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276 A.3d 821

Com. v. Wright, C.

Superior Court of Pennsylvania

Decided May 31, 2022

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Superior Court of Pennsylvania · decided 2022-05-31

Cited by 1 later decisions — most recently April 2023

1 state decisions

Applies 29 U.S.C. § 1001 (§ 2 of the Employee Retirement Income Security Act of 1974) · 29 U.S.C. § 1103 (§ 403 of the Employee Retirement Income Security Act of 1974) · 29 U.S.C. § 1144 (§ 514 of the Employee Retirement Income Security Act of 1974)

Relies on Fmc Corporation v. Holliday · Commonwealth v. Harner · In Re MW

Good law ✅— No negative treatment on recordhow we know

Decided 2022-05-31

View the full empirical analysis of this case →

J-A05001-22

                                   
2022 PA Super 101


  COMMONWEALTH OF PENNSYLVANIA                 :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
  COLIN LYNN WRIGHT                            :
                                               :
                       Appellant               :   No. 486 MDA 2021

    Appeal from the Judgment of Sentence Entered September 24, 2020
  In the Court of Common Pleas of York County Criminal Division at No(s):
                        CP-67-CR-0004124-2019


BEFORE:      OLSON, J., KUNSELMAN, J., and STEVENS, P.J.E.*

OPINION BY OLSON, J.:                                    FILED: MAY 31, 2022

       Appellant, Colin Lynn Wright, appeals from the judgment of sentence

entered on September 24, 2020. We vacate and remand.

       On September 24, 2020, Appellant pleaded guilty to simple assault.1 In

exchange for this plea, the Commonwealth agreed to recommend a sentence

of “[two] years [of] probation, plus restitution of $500.00 to [the Pennsylvania

Victims Compensation Assistance Program (“VCAP”)] in Harrisburg.”            N.T.

Guilty Plea, 9/24/20, at 2.              Further, the   parties   agreed that the

Commonwealth “reserve[ed] the ability to modify restitution.” 
Id.

       During the plea hearing, Appellant admitted that, on February 20, 2019,

he pushed J.M. (hereinafter “the Victim”) and that, as a result of this assault,

____________________________________________


* Former Justice specially assigned to the Superior Court.


1 18 Pa.C.S.A. § 2701(a)(1).
J-A05001-22



the Victim sustained injuries. Id. at 7; see also Commonwealth’s Amended

Information, 1/29/20, at 1. On September 24, 2020, the trial court accepted

Appellant’s plea and, that day, the trial court sentenced Appellant in

accordance with the negotiated agreement. N.T. Guilty Plea, 9/24/20, at 12.

      On September 25, 2020, the Commonwealth filed its “Motion to Modify

Restitution.” The motion declared:

        Due to the direct cause of the injury [to the Victim, the
        Victim] had to undergo [shoulder] surgery, various medical
        procedures, and medical visits. These costs owed by the
        [Victim] were covered by The [Phia] Group in the amount of
        $51,039.07. Likewise, [VCAP] has covered $5,974.80 of the
        [Victim’s] medical expenses. Therefore, the Commonwealth
        is requesting that the total amount of restitution be modified
        to $57,013.87.

Commonwealth’s Motion to Modify Restitution, 9/25/20, at 1 (citations

omitted).

      The trial court later held a hearing on the Commonwealth’s motion.

During the restitution hearing, the Commonwealth called Maribel McLaughlin,

an employee of The Phia Group, as a witness. As Ms. McLaughlin testified, at

the time of the Victim’s shoulder surgery, the Victim was employed by HCR

ManorCare and she received her health coverage “as an employee through

this company.” N.T. Restitution Hearing, 12/15/20, at 15-16. HRC ManorCare

self-insures its employees’ health care benefits through its self-funded

employee benefit plan. Id. The assets of the employee benefit plan are held

in trust and the trust is administered by a third-party administrator, Meritain

Health. Id. Meritain Health, in turn, “work[s] with Aetna, a network, to obtain


                                     -2-
J-A05001-22



preferred providers to cover negotiated fees, and in this case, WellSpan

[Health] is a preferred provider through that network.”      Id.   Further, Ms.

