Court Opinion

ID: 4293217
Source: CourtListenerOpinion
Date Created: 2018-07-11 17:00:29.870169+00
Date Added: 2024-06-11T14:38:26.705237
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                 ______________

                                       No. 16-3623
                                     ______________

                                      FATAI KING,
                                               Appellant

                                             v.

  U.S. XPRESS, INC. AND MOUNTAIN LAKE RISK RETENTION GROUP, INC.

                                     ______________

             APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                            (D.C. No. 2-15-cv-02270)
                      District Judge: Hon. Paul S. Diamond
                                 ______________

                      Submitted under Third Circuit L.A.R. 34.1(a)
                                     July 9, 2018
                                   ______________

           Before: SHWARTZ, NYGAARD, and RENDELL, Circuit Judges.
                             (Filed: July 11, 2018)

                                     ______________

                                        OPINION*
                                     ______________

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

       Fatai King was involved in an accident while driving a truck for his employer, and

he sought to collect uninsured motorist benefits1 from his employer’s commercial

automobile insurer. Because his employer waived uninsured motorist protection under

the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa. Cons.

Stat. Ann. § 1701 et seq., and the waiver complies with the MVFRL, the District Court

correctly enforced the waiver, and we will affirm.

                                             I

       King was driving a truck owned by his employer, Defendant U.S. Xpress, Inc.

(“USX”), and insured by Defendant Mountain Lake Risk Retention Group, Inc.,

(“Mountain Lake”), when he was hit by an unidentified vehicle that left the scene. King

sustained injuries and filed a claim seeking uninsured motorist benefits from Mountain

Lake. Mountain Lake denied the claim because the commercial automobile policy it

issued to USX included USX’s signed rejection of uninsured motorist protection (“the

waiver”). King filed a lawsuit asserting breach of contract and bad faith under 42 Pa.

Cons. Stat. § 8371 and alleging that USX’s wavier was invalid and unenforceable

because it did not comply with MVFRL § 1731. The parties stipulated to dismissal of the

       1
         Uninsured motorist coverage “provides protection for persons who suffer injury
arising out of the maintenance or use of a motor vehicle and are legally entitled to recover
damages therefor from owners or operators of uninsured motor vehicles.” 75 Pa. Cons.
Stat. Ann. § 1731(b).
                                             2
bad faith claim, and the District Court granted summary judgment to USX and Mountain

Lake on the remaining breach of contract claim. King appeals.

                                             II2

         “We exercise plenary review over a district court’s grant of summary judgment.”

Chavarriaga v. N.J. Dep’t of Corr., 806 F.3d 210, 218 (3d Cir. 2015). We apply the same

standard as the District Court, viewing facts and making all reasonable inferences in the

non-movant’s favor. Hugh v. Butler Cty. Family YMCA, 418 F.3d 265, 266-67 (3d Cir.

2005). Summary judgment is appropriate where “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a).

                                             III

         King argues that the District Court’s order granting summary judgment to USX

and Mountain Lake must be reversed because the waiver of uninsured motorist coverage

that USX signed did not comply with the requirements of MVFRL § 1731. We disagree.

         Section 1731 provides that insurers must offer uninsured and underinsured

motorist coverage, but the purchase of such coverage is “optional.” 75 Pa. Cons. Stat.

Ann. § 1731(a). To validly waive uninsured or underinsured motorist benefits, a written

waiver must “specifically comply” with the statutorily-provided forms for rejecting

         2
        The District Court had jurisdiction under 28 U.S.C. § 1332. We have jurisdiction
pursuant to 28 U.S.C. § 1291.
                                             3
uninsured or underinsured motorist protection.3 Id. § 1731(c.1). “Any rejection form

that does not specifically comply with [the forms in § 1731] 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.” Id.   A

verbatim reproduction of the language, however, is not required, except for rental or

leased vehicles. For those vehicles, the rejection language “may only be changed

grammatically to reflect a difference in tense in the rental agreement or lease agreement.”

