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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UNITRIN AUTO & HOME :

INSURANCE COMPANY, : CIVIL NO. 4:CV-04cv2100

:

Plaintiff, :

: Judge Jones

v. :

:

TAMMY A. HEISTER :

:

Defendant. :

MEMORANDUM AND ORDER

September 22, 2005

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

Pending before the Court are cross-motions for Summary Judgment filed by

Plaintiff Unitrin Auto & Home Insurance Company (“Unitrin” or “Plaintiff”) and by

Defendant Tammy A. Heister (“Heister” or “Defendant”). (Rec. Docs. 11 and 13).

Diversity jurisdiction in this Court is proper pursuant to 42 U.S.C. § 1332.

For the following reasons, we will grant the Plaintiff’s Motion for Summary

Judgment and deny Defendant’s Motion for Summary Judgment. 

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STANDARD OF REVIEW:

Summary judgment is appropriate if "there is no genuine issue as to any

material fact and . . . the moving party is entitled to judgment as a matter of law." 

Fed .R. Civ. P. 56(c); see also Turner v. Schering-Plough Corp., 901 F.2d 335,

340 (3d Cir. 1990). The party moving for summary judgment bears the burden of

showing "there is no genuine issue for trial." Young v. Quinlan, 960 F.2d 351, 357

(3d Cir. 1992). Summary judgment should not be granted when there is a

disagreement about the facts or the proper inferences which a fact finder could

draw from them. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir.

1982). 

Initially, the moving party has a burden of demonstrating the absence of a

genuine issue of material fact. Celotex Corporation v. Catrett, 477 U.S. 317, 323

(1986). This may be met by the moving party pointing out to the court that there is

an absence of evidence to support an essential element as to which the non-moving

party will bear the burden of proof at trial. Id. at 325.

Federal Rule of Civil Procedure 56 provides that, where such a motion is

made and properly supported, the non-moving party must then show by affidavits,

pleadings, depositions, answers to interrogatories, and admissions on file, that there

is a genuine issue for trial. Fed. R. Civ. P. 56(e). The United States Supreme

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Court has commented that this requirement is tantamount to the non-moving party

making a sufficient showing as to the essential elements of their case that a

reasonable jury could find in its favor. Celotex Corp., 477 U.S. at 322-23. 

It is important to note that “the non-moving party cannot rely upon

conclusory allegations in its pleadings or in memoranda and briefs to establish a

genuine issue of material fact." Pastore v. Bell Tel. Co. of Pa., 24 F.3d 508, 511

(3d Cir. 1994) (citation omitted). However, all inferences "should be drawn in the

light most favorable to the non-moving party, and where the non-moving party's

evidence contradicts the movant's, then the non-movant's must be taken as true." 

Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir.

1992), cert. denied, 507 U.S. 912 (1993) (citations omitted).

Still, "the mere existence of some alleged factual dispute between the parties

will not defeat an otherwise properly supported motion for summary judgment; the

requirement is that there be no genuine issue of material fact." Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)(emphasis in original). "As to

materiality, the substantive law will identify which facts are material." Id. at 248. A

dispute is considered to be genuine only if "the evidence is such that a reasonable

jury could return a verdict for the nonmoving party." Id.

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STATEMENT OF MATERIAL FACTS:

In the main, the facts of this case are undisputed. On March 29, 2004 at

approximately 1:10 a.m., Defendant was injured in an automobile accident when the

vehicle in which she was a front seat passenger was struck by a tractor trailer in

South Middletown Township, Cumberland County, Pennsylvania. As a result of

the accident, Defendant suffered significant and severe injuries. At the time of the

accident, Defendant was insured by an automobile policy number CV705534

issued by Plaintiff (the “Policy”). The Policy included liability insurance for

Defendant in the amount of $100,000 per person and $300,000 per accident. 

