Progressive loses ill-considered fight over payment of PIP benefits to tow-truck driver
Dr. C.J. Mazure had to sue Progressive and State Farm to recover for the treatment he provided to a tow truck driver who accidentally dropped a towed vehicle on himself. The driver had moved under a partially lifted vehicle to disengage the transmission when it lurched and crushed him. Progressive insured the truck but claimed an exclusion from coverage: State Farm was assigned the claim by the State Assigned Claims plan, but refused to pay (despite the fact that in a priority dispute such as was argued by State Farm, the insurer is obligated to pay benefits and litigate priority with the other insurer).Progressive argued that since the tow truck was "parked," it was not responsible for PIP benefits [which include the driver's medical expenses]. Progressive also argued that it had excluded coverage for "employees" of the owner. The Court ruled that the injuries arose out of the "use, ownership or maintenance" of the tow truck, as defined in the no fault law, and held Progressive responsible for payment. On appeal, the higher court agreed.
The appellate judges noted that a parked vehicle is "involved" in an injury if it is being used "as a motor vehicle" [i.e. for transportation purposes] and if the parked vehicle is being loaded or unloaded. In this case the driver had already placed the vehicle in the tow-truck's harness and moved it a few feet before recognizing the need to disengage the transmission. Therefore, he was loading the vehicle on the truck for transportational use.
Lastly, the appellate court rejected the doctor's claim for attorneys fees against State Farm. The doctor claimed that State Farm owed a duty to pay benefits while the priority dispute was being litigated and that its failure to pay PIP benefits in the interim was unreasonable--rendering it responsible for costs and fees. The higher court did not acknowledge State Farm's clearly-established duty to pay the benefits and seek reimbursement from the insurer it deemed responsible and simply ruled that since State Farm won the priority dispute with Progressive, it did not owe fees. This holding completely guts the prior holdings and public policy pronouncements of the several courts which have shifted the duty of litigation in a priority dispute to the insurers involved, and away from the victim (or health care provider) who is clearly entitled to PIP benefits from someone.