Id. § 1731(b.2). Thus, outside the rental and leased vehicle contexts, an insurer’s

uninsured motorist form may “specifically comply” with § 1731 if the form “differs from

the statutory form in an inconsequential manner” or “contains de minimis deviations from

       3
        Section 1731(b) includes a form the named insured must sign to reject uninsured
motorist protection. The form provides:

       REJECTION OF UNINSURED MOTORIST PROTECTION

       By signing this waiver I am rejecting uninsured motorist coverage under this
       policy, for myself and all relatives residing in my household. Uninsured
       coverage protects me and relatives living in my household for losses and
       damages suffered if injury is caused by the negligence of a driver who does
       not have any insurance to pay for losses and damages. I knowingly and
       voluntarily reject this coverage.

                                                   ___________________________
                                                   Signature of First Named Insured

                                                ___________________________
                                                                Date
75 Pa. Cons. Stat. Ann. § 1731(b). A similar form is provided for rejecting underinsured
motorist protection. Id. § 1731(c).
                                              4
the statutory rejection form.” Ford v. Am. States Ins. Co., 154 A.3d 237, 245-46 (Pa.

2017).

         Here, USX’s signed waiver included the required statutory language and

additional language, underlined below:

         By signing this waiver I am rejecting uninsured motorist coverage under this
         policy for myself and all relatives residing in my household and all persons
         driving or working under the authority of any named insured or riding as a
         passenger in an insured vehicle. Uninsured coverage protects me and
         relatives residing in my household for losses and damages suffered if injury
         is caused by the negligence of a driver who does not have any insurance to
         pay for losses and damages. I knowingly and voluntarily reject this coverage
         for all insured drivers, and I act on full authority of all insureds under this
         commercial auto policy.

App. 75. The additional language adapts the statutory form’s language to the

commercial, rather than individual, setting4 but does not change or limit the scope of

coverage, create ambiguity, or contravene the contracting parties’ understanding of the

intended coverage. Compare Ford, 154 A.3d at 240, 246 (holding that an underinsured

motorist waiver form that includes all of the statutory language in the § 1731(c) form,

with the addition of an “s” to “motorist” and the word “motorists” between

“underinsured” and “coverage” were de minimis modifications), with Jones v. Unitrin

Auto & Home Ins. Co., 40 A.3d 125, 128-30 (Pa. Super. Ct. 2015) (holding that the

addition of the sentence “By rejecting this coverage, I am also signing the waiver on P.

13 rejecting stacked limits of underinsured motorist coverage” to an underinsured

         4
        In Travelers Indemnity Company of Illinois v. DiBartolo, 171 F.3d 168, 169, 170
n.4, 172 (3d Cir. 1999), we held that a corporation can waive uninsured motorist
coverage for its employees just as an individual can and enforced such a waiver that used
only the statutorily-required language in § 1731.
                                               5
motorist waiver rendered it void and unenforceable because the waiver “interpose[d] a

sentence, not directly related to rejection of [underinsured motorist coverage] and

therefore did not “specifically comply” with § 1731), and Am. Int’l Ins. Co. v.

Vaxmonsky, 916 A.2d 1106, 1109 (Pa. Super. Ct. 2006) (concluding that an underinsured

motorist protection rejection form that omitted “all” from the phrase “all losses and

damages” required under § 1731(c) was invalid because the omission “made the form

more ambiguous . . . by restricting the scope of coverage” even though the MVFRL

“expands the scope of [underinsured motorist] coverage to all losses and damages).

Indeed, the language fulfills the MVFRL’s goal of establishing that the insured knows the

coverage it is waiving. Ford, 154 A.3d at 245.

       While the additional language tailors the waiver to the commercial setting and

might be viewed as “consequential,” we cannot imagine that the Pennsylvania courts

would strike down what appears to be a necessary clarification. Indeed, in the

commercial setting, a waiver that refers only to households would be confusing and could

potentially be misunderstood. Accordingly, the District Court properly granted summary

judgment to USX and Mountain Lake on King’s breach of contract claim.

                                            IV

       For the foregoing reasons, we will affirm.

                                             6