Court Opinion

ID: 2780106
Source: CourtListenerOpinion
Date Created: 2015-02-18 20:05:57.486369+00
Date Added: 2024-06-11T11:28:14.714266
License: Public Domain

J-S51032-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

TIM WILBUR MECHANICAL AND                      IN THE SUPERIOR COURT OF
TIM WILBUR                                           PENNSYLVANIA

                         Appellant

                    v.

NORGUARD INSURANCE COMPANY

                         Appellee                   No. 364 MDA 2014

               Appeal from the Order Entered January 24, 2014
             In the Court of Common Pleas of Cumberland County
                        Civil Division at No(s): 06-6048

BEFORE: BOWES, J., OTT, J., and MUSMANNO, J.

MEMORANDUM BY OTT, J.:                         FILED FEBRUARY 18, 2015

     Tim Wilbur Mechanical and Tim Wilbur (Wilbur) appeal from the order

entered January 24, 2014, in the Court of Common Pleas of Cumberland

County granting summary judgment in favor of defendant, NorGUARD

Insurance Company (NorGUARD).        The trial court determined that, as a

matter of law, NorGUARD had effectively cancelled Wilbur’s workmen’s

compensation insurance policy prior to the claimed accident and therefore,

Wilbur had failed to state a cause of action upon which relief could be

granted. Additionally, the trial court found Wilbur was collaterally estopped

from challenging the effective cancellation of the worker’s compensation

policy. Following a thorough review of the certified record and relevant law,

we affirm.
J-S51032-14

       In this appeal, Wilbur raises two issues: (1) the trial court erred in

determining the policy was effectively cancelled even though NorGUARD did

not make a timely return of Wilbur’s unearned premium, and (2) the trial

court erred in determining Wilbur was collaterally estopped from bringing the

lawsuit.

       Initially, we note the procedural problems found herein.    This case

arises from an accident suffered on October 16, 2002, in the course and

scope of employment, by a Wilbur employee.         Wilbur had purchased a

worker’s compensation insurance policy from NorGUARD. However, Wilbur

had failed to make the required June 9, 2002 premium payment. 1 On June

17, 2002, NorGUARD mailed notice of cancellation of the policy, effective

July 7, 2002, unless the required premium payment was made.         Payment

was not tendered; the policy was cancelled.

       On October 16, 2006, Wilbur filed suit against NorGUARD claiming

breach of contract, bad faith, and punitive damages. All of these claims are

based upon the assertion that NorGUARD did not effectively cancel the

worker’s compensation policy. On April 1, 2013, NorGUARD filed a motion

for summary judgment arguing that it had effectively cancelled Wilbur’s

____________________________________________

1
 The record indicates Wilbur had failed to make two prior payments as well.
Both of these failures led to cancellation notices being sent to Wilbur.
However, in both prior instances, Wilbur made payment before the effective
cancellation date and so the policy was reinstated both times.

                                           -2-
J-S51032-14

worker’s compensation insurance as of July 7, 2002. Therefore, it did not

and could not breach the contract regarding the October 16, 2002 accident,

because no contract existed at that time. Wilbur did not file a response to

the motion, despite Pa.R.C.P. 1035.3 requiring the adverse party to file a

response within 30 days of service of the motion for summary judgment.2

In the January 24, 2014 order granting NorGUARD’s motion for summary

judgment, the trial court commented that it had considered Wilbur’s brief in

opposition to NorGUARD’s motion.               That brief is not part of the certified

record.

        Although “response” is not defined, it does not appear to include

simply a brief.     Rule 1035.3(e)(1) allows a trial court to rule on summary

judgment “without written responses or briefs” as long as no party is
____________________________________________

2
    Rule 1035.3 states, in relevant part:

        Except as provided in subdivision (e) [allowing the court to
        decide a motion without written responses or briefs if no party is
        prejudiced] , the adverse party may not rest upon the mere
        allegations of denials of the pleading but must file a response
        within thirty days after service of the motion identifying

           (1) one or more issues of fact arising from evidence in the
           record controverting the evidence cited in support of the
           motion or from a challenge to the credibility of one or
           more witnesses testifying in support of the motion, or

           (2) evidence in the record establishing the facts essential
           to the cause of action or defense which the motion cites as
           not having been produced.

Pa.R.C.P. 1035.3(a)(1)-(2) (emphasis added).

                                           -3-
J-S51032-14

prejudiced.    This Rule indicates that a brief is not the same as a written

response.     Further, case law indicates the trial court has the discretion to

require a brief and/or oral argument. See Thomas v. Elash, 781 A.2d 170

(Pa. Super 2001); Smitley v. Holiday Rambler Corp., 707 A.2d 520 (Pa.

Super. 1998).      Rule 1035.3 clearly states that a response must be filed.

