JANUARY 2006 BAD FAITH CASES BAD FAITH STATUTE PRE-EMPTED BY CLAIM FOR FIRST-PARTY BENEFITS CLAIM UNDER MVFRL, BUT NOT PREEMPTED BY CLAIM FOR LOST WAGES UNDER THE MVFRL (Philadelphia Federal)
An injured motorist sought first-party medical benefits and lost wages from her automobile insurance carrier. The Federal District Court was presented with a Motion to Dismiss from the defendant/carrier, based on the assertion that the bad faith statute, 42 Pa. C.S.A. § 8371, and the Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa. C.S.A. §§ 1716, 1797, are in conflict as to the remedies available, and the MVFRL, the more specific statute, preempts the bad faith statute.
The Court granted the Motion as to the motorist’s claim for first-party medical benefits, and denied the motion with respect to the claim for lost wages. The Federal Court reasoned that since both statutes punish similar conduct for denial of first-party medical benefits (i.e., wanton conduct under the MVFRL and bad faith conduct under the bad faith statute), yet provide different remedies, the MVFRL, as the more specific statute, preempts the bad faith statute.
The Court therefore dismissed the motorist’s bad faith claim for denial of first-party medical benefits.
Conversely, the statutory bad faith claim was not preempted by the lost wages claim since the bad faith statute imposes different remedies for different degrees of culpable conduct (i.e., unreasonable conduct under the MVFRL and bad faith conduct under the bad faith statute).
The statutes are not in conflict and effect may be given to both. This result is consistent with other courts’ interpretations of the MVFRL prior to recent amendments.
This Opinion also relied upon the Superior Court’s decision in Barnum v. State Farm Mut. Auto. Ins. Co., 430 Pa. Super. 488, 635 A.2d 155 (Pa. Super. Ct. 1993), reversed on other grounds by, 539 Pa. 673, 652 A.2d 1319 (Pa. 1994)(where the Supreme Court reversed and remanded the Superior Court’s decision only due to recent changes in procedure under the MVFRL), and Gemini Physical Therapy & Rehabilitation v. State Farm Mut. Auto. Ins. Co., 40 F.3d 63 (3d Cir. 1994).