Court Opinion

ID: 9692461
Source: CourtListenerOpinion
Date Created: 2023-08-25 15:54:53.714127+00
Date Added: 2024-06-11T18:19:34.652082
License: Public Domain

BROSKY, J.,
concurring.
¶ 1 I believe that much of the majority’s Opinion is a valid review of current insurance decisions, but that the majority fails to adequately address the problem at hand. I write separately to express my concern about the impact of the panel decision in National Union Fire Insurance Co. v. Irex Corp., 713 A.2d 1145 (Pa.Super.1998), on this case.
¶ 2 The majority treats the issue before us as “[t]he proper relationship of § 1731 and § 1734 in a situation involving reduced UM or UIM coverage (and not complete *852rejection of either coverage)”. The majority states that this is an issue of first impression. That is not quite an accurate description of the question with which we are faced in this appeal. The situation before us is one in which the trial judge, perceiving himself bound by the decision in Irex, granted judgment on the pleadings in favor of Appellees/insureds in this declaratory judgment action brought by Appel-lees. Thus, the matter that we must consider is whether the trial judge erred in granting judgment on the pleadings in favor of Appellees on the basis of Irex. If he did err in his reasoning but properly granted judgment on the pleadings, we could still affirm on other grounds.
¶ 3 As the majority Opinion indicates, the trial court may grant judgment on the pleadings only where the moving party’s right to succeed is certain and the case is so free from doubt that trial would be a fruitless exercise. Kafando v. State Farm Mut. Auto. Ins. Co., 704 A.2d 675, 676 (Pa.Super.1998). Our standard of review is to determine whether the trial court’s decision to grant judgment on the pleadings was based on a clear error of law or whether there were facts disclosed by the pleadings that should properly go to a jury. Kelly v. Nationwide Ins. Co., 414 Pa.Super. 6, 8-10, 606 A.2d 470, 471 (1992).
¶ 4 I would find that the trial judge erred in granting judgment on the pleadings, but not for exactly the reasons articulated by the majority Opinion. I would conclude that the trial judge, relying on dicta in Irex, improperly determined that Appellee’s written request to reduce was inoperative under section 1734. Further, I find that judgment on the pleadings in favor of Appellees should not have been granted on any other grounds.
¶ 5 Here, the named insured, Robert A. Lewis, signed a written request for reduced coverage for uninsured motorist (UM) and underinsured motorist (UIM) benefits coverages. The form that Appellant Erie provided to Robert A. Lewis regarding UM and UIM coverage options had four separate provisions. These provisions were for rejection of UM and UIM benefits coverage and for reduced limits of UM and UIM benefits coverage. They were all set forth on the same sheet of paper. Robert A. Lewis signed and dated only the portions pertaining to a request for reduced coverage for UM and UIM benefits. As to both UM and UIM, he wrote in $50,000 each person and $100,000 each accident.
¶ 6 After his son, a resident relative covered as an insured under the policy at issue, was injured and was dissatisfied with the amount of the reduced coverage, Robert A. Lewis sought to avoid his election of reduced UM and UIM coverage, urging it was invalid. The invalidity Ap-pellees asserted was that the writing Robert A. Lewis signed was not on separate pages. Appellees sought to have the contract reformed to provide the policy’s bodily injury liability coverage of $500,000 per person and $500,000 per accident, with the stacking option applicable. Appellant Erie maintained that the named insured, Robert A. Lewis, elected to have reduced coverage for UM and UIM benefits under section 1734 of the MVFRL and that his written request was in compliance with that section.
¶ 7 Section 1734 of the MVFRL provides:
§ 1734. Request for lower limits of coverage
A named insured may request in writing the issuance of coverages under section 1731 (relating to availability, scope and amount of coverage) in amounts equal to or less than the limits of liability for bodily injury.
75 Pa.C.S.A. § 1734. Two types of coverage that are included in section 1731 of the MVFRL are UM and UIM benefits coverage.