Therefore, a brief, which is supplied at the discretion of the court, is not

contemplated to replace the required filed response.             Finally, Scopel v.

Donegal Mutual Ins. Co., 698 A.2d 602 (Pa. Super. 1997), in commenting

on Rule 1035.3, notes that “litigant’s briefs are not part of the official

record.”3    Id. at 606.     This comment also indicates that a brief does not

equate to a mandatory filed response.

       While the failure to respond to a motion can result in a finding of

waiver, here, the trial court scheduled argument on the motion.               Said

argument was apparently held on November 8, 2013.4               Subsequently, the

trial court ruled on the motion, having considered both the brief and the

argument.      See Order, 1/24/2014.           Because the trial court ruled on the

____________________________________________

3
  This fact is demonstrated by the instant certified record, which does not
contain Wilbur’s brief in opposition to NorGUARD’s motion.
4
  The certified record contains an order scheduling argument for that date.
However, the official docket has no entries for that date and there are no
stenographer’s notes from that date.

                                           -4-
J-S51032-14

merits as if Wilbur had properly responded to NorGUARD’s motion, we will

address the issues as framed by the trial court.5

       We note our applicable scope and standard of review:

       Our scope of review of an order granting summary judgment is
       plenary. [W]e apply the same standard as the trial court,
       reviewing all the evidence of record to determine whether there
       exists a genuine issue of material fact. We view the record in the
       light most favorable to the non-moving party, and all doubts as
       to the existence of a genuine issue of material fact must be
       resolved against the moving party. Only where there is no
       genuine issue as to any material fact and it is clear that the
       moving party is entitled to a judgment as a matter of law will
       summary judgment be entered.

       Motions for summary judgment necessarily and directly implicate
       the plaintiff's proof of the elements of his cause of action....
       Thus, a record that supports summary judgment will either (1)
       show the material facts are undisputed or (2) contain insufficient
       evidence of facts to make out a prima facie cause of action or
       defense and, therefore, there is no issue to be submitted to the
       [fact-finder]. Upon appellate review, we are not bound by the
       trial court's conclusions of law, but may reach our own
       conclusions. The appellate Court may disturb the trial court's
       order only upon an error of law or an abuse of discretion.

Stein v. Magarity, 102 A.3d 1010, 1013 (Pa. Super. 2014) (citation

omitted).

____________________________________________

5
   Because we have no direct record of Wilbur’s arguments before the trial
court, we cannot rely upon either Wilbur’s Pa.R.A.P. 1925(b) statement or
his Appellant’s Brief. “Issues not raised below cannot be advanced for the
first time in a 1925(b) statement or on appeal.” Irwin Union National
Bank and Trust Co. v. Famous, 4 A.3d 1099, 1104 (Pa. Super. 2010)
citing Diamond Reo Truck Company v. Mid-Pacific Industries, Inc.,
806 A.2d 423, 430 (Pa. Super. 2002). Accordingly, we must rely on the trial
court’s recitation.

                                           -5-
J-S51032-14

       Here, the trial court reviewed the specific language of the policy and

determined that the contractual requirements for cancellation of the policy

were contained in Part Six, Section D. In relevant part, the policy states:

       2. We may cancel this policy. We must mail or deliver to you
          not less than ten days advance written notice stating when
          the cancelation is to take effect. Mailing that notice to you at
          your mailing address shown in Item 1 of the Information Page
          will be sufficient to prove notice.

       3. The policy period will end on the day and hour stated in the
          cancelation notice.

       4. Any of these provisions that conflict with a law that controls
          the cancelation of the insurance in this policy is changed by
          this statement to comply with the law.

NorGUARD Policy, Part Six, ¶ D, (2)-(4), at 5.

       The evidence of record, produced by NorGUARD, demonstrates that

NorGUARD complied with the contractual requirements. Notice was mailed

to Wilbur, at the proper address, on June 17, 2002, effective July 7, 2002 at

12:01 A.M. Therefore, the notice provided more than the ten days’ advance

written notice required by paragraph 2.6
____________________________________________

6
  Although not mentioned by either the trial court or Wilbur, we note the
relevant Pennsylvania statute, 40 P.S. § 3403(3)(ii), requires a minimum 15
days’ advance notice when an insurance policy is terminated for reasons of
non-payment of premiums. However, NorGUARD provided 20 days’ advance
notice, so the statutory requirement for timely notice was met. Additionally,
40 P.S. § 3407(b) exempts workmen’s compensation policies that are
subject to the “Healthcare Services Malpractice Act” from the cancellation
requirements of Section 3403. The “Healthcare Services Malpractice Act”
was repealed and there is no indication in the certified record that the
NorGUARD policy is or ever was subject to that law.

