Court Opinion

ID: 6338828
Source: CourtListenerOpinion
Date Created: 2022-05-09 16:11:50.968581+00
Date Added: 2024-06-11T15:49:09.252189
License: Public Domain

J-A05037-22

                                    2022 PA Super 85

    HARTFORD FIRE INSURANCE                    :   IN THE SUPERIOR COURT OF
    COMPANY                                    :        PENNSYLVANIA
                                               :
                                               :
                 v.                            :
                                               :
                                               :
    CHARLES DAVIS AND KEYSTONE                 :
    AUTOMOTIVE OPERATIONS, INC.                :   No. 310 MDA 2021
                                               :
                                               :
                 v.                            :
                                               :
                                               :
    HARTFORD FIRE INSURANCE                    :
    COMPANY, INDIVIDUALLY AND                  :
    D/B/A THE HARTFORD INSURANCE               :
    GROUP AND THE HARTFORD                     :
    INSURANCE GROUP, INDIVIDUALLY              :
    AND D/B/A THE HARTFORD AND THE             :
    HARTFORD,                                  :
                                               :
                       Additional              :
    Defendants

             Appeal from the Judgment Entered February 11, 2021
    In the Court of Common Pleas of Luzerne County Civil Division at No(s):
                                 2822-2007

BEFORE:      OLSON, J., KUNSELMAN, J., and STEVENS, P.J.E.*

OPINION BY STEVENS, P.J.E.:                               FILED: MAY 9, 2022

        Appellant, Charles Davis, appeals from the February 11, 2021 judgment

entered in favor of Appellees, Hartford Fire Insurance Company, individually

and d/b/a The Hartford Insurance Group and The Hartford Insurance Group,

individually and d/b/a The Hartford and The Hartford (hereinafter, “Hartford”),
____________________________________________

*   Former Justice specially assigned to the Superior Court.
J-A05037-22

following the trial court’s order granting Hartford’s motion for summary

judgment; denying Appellant’s counter motion for summary judgement; and

vacating the arbitration award entered against Hartford on October 31, 2007

and modified on February 8, 2008.        After careful review, we vacate the

judgment and remand for proceedings consistent with this opinion.

      This case stems from a September 9, 2005 motor vehicle accident in

which Appellant was injured while operating a vehicle owned by Keystone

Automotive Operations, Inc. (“Keystone”) during the course and scope of his

employment.     The vehicle was insured by Hartford under a commercial

automobile policy for the April 1, 2005 to April 1, 2006 policy term. This policy

was first issued to Keystone in April 2002 and then renewed annually up and

through the time of Appellant’s accident. The record reflects that it was the

practice of Hartford to obtain an Underinsured Motorist (“UIM”) Coverage

Rejection form for each policy term renewal.       See “Action for Declaratory

Judgment,” 3/16/07 at ¶¶ 8-10.         Hartford obtained a Rejection of UIM

Coverage form signed by the Executive Vice President of Keystone in 2003 but

failed to do so for the 2005-2006 policy at issue. Id.       At the time of the

accident, a Pennsylvania UIM Coverage Endorsement was appended to the

2005-2006 policy, although the policy did not specify a limit of UIM coverage

for Pennsylvania. See notes of testimony – deposition, 7/5/14 at 49-50; notes

of testimony – deposition, 7/23/15 at 197-199.

      The trial court summarized the procedural history of this case as follows:

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          [Appellant] filed a claim with Hartford for benefits by
          correspondence dated October 17, 2005.              The
          Hartford Policy had a basket deductible of
          $3,750,000.00 with a $250,000.00 deductible for
          each accident involving multiple coverages within the
          Hartford Policy.

          In the October 17, 2005 letter, [Appellant] requested
          a certified copy of the Hartford policy so that he could
          determine the amount, if any, of [UIM] coverage
          available. After numerous failed attempts to contact
          Hartford, [Appellant] made a formal demand for
          Arbitration by correspondence dated November 17,
          2005. When this correspondence went unanswered,
          [Appellant] filed a Writ of Summons against Hartford
          on December 16, 2005 in the Court of Common Pleas
          for Luzerne County. [Appellant] also filed a Petition
          requesting the Court appoint Hartford’s arbitrator and
          a neutral arbitrator. A Rule Returnable dated
          December 17, 2005 was issued requiring Hartford to
          show cause as to why the Court should not appoint a
          neutral arbitrator and a hearing was scheduled for
          January 26, 2006. In an order dated January 23,
          2006, the Court made its Rule Returnable absolute,
          by agreement of the parties, appointing a neutral
          arbitrator with Hartford also appointing its arbitrator
          at that time.

