The Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) was enacted to contain the rising costs of automobile insurance. Cases interpreting §1722 of the MVFRL have held that outside of some narrow exceptions, generally, a plaintiff cannot plead and recover medical expenses, wage loss and other benefits paid or payable by another source. Most notably, the MVFRL is preempted by any benefits that fall under a federal ERISA plan. However, specifically excluded from ERISA are private insurance policies, which are regulated under Pennsylvania law.

In Tannenbaum v. Nationwide Insurance, the carrier filed a Motion in Limine to preclude Tannenbaum in an underinsured motorist (UIM) arbitration from introducing evidence of amounts paid or payable by his private disability insurance policies. The motion was granted by the arbitration panel and Tannenbaum filed a petition to vacate the arbitrator’s award which was granted. An appeal to the Superior Court followed.

The Superior Court held that the private disability policies were separate and apart from UIM coverage, paid for exclusively by the claimant either directly or through deductions from his wages. Therefore the payments received from the policies did not duplicate benefits under the MVFRL as they were fundamentally different from those benefits.