McLaughlin testified, the Victim received her shoulder surgery at WellSpan

Health. See id.

      Ms. McLaughlin testified that, in total, “the amount charged to the health

plan” for all expenses related to the Victim’s shoulder surgery was $63,716.15.

Id. at 13-14; see also Commonwealth’s Exhibit 2. Ms. McLaughlin testified

that “the self-funded benefit plan through HCR ManorCare” then paid a total

of $51,039.07 for the Victim’s surgical care.       N.T. Restitution Hearing,

12/15/20, at 13-14; Commonwealth’s Exhibit 2.           She testified that the

self-funded benefit plan paid the lower amount, as it was “[b]ased on the

network [and] . . . based on a negotiated amount.” N.T. Restitution Hearing,

12/15/20, at 14.

      As Ms. McLaughlin testified, The Phia Group “contracted with [the third

party administrator, Meritain Health,] to review data and pursue claims for

recovery and reimbursement to health plans.”         N.T. Restitution Hearing,

12/15/20, at 11. She further explained that The Phia Group is “merely the

recovery and reimbursement subrogation vendor for HCR ManorCare and

Meritain.” Id. at 16. She testified: “[The Phia Group does] not pay claims.

The claims get paid through the third party administrator, which is Meritain

Health. The funds come out of the trust out of HCR ManorCare health plan.”

Id.




                                     -3-
J-A05001-22



      Next, the Commonwealth called Dr. John Deitch as a witness. Dr. Deitch

testified that he is an orthopedic surgeon and director of sports medicine for

WellSpan Health and that he performed the September 11, 2019 shoulder

surgery on the Victim. Id. at 18-19. As Dr. Deitch testified, following the

February 20, 2019 assault, the Victim: “[w]as evaluated in the emergency

department [on February 20, 2019] and was diagnosed or presented with

what appeared to be a shoulder dislocation. It was reduced in the emergency

department that night.” Id. at 24. As the doctor testified, the medical records

reveal that the Victim suffered a “full dislocation” of her shoulder on February

20, 2019. He testified:

        [the medical records from February 20, 2019] indicate[ that
        the Victim] was awaiting post-reduction x-ray. The clinician
        at the time, based on exam and mechanism per the record,
        said likely anterior inferior dislocation.   The prescribing
        clinician recommended numbing medicine as well as an
        antinausea medicine and then performing a shoulder
        reduction, in other words, put the joint back in place.

Id. at 26-27.

      Dr. Deitch testified that he first met with the Victim on June 6, 2019.

He testified that he did not immediately recommend surgery “because we

needed to get further information to help plan the surgery.” Id. at 29. The

doctor thus “order[ed an] MRI arthrogram.”        Id.   He testified that, after

meeting the Victim in June 2019, the Victim experienced “multiple dislocations

or subluxations unrelated to the February incident.” Id. The doctor testified

that he eventually arrived at the opinion that the Victim required surgery. As



                                     -4-
J-A05001-22



he testified:     “[the February 20, 2019] dislocation as well as other[

dislocations] precipitated chronic recurrent shoulder instability for which [the

Victim] required surgery.” Id. at 24 and 25.

      The Victim also testified at the restitution hearing.      As the Victim

testified, before the February 20, 2019 assault, she suffered one prior

shoulder dislocation in November 2017. However, she testified: “I had no

issues between November of 2017 and February of 2019. Yeah, I had no

shoulder problems, nothing. Like, I healed fine. Everything was fine.” Id. at

36-37. The Victim testified that, after Appellant assaulted her on February

20, 2019, her shoulder “wouldn’t stay stable. Like, I couldn’t even reach my

arms out to give my kids a hug. My arm would just, like, fall out of [the]

socket.   Just movement like that, it would just fall out.”    Id. at 37.   She

testified that she finally met with Dr. Deitch “because I didn’t know what else

to do. Like, it wouldn’t stay stable. There was nothing I could do. You know,

I couldn’t function. I couldn’t work. I couldn’t do anything.” Id.

