Heller v. Pa. League of Cities and Municipalities (majority)Annotate this Case
At issue before the Supreme Court was whether it was a violation of public policy to exclude from underinsured motorist coverage (UIM) a claim by an individual eligible for workers' compensation benefits. Appellant Frank Heller was severely injured from an automobile accident that happened during the course of his employment as a police officer for Sugarcreek Borough. Workers' Compensation covered his medical expenses and two-thirds of his salary. The Borough paid the remainder of Appellant's salary. Appellant's losses and damages far exceeded the policy limit from the tortfeasor's insurance carrier. Accordingly, Appellant notified his insurer of a potential UIM claim and sought UIM benefits from the Borough pursuant to a policy issued by the Pennsylvania League of Cities and Municipalities. Ultimately, Appellant's claim was denied. Upon review, the Supreme Court concluded that an exclusion in Appellant's workers' compensation policy violated public policy and was therefore unenforceable. The Court reversed the Commonwealth Court which held that the policy considerations favored the insurer: "Invalidating the workers' compensation exclusion would not force [the UIM insurer] to underwrite an unknown risk for which it did not receive compensation. The Borough voluntarily elected to purchase optional UIM coverage. .. [W]e find [Appellant's] assertion that the Borough purchased illusory coverage persuasive… the vast majority of all UIM claims likely will be made by Borough employees who are eligible for workers' compensation. The subject exclusion operates to deny UIM benefits to anyone who is eligible for workers' compensation."