Opinion ID: 793035
Heading Depth: 2
Heading Rank: 2

Heading: Reasonable Expectations of the Insured

Text: 40 Canal further argues that the great weight of authority in Pennsylvania strongly favors a conclusion that the Pennsylvania Supreme Court would in this case permit the reasonable expectations of the insured to be relied on to determine whether facially unclear insurance policy language is ambiguous, and further find such ambiguity to preclude exclusion and favor coverage of Mr. Singh. Aplt. App. at 26. Specifically, Canal claims that Singh reasonably expected the business use exclusion to apply only to acts related to or furthering the business of a commercial carrier, not to acts related to selling or trading the Tractor. Id. at 19. Because Underwriters' construction of its exclusionary language is contrary to the reasonable expectations of the insured, Canal contends that the language is ambiguous and should be interpreted in favor of Singh. Relying on Matcon Diamond v. Pennsylvania Nat'l Ins. Co., 815 A.2d 1109, 1114 (2003), the District Court here disagreed, explaining that it is well settled in Pennsylvania that the reasonable expectations doctrine does not provide relief where the language of the contract is clear and unambiguous: 41 Canal also argues that Underwriters' position is precluded by the doctrine of reasonable expectations of the insured as that doctrine has developed under Pennsylvania law. The Court disagrees. The Supreme Court of Pennsylvania has held that the polestar for determining the parties' intent is the language of the policy itself. To that end, the Superior Court of Pennsylvania has noted that, generally, courts cannot invoke the reasonable expectation doctrine to create an ambiguity where the policy itself is unambiguous. As recognized by the Matcon court, the highest court in Pennsylvania has limited the argument that the reasonable expectations of the insured trump the clear and unambiguous language of a policy to two occasions: (1) protecting non-commercial insureds from policy terms which are not readily apparent; and (2) protecting non-commercial insureds from deception by insurance agents. 42 Canal Ins. Co., 333 F. Supp. 2d at 356-57 (internal citations omitted). The Court expressly declined Canal's invitation to look beyond the plain and unambiguous language of the policy in order to scrutinize what Mr. Singh's expectations may have been regarding coverage because Canal advanced no argument that Underwriters' policy terms were not readily apparent or that there was deception by the insurance agents. Id. at 357. 43 Our Court recently weighed in on the Pennsylvania reasonable expectations doctrine, stating that 44 Pennsylvania case law . . . dictates that the proper focus for determining issues of Insurance coverage is the reasonable expectations of the insured. In most cases, the language of the insurance policy will provide the best indication of the content of the parties' reasonable expectations. Courts, however, must examine the totality of the insurance transaction involved to ascertain the reasonable expectations of the insured. As a result, even the most clearly written exclusion will not bind the insured where the insurer or its agent has created in the insured a reasonable expectation of coverage. However, this aspect of the doctrine is only applied in very limited circumstances to protect non-commercial insureds from policy terms not readily apparent and from insurer deception. Absent sufficient justification, however, an insured may not complain that his or her reasonable expectations were frustrated by policy limitations that are clear and unambiguous. 45 Liberty Mut. Ins. Co. v. Treesdale, Inc., 418 F.3d 330, 344 (3d Cir. 2005) (internal citations and quotations omitted). In this context, the District Court's refusal to look beyond the plain meaning of the unambiguous exclusionary language to Singh's reasonable expectations is consistent with the interpretation of Pennsylvania case law in our Circuit.