          For the next month, Hartford participated in the
          Arbitration process. In a letter dated February 28,
          2006, Hartford asserted that the subject policy did not
          include UIM benefits. On March 16, 2007, Hartford
          commenced the instant action seeking a declaratory
          judgment that the policy at issue does not provide UIM
          benefits. On March 21, 2007, Hartford filed a Motion
          to stay the pending UIM arbitration until there was a
          determination of coverage pending in its declaratory
          judgment action, which was opposed by [Appellant].
          Hartford’s Motion for Stay was denied in an order
          dated April 23, 2007.

          The claim went to Arbitration on October 30, 2007,
          and on October 31, 2007 the panel awarded the
          amount of $2,930,000.00 to [Appellant].        On

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              December 3, 2007, Hartford filed a Petition to Vacate
              or Modify the UIM Arbitration Award which is docketed
              to 2007-13910.        [Appellant] opposed Hartford’s
              Motion in an Answer and Brief in Opposition filed on
              December 19, 2007. After briefing was complete in
              that matter, the Arbitration Award was modified from
              $2,930,150 to $2,000,000 to reflect the purported
              policy limits of the insurance policy at issue by Court
              Order dated and filed February 8, 2008.

Trial court opinion, 5/4/21 at 2-5 (citations and footnotes omitted).

        The question of whether the policy provided for UIM coverage remained

undecided. Eventually, the stay of the action was lifted and on April 17, 2019,

Hartford filed a motion for summary judgment.          Appellant filed a counter

motion for summary judgment of May 31, 2019. Following oral argument and

the filing of supplemental briefs, the trial court entered an order on January

11, 2021 denying both motions. On January 25, 2021, Hartford filed a motion

requesting that the trial court reconsider its denial of the parties’ summary

judgment motions. The trial court granted Hartford’s request on February 8,

2021.

        As noted, on February 11, 2021, the trial court entered an order

granting Hartford’s motion for summary judgment; denying Appellant’s

counter motion for summary judgement; and vacating the arbitration award

entered against Hartford on October 31, 2007 and modified on February 8,

2008. The trial court entered judgment in favor of Hartford that same day.

        In reaching this decision, the trial court found that the policy issued by

Hartford for the 2005-2006 term did not specify a limit of UIM coverage for

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Pennsylvania and, thus, the coverage limit was zero and the “Pennsylvania

UIM Coverage Endorsement” (Endorsement 60) appended thereto was a

nullity. See trial court opinion, 5/4/21 at 15-20. The trial court further held

that Keystone effectively waived UIM coverage in Pennsylvania by executing

a “Rejection of UIM Protection” form in 2003. Id. at 22-31. The trial court

found that this form: (a) was applicable to the 2005-2006 policy, despite the

fact that a new rejection form was never obtained for the 2005-2006 policy

term; and (b) fully complied with Section 1731 of the Pennsylvania Motor

Vehicle Financial Responsibility Law, 75 Pa.C.S.A. §§ 1701-1799.7. Id.

      On March 5, 2021, Appellant filed a timely notice of appeal. Appellant

filed a six-page Pa.R.A.P. 1925(b) statement on March 24, 2021. The trial

court filed its Rule 1925(a) opinion on May 4, 2021, indicating that it was

relying on the reasoning set forth in its prior opinion and order entered

February 11, 2021.

      Appellant raises the following issues for our review:

            1     Did the Trial Court err in finding that the Policy
                  issued by [Hartford] to [Keystone]for the 2005-
                  2006 term did not provide Pennsylvania [UIM]
                  Coverage despite the fact that a Pennsylvania
                  [UIM] Coverage Endorsement was appended to
                  the Policy?

            2.    With respect to the 2003 Rejection of [UIM]
                  Protection form, did the Trial Court err in: (a)
                  finding that it was applicable to the 2005-2006
                  Policy term; and (b) finding that it strictly
                  complied with the requirements of the
                  [Pennsylvania      Motor     Vehicle    Financial
                  Responsibility Law]?