The Policy also indicated that it did not provide underinsured motorist

(“UIM”) benefits as a result of Defendant having signed a form provided by

Plaintiff entitled “Rejection of Underinsured Motorist Protection” (“UIM rejection

waiver form”) on August 24, 2003. (Rec. Doc. 13, Ex. A). This UIM rejection

waiver form states:

REJECTION OF UNDERINSURED MOTORIST INSURANCE

By signing this waiver, I am rejecting underinsured motorist coverage

under this policy, for myself, and all relatives residing in my

household. Underinsured coverage protects me and relatives living in

my household for losses and damages suffered if injury is caused by

the negligence of a driver who does not have enough insurance to pay

for all losses and damages. I knowingly and voluntarily reject this

coverage. By rejecting this coverage, I am also signing the

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waiver on pg. 10 rejecting stacked limits of underinsured

motorist coverage.

(Rec. Doc. 13, Ex. B)(emphasis added). On that same date, Defendant also signed

a form rejecting stacked UIM coverage (“stacked UIM waiver form”). 

Defendant’s parents purchased a similar policy from the Plaintiff which was

issued to number CV893989 (the “Parents’ Policy”). On or about July 20, 2003

Defendant’s parents signed a form entitled “Rejection of Underinsured Motorist

Protection” that was identical to above-excerpted UIM rejection waiver form signed

by Defendant. Defendant’s parents also signed a stacked UIM waiver form. It is of

course not disputed that both policies as just described are governed by the

Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), codified at

75 Pa. Cons. Stat. § 1701 et seq.

Subsequent to signing these forms, Defendant made claims against Plaintiff

under both her Policy and the Parents’ Policy for UIM benefits stemming from the

March 2004 accident. In light of the aforementioned signed waivers from

Defendant and her parents, Plaintiff filed this action seeking a declaratory relief that

it need not pay UIM or UIM stacking benefits to Defendant. Defendant contends

that the UIM rejection waiver forms are invalid because they do not comply with

the requirements of 75 Pa. C. S. § 1731. 

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 Underinsured motorist insurance was mandatory in Pennsylvania until the MVFRL was

amended in 1991. See Borgia v. Prudential Ins. Co., 750 A.2d 843, 847-48 n.6 (Pa. 2000).

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Both parties’ Motions for Summary Judgment have been fully briefed and

are therefore ripe for review.

DISCUSSION:

A . APPLICABLE STATUTORY SECTIONS

Section 1731 of the MVFRL has made UIM insurance optional for all

insured drivers in Pennsylvania.1 See 75 Pa. Cons. Stat. § 1731(c). For an insured

to opt out of UIM coverage:

the named insured shall be informed that he may reject underinsured motorist

coverage by signing the following written rejection form:

REJECTION OF UNDERINSURED MOTORIST PROTECTION

By signing this waiver I am rejecting the underinsured motorist

coverage under this policy, for myself and all relatives residing in my

household. Underinsured coverage protects me and relatives living in

my household for losses and damages suffered if injury is caused by

the negligence of a driver who does not have enough insurance to pay

for all losses and damages.

......................................................

Signature of First Named Insured

......................................................

Date 

 

75 Pa. Cons. Stat. § 1731(c)(capitalization in original). The MVFRL also provides

the following about how an insurer is to present said rejection form to an insured:

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 There is no dispute that the Plaintiff’s rejection of UIM stacked coverage waiver form was in

accordance with the MVFRL. Therefore, regardless of our determination as to the validity of the UIM

rejection waiver form, Defendant cannot recover stacked UIM benefits.

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Form of waiver.--Insurers shall print the rejection forms required by

subsections (b) and (c) on separate sheets in prominent type and

location. The forms must be signed by the first named insured and

dated to be valid. The signatures on the forms may be witnessed by an

insurance agent or broker. Any rejection form that does not

specifically comply with this section is void. If the insurer fails to

produce a valid rejection form, uninsured or underinsured coverage, or

both, as the case may be, under that policy shall be equal to the bodily

injury liability limits. On policies in which either uninsured or

underinsured coverage has been rejected, the policy renewals must

contain notice in prominent type that the policy does not provide

protection against damages caused by uninsured or underinsured

motorists. Any person who executes a waiver under subsection (b) or

(c) shall be precluded from claiming liability of any person based upon

inadequate information.

