2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
10-27-2004 

# O ' C onnor-K

ohle r v . S t at e F a rm Ins C o P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 03-3961

F o l lo w thi s a nd a dd it ion al work s at : h tt p://d i g it alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2004

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2004 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m at ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion
" O ' C onnor -Ko hle r v

. S t at e F a r m I n s C o " (2004). 2004 D e cisio n s . P ape r 193. h tt p://d i g it alc ommon s .l a

w . vi l l a no va . e du/thir dc ir c uit_2004/193NOT PRECEDE NTIAL IN THE UNITED STATES COURT OF APPEALS

FO R T HE TH IRD CIR CU IT

____________________ NO. 03-3961

____________________ KAREN O’CONNOR- KOHLER, Appellant

v. STATE FARM I NSURANCE COMPANY

_______________________________________ On A ppeal Fro m the U nited States D istrict Court For th e M iddle D istrict of P enns ylvania (D.C. No. 01-CV-01412) Distri ct Judge: Honorable James M. Munley

______________________________________ Submitte d Under Third Circ uit LAR 34.1(a)

October 26, 2004 Be for e: S CIR ICA , Chief Judge , FIS HE R a nd B EC KE R, Circuit Judges
. (Fil ed: October

27, 2004)

________________________

OPI NION

________________________ BE CK ER , Circuit

Judge. This is a diversity case abo ut the stacking o f unde rinsured m otorist (UIM ) insurance coverage. Plainti ff Karen O ’Connor-Ko hler was severely i njured while a guest in a vehicle ow ned by a corp oration w hose ve hicles were insured by defe ndant S tate Farm2

In sur anc e Co. She app eal s f ro m a gr ant

of s ummar

y ju dgme ntin fav orof S ta te Farm. O’C onnor-K ohler claims tha t she can “stac k” the U IM c overage on the co rporation’s other vehi cles. State Farm claims that, because O’Connor-Kohler was merelya passenger in the ve hicle , with no ot her connection to t

he company or

the ins urer, and was not rel ated to the d river, sh e can not stac k the c om pany’s c over age. S tate Fa rm’s p osition is corre ct, so we affirm. The parti es are ful lyfamili ar with t he facts ; hence, we limit our disc ussion largely t o a statement of the rati o decidendi
. I State Farm covered thr ee vehicl es owned by GastroenterologyConsultant s, I nc. (GC I) under sep arate, non-fleet, $10 0,000/$3 00,000 p olicies (with $10 0,000 ea ch in U IM coverage) . O’Connor-Kohler was injur ed while a pas senger i n one of the vehi cles, as the guest of GCI pri ncipalDr. Martin Fried, en route to a GCI Christmas party . GCI selected, and p aid ex tra for, o ptiona l “stack ing” o f U IM cove rage: in sured s wo uld b e entitled to stack th e cov erage of ea ch po licy in case th e cov erage of o ne w as insu fficien t. The State Farm policy included the foll owing statements: Who I s an I ns ur ed—Cov er ag es U, U3 , W an d W3 Insured —M eans the i nsured person or persons covered byuninsure d motor vehicl e or underi nsured motor vehicl e coverage. This is: 1. the f irst person named in the declarations; 2. his or her spouse; 3. their relatives; and 4. any other person while occupying: a. your car , a temporary subs titute car , or a t rail er1 Contrisc iane conc erned a flee t policy, bu t its reaso ning did n ot turn o n that f act.

O’Con nor-Kohler notes that the poli cies at is sue here were non-fleet, separate poli cies, but does n ot explain w hy the difference is significant. It is true that courts are mo re hostile to stacking in fleet poli cies: O’Connor-Koh ler cites Miller v . Royal I ns. Co. , 510 A.2 d 12 57, 1 258 -59 (Pa . Su per . Ct. 1 986 ), aff’ d without opinion , 535 A.2d 1049 (Pa. 1988), which determined that even cl ass one i nsureds are not el igibl e for st acking under commercial f

