This matter arose out of a claim for personal injuries arising out of a pedestrian/motor vehicle accident brought by Francine Smith against Progressive Specialty Insurance Company, her UIM carrier. Smith v. Progressive, No. 2:15-cv-528 (Memorandum Opinion).
The carrier argued that she was “precluded from recovering UIM benefits for lost wages in the amount of Social Security disability benefits” that were awarded after the accident. Plaintiff claimed the social security benefits were a “collateral source” which did not affect her rights to recovery of UIM benefits. The Court noted that although the MVFRL was designed to reduce costs, it also was designed to be construed liberally. The Court contrasted this issue with Section 1722 of the MVFRL which precludes recovering “required benefits.” The Court also contrasted the holding from Tannebaum v. Nationwide Ins. Co., 922 A. 2d 859 (Pa. 2010) to determine whether Social Security Disability benefits would be considered “required benefits.” The Court examined a prior case, Browne v. Nationwide Mutual Ins. Co., 674 A.2d 1127 (Pa. Super. Ct. 1996) and found that that Court’s determination that “because Social Security were never subject to subrogation, they do not fall within the purview of Sections 1720 and 1722. Historically they have not been viewed as an item for which a traditional tort award would be reduced.”
The court cited Browne and held that had the legislature wished to add an offset such benefits it could have done so. The court noted that Tannenbaum had disagreed with some aspects of Browne, relative to the paid-for litmus test, but did not disavow this aspect of the decision. Describing the motion as raising a novel theory, the court denied the motion.
