Court Opinion

ID: 9735418
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:14:45.642928+00
Date Added: 2024-06-11T18:26:58.344218
License: Public Domain

DISSENTING OPINION BY
DEL SOLE, P.J.
¶ 1 I disagree with the Majority’s ruling in this matter and would conclude under the facts of this case that the household exclusion included in the Nationwide policy was not a valid bar to prevent Appellee from receiving UIM benefits under the Nationwide policy. I believe the Majority improperly relies upon prior decisions which were based upon significantly different factual scenarios.
¶ 2 The Majority finds that the question presented in this case is similar to that decided in Old Guard Ins. Co. v. Houck, 801 A.2d 559, 2002 PA Super 161. It further notes that Old Guard cited to prior decisions in Paylor v. Hartford Ins. Co., 536 Pa. 583, 640 A.2d 1234 (1994), Eichelman v. Nationwide Ins. Co., 551 Pa. 558, 711 A.2d 1006 (1998), Hart v. Nationwide Ins. Co. 541 Pa. 419, 663 A.2d 682 (1995) and Windrim v. Nationwide Ins. Co., 537 Pa. 129, 641 A.2d 1154 (1994). As further support for its ruling the Majority offers our Supreme Court’s recent decision in Burstein v. Prudential Property and Cas. Ins. Co., 801 A.2d 516 (Pa.2002). My review of these decisions finds that none has *1278a factual background similar to that presented in the instant case.
¶ 3 These prior decisions each uphold a clear and unambiguous household exclusion to UIM coverage as valid. The validity of the exclusion in these cases was considered in circumstances where the plaintiff was either attempting to convert underinsured coverage into liability coverage, or where the plaintiff failed to purchase UIM coverage for the vehicle involved in the accident or failed to purchase it in the amount purchased for other vehicles in the household.
¶ 4 In Old Guard, the insured was in a collision while riding a motorcycle insured by Guide One Insurance with UIM coverage of $15,000. The insured received the policy limits from the tortfeasor’s insurer. Thereafter the insured sought UIM coverage from Guide One and Old Guard Insurance Company through which she had insured three other vehicles owned by her and her husband with UIM coverage of $100,000 per person/$300,000 per accident. The household exclusion contained in the Old Guard policy was held enforceable. The court specifically noted that, although the insureds had purchased UIM coverage on the motorcycle, “they only purchased $15,000 in UIM coverage.” The court remarked, “[w]ere we to accept Appellant’s position, a family with multiple vehicles could insure one vehicle with one insurer for a high amount of UIM coverage and insure the remaining vehicles with another insurer for minimum UIM coverage, and yet still recover from the former insurer when the latter’s benefits prove inadequate when an accident occurs.” Old Guard, at ¶ 30.
¶ 5 As noted, Old Guard relied on our Supreme Court’s decision in Paylor. Therein, a husband and wife were killed in a single car accident while traveling in a motor home owned by them and insured under a policy issued by Foremost Insurance Company. The administratrix of the wife’s estate recovered the limits of liability coverage under the Foremost policy and then sought to recover UIM benefits under a policy issued by Hartford Insurance Company on three other cars owned by the couple. In upholding a family car exclusion in the Hartford policy the court remarked: “to permit decedent’s estate to recover the underinsured coverage ... is to allow the named insured’s estate to convert inexpensively purchased underin-sured motorist coverage for the family cars into liability coverage on the motor home.” Paylor, 640 A.2d at 1241.
¶ 6 In Eichelman the appellant was struck by a truck while riding his motorcycle. The motorcycle was insured by Aegis Security Insurance Company, but the policy did not include UIM coverage. After receiving the limits of liability benefits available under the truck owner’s insurance, the appellant sought to collect UIM coverage under a Nationwide Insurance Company policy which contained a household exclusion, and which was issued to the appellant’s mother and her husband, with whom he resided. The court noted that the appellant voluntarily chose not to purchase underinsured motorist coverage and therefore received reduced insurance premiums. The court held, “[t]hus, this Court concludes that giving effect to the ‘household exclusion’ in this case furthers the legislative policy behind underinsured motorist coverage in the MVFRL since it will have the effect of holding appellant to his voluntary choice.” Eichelman, 711 A.2d at 1010.