¶ 8 There is no requirement set forth in section 1734 that the request for reduced UM/UIM benefits coverage be made on separate pages. Appellees urged, howev*853er, that the requirement for separate pages set forth in section 1731(c.l), regarding an insured’s waiver of UM/UIM benefits coverage, must be met with regard to section 1734 written requests to reduce such coverage. Section- 1731(c.l) provides, with regard to waiver forms, that insurers must print rejection forms for UM and UIM benefits coverages on separate sheets in prominent type and location. Further, section 1731(c.l) provides that, if the insurer fails to produce a valid rejection form, UM or UIM coverage, or both, as the case may be, under that policy shall be equal to the bodily injury liability limits.
¶ 9 The requirements of section 1734 were directly addressed by a panel of this Court in Motorists Insurance Companies v. Emig, 444 Pa.Super. 524, 664 A.2d 559 (1995). In Emig, which is accurately explained by the majority Opinion, the insurer was attempting to avoid coverage for UIM benefits in the amount of the policy’s bodily injury liability limits and was instead claiming that the insured had elected to reduce the coverage amount for UIM. We concluded that, under section 1734, an insured must have requested reduced limits for UM/UIM coverage in writing for the insurer to provide such coverage in an amount not equal to the policy’s bodily injury liability limits. Further, we held the agent’s actions were not sufficient to meet the requirements of section 1734; the actions must be by the insured.
1110 Irex was a case concerning the rejection of UM benefits coverage. The only issue in Irex regarding a construction of section 1734 was whether a rejection of UM benefits coverage that is invalid under section 1731 may be treated as a written request by the insured for a reduction of UM benefits coverage under section 1734. The panel held that it could not, because such a result would be absurd and would allow an insurer to circumvent the requirements of the MVFRL.
¶ 11 The majority in Irex went farther in its discussion than simply answering the question before the panel, however, and engaged in an instructional discourse on how sections 1791, 1731, and 1734 should work together. Relying on Emig, the majority in Irex reasoned that section 1791 of. the MVFRL, 75 Pa.C.S.A. § 1791, requires an insurer to provide notice to policy applicants of the types and amounts of coverage required to be offered. The majority stated that the notice to the applicant must explain that the applicant may purchase or reject these coverages, and that the applicant may purchase coverages in higher or lower amounts than those set forth in the ‘Important Notice’ of section 1791. The majority concluded that there could be no application of the conclusive presumption of section 1791 when the insurer admittedly did not provide section 1791 notice to the applicant.14
¶ 12 In arriving at this conclusion, the majority in Irex stated the following:
Construing sections 1731,1734, and 1791 in pari materia, we arrive at the following conclusions. First, one must be given the general notice of benefits and coverages, including UM/UIM coverage, found within section 1791; only then can the insured render a knowing and intelligent election to accept or reject such coverage. In order to effectively accept or reject UIM or UM coverage, an insured must be given sufficient notice provided in section 1731. This notice requires an insurer to strictly comply with designated statutory language and technical and procedural rules annunci-ated [sic] in 1731. Only when the insurer has complied with the requirements of section 1731 will we apply the conclusive presumption of 1791. [Lucas v. Progressive Casualty Ins. Co., 451 *854Pa.Super. 492, 680 A.2d 873 (1996), allocatur denied, 548 Pa. 619, 693 A.2d 589 (1997) ].
Second, in order to validly elect lower UM or UIM coverage limits under section 1734, one must first validly elect such coverage by being given notice of the availability, scope and amount of coverage for UIM/UM benefits — again, this notice is specifically provided in section 1731. Thus, in order to effectuate a knowing and intelligent waiver of statutory UM/UIM benefits equal to the bodily injury liability limit of the relevant insurance policy, one must first comply with section 1731. If a valid acceptance is rendered, the insured may then make a knowing and intelligent decision to reduce the amount of available UM/UIM coverage under section 1734. As our court held in Lucas and Emig, in order to conclusively presume waiver under section 1791, an insurer must strictly comply with sections 1731 and 1734. Logic dictates, then, that in order to reduce coverage, one must have first elected to accept such coverage and been informed of the availability of such coverage and the right to reject or reduce the coverage limit.
