Court Opinion

ID: 4472659
Source: CourtListenerOpinion
Date Created: 2020-01-14 18:00:21.476174+00
Date Added: 2024-06-11T11:50:56.270398
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  ____________

                                       No. 19-1685
                                      ____________

                  SELECTIVE INSURANCE COMPANY OF AMERICA

                                             v.

                  ROBYN NOVITSKY, individually and as Executrix of the
           Estate of Kevin C. Novitsky, deceased; VILLAGE AUTO SALES, INC.;
                     PATRICIA NOVITSKY, as Executrix of the Estate of
                                Clement Novitsky, deceased,
                                                                   Appellants
                                        ____________

                      On Appeal from the United States District Court
                          for the Middle District of Pennsylvania
                                 (D.C. No. 3-17-cv-02376)
                       District Judge: Honorable Robert D. Mariani
                                      ____________

                        Submitted under Third Circuit LAR 34.1(a)
                                    January 13, 2020

               Before: HARDIMAN, PHIPPS, and PORTER Circuit Judges.

                                 (Filed: January 14, 2020)

                                      ____________

                                        OPINION*
                                      ____________

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.

       This appeal involves a dispute about insurance coverage following a tragic

automobile accident. The question presented is whether Appellants are entitled to

insurance proceeds of $1,000,000 or $35,000. The District Court found the lesser amount

due under law. Perceiving no error, we will affirm.

                                            I1

       Appellant Village Auto bought insurance from Selective Insurance Company of

South Carolina (Selective-South Carolina) in 1999. Two years later, Appellant Robyn

Novitsky, in her capacity as President of Village Auto, signed an uninsured/underinsured

motorist’s (UM/UIM) coverage selection form that reduced its UM/UIM combined single

limit from $1,000,000 to $35,000. The form stated that “[t]hese coverages will remain as

outlined above until such time I [sic] execute another Coverage Selection Form.” App.

87. Ms. Novitsky also signed an “Important Notice,” which explained the statutory

UM/UIM benefits. That notice specified that Ms. Novitsky understood the statutory

requirements along with the benefits and limitations she chose (here, the waiver of

UM/UIM coverage).

       In 2012, Selective-South Carolina transferred Village Auto’s coverage to an

affiliate, Appellee Selective Insurance Company of America (Selective-America).

       1
         The District Court had jurisdiction under 28 U.S.C. § 1332, and we have
jurisdiction under 28 U.S.C. § 1291. We review the District Court’s interpretation of state
statutes de novo. Stiver v. Meko, 130 F.3d 574, 577 (3d Cir. 1997).

                                             2
Selective-America sent Ms. Novitsky a Notice of Policy Transfer which stated that the

old policy would expire and the new policy would go into effect at the same time with no

break in coverage. The policy number, coverage, and premium remained the same.

Finally, the Notice stated that the insured would deal with the same agent and the transfer

required “no further action” by Village Auto except to pay its premium as it “normally

would.” App. 554. Following the transfer in 2012, Selective-America did not send

Village Auto another UM/UIM coverage reduction form to sign.

       In 2017, Ms. Novitsky’s husband Kevin and her son Clement were killed in a car

accident while driving a Village Auto company vehicle. The tortfeasor’s insurance carrier

distributed the policy limits of $1,000,000 among all claimants, including $789,576.80 to

the Novitskys, which was insufficient to compensate them in full. Accordingly, they

sought to recover UIM benefits under the Village Auto policy, claiming entitlement to

$1,000,000. Selective-America responded that the applicable policy limit was $35,000.

       To resolve the parties’ dispute, Selective-America filed a declaratory judgment

action seeking a judicial determination of the amount of underinsured motorist coverage

due under the policy. The parties cross-moved for summary judgment and the District

Court granted Selective-America’s motion. The Court found that the $35,000 election

remained valid following the transfer of the policy from Selective-South Carolina to

Selective-America. We agree.

                                             3
                                                  II2

       Rather than impose our own view of state law, we must attempt to predict how the

state’s highest court would rule based on its existing precedent. See Koppers Co., Inc. v.

Aetna Cas. & Sur. Co., 98 F.3d 1440, 1445 (3d Cir. 1996) (citing Kowalsky v. Long

Beach Twp., 72 F.3d 385, 388 (3d Cir. 1995)). “In the absence of guidance from the

state’s highest court, we must look to decisions of state intermediate appellate courts, of

federal courts interpreting that state’s law, and of other state supreme courts that have

addressed the issue.” Id. (citing Wiley v. State Farm Fire & Cas. Co., 995 F.2d 457, 459–

60 (3d Cir. 1993)).

       Pennsylvania’s Motor Vehicle Financial Responsibility Law, 75 PA. CONS. STAT.