Id. § (c.1). The MVFRL includes a similar statutory section governing waiver of

stacked UIM coverage. See 75 Pa. Cons. Stat. § 1738.

B LEGALITY OF DEFENDANT’S WAIVER OF UIM

BENEFITS

 At issue is the effect of the following sentence appended by Plaintiff to the

UIM rejection waiver form: “By rejecting this coverage, I am also signing the waiver

on pg. 10 rejecting stacked limits of underinsured motorist coverage.” (Rec. Doc.

12, Ex. 4 at 9). Upon receiving the UIM rejection waiver form, Defendant signed it

as well as the stacked UIM waiver form.2 Defendant now contends that since the

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 In her affidavit, Ms. Fiorentino states that in April of 2003, she worked on a submission of

forms to the Insurance Department, and the package included rejection forms. (Rec. Doc. 12, Ex. 5 at

2)

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UIM rejection waiver form failed to strictly comply with the requirements of § 1731

of the MVFRL the waiver must be deemed invalid and that as a result the subject

UIM insurance benefits are activated to the aforesaid limit of the liability coverage.

1. INSURANCE DEPARTMENT APPROVAL OF UIM

REJECTION WAIVER FORM

Our analysis begins with the approval status of the rejection form signed by

the Defendant and her parents. Plaintiff contends that the very form at issue was

approved by the Commissioner of the Pennsylvania Insurance Department (the

“Commissioner” or “Insurance Department”) for use in the Commonwealth. With

its Motion, Defendant submitted an affidavit from Susan Fiorentino, an employee

of Plaintiff’s subsidiary Kemper Independence Insurance Company. (Rec. Doc.

12, Ex. 5) Ms. Fiorentino’s affidavit states that Kemper submitted the subject UIM

rejection waiver forms to the Commissioner and that the forms were approved by

the Commissioner.3 In proof of Ms. Fiorentino’s statements is an attached letter

dated April 14, 2003 and stamped by the Insurance Department. This stamp

indicates that the forms submitted under cover of the letter were “Approved,

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Effective 5/6/03.” (Rec. Doc. 12, Ex. 5 at 5). We see no need to doubt the

veracity Ms. Fiorentino’s affidavit, nor any reason to disregard the stamp of the

Insurance Department as genuine. It appears to us that aforementioned stamp

signals the Insurance Department’s approval Plaintiff’s UIM rejection waiver form.

(Rec. Doc. 12, Ex. 5 at 5). 

The case law indicates that we should afford substantial deference to the

Pennsylvania Insurance Department’s approval of Plaintiff’s UIM rejection waiver

form. “It is well settled that when the courts of this Commonwealth are faced with

interpreting statutory language, they afford great deference to the interpretation

rendered by the administrative agency overseeing the implementation of such

legislation.” Winslow-Quattlebaum v. Maryland Insurance Group, 561 Pa. 629, 635

(2000). Therefore, absent fraud, bad faith, abuse of discretion or clearly arbitrary

action, our courts will not “disturb administrative discretion in interpreting

legislation within an agency’s own sphere of expertise.” Id. at 636. 

The Insurance Department is the agency charged with the implementation of

the MVFRL and we accordingly defer to its approval of Plaintiff’s UIM rejection

waiver form. We therefore find that Defendant’s and Defendant’s parents’

signatures on the contested form constituted legal waivers of UIM benefits. It

should be noted that Defendant does not plead any allegation of fraud, bad faith,

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abuse of discretion or arbitrary action relating to the Insurance Department, and

therefore, deference to the Insurance Department is warranted. 