Irex, 713 A.2d at 1154.
¶ 13 The majority ruled:
[H]aving found that there was no valid section 1731 waiver of UM coverage, that there was no valid section 1734 election of reduced UM coverage, and that there could be no conclusive presumption of section 1791 notice where no section 1791 notice was ever provided, the appellees [Irex, and the estate of the named insured’s employee and spouse] are entitled to judgment as a matter of law.
Irex, 713 A.2d at 1156.
¶ 14 Judge Schiller, anticipating the problems posed by the ramifications of the decision, filed a Dissenting Opinion in Irex. Judge Schiller expressed his belief that nothing in the MVFRL requires that the technical aspects of section 1731 be met as a threshold to an inquiry into whether the requirements of section 1734 are satisfied. Judge Schiller also emphasized that the majority’s apparent pronouncement, that an insured cannot elect a reduced amount of UM benefits coverage under section 1734 unless the insurer has met the requisites of section 1731, would have an effect of increasing the insurance costs in the Commonwealth. This is because even those persons who elected to carry reduced UM/UIM coverage under section 1734 would be given the benefit of coverage equal to their policy’s bodily injury limits if there was something amiss with the section 1731 notice from the insurer. The insured would reap this windfall, although coverage equal to the policy’s bodily injury limits was not selected and purchased by the insured.
¶ 15 In the present case, the insureds are attempting the reverse of the situation in Emig. They wish to receive coverage for UM equal to the policy’s bodily injury liability limits by asserting the invalidity of the written request that the named insured, Robert A. Lewis, made for reduced UM/UIM benefits coverage, not the invalidity of a writing by the agent. Thus, we are presently confronted squarely by the scenario that Judge Schiller was envisioning in his Dissenting Opinion in Irex.
¶ 16 On the basis of language in Irex, the trial judge reasoned that a court must first determine that the insurer met the technical requirements for the rejection forms set forth in section 1731. Only then, if the requirements of section 1731 were met, may the court determine whether an insured executed a valid written request to reduce coverage under section 1734. Since the rejection forms provided in this matter were not on separate sheets and therefore did not meet the technical requirements of section 1731(c.l), citing Irex, the trial judge did not proceed to analyze whether the insured’s written request to reduce his coverage complied with section 1734.
*855¶ 17 The panel in Irex was called upon to address only whether an invalid rejection form could be treated as a valid reduction request. The discussion by the panel of the interplay between sections 1791, 1731, and 1734 went beyond the question of whether an invalid rejection of UM and/or UIM coverage may be treated by the insurer as an election by the insured to reduce coverage under section 1734. The panel’s holding was that an invalid rejection form may not be treated by an insurer as a written request to purchase reduced coverage because the insured has not made a decision to accept coverage. The insured has made a decision to reject coverage, but there was something invalid about the rejection forms themselves that invalidates the rejection.
¶ 18 The majority’s discussion in Irex indicates that the MVFRL requires a “valid acceptance” of UM and/or UIM benefits before a court can examine a reduction election under section 1734. The trial judge interpreted that statement as meaning nothing may be technically amiss with the rejection forms under section 1731 before an applicant or insured can make a written request to reduce coverage for UM and/or UIM benefits under section 1734.
¶ 19 Because the issue of whether an insurance provider must have met the technical requirements of section 1731 for a section 1734 request to reduce coverage to be valid was not before the panel in Irex, any ruling on that issue is merely dicta. Tulewicz v. SEPTA, 529 Pa. 588, 592-594, 606 A.2d 427, 429 (1992) (stating that the Court’s comments on an issue not raised or argued by either party before the Court are dicta). See also Commonwealth v. Tilghman, 543 Pa. 578, 585-586, 673 A.2d 898, 902 (1996), quoting In re Kenin’s Trust Estate, 343 Pa. 549, 23 A.2d 837 (1942) (stating that in every case, what is actually decided is the law applicable to the particular facts; all other conclusions are but obiter dicta).