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            3.     Did the Trial Court similarly err in dismissing the
                   extracontractual bad faith claims once it
                   determined that the 2005-2006 Policy term did
                   not provide Pennsylvania [UIM] Coverage?

Appellant’s brief at 3.

      Our standard of review of a trial court’s order granting summary

judgment is well settled:

            A reviewing court may disturb the order of the trial
            court only where it is established that the [trial] court
            committed an error of law or abused its discretion. As
            with all questions of law, our review is plenary.

            In evaluating the trial court’s decision to enter
            summary judgment, we focus on the legal standard
            articulated in the summary judgment rule. The rule
            states that where there is no genuine issue of material
            fact and the moving party is entitled to relief as a
            matter of law, summary judgment may be entered.
            Where the non-moving party bears the burden of
            proof on an issue, he may not merely rely on his
            pleadings or answers in order to survive summary
            judgment. Failure of a non-moving party to adduce
            sufficient evidence on an issue essential to his case
            and on which it bears the burden of proof establishes
            the entitlement of the moving party to judgment as a
            matter of law. Lastly, we will 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.

JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-1262

(Pa.Super. 2013) (citations and internal quotation marks omitted).

      Pennsylvania Rule of Civil Procedure 1035.2 governs motions for

summary judgment and provides, in relevant part, as follows:

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            After the relevant pleadings are closed, but within
            such time as not to unreasonably delay trial, any party
            may move for summary judgment in whole or in part
            as a matter of law

            (1) whenever there is no genuine issue of any
            material fact as to a necessary element of the cause
            of action or defense which could be established by
            additional discovery or expert report, or

            (2) if, after the completion of discovery relevant to
            the motion, including the production of expert reports,
            an adverse party who will bear the burden of proof at
            trial has failed to produce evidence of facts essential
            to the cause of action or defense which in a jury trial
            would require the issues to be submitted to a jury.

Pa.R.C.P. 1035.2.

      We begin by addressing Appellant’s first two claims simultaneously.

Appellant argues that the trial court erred in finding that the 2005-2006 policy

issued by Hartford did not provide for UIM coverage at the time of his

automobile accident, despite the fact that a UIM Coverage Endorsement was

appended to thereto. Appellant’s brief at 11-20. Appellant also contends that

the trial court erred in concluding that the “Rejection of UIM Protection” form

executed by Keystone in 2003 was applicable to the 2005-2006 policy term.

Id. at 22-27. Following our careful review, we agree

      It is well settled in this Commonwealth that in interpreting an

automobile insurance policy, “a court must view the policy in its entirety,

giving effect to all of its provisions.” Continental Cas. Co. v. Pro Machine,

916 A.2d 1111, 1121 (Pa.Super. 2007) (citations omitted). “An insurance

policy must be read as a whole, and not in discrete units.” Clarke v. MMG

                                     -7-
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Ins. Co., 100 A.3d 271, 276 (Pa.Super. 2014) (citation and internal quotation

marks omitted), appeal denied, 117 A.3d 294 (Pa. 2015).                “[The]

interpretation of an insurance policy presents a pure question of law, over

which our standard of review is de novo.” Erie Ins. Exch. v. King, 246 A.3d

332, 336 (Pa.Super. 2021), appeal denied, 259 A.3d 341 (Pa. 2021).

      Pursuant to the Motor Vehicle Financial Responsibility Law (hereinafter,

“MVFRL”), motor vehicle liability insurance carriers are required to offer the

named insured UIM liability coverage, unless such coverage is rejected in

accordance with the statute. Subsection 1731(a) of the MVFRL provides as

follows:

            (a) Mandatory offering.-- No motor vehicle liability
            insurance policy shall be delivered or issued for
            delivery in this Commonwealth, with respect to any
            motor vehicle registered or principally garaged in this
            Commonwealth, unless uninsured motorist and
            underinsured motorist coverages are offered therein
            or supplemental thereto in amounts as provided in
            section 1734 (relating to request for lower limits of
            coverage). Purchase of uninsured motorist and
            underinsured motorist coverages is optional.

