America, Inc., Del. Super., 534 A.2d 272, 276 (1987).
Curran v. Time Ins. Co., D. Del., 644 F. Supp. 967 (1986).
Further, the Court finds State Farm's argument that such a ruling would be counter to the objectives of Delaware's no-fault statute, 21 Del. C. § 2118, to assure the prompt disposition of claims is not persuasive as it relates to the issue of subrogation. The Court believes that the legislature's fundamental purpose in passing the no-fault statute was to ensure that an individual injured in an accident could obtain prompt financial relief for the injuries regardless of who was at fault. It stretches one's credibility to argue that these same concerns were present as to the insurance companies' battles over who would ultimately pay.
CONCLUSION
For the reasons set forth above, the Court finds that the cause of action accrued on April 22, 1999, which was the date of the last PIP payment to Sandra DeMasi. Because the three-year statute of limitations began to run on this date, and Prudential filed its complaint against State Farm on September 3, 1999, the action is not barred. Accordingly, Prudential's motion for summary judgment is GRANTED, and State Farm's motion is DENIED.