2. LEGALITY OF UIM REJECTION WAIVER FORM 

UNDER SECTION 1731 OF THE MVFRL

The foregoing analysis makes it unnecessary for us to determine the validity

of the UIM rejection waiver form under § 1731 of the MVFRL in the absence of its

approval by the Insurance Department. However, for the sake of completeness we

note that regardless of the Insurance Department’s approval of the contested form,

Plaintiff’s UIM rejection waiver form does satisfy the requirements of § 1731,

despite the additional sentence appended by Plaintiff.

It is undisputed by the parties that the UIM rejection waiver contains all of

the language required by § 1731. Despite Defendant’s arguments to the contrary, it

appears to us that the disputed sentence was added by Plaintiff to clarify the

relationship between the UIM waiver and the waiver of stacked UIM benefits that

appears on a separate sheet of paper. By highlighting the conjunctive relationship

between the waivers, the additional sentence was surely designed to aid the insured

in understanding his policy, an otherwise esoteric and complicated document for

the lay reader to comprehend. 

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 In Winslow-Quattlebaum v. Maryland Insurance Group, 561 Pa. 629 (2000), the Supreme

Court of Pennsylvania also chose to not to elevate form over substance. The Supreme Court held that

a form for rejecting UIM benefits did not need to be on a separate sheet of paper from the rejection of

stacked UIM benefits in order to be valid.

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We elect to take a common-sense approach to the resolution of the matter

before the Court. To find today that a clarifying sentence, appended to a waiver

that otherwise fully complies with § 1731, invalidates the waiver’s effect is truly to

elevate form over substance.4 In part, we look to Pennsylvania case law to support

the approach we choose to take today. In Allstate Insurance Company v. Seeyle,

the Pennsylvania Superior Court held that a waiver of stacking for uninsured

motorist coverage was valid despite the use of additional language in the waiver. 

The court reasoned that the additional language only served to clarify the text of the

waiver. See Seeyle, 826 A.2d 1286, 1288 (Pa. Super. Ct. 2004). The same year in

Vosk v. Encompass Insurance Company, the Pennsylvania Superior Court held

that “minor deviations in the title of the executed [stacked UIM rejection] form” did

not void the legality of the waiver. Vosk, 851 A.2d 162, 167 (Pa. Super. Ct. 2004). 

Once again, the court reasoned that the purpose of additional words were to

achieve clarity. See id. at 168. Although we recognize that Seeyle and Vosk

involved § 1738 of the MVFRL, the import of both cases is to illuminate the policy

of the Commonwealth courts to uphold otherwise statutory complaint rejection

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forms that merely utilize clarifying language. 

We are also not persuaded by Defendant’s arguments that the use of the

word “specifically” in § 1731(c.1) is fatal to Plaintiff’s claim. In fact, Plaintiff’s

UIM rejection waiver form does specifically comply with the statute, inasmuch as it

uses the exact language required by § 1731. Furthermore, § 1731(c.1) nowhere

indicates that additional clarifying language vitiates an otherwise valid UIM rejection

waiver form.

Although we find for Plaintiff today, we take pause to mention that we

believe the better practice for Plaintiff and its fellow insurance companies is not to

supplement the required language of § 1731. Efforts to achieve clarity regarding

UIM waivers are better suited perhaps in the form of a cover letter or in a dialogue

between the insured and an insurance carrier representative. Surely by utilizing only

the exact language provided for in the statute, Plaintiff and other insurance carriers

doing business in Pennsylvania will reduce their exposure to future litigation on this

issue.

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NOW, THEREFORE, IT IS HEREBY ORDERED:

1. Plaintiff’s Motion for Summary Judgment (doc. 11) is GRANTED.

2. Defendant’s Motion for Summary Judgment (doc. 13) is DENIED.

3. The Clerk shall close the file on this case.

s/ John E. Jones III

John E. Jones III

United States District Judge

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