leet polici es, because theymight cover many vehi cles, so all owing stacki ng cou ld m ake cos ts pro hib itive and def eat re aso nab le ex pec tatio ns. Miller noted that “c ourts are v irtua lly una nim ous ” in d enyin g sta ckin g un der com me rcial flee t po licies
. Id. (quoti ng Howell v. Harl eysvil le Mut. I ns. Co. , 505 A .2d 10 9, 111 (M d. 198 6)); cf. Contrisc iane , 473 A .2d at 1010 n.4 (“W e expressly reserve fo r another da y the question[] of w hether a “cla ss o ne” insu red ma y stack cov erag es u nde r a fl eet p olicy . . . .” ). No ne of this, how ever, e stablish es that c ourts w ould allow class tw o insu reds to 3 atta ched to such a car . Such oth er person is an insured only un der the cove rage a pplica ble to the vehicle which that person was occupying and such person is not

an insured

under the coverage appl icabl e to anyother vehi cle i nsured by this pol icy . Such vehi cle has to be used within t he scope of the consent of you or your spouse . The n amed insured un der the policy wa s GC I. O’Connor-Kohler fi led a cl aim for $300, 000, theamount of “st acked” coverage
. State Farm paid only$100,000, c laimi ng that O’Connor- Kohler was inel igibl e for stacking. O ur review of the D istrict Court’s grant of su mm ary judgmen t is plenary. There is no d is pute tha t t

hi s c as e i s g ove rn ed byPen ns y lv an iala w. II The basic Pennsylvania rule i s that

a polic y of t

he type in thi s case al lows stac king for “cla ss o ne” insu red s, bu t no t for “cla ss tw o” in sure ds. Utica Mut. I ns. Co. v. Contrisc iane , 473 A .2d 1005 , 1010-11 (Pa. 1984 ). 1 Traditionally, “class one” consis ts ofstack i n non-flee t cases . While t here is no Pennsyl vania Supreme Court case on the que stion , Bowd ren v. Aetna Life & Cas. , 591 A .2d 75 1, 755 (Pa. S uper . Ct. 19 91), u pheld an arbit rator ’s deci sion deny ing st acking t o a class two insure d under a non-fl eet, personal U IM po lic y. 2 As fo r class one insu reds, after Contrisc iane , Penn sylvania e nacte d a statu te exp licitly req uirin g in sure rs to s tack UI M ben efits for clas s on e ins ure ds. See 75 Pa. C.S. A. § 1738. The statute requires st acking for an “insured,” defi ned as the named insured and hi s or her spo use and relat ives if the y resid e in th e sa me hou seh old
. See 75 P .S.A . § 170 2. Th is statu te w as a dop ted in 199 0, see State Farm Mut. Auto. Ins . Co. v. Kramer , 20 03 WL 231 001 65, * 3 (P a. C .P. M ar. 3 1, 20 03)
. 4 the named ins ured, hi s or her s pouse, and hi s or her relatives; “class two” consis ts of gue sts in the n am ed in sure d’s v ehic le. Id . at 101 0. Th e Su prem e Co urt of P enns ylvania has explained why class two insureds are not enti tled to st ack benefits: A claimant whose cover age is s olely a resul t of membershi p in thi s clas s has not paid premiums, nor i s he a speci fical lyintende d benefici aryof the policy . Thus, hehas no recogni zable cont ractual rel ations hip with t he insure r, and th ere is n o bas is upo n w hich h e can reaso nably ex pect m ultiple coverage. Id. at 1010-11. 2
The argument pres sed by O’Connor-Kohler i s a functi on of the fact that t he named insure d here is not a human being. It i s clear enough that

GCI itsel f could never

suffer bodily injury ( which is what i s covered bythe UIM coverage). GCI, of course, does not have a spouse or

relat ives. Thus, O’Connor-Kohler argues, under the St ate Farm pol icyat issue, there wereno class one insur eds. I n her submiss ion, i f onlyclass one insur eds can stack cove rage, and there are no cla ss one ins ureds, then State Farm was charging5

additi onal premi ums for nonexis tent c overage. State F arm h as a co mp elling re spon se to this . It notes th at so me people might legitimately be class one insu reds und er GC I’s policy—b ut not O ’Conn or-Ko hler. In Contrisc iane , thePennsyl vania Supreme Court “reserve[d] for anot