      On February 23, 2021, the trial court granted the Commonwealth’s

motion to modify restitution and ordered Appellant to pay restitution, as part

of his direct sentence under 18 Pa.C.S.A. § 1106, in the following amounts:

$51,039.07 to The Phia Group and $5,000.00 to VCAP. See N.T. Restitution

Hearing, 2/23/21, at 22 and 25. Appellant filed a timely notice of appeal. He

raises three issues on appeal:

          [1.] Did the trial court err when it modified the sentenc[ing]
          order when it determined that [The Phia Group] was a victim
          under 18 Pa.C.S.A. § 1106(c)?

                                      -5-
J-A05001-22



        [2.] Did the trial court err when it modified the sentenc[ing]
        order by failing to apply the “but for” test to identify damages
        which occurred as a direct result of the crime and which
        should not have occurred but for [Appellant’s] criminal
        conduct?

        [3.] Did the trial court err when it modified the sentenc[ing]
        order because the modification was speculative and
        unsupported by the record?

Appellant’s Brief at 4.

      Our Supreme Court has explained:

        in the criminal context, generally speaking, restitution is the
        requirement that the criminal offender repay, as a condition
        of his sentence, the victim or society, in money or services.
        It is well established that the primary purpose of restitution
        is rehabilitation of the offender by impressing upon him or
        her that his [or her] criminal conduct caused the victim's loss
        or personal injury and that it is his [or her] responsibility to
        repair the loss or injury as far as possible. Thus, recompense
        to the victim is only a secondary benefit, as restitution is not
        an award of damages. Although restitution is penal in nature,
        it is highly favored in the law and encouraged so that the
        criminal will understand the egregiousness of his or her
        conduct, be deterred from repeating the conduct, and be
        encouraged to live in a responsible way.

Commonwealth v. Brown, 
981 A.2d 893
, 895-896 (Pa. 2009) (footnotes

and citations omitted).

      In this case, the trial court ordered restitution as a part of Appellant's

direct sentence, in accordance with 18 Pa.C.S.A. § 1106.       See, e.g., Trial

Court Opinion, 6/3/21, at 19; Commonwealth’s Brief at 11. In relevant part,

Section 1106(a) reads:

        (a) General rule.--Upon conviction for any crime wherein:



                                     -6-
J-A05001-22


          (1) property of a victim has been stolen, converted or
          otherwise unlawfully obtained, or its value substantially
          decreased as a direct result of the crime; or

          (2) the victim, if an individual, suffered personal injury
          directly resulting from the crime,

       the offender shall be sentenced to make restitution in
       addition to the punishment prescribed therefor.

                                    ...

       (c) Mandatory restitution.--

          (1) The court shall order full restitution:

              (i) Regardless of the current financial resources of the
              defendant, so as to provide the victim with the fullest
              compensation for the loss. The court shall not reduce
              a restitution award by any amount that the victim has
              received from the Crime Victim's Compensation Board
              or other government agency but shall order the
              defendant to pay any restitution ordered for loss
              previously compensated by the board to the Crime
              Victim's Compensation Fund or other designated
              account when the claim involves a government
              agency in addition to or in place of the board. The
              court shall not reduce a restitution award by any
              amount that the victim has received from an
              insurance company but shall order the defendant to
              pay any restitution ordered for loss previously
              compensated by an insurance company to the
              insurance company.

              (ii) If restitution to more than one victim is set at the
              same time, the court shall set priorities of payment.
              However, when establishing priorities, the court shall
              order payment in the following order:

                 (A) Any individual.

                 (A.1) Any affected government agency.

                 (B) The Crime Victim's Compensation Board.

                                    -7-
J-A05001-22



                 (C) Any other government agency which has
                 provided reimbursement to the victim as a result
                 of the defendant's criminal conduct.

                 (D) Any insurance company which has provided
                 reimbursement to the victim as a result of the
                 defendant's criminal conduct.

                 (E) Any estate or testamentary trust.

                 (F) Any business entity organized as a nonprofit or
                 not-for-profit entity.

                 (G) Any other business entity.