§ 1707 et seq., governs this case. Section 1731 of that law requires insurance companies

to “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. Ct. 2013) (citation omitted). And an insured may “request in writing the

issuance of coverages under section 1731 . . . in amounts equal to or less than the limits

of liability for bodily injury.” 75 PA. CONS. STAT. § 1734. The statute also presumes that

       2
         Summary judgment is appropriate when the parties do not contest any facts and
the case deals only with legal questions. Sloan & Co. v. Liberty Mut. Ins. Co., 653 F.3d
175, 179 (3d Cir. 2011). In Pennsylvania, the interpretation of an insurance policy is a
matter of law amenable to resolution at summary judgment. Nationwide Mut. Ins. Co. v.
Nixon, 682 A.2d 1310, 1313 (Pa. Super. Ct. 1996).

                                              4
the insured knew all its rights upon receipt of an Important Notice (like the Novitskys

received here) “at the time of application for original coverage.” 75 PA. CONS. STAT.

§ 1791. These three sections (§§ 1731, 1734, and 1791) must be read together. See Lewis

v. Erie Ins. Exchange, 793 A.2d 143, 149 (Pa. 2002); Salazar v. Allstate Ins., 702 A.2d

1038, 1041 (Pa. 1997).

       The statutory language is clear. We have interpreted Section 1731 to mandate

“that an insurance company cannot issue a policy in the Commonwealth of Pennsylvania

unless it provides UM/UIM coverage equal to the bodily injury liability coverage, except

as provided in § 1734.” Nationwide Ins. Co. v. Resseguie, 980 F.2d 226, 231 (3d Cir.

1992) (emphasis added). The Supreme Court of Pennsylvania later adopted this

interpretation. See Blood v. Old Guard Ins. Co., 934 A.2d 1218, 1226 (Pa. 2007). When

issuing a new policy, insurers must provide the bodily injury liability coverage, unless the

insured requests a lower amount of coverage in writing. “[S]ection 1791 . . . clearly states

once notice of available coverages and the possibility of rejection of those coverages has

been given [in an Important Notice], no further rejection notice or form is required.”

Smith v. Hartford Ins. Co., 849 A.2d 277, 281 (Pa. Super. Ct. 2004).

       Here, Selective-South Carolina provided Village Auto with a Section 1791

Important Notice, and Village Auto elected $35,000 UM/UIM coverage knowingly,

voluntarily, and in writing in 2001. Village Auto’s decision to waive UM/UIM coverage

is presumptively effective during the life of the policy unless changed. See Smith, 849

A.2d at 281; Sackett v. Nationwide Mut. Ins. Co., 919 A.2d 194, 199 (Pa. 2007). Because

                                             5
Village Auto made no changes, Selective-America would have to send a new written

reduction form only if the transfer from Selective-South Carolina to Selective-America

created a new insurance policy. The Novitskys claim such a new policy was issued.

       We agree with the District Court that the transfer did not create a new policy.

According to the Novitskys, in 2012 Selective-South Carolina effectively cancelled the

Village Auto policy and Selective-America created a new one. The Novitskys argue that

because Selective-America “delivered” this new policy without a new Section 1734

waiver the policy carried the UM/UIM $1,000,000 combined single limit. See 75 PA.

CONS. STAT. 1731(a). Selective-America responds that it merely renewed the Selective-

South Carolina policy, with identical terms. The only difference was the insurer.

       Pennsylvania precedent supports Selective-America’s argument. In Breuninger v.

Pennland Insurance Company, the appellant was involved in an accident and sought

greater UM/UIM coverage than originally selected. 675 A.2d 353 (Pa. Super. Ct. 1996).

Like the Novitskys, the appellant in Brueninger argued that transferring a policy from

one insurer to an affiliate required it to issue a new § 1791 Important Notice and that the

waiver of UM/UIM coverage was no longer valid. See id. at 354, 358. The Pennsylvania

Superior Court disagreed, noting that the appellant’s policy number, coverage, and

premium remained the same. Id. at 358. Further, the appellant never objected to the

transfer and kept making payments to the affiliate. Id. Because of these factors, the court

held it was the same policy, not a new one, so the affiliate had no duty to send a new

§ 1791 notice. The appellant’s prior waiver of UM/UIM coverage remained effective. Id.

                                             6
at 359; see also Snyder v. Liberty Mut. Fire Ins. Co., 2013 WL 11257220, at *4 (Pa.

Super. Ct. July 31, 2013) (“[T]he transfer of a motor vehicle insurance policy from one

company to another does not constitute a ‘new’ policy.”)

      Here, as in Breuninger, the only difference between the policy at issue following

the transfer was the name of the insurer. See Breuninger, 675 A.2d at 358. Village Auto

kept the same policy number, paid the same premiums, maintained the same coverage,

used the same agent, and never had to apply for coverage. When the policy was first

issued, Village Auto had notice about the limits and coverages available and voluntarily

signed a waiver reducing its UM/UIM coverage. The transfer between insurers acted as a

renewal of the same policy, rather than an issuance of a new policy. In view of the

similarities between the cases—and because we see no reason why the Supreme Court of

Pennsylvania would deviate from the unanimous opinion of the Superior Court in

Brueninger—we hold that the District Court did not err in finding that Village Auto’s

election of $35,000 in UM/UIM remained effective after the transfer.

                                                III

      We will affirm the District Court’s judgment for the reasons stated.

                                            7