her daythe question[] . . . whether the ow ner and/or o fficers of a c orporation are ‘class one’ insure ds unde r a policy issued in the nam e of a co rporation.” 473 A.2d a t 1010 n .4. That que stion appea rs to have been answe red in the affirmative i n later cases. In Ober v. Aetna Cas. & Sur. Co. , 766 F. S upp . 342 , 345 (W .D. P a. 19 90) , aff’d without opinion , 944 F.2d 898 ( 3d Cir. 1991) , Judge Lee determined that, under Pennsyl vania l aw, the “i ntended benefi ciari es [i. e. cl ass one i nsureds] of [a corporate] policy are at minimum the offi cers and director s of the cor porati on, whose coverageis not ‘s ol el y th e r es ul t’ of me mber ship i n a c la ss .” The q uoted l ang uag e i s f ro m Contrisc iane , and is intend ed to d istingu ish of ficers a nd d irectors f rom those wh o are c over ed on ly be ca us e th ey a re un re lat ed pa ss en ge rs— as O ’C on no r-K oh ler in di sp ut ab ly w as . S im ila rly, in Miller , thePennsyl vania Superi or Court appears to have assumed that the wife of a corporate officer

was a class one insur ed under thecorporation’s pol icy , though i t did not actu ally de cide the q ues tion
. See Miller , 510 A .2d at 1 258 ; cf. Ober , 766 F. Supp. at 345- 46. Given this , it

seems li kelythat, as a matt er of Pennsy lvania law, there are human class one insur eds under GCI’s pol icy : GCI’s offi cers and director s. Dr. Fried, theref ore,3 Despite St ate Farm’s concessi on, Pennsy lvania courts do not appear

to have deci ded this issue. In Ober , a fed eral jud ge de termin ed tha t the clas s one insure ds on a corp orate policy are “at a minimum” the di rector s and office rs, 766 F. Supp. at 345, but l eft open the “ ma xim um ” sc ope of th at cla ss. O ne P enn sylvan ia C our t of C om mo n P leas cas e, State Farm M ut. Auto. Ins . Co. v. Kramer , 2003 W L 231 00165 (Pa. C.P. M ar. 31, 2003 ), allowed an employ ee to st ack coverage on hi s employ er’s UIM polic ies, under the particu lar polic y langua ge at iss ue, bu t it did no t determ ine w hethe r that em ployee w as in fact a cl ass one i nsured. 6 wou ld have b een able to stac k cove rage if he h ad been injured in the acc ident. If O’Connor-Kohler had been hi s wife or daughter, s he would have been abl e to st ack coverag e. If she had been a G CI employee , she might have had a color able cl aim that she could st ack coverage. Indeed, St ate Farm concede d in it s papers i n the Dist rict Court that if she had be en a GCI employee, she could receive s tacked cover age. 3 But, i n fact, she had no connecti on to GCI beyond bei ng a passenger in a corpor ate vehi cle—which makes her the c leare st po ssib le ex am ple o f a c lass t wo insu red
. O’Connor-Kohler ar gues that because she was a pas senger i n a GCI vehicle, being operate d by a GCI offic er, and on t he way to aGCI employee Chri stmas party , “[t ]he clear infere nce is t

hat thi s particular tr avel was for a bus iness pur pose to pr omote the corporation’s interest.” This proves t oo much: if this is a “business purpose,” t hen almost every conceivable purpose for which anyone might be in a corporate vehicle i s a “busines s purpose, ” and so every unrelated passenger

would be a clas s one insured. O’Connor-Kohler ar gues that the defi niti on of a clas s one insured under thepolicy at issue here is open to mo re than one in terpreta tion, an d there fore th e am bigu ity should be con strued against the in surer. In fact, the policy languag e and cu rrent law are7

unam biguou s. The lang uage in item 4(a) of the p olicy cited above (“S uch othe r person is
an insured

onlyunder the c overage appl icabl e to thevehicl e which that person was occupying and such person is not an insured

under the c overage appl icabl e to anyother vehicle insured bythis policy .”) unambiguously excludes stacki ng by unrelated guests, and the Pennsy lvania

cases al l seem to bein accor d. Therefore, there is no basis f or her clai m that she i s a clas s one insured and so enti tled to stack cove rage. The judgment of the District Court will be affirmed.