¶ 7 Similarly, Hart involved a situation where the injured party was driving his own vehicle for which he had purchased insurance, but not UIM coverage, when he was struck by another driver. The injured party, who resided in a home with his daughter, collected the policy limits from *1279the other driver’s insurance carrier and then sought UIM coverage under a separate policy of insurance issued to his daughter. The Supreme Court in a per curiam order reversed this Court’s ruling which found the household exclusion in the daughter’s policy void as against public policy. The Court cited to Windrim in its order. The driver in Windrim claimed that while he was driving his own uninsured vehicle it was struck by a hit-and-run driver. Windrim sought UIM coverage under a policy issued by Nationwide to his mother claiming he was an insured because he was a relative residing in his mother’s household. The Court found the household exclusion contained in the Nationwide policy valid and enforceable, remarking that its “conclusion is bolstered by the fact that Windrim’s argument, if accepted, would actually contravene the legislative intent behind the MVFRL by serving as a disincentive to insure vehicles.” Windrim, 641 A.2d at 1158. The Court noted that if it were to rule otherwise, relatives living with an insured would be less inclined to purchase insurance for their vehicle and instead rely on coverage from their relative’s insurance policy.
¶ 8 Finally, and most recently, the Supreme Court had occasion to again consider an exclusion in Burstein. Therein the injured parties were driving a company car, which did not have UIM coverage, when it was hit by a motorcycle. The motorcyclist’s insurance company tendered the maximum amount payable under the liability limits of its policy, but the injured parties were not fully compensated so they sought to recover UIM benefits under a policy issued by Prudential on three vehicles which they owned. The Court upheld an exclusion for regularly used non-owned vehicles. The Court commented that Mrs. Burstein should have taken affirmative steps to determine whether the employer-provided vehicle had UIM coverage. If she did not wish to accept the risk of driving without UIM coverage, the Court advised that she could have negotiated with her employer for the purchase of such coverage, purchased it herself, or refused to drive the car.
¶ 9 In each of these cases the party seeking recovery of UIM benefits either elected to not purchase such benefits themselves, or purchased them in an amount less than that purchased for other vehicles they owned. The concern in these cases, that an individual will elect to forgo the purchase of UIM insurance for certain vehicles when they have UIM coverage on another household vehicle, does not hold true in this case. Ms. Rudloff had purchased liability, underinsured and uninsured motorist protection from Hanover Insurance Company with $100,000 limits to cover the car she owned and was operating at the time of the accident.
¶ 10 Ms. Rudloff collected both the policy limits from the tortfeasor and the UIM coverage from Hanover before she sought recovery of UIM benefits from Nationwide under a policy issued to her father, with the same $100,000 limits. Unlike the parties in the cases relied on by the Majority, Ms. Rudloff did not seek to escape the purchase of UIM coverage. She had purchased UIM coverage in the same amount as that purchased by her father under the Nationwide policy. It was only when the amounts tendered by the tortfeasor and her own UIM coverage were insufficient to compensate' her that she turned to the Nationwide policy. In these circumstances, recovery of UIM benefits under the Nationwide policy is directed by the provisions of the MVFRL which provide under Priority of Recovery:
(a) General Rule — Where multiple policies apply, payment shall be made in the following order of priority:
*1280(1) A policy covering a motor vehicle occupied by the injured person at the time of the accident.
(2) A policy covering a motor vehicle not involved in the accident with respect to which the inured person is an insured.
75 Pa.C.S.A. § 1733. Absent application of the household exclusion, it is undisputed that Ms. Rudloff is entitled to UIM benefits under the Nationwide policy as a relative residing in her father’s household. The General Assembly in 75 Pa.C.S.A. § 1733(a)(2) sought to offer protection to those such as Ms. Rudloff who seek recovery from a policy covering a motor vehicle not involved in the accident under which they are insured. The exclusion under the facts of this case should not operate to bar recovery contrary to the express provisions of the MVFRL.
¶ 11 Further, application of the exclusion in this case does not seek to protect against the same harms envisioned in the cases cited by the Majority. The injured party in this case did purchase UIM insurance. She purchased it in an amount equal to that purchased by her father in his policy with Nationwide. The stated public policy of reducing the increasing costs of insurance does not support enforcement of the exclusion under the present facts, where the party seeking UIM benefits did purchase it on her own vehicle and seeks to recover as an insured under her father’s policy only after exhausting her own UIM coverage. The fact that Ms. Rudloff purchased coverage from Hanover, and her father from Nationwide, is likely not to have impacted on the overall costs of insurance. Had she too sought to purchase coverage from Nationwide, it is most likely the family would have been entitled to a discount as a reward for insuring all the family’s cars with the same company.
¶ 12 Thus, I conclude the distinct facts of this case do not warrant application of the case law cited by the Majority. Ms. Rudloff, as an insured under her father’s policy, is entitled to UIM benefits and I believe the exclusionary language in the policy which seeks to prevent her from seeking these benefits violates the express terms of the MVFRL and should not be upheld.