                                    ...

       (h) Definitions.--As used in this section, the following
       words and phrases shall have the meanings given to them in
       this subsection:

                                    ...


          “Business entity.” A domestic or foreign:

              (1) business corporation;

              (2) nonprofit corporation;

              (3) general partnership;

              (4) limited partnership;

              (5) limited liability company;

              (6) unincorporated nonprofit association;

              (7) professional association; or

              (8) business trust, common law business trust or
              statutory trust.
                                  ...


                                   -8-
J-A05001-22


              “Insurance company.” An entity that compensates a
              victim for loss under an insurance contract.


              “Insurance contract.” A contract governed by the
              insurance laws of the state in which it was issued or a
              plan of benefits sponsored by an employer or employee
              organization.

                                           ...

              “Restitution.” The return of the property of the victim
              or payments in cash or the equivalent thereof pursuant to
              an order of the court.

              “Victim.” As defined in section 103 of the act of
              November 24, 1998 (P.L. 882, No. 111), known as the
              Crime Victims Act. The term includes an affected
              government agency, the Crime Victim's Compensation
              Fund, if compensation has been paid by the Crime
              Victim's Compensation Fund to the victim, any insurance
              company that has compensated the victim for loss under
              an insurance contract and any business entity.

18 Pa.C.S.A. § 1106 (effective October 24, 2018) (footnote omitted).2, 3
____________________________________________


2 Appellant committed his crime on February 20, 2019.    Therefore, the current
version of Section 1106 applies to this case.

3 Section 1106(h) declares that the term “victim” includes the relevant
definition “in section 103 of the . . . Crime Victims Act.” In relevant part, 18
P.S. § 11.103 defines the terms “direct victim” and “victim” as follows:

       “Direct victim.” An individual against whom a crime has been
       committed or attempted and who as a direct result of the criminal
       act or attempt suffers physical or mental injury, death or the loss
       of earnings under this act. . . .

       “Victim.” The term means the following:

           (1) A direct victim.

(Footnote Continued Next Page)


                                           -9-
J-A05001-22



       We have explained that, under the plain terms of Section 1106(a), the

sentencing court “is statutorily required to impose restitution . . . when the

Commonwealth has established that the defendant committed a crime, the

victim suffered injury to person or property, and there exists a direct causal

nexus between the crime of which defendant was convicted and the loss or

damage suffered by the victim.” Commonwealth v. Weir, 
201 A.3d 163
,

170 (Pa. Super. 2018). Further, Section 1106 demands that the trial court

order “full restitution . . . to provide the victim with the fullest compensation

for the loss.” 
Id.
 Our Supreme Court has, however, held:

         Because [18 Pa.C.S.A. § 1106] imposes restitution as part of
         a sentence, its penal character must not be overlooked and
         it would seem to us that restitution can be permitted under
         18 Pa.C.S.A. § 1106 only as to losses for which the defendant
         has been held criminally accountable. This is in keeping with
         the well established principle that criminal statutes must be
         strictly construed. See 1 Pa.C.S.A. § 1928(b)(1).

Commonwealth v. Harner, 
617 A.2d 702
, 705 (Pa. 1992) (some citations

omitted).


____________________________________________


            (2) A parent or legal guardian of a child who is a direct victim,
            except when the parent or legal guardian of the child is the
            alleged offender.

            (3) A minor child who is a material witness to . . . [certain
            crimes and offenses] committed or attempted against a
            member of the child's family. . . .

            (4) A family member of a homicide victim . . . except where
            the family member is the alleged offender.

18 P.S. § 11.103.

                                          - 10 -
J-A05001-22



      We turn now to consider the precise nature of Appellant's challenges to

the trial court's restitution order. In discerning the nature of a challenge to

the imposition of restitution, we have held:

        the appellate courts have drawn a distinction between those
        cases where the challenge is directed to the trial court's
        [statutory] authority to impose restitution and those cases
        where the challenge is premised upon a claim that the
        restitution order is excessive. When the court's authority to
        impose restitution is challenged, it concerns the legality of
        the sentence; however, when the challenge is based on
        excessiveness, it concerns the discretionary aspects of the
        sentence.