¶ 20 A panel of this Court is not bound to rely on the dicta of another panel in a prior opinion, nor must it follow a decision that never directly addressed the issue presently before a different panel. See Uguccioni v. USF & G, 408 Pa.Super. 511, 514-516, 597 A.2d 149, 151 (1991) (Judge Beck, concurring). Although it is understandable that the learned trial judge felt constrained to follow the dicta in Irex, this panel need not affirm the trial judge’s interpretation of the Irex decision. The trial judge’s decision, while motivated by stare decisis, elevated language in Irex, giving dicta the status of precedent. This was an obvious concern that Judge Schiller foretold in writing his Dissenting Opinion in Irex. Although dicta may be instructive in predicting the direction that a court is likely to take, “it is not what was meant by precedential authority in our system of jurisprudence.” Commonwealth v. Blouse, 531 Pa. 167, 175-177, 611 A.2d 1177, 1182 (1992) (Justice Flaherty, dissenting). This panel therefore is not constrained to apply the dicta from Irex in deciding the issue before us.
¶ 21 The most important point to recognize in the present case is that it is a reduction case and not a rejection case. Despite the efforts of the insurer in Irex to cast that case in a different posture, Irex was a rejection case. Squarely addressing the question before us, the only applicant/insured who will be exercising the option to request reduced coverage for UM and/or UIM under section 1734 is one who has elected not to reject the coverage in its entirety under section 1731. As I see it, the remedy provision of section 1731 protects against the possibility of an uninformed rejection of coverage and recognizes that an insured may very well reject coverage where he would not have done so had he been fully informed of the consequences of his action. Not only are the same provisions not explicitly provided with respect to section 1734, but also the underlying concern is not presented. Whereas there may be a reasonable concern that coverage was rejected unknowingly, a person who reduces coverage must *856first “accept” coverage by choosing not to reject it, then must take an affirmative action to reduce the coverage. This requirement of taking an affirmative step of making a reduction request in writing, along with a designation of the coverage amount desired, provides adequate protection against a reduction request being made “unknowingly”.
¶ 22 As illustrated by the present case, an applicant/insured may have been notified of the availability of UM and/or UIM coverages and the option of waiving such coverage, but not on separate pages, and still have decided to accept the coverage. This applicant/insured, armed with the knowledge of the available coverages, may make a knowing and intelligent decision to carry a reduced amount of coverage for UM and/or UIM. There is nothing in the MVFRL that requires the insurer to provide the insured with the bodily injury liability limits of the policy when the applicant/insured subsequently discovers that something was technically amiss with the rejection form that he decided not to sign in any event. As Judge Schiller observed, such a result would run contrary to the intent behind the MVFRL of curbing rising insurance costs. See Donnelly v. Bauer, 553 Pa. 596, 610-611, 720 A.2d 447, 454 (1998).
¶ 23 Here, the named insured signed and dated a written request for reduced UM and UIM coverage. Under Emig, this was a sufficient reduction request pursuant to section 1734. The law was not clear on the question of the validity of the reduction request pursuant to section 1734 if the technical requirements of section 1731 were not met, however. Although section 1734 itself is concisely worded, there was the dicta in Irex that led to confusion as to whether this Court had ruled that the requirements of section 1731 must be met before a court may address the validity of a decision to reduce coverage under section 1734. Since the law was unclear, I would find that the trial judge erred in granting judgment on the pleadings in favor of Appellees on the basis of Irex. Like the majority, I would reverse and remand to the trial court for further proceedings.

. Section 1791 provides for a presumption that an insured has been advised of the benefits and limits available under the MVFRL if the notice prescribed by section 1791 has been given to the applicant for insurance at the time of the application for original coverage.