                                           -6-
J-S51032-14

        The trial court noted that Wilbur claimed that NorGUARD failed to

return the unearned premium to Wilbur within the ten days required by the

policy. Wilbur’s argument is based upon language found in an endorsement

to the policy.7

        The endorsement addresses three issues: nonrenewal, notice of

increase of premium, and return of unearned premium. In relevant part, the

endorsement reads:

        1. If this policy is canceled and there is unearned premium due
           you:

          a. If the company cancels, the unearned premium will be
             returned to you within 10 business days after the
             effective date of cancellation.

          b. If you cancel, the unearned premium will be returned
             within 30 days after the effective date of cancellation.

        2. Because this policy was written on the basis of an estimated
           premium as is subject to a premium audit, the unearned
           premium specified in 1a. and 1b. above, if any, shall be
           returned on an estimated basis. Upon our completion of
           computation of the exact premium, an additional return
           premium or charge will be made to you within 15 days of the
           final computation.

Policy Endorsement, WC 37 06 03A.

        Based upon the language of this endorsement, Wilbur claimed that the

cancellation was not effective on July 7, 2002, because NorGUARD did not

____________________________________________

7
    The endorsement language was required by 40 P.S. § 3404.

                                           -7-
J-S51032-14

return the unearned premium within the ten days required by the policy in

paragraph 1a.8

       The trial court analyzed this language and determined that, contrary to

Wilbur’s assertion, the return of any unearned premium was not a

prerequisite to the cancellation of the policy.       The paragraphs addressing

unearned premium were not contained within Part Six, ¶ D (regarding

cancellations) of the policy.       Part Six, ¶ D does not refer to the return of

unearned premiums as a condition or requirement of cancellation of the

policy.9   Further, the relevant language of the endorsement indicates that

the return of any unearned premium is an action contemplated as occurring

subsequent to the cancellation of the policy, not as a prerequisite to effective

cancellation.     Therefore, effective cancellation of the policy cannot be

conditioned upon an action taken only after cancellation.         Stated another

way, there is no language in the policy to support an argument that the

____________________________________________

8
   The policy was subject to estimated premiums, see Complaint,
10/16/2006, at ¶ 8; Answer, 12/7/2006, at ¶ 8. Therefore, it appears that
the return of any unearned premium was subject to the terms of paragraph
2, not paragraph 1a.
9
   We note there is nothing in the statutory language cited by Wilbur
indicating effective cancellation of a policy is conditioned upon timely return
of any unearned premium.

                                           -8-
J-S51032-14

return   of   any    unearned     premium,       within   the   time   allotted   in   the

endorsement, is required to ratify an otherwise effective cancellation.10

       The trial court noted that Wilbur argued Gosch v. Fireman’s

Insurance Company, 33 Pa. Super. 496 (1906), made the return of any

unearned premium a requirement to the effective cancellation of the policy.

The trial court correctly noted that Gosch is easily distinguishable from the

instant matter.        We note that Gosch predates statutory insurance

regulation. The contract in Gosch contained language linking the return of

unearned premium to the cancellation of the policy.11                  As demonstrated

above, such language does not exist in the NorGUARD policy.

       Further, we note that subsequent case law effectively limits Gosch to

the facts presented in that case. See Pomerantz v. Mutual Fire Ins. Co.

of Chester County, 124 A. 139, 140 (Pa. 1924) (noting subsequent

enactment of statutorily mandated policy forms: “Formerly, the unearned

premium was required to be tendered when the policy was canceled,

otherwise the latter would continue in effect.”); Turney v. Allstate Ins.

____________________________________________

10
    If we accept Wilbur’s interpretation that effective cancellation is
conditioned upon the subsequent timely return of any unearned premium,
then pursuant to the endorsement at ¶ 1b., if a customer sought to cancel
the policy, but the unearned premium was not returned within 30 days, then
the cancellation would be defeated.
11
   Another factual difference is that Gosch actually made timely payment to
his insurance agent. It was the agent who failed to make payment to the
insurer.

                                           -9-
J-S51032-14

Co., 74 A.2d 730, 731 (Pa. Super. 1950) (noting Pomerantz had effectively

ruled return of unearned premium was no longer a condition precedent to

effective cancellation of a policy).

       Because the evidence of record supports the trial court’s determination

that   NorGUARD     complied    with   all   of   the   contractual   and   statutory

requirements to effectively cancel Wilbur’s policy for non-payment of

premiums, and correctly determined as a matter of law the return of any

unearned premium is not a condition precedent to effective cancellation of a

policy nor is it required to ratify cancellation, Wilbur cannot prevail.          As

noted above, all of Wilbur’s claims were dependent upon a finding that the

policy was not properly cancelled. Therefore, summary judgment as to all

claims was properly granted.

       Because the trial court correctly determined the policy had been

effectively cancelled, we need not address Wilbur’s second claim regarding

collateral estoppel.

       Order granting summary judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/18/2015

                                       - 10 -