Commonwealth v. Oree, 
911 A.2d 169
, 173 (Pa. Super. 2006); see also

In re M.W., 
725 A.2d 729
, 731 (Pa. 1999) (holding that, when an issue

“centers upon [the court's] statutory authority” to impose the sentence, as

opposed to the “court's exercise of discretion in fashioning” the sentence, the

issue implicates the legality of the sentence); Commonwealth v. Walker,

666 A.2d 301
, 307 (Pa. Super. 1995) (“challenges alleging that a sentence of

restitution is excessive under the circumstances have been held by this court

to be challenges to the discretionary aspects of sentencing”).

      First, Appellant claims that the trial court lacked statutory authority to

order that he pay restitution to The Phia Group, as The Phia Group is neither

a victim nor an insurance company. Appellant’s Brief at 7. Appellant’s claim

implicates the legality of his sentence, as the challenge “centers upon [the

court's] statutory authority” to impose the sentence of restitution. See In re

M.W., 725 A.2d at 731. We note that “[l]egality of sentence questions are



                                    - 11 -
J-A05001-22



not waivable and may be raised sua sponte [on direct review] by this Court.”

Commonwealth v. Watley, 
81 A.3d 108
, 118 (Pa. Super. 2013) (en banc).

Further, since Appellant’s claim implicates the legality of his sentence, the

claim “presents a pure question of law.” Commonwealth v. Petrick, 
217 A.3d 1217
, 1224 (Pa. 2019). As such, “our scope of review is plenary and our

standard of review de novo.” 
Id.

     Appellant’s claim requires that we “interpret[] the provision of the

Crimes Code which mandates restitution.” Commonwealth v. Brown, 
981 A.2d 893
, 897 (Pa. 2009). To do so, “we necessarily turn to the Statutory

Construction Act. 1 Pa.C.S.A. §§ 1501 et seq.” Brown, 981 A.2d at 897. As

our Supreme Court has explained:

        The Statutory Construction Act provides that the object of our
        interpretation and construction of statutes is to ascertain and
        effectuate the intention of the legislature.       1 Pa.C.S.A.
        § 1921(a). The General Assembly's intent is best expressed
        through the plain language of the statute. When the words
        of a statute are clear and unambiguous, there is no need to
        look beyond the plain meaning of the statute “under the
        pretext of pursuing its spirit.” 1 Pa.C.S.A. § 1921(b).
        Therefore, only when the words of a statute are ambiguous
        should a court seek to ascertain the intent of the General
        Assembly through consideration of statutory construction
        factors found in Section 1921(c). 1 Pa.C.S.A. § 1921(c).
        Finally, penal statutes are to be strictly construed. 1
        Pa.C.S.A. § 1928 (b)(1).

        The need for strict construction, however, does not require
        that the words of a penal statute be given their narrowest
        meaning or that legislative intent be disregarded. It does
        mean, however, that, if an ambiguity exists in the verbiage
        of a penal statute, such language should be interpreted in the
        light most favorable to the accused. More specifically, where


                                    - 12 -
J-A05001-22


         doubt exists concerning the proper scope of a penal statute,
         it is the accused who should receive the benefit of such doubt.

         Finally, the Crimes Code itself supplies guidance as to the
         construction of the provisions of the Code: “The provisions of
         this title shall be construed according to the fair import of
         their terms but when the language is susceptible of differing
         constructions it shall be interpreted to further the general
         purposes stated in this title and the special purposes of the
         particular provision involved.” 18 Pa.C.S.A. § 105.

Brown, 981 A.2d at 897-898 (some citations and quotation marks omitted).

      The case at bar is not one where “property of a victim has been stolen,

converted or otherwise unlawfully obtained, or its value substantially

decreased as a direct result of [a] crime.” See 18 Pa.C.S.A. § 1106(a)(1).

Rather, in this case, restitution was ordered because the Victim “suffered

personal injury directly resulting from the crime.”            See 18 Pa.C.S.A.