75 Pa.C.S.A. § 1731(a).

      Under the MVFRL, insurers are also required to inform named insureds

that they may reject UIM coverage by signing a written rejection form set

forth in Subsection 1731(c). See id. § 1731(c).

      Subsection 1731(c.1) further provides that if an insurer’s UIM coverage

rejection form does not “specifically comply” with Section 1731, then UIM

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coverage shall be equal to the policy’s bodily injury liability limits. Specifically,

Subsection 1731(c.1) states as follows:

             (c.1) Form of waiver.--Insurers shall print the
             rejection forms required by subsections (b) and (c) on
             separate sheets in prominent type and location. The
             forms must be signed by the first named insured and
             dated to be valid. The signatures on the forms may be
             witnessed by an insurance agent or broker. Any
             rejection form that does not specifically comply with
             this section is void. If the insurer fails to produce a
             valid rejection form, uninsured or underinsured
             coverage, or both, as the case may be, under that
             policy shall be equal to the bodily injury liability limits.
             On policies in which either uninsured or underinsured
             coverage has been rejected, the policy renewals must
             contain notice in prominent type that the policy does
             not provide protection against damages caused by
             uninsured or underinsured motorists. Any person who
             executes a waiver under subsection (b) or (c) shall be
             precluded from claiming liability of any person based
             upon inadequate information.

Id. § 1731(c.1).

      Here, the record reflects that the policy at issue expressly provided for

UIM coverage at the time of Appellant’s September 9, 2005 accident. It is

undisputed that the 2005-2006 policy issued by Hartford contained a UIM

Coverage Endorsement.        Additionally, the UIM Coverage Endorsement was

referenced on both the Declarations Pages and in the List of Policy Provisions

and Endorsements. See Hartford’s Motion for Summary Judgment, 4/17/19,

Exhibit M – Hartford Policy, 2005-2006 Policy Term.

      As discussed, under the MVFRL, “Section 1731 mandates that an

insurance company issuing a policy in the Commonwealth of Pennsylvania

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must provide UM/UIM coverage equal to the bodily injury liability coverage,

unless the insured validly rejects UM/UIM coverage or validly requests lower

limits of coverage pursuant to section 1734.” Weilacher v. State Farm Mut.

Auto. Ins. Co., 65 A.3d 976, 983 (Pa.Super. 2013) (citations omitted); see

also 75 Pa.C.S.A. § 1731(c.1).

      The insurance policy issued by Hartford to Keystone and in effect at the

time of Appellant’s accident provided $2,000,000.00 in liability coverage.

Thus, absent a valid and specific rejection for the 2005-2006 policy term, the

Pennsylvania UIM coverage limit was also $2,000,000.00.

      Hartford would have this Court find that the UIM Coverage Endorsement

was issued as a result of a “clerical error” and the Rejection of UIM Coverage

form executed by Keystone in 2003 was applicable to the 2005-2006 policy.

See Hartford’s brief at 10. We decline to do so.

      Hartford acknowledged that a signed Rejection of UIM Coverage form

was never obtained from Keystone for the 2005-2006 policy term, pursuant

to its own policies and procedures, and it specifically appended the UIM

Coverage Endorsement to the 2005-2006 policy. Contrary to the trial court’s

findings, there was also no valid and specific rejection of the UIM coverage for

the policy in effect at the time of the accident.

       It is immaterial that the policy issued by Hartford for the 2005-2006

term did not specify a limit of UIM coverage for Pennsylvania. Pursuant to the

MVFRL, liability and UIM coverages must be co-extensive unless rejected in

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accordance with Subsection 1731. See id. Instantly, no Rejection of UIM

Coverage form was ever executed by Keystone for 2005-2006 policy term,

and thus, by operation of law, the policy at issue was required to provide UIM

coverage in an amount equal to the liability coverage of that policy,

$2,000,000.00.

       Based on the foregoing, we find that the trial court failed to give full

effect to all the terms of the 2005-2006 policy, namely, the UIM Coverage

Endorsement appended thereto.            Accordingly, we hold that the trial court

erred in granting summary judgment in favor of Hartford; vacate the February

11, 2021 judgment; and remand for proceeding consistent with this opinion.1

       Judgment vacated. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 05/09/2022

____________________________________________

1In light of our disposition, we need not address Appellant’s remaining claim
of trial court error.

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