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Owners of registered but uninsured vehicles are ineligible for first-party benefits when they are injured in an accident in another vehicle, a unanimous Pennsylvania Supreme Court has ruled. Chief Justice Ralph J. Cappy, writing in Swords v. Harleysville Insurance Companies, said Section 1714 of the state Motor Vehicle Financial Responsibility Law unambiguously bars persons who fail to insure registered vehicles from tapping into the first-party benefits of any other policy. “There can be no doubt that in passing the MVFRL, the Legislature sought to penalize owners of registered vehicles who do not maintain financial responsibility,” Cappy wrote. The fact that the claimant was driving an insured car — and that their uninsured car was in no way involved in the case — does not alter the bar, Cappy said. “The General Assembly did not qualify this preclusion by limiting its reach to situations in which an owner of a registered but uninsured vehicle is in an accident involving his or her uninsured vehicle, and we are not at liberty to add such a qualification in the face of the clear and unambiguous words of Section 1714.” Wayne Swords was driving his father’s insured pickup truck when he was injured in an accident. At the time of the accident, Swords’ registered but uninsured car was parked in his garage, Cappy wrote. His noncompliance with the financial responsibility law cost Swords the possibility of receiving first-party benefits under any other policy, even though he was driving a vehicle that was insured. Swords argued that a 1993 decision of the high court, Heinrich v. Harleysville Insurance Companies, opened the door to first-party benefits for those who own uninsured vehicles. In Heinrich, the claimant — herself the owner of a registered but uninsured vehicle — was injured while a passenger in a friend’s uninsured car. The claimant sought benefits as a named insured under her father’s uninsured motorist policy. The Heinrich court allowed the claimant to receive UM benefits on the premise that she was not driving her own uninsured vehicle at the time of the accident, Cappy said. Writing in Swords, Cappy said the high court would “temper” any expansive reading of Heinrich. Heinrich, Cappy pointed out, deals with eligibility for UM benefits. The financial responsibility law does not impose a bar to UM recovery for those who own registered but uninsured vehicles, he explained. And while the Heinrich court was correct in its view of eligibility for UM benefits, the MVFRL mandates a different result when the question is eligibility for first-party benefits, Cappy said. “In Section 1714 of the MVFRL, the Legislature could not have been any clearer insomuch as it intended to preclude owners of registered vehicles from being eligible to recover first-party benefits, regardless of what vehicle in which they are injured,” Cappy wrote. “Yet, nowhere in the Law did the Legislature expressly preclude owners of uninsured vehicles from being eligible to receive the benefits of uninsured and underinsured motorist coverage.” Swords argued that he was financially responsible at the time of the accident because he was driving his father’s insured vehicle, according to the opinion. Cappy disagreed. “[T]he MVFRL does not allow owners such as [ Swords] to rely on the financial responsibility of others to circumvent the preclusion set forth in Section 1714,” he said. Harleysville’s attorney, Robert E. Kelly of Kelly Hoffman & Goduto in Harrisburg, Pa., said, “You have to pay into the system in order to benefit from the system.” Section 1714, which discusses ineligible claimants, states that “an owner of a currently registered motor vehicle who does not have financial responsibility … cannot recover first party benefits.” Cappy said the result in Swords is in keeping with the goal of the Legislature when it repealed the No-Fault Act and replaced it with the MVFRL in 1984. “[T]his court specifically has recognized that ‘the MVFRL reflects a heightened concern by the General Assembly toward the increasing consumer cost of automobile insurance attributable in part to motorists who ignore the legal requirement that they insure their vehicles,” Cappy said. Swords argued that prohibiting him from collecting first-party benefits is unnecessarily harsh considering he left his uninsured vehicle at home, and instead drove a properly insured vehicle, according to the opinion. “While the preclusion set forth in 1714 may be harsh, so long as legislation is constitutional, it is the prerogative of the Legislature to employ harsh consequences in order to accomplish the policy behind the legislation,” Cappy said. Kelly said this ruling would encourage motor vehicle owners to obey the financial responsibility law. “The legislature had made a clear decision that owners of registered motor vehicles, that is, cars which are eligible to be driven on the streets of Pennsylvania, but who did not carry proper insurance, should have to pay a price,” he said. The Heinrich case was cited by the Superior Court in a 1993 case, Kafando v. State Farm Mutual Automobile Insurance Company, where the appeals court found that an owner of a registered but uninsured vehicle could collect first-party benefits when in an accident in another insured vehicle. When Swords reached an en banc panel of the Superior Court, it overruled its decision in Kafando, and said the Kafando court misinterpreted the Heinrich decision, according to the opinion. The Superior Court ruled that Swords was not comparable to Heinrich because Swords was seeking first-party benefits, not the UM benefits Heinrich was looking to collect, Cappy said. It also said UIM/UM coverage claims are based on separate provisions of the MVFRL than first-party benefits. The Superior Court further explained that any discussion of first-party benefits in Heinrich was dicta, because it dealt only with UM coverage, Cappy said. The attorney of record for Swords, Christian Earl Eaby of Lancaster, Pa., could not immediately be reached for comment.

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