§ 1106(a)(2). Thus, in the case at bar, the trial court was required to order

that Appellant pay restitution under 18 Pa.C.S.A. § 1106(a)(2).           As noted

above, Section 1106(a)(2) declares: “[u]pon conviction for any crime wherein

. . . the victim, if an individual, suffered personal injury directly resulting from

the crime, the offender shall be sentenced to make restitution in addition to

the punishment prescribed therefor.” 18 Pa.C.S.A. § 1106(a)(2).

      Section 1106(c) goes on to declare that the trial court “shall order full

restitution . . . [r]egardless of the current financial resources of the defendant,

so as to provide the victim with the fullest compensation for the loss.” 18

Pa.C.S.A. § 1106(c)(1)(i).     Further, as our Supreme Court has held, “as

evinced by the [ever] broaden[ing] Section 1106, the General Assembly not



                                      - 13 -
J-A05001-22



only expressed an increased focus on the importance of mandatory restitution,

it believed that criminal offenders should provide restitution to the victim

directly, and to entities incurring expenses on the victim’s behalf.” Brown,

981 A.2d at 900. Thus, included in the definition of “victim” is “any insurance

company that has compensated the victim for loss under an insurance

contract.” 18 Pa.C.S.A. § 1106(h).

      In this case, the trial court ordered Appellant to pay restitution, to The

Phia Group, in the amount of $51,039.07. On appeal, Appellant claims that

the trial court lacked statutory authority to order that he pay restitution to

The Phia Group, as The Phia Group is neither the “victim” nor an “insurance

company.” We agree.

      The testimony at the restitution hearing reveals that HRC ManorCare

self-insures its employees’ health care benefits through its self-funded

employee benefit plan.      N.T. Restitution Hearing, 12/15/20, at 15-16.

Self-funded employee benefit plans are governed by the Employee Retirement

Income Security Act of 1974 (“ERISA”), 
29 U.S.C. § 1001
 et seq. See, e.g.,

FMC Corp. v. Holliday, 
498 U.S. 52
 (1990). The assets of the employee

benefit plan are held in trust, pursuant to 
29 U.S.C. § 1103
, and the trust is

administered by a third-party administrator, Meritain Health. N.T. Restitution

Hearing, 12/15/20, at 15-16; see also 
29 U.S.C. § 1103
(a) (“[e]xcept as

[otherwise provided,] all assets of an employee benefit plan shall be held in

trust by one or more trustees”).




                                     - 14 -
J-A05001-22



      The Victim received health care coverage through her employment at

HRC ManorCare. N.T. Restitution Hearing, 12/15/20, at 15-16. The Victim

testified that, as a direct result of Appellant’s February 20, 2019 assault, she

required shoulder surgery.     N.T. Restitution Hearing, 12/15/20, at 36-37.

Maribel McLaughlin, of The Phia Group, testified that the funds for this surgery

came directly “out of the trust out of HCR ManorCare health plan” and that

the trust paid a total of $51,039.07 for the Victim’s surgical care. Id. at 13-14.

Ms. McLaughlin’s testimony also clarified The Phia Group’s role in paying

health care claims on behalf of beneficiaries of the HCR ManorCare health plan.

She testified that The Phia Group is “merely the recovery and reimbursement

subrogation vendor for HCR ManorCare and Meritain” and that “[The Phia

Group does] not pay claims.” Id. at 16.

      Our restitution statute defines the terms “insurance company” and

“insurance contract” in the following manner:

        “Insurance company.” An entity that compensates a victim
        for loss under an insurance contract.

        “Insurance contract.” A contract governed by the
        insurance laws of the state in which it was issued or a plan of
        benefits sponsored by an employer or employee organization.

18 Pa.C.S.A. § 1106(h).

      Further, Section 1106 specifically declares:

        The court shall not reduce a restitution award by any amount
        that the victim has received from an insurance company but
        shall order the defendant to pay any restitution ordered for
        loss previously compensated by an insurance company to
        the insurance company.


                                     - 15 -
J-A05001-22



18 Pa.C.S.A. § 1106(c)(1)(i) (emphasis added); see also 18 Pa.C.S.A.

§ 1106(h) (defining the term “victim” as including “any insurance company

that has compensated the victim for loss under an insurance contract”).

       Simply stated, The Phia Group did not compensate the Victim in this

case for a loss and The Phia Group was not operating “under an insurance

contract” with the Victim. As such, The Phia Group does not qualify as an

“insurance company” under Section 1106. Rather, in this case, it appears as

though the trust established pursuant to HCR ManorCare’s self-funded

employee benefit plan “compensate[d the V]ictim for loss under an insurance

contract,” where the “insurance contract” was “a plan of benefits sponsored

by [the Victim’s] employer,” HCR ManorCare.4
____________________________________________


4 The ERISA preemption provision is contained in 
29 U.S.C. § 1144
(a). In
relevant part, Section 1144 declares:

       (a) Supersedure . . .

       Except as provided in subsection (b) of this section, the provisions
       of this subchapter and subchapter III shall supersede any and all
       State laws insofar as they may now or hereafter relate to any
       employee benefit plan described in section 1003(a) of this title
       and not exempt under section 1003(b) of this title. . . .

       (b) Construction and application

                                           ...

       (2)(B) Neither an employee benefit plan described in section
       1003(a) of this title, which is not exempt under section 1003(b)
       of this title (other than a plan established primarily for the purpose
       of providing death benefits), nor any trust established under such
       a plan, shall be deemed to be an insurance company or other
(Footnote Continued Next Page)


                                          - 16 -
J-A05001-22



       Further, although Ms. McLaughlin testified that The Phia Group

contracted with the third-party administrator of the trust, Meritain Health, to

“pursue claims for recovery and reimbursement” that were expended by the

trust, the plain language of Section 1106(c)(1)(i) only permits restitution to

go “to the insurance company” – not to a separate company that pursues

“recovery and reimbursement” on behalf of the insurance company.             18

Pa.C.S.A. § 1106(c)(1)(i) (emphasis added).        Our interpretation of Section

1106’s plain language is bolstered by the fact that Section 1106 is a penal




____________________________________________


       insurer, bank, trust company, or investment company or to be
       engaged in the business of insurance or banking for purposes of
       any law of any State purporting to regulate insurance companies,
       insurance contracts, banks, trust companies, or investment
       companies.

                                           ...

       (4) Subsection (a) shall not apply to any generally applicable
       criminal law of a State.

29 U.S.C. § 1144
.

Section 1144(b)(2)(B) declares that an employee benefit plan and a trust
established under such a plan may not “be deemed to be an insurance
company” under ERISA. 
29 U.S.C. § 1144
(b)(2)(B). However, Section
1144(b)(4) declares that ERISA does not preempt “any generally applicable
criminal law of a State.” 
29 U.S.C. § 1144
(b)(4).

The issue of whether Pennsylvania’s criminal restitution statute, 18 Pa.C.S.A.
§ 1106, completely falls within ERISA’s anti-preemption provision has not
been briefed in this case and a decision on the issue is unnecessary to resolve
Appellant’s claims.


                                          - 17 -
J-A05001-22



statute and thus must be “strictly construed in favor of the defendant.”

Commonwealth v. Smith, 
221 A.3d 631
, 636 (Pa. 2019).

       Thus, since The Phia Group is not an “insurance company” and did not

pay any claim in this case, The Phia Group was not entitled to restitution under

the plain language of Section 1106. We must, therefore, vacate Appellant’s

judgment of sentence and remand for resentencing.5, 6

       Judgment of sentence vacated.               Case remanded for resentencing.

Jurisdiction relinquished.



Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 05/31/2022




____________________________________________


5 Since we vacate Appellant’s judgment of sentence, Appellant’s remaining
claims are moot.

6 Our holding does not mean that the trial court is precluded from ordering

Appellant to pay restitution for losses previously compensated by an insurance
company. We simply hold that restitution must be ordered in accordance with
Section 1106 and that The Phia Group is not eligible under that provision to
receive payment since it is neither an “insurance company” nor a “